Michael Kovnat (5:08)

Yeah, it's definitely weird to watch, especially as a reporter covering these companies. And I can't imagine, I remember being in the audience at one of Facebook's developer conferences hearing Zuckerberg talk about how we should build bridges, not walls or something like that while Trump was being elected. And now, I mean look, a lot of people did have shifts one way or the other over the eight years, but now, just like being Trump fan number one on Rogan. But that being said, here's the counterpoint. It's working out for them. It really is.

Sagar Enjeti (5:34)

It is working out for them.

Michael Kovnat (5:35)

Throughout all this flip flopping they've maybe figured out that politicians in power just wanna hear you say that you're with them and they're the most valuable companies in the world.

Sagar Enjeti (5:46)

I think that's absolutely true for Trump. I think what I'm just saying is that they're losing genuine democratic trust. Like, I mean one thing that Zuckerberg. I guess I'll return to this. Do you remember Obama? I think it was 2012, State of the Union and he's like, we're the nation of Facebook, of Google. And America was like, yeah, we're the nation of Facebook and Google. There was a lot of trust, man. People loved Facebook, Google, like the Amazon, I mean they were held up. I remember at one point Amazon had some 90s, 90% type approval rating by the American consumer. The most beloved technology brand in the entire country. There was a sense that they were not only our best and their brightest, the juggernaut of our economy, but in the interim by, in the way that I think that they've handled their politics, I don't dispute that they won't get the tax, whatever treatment that they want under Donald Trump. I'm just thinking about, I'm taking them seriously. All of them tell us we're cent, we're going to be a century old company, we're going to the moon. What we've done so far is nothing. You know, listen to Zuckerberg and take him seriously. When he seriously believes that the most important work he's ever done is today on AI, on meta, like the Metaverse and all of that. Look at the way Google, look at the capex these guys have on AI, they tens of billions, right? I mean what was it, 75 billion last quarter on AI spending that I just read in the, in the Journal. So like in, in their minds, they're making a century long bet for the future. And I don't think that a great company should conduct itself this way. And you know, the, the way that I can compare it to is Wall street, because, Alex, you live in New York and you've covered the bankers and then what? Wall street has been a juggernaut institution for over a century and they have well developed norms and ways that they handle both parties. They have ambassadors. Yes, they're shuffling. And Jamie Dimon occasionally makes a fool out of himself a little bit. Although I'm totally with him on the Zoom thing. Can I say that I absolutely loved his.

Michael Kovnat (7:47)

Yeah. We played it on a recent Friday podcast. Did you speech about Zoom? It's amazing.

Sagar Enjeti (7:51)

So good.

Michael Kovnat (7:52)

I mean, I said it. This, this is what I said. I said like, basically, if, you know, I believe that workers should have flexibility, like if you need to stay, work from home, stay with your sick kid, you should be able to do that without having to fight your manager. But what Jamie said was actually like, objectively hilarious.

Sagar Enjeti (8:05)

I almost, I almost have an age bias on this where I think everyone under 30 should have to go into work. And I'm. Maybe you. Did you ever go to the BuzzFeed offices? Were you in person with.

Michael Kovnat (8:16)

Yeah, I did. I. For me, actually. So I also, I never got a journalism degree, so for me, I freelanced and then first I was in sales, then I freelanced and worked my way into a staff job at newsrooms because I needed to learn from colleagues and editors in person. And I think you're right about there's, there is. And this is something that diamond pointed out as well. There's something about young people being in the office that if you're not there, you are losing out on a big development moment for your career. Without a doubt.

Sagar Enjeti (8:42)

I could not agree more. That actually is the part of his rant which spoke to me the most. You know, I'm 30, 33 now, so it's like, look, you know, I've made plenty of friends and I, you know, we're more established in our careers. We can just reach out to people and meet with them. But there is something to be sad about the office. When you're 22, you don't know anybody else, you know your college friends, that's it. And you expand, you create a professional network. You learn, you all grow together. It's really fun. You become a cohort, almost like a mini family. And you, you'll introduce people through them. So I do think that's something. If you're 22 and you're starting out, my number one advice for you, do not take a remote, get in the office. And especially if you're trying to do a job like you and I had, the newsroom is one of the best places in the world to grow up. Like, it's so fast paced, it's so fun. You absorb so much through osmosis. You learn a lot from your bosses, you know, by defin mission. It's like an open environment which is very reactive. It is, it's just one of the most exciting places to be. But returning to what I was saying is if when I Compare the technology CEOs in the way that they're handling everything, it feels as if it's unmoored from a sense of like who they are and what they're trying to be. Whereas when I compare them to the Wall street bankers, the hedge funders and all of that, they have well oiled machines, networks, norms, principles, et cetera in how they deal with politics, with principles they're wired in as opposed to being so reactive in the public. I just don't really believe that Jamie Dimon, who's been on the political scene since Barack Obama, now I'm a central figure in American politics, he would just never have the heel turns that Mark Zuckerberg has had in just half the amount of time in the last eight years. So maybe, I hope this is coming across.

Michael Kovnat (10:28)

No, it is, it's definitely coming across. And you know, as we're talking about this, I think the real question that comes to mind is, okay, so it doesn't look like they're suffering too much. They are flip flopping a little bit and that is hurting their image a little bit and is, you know, sort of maybe detracting from their ability to be great American companies. I think, you know, the thing that a lot of people are thinking now is we've seen how intensely they've gone toward Trump. And that's maybe the real question is, and you mentioned this, I think in your reaction right after the inauguration. This is the United States of America. The political winds change. You know, at one point Trump can never be the president. Then Trump is the president. Trump won't lose. And then Trump loses. Cuz, you know, Covid happens and whatever people rejected his version of leadership, January 6th happens. There's no way Trump will sniff the White House again. He is, he's the president now. And then now it looks like, all right, he's gonna leave and there'll be eight years of J.D. vance, but we don't know that. And things change quickly. And it's been interesting the magnitude with which these leaders have gone towards Trump, the fact that Bezos stepped in and blocked the Kamala Harris endorsement in the Washington Post. That Zuckerberg, you know, now is three hours on Rogan talking about how the Biden administration yelled at him. And he's really upset. Sundar doesn't say anything, but, you know, he shows up at the inauguration, he's there, and he very hesitantly did anything political beforehand and talked about how disappointed he was about the election results after 2016. Now they've also fully gone towards Trump. I think this was your point. The political world's winds might shift again, and that could leave them exposed.

Sagar Enjeti (12:01)

Yeah, yeah, that's what I mean. Because not only do they not have credibility with liberals and all of that, it's just. I don't believe you anymore. And there's something to that which is really difficult, you know, for. For people like us who not only do coverage like, I'm just not gonna believe a word that they ever say. It's just. And maybe I shouldn't have ever. But, you know, I've read a lot about these folks. I even gotten to meet some of them, which is kind of interesting. And there's just a sliminess that I'm now feeling at this point where I'm like, ah, well, you know when you give a whole speech and you bet your whole company behind lean in, like Zuckerberg, I think I texted this to you.

Michael Kovnat (12:41)

Oh, yeah.

Sagar Enjeti (12:42)

It's like, dude, like, you hired Sheryl Sandberg. And then he was talking about feminized corporate culture. I'm like, you are lit. Like, outside of Cheryl, you are more responsible for that than any individual in the United States. There's. There's just the cognitive dissonance on that is crazy. And then I remember how much he used to hold her up as the icon of the company and backed all these. This lean in stuff, which, I mean, look, I've been against all that crap from the beginning, but my point is, is that it's just surreal to watch it. So then, like I've said in my political analysis, the winds of political change in America happening dizzyingly, and part of the problem is that we always have temporary amnesia. And so I give this example. You know, it is February of 2025 when you and I are recording this. Well, let's take it back to the last time a Republican won the popular vote. And let's say It's February of 2005. What are my narratives politically? America's a Christian country. Get over it. We will never see gay marriage in this country. Abortion will be over soon. We are neoconservatives. We're. We're into nation building. Iraq will be a great Democratic experiment. The American people want to be safe. 2006, the Republicans get blown out in the midterm elections. It happens in a span of one year. Iraq goes south. Hurricane Katrina is a disaster. Privatization of Social Security. Now Nancy Pelosi is the speaker of the House. Barack Obama, four years later, wins the state of Indiana and Ohio and North Carolina. All right, so do we see how quickly things in this country can change? Things can go south, and not even in 12 months. Joe Biden, his presidency fell off a cliff in October of 2021. That was the first day that his approval rating switched from positive to negative. So, you know, it feels like quickly and, you know, in the grand scheme, it kind of is. That's nine months. Like, we still have a long way to go to October. So that's part of what my problem is with the tech guys is what am I going to be hearing you say two years from now? Like, are we just going to. Yo, yo. In between all of this? And they claim that they've learned their lesson, but I just don't believe it because of so many different turns that they've made in the last 10 years.

Michael Kovnat (15:00)

You know, yeah, they'll shift again. And also, like, Zuckerberg. Yeah, Zuckerberg. Comments like, I understand if you want to take a, you know, if you want a break from, you know, the previous political philosophy you had, but to talk about how your workplace is too feminized, it's just like, what. What are you saying? It just. Yeah, just whatever. Altogether. That's kind of rude. Let's talk about the person who we think has real genuine political feeling here, and that's Elon. I'm gonna run this episode back to back with an episode that we had with Chris Hayes. And he brought up the fact that Musk and I think a lot of folks on the left believe this is flying too close to the sun. Actually, I don't even think it matters politically. Like, there's clear. It's clearly the case that Musk is taking a major risk here by being so close to Trump. A, you know, he could potentially upset Trump and fall out of favor and incur the wrath on that front. We've seen that happen before. B, you just think about the fact that, again, the political Winds will shift again. The next administration that comes in that's not aligned with Trump may say, hey, let's take a look at. Let's. Let's doge those Space X contracts or why are we buying Teslas?

Sagar Enjeti (16:08)

Yeah. If you're. Whoever. If you're Gavin Newsom administration, you're done. Like, it's, it's. I'm going to use the exact executive order precedent, and all those contracts are getting canceled. This is not an endorsement, by the way. I'm just saying that's the world that we live in now.

Michael Kovnat (16:22)

This is politics.

Sagar Enjeti (16:23)

Yeah.

Michael Kovnat (16:23)

So how do you think this goes for Elon?

Sagar Enjeti (16:25)

I really don't know. I'll be honest. I didn't even think we would ever get here. I already. Where we are is crazy. I really did not think that Trump would ever allow someone like Elon to upstage him. I guess my only theory of it is that Trump is both mesmerized and amazed by Elon's ability to attract the same level of detraction and media capture that he does, and that this is all a bunch of stuff that Trump wants anyways. So he would rather Elon absorb that. Elon, I think Trump also. No. I've covered Trump for a long time. I've observed him a lot, and I've, you know, and the thing is, and even my own interactions with him, I feel like the thing he cares the most about is attention. And so Elon is a lot like Trump in that he is a magnet of attention, a driver of conversation. I think Trump has really come to appreciate Elon's ability to shape narratives in exactly whichever direction that he wants. But, I mean, it's objectively true that he is flying very close to the sun. And there's a lot of risk for Elon politically because, you know, Project 2025 is a good example. Project 2025, if we're all being honest, basically had the blessing of the Trump administration. And a lot of people are going into Trump and it was the def. It was the plan. Let's. Okay, again, we can. The election's over. We can all admit it. It's obviously, it was the plan all along. Well, when Trump realized that it was unpopular, he denounced it and then said that nobody is ever going to work for him again. Whoever worked for Project. So he's, you know, very quickly would be willing to come out and to denounce anybody with attach to something that becomes unpopular. And that's another thing where I would say to Elon and the rest of the Doge crew, And all of that is, listen, guys, like, you know, I, you know, even if I were to respect some of the work you guys are doing and all that, you just got to be careful the way that you're taking all the credit on this, because if it goes south, 100% of it's going to be on you. It's a very non Washington way of operating. So, yes, he absolutely setting himself up for a lot of risks, both in the future and not. So I guess all I can think of with Elon is I think he just believes it. It's pretty clear. Like he took the red pill a few years ago, much later than most, I guess just went full on the way that he does with everything. You know, if you read some biographies of Elon, this is how he's halfway.

Michael Kovnat (18:58)

He's all in.

Sagar Enjeti (18:59)

Just when he's in, he's in. This is all that he does. But the risk is also, you know, having read some of that, is he does tend to have falling outs with almost everybody who he's involved with, except for people like Peter Thiel and a few others. But even they, they bet on him, but they don't directly work with him. In terms of the people who actually directly work with him, there's not a very good track record. So I have no idea how it will go because it's already gone much farther than, than I ever thought it would. But I see big risks for Elon. I see huge existential risks to his companies to, I mean, to himself, his reputation. I mean, I don't know. I mean, Alex, you tell me, because you've actually written about these companies. Like, if you're a Democratic administration and you're the board of Tesla, like, are you keeping Elon, like, Like, is it really. Is that even he can't. I mean, we're talking about a, you know, what's the market cap of Tesla and all that? The existential risk of him to the, to the stock at this point, it's just. It would be outrageous, enormous. Like, it would literally be almost a company killing.

Michael Kovnat (20:05)

Eventually I'm gonna revise. I might still keep him. I mean, it is a story stock, but it's trading multiples, many multiples of Ford because Elon is there. And it was, you know, before the election, it was running up after the election, basically almost doubled. Right? I mean, just the increase is crazy. But the thing is, the story can reverse. Right now, all that upside becomes liability. But the question is where the floor is. And the floor could be much lower than it was before. The election, because you have a lot of liberal voters who now have these bumper stickers on their Teslas. I bought it before I knew he was an asshole. You have a lot of Tesla dealerships in blue cities. And, okay, you have the cybertruck, and that is gonna be a symbol of being conservative and being pro Trump until Trump or if and when Trump turns on Elon. So it's very, very big risk.

Sagar Enjeti (20:56)

I totally agree. I actually think that's the biggest risk. And also considering how that's the literal vast majority.

Michael Kovnat (21:01)

That's it.

Sagar Enjeti (21:02)

Of his net worth, so it's like, that's everything. So I don't know. I mean, I remember. Remember when Elon, a few years ago, did that poll, and he's like, should I keep doing Twitter, or should I go back to CEO of Tesla? I was like, bro, CEO of Tesla? I was like, I'm a Tesla shareholder. I'm looking out for myself, man.

Michael Kovnat (21:17)

Yep. Well, but then he did hire a CEO of Twitter, but we all know that he's still calling the shots, right? So I just keep laughing at the scene that happened where his. His kid, X. I think he told Trump to shut his mouth up and then picked his nose and pushed it on the Resolute desk. It's like, I just can't imagine. I could never imagine Trump allowing that scene to play out without repercussions with maybe anybody else but Elon.

Sagar Enjeti (21:43)

I agree. And that's part of why the relationship dynamic is just odd.

Michael Kovnat (21:48)

So I don't know.

Sagar Enjeti (21:49)

If I was working for Trump, I'd be furious, by the way. I mean, I was. If his press secretary or somebody like this. I want to answer questions about somebody else. I want to answer questions about people who report to me who are controllable. So I don't know. But like I said, it's already gone so much farther than I ever thought. So I really have no idea where this goes.

Michael Kovnat (22:06)

The narrative that will come up if this goes longer is that Trump is old and Elon is basically controlling him, and he's really the president, which I.

Sagar Enjeti (22:13)

Think is a terrible narrative for Trump. I mean, this is where the liberals have a point. Like, well, okay, so the liberals are overstating it, and they're like, nobody voted for Elon. I'm like, well, I don't think that's entirely true. I didn't know.

Michael Kovnat (22:25)

As close as they were.

Sagar Enjeti (22:26)

Yeah, it's like, it was pretty close. Like, he. He was on the stage. He was at the election party. He was doing the spaces. You know, he was on Rogan making his case the day before the, like looking directly into the camera. So I don't think it's true a hundred percent. Nobody voted for Elon. I think a lot of people did actually vote and are excited about Doge, but I mean, nobody voted for him to have unilateral control. And that is where the risk comes with Trump is if Elon, I mean, I'm going back to Katrina, right? Which was, and this always happens. There's going to. There will be a natural disaster. I don't wish it. We know that every presidency, there will be a disaster. So let's forward, Alex, this horrible crash which happened here in Washington. Let's forward 18 months. Even if, as you and I know, politically, even if the Doge firings had nothing to do with it, politically, that's going to be a real tough thing to crawl out of. And so you and I could see exactly like, if anything, the administration is lucky that happened in the first week because it's obviously had nothing to do with them. But let's say 18 months later, I mean, again, using the Katrina example, Bush was crucified for bad FEMA response. The Biden people, remember, they were hit hard for the North Carolina floods and their lack of response. So we, I can just, I can see it on the horizon. Like, let's say there's a hurricane and currently Doge is going after Noah, the National Oceanic Administrator, the guys who fly those planes into hurricanes. It's like, man, you just need one thing. And if it don't do it right, even if it's not your fault, they'll hang it on you. And they will. I mean, especially with the media now outlined against you with the Democrats. Like, I, I would not want to be in that position.

Michael Kovnat (24:09)

Okay, I have one more question for you about Silicon Valley and the Trump administration. And then we're going to move on to AI. This is a question that I have that's been sitting with me and it's like, nice to have somebody who knows Washington to field it. How influential have the all in folks been in this administration? And we also know that Marc Andreessen spends a lot of time talking about how involved he is. So how involved is he actually?

Sagar Enjeti (24:34)

Well, okay, so no offense to the crew of all in, but it's David and then the rest of them. So, like, David is obviously very influential. But, you know, this is a great lesson because I know there are tech people who are listening. David has always been political. David produced. Thank you for smoking. Remember, David was part of the Stanford Review. He's always had an interest in Washington and in politics for years. For he was interested. And I've known. I got to know David over the chase of Boudin, recall. I started interviewing him even, I think, before all in, because he was starting to get involved in these elections in San Francisco and others. So the thing is, is that David swims and knows the world of politics very, very expertly. And by the way, I have zero inside information, so I'm not speaking from any place of this is just purely me analytically. But remember, he really bet the house on becoming somewhat of. Of like an expert. If his detractors would say he's an idiot, whatever on Ukraine, an activist, can we say? Well, he bet the house becoming an activist on Ukraine. And I would say he is probably one of the single most influential outside voices on the Ukraine conflict in all of the United States. First because of his influence on Musk originally, but then also for his involvement, the donation, the fundraiser for Donald Trump, and now as the AI Crypto czar. So when you put all of that together, he really used his ability to both post his public profile and his past political experience to bring it together to be, in my opinion, one of the most powerful people we've ever seen in Washington, who is a representative of Silicon Valley. Marc Andreessen, I also would say, is actually quite similar. Um, Mark, even though being somebody who's been involved in tech for his entire life, literally since he invented Netscape. But in that period, as you know, Alex, he always has been interested in politics, as in especially the last decade from the Trump administration. He's constantly been tweeting, not only about politics, but about a lot of the books and theories that he has about that. And his involvement more recently in Washington predates the Trump victory and really was like, laying the groundwork for his involvement in his theories of government. So I definitely don't think that either of those two narratives are underplayed. And look, no offense again to the all in guys I got to meet, meet them during the inauguration and all of that, but I just think David is far more influential. Of course, Chamath and the rest of those guys, they went to the inaugural ceremony, and to the extent that those guys have quote, unquote, and in, it's because they're. They have the popular podcast. But I would compare them more to, like, media influential as opposed to genuinely politically influential, which David now is, as the literal AI Cryptos are in one of the most transitional tech periods in, like, modern history.

Michael Kovnat (27:31)

Yeah, all right. So on this show, we've been talking a lot about Deep Seek from a techno, from a technology standpoint. I'm actually interested to hear what the rise of Chinese AI is going to do to US China relations and the attempts to regulate or the attempts to bolster the United States AI industry. So why don't we do that when we come back from the break right after this?

Sagar Enjeti (27:53)

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Michael Kovnat (28:06)

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Sagar Enjeti (28:13)

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Michael Kovnat (28:16)

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Sagar Enjeti (28:18)

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Michael Kovnat (28:25)

And we're back here on Big Technology Podcast with Sagar and Jetty. He's the host of Breaking Points. You can find it on your podcast app of Choice or on YouTube. So, Saga, I'm curious. You've been dissecting what Deepseek means for US Global AI policy. Obviously, it sort of took a lot of people off guard, the fact that China, who for the Chinese companies for a long time have not been able to build the best models, all of a sudden, jump in, they have a model that reasons about as well as the best that the US can offer is open source and is cheaper to run. So what are the geopolitical implications of that? And are we starting to already see it play out?

Sagar Enjeti (29:05)

Oh, absolutely. And as you could already see from David Sacks, who we were just talking about, he had initially had a response there from the White House. This caused like global market reaction. Already JD Vance is in France giving speeches about AI. I really do believe this will be, you know, the in the way that the Clinton presidency is largely remembered for its transition to the Internet, I think that in the long term, we may view the Trump years at the second administration as the AI presidency in terms of the way that our economy and our life and all of that were transformed. And in that, I think there's a lot going on here. And first and foremost is an interesting clash within technology itself. So this will be a huge fight going forward around export control. So a lot of people were passing around after the Deep Seek revelation. But that Alexander Wang clip where he was like, look, they obviously have more Nvidia H1 hundreds than they can admit because they're going around export controls. And then I was not even aware of this how 20% or whatever of Nvidia revenue is in Singapore, I'm like, yeah, I'm sure Singapore leads a lot of chips. It's like, oh, fascinating, right? It's obviously leakage in terms of export control to China. It makes sense too why Nvidia was pushing back so hard in the later days of the Biden administration against tightened export control rules. I hadn't followed it fully at the time, but putting it all together, I'm starting to, it's starting to click how much of revenue that they alone are also kind of relying on by a trans shipping chips. But, but. So at a broader level, we have like a couple of choices and interesting paths. Like one would be, okay, we should just go full open source. We should be. These companies should stop individually chasing this 75 billion per quarter on AI. We should focus on efficiency. Well, one of the tells to me that Deep Seek was not quote unquote, as revolutionary as people said, is because the companies are still spending the money. And so what they took away from that, as I understand by OpenAI and others, is that they saw that their model was used by the Deep Seq hedge fund to train off of. And so actually what's happening is the net effect of what happens whenever you have kind of breakthrough technology. If we think about it like the atom bomb. Well, what happens is that inevitably you have scientists copying other scientists. And so that leads to closed circles, secrecy, closed models, national security concerns, and overall, like geopolitical. Geopolitical implications of your individual business decisions such that it no longer really becomes about Nvidia or Meta stock, it becomes about the United States of America. And I think this will be a very difficult thing for Nvidia, for Meta, for Google and all of them to deal with, because I think that in their hearts, at least in the past, they really were globalists. And it makes sense. You know, Meta is their user base. The vast majority of them are not Americans. But you're headquartered here. Sorry. And Mark Zuckerberg, you're waving your American flag around on your surfboard or whatever. So you've, you've planted your flag quite literally how far we've come trying to.

Michael Kovnat (32:25)

Name his kid after she.

Sagar Enjeti (32:27)

She. Yeah, that's right. Yeah. After doing that, as you and I know, which is even more hilarious in retrospect. So putting all of that together with the Deep Seek thing, you basically see it laid out by JD Vance in his policy speech where he's like, we want America to be the leader in AI. We will not allow, you know, espionage on our companies. So we're going to see literal walls begin to go up. Much tighter export control, a recognition that these companies and this technology is vital and of interest. And I don't really think there's any way out of it, to be honest, because, you know, I was really thinking about it and it's like, well, what is the alternative? Because we could try to have some path of not going down that. But it's very clear that the Chinese, especially in the case of Deep Seek, I mean, this idea that it's $6 million or whatever to run is ludicrous. It obviously cost over a billion dollars to train the model before it eventually got to the point where it could run off of that 6 million. It's clearly subsidized and at least pushed and allowed by the Chinese government, who themselves. I'm not sure you've seen it, Alex, but the Chinese tech Scots are. Tech stocks are roaring on the Hong Kong stock exchange right now as a result of the Deep Sea thing. So the government has its own interest and control and all that behind the scenes for them. And the Chinese are never going to move away from their own firewall model. So in a sense, you know, naturally the United States, especially to preserve so much of the enterprise value and the genuine technological breakthrough, doesn't really have a choice but to behave quite similarly. And I just think that's an inevitable kind of Thucydides trap of any great superpower competition on any technological basis.

Michael Kovnat (34:10)

I want to ask you a similar question that I asked Alexander Wang when he was here, which is why is it such a strategic liability if China takes the lead on AI models? Like just take Deep Seq for example. Yes, they definitely trained with a lot more money than they said they did to build this R1 model. However, the R1 model is like undeniably cheaper to run. And so now you have us startups using that model to build products they probably couldn't build in the past. So talk a little bit about why it's so strategically important for the US to have the lead and not not China.

Sagar Enjeti (34:42)

There's a couple different ways. I mean, first and foremost is just. Well, actually let me give you a really meta way that he's probably never going to admit. And this is the truth. America has decided that our retirement plan is number go up and our numbers need to go up. That number can't go up if we're number two. And if we're subject in the 20 of our GDP, which is technology, the fastest growing sector, the Magnificent Seven comprises what percentage of the S P 500.

Michael Kovnat (35:13)

It's like 20 to 25 depending on the day or 30 sometimes.

Sagar Enjeti (35:17)

Let's, let's look at this realistically. Like at a basic level we don't have a choice, like we have all chosen that America retires because the number goes up and the number is not going to go up if we're not the leaders in the technology because it means that we won't be able to unlock the enterprise value and have all, you know, all of the benefits of network capitalism and AI. But at a more like basic level, the United States, especially with respect to technology, with its, with research and everything, the implicit, you know, deal that we've all made is that like I said, we're not gonna have government retirement or government healthcare or any of that. But in exchange we will be the leaders of the global economy of the world and you know, rule the rules based international order to the benefit of the American consumer. And so at a really like high level, strategic wise, it's the same reason why Sputnik simply could not be allowed to stand. It's because even if the terms and the way that we're fighting seem ridiculous, the notion of space supremacy by our adversary or technological supremacy, beating us in that category just means their ability to compel our behavior. So at a very like meta level in terms of why it's strategically important, it really is gets back to that Thucydides trap idea of we don't. When your adversary is to choose development down a closed path which would allow technological dominance over you, you either have a choice to like reach your hand out, shake hands, have some mutual agreement where that's simply not going to happen, and then have the trust, the enforceability in such a contract that you can ensure things stay smooth. That's not going to happen unfortunately or you have the chance to respond. And so yeah, I just, I don't even think of it as AI. I think about it as the way I would any breakthrough technology. I would give you the exact same answer.

Michael Kovnat (37:17)

Yeah, and there's been some talk that like okay, well AI is both a business, but it's also a weapon. And I am curious. Like you know, J.D. vance recently said the fears about AI are overblown. So where do you stand on that question?

Sagar Enjeti (37:30)

Because I mean every day, so every day I either am an alarmist or I just think it's all ridiculous. So you and I want to.

Michael Kovnat (37:39)

It's funny how you go back and forth. The same thing happens to me where I'm like this chatgpt can't tie its shoes. But on the other hand you're like oh no, this can control computers and right. Build deep research reports. Like oh God, what's gonna happen?

Sagar Enjeti (37:50)

That's how I feel. So I use Claude. I'm a Claude guy. I can't really tell you why. I just like the interface for data analysis.

Michael Kovnat (37:56)

We talk about it a lot. It's pretty nice to talk to like she feels less bot like.

Sagar Enjeti (38:01)

Yeah, yeah, I totally agree. And you know, for data, data analysis. Look, I'm not the typical person, I'm not a coder any of this stuff. You know what I really use it for personal finance. I go, how much money have I spent on groceries this year? And I'll be like here, this. And this is your breakdown.

Michael Kovnat (38:14)

That's a pretty cool use case. I haven't heard that before. So you like upload your like bank statements and talk to.

Sagar Enjeti (38:19)

So I have a budget app which has all my transactions and then I downloaded my transactions for the last seven, uploaded it to Claude and I go, so how much money do I spend on milk? How much money do I spend on eggs? What's my average burn rate on travel? So and then also you can, you can calculate to the literal dollar not only you're spending but then you're not your discretionary spending, your non discretionary spending. And then if you're trying to budget and project like let's say investments, I use it for investment analysis all the time. That's I'll be like if I dollar cost average $200 a month into X stock based on historical returns, what is my expected over a 10 year period and it spits out charts. It's fantastic.

Michael Kovnat (39:02)

I have it do my taxes like I'm thinking like I can just upload all my books and see.

Sagar Enjeti (39:06)

No, the problem is legally, legally you're, it's, you're getting dicey, right? So like when I'm doing some bullshit stock analysis like the stakes are not that high but we're doing your taxes.

Michael Kovnat (39:16)

I mean I would obviously double checks.

Sagar Enjeti (39:18)

Yeah, I mean maybe you should try it. Tell me, tell me what you think.

Michael Kovnat (39:21)

I'll keep you posted.

Sagar Enjeti (39:22)

Okay, thinking about AI have you ever used Tesla full self driving?

Michael Kovnat (39:28)

I haven't driven with it, but I've been in the car when someone put it on.

Sagar Enjeti (39:31)

Okay, so I have a Tesla and I have full self driving. So that's where I don't buy the AI hype I have been hearing for years. Oh, this car is going to drive itself. No it's not. Tesla can barely Turn left, bro. And even when it does, even when it does turn left, it turns left like a right angle, you know. Or just the other day. You'll love this example because this just shows how dynamic and difficult it is to try and accomplish this problem. It snowed and the snow got caught in the lights, the red light, like in the cup that holds the lights. So the Tesla could not distinguish whether it was red or whether it was green. So my eye could, I could tell like oh, right up there, there's a little bit of red light, green light, but there's so many different things or there's areas where I live where you can park in this lane sometimes but not others. And so the Tesla, if it sees it open, will want to get into that lane. Even though I know, you know, like, oh, it's 4pm I can't get there. My point is, is that I've, even with all of the hype and even with, let's be real, the best self driving technology available in the U.S. it's not that useful unless you're on the highway. Is it that much better than Toyota's or than Honda's assisted assisted autopilot? Yeah, it's good. It can change lanes and stuff like that. But I've been in a BMW that can change its own lanes. So my point is, is that even with Tesla, which has thrown billions at this problem, which is the world's leader and all of that, I've owned this thing for a couple of years and it's definitely gotten better, but it's not that great. And that's as in I'm not, I'm not taking my hands off the wheel anytime soon. Especially whenever, you know, if you have your loved ones or others who are.

Michael Kovnat (41:08)

Have you been in a waymo before?

Sagar Enjeti (41:09)

I haven't been. In a way.

Michael Kovnat (41:10)

You got to get in a way.

Sagar Enjeti (41:10)

I still want to do that. Yeah, I've been around them in Austin and. But I think the use case is a little bit different just in terms of what they're allowed to do, etc. In terms of the.

Michael Kovnat (41:19)

Definitely there's predescribed routes that they can take.

Sagar Enjeti (41:22)

Exactly. And so that's what I mean in terms of they can do it because of the pre described routes and their select area. But I'm talking about, I've driven my car all across the entire country and there's just so many cases where I go, the driving, it just, it can't pick up the nuance of this whole situation. And so that's kind of how I feel about AI. On the one hand, you know, for years everyone keeps telling me we're gonna conquer driving, we're conquer driving. I'm like, no, you're not. Just literally not gonna happen anytime soon. But the other, you know, I get to, I see this, the, you know, the AI safety people put up this report about they develop personalities and you know, they at a certain point was so called AGI may have already been reached and the ability to, to turn it off may soon be soon be going past. Or you know, the nightmare scenarios of like once that they have developed their own value systems that it's very difficult to program them off. Or even scarier is incorporating human value systems that we can't even all agree on into these things. So I think that the existential questions are important. But yeah, I oscillate between being an alarmist and also just being somebody who's like, eh, is it really that different or is it just a better Excel? You know, my black pill case for AI is congratulations, you're all going to have AI assisted Microsoft Teams while you continue your. Continue your consulting jobs. You know, I'm sure it'll do better data analysis and I'm sure it'll increase efficiency. I'm sure it'll be a great tool. But I'm still a bit skeptical in terms of its ability to change everything about my daily life.

Michael Kovnat (43:02)

On your show recently, you had a very interesting analysis about how they started to develop their own value systems. Yeah. That AI agents would sort AI models as they got smarter would develop their own value system. I mean that's. This stuff like is crazy to me. We also, we talk a lot about on the show about how AIs have started to deceive their evaluators. So if you're like trying to evaluate whether something's you into its value system and it's not, the AI will just sort of try to fake it so you don't reprogram it. I mean this stuff is.

Sagar Enjeti (43:33)

Right.

Michael Kovnat (43:34)

The cutting edge of this stuff is amazing.

Sagar Enjeti (43:37)

Yeah, I don't know. I, I really am torn. I like to listen to the technologists I just keep my eye on. I think what I do with AI is the same way I do about any subject which I know is controversial is I just read the whole gamut and I try and experience a tech for myself and then kind of see where I land. Right now I'm not yet in a complete doomer. I'm not a. It's gonna kill. Kill us all. I still think that the dynamism and the experience of humanity and of our lives is still just way more complicated than it seems. That it's much more complicated than people might be led to believe. That's why I always use that car example of who could ever program in, that it was a snowy day and that the red light gets covered. Or who could ever program in, you know, these time limits or you know, even, even, sometimes pedestrians and where they cross illegally. And I know that there's always some idiot who's gonna try here around 7am but the car is not gonna know that. Or even in terms of brake speed, I found that it breaks very hard even when it doesn't need to.

Michael Kovnat (44:44)

You got to try the Waymo and we got to have you back on because breaking in the Waymo is, is pretty unbelievable.

Sagar Enjeti (44:49)

Where is Waymo right now?

Michael Kovnat (44:50)

Perfect.

Sagar Enjeti (44:50)

San Francisco.

Michael Kovnat (44:51)

In San Francisco. It's in Phoenix. It's coming to la. I think it's in maybe four cities, but I'm sure it's just going to be all over the country pretty soon. It's expanding wildly fast. So look, my number one argument against the fact that AI or against this idea that AI might kill us is Apple Intelligence. I mean, use that stuff and you're just like, we're good. You basically described the problem with Apple intelligence. Messages have yet to experience a single useful AI summarized iMessage. I mean, it's the most visible feature in Apple intelligence and it sucks. Tell me, give me your unvarnished opinion about Apple Intelligence.

Sagar Enjeti (45:28)

I am the biggest Apple fanboy you'll ever meet. As you know, I bought the Vision Pro on day one. Okay.

Michael Kovnat (45:34)

Day one, Vision Division Pro right after this.

Sagar Enjeti (45:36)

Yeah, okay. All right. Division Pro D. Day one, holder iPhone 16, whatever. What iteration are we on? 16. That's whatever. I have 16. Day one holder. Day one for Apple Intelligence. I have never been more disappointed in the promise. You know, I really should. I. I gotta credit Marquis Brownlee. Cause he's totally right. I'm an idiot. I'm the sucker. Don't ever buy a product with the promise of future product. And that's what they did with this phone, is they promised us all of these cool features with like you said, text message, summary email. Oh my God. My wife has. We both have the same phone and she actually uses the Apple Mail app and she's showing me Apple's AI ranking of her mail. It's terrible. She had to turn it off. Right. And so that's the thing.

Michael Kovnat (46:24)

I don't understand.

Sagar Enjeti (46:26)

I don't understand. With Apple is, I know you can do it. And you're the, you know, you've got this market cap and you've got all this money and you, you're, you're the one telling you're doing it the Apple way. You're like, we're going to look at it and then we're going to refine it the way that we always do with breakthrough technology and we're going to make it the easiest possible thing and then we're going to roll it out to all of our customers. You guys are going to love it and that's what they usually do. But Apple intelligence has been a complete bust. I'm an idiot for buying this phone. It's really, it's not different at all. Apple AI summaries for my text messages are garbage. Literally less than useful. I think the only thing it does is burn more of my battery. The use cases I've seen on mail, Awful. Do you use the action button? Do you have the new one?

Michael Kovnat (47:12)

I have the 15, but I don't really use the action button at all.

Sagar Enjeti (47:15)

Never use the action button. Not once. I don't think I've used it a single time. There's so many things about this phone.

Michael Kovnat (47:20)

Yeah.

Sagar Enjeti (47:21)

Where it's such a bust. I just don't understand how this happened.

Michael Kovnat (47:24)

Look, I've been doing this for a very long time and I can tell you I've never seen an instance where you have such a high stakes presentation from such a prominent company that undelivers to this under delivers to this magnitude. 100% astonishing how bad it is.

Sagar Enjeti (47:40)

100% agree. It's horrible. It's horrible. The photos thing, that's what everybody's saying is cool. Guys, look, this is where even with the Apple fanboy, Galaxy's had that for five years. Like AI, AI editing and enhancement on your photos. The galaxy's had that for years. Like I don't know, I'm very, very disappointed in all of the Apple intelligence stuff especially because like you and I, we use our imessage and stuff for work and I literally just want to see the message because I know that the AI summary is so untrustworthy. So it's actually making my life more difficult. So I have to like unlock my phone and be like okay, what did the messages actually say as opposed to the dumbass Apple Intelligence? I mean it's been almost a year now, right? I mean I just, I can't even, I don't know what happened with this entire thing.

Michael Kovnat (48:36)

I thought about turning it off completely just Being like, I want these summaries. And they're always. They're so dispassionate, which is so funny, where it's like someone tells you they can't make an event and just like, you know, friend says no or something.

Sagar Enjeti (48:49)

Friend says no. And then, oh, the suggested comments, too, are always so stupid. It's, oh, that's tough. Or.

Michael Kovnat (48:56)

I know. It's like, we can't let the AI take over. And there have been some even better examples, like on Twitter, of people, like, sharing. Someone's, like, sent them, like, a breakup text and it's like, just wants to be friends. Can you imagine being broken up that way? My God.

Sagar Enjeti (49:13)

Yeah, exactly. I just want to experience it in its own words. So, yeah, I'm very disappointed. Don't they have some new announcement? What's that gonna be? Is that the new Mac?

Michael Kovnat (49:21)

Yeah, when this airs, it'll probably be live, but everybody thinks it's the SE, the iPhone SE. But you don't know because Tim Cook says it's gonna be a new member of our family of products. And it's like, I'm pretty sure it's just gonna be the same member of your family products with like, you know, a new chip in it, which. Great. But they don't have much to announce anymore.

Sagar Enjeti (49:39)

Yeah, they just really don't. I don't know. I'm really bummed with the way that it's been like, I expected bit. I really thought Vision Pro was the start of something.

Michael Kovnat (49:49)

Yes, I wanted. Before we go, let's hear your Vision Pro take. Is it a paperweight?

Sagar Enjeti (49:55)

Not. Not for me, because I have always defended it this way. I love to watch movies on it and I love, in particular Apple TV shows. The way that. It's hard to explain someone who's never used a Vision Pro, but Vision Pro on Apple TV has the function where you can put yourself in a movie theater. And so it literally, when I'm on my couch, I feel like I'm watching Severance or Masters of the Air or any of these shows like I am in the movies. It's incredible, especially if your AirPods on. But unfortunately, as you and I know, Apple TV, outside of severance and a few other things, not great content. And so I wouldn't say I don't use it as much as I used to in particular. Also, the software has not been updated properly in the way that I thought it would be, so it's getting a little bit laggy. So there's a couple of things which I'm not Too happy about it. But I will tell you this every once in a while, whenever I do need to do the. Whenever I have a lot of research to do. So I love to use that ultra wide function where I have my laptop in my laptop in my lap and I can bring the desktop up and have like 10 different things that are all happening in front of me. That is genuinely cool. Another massive use case for the Vision Pro is flying airports. When you're mobile, it's amazing.

Michael Kovnat (51:16)

So if you're on airport.

Sagar Enjeti (51:18)

Oh yeah, many times. Many, many times. You're definitely going to get comments, I'll say that. But I mean, people, people are curious.

Michael Kovnat (51:24)

Yeah.

Sagar Enjeti (51:25)

Well, the first time that I ever used it, it was kind of awkward because I. I was in cinema mode and the flight attendant was kind of talking to me. I literally couldn't see her. Right. I couldn't see her, I couldn't hear.

Michael Kovnat (51:37)

Excuse me, ma'am, I'm in a VR movie theater. Can you.

Sagar Enjeti (51:39)

She tried to put a drink in my hand because she saw me going like this and I was like, I was like, what are you doing? I was like, I was like, what? I was like, oh my God, I'm so sorry. I was watching. She was like, oh, I thought you wanted a drink. And she's like, I saw your virtual eyes on the screen especially, especially if you're in economy class like me because you don't have that much room. So you actually end up kind of like a T. Rex in terms of moving your, like moving your fingers around, just being like, like moving stuff like this. And people are always very curious. They're always so curious about it. But I'm more of a use it in the airport guy for lap for my laptop, like actually doing stuff while I'm on it. So I like it. It's a bit bulky. That's my only thing that I'm upset about. But I, I see why people are disappointed because I again, the idiot thought that it would get better over time and they haven't updated this thing at all. Guys, like for anybody out there, I can't even tell you how much they've just abandoned this thing completely. Completely. So if you don't like any of the day one stuff on it, do not get it because they haven't. They've barely done any support or development for this thing. New nor new apps, no new breakthroughs. It's genuinely disappointing.

Michael Kovnat (52:57)

Yeah, I'm stunned they haven't updated it because that was always the promise. They had this device, it was going to get Better. And I guess they haven't let developers in the way that you would expect. Also, developers have said no to them because, yeah, they just said they're so used to being raked over the coals by the 30ft fee. Netflix, for instance, is like, oh, you want me to develop for you? That's a funny idea. I'm not doing that.

Sagar Enjeti (53:17)

I will say you can just use Netflix and Safari on Vision Pro. I do it all the time. Yeah, it's actually super easy. It's. Everyone made a big stink about the Netflix thing. Honestly, it didn't do anything. You're getting me excited though, because you know what? House of The Dragon Season 3 is about to come out. And when I bought the Vision Pro, season two was coming out. Man, when you're watching fantasy shows on the Vision Pro. Oh my God. Apple also did a few remasterings of movies. So you know that Tom Cruise movie, Edge of Tomorrow? They did that for Vision Pro 3D plus in Apple TV. So it's 3D while you're in the cinema thing. Dude, that was. That is one of the cr. Like one of the coolest cinematic experiences I've ever had. And I was at home. So my dream for the future is a shared VR so that like, let's say you and I were hanging out and we wanted to watch a movie that we'd both put the goggles on, but we could have a shared space and we could blow it up and then we could like, kind of experience it together while also being able to like, maybe see each other and be like, oh my God, dude, that was crazy. Because the problem with the entire Vision Pro right now is that it's a singular experience. It's only happening when I'm by myself. You can see it. TV is actually way more social than people think.

Michael Kovnat (54:30)

Yeah, yeah. For me, like I. I would buy if I could sit at like the 50 yard line 15 rows up and watch NFL games, that would be an easy buy. I've watched NFL and like 3D and it's amazing. If I could do that on the Vision Pro, I would pay for it.

Sagar Enjeti (54:45)

Oh, yeah, but it's not there yet. I don't watch baseball, but some of my friends or. No, no, no basketball. It has a basket. I think NBA had some Vision Pro thing. Oh yeah, dude. NBA on Vision Pro is apparently incredible. So I'd say I use it like once a week or so. Especially right now. Severance is out. I love to watch severance on it. Like now I'm getting hyped for house of the Dragon because HBO has a. They have an app specifically for the Vision Pro, and they're. The max app on Vision Pro is insane. It's so good. Yeah, it's.

Michael Kovnat (55:16)

Oh, my man. We started this Vision Pro segment really tucking down to it, and now I feel like running out to the Apple Store and grab one.

Sagar Enjeti (55:23)

It's not worth the money. It's just not.

Michael Kovnat (55:25)

I mean, it's 35% too much. Right?

Sagar Enjeti (55:28)

The promise of it was not what has materialized. I have found a way to still use it, but actually, a lot of my friends who have it, they don't even use it anymore. It's literally a paperweight. Like you said. I just love tv and I like to watch movies, so I've been able to appropriate it. But that's a shitload of money for an entertainment device, right? You could just. You could buy a pretty nice TV for whatever it costs.

Michael Kovnat (55:49)

Yes, definitely. All right, folks, the show is breaking points. You can find it on YouTube or your app of choice, Sagar. Always great to see you. Thanks for coming by.

Sagar Enjeti (55:57)

Good to see you, man. Thank you for having me.

Michael Kovnat (55:58)

All right, everybody, thank you for listening, and we'll see you next time on Big Technology Podcast.