Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey

Summary

Episode Summary: All-In with Chamath, Jason, Sacks & Friedberg

Episode Title: Hurricane Fallout, AlphaFold, Google Breakup, Trump Surge, VC Giveback, TikTok Survey
Podcast Information:

• Title: All-In with Chamath, Jason, Sacks & Friedberg
• Host/Author: All-In Podcast, LLC
• Description: Industry veterans, degenerate gamblers & besties Chamath Palihapitiya, Jason Calacanis, David Sacks & David Friedberg cover all things economic, tech, political, social & poker.

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I. Introduction to the Episode

The hosts kick off the episode with enthusiasm about reaching nearly 200 episodes of the podcast, celebrating milestones like acquiring the domain allin.com and teasing upcoming events.

• Jason Calacanis [00:00]:
  "We're about to hit our fourth anniversary here. Episode 200 is coming up and a bunch of lunatic fans are getting together."

• David Sacks [00:39]:
  "We have all in dot com. How much do we spend on this? This is great, guys."

II. Hurricane Milton: Impact and Causes

A. Scientific Explanation

David Friedberg delves into the scientific factors contributing to the increased frequency and intensity of hurricanes, emphasizing the role of elevated sea surface temperatures and the recent policy changes affecting sulfur dioxide emissions from cargo ships.

• David Friedberg [04:49]:
  "Warm ocean temperatures drive moist air up... creating a feedback loop. The more energy you have in the ocean, the more likely you are to accelerate wind forces in storms."

• Jason Calacanis [06:51]:
  "Emissions from cargo ships block sunlight, which then, of course, reduces the heat absorbed by the oceans. And so we're now choosing between pollution of the air or overheating of the oceans. Am I correct in summarizing that?"

B. Economic and Social Consequences

The discussion shifts to the devastating economic and social impacts of hurricanes, particularly focusing on Florida's coastline, the challenges faced by the insurance market, and the potential need for federal intervention.

• David Friedberg [15:31]:
  "Probably the total value of all mortgages and homeowner mortgages in Florida is $454 billion... many people have their entire net worth into their home."

• David Sacks [17:37]:
  "You should explain the loop here...when you have real exposure on loss more frequently than 1 in 100 years to your point, they need to be repriced."

III. Insurance Market Challenges in Florida

A. Rising Costs and State Reinsurance

The hosts explore the unsustainable rise in insurance premiums due to the increasing frequency of hurricanes, the strain on Florida's state-backed reinsurance fund, and the broader implications for homeowners.

• David Friedberg [16:02]:
  "So the state over the last several years has had to step in and effectively subsidize the insurance."

• David Sacks [21:18]:
  "In the absence of going in one anyways, we ended up getting the..."

B. Potential Federal Bailouts and Economic Implications

There is contemplation about whether the federal government will need to intervene to support the housing market, setting precedents for other states facing similar climate-induced challenges.

• David Sacks [17:15]:
  "Because if they don't, well, it's a terrible precedent to set... everyone will get a bailout or nobody gets a bailout."

IV. Breakthrough for AlphaFold and Nobel Prize

A. Significance of AlphaFold's Achievement

The podcast celebrates the Nobel Prize in Chemistry awarded to DeepMind's AlphaFold creators, highlighting its transformative impact on biochemistry and biotechnology.

• David Friedberg [29:34]:
  "Understanding the shape of a protein is really hard... AlphaFold project at DeepMind solve this problem."

• David Sacks [29:49]:
  "The Breakthrough Prize is actually meaningfully more relevant and a positive directional indicator to breakthrough science."

B. Implications for Biotechnology and Research

Friedberg elaborates on how AlphaFold has revolutionized protein structure prediction, enabling advancements in drug discovery and industrial biotech applications.

• David Friedberg [30:49]:
  "There's been a long challenge... AlphaFold models to actually design and develop those molecules."

V. DOJ's Antitrust Suit Against Google

A. Background and Findings

The hosts discuss the Department of Justice's (DOJ) antitrust suit against Google, which found the company liable for maintaining monopolies in search and digital advertising.

• Jason Calacanis [36:02]:
  "Google is found liable for maintaining a monopoly in search and digital ads... considering asking a federal judge to force Google to sell off parts of its business."

• David Friedberg [40:27]:
  "We should take apart the monopolistic antitrust actions and behaviors that they take and then identify ways to remedy those behaviors."

B. Potential Remedies and Implications

Chamath Palihapitiya and the other hosts debate the potential breakup of Google, weighing the benefits of Google's investment in research against the risks of monopolistic practices.

• Chamath Palihapitiya [45:29]:
  "It might even be good for shareholders... Google is facing the most existential threat to its search monopoly."

• David Sacks [43:14]:
  "There'll be some form of forced remedy. It's going to wind up being completely meaningless."

VI. Venture Capital Trends: CRV's Response

A. Return of Capital to LPs

The conversation moves to the trend of venture capital firms like Charles River Ventures (CRV) returning capital to limited partners (LPs) due to unfavorable market conditions for late-stage investments.

• Jason Calacanis [50:19]:
  "CRV is giving back about half of that 275 million to investors... market conditions for late stage have worsened dramatically."

• David Sacks [55:03]:
  "Venture needs to go through a phase where it re rationalizes... private markets have to exceed that in order for it to be a real viable alternative."

B. Broader Implications for Venture Capital

Friedberg and Sacks discuss the challenges faced by venture capital in the current market, emphasizing the need for more concentrated investments and the difficulty of achieving significant returns.

• David Friedberg [57:46]:
  "The froth that has occurred because of that is being cleared out... a lot of the right things to do."

• Chamath Palihapitiya [62:07]:
  "The data that I think LPs look at shows that smaller venture funds tend to perform better for this reason."

VII. TikTok as a News Source

A. Pew Study Findings

Jason Calacanis presents research from Pew indicating that TikTok has become a significant source of news for younger adults, surpassing traditional social platforms.

• Jason Calacanis [63:08]:
  "Four in 10 U.S. adults aged 18 to 29 are now regularly getting their news from TikTok."

• Chamath Palihapitiya [65:32]:
  "95% of adults that use TikTok say they use it because it's entertaining. Only 10% post content related to political or social issues."

B. National Security Concerns and Public Perception

The hosts debate the potential national security risks associated with TikTok's algorithm and its influence on public opinion, ultimately downplaying exaggerated fears.

• David Sacks [73:40]:
  "Look, there's so much content out there already... it's a drop in the bucket."

• Chamath Palihapitiya [74:49]:
  "It's mostly an entertainment app... the moral panic has been exaggerated."

VIII. 2024 Election Update

A. Polling and Betting Market Trends

The episode provides an update on the 2024 U.S. presidential race, highlighting a slight surge for Donald Trump in betting markets versus Kamala Harris's leads in traditional polls.

• Jason Calacanis [70:02]:
  "The betting markets and polling indicate a really tight race, but maybe Trump is surging this week."

• Chamath Palihapitiya [77:14]:
  "Trump is winning the Electoral College... he's up in almost every swing state."

B. Candidate Strategies and Potential Outcomes

The discussion touches on Kamala Harris's interview strategies and the potential pitfalls she faces if she continues to struggle in resonating with voters.

• Chamath Palihapitiya [78:43]:
  "She is going to have to abandon this sort of basement strategy of not doing interviews... It's a doom loop."

• David Sacks [80:14]:
  "I'm not sure... there's a bunch of spanners in the works between now and November."

IX. Conclusion and Final Remarks

The hosts wrap up the episode with light-hearted banter, reflecting on past discussions and teasing future topics. They emphasize the importance of engaging content and maintaining a sense of humor.

• Jason Calacanis [83:20]:
  "Make sure you go to allin.com meetups... we'll see everybody next time on the all in love. Bye bye."

• Chamath Palihapitiya [84:04]:
  "We should get merchies."

---

Notable Quotes with Timestamps:

• Jason Calacanis [00:00]:
  "We're about to hit our fourth anniversary here."

• David Friedberg [04:49]:
  "Warm ocean temperatures drive moist air up... the more energy you have in the ocean, the more likely you are to accelerate wind forces in storms."

• David Sacks [15:31]:
  "Probably the total value of all mortgages and homeowner mortgages in Florida is $454 billion..."

• David Friedberg [29:34]:
  "Understanding the shape of a protein is really hard... AlphaFold project at DeepMind solve this problem."

• Chamath Palihapitiya [45:29]:
  "It might even be good for shareholders... Google is facing the most existential threat to its search monopoly."

• Jason Calacanis [63:08]:
  "Four in 10 U.S. adults aged 18 to 29 are now regularly getting their news from TikTok."

• David Sacks [73:40]:
  "There's so much content out there already... it's a drop in the bucket."

• Chamath Palihapitiya [77:14]:
  "Trump is winning the Electoral College... he's up in almost every swing state."

---

Key Takeaways:

1. Climate Change and Natural Disasters:
   Rising sea temperatures and policy changes are exacerbating hurricane intensity, leading to severe economic and social impacts, particularly in Florida. The insurance market is under immense strain, raising questions about the sustainability of current policies and the need for federal intervention.

2. Technological Breakthroughs:
   AlphaFold's Nobel Prize underscores the significant advancements in biotechnology driven by AI, with far-reaching implications for drug discovery and industrial applications.

3. Antitrust and Big Tech:
   The DOJ's move against Google highlights ongoing concerns about monopolistic practices in the tech industry. The potential breakup of Google could reshape the digital landscape and spur innovation.

4. Venture Capital Dynamics:
   Venture firms like CRV returning capital reflect broader market challenges, emphasizing the need for more focused and strategic investments in a volatile economic environment.

5. Media Consumption Shifts:
   TikTok's rise as a news source among younger adults presents both opportunities and challenges, raising discussions about information integrity and national security without succumbing to unfounded fears.

6. Political Landscape:
   The 2024 election remains highly competitive, with shifting poll numbers and strategic maneuvers by candidates potentially influencing the outcome as the calendar inches closer to November.

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This comprehensive summary encapsulates the multifaceted discussions of the episode, providing listeners with a clear understanding of the critical topics covered by Chamath Palihapitiya, Jason Calacanis, David Sacks, and David Friedberg.

Transcript

[Jason Calacanis]

All right, everybody, welcome back to the number one science, politics, technology and business podcast in the world for five years running. We're about to hit our fourth anniversary here. Episode 200 is coming up and a bunch of lunatic fans are getting together. You can join them all in.com meetups. Holy cow. We got the domain name all in. Fantastic. Go to allin.com meetups and hey, subscribe to our YouTube channel. We're going to do some sort of crazy event for the million subscriber party. We're like 300,000 away. Gentlemen. This is nuts, huh? Can you imagine? This thing made it to 200 episodes. Wow.

[David Sacks]

We have all in dot com. How much do we spend on this? This is great, guys.

[Jason Calacanis]

I negotiated it, I got it. It took me two years and I got a sick deal on it. I don't even want to say because I, you know, I don't want to change it. But don't say I think I got it. Don't say. I'll just say you bleep it out. I got it for or so. And that's a million dollar domain. Just so we all know five letters in the dictionary. So good for branding.

[Chamath Palihapitiya]

Good job, J. Cole.

[Jason Calacanis]

Thank you, my friend.

[Chamath Palihapitiya]

Yeah, now we have all in dot com. Tequila.

[David Sacks]

Ooh, I love it.

[Jason Calacanis]

Exactly, exactly. And you can yum yum. Yeah, I got you saks.com, didn't I? You have the domain name saks.com. i negotiate that for you.

[David Friedberg]

Wow.

[David Sacks]

We have all the way back to episode one. This is incredible.

[Jason Calacanis]

Oh, the new website.

[David Sacks]

Yeah, this is great.

[Jason Calacanis]

Oh, can I tell you if I.

[David Sacks]

Look who's the website all in.com?

[David Friedberg]

Allin.Com. That's our website.

[Chamath Palihapitiya]

It's like this thing is real.

[Jason Calacanis]

Yeah, it's like a real thing.

[David Friedberg]

After four years, we got our together. This looks great.

[Jason Calacanis]

Here we go. And I want to give a shout out to Podcast AI, one of our remember those fake all in episodes that became a startup Podcast AI and they built our website for us. So shout out to the team over there. All right, ladies, let's move on. And I am of course your executive producer for life and the moderator. We all in podcasts. And if I may, just a tiny plug if you're a founder. We are having our ninth cohort of founder university. It's a 12 week course I teach on starting companies.

[David Sacks]

What are you doing? Stop, stop.

[Jason Calacanis]

I'm just giving a quick plug for Founder University. I need to get a plug in because I want to be found.

[David Friedberg]

Go to Erawan and buy super gut bars. $3.99. You can pick them up this aftern.

[Jason Calacanis]

Your winners ride Rain Man David Sa.

[Chamath Palihapitiya]

And it said we open sources to the fans and they've just gone crazy with it.

[Jason Calacanis]

Love you, Queen of Kinwa. Speaking of that, your people used to be in an ad, Freedberg, so don't talk about plugs.

[Chamath Palihapitiya]

A few weeks ago when I shouted out that Glue AI was hiring engineers, we had like a hundred applications just from that.

[Jason Calacanis]

From Glueai.

[Chamath Palihapitiya]

Looking for engineers For Glueai. Yeah, right.

[Jason Calacanis]

That's awesome. For Glueai. And if you haven't tried Supergut, Freeburg's team literally made an advertisement with me talking about Supergut and didn't tell me.

[Chamath Palihapitiya]

And we're still hiring.

[Jason Calacanis]

Okay, well, there you have it. So go to Founder University to apply for my 12 week program.

[David Friedberg]

Check out Grok. I'm running a GoFundMe. Yeah, go to GoFundMe Friedberg.

[Jason Calacanis]

For what? More Xanax to deal with your panic attacks. All right, let's get started everybody. Enough of the shenanigans. Hurricane season is upon us. As Freiburg had predicted, Hurricane Milton made land fall on Wednesday evening along the west coast of Florida. As many of you know, it's been downgraded. It started as a category five, potentially, then a category three, and then it looks like it's a category one now. So I guess these things are quite random. Leading up To Milton though, 6 million Floridians across 15 counties were ordered to evacuate. That's a lot of people moving out. And it was a pretty powerful storm. It ripped off the roof of the Tropicana field in Tampa. So far the death toll is at 4, but it's expected to rise sadly. And just two weeks ago, Hurricane Helene swept through six southern states killing over 220 people. Tragically devastating western North Carolina and entire towns were wiped out. These are also beyond the tragic. Human losses are economically staggering. In terms of the losses, AccuWeather estimating the total economic damage could be between 145 and 160 billion. From Helen and Moody estimates the property damage alone could be as high as 26 billion tons. To get into here, FEMA, Starlink, saving the day, tons of stuff. But Freiberg, back on episode 182, you predicted this would happen. What's causing all this? And let's just start with the science angle, I guess before we get into the other political and insurance issues.

[David Friedberg]

Well, I think if you'll remember when we talked about this a couple months ago, the sea surface temperature was at a record high in the Atlantic. And warm ocean temperatures drive moist air up. That evaporates. The warmer the air, the faster the evaporation. And that starts to cause the movement of the air, which drives ultimately the hurricane. And then the hurricane sucks up more warm, moist air from the ocean, and it creates a feedback loop. So the more energy you have in the ocean, the more likely you are to accelerate wind forces in storms. And that's why you get these massive hurricanes that suddenly form seemingly overnight and go like in the case of Helene, that hurricane went from a Cat 2 to a Cat 4 or Cat 5 in, like, 48 hours because of the energy that's stored up. And 90%. Here's an interesting stat. 90% of the energy that we get from the sun is absorbed and stored in our oceans. The other kind of fact that's playing into this, if you pull up that Nature article, and this is something that I think you guys may remember, we talked about. So this was an article that came out, a paper, a science paper that came out a couple of months ago. And in this paper, these scientists identified that removing sulfur dioxide from cargo ships that travel across the oceans is actually causing accelerated warming in the oceans. And the reason is that the sulfur dioxide forms cloud formations and those as they travel across the oceans, and those cloud formations reflect sunlight. And in the absence of those cloud formations, that sunlight makes its way into the ocean and you get more ocean warming. And by their estimation, removing sulfur dioxide, which causes acid rain, and that's the reason it's been pushed to be removed, and they started removing it in 2020, 2021 from cargo vessels. By removing sulfur dioxide, we are now going to see a doubling of the rate of warming of the Oceans in the2020s. And going forward.

[Jason Calacanis]

Let me push there for a second just to make sure people understand what you're saying. Emissions from cargo ships block sunlight, which then, of course, reduces the heat absorbed by the oceans. And so we're now choosing between pollution of the air or overheating of the oceans. Am I correct in summarizing that?

[David Friedberg]

That's roughly it. And what is the pollution, again?

[Chamath Palihapitiya]

Sorry, I just understand sulfur dioxide.

[David Friedberg]

Sulfur dioxide, yeah. That goes into the fuel of cargo vessels. And a couple of years ago, they started to implement these mandates that sulfur dioxide no longer be used in the fuel. As a result, when sulfur dioxide is emitted from these vessels, it goes into the atmosphere and it actually triggers cloud formation. So now you have these clouds that are forming. And Nick's going to pull up this image right now. Yeah. Here you can See that? So all of these tracks are these cargo vessels moving across the ocean. And as they move across the ocean, they create cloud cover. That cloud cover actually reduces the warming in the ocean because it reflects sunlight. So now that sunlight energy gets absorbed into the ocean. So this is another driving force that some people are now speculating may be accelerating the warming of the oceans that we're seeing, which drives this extreme storm and hurricane events. And so this becomes a more frequent event. Now a lot of.

[David Sacks]

Sorry, can I ask you a question? Does that mean that we're mean reverting? Meaning if we improve the quality of the fuel source that are used in shipping, doesn't that then mean that we're reverting back to what would have happened in the absence of these dirty fuel sources?

[David Friedberg]

Yeah. So in addition.

[David Sacks]

No, no, I'm asking. Yeah, I'm asking you the question. Is that true or not?

[David Friedberg]

So, yes, we are no longer reflecting as much sunlight. And so for several decades, we had bad fuel source, we had artificial cooling.

[David Sacks]

Effectively an artificial cooling. And now we take. But that's counter to the narrative of what we all think is happening.

[David Friedberg]

Oh, well, the argument is that we've actually been warming the atmosphere, which we have been. We can see the data that shows that everywhere, all over the Earth, not just about sunlight coming in on the oceans. And not just ocean warming, but the atmosphere is warming, the planet is warming. And so this is by. By blocking the sunlight above the oceans, we were artificially dampening that effect and we were reducing the amount of heat energy that was getting into the oceans. So now by taking that away, we're seeing the heat energy in the oceans accelerate. And now the oceans are getting much, much warmer.

[Chamath Palihapitiya]

Right. So the pollution was good.

[David Friedberg]

Turns out it was good.

[Jason Calacanis]

That's the paradox here, is that it was creating a blocker for sunlight. And to your point, Chamath, exactly. Like, shouldn't we just be going back to what was normal, but at the same time, in the same system, we had heated things up? So this is a multifactored system that we're dealing with. Friedberg. And I guess the takeaway from all of this is that we gotta be really careful with what we do with the environment. Right.

[David Friedberg]

Well, I mean, let's talk about economics. Right? So how much real estate do you guys think is on the Florida coastline? What's the real estate value?

[David Sacks]

Sorry, Freiburg, can you just anchor this? Like, was it that it was supposed to be a category five and now it's a category three when it hit land.

[David Friedberg]

Right. So what Happens typically when storms hit land is they no longer have that hot ocean pumping energy back into the storm that keeps the feedback loop going. So the storm cycle starts to break down. All hurricanes, when they hit land, they start to break apart. And so the category which measures the wind speed actually reduces. This is just a natural thing that happens. But this was a Category 5 hurricane when it made landfall. I believe it was category four. So, you know, it was a massive hurricane approach.

[David Sacks]

We should not dismiss it. Because my understanding was Helen was Cat 4 when it, like, hit North Carolina. But I read yesterday that what happened.

[David Friedberg]

Yeah, what happened with Helen was.

[David Sacks]

It was Cat 3 when it hit Tampa or something. Is that not right?

[David Friedberg]

Yeah, so that's right. But what happened when Helene hit North Carolina, it was not a cat 4. What happened is as that storm moved inland, it hit the mountains. And the first mountains it hit are in western North Carolina. That area is elevated. There's mountains there. So when a heavy hot storm runs into cold mountains, all the moisture dumps out. It's like it runs into it, and suddenly everything precipitates out of that storm. And that's why some parts of western North Carolina got like 18, some high, some people measured as high as 30 inches of rainfall in a couple of hours. So this insane dumping happens when that hot air hits cold, hits a cold region, and suddenly everything, all that warm moisture precipitates out and dumps to the ground. So it ran into a mountain. It's effectively why everything fell out of North Carolina.

[Chamath Palihapitiya]

Wait, so you're saying that it wasn't Democrats who basically.

[Jason Calacanis]

Right.

[David Friedberg]

I blame Putin. Let me ask who did it?

[Jason Calacanis]

Sachs?

[Chamath Palihapitiya]

I thought Nancy Pelosi cast a spell or something and.

[Jason Calacanis]

Yes.

[David Friedberg]

Well, isn't there a lot of geoengineering conspiracy theories going on in your cohort? I mean, what's going on?

[Chamath Palihapitiya]

I don't think so, but Vinod wants us to be very clear that we need to. We need to stop all this disinformation that somehow Democrats were behind that storm.

[David Friedberg]

Well, there are.

[Chamath Palihapitiya]

So we can assure everyone that it was dissipation.

[David Friedberg]

There's a theory online that there's a ton of late geoengineering being run by government agencies to drive.

[Chamath Palihapitiya]

These people aren't taking that seriously.

[Jason Calacanis]

Well, I mean, the origin of this, though, Freiburg, is people have done experiments for decades on trying to control the weather or, you know, alter the weather. And they're doing that in the Middle east by seeding clouds and creating more rain. We saw that with the Dubai floods. They said that that Might have been caused by overseeding of clouds which they're doing there. And then there have been experiments just to, you know, for the crazy laser people, conspiracy theorists. There is on X there actually have been experiments with lasers, you know, being shot into hurricanes and storms. Correct.

[David Friedberg]

Are you, Alex Jones, is that what we're doing? Well, no, I'm not saying that Alex Jones about.

[Jason Calacanis]

I'm just saying that's the origin of where people are kind of building on this. There have been.

[David Friedberg]

Okay, so let's just talk about the hurricane. The amount I'm teeing it up for.

[Jason Calacanis]

You to debunk it is what I'm doing here.

[David Friedberg]

Yeah, putting particulates in clouds to accelerate precipitation is. I mean we've done that for 100 years. You can increase the precipitation rate when there's already clouds that have formed. But that has nothing to do with creating 200 mile an hour wind speed. That requires an extraordinary amount of energy, all of this energy. The oceans are like giant batteries. And when a hurricane gets going, that battery is accelerating the hurricane and the hurricane sucks up more power from the battery and it creates this incredibly dynamical system. There is no human created energy system that can form a hurricane. A hurricane is an extraordinarily powerful natural phenomenon that arises from the amount of energy that can come out of very, very, very hot oceans, relatively speaking. So, you know, that's really where these hurricanes are coming from now. They're going to be more frequent if the ocean temperatures remain elevated as they seem to be and continue to be elevated. And this can be a function of generally the temperatures, warming on Earth, generally the removal of sulfur dioxide, generally these El Nino La Nina cycles. There's a lot of factors, but it seems to be the case that we are having a very significant trend of continuously warmer oceans. And those continuously warmer oceans means that we're going to have what used to be called a 1 in 500 year storm, which is what Asheville is being termed at 1 in 500 year. These sorts of storm events can happen every couple of years. And we're now looking at one in 100 year events happening every two to three years in the United States with the hurricane activity that we've been seeing.

[Jason Calacanis]

I think a lot of the conspiracy theories are built on actual experiments that happened. This one, Project Storm Fury I'm sure you know about was to try to modify hurricanes by putting in some chemicals that would freeze them and dull them. So they're kind of building on.

[David Friedberg]

Break it apart.

[Jason Calacanis]

Yeah, break it apart. So, you know, there have been experiments Here with altering weather, altering hurricanes. But that doesn't mean it's Putin, Pelosi or you know, the Illuminati.

[David Sacks]

Okay, so let's get back to brass tacks.

[David Friedberg]

So let's talk about the economics. So there's 500 billion to a trillion dollars of real estate value on the Florida coastline and what used to be a one in 100 year event. The average Florida homeowner historically has been paying about 1% of the real estate value in insurance. So now if your real estate is likely to be wiped out one out of every 20 years instead of one out of every 500 years, the cost of insurance gets to the point that it is untenable for most people to pay for their insurance. Florida has a state backed reinsurance provider called the Florida Hurricane Catastrophe Fund. And this fund issues debt to meet its coverage demands because it reinsures insurance companies in order to incentivize them to come into the state and underwrite homeowners insurers.

[David Sacks]

You should explain the loop here, which is you go and get a mortgage, the bank says you need to get insurance if I'm going to lend you the money to buy the home. So then a bunch of insurers need to decide that they're willing to underwrite that area and then when they give you that insurance, they then want to lay that risk off and go to reinsurer. Is that the cycle?

[David Friedberg]

That's right. And what's happening is they would normally underwrite that risk. They would say this is going to cost, you're going to lose the value of your home every hundred years or every 200 years. But now the models are showing because of the frequency of these sorts of hurricane events and the severity of the hurricane events, that maybe you'll lose the value of your home once every 20 years or once every 30 years. And no consumer is going to be willing or able to pay that much for the insurance on their home. So the state over the last several years has had to step in and effectively subsidize the insurance. And now the state reinsurance vehicle only has statutory liability maximum of $17 billion in a single hurricane season. Now I think they got lucky with Milton today, but some were estimating that the Milton losses were going to be in excess of 100 billion bigger than Katrina. It's likely. As of this morning, the reinsurance websites are all saying it's probably a 40 to $50 billion loss event which still exceeds the state's reinsurance capacity. So you can kind of think about Florida State's reinsurance Thing being effectively bankrupt, it doesn't really have the capacity to underwrite the insurance anymore. So the real question for everyone is, is the federal government going to have to step in and start to support the price of homes?

[David Sacks]

Because if they don't, well, it's a terrible precedent to set. Because if you do it for Florida, then you'll have to do it in Texas and Louisiana and Mississippi, California with wildfires, Arizona, there's. And Texas, there's going to be no way to create a clear demarcation of who gets a bailout and who doesn't, which will mean that everybody will get a bailout or nobody gets a bailout.

[David Friedberg]

That's right.

[David Sacks]

And if everybody gets a bailout, and if you think about how systematically unpredictable, at least in the southern states the weather is, you're going to be talking hundreds of billions of dollars a year.

[David Friedberg]

Probably the total value of all mortgages and homeowner mortgages in Florida is $454 billion. And those people typically have a debt to equity ratio probably on the 50 to 80% range. So if the value of your home dips by 25% because everyone starts selling their homes, leaving Florida or they can't get insurance, then the people that live in Florida, most of them have their net worth tied up in their home, are going to see their personal net worth wiped out or cut in half. So it's not just an economic problem, it's a social problem that now there are so many people that have put their entire net worth into their home. The value of their home is written to a point that it no longer makes sense given the frequency at which homes are going to get destroyed.

[David Sacks]

That's probably the reason why they'll have to do it, because they'll.

[David Friedberg]

Exactly.

[David Sacks]

But then that calculation will have to happen for every single homeowner in every single state where this is a. This is an issue.

[David Friedberg]

Yeah.

[Chamath Palihapitiya]

Wait, Free bear. Are you saying the entire Florida coastline is no longer economically viable?

[David Friedberg]

No, it's totally viable. It's just the question is what are you willing to price? At what price will you pay 5% of your home value for insurance every year? You know, will you pay 2%, 3%?

[Chamath Palihapitiya]

If the expected life of a house is 20 years, then no, that's not, that's not viable.

[David Sacks]

It becomes very, very untenable.

[David Friedberg]

Well, it used to be 1 in 500 year. Now it's probably 1 in 15.

[Chamath Palihapitiya]

Does this apply to the entire coastline or just parts of it?

[David Friedberg]

Well, I mean, you saw that the range at which these events can Happen is all over the place. And the, and the challenge is the events are getting more significant because of this warm ocean weather that we see this warm ocean temperature. The only good news, Freiburg is that.

[Jason Calacanis]

Now people are building the first couple of floors in high rises in Miami and homes on stilts with concrete and with resistant, you know, saltwater resistant material. So there is a counter to this. So we might be looking at an.

[David Friedberg]

Investment in climate resilience. That's right, yeah.

[Jason Calacanis]

So it might actually be an opportunity to upgrade all these homes to resistant ones using another set of technologies. But the bailout is really interesting too, Sachs, because Florida's got a lot of electoral college votes, doesn't it? Like, I hate to bring this back to politics, but you know, promising people bailouts is how these politicians seem to be getting votes these days.

[Chamath Palihapitiya]

Yeah, but is anyone talking about a federal bailout? I mean, is that, this is something you're.

[David Sacks]

I think what Friedbrook is saying is that there's a, there's a pretty obvious parade of terribles here where the question will have to be answered one way or the other. Because if you only have a $17 billion reinsurance fund and there's 50 billion of damage, somebody's going to have to come in and cover the gap. And if it's the insurance companies, expect your insurance premiums to double or triple.

[David Friedberg]

That's right. And that's what happened in California. And by the way, State Farm left a lot of California.

[David Sacks]

This is what I was going to say. Most of these big insurance companies have already done the calculus to realize that these regions are no longer profitable enough to justify the downside risk 100% bigger problem. So then the ones that are left are insolvent reinsurers or insurers that are just funding short term arbs because they know that the odds are they're going to get wiped out, so they'll price gouge effectively. So, you know, a different example is that here where I live in Menlo park, we're not in a floodplain, we're not in a fire region, none of that stuff. But in order for us to get home insurance, you have to now go through a risk assessment. And in our specific case, we were like, hey, what should we do with our roof? And they were like, you gotta take the roof off if you want home insurance. We're like, well, home insurance is probably a good thing to have.

[Jason Calacanis]

Was it a wood shake roof on your house?

[David Sacks]

It was a beau. You saw our house, It's a beautiful wood shake roof and we had to remove it. And the two choices were a $350,000 like iron composite materials.

[Jason Calacanis]

Yeah.

[David Sacks]

Or like 70k for composite. And it's like this is insane. And the cost of insurance was just egregious. In the absence of going in one anyways, we ended up getting the.

[David Friedberg]

For most homeowners, when the cost of insurance gets to a certain threshold, you don't have budget for it, you can't afford it. And so that's a lot of why the insurers leave. They'll underwrite anything at any price, but they just know that most consumers can't afford it. Here's some other interesting statistics, related but unrelated. In the early 1900s, the city of Phoenix, Arizona averaged five days a year of temperatures of 110 degrees or warmer. By the 2000s, Phoenix averaged during the 2000s, 27 days a year where the temperature was 110 or higher. Since 2021, Phoenix averaged 100 plus days, 42 days. And in 2024 it's been 70 days so far this year that the temperature is over 110. So this is affecting. And so there's increased risks in California with wildfires, increased risk with hurricane. There are a lot of these factors and I have friends that work in reinsurance and in the insurance markets, even.

[David Sacks]

If you don't get affected by a wildfire or disaster. When that article was in the Wall Street Journal, I think it said that the number of average days above 100 was like 100 something.

[David Friedberg]

Yes, that's right.

[David Sacks]

And they profile this retired woman who is an insurance adjuster or something. And the whole point of the article was not that her house was destroyed or at risk, but the cost of electricity has gone just absolutely sky high. Even with solar panels, even with storage, you need to basically lean on the grid and the grid now just charges you an exorbitant amount of money. And so these, these folks were paying thousands of dollars a year. So if you imagine the, the trifecta, you have all of this climate risk that could destroy your home. You're paying an enormous premium for home insurance and then you're paying an enormous premium for electricity from the mainline power utilities. It's, it's not sustainable.

[David Friedberg]

Yeah.

[Jason Calacanis]

And just for background, FEMA manages something called the NFIP National Flood Insurance Plan. And it's historically about 50% cheaper than private flood insurance. They have 4.7 million active policies providing 1.3 trillion in coverage. But they instituted a new risk assessment system and that caused rates to increase and yeah, it's because of all this, the policies have decreased over the last couple years, meaning less people have flood insurance at the same time that these things are getting worse. And so yeah, this is a really tough issue. I wonder if this is an opportunity chamath. If you think about historically how insurance worked, it worked in communities where people would help each other out, do barn raising kind of events when somebody had a problem. So if we just put on our entrepreneurial hats here. If you look at the cost of insurance, if a hundred different people bundled the cost of their homes together, put money into some sort of platform like an Uber Airbnb marketplace, and there was some management structure here of self insurance because I know some people are doing self insurance for healthcare at their companies for this kind of thing. Do you think there's going to be a new business opportunity here?

[David Friedberg]

Let's talk to our Jason. It's called a mutual and those are like a good chunk of the industry are mutuals where the shareholders are the members and they all share the risk and the ownership.

[David Sacks]

The problem is those things work because you have broad geographic coverage. If you had to go just into Malibu and self insure, the rates would literally be greater than the value of the home.

[David Friedberg]

Right. No one would pay into it. If you do proper underwriting, what's happened in the last couple of years is all the reinsurance companies and all the insurance companies have had to re underwrite the rates that they charge for insurance because the frequency of a disaster has gone up and the new price that they should be charging is so high. It doesn't matter how the capital structure is set up. It's simply there's one big event that's going to cause a big wipeout for a large number.

[David Sacks]

My personal belief is, I think that the real estate markets in some of these places are meaningfully mispriced. And specifically what I mean is that they're massively overpriced.

[David Friedberg]

That's right.

[David Sacks]

Because I think when you actually account for the climate damage and the long term financial stability of the insurers and the reinsurers, I don't think that many of the markets that have seen these crazy sky high prices, I'll name two to be specific, West Palm beach and Malibu. So both ends of the coasts, these things just don't make sense. And I think people view these things as investments. But on the west coast, when you deal with things like soil erosion and other things, I think it's a, there's, it's a calamity waiting to happen. And I think on the east coast when you factor in the extreme weather conditions even. Jason, your comment about rebuilding these homes in a more foolproof way doesn't solve it because it, you won't be able to rebuild the entire state. There's a lot of people that just can't afford it. There's a lot of folks that will not have adequate coverage. So I just think these are disasters waiting to happen, unfortunately.

[Jason Calacanis]

Yeah. And Sachs, there's a movement right now, a lot of people even of means are renting their homes. And so in the real estate market, what are your thoughts on that? Just renting versus buying now becoming like a something that people in the top half of homeowners or potential homeowners are now electing to not own their home and rent. Have you been monitoring that?

[Chamath Palihapitiya]

Honestly, I hadn't heard that. I mean the trend that I thought was happening was that you had these big funds like BlackRock or whatever buying up huge numbers of homes and then renting them to low end homes. Yeah, low end or medium to families. I thought that's what was going on. I hadn't heard that at the high end of the range that people were.

[Jason Calacanis]

Well, if you think about it like there's, there seems to be a cap when you have a $10 million home of what you can possibly rent it for. And it's, it's the prices are now making more sense to keep, more sense to keep your money in the market or in other places and then rent. I'm just hearing Friedberg, are you, are.

[David Sacks]

You long real estate in Florida or coastal California, if you could or do you treat them differently?

[David Friedberg]

I think they're different. But Florida is like, I mean, I don't know how you do the math on. I just don't know what you do on a trillion dollars of real estate value with half a trillion of mortgages when you have real exposure on loss more frequently than 1 in 100 years to your point, they need to be repriced. And how do you reprice those homes in the significant level that they need to be repriced without causing massive economic and social consequence? That's what's kind of, I think challenging me in thinking about what's the path here.

[Chamath Palihapitiya]

So it was a good thing that I sold my Miami place last year.

[Jason Calacanis]

Once again, Sax makes a great trade. Pretty awesome. Well done, Sax. You top ticked it again. Well done, Saksy Boo. Just like beep.

[Chamath Palihapitiya]

I really love, I love that house. It was on the Miami house.

[Jason Calacanis]

You love that house. Where do you think I stayed when I was in town. You're so selfish. I lost a place to stay. I mean the yacht access alone, being able to get out on the bay and get on a boat, the ski news, all this great stuff. All right, let's, let's keep the Friedberg train going here. Huge news. AlphaFold creators just won a Nobel Prize in Chemistry. Two members of Google's DeepMind AI research team, Demis Hasabis and John Jumper, received this year's Nobel Prize in Chemistry. They both work for Google's DeepMind, as you know. And Freeberg, again, all in getting there first explained what AlphaFold was back on episode 14 in December of 2020. That was almost four years ago. Friedberg, maybe you could explain.

[David Friedberg]

Did we predict that they would win the Nobel Prize at the time?

[Jason Calacanis]

I believe you did. We'll go check the receipts using podcast AI search engine.

[David Sacks]

It was, it became, it became much more likely that they would win the Nobel after they won the Breakthrough Prize. I mean, just to, just to point this out.

[Jason Calacanis]

But yeah, yeah, shout out Yuri Milner.

[David Sacks]

Shout out Yuri and Julia.

[Jason Calacanis]

And Julia.

[David Sacks]

Because when those guys won that award for 2023 and you heard the extent of what they've done, it was almost like obvious that they were going to win a Nobel after the fact. So I think the really interesting thing is actually in this community, I think the Breakthrough Prize is actually meaningfully more relevant and a positive directional indicator to breakthrough science.

[Jason Calacanis]

Well, it's kind of like winning Sundance or can you win the Palme d'or? You become a favorite to win at the Oscars right in the Academy Award. So that's actually interesting. The regional or more industry centric award could lead to the next one. So Friberg, just explain to us why this is so important before.

[David Sacks]

I just think it's much more rigorous than the Nobel. I think the Nobel can be a little bit gamed, I think.

[Jason Calacanis]

Oh, interesting. Okay, what do you think, Freiberg? Explain to the audience why this is important and what's transpired since we talked about it four years ago.

[David Friedberg]

There's been a long challenge in biochemistry on understanding or predicting or visualizing the three dimensional structure of proteins. Because remember, proteins are produced by long chains of amino acids and those amino acids are kind of create like a bead, beaded necklace. And then the whole necklace collapses on itself in a very specific way. And that three dimensional molecule, that big chunky protein, does something structurally, physically. And so trying to understand the shape of a protein is really hard. I mean, we've used kind of X ray imaging systems to try and identify it and tried to build models to identify how does that quote, protein folding work? How do those amino acids collapse on each other to create that three dimensional construct? And I don't know if you guys remember, in the early 2000s there was a Stanford foldingome distributed computing project. Do you guys remember this?

[Jason Calacanis]

Yeah. It would use people's machines and extra CPU like the Setiome project to.

[David Friedberg]

Precisely. Yeah, exactly. Right, yeah. So it's like it ran on the background of your computer, used your CPU cycles when you weren't using your computer and it tried to model protein folding. This has been a problem that folks have tried to tackle with compute for decades to figure out the 3D structure. This is so important because if we can identify the 3D structure of proteins and we can predict them from the amino acid sequence, we can print out a sequence of amino acids to make a protein that does a specific thing for us. And that unlocks this ability for humans to create biomolecules that can do everything from binding cancer, to breaking apart pollutants and plastics, to creating entirely new molecules, to running in some cases, like what David Baker did at University of Washington. He shared the Nobel Prize creating micro motors, mini motors from proteins that he designed on a computer. And so this becomes, I think this great big holy grail in biochemistry. And the AlphaFold project at DeepMind inside of Google solve this problem. And by the way, since then they've come out with AlphaFold 3. They've launched a drug discovery company called Isomorphic Labs where they're basically predicting molecules that will do specific things for a target indication. And then they use the AlphaFold models to actually design and develop those molecules. And there have been literally dozens of companies that have been started since DeepMind was published and probably several billion dollars of capital that's gone into companies that are creating new drugs, creating new industrial biotech applications using this protein modeling capability that was unleashed with DeepMind a number of years ago. So it really has transformed the industry. It'll be a couple years before we see it transform the world. But it's an exciting kind of thing.

[Jason Calacanis]

Not to virtue signal here, but those are plus size proteins now Freeberg. They don't like being called chunky. You call them plus size proteins.

[David Friedberg]

Plus size proteins, yes.

[Jason Calacanis]

One really difficult technical question for your Freeberg. Is there any way for you to take this amazing breakthrough and make Sacks interested in it? Is there any possible vector here for it to relate to Sacks and get him off his BlackBerry right now? BlackBerry? I think he's playing chess with Teal. And J.D. vance is watching them play chess. I think that's what's going on right now. It's really hard. I mean, the poor audience here is watching Sax looking down. All right, let's keep this train moving here. Enough of the shenanigans.

[David Friedberg]

Anyway, congrats to the teams, the various. Congrats. Yeah, I mean, it's just great. And David Baker at the Baker Lab and University of Washington and David Mitcher.

[David Sacks]

Also a breakthrough prize winner. What's interesting to me is like these two Nobels, these guys, but also Jeffrey Hinton's. You're really seeing now the convergence of the hard sciences and computer science.

[David Friedberg]

Totally.

[David Sacks]

In a really meaningful way. And I think that that's so interesting and cool.

[Jason Calacanis]

I think in the group chat, Chamath, you had an interesting. Hey, maybe there should be a computer science award for, you know, a Nobel computer science award.

[David Sacks]

And I actually think it's the opposite now, which is that it's amazing to see folks using computers to improve our understanding of the natural sciences. And I think that that's a really great place to be. So what Demis and John and David are doing in the life science is amazing. What Geoffrey Hinton did 30 and 40 years ago and 20 years ago in terms of training deep neural. And that's also really amazing.

[Jason Calacanis]

In related news, all computer based. Yeah, all computer based. And in related news, Benioff just nominated himself for excellence in CRM management. So congratulations to Benioff on nominating himself for a Nobel. What is that comment?

[Chamath Palihapitiya]

Why are you attacking Benioff?

[Jason Calacanis]

The audience.

[David Sacks]

What did he do wrong?

[Jason Calacanis]

Yeah, they're just jokes.

[David Sacks]

Have you not learned anything to people that attack you?

[Jason Calacanis]

It's not an attack, it's a joke. Has done so much for philanthropy. Just ask him if you.

[David Sacks]

Can. He's doing a great job.

[Jason Calacanis]

What are you doing exactly? Can you people have a sense of humor about yourself?

[David Sacks]

No, but it's not even, it's not even funny. If you had said it's something else.

[Jason Calacanis]

I mean, okay, give me a. Give me a funnier Nobel. Go ahead, go.

[David Friedberg]

Benioff runs a 300 billion market cap.

[Jason Calacanis]

Go ahead.

[Chamath Palihapitiya]

He's chomping at the bit to come back on the pod and explain why AI is not going to disrupt SaaS.

[David Sacks]

Really?

[David Friedberg]

Oh, we see.

[Jason Calacanis]

He wants to be back on the pod.

[Chamath Palihapitiya]

He's texting me. He wants to. Come on.

[David Sacks]

We'll check in. We'll check in. In a hundred billion dollars. He had his chance. That chance is closed.

[Jason Calacanis]

Shot a shot and it did not land.

[David Sacks]

That door was closed when he insulted our guests about not being able to afford the Disney called you all in.

[Jason Calacanis]

People bores.

[David Friedberg]

Oh, my God. Now you're piling on.

[Jason Calacanis]

Anybody coming to Dreamforce 2025. Okay, let's move on.

[David Friedberg]

Sorry.

[David Sacks]

Anyways, leave Benioff alone.

[Jason Calacanis]

It's like leave Britney alone. That famous meme. Leave Benioff alone.

[Chamath Palihapitiya]

So how many new enemies do you want to create?

[Jason Calacanis]

I just joke. Just jokes.

[Chamath Palihapitiya]

Just when you thought he was running out of feuds, you know, I'm not.

[Jason Calacanis]

In the feud with anybody. I'm making stupid jokes. The reason people tune in is because you laugh and learn.

[Chamath Palihapitiya]

Did you guys see that tweet that somebody suggested throwing a conference with all of J. Cal's haters?

[Jason Calacanis]

Jason Khan. J. Khan. Jaders convention.

[David Sacks]

What is it called? Jaders.

[Jason Calacanis]

Jaders.

[Chamath Palihapitiya]

Yeah.

[Jason Calacanis]

Yeah. Jason haters. Jaders. Yeah. I'd like to shout out my Jaders. They're just jokes, folks. I love you, Mark. Penny off. Come on, the pod. Zach.

[Chamath Palihapitiya]

I think somebody could launch a successful summit just doing that. It's like a ready made audience and they're clearly passionate. Clearly passionate.

[David Friedberg]

All the YC founders will be there.

[Jason Calacanis]

Keynote day one, Palmer Lucky. Keynote day two, David Sacks.

[Chamath Palihapitiya]

I think it would rival the all in summit in terms of the passion of the fans.

[David Sacks]

All three of us would show up. Jake out would be so devastated. Keynote?

[David Friedberg]

Are you kidding me? I think it's hilarious.

[Chamath Palihapitiya]

I'd have to key.

[Jason Calacanis]

Off. I like Betty off. What? I don't try to make enemies with Betty off. He's just gotta have a sense of humor.

[David Sacks]

Oh, my God.

[Chamath Palihapitiya]

Megan Kelly.

[Jason Calacanis]

Chat. Megan Kelly and Farmer Lucky.

[David Sacks]

Wait, does Zuck hate you too? Why does Zuck hate you?

[Chamath Palihapitiya]

Oh, my God. J. Cal was just so.

[Jason Calacanis]

I was brutal to Zuck in the early days.

[Chamath Palihapitiya]

Brutal? Yeah.

[David Sacks]

Why?

[Jason Calacanis]

Well, he just. Anyway, we'll get to it later.

[Chamath Palihapitiya]

But you're right, like, you know, throwing a conference for J haters would just be ready made.

[Jason Calacanis]

Jaders.

[Chamath Palihapitiya]

That is an underserved and passionate demographic.

[David Sacks]

It would be bigger than passionate demographic.

[Jason Calacanis]

Just look at Saks replies.

[David Friedberg]

Community with shared values.

[Jason Calacanis]

Hey, man, if I can get 25% of those ticket sales, I'm in. Let's go. All right, let's keep the train moving here. We have an update on the DOJ's antitrust suit with Google. Looks like they're going for the breakup as Chamath predicted. You remember the Bloomberg report back in August? We covered it on episode 192. Google is found liable for maintaining a monopoly in search and digital ads. Now the DOJ is working on the remedy, right? Okay, they're guilty. So now comes time for the remedy and the DOJ is quote, this is from Bloomberg, considering asking a federal judge to force Google to sell off parts of its business. And according to this filing, the DOJ is specifically considering structural remedies that would prevent Google from using products such as Chrome, Google Play, that's the app store on Android, and Android itself to Advantage. Google Search 32 page document released by the DOJ lays out several options and we'll go through them and talk about them here. The obvious one, terminating Google's exclusive agreements with hardware companies like Apple. They're the default search engine there for 30 or 40 billion a year. Samsung, that's a layup separating Chrome and Android. My God, that would be drastic. Ripping that out of the Google ecosystem, prohibiting certain kinds of data tracking, that's a layup as well. Or other behavioral and structural changes for the. I'm going to pause there, Friedberg, and get your thoughts on this. As a former Googler and you interviewed Sergey at the summit, but I don't think we talked to Sergei about this because obviously he would not be able to talk about it. So what are your thoughts here on a potential remedy?

[David Friedberg]

I think we've talked about this. I mean, look, I've shared in the past my belief that companies that are big, that have excess capital, that then invest that excess capital in R and D can be a net benefit for all of us. Look at Bell Labs. Bell Labs had a monopoly on, through their association with AT&T, with developing radar, microwave, the transistor, integrated circuitry, information theory, everything that is the basis of the Internet, computing, even nuclear technology, and so on. It's because they had this extraordinary capital flow from the scale of the business and they were able to invest in R and D. Similarly, Google acquired and invested for many, many years in DeepMind. And we just talked about how Demis and team won the Nobel Prize for the work that they did. And they by the way, published the protein structure for 200 million proteins for free out of that service. I just want to zoom out for a minute and talk about the fact that this isn't about whether Google has a monopoly in search that prohibits competition or in ads that prohibits competition. But is it really worth penalizing any company that's big, particularly do we lose the benefit of those big companies investing in technology that pushes us forward? Google also invested in Waymo for years and years and years, which arguably spurned and drove investment from many other companies in self driving technology. And if Google hadn't done that, would self driving have taken off the way it did? I don't know. Same with Kitty Hawk and Larry's investment in EVTOLs and that spawned a lot of EVTOL investing. And similarly, if you think about Amazon and their investment in aws, where they were burning cash for many years, that turned out to spawn arguably a lot of interest and investment in cloud. And so I don't think that these big companies are bad just because they're big. I think we should take apart the monopolistic antitrust actions and behaviors that they take and then identify ways to remedy those behaviors versus just saying anyone or anything that's big should be taken apart because there is a tremendous benefit to be gained from the R and D dollars that they all put into things that move the whole industry forward. And I think that leadership's important and needed. Otherwise if you've got a bunch of startups that are trying to get $10 million checks from VCs, I'm not sure they're going to build a Waymo and I'm not sure they're going to build Amazon Cloud and I'm not sure they're going to build a Deep mind protein folding company and publish it for free. So I don't know. That's just my point of view on Chamath.

[Jason Calacanis]

What's the likely outreach, how we should.

[David Friedberg]

Think about this stuff?

[Jason Calacanis]

Chamath, you kind of nailed this one pretty good with these predictions. Tell us we'll be sitting here five years from now. What will have occurred?

[David Sacks]

Unfortunately not what Friedberg just said. It'll be the opposite. There'll be some form of forced remedy. I'm sympathetic to Friedberg's argument. I don't think that it's really a good thing in the end because I do think there are some incredible examples of Google specifically reinvesting in a way that's really added value in the world. I think the problem though is that the technology innovation cycle has gotten too elongated. So you're not seeing creative destruction be the natural force that keeps all of these companies in their own swim lanes. And so they are allowed to become too amorphous and too profitable. And I think it becomes an obvious target for politicians.

[Jason Calacanis]

I think that's a really good observation there about the timeline of this because if you look at this, I have started now and I know many people are starting their search journey on Claude and ChatGPT every day. I'm doing 30, 40, 50 queries and follow ups per day. I force my entire team to do that as well. And so just as there's an actual viable competitor to Google, this action has reached, I don't know the halfway mark. This is going to wind up being completely meaningless. Saks, if ChatGPT does build a viable competitor coexistor that siphons off search. Am I wrong here?

[Chamath Palihapitiya]

Well, it is ironic that frequently the government takes actions on these monopolies at precisely the moment they're subject to the greatest disruption. Totally the same thing happened with Microsoft in a way, but it was still a good thing that the government acted when it did because there was a risk of Microsoft porting over its desktop monopoly into this new era of the Internet. I think it's still a good thing to be looking at breaking up Google. I actually think that would be good. At the end of the day, it might even be good for shareholders. This thing should be probably three separate companies like we've talked about in a previous show. But it is true that Google is facing the most existential threat to its search monopoly, and it is a monopoly in the form of OpenAI at this point in time.

[Jason Calacanis]

I have one final thought here and piece of advice for Sergey and the team over there. And I told Sergey directly they have to get good at making apps to go use ChatGPT. You take out the app and it's a wonderful, beautiful experience. When you go try to figure out how to use Gemini, it's like shoehorned into search results and then it's like some subdomain. That's why people aren't using it. Go buy the domain name chat.com and make a dedicated app just for Gemini.

[David Sacks]

You're 100% right.

[Jason Calacanis]

Kick ass.

[David Sacks]

You're 100% right.

[Jason Calacanis]

We suck at apps.

[David Sacks]

We said this when you asked about the bear case of OpenAI. If the DOJ is going to go after Google. And by the way, the interesting thing, Jason and I mentioned this to you is that in the same article that floated the trial balloon about this remedy of a Google breakup, the headline in the Wall Street Journal, which I think was very purposeful, said Google and Meta. So I think that they, if given their druthers, they being the powers that be at Washington, will probably want to take a run at both of these companies. They'll start with the one that they think they can disassemble the quickest and then they'll go to Meta afterwards. My strong advice to Meta and Google is if this is going to happen, you got to go out kicking and punching and fighting and scratching. And I think the most obvious thing is what you just said, Jason, which is you are the front door through the Internet and there is this completely new emergent technology. And where is the same response to ChatGPT that you had to X or that you had to Snapchat or that you had to TikTok? Because if it's going to happen, it's going to happen and then you might as well just go for it. Yeah, build the apps, make them kick ass, make the chat GPT alternative and get it to billions of people yesterday. That would be the most logical game theory thing to do, to build up a pool of users that you will rely on when the DOJ tries to come with some consent decree or whatnot. So this is the time to build up the assets now as aggressively as possible.

[Jason Calacanis]

Yeah. And selling YouTube would be the ultimate. I know that the ad networks you pointed out, free Brug, are connected, but if they distributed, if they spotted.

[David Sacks]

I'll give you something about the ad thing.

[Jason Calacanis]

Can you imagine $500 billion going into Google's coffers in YouTube shares? They would have 500 billion in cash. Chama.

[David Sacks]

I talked to a company, the CEO of a public consumer facing company and this was in the context of some 80, 90 stuff and he said that he and two other CEOs, the three of them, you guys would all know these are very big companies. The three of them combined are particularly large and they said they've had multi year roadmaps to try to build a reasonable set of tools in advertising and it's been impossible. And partly why is that the tools that the big folks offer are so good that they just cannibalize and run over the entire market. And so what they hear from cmos is we would love to advertise on your company, your site, but A, your tools are substandard and B, even though your inventory is cheaper, you just don't give us the same scale and breadth that we get in these other big places. I'm not saying that that's either right or wrong, but through the lens of probably what the DOJ sees is when a lot of these folks write letters to them talking about what they're going through, this is what they're saying. And I suspect that if you could actually have a more fragmented market in some of these key markets, it's going to be a little bit easier for these smaller companies to have a business.

[Jason Calacanis]

Yeah.

[David Sacks]

Now you could say, well tough luck, you tried and you couldn't build it. I get that argument and I, and I think that that at some point that is legitimate. But the problem is if you're public and you're trying to make your company profitable, what do your engineers want to work on? They want to work on consumer facing forward features. And so what always falls off the list? It's the stuff at the end.

[Jason Calacanis]

The ad tech. Yeah.

[David Sacks]

And so anyways, it's this recursive negative loop that a lot of these other companies are in, in the shadow of these big companies that I think is going to cause the DOJ to try to do something.

[Jason Calacanis]

This is a great setup for M and A. It's a great setup for IPOs starting to look like. And this is a multi administration case that's been going right. I think this started under Trump, went into Biden and is now going to continue on to Trump or Harris. So what are your thoughts here, Sachs?

[Chamath Palihapitiya]

Well, in terms of the political environment for M and A next year.

[Jason Calacanis]

Yeah.

[Chamath Palihapitiya]

Yeah. I mean, so obviously it depends which administration's in power. A lot of Democrats, you know, prominent Democrats in tech like Mark Cuban or Reid Hoffman have been making the case that if Kamala is president she's going to be much more hospitable and friendly towards M and A. And they've been saying explicitly that they want Lina Khan fired. Well, in response to that, AOC just came out and said we're going to have a throwdown if you do that. So I don't.

[Jason Calacanis]

Let's go.

[Chamath Palihapitiya]

I would not expect a substantial difference or improvement in the regulatory permissiveness towards M and A if we have a Democratic administration. If you have Trump in office next year, I think that there will be an opening up of M and A. I think the Republicans have their own issues with big tech, but those issues tend to revolve around censorship and bias and search results and LLMs, things like that, as opposed to bigness per se. So I think it will be easier to get M and A done next year if you have a Republican administration.

[Jason Calacanis]

Absolutely. I am going to be printing money in a Trump administration. It is going to be obscene how many M and a deals and IPOs are going to occur. There is such a huge backlog. But I do think the Democrats want to get this moving as well. And I was talking to Reid Hoffman and you and Peter Thiel in the Illuminati meeting and they voted 190 to 2 to replace Lina Khan in the Illuminati meeting. Chamath, why didn't you make the Illuminati meeting last week. I'm shocked that you weren't there.

[David Sacks]

I'm not invited to that.

[Chamath Palihapitiya]

People don't know that you're being facetious, Jason.

[Jason Calacanis]

Oh, really? They don't understand that I'm joking about the Illuminati.

[Chamath Palihapitiya]

They often don't. They often don't.

[Jason Calacanis]

Well, I'm sorry to the low IQ listeners who don't know that the Illuminati is not real.

[David Friedberg]

Oh, now you're insulting the audience.

[Jason Calacanis]

No, I mean consulting the ones who believe there's an Illuminati.

[David Sacks]

He's trying to sell tickets to the Jaders.

[Jason Calacanis]

Sell tickets to the Jaders Ball with Buck Nasty. Zuck Nasty. J Cow is the biggest hater in the tech industry. You ever see the Haters ball, Sacks? I'm not Chappellsha.

[Chamath Palihapitiya]

No, Chamath.

[Jason Calacanis]

It looks like between the time we mentioned it on the pod, it's actually happening here. It is the Jaders Ball happening there. It is. Lena Khan, David Sacks.

[Chamath Palihapitiya]

Wait, why am I there?

[Jason Calacanis]

Well, because you're a headliner. You were organizing. I think you're the host.

[Chamath Palihapitiya]

I'm going to be a keynote. You're the mc, I'm the. Okay. Wow. I'm in the mc There.

[Jason Calacanis]

Look, there's Zuck Nasty. And there's Palmer. Lucky you guys don't know this bit from Chappelle. The Haters ball from Chappelle. Oh, my God. It's the funniest bit on Chabelle's show. It's literally.

[Chamath Palihapitiya]

I mean, I saw a lot of Chappelle Show.

[Jason Calacanis]

I never just show the real picture, Nick. On the Chappelle show, they have all of these pimps who have a yearly convention which is their player Haters.

[David Sacks]

Oh, I've seen this. I've seen it.

[Jason Calacanis]

And all they do is sit there with like a toothpick in and they hate on each other and make fun of each other.

[David Sacks]

I've seen this.

[Jason Calacanis]

It is the funniest bit in the history of the Chappelle Show. All right, let's keep the train moving here. CRV is giving back. Or maybe not. Calling down 275 million from their LPs. Charles River Ventures. Shout out to my pal George Zachary and Greek brother from crv. Historically, they invest in early stage startups. They did Doordash, Airtable, Twitter back in the day. They had two funds that they raised back in 20. $22 billion. Early stage fund and a 500 million growth fund. Sometimes people call that an opportunity fund or a select fund. The New York Times reported CRV is going to give back about half of that 275 million to investors. Or technically probably not. Call it down. The four partners at CRV gave an exclusive to the New York Times. So either getting ahead of this story or maybe, who knows what the motivation here is, but the reason they gave is that the market conditions for late stage have worsened dramatically and that the valuations are still too high. Yes, the rent is too high. And that there aren't any exit options as we just talked about with the administration. No IPOs, no M&A. And that VC map doesn't work in the late stage. So I'll just stop there. There's a bunch of other notes here. Obviously this isn't the first time this has happened. I think Founders Fund cut the size of its eighth fund in half from 1.8 billion to 900 million. They didn't actually give the capital back to VCs like they're saying CRV did here. Again, I'm not certain if that's what's happened or not. They put the extra 900 million into its ninth fund if they decide to raise that, which I'm assuming Founders Fund will. Chamath, you have any thoughts on this? I guess trend. We have two stories here. So I don't know. Peter Thiel. Peter.

[David Sacks]

Peter Thiel did this and he gave back quite a large piece of his fund a couple of years ago and then CRV just did it. I want to make sure I get the citation right. I think it was Thomas Lafont at CO2 who said this. It was really powerful. It made a huge impression on me, which is that the Nasdaq creates about $800 billion of enterprise value a year. And he brought that up in the context of private markets have to exceed that in order for it to be a real viable alternative to just owning public indices. And so if you factor in illiquidity, risk and the duration, you have to probably generate, I don't know, a trillion, $1.2 trillion of enterprise value in private tech every year. That just seems like it's really hard to do. Where is all of that value getting created? So I think that venture needs to go through a phase where it re rationalizes. This is sort of what I said at David's LP day, which is I think that LPs have made a couple of very big mistakes. And I think the biggest mistake that they've made is by mirroring too much money across too many general partners. And I think if you had to redo it a it's probably a lot less money in total. But B, and the example I gave there was instead of giving $50 million to Kraft and $10 million to somebody else, you're better off giving $60 million to Kraft and not even having that other GP because that GP makes everybody's life complicated. They overpay, they miss pay. They're probably not supposed to be a GP in the first place. And so they force returns down. And then when you contrast that again to a public market that is systematically creating $800 billion of enterprise value a year, this is an incredibly tough game and it's getting much, much harder. So I think that if you just take a step back, these are the right things to do because you're much better off having a smaller pool of capital that you can concentrate into the things that matter. You're probably better off having smaller teams versus bigger teams, and you're probably better off trying to forge LP relationships where they're not doing 50 fund investments because it just makes the entire industry lag. Public liquid alternatives. And I think that that's just not good.

[Jason Calacanis]

Peanut butter getting spread a little bit thin there. Any thoughts, Freiberg, on this trend, if we can call it that, or is this like maybe they're reacting right as the market is changing and valuations are getting more reasonable and the exit opportunities are getting more reasonable? It seems like this was the right reaction two years ago, but maybe it's the wrong reaction now. What do you think, Friedberg?

[David Friedberg]

For a venture firm to return capital, they need to have at least one or two big winners. And so if that winner needs to be a 10x or 20x or 30x of the fund, because most of the investments in the fund are not going to work, you need to be able to enter at a reasonable price. And there needs to be enough opportunity relative to the capital trying to invest in that opportunity out there for it to make sense. So in a market where there is excess venture capital, where valuations are at a premium, and where you don't see the exit path, the M and A or the IPO events that make sense, that you can actually realize that model, you should take less capital and make fewer surer investments. And I think that that's what some folks have realized. They don't want to be chasing highly valued, inflated opportunities, and they don't want to be putting capital into tier B or tier C opportunities just for the sake of deploying capital. This is a really interesting moment where you can kind of see who are the the right folks in terms of thinking long term in Silicon Valley, long term in terms of building an investment practice and private venture and maybe who are folks that are trying to build their Aum stack and folks who have done reasonably well, like Founders Fund has probably the most exceptional track record in Silicon Valley as a venture firm. They are very cognizant of the market conditions and I think that they're being very smart. By the way, the other thing I've heard from LPs is they're similarly trying to find more concentrated capital themselves. So they're trying to put more capital to work in fewer managers. And so there's a real wheat from the chaff moment happening in Silicon Valley venture right now. What I think a couple years ago was, hey, everyone's going to go do a startup. A few years ago became everyone's going to go do a venture fund. And now I think the froth that has occurred because of that is being cleared out.

[Jason Calacanis]

And to just explain this math before I get Sachs thoughts on this, if this was a $500 million fund, let's say they were putting $25 million into each. We'll take management fees out of it, $25 million into each opportunity at a billion dollar valuation. They would own two and a half percent, obviously of those firms. They need to get probably a $30 billion power law exit, a 30x acts in order to just return the fund. There'll be some dilution obviously along the way. That's why it's not 20x. And the number of companies that go from A billion to 30 billion per cycle is incredibly low. Uber, Coinbase, Airbnb. It's a really short list, huh? Sachs in recent history, Robin?

[Chamath Palihapitiya]

Yeah, I mean, look, just go back to the CRB thing. You said at the outset of the conversation that this was either a growth fund or an opportunities fund. And that makes a really big difference. Explain please, because, well, an opportunities fund typically exists to back up your winners. In other words, if the venture fund is producing some big winners, the opportunities fund exists to deploy more capital into those into those companies, as opposed to a growth fund, which is you'd be underwriting brand new companies from scratch. Typically, an opportunities fund is limited to companies that you're already an investor in through your venture fund. So that makes a big difference. I mean, if CRV has a billion dollar venture fund and only a $500 million opportunities fund, it may just be the case that they don't need all of that capital to back up the winners. They can do their pro ratas out of the Main fund. So I suspect that that might be what's going on. I actually think this is a pretty good time to have a growth fund. A lot of the. Why? Well, because a lot of the crossover capital has left the ecosystem.

[Jason Calacanis]

Okay. A few years ago, Tigers and that sort of cohort, SoftBank, Masayoshi San.

[Chamath Palihapitiya]

Yeah, well, Tiger and SoftBank are still around, but there are other very large investors, hedge funds and so on, who had come into the ecosystem with billions of dollars a few years ago and now they've left. And some of those funds that you're talking about, like Tiger used to be $10 billion funds, now they're $2 billion funds.

[David Friedberg]

Right.

[Jason Calacanis]

They've been right sized. They're not violently doing, I mean, the, the Tiger deals. My understanding was they weren't joining the board in a lot of the cases and they were outsourcing the diligence and that was a pretty violent pace. I don't know what.

[Chamath Palihapitiya]

Yeah, this is the best time in probably five years to have a growth fund.

[Jason Calacanis]

Interesting.

[Chamath Palihapitiya]

But to your point about the size of the venture fund, the bigger the venture fund, the bigger the winner that you need to make that pay off. Obviously.

[Jason Calacanis]

Yes.

[Chamath Palihapitiya]

And so because of the power law. So to take an example, I don't know, let's say you've got a billion dollar venture fund. Let's say that at IPO you own 10% of whatever that winner is. And because of the power law, your fund performance is really determined by your best outcome. Right?

[Jason Calacanis]

Yep.

[Chamath Palihapitiya]

So in order to take a $1 billion venture fund and say deliver a 3x so 3 billion of returns and your best company, you own 10% of that implies you have a $30 billion winner in that fund. And there are precious few outcomes where you have a $30 billion IPO. Right.

[Jason Calacanis]

Yeah.

[Chamath Palihapitiya]

This doesn't happen very often.

[Jason Calacanis]

Count them on two hands. The last cycle like I just did, you got Uber, you got Robinhood, you got Coinbase, Stripe will eventually come out. You got SpaceX. Well, that was two cycles ago.

[Chamath Palihapitiya]

So I mean, yeah, you're going to need to have a meaningful ownership position in a massive company in order to make a fund that big payoff. The data that I think LPs look at shows that smaller venture funds tend to perform better for this reason. 500 $600 million funds. So yeah, I personally wouldn't want the pressure of a billion dollar venture fund. That would be really hard. As a 5 or $600 billion venture fund, you kind of need to have or want to have like a decacorn outcome to make that a great fundamental. But to have to have a $30 billion plus outcome, it's even more difficult.

[Jason Calacanis]

Moving on. Pew just published some really interesting research on TikTok. If you don't know the Pew study, they've been doing it for decades. It's very well respected and bipartisan or nonpartisan. Four in 10 U.S. adults aged 18 to 29 are now regularly getting their news from TikTok. Here are some charts for you to take a look at. As you can see, the younger generation is really spending a lot of time on TikTok and getting a lot of their news there. I know this because, yeah, I've talked to a bunch of kids about this. And people that use TikTok 52% are regularly getting their news from the platform. And that number has skyrocketed compared to other social platforms. Take a look at this chart. Here's X. 59% of people say they get their news at X. It's really a news platform, so that makes total sense. You look at Facebook, it's 48% right now. Reddit 33%, YouTube 37% in 2024. Instagram 40%. But TikTok 52, up from 22%. So it's no longer just dancing. And this is the reason, I think many people in the government were concerned about the attack vector that the CCP would have in the United States since they still control the company for services like Snapchat, LinkedIn and WhatsApp. And Nextdoor, it's below 20. Below 30% get their news from there. There's your truth social there, Sachs, 57% of people get news there and rumble 48%. So what's your takeaway from this? Just Saks looking at it in this impact that TikTok has. Is this concerning on a national security level, since the algorithm is a black box and you could tweak it if you really wanted to, to really change sentiment. And young people are obviously very impressionable on this platform and they're big users of it.

[Chamath Palihapitiya]

Well, I thought there was other data in this study that should calm people's fears that TikTok would somehow be used as a weapon. So in the same survey you're talking about, 95% of adults that use TikTok say they use it because it's entertaining. So that's the main reason people use it. And only 10% of accounts followed by US adults post content related to political or social issues.

[Jason Calacanis]

Okay, that's posting and the main reason, right?

[Chamath Palihapitiya]

Yeah, but so basically 90% of the accounts that get followed aren't even posting political or social issues. They're there for entertainment. As people watching dance videos. As people watching. I mean, the main thing I use it for is to watch wrestling highlights. So you're a wrestling guy? Yeah, I'm a wrestling fan.

[Jason Calacanis]

What?

[Chamath Palihapitiya]

Yeah.

[Jason Calacanis]

You're into this Kabuki theater of wrestling. This is new information.

[Chamath Palihapitiya]

I'm talking for 20 years. I get my WWE on TikTok. Cause I don't know if you watch the whole. Yeah. Who's your favorite?

[Jason Calacanis]

Are you a Hulk Hogan guy? Are you an undertaker guy? Vince McMahon?

[David Sacks]

I mean, Jimmy Superfly Snuka?

[Jason Calacanis]

Who are you? Andre? The guy is.

[Chamath Palihapitiya]

I know all those names, but I like.

[David Sacks]

I also love the Road Warriors. Ultimate Warrior. I loved. I was a huge wrestling fan. That was the one thing that my dad and I bonded over. We would watch wrestling every Saturday. Sax, did you ever watch the specials on Saturday night? Like the.

[Chamath Palihapitiya]

Oh, yeah.

[David Sacks]

Oh, those were Savage.

[Chamath Palihapitiya]

That was the era of Hulk Hogan, for sure. Saturday night's main event, Randy Savage. Savage, yeah.

[David Sacks]

Savage is great. Savage, yeah.

[Chamath Palihapitiya]

I mean, look, my all time favorite was Stone Cold Steve Austin.

[David Sacks]

Stone Cold is great.

[Chamath Palihapitiya]

I marked out the hardest for Austin.

[David Sacks]

He was anti woke before anti woke became a thing.

[Chamath Palihapitiya]

Totally.

[Jason Calacanis]

This is crazy. You guys are into wrestling?

[David Sacks]

I love wrestling.

[Chamath Palihapitiya]

I'd say Flair Rick is number two for me.

[Jason Calacanis]

Wait, wait, hold on. Have you gone to a wrestling event?

[David Sacks]

Did you only like the WWE or did you like the NWA as well?

[Chamath Palihapitiya]

They had their moments. When Hogan turned heel and joined, was it the nwo? That was like a big moment.

[Jason Calacanis]

I'm a big Andy Kaufman wrestling fan. That was my only interest is when Andy Kaufman came in there and trolled them.

[Chamath Palihapitiya]

Andy Kaufman, Yeah. Well, that was like in the 1970s, wasn't it?

[Jason Calacanis]

It was the late 80s. Remember he was on David Letterman with Jerry Waller and he comes to a wrestling match. Sax. In the south, that's where I grew.

[Chamath Palihapitiya]

Up, in my hometown of Memphis.

[Jason Calacanis]

Right. So he goes there and he gets in the ring and he says, all of you rednecks, I want to show you some new inventions. This is called soap. And this is called the washcloth. And you use it to clean yourself. And he's like just mocking the southern accent. And Jerry Lawler, I remember Jerry Lawler smacks him. And on Letterman, oh, it's the greatest.

[Chamath Palihapitiya]

It was a huge deal. I mean, where I grew up, because that. This was like on the local news.

[Jason Calacanis]

Yes.

[Chamath Palihapitiya]

When I grew up in Memphis, there was no professional sports teams. Okay. All we had was the Memphis State basketball and wrestling. Every Monday night, the midsouth Coliseum. That was it. That was like professional sports in Memphis.

[Jason Calacanis]

You also had probably like some state fairs or, you know, like best goats, best sheep or something.

[Chamath Palihapitiya]

Lawler was so popular that he could have been elected mayor. In fact, I think there was talk at one point of him becoming mayor.

[David Sacks]

Wow.

[Jason Calacanis]

I mean, the Intergender champion, Andy Kaufman.

[David Sacks]

Did you. Did you guys like Mouth of the South?

[Chamath Palihapitiya]

Jimmy Hart? Oh, yeah, of course. Yeah. He was amazing. He was like the main heel manager for a while.

[David Sacks]

Yeah.

[Jason Calacanis]

Okay.

[Chamath Palihapitiya]

This is before the WWE took over. I guess it was called WWF back then. But there were all these little fiefdoms and kingdoms and Mid south wrestling was like one of those kingdoms and Lawler was like the king of it. And then you had all these guys come in and out and wrestle.

[Jason Calacanis]

Friedberg, you ever watch wrestling and what do you think of this TikTok survey?

[David Friedberg]

I don't watch wrestling.

[Jason Calacanis]

Okay, very good. And TikTok survey, anything worry you? No. Any thoughts?

[David Friedberg]

Looks like they gathered some reasonable data.

[Jason Calacanis]

Okay, there you go. There's your hard hitting hot.

[Chamath Palihapitiya]

My point was that it's mostly an entertainment app where people go to watch dance videos, wrestling clips, style influencers and so on. And I think that this idea that it's somehow a propaganda tool around programming our youth, I think that's a moral panic that's been exaggerated.

[David Sacks]

What do you think the odds are that TikTok is hacked to allow you to passively listen even when the app is not being used?

[David Friedberg]

Zero.

[David Sacks]

You think it's definitively zero?

[David Friedberg]

No, like 5%. I think that's very unlikely. Yeah, because. So someone said that that was. That was a. There was some code that enabled that in the early version of the app. And then some other people audited it and they said they did not find evidence that there was any technology. And Apple's got a very good audit system for this.

[David Sacks]

Did those same people audit WhatsApp and then it turned out that it was passively listening? Yeah.

[David Friedberg]

Does WhatsApp passively listen?

[David Sacks]

Yeah, it's one of the most well known breaches.

[David Friedberg]

Well, maybe they do. Maybe It's. Maybe.

[Jason Calacanis]

I'm 100% certain that the CCP is using it because they. These people have tracked already journalists using it. So if they've already done it, it's 100%. I don't know about the passive listening, but any thoughts on 50% plus of young people getting their news here? Chamath, Any news on that? I mean, obviously we don't have evidence that it's being used currently to manipulate people, but it's over 50% of young people are now getting their news there or say they're getting their news there.

[Chamath Palihapitiya]

I met more than 50% of young people are getting their news from podcasts. And those podcasts get chopped up and clipped and then people watch them on TikTok.

[Jason Calacanis]

Yeah, for sure.

[Chamath Palihapitiya]

I bet that's how it's happening.

[Jason Calacanis]

There are a lot of people who think this show is a TikTok show and they don't know it's a big show.

[David Sacks]

Yeah, we'll have to prepare for a brave new world in the following way. There was an article, I think it was in the Wall Street Journal that said that Russia and Iran were paying low level street criminals to create chaos. Okay. And I, and I read that article and I thought, okay, well, what does this mean? If you actually extrapolate this, which is that the hot wars are very complicated, not worth doing. These disruptive fissures are the better way to sow chaos. And it occurred to me then that tying this back to something that we saw before, it does make sense for a lot of folks to sponsor a lot of long tail content that say a lot of different things. I think that that just is pretty obvious. And so I think that if you put these two ideas together, it stands to reason that a lot of people will be paying influencers a lot of money to create all kinds of content that is specific to a perspective that they have. And then on top of that, if you can algorithmically amplify one over the other, you know you're going to have issues. Is it the biggest issue in the world? Probably not.

[Jason Calacanis]

Swing an election, but it would cause chaos. And we just had the Southern district of New York target that Russian Russia today was giving $10 million to four podcasters didn't even know they were getting paid by the Russians. They just picked them because they liked their opinions and they gave them 100,000 an episode to promote pro Russian positions.

[Chamath Palihapitiya]

If the Russians were actually doing it, it's the stupidest use of $10 million ever, because great use. Those podcasters already had their own channels. They're already putting out lots of content. And this other content is a drop in the bucket. I think, Jamath, the issue with what you're saying is just there is so much content out there already. People create it for free. People create it because they have a career in it. There's a whole long tail of influencers. There is so much content out there already through Podcasts, through websites, it's all being chopped up. That trying to do it as some sort of disinformation strategy, I think is very hard to do because it's just when there's billions and billions of impressions, any effort that you try to engineer ends up just being a drop in the bucket.

[Jason Calacanis]

I agree with you. Yeah, it's definitely a drop in the bucket.

[Chamath Palihapitiya]

It makes sense in theory, but it makes sense in theory. It's very hard to do in practice.

[Jason Calacanis]

Yeah. The goal is not to win any specific argument. It's to create mistrust in the entire news ecosystem, in the information system, so that people give up trying to figure out what the truth is. And that's what the Russians, I think.

[Chamath Palihapitiya]

The mainstream media is doing that on their own. The mainstream media lies so much. That's what's creating the distrust, as are.

[Jason Calacanis]

The Russians paying off podcasters. Okay, let's.

[Chamath Palihapitiya]

How is $10 million going to accomplish anything if that story is even true? Very simple.

[Jason Calacanis]

Great question. Great question. May I answer it?

[Chamath Palihapitiya]

Conspiracy theory.

[Jason Calacanis]

Not a conspiracy there at all. These were very low level, mid tier, B, C, D podcasters. If you give them $100,000 per episode, they can spend more money buying cameras, promoting their shows, hiring people. So you're just finding people and dropping money on their head so they can do more of the same. So it's a very smart strategy. In fact, I think.

[Chamath Palihapitiya]

I think it's the stupidest thing I've ever heard. They took podcasters who are already successful and paid them to release content through a less watched channel. That's the question.

[Jason Calacanis]

Yes, it was. It was just more about getting the money to produce more content. And then they. In the.

[Chamath Palihapitiya]

These guys are allegedly. These guys are already live streaming, like 24, 7.

[Jason Calacanis]

Oh, there's a puppy. Oh, here he goes. Freeburg trying to win more people over with his puppy love. Unbelievable. This guy is absolutely ridiculous. Unbelievable. All right, listen, let me give Sachs some red meat here. He got his little steak tata with my Russia Today story. You got your little amuse bouge, and now I give you your tomahawk. You ready, Sachs? You want your tomahawk? You want it rare? Here it comes. 2024 election update. The betting markets and polling indicate a really tight race, but maybe Trump is surging this week. Poly Market, which is a betting market, has Trump 55 to 45 versus Kamala Kalshi. Another betting market, 5,000, 248. Trump, Bovada and points Bet. Those are offshore booking. And Polymarket is also offshore 52, 48, TRUMP Nate Silver, friend of the pod. His algorithm has it 5347. Kamala, real clear polling. That's an algorithm has Kamala with a two point lead. New York Times, Sienna Kamala with a three point lead. Reuters IPSO pretty well trusted three point lead for Kamala. Npr, pbs Maris poll has Kamala with a two point lead. So sport books and betting markets are favoring Trump slightly while the polls are slightly favoring Kamala Saks. I sliced it up nice for you. You got nice 10 slices of meat here. Which slice you going for?

[Chamath Palihapitiya]

Well, I think your recitation of the polls there kind of mixes up a couple of things. There's popular vote polls and then there's Electoral College, which goes state by state. If you look at pretty much now all the main pollsters, you look at Tony Fabrizio, you look at Real Clear Politics, they're now showing that Trump is winning the Electoral College. Right now he is up in almost every swing state, including I think Michigan, which is pretty surprising. Clearly, there's been a huge swing towards Trump over the last week or two. And look, there's still 25 days to go, so anything can happen. I don't want to overstate this, but yeah, this is a good example right here showing that Trump, I think the.

[David Sacks]

Electorate colleges is 296 to 242.

[Jason Calacanis]

What is Fabricio?

[Chamath Palihapitiya]

He's just a Republican pollster, but his accuracy is pretty high.

[Jason Calacanis]

I've never heard of it. Fabricio.

[Chamath Palihapitiya]

Well, another guy who I think is more neutral is Mark Halperin, who is a pundit who has been very accurate this election cycle. Remember, he's the one who broke the scoop that Biden would be replaced by Harris. And he even said exactly when it would happen and he predicted it down to the day. He was exactly right about that. And if you follow his account, he is now saying that both Republican and Democrat insiders that he talks to are both saying the same thing, which is their internals are now showing Trump ahead in every swing state or almost every swing state. And things seem to be breaking Trump's way right now. Again, there's 25 days left. But if you're wondering why is Harris all of a sudden doing interviews, it's because their internals started showing that she was in trouble so they decided to get her out more.

[Jason Calacanis]

Or is it the other way? Is it that her Howard Stern interviews or whatever are causing her to lose votes?

[Chamath Palihapitiya]

Well, yeah, exactly. Well, so you know, which one is.

[Jason Calacanis]

It, do you think? Because I don't know When I don't have the dates of all these polls versus that.

[Chamath Palihapitiya]

No, I think it's, it's what I predicted a couple of months ago. It's the doom loop. So what I said two months ago is that if Harris gets behind, she's going to have to abandon this sort of basement strategy of not doing interviews. She's going to have to start doing interviews. The problem is she's not good at interviews. And if she does more interviews, she's going to fall further behind in the polls and it could cause a doom loop. So that's where we appear to be right now. I said that on August 30th.

[Jason Calacanis]

Okay, Chamath, your thoughts?

[David Sacks]

I think that Donald Trump has basically stuck to his strategy, which is he is a generational retail politician. I just heard parts of what he did with Andrew Schultz, another great sort of podcast. I think David's right that the editing and the massaging of the Kamala Harris talking points are galvanizing the people that have already decided and turning off the people that have already decided to vote for Trump. And she's losing the folks in the middle. And so this is what's causing her to have to be out there and she's going to have to deliver a very crisp message. And I think that right now it's been a little bit lacking, which is why you're seeing the polls, at least the electoral college, which is really what matters at this point, turn Trump. So she's going to have a bit of an uphill fight between here and November. The other thing I'll say is that if you've seen what's happening in the appellate court, it's not clear whether the Trump case is going to get overturned before the election. But if that does, that could be very meaningful momentum for him. And then I think the third thing is that we should now buckle in because if the last two elections are any guide, there are going to be a bunch of spanners in the works between now and November.

[Jason Calacanis]

Wait, what did you say? Spanners?

[David Sacks]

Spanners in the works. Yeah.

[Jason Calacanis]

What does it mean?

[David Sacks]

What do you call it? Wrench in the system?

[Jason Calacanis]

You mean like an October surprise? You mean like some crazy turn of events? Okay, Friedberg, any thoughts here? Would you like to Rorschach test this and see what you want in the numbers or do you have some objective thoughts here? What, what's your, what's your take? You know, there's a polling data or. Yeah. Where we're at in the election, you pretty open ended here. You can look at the. You can make a note on overall what you see between the betting markets and the polls and that disparity. You could just talk generally about where you think we are. You could talk about Kamala on Howard Stern and doing a bunch of interviews with friendlies. Where are you at right now?

[David Friedberg]

I didn't see her interviews.

[Jason Calacanis]

Okay.

[David Friedberg]

I saw some excerpts on Twitter.

[Chamath Palihapitiya]

Oh, boy.

[David Friedberg]

Yeah.

[Chamath Palihapitiya]

Let me just follow up on a point Chamath made. Chamath said that she had to be crisp. If you look at any of these interviews, they're the opposite of crisp. She's asked softball questions by like Stephen Colbert saying, why are you running for president? How are you different than Joe Biden?

[Jason Calacanis]

Yeah.

[Chamath Palihapitiya]

And she doesn't have good answers. She starts free associating. She gives these very long winded answers that don't go anywhere. She says she can't think of a single way she's different than Joe Biden. When pushed on that. It's very strange. These are.

[Jason Calacanis]

She definitely did the most favored shows. I wish she would do some challenging shows. I think she's got to do Joe Rogan all in. And what would be another good podcast for her? Duchema? If she really wanted to do the adversarial thing or something more.

[Chamath Palihapitiya]

Why don't you do an adversarial?

[David Friedberg]

Why should I do an adversarial? Just come to all in. Come and have a conversation.

[Jason Calacanis]

Come and have a normal conversation here. Yeah. No, I'm just thinking, like, it seems like sex.

[David Friedberg]

If she comes and has a. Has a conversation, you'll be respectful.

[Chamath Palihapitiya]

Yeah. This whole idea that I didn't treat Cuban respectfully is nonsense. Just watch the tape.

[David Friedberg]

I don't think he thought that.

[Chamath Palihapitiya]

No, I know somebody. Somebody asserted that.

[Jason Calacanis]

No, I mean, if you look back on every single presidential related one we did here, they were all respectful and they were all conversations. I think the Cuban one dipped because of both of you into a bit more of a debate. And it was a lot more crossover than the other ones I wanted.

[David Friedberg]

That's what you wanted.

[Chamath Palihapitiya]

Referring back to him.

[David Friedberg]

He likes to come out. He likes to do his thing. That's exactly what I wanted.

[Jason Calacanis]

If you look at all the other ones, I'm trying to think of a moment where if you look at the other. Dean B. Phillips, Chris Christie, Vivek.

[David Sacks]

Boring. Gotta go. Love you guys.

[Jason Calacanis]

All right, this has been another amazing episode of the awesome all in podcast. Episode 199. Make sure you go to all in.com meetups. Make sure if you're starting a company you go to Founder University if you're an engineer what are you doing? Please go to I'm doing whatever the I please. David Sacks. Make sure you go to super good Glue AI if you're an engineer and if you like potatoes go to a hollow.com and order your potatoes pre order a subscription.

[David Friedberg]

I mean if we're doing let's sell.

[Jason Calacanis]

Some Super Gu off. 80908090 go to 8090 and 89 control. We'll see everybody next time on the all in love. Bye bye.

[Chamath Palihapitiya]

We'll let your winners ride Rain Man.

[Jason Calacanis]

David.

[Chamath Palihapitiya]

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

[Jason Calacanis]

Love you queen of K.

[Chamath Palihapitiya]

We should.

[David Sacks]

All just get a room and just have one big huge orgy because they're all just useless. It's like this like sexual tension that they just need to release somehow what.

[Chamath Palihapitiya]

You'Re about be wet your feet.

[Jason Calacanis]

We need to get merchies. Are.