Socialists Sweep NYC, China Catches Up in Coding, AI Memory Crunch, Micron's Blowout Quarter

Summary

Podcast Summary: All-In Ep. 278 "Socialists Sweep NYC, China Catches Up in Coding, AI Memory Crunch, Micron's Blowout Quarter"

Podcast: All-In with Chamath, Jason, Sacks & Friedberg
Date: June 26, 2026
Participants:

• Jason Calacanis (Host, A)
• Chamath Palihapitiya (D)
• David Sacks (E)
• Travis Kalanick (B) [Guest]
• Gavin Baker (C) [Guest]

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Episode Overview

This episode dives into the recent sweep by Democratic Socialists in NYC primaries, the surprising ascent of Chinese open source AI models, a deep look at the “AI memory crunch” in hardware, and the blowout quarter of Micron (a key memory supplier). The discussion is lively and sharp, featuring candid takes on politics, economics, tech, and the evolving startup landscape, with plenty of trademark bestie banter.

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Key Segments & Insights

1. NYC Socialist Sweep & DSA Momentum (00:54–44:53)

The Wins & Upset

• Three DSA-backed candidates win Democratic primaries in major NYC districts, including the affluent 10th, poor 13th, and DSA-stronghold 7th ("Commie Corridor").
• Mayor Zoran Mamdani’s endorsements sweep, defying pre-election odds ("This was a pretty big upset…like the trifecta there if you were gambling." – Jason, 01:29).

Why Is This Happening?

• Chamath: AI is a missed opportunity as an economic leveler; Silicon Valley’s internal dysfunction left a vacuum for “doomerism” and allowed alternate narratives to rise. "Silicon Valley has lost even more credibility with the people at large. And in that vacuum, what other people can paint is a picture of how anything other than what capitalism looks like today is a better version…” (D, 03:17).
• Sacks: This is a populist leftist revolution akin to Trumpism on the right. The DSA platform: abolishing the Senate, carceral state, ICE, advocating for public ownership and radical change to constitutional structures.
  • “They want to abolish the carceral state…abolish ICE…replace the President and Supreme Court with an executive and judiciary chosen by Congress…” (E, 07:09).

Demographics Behind the Sweep

• Gavin: DSA support is NOT from the traditional working class but relatively wealthy, downwardly-mobile white liberals, often in the nonprofit/NGO ecosystem.
  • “Their ideas appeal to this narrow subset of downwardly mobile rich white people…not doing productive things for the world.” (C, 20:00).

Takeover Tactics

• Sacks: “We’re using the Democratic Party as a ballot access vehicle…We see the Democratic establishment as an obstacle, not a home.” (E, 10:42).
• “If you import massive amounts of migrants, don’t assimilate them, and then have these Marxist leaders, you’ll end up with the American system coming to resemble the countries from which [the migrants came].” (E, 12:26).

Notable Exchange on "Communism in Our Blood"

• Travis: “Communism is in all of us…Have you ever in your life been lazy?…The difference is, do you make that a way of life?” (B, 16:11).

Influence & Communication

• Gavin: Zoran Mamdani is credited as a once-in-a-generation communicator with “Obama, Trump charisma…he is the reason that the DSA is ascendant. Not their ideas or dissatisfaction with AI, but it’s him.” (C, 22:49; A, 44:41).

Virality, Social Media, and Youth Radicalization

• Chamath: Draws a line between open social media, charismatic radical leaders, and youth radicalization—advocates consideration of under-16 social media bans.
  • “If you cut the legs off by saying young people should age into social media, you’ll have a far less radicalized youth…” (D, 25:35).
• Travis pushes back: “The real point of banning under 16 is so that you can force adults to de-anonymize…so you can set up a full-scale censorship regime…” (B, 26:56).

Israel as a Defining Political Divide

• Israel/Palestine positions moved to the forefront as a motivator for the DSA base, flipping tenured Democrats in primaries.
  • “80% of Democrats now say they disapprove of Israel…You can’t underestimate how big a motivator this is for young Democrats.” (E, 35:30).

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2. China's Leap in Open Source AI (45:04–61:31)

GLM 5.2’s Breakthrough

• China's Z AI releases GLM 5.2: "Frontier-class open source, 744B params, MIT license…fully self-hostable, beats prior open models on coding benchmarks, 85% cheaper than GPT 5.5.” (A, 45:01–46:03).
• Gavin: “How good GLM 5.2 is has challenged some of my beliefs…there’s been immense amount of distillation.” (C, 47:01)
  • Explains distillation: “Imagine asking the cloud API through masked accounts…harvesting the reasoning traces”—a cheat sheet for training your own model. (C, 47:18)

Composable Future

• Gavin: Predicts composable, “council of LLMs” in enterprise—using open source first, forwarding tough queries to frontier models.
  • “Frontier tokens capture 90% of economic value, open source tokens are maybe 80%+ of tokens processed. I think composable models are the future.” (C, 50:23)

U.S. Competitive Weakness & Regulatory Risks

• Sacks: Warns U.S. regulatory bottlenecks (after a major AI model got pulled over security/jailbreak concerns) could cost valuable time, allowing China to catch up or surpass.
  • “We cannot afford to do things unnecessarily that slow our companies down.” (E, 53:12)
  • “With respect to risks like cyber…the only thing you can do is go out and find all the vulnerabilities first…If you clamp down so hard you don’t let these models be used, the Chinese are going to have these capabilities imminently.” (E, 57:12)

China's Hardware Push

• China claims to have trained models on domestically-produced Huawei chips (though panelists are skeptical). See timing as evidence of rising competitive parity in hardware and software.

Censorship

• Hosted Chinese models still have hardcoded CCP censorship (“no answer on Taiwan, Tiananmen Square”) but U.S. companies quickly strip this in forks. (A, 60:12; E, 60:48)

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3. AI Memory Crunch & Micron’s Blowout Quarter (61:31–97:08)

DRAM as Bottleneck

• Micron (one of three global makers of HBM) sees revenue up 4x y/y, 2026 supply completely sold out.
  • “The bottleneck that matters is DRAM…memory capacity and bandwidth are foundational to the performance of every AI model. This is the most important bottleneck.” (C, 63:35)
• Elon’s Terafab focused on memory, not just compute/chips.

Implications

• Gavin: “DRAM is probably going to be 30–40% of all hyperscaler capex next year…this may give us time as a society to adapt to AI.” (C, 66:59)
• Apple & others raising consumer hardware prices due to AI-driven memory shortages & inflation. “Inflation has come to the desktop.” (A, 62:34)

Data Center Build-Out, Orbital Compute

• New data centers will see ramping costs and supply constraints; Elon’s Starship could make orbital compute more cost-effective in the future.
  • “When Starship is reusable…it’s going to cost $5B to put a gigawatt of compute into space. Terrestrial: $60B. So in a few years, it may be $70B vs $40B.” (C, 72:46)

Modular, Distributed Compute (Megapods, Kitchens)

• Tesla’s “Megapod” trademark: speculation about prefabricated, modular, GPU-powered data centers at Superchargers.
• Kalanick: “We’re literally looking at putting some of our compute into our kitchens.” (B, 79:14)
• Chamath: “If you can contribute to a distributed training or inference pool… A Pan-American idea, whoever figures it out is onto something.” (D, 85:21)
• “Everything that cuts against training works for inference…Distributed inference costs are coming.” (C, 82:47)

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4. The AI IPO Tsunami: SpaceX, Anthropic, Cerebras & Market Absorption (87:20–99:01)

• Gavin estimates Anthropic’s valuation at $3T, SpaceX’s IPO well managed, Cerebras faces market volatility due to shifting institutional tactics (selling if stocks break issue price).
• “[Anthropic] will end the year well over $100B [in revenue]...very profitable at that scale…global capital markets can absorb this.” (C, 88:39)
• Panelists reminisce about when $14B was considered a staggeringly high round for Uber (“I remember when it was hard to raise $1.5M!” – Jason, 100:02).

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Notable Quotes & Memorable Moments

• On the DSA Sweep:

  • “It’s always the rich poors. You know, they’re rich, but they pretend to be poor.” – Sacks, 02:44
  • “Socialists are just using the Democratic Party as a host. Like, they literally want to infect…they want to infect the Democratic Party and then just get the voting base.” – Jason, 42:07

• On Communism:

  • “Communism is in all of us.” – Travis, 16:11

• On AI Models:

  • “Distillation is a cheat sheet for other models to catch up.” – Gavin, 48:09
  • "Composable models are the future." – Gavin, 50:23

• On Regulatory Capture:

  • “Dario got what he wanted…a regulatory moat.” – Gavin, 55:40
  • “We do not have months to give away in this race.” – Sacks, 56:31

• On Tech Bottlenecks:

  • "This is as close to magic as science can get." – Gavin, 63:35

• On Megapods/Data Center Innovation:

  • “Here’s a shipping container you can drop on a concrete pad, plug in the power, and let it rip…a 90-day build cycle, which is unheard of.” – Chamath, 77:13

• Closing Banter & Reminiscence:

  • “Remember when $15B used to be a whole lot of money?” – Travis, 97:28
  • “It used to be that was a lot of money, and that was unheard of at the time…” – Travis, 99:01

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Timestamps to Key Segments

• [00:54–44:53] NYC DSA Sweep, political/economic analysis, generational factors, social media, Israel/Palestine faultline
• [45:04–61:31] China’s AI leap: GLM 5.2, open source future, U.S. regulatory stumbles, hardware race
• [61:31–87:09] AI memory crunch, Micron, DRAM, Apple, orbital compute, modular data centers, distributed inference
• [87:20–99:01] IPO explosion: SpaceX, Anthropic, Cerebras, shifting market norms

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Tone & Atmosphere

Candid, fast-paced, irreverent, and deeply informed. The panel mixes biting humor, realpolitik skepticism, technical depth, and nostalgia for earlier (less capitalized) times.

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TL;DR Takeaways

• The Democratic Socialists are rapidly taking over key urban Democratic strongholds, with their most potent weapon being charismatic leadership and social media mastery—not working class support.
• Open source AI from China is now nearly on par with top U.S. commercial models; U.S. regulatory delays are seen as self-inflicted wounds in the competitive AI race.
• Massive memory bottlenecks (DRAM/HBM) are redefining cost and competition across tech, AI, and consumer hardware alike.
• Modular, distributed, and possibly orbital compute are the next frontier for AI infrastructure.
• The size of private-to-public tech offerings is now mind-bending, but the consensus is global markets can absorb the flood—though disciplining IPO pricing (via auctions) remains tricky.
• “Remember when $1.5 million was a big raise?” The scale has changed, but the besties’ banter and skepticism remains eternal.

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This summary captures the full sweep of discussions, analysis, and flavor from the episode, suitable for listeners, investors, policymakers, and tech enthusiasts who missed the show.

Transcript

[A]

All right, everybody, welcome back. Welcome back to the number one podcast in the world, the All in podcast, episode 278. And Freeberg, he took a mental health day today after the socialist sweep in New York City. So we invited two guests. They both said yes. Travis Kalanick is here from Adams. How are you doing, brother?

[B]

I'm good, I'm good. Good to see you.

[A]

Good to see you. Good to see you. And after a triumphant week at Starbase, the one, the only, everybody's favorite, Gavin Baker of Atreides Management. How are you doing, Gavin?

[C]

Great, man, thanks for having me.

[A]

You're still floating on cloud nine after the SpaceX IPO.

[C]

Yeah, that was a very special moment and it was a culmination of decades of hard work. But man, to quote Bill Belichick, onto Cincinnati.

[D]

Yeah, yeah, exactly right, yeah.

[A]

00 is how the Knicks talked about the next game. In every series, they're like, it's 00. We come into this as if it's like the first game of the series, even if we're up two games or three games. The Socialists have swept New York in the Congressional Democratic primaries. On Tuesday, New York City Mayor Mondame went three for three in the candidates which he endorsed. And they all won their primaries. 10th district leader Brad Lander defeated two term incumbent Dan Goldman. 10th is one of New York's richest districts, includes the West Village, all those townhouses, Wall Street, Dumbo, Cobble Hill, Carroll Gardens, Park Slope. That's some weird geography put together there. In New York's 13, Chevalier beat a five term incumbent who was backed by House Speaker Hakeem Jeffries. And apparently the Socialists are coming for him. Thirteen is one of the poorest districts, Harlem and the West Bronx, the boogie down Bronx. She's a 32 year old democrat Socialist with a history of spicy remarks. New York's 7th district, Claire Valdez won the open seat over the handpicked successor. The incumbent seven is a DSA stronghold. Bushwick, Williamsburg, Long Island City, Greenpoint, known as the Commie Corridor. A lot of hipsters and baristas with suspenders in that neighborhood. According to our partners, Polymarket, this was a pretty big upset. The Mondami suite chances were just 26 before election day. Yeah, that would be like the trifecta there if you were gambling. These candidates, just like Mondami did a lot better with younger, college educated and high income folks. The folks who can afford to be socialists. And these are all safe Democratic seats the DSA will very likely win. So the DSA caucus, that's the best way.

[D]

You just said people who can afford to be socialist, it's always. It's always the rich poors. You know, they're rich, but they pretend to be poor.

[A]

It's perfect. I mean, this is the history of our country from the 30s, the 50s, Red Scare, Black Panthers. I mean, we'll get into it, Chamath. But basically, if you're intelligent and you get into business, you become a capitalist. If you're super intelligent and you go into academia, eventually you have the luxury of belief that socialism is awesome. What's your take here, Chamath? And then I'll go to you, Saxypo, because I know, I can see you're chomping on something over there. You're just ready to go.

[D]

Honestly, I think that we are losing the script. And part of it is because we've been our own worst enemy. I'll just keep saying this, that I think AI is a very good prism into this problem. I think AI is the greatest economic leveler will ever find in our lifetime. I think it's the thing that can create the greatest amount of equality. I think that it can even the starting line for every single person on earth. But we've done such a poor job in representing it, in bringing it to market, in talking about it. We've let all of our own personal trials and tribulations and insecurities and fights spill out into the open. As a result, Silicon Valley has lost even more credibility with the people at large. And in that vacuum, what other people can paint is a picture of how anything other than what capitalism looks like today is a better version of what they see. And this is why you're seeing, I think a lot of these people get a lot of momentum. I think if you look at some of the key congressional races, they were a referendum on AI. And the good news is we were able to hold the line in some of these key places, but just barely. In Utah and in New York, there was a couple of very important races where it was essentially anthropic funded anti AI groups, which is again, insane against in some ways, OpenAI funded pro AI groups. And the pro AI groups won.

[A]

You just explained that it's a great leveler. Can you give a couple of examples and just expand on that briefly? How is it a great leveler? I mean, I know, but for the audience's sake, you've said this a couple of weeks now, so I think unpack it a bit.

[D]

The best way to explain it is I think that the first real major unlock of Economic productivity was when the Internet and specifically Google went and harvested and collected all the world's knowledge and all the world's information and they made it available via search. What we figure out, though 25 years later, despite the fact that they built a great business, is what was missing was then being able to take that knowledge and information and transform it into expertise and intelligence. And that's effectively what AI does. It takes that world's knowledge and it allows you to act upon it so that every single man, woman and child has an equivalent. Travis Kalanick as his co founder, a super founder, this brilliant person that can think through all your problems, can out engineer people, can outthink people and they sit beside you and you have that and there is no gatekeeping that can prevent you from having that. And so now you're only as good as your ability to direct that energy into something productive that you value. That is an incredibly powerful thing. And instead we've gotten caught up in doomerism and job being lost and water being consumed. All of which are lies, all of which are complete fabrications and misinformation. And these have been created in order to specifically help one small set of actors inside the AI race. And it's been fed and funded by those folks. So in this vacuum, Jason, we've allowed all these other people to paint the other version. And right now the other version looks way more compelling than the current version because the current version has very poor brand ambassadors.

[A]

Sachs, what's your take on this? I guess some people are looking at this as the left's version of the populist takeover that Trump did over the last 10 plus years. What's your take on what we're seeing here with socialism and it's amazing appeal and it's winning at the election box.

[E]

I think there is some truth to that. I mean, I think the choices of the future are gonna be communism or if you wanna call it socialism in the Democrat Party or nationalism in the Republican Party. I mean that is where we're headed. Those are the two populist directions. But let's look at what these DSA candidates stand for. So let's look at what their platform is. They actually say they wanna abolish the Senate. They want to abolish the carceral state. That means basically police forces and prisons. They want to abolish ICE and grant amnesty for all. They do not support any deportations whatsoever. They want to replace the President and Supreme Court with an executive and judiciary that is chosen by and subordinate to Congress, which basically Now I guess just means this House. And with respect to House elections, they want to abolish the Electoral College. They want to replace the two party system with a multi party democracy. And they want to expand the House of Representatives, implement proportionate representation and ranked choice voting in all elections. So this would be a total makeover of our constitutional system. They want to free Palestine. They want public ownership of major corporations. They want to defund the Department of War. This is a very radical organization and you would laugh at a lot of these types of proposals, but you can't really laugh at it anymore because these guys are taking over the Democratic Party. And you can see the Democratic establishment is in complete panic right now because they have lost control of the party to Zoram Mamdani and his allies. So Jason, like you said, I mean, let's take this one race here, New York 13, you've got this ally of Hakeem Jeffries, longtime incumbent Congressman Espalat I guess is his name. He is the chair of the Congressional Hispanic Caucus and he was defeated by an unemployed 32 year old PhD candidate. She's never had a job. She's been in college for 10 years, I guess writing this PhD thesis. And I think even by DSA standards she might be kind of a lunatic. So she has declared that she wants to end Western civilization. She wants to eradicate Western civilization.

[A]

Wait a second. What? We're soaking in it.

[E]

Yeah. She actually said she used the American flag as a napkin to clean her hands.

[C]

Oh.

[E]

She attended a rally one day after October 7th celebrating the slaughter of Israeli civilians. I mean, she's very pro Palestine, but even to the point of celebrating Israeli civilian deaths, she calls white women ugly colonizers. She's called for the complete defunding of the police and abolishing all prisons and borders. Doesn't want a single deportation, Hates the police, openly calls them pigs or has on social media before, calls U.S. service members war criminals and says the U.S. is a disgrace of a country. She's written favorably about communism and seizing the means of production. And on and on and on. So this is basically the new Democratic Party. It's gonna be. Even if the Democrats do take the House in November and Hakeem Jeffries becomes Speaker, this is gonna prove to be a huge headache for him managing all these new DSA members because they do not actually see the traditional establishment wing of the Democratic Party as an ally. They see it as an obstacle. This is the DSA co chair, Josh Block said, we're using the Democratic Party as a ballot Access vehicle.

[D]

Oh, my God.

[E]

Not because we share its goals. We build our own organization, get elected under the Democratic label, caucus with Democrats when it's useful, and push our own agenda from the inside. We see the Democratic establishment as an obstacle, not a home. So the DSA is coming from the Democratic Party. It controls the base now. It's where all the energy is. I think this takeover will continue. I think the DSA will gradually take over more and more of the Democratic Party. And all I can say to these establishment Democrats is play stupid games, win stupid prizes. You supported this open border policy that brought in this wave of mass migration that is a huge part of the base of this new DSA wing. Mamdani would not have won the mayoral election in New York if it had just been native born New Yorkers voting. It was the mass migrant vote in New York that swung it to Mamdani. It's not exclusively the DSA base. It's the migrants plus these over educated white progressives who. I say over educated because they're more downwardly mobile. They end up going to work in academia or NGOs, that kind of thing. They're hard left wing, they're kind of the vanguard. And it's this combination of these recent college graduates who are kind of the organizers and this migrant movement who are really taking over the Democratic Party. But again, this all goes back to Democratic Party policies. They may not have intended for this to happen, they may not have intended for them to lose control, but it was their open border policy. It was also the fact that they have cracked the melting pot and the policy we had for many years in America of assimilating migrants. Right, Immigrants.

[A]

Yep.

[E]

That all got cracked by multiculturalism and wokeism. We don't really do that anymore. So now you've got these candidates like Chevalier openly declaring they're not just anti American, they're post American. They don't have any respect for the American system, our constitutional order, our free enterprise system. They want to introduce something in much different and it's going to look a lot like the countries where these migrants are coming from. Yeah. So again, if you import massive numbers of migrants, don't assimilate them into our system, and then you have these Marxist leaders. You're going to end up with the American system coming to resemble the countries from which.

[A]

It's really interesting you mentioned how she wants to get rid of all of these, delete all of these units. It's very similar to Trump's. He wanted to delete a separate set of things like The IRS and usaid, Department of Education, epa, they each use that playbook as well. Like, hey, we're going to delete some of this stuff. Travis, you famously had the fountain head.

[E]

Trump didn't want to delete the U.S. constitution.

[A]

No, definitely not.

[E]

Travis, you're used to slight difference.

[A]

Slight difference. I agree. He didn't want to delete Western culture.

[E]

I don't think he wants to delete western culture.

[A]

No.

[E]

You might want to delete USAID because it was a festering, it was basically a front for all these CIOs.

[A]

NCIA. Yeah.

[E]

By the way, you may have noticed that in South America we've had seven elections where the countries have swung to the right. And I think a big part of the reason why might be you don't have the USAID there conducting all these left wing regime change operations.

[D]

Payola disappeared and the incentives disappeared with it.

[A]

Travis, you famously had the Fountainhead, Ayn Rand's novel, as your Twitter avatar for a decade or two years later.

[B]

No, they've been writing about it for a decade or two. This is like a six month thing where I would read a book and then rotate it. My avatar. Yeah, yeah. Hamilton for a while. I had Ender's game for a while, but yeah, it became. Yeah.

[A]

Having known you for a while, I think believe in the individual and their exceptionalism and trying to have a little ruggedness there. This is obviously the exact opposite. What's your take on what's happening in these pockets? Because it's not national yet, but it's definitely notable.

[B]

All right, I've got sort of two aphorisms for us. Okay. First is truth, and justice is the immune system for society. When the immune system is suppressed, all the social ills flare up. Okay. So if you're seeing us losing truth, like social media, mainstream media, whatever you call it, like that's an early indicator or bad things happening in society. Okay. And it's not just like social media, mainstream media, it's just everything around us. And the same on the justice side too. If people commit crimes and there's no consequences, it's a nice early indicator. So you can kind of watch, you can watch these things and say, is truth winning today or is it losing? Is justice winning today or is it losing? And what is the trajectory will tell you, are we going to get worse, Are we going to get better?

[C]

Right.

[A]

Covid makes in the Fauci case. Now we're seeing a lot more information come out. We have a really hard time getting the truth and, and maybe we'll get justice eventually. It seems like we're getting a little more truth five years later. But it's like a perfect level of what you're discussing.

[B]

Yeah, there's a lot packed into that, but you can unpack it. If we had a lot of time, we could unpack it. But those become the sort of atomic things that you look at. And then the other thing I'd say, and some people get a little surprised when I say this, which is, communism is in all of us. Communism is in our blood as humans. And people go, what the hell are you talking about? You're crazy. What do you mean? Well, I'm like, well, have you, have you ever in your life been lazy? And everybody's like, yes, I've been lazy in my life before. I said, have you ever in your life wanted something for nothing? Yeah. The difference is, do you make that a way of life? And when you have ecosystems that essentially allow you to do both of those things without consequence, those ecosystems get a critical mass and start taking hold. And I think that's what we're seeing.

[D]

Well said.

[A]

Yeah, I think it's well said. Gavin, I don't know you to talk too much about politics, but talk about markets. But these two things do relate, I think. So give us the economic perspective here on why this is happening, because obviously different generations have had different economic experiences. So I don't want to lead the witness here, but I have had conversations with you about this before.

[C]

Yeah, well, so I do think, Iris, obviously AI is, I think, going to be the defining political issue of the midterms and for sure the next presidential election. But I feel like what is going on with the DSA is really a fusion of two things. So the Democratic Party, I was a Democrat for most of my life, and it was the party of the working class people that was trying to create opportunities, maybe level out equality, help black Americans, help Hispanic Americans. And you can agree or disagree with their methods, but I think those are all noble goals. And to a large extent, none of those are really present in the dsa. None of them. If you look at who voted for which candidate, the voting base of the DSA are relatively wealthy white liberals who are downwardly mobile. They're losing votes with working class people, they're losing votes with poor people, they're losing votes with black Americans, they're losing votes with Hispanic Americans. And those, you know, the people that the Democratic Party, I think, for a long time tried. And whether they failed or succeeded is up to try to represent and give a Voice to. They are not of interest to the dsa. And I think the DSA is, is dangerous. It's tragic that we are electing profoundly anti American candidates who in some cases have called for violence to eradicate America. And I just think there's a whole class of people who went to an elite school, they grew up in really nice circumstances, and instead of going into industry, they went into this kind of giant NGO, nonprofit machine. And their outcomes have been very different from people who did productive things for the world. I've said on the show many times, Elon has done more to decarbonize the planet than every activist combined.

[A]

Yeah, times 10, by the way.

[C]

Times 10. And I think these NGOs and the fact that the government is increasingly outsourcing a lot of funding to them is a really big part of this problem. And they are pursuing policies. You know, I think we maybe talked about it last time, but the curly effect, a mayor of Boston, you pursue policies that you know are going to be disastrous for this, your constituents, but they drive out your rivals. And then you can give jobs, $600,000 a year jobs running an NGO that does nothing productive to your friends and allies. And it's really organized corruption happening at a massive scale. The one thing, whatever you want to say about the Trump administration, a lot of people are up in arms about this new plane he's getting from the Qataris. Well, one, sounds like we needed a new plane, but two, it's right there for you to see. I think there are tens of billions, maybe hundreds of billions of these payments flowing to these NGOs. And if you look in California and New York, it's like, I think the per capita spending on homelessness has more than doubled and it's all gone to NGOs. And outcomes have gotten worse. In California, it's quadrupled and outcomes have gotten worse. So I think this is dangerous. And I hope that the mainstream Democrats can find a compelling candidate because I think the reason that the DSA is increasingly ascendant is not because of their ideas. I think their ideas appeal to this very narrow subset downwardly mobile rich white people who increasingly maybe live in quasi genteel poverty because they're not doing productive things. They may be, well attention, but they're not doing productive things and can find a compelling candidate because I think the reason they're ascendant is Zoram Mamdani. I think he is one of the most talented politicians I've ever seen in my lifetime. You know, he can give a great speech he's good. In an interview, he can tap into all of this. He's kind of a chameleon who can shift. But I think he is a singularly talented politician, and he is the reason that the DSA is ascendant. Not their ideas or not dissatisfaction with AI, but it's him. And there is no one else in the Democratic Party. I used to think AOC was by far the most talented Democratic politician.

[A]

That was the warmup.

[C]

Yeah, she was talented. She's nothing. Clearly so wrong from a political.

[A]

Is clearly talented. And if you combine his charisma and ability to communicate with generations like we're now, like, I have two of these lost generations that feel like they're going to do worse than their parents. And if you look at housing and college debt, health care, they don't believe that they can participate in the system. They feel the system's rigged. And if somebody comes along who speaks to them and they have no conception of socialism and, and what happened, you know, in Germany or during the Red Scare, they have no idea what socialism or communism is. They have this incredible wrapper they've put around this, which is, you know, they're Democratic socialists. It's like, it's the Coke Light. It's a Coke Zero of socialism. It's actually just communism. They want to literally seize people's assets. They want to seize half of, you know, these companies stock. They want to seize their wealth. They just want to take from the people who have made stuff, as we talked about last week, and we've done nothing to change their mind. We haven't made more houses, we haven't made college more affordable. Healthcare is a disaster, inflation's a disaster, and starting pointless wars. Obviously the support of Israel is somewhere in here as part of.

[D]

Can I say something?

[A]

Yeah, sure, of course.

[C]

Yeah.

[D]

I was on Megyn Kelly yesterday, and I had this theory that I've been kind of working through, and I'll just share it with you guys because I'd love your reaction. If you look at the scourge of socialism, if you take the rhetoric away and you actually look at the outcomes, there are three countries that I think have veered far towards socialism well before the United States, Canada, the UK and Australia. And I think when you look at any sort of reasonable measure of their progress, it's been an unmitigated disaster. So all of the virtue signaling on social issues, all of the virtue signaling on immigration and open borders, all of the virtue signaling on climate change has left each of those three countries in some state of disrepair, with enormous amounts of infighting, tremendous political instability. They are all sort of powder kings. And there's an interesting thing that happened in each of those three countries that I think has the potential to turn the tide and it speaks to what Gavin said. Each of those three countries now have banned social media when you're 16 and under. And I think it's sort of like making sure the kid doesn't get addicted to the drug too early. And when you look at somebody like Zoran Mamdani, I think Gavin is right. I'll go even further. He aoc the lady that just won.

[E]

Chevalier.

[D]

Chevalier. Let's just break it down. They're all good looking, they're all charismatic, they have their pulse on the gestalt of the moment. They know how to use social media and they are essentially curating an army. Now if you cut the legs off by saying young people should actually age into social media, I suspected the most important, important channel of information consumption being taken away from them actually starts to give them the opportunity. And the rest of us, quite honestly, because we have to deal with kids who are just really stupid constantly asking for this stuff. The chance to actually show you how a balanced diet actually allows you to be much healthier in your later life. And I think as relates to information consumption, I think you are going to see, I suspect, a far less radicalized youth aging into the voting rolls in those three countries. And I suspect if you start to see political stability and predictability in Canada, the UK and Australia, you can put your finger right on this ban as the reason why. And Florida has already done it in the United States and I think we need to deeply consider it across the rest of the United States.

[A]

Social media ban is now starting at 16 and guys, Canada has it. It may come to the U.S. go ahead Travis.

[B]

I'm a full counter to Chamath on this one. The I think we all agree social media is bad for the kids and for the adults. Like too much of that stuff is very bad. It's brain rot for real. And it's going to be worse than cigarettes. It's all the things. But the real point of banning under 16 is so that you can force adults to identify themselves and de anonymize themselves so you can set up a full scale censorship regime which they're sort of contemplating in the UK and what censorship is really about is not about harmful content. It's about content that the people in power don't want you to see that disagrees with them if it agreed with them. It's not harmful. It's the stuff that doesn't agree with them. And so what they're doing is they're criminalizing, disagreeing with them. And so there's a derivative of this age based stuff, age gating, which is really about the adults, not the kids.

[A]

That is the downside to it. Gavin, you wanted to add.

[C]

No, I super agree that I think that a social media ban under 16 would be great, but I think it comes at a really high cost outlined by Travis. And that's what's really going on is they want to restrict anonymous accounts on X who say things that particularly the powers that be in the EU do not like. And if there's a way to do that while preserving anonymity and free speech, I'm all for it. But I think if, if it were not for free speech and acts like I think we'd be living in a very different world today, that would be a lot worse. And just to riff on a few things that all of you have said, you know, on communism, it is communism and the great tragedy of human experiences. We can't learn from the experiences of others. And it may not matter that communism has failed utterly and ended in death and misery wherever it has been tried, in a variety of different cultures with a variety of different mechanisms. And every generation may need to experiment with it. I think the saving grace and the importance of preserving free speech is, is that the DSA's policies, and I would say in particular super progressive Democratic policies are measurably bad. They lead to bad outcomes. If you care about black lives, there's a study that is uncontested that when you elect a Republican da all cause mortality for young black men in that city drops by 7%. That's all it takes.

[A]

Yeah.

[C]

You care about the environment. Well, progressives, there's so many regulations that you can't build solar, which is really the only thing that matters. And like the world is going to run on sunlight. You care about education, their approach to education, of getting rid of these elite schools that allows low income people to have a real chance, you know, getting rid of math in California, it is profoundly disadvantageous to people. It leads to terrible outcomes. And we all know what happens with crime. It turns out that there's a certain percentage of people who you know, are. I think it's like 60, over 60% of the violence or 75% of the violence comes from people who have like 10 or more convictions.

[D]

Yeah, I think the specific stat is like 0.1% commit 70% of the crimes. And if you just dealt with the 0.1%, you effectively no crimes.

[C]

And so I just think the scary thing is, and I do worry, for the first time, like as a student of history, the United States has been like a very stable political economic entity, geographically stable for a long time. And that's to its credit, because we could have literally taken over the world after World War II. But, man, if they get total control of some of these cities and drive out every everyone who is productive, I don't know how you come back. And so that is a little worrisome to me in terms of the future of the United States.

[E]

Well, and by the way, I don't think it's just New York. I mean, that race for mayor in la, where was it? Raman somehow beat Spencer Pratt thanks to ballot harvesting after voting day, or I should say votes that were found and counted after election day. I mean, that will be a test of the DSA because they are highly organized and they have learned how to take advantage of all these rules, these ballot harvesting rules and all these types of things. The dsa, I think they've got something like half the city council seats now in la, and they're growing, so especially in these low turnout elections. And look, this was a Democratic primary in New York, which is a strongly blue state. So I think maybe 17% turned out. It was very low. But this is where the DSA really thrives and excels because they care passionately and they're highly organized and they know how to take advantage. This is why they want all these ranked choice voting and all these types of things. They know how to manipulate and take advantage of those kinds of systems. So I think that you're going to see this in lots of other jurisdictions, wherever they're organized. I think LA will be a really interesting test. So I don't think we can just chalk this up to Zoran's popularity. This is a national movement and we're going to see it in a lot of places. But there's no question that Mamdani is now kind of the spiritual leader. I mean, a lot of these people don't they think AOC is a sellout or Bernie is a sellout. They are way more radical than even those types.

[A]

To add to that, Sachs, they did learn something from Trump, which builds a big tent. So you're seeing Bernie Mandami, Ro Khanna, they're all kind of like, yeah, we're different, but there's enough room in this tent.

[E]

Well, what's happening is that these sort of more established progressive leaders, they want to tap into this energy and even the establishment wing of the Democratic Party is now bending the knee. And so what you're going to see is regardless of how many DSA candidates actually get elected, the rest of the party is now responding to this and they're going to bend, they're going to blow in this direction. And because they don't wanna get challenged in a primary. I mean think about this. You had three major congressional races where the Mamdani candidate won, two of them unseated really strong incumbents. These were big upsets. So you gotta think now that every congressional race in a pretty blue district, those members are now gonna have to take into account that they could get primaried and they're gonna have to tilt their voting and their views and their rhetoric in this DSA direction and because they don't want to have happen to them what just happened to Dan Goldman in the New York 10th district. And just to make one last point on that. So Jake Al, you mentioned the Israel issue. And I actually think that is a hugely important and salient issue now in the Democratic Party. In Democratic primaries, obviously you saw that as part of the DSA platform, one of the legs is free Palestine. This defeat of Dan Goldman, two time congressman, he led the impeachment effort against Trump. He had all the right progressive credentials, he checked the box and all the left wing policies. He was on the right cable news channels all the time. No one expected him to lose. He lost to Brad Lander really just over this issue of Israel. Dan Goldman is very pro Israel. He basically defended Israel's actions over the past few years, whereas Lander, who like Goldman is also Jewish. So this was again, you know, white Jewish congressman against white Jewish longtime New York politician. So on paper they're very similar. It was just in this issue of Israel where they disagreed and Lander went to a mosque in order to denounce what he called the genocide in Gaza. So this was really as close as you can get to a straight up vote on that one issue in this primary. And Lander won pretty handily. Now the reason for this is if you look at polling, 80% of Democrats now say they disapprove of Israel. So you know, the approval disapproval rating. Israel used to have high approval ratings pretty much across the board. I mean it was sort of a consensus, both Democrats and Republicans. Now 80% of Democrats say they disapprove. You really can't underestimate how much of a motivator this is for young Democrats, they believe that.

[A]

Oh, we saw it. They were all over campuses. We see it. I mean, it's draws people out. And it has been quite polarizing just to call balls and strikes here inside the Republican Party as well. You have Tucker leaving the party over this. You have Megyn Kelly going mental over this. And you have a lot of civil war inside this administration, according to the report. So this is the.

[E]

Well, look, I mean, I'm not taking a side in this. I'm just trying to describe what's going on.

[D]

Absolutely.

[A]

Same as me.

[E]

I think the Republican Party is a little bit more mixed on this issue. And it really comes down to age. So if you're part of the older, more establishment Republicans, let's say you're a Fox News viewer, you still have high approval ratings for Israel. But if you're under 50, which means you're probably not watching Fox that much anymore, you're probably onto the podcast. I think the disapproval rating for Israel is now 57%.

[A]

Interesting.

[E]

So it really comes down to age. Young people across the board have serious problems with what Israel is doing. And then as you get into older age groups, that's where you see a big difference between Republicans, I think.

[A]

Chamath, you did a wonderful job of explaining this on Megyn Kelly. There's Jewish people, there's the state of Israel. There's Israelis who live in the state of Israel who are also Jewish. And then there's Bibi Netanyahu. And I think there's a lot of concern.

[D]

I mean, look, I need to be.

[A]

Netanyahu is just absolutely out of control. Is the consensus, I think amongst many people across many religions and political parties

[D]

not to react this whole thing. But there are a lot of parallels from what happened in 10, 7 and what happened in 9, 11 in the following ways. When you invade a country and you slaughter their people, it creates an enormous injury, an enormous emotional, physical, psychological injury. And what that country typically does is respond by giving the authority to the leader at that time to set the table. Right. And you have to remember there was a lot of things that happened post 911 that under any other circumstance would never have happened. At the top of the list would have been the Patriot act, which in any other world would never have gotten passed and would have seen the light of day, but not for 9 11. So there are moments where leaders are put in a position and they essentially act on behalf of their country and their people to right a wrong. I understand that. I think everybody understands that. What's happened now, though, is that people cannot logically disambiguate Jews, Israelis and Bibi. And I think that's very unfortunate because we're at a point in time where everything gets conflated and this thing has become this third rail issue. And I find it absolutely shocking. It's completely reasonable for people to have a point of view on Bibi and say, hey, you know what, it's enough or it's gotten too far or whatever it is. And I think that there is a very reasonable claim to make that it's time to find different leadership, new leadership inside of Israel and have an opportunity to reset their standing on the global stage. They deserve that. The Israeli people are incredible, Jews are incredible. But the idea that you fold it all together and you look at one person and then you apply it to an entire country and then an entire religion is insane.

[C]

May I add one thing? May I add one thing, please, Gavin? I think there's two things really, and I'll be quick. One, Israel has a giant PR problem. They need a young sub 35 year old American Israeli who's super fluent in English, conversant in social media and is their kind of spokesperson to America. And they need that in France, in Germany, in every country. And they do not have that. There was a young, I think his name, I forget his name, but there was a young Israeli who was doing a really good job. Israeli American representing Israel after October 7th. And evidently Bibi Netanyahu's wife didn't like him, so they canned him and they've never really found a replacement. And I do think this is an urgent issue for Israel because it's like they are taking body blows every second and they're not even responding. And what I think they do, what they tend to do is they'll sometimes roll out someone who's a great man or woman in Israel and is in their 60s and a hero of a war, but isn't that fluent in social media. Maybe the command of English is, you know, technically precise, but there's an accent and those are great people, but they're not great spokespersons. And this is an urgent issue. As far as the antidote going back to Chamas comment, I do think a big reason Trump got elected, every Democrat, many of the Democrats I know who voted for Trump, a big part of it was that during COVID they heard what their children were being taught for the first time and it was radicalizing for them.

[D]

Yeah.

[C]

And I think it's just really important that like as part of the American educational system, just there not Be overtly anti American things. Listen, we've made mistakes as a country. We're not perfect. We're about as good as it gets. And we need to tell that story in every grade consistently, and we can have a debate. We've done so many things wrong. Let's learn from them. But just, you know, slavery was endemic to the world apart from some countries in East Asia. Like, it's not a uniquely American problem. And we need to tell those stories because I think a lot of kids, the reason they're so susceptible to this social media propaganda is they brought up being ashamed to be American, ashamed of various things in their identity, and being told that America is evil. And we need to unwind that because America is awesome.

[B]

And.

[C]

And we're the only vaguely successful multicultural society on planet Earth.

[A]

Yeah, the melting pot. And if you say that, Gavin, if you say the melting pot is a beautiful thing, you're gonna get canceled because, oh, my God, you're getting rid of people's culture. It's like, no, no, keep your culture and then join this culture and we can all have this great smorgasbord.

[C]

Yeah.

[D]

You know what my culture is? You know what my culture is?

[A]

Oh, no, it's no longer Laura Piano. I know that. I know. You're off the train.

[D]

Winning, winning.

[A]

The culture of winning. I love it.

[D]

Learning, learning, Progress, adventure.

[C]

Do you piss?

[A]

Excellence.

[C]

To quote, quote Ricky Bobby.

[D]

Oftentimes I piss.

[A]

Excellent.

[D]

Just sometimes it burns. But oftentimes, just to warn.

[A]

Just to warn the dopey Democrats who have been unable to get anything done. The socialists are using your party and this guy went viral. They're just a host. Like, they literally want to infect the. Oh, yeah, good image. They want to infect the Democratic Party and then like, just literally get the voting base. And this guy, Gustavo Guardillo, I don't know if you guys saw this. He's a DSA co chair in New York City and he just said it outright. I was going to read you the quote. We're part of the Democratic Party caucus, but we don't agree with the way the Democratic Party runs its apparatus. So we're trying to build our own independence, by far focusing on volunteer led movement. We think everyone should be able to be trained and become someone who can participate in the political process. And we don't think the Democratic Party is run that way. In terms of the agenda. There's a problem in the Democratic Party. They are funded by billionaire donors and at the same time, they're trying to represent the working class in Our opinion, you have to choose between the billionaire class and the working class. They are just taking over the party. And again, back to the playbook. This worked really well for Trump. He took the Republican party over and he owned them. And they tried to get him out, they tried to get him out. But his message and his communication style was just too on point. He knew exactly what people wanted to hear and he knew exactly how to deliver it. He is a all time comedic performer. Like of non comedians he's the number one comedian in the world. And of actual comedians he's in the top 20. So he communicates perfectly. And that's exactly what Mondami's done. He's taken the Trump playbook and he has applied it. Here he is taking over with this communication. You guys know I'm a die hard Knick fan. My whole life cried. It was at game five when they won the finals. And then Mondame gave this speech that somebody wrote for him about the Knicks. And I was just absolutely flabbergasted and upset that it was so great. He's got that Obama Trump charisma and he is going to destroy your party from the inside out. Socialism is communism and is the road to suffering and pain. As Gavin said, no good will come out of it.

[E]

Isn't it amazing?

[C]

Oh, here we go.

[E]

Okay. You know Mamdani is a communist and what he represents is graciously evil. And yet because he just gave a speech about the Knicks, you love him now.

[C]

No, I love the speech and I like why.

[A]

The speech?

[E]

That's all it takes. We're screwed. That's all it takes.

[A]

It's true though.

[E]

If somebody, I mean this guy, he's a total phony. I mean he doesn't stop smiling. He's got this like crocodile smile all the time. He's talking about eating you. And it's totally fake.

[A]

Absolutely.

[E]

I mean, come on, you gotta be able to see.

[A]

He was making Knicks references and it was the most get out of your seat. Standing ovation, Cheer up. Speech I've ever heard about the Knicks. And I was infuriated. This guy is such a good orator.

[E]

You got programmed.

[A]

I hate him.

[E]

We're have to deprogram you now.

[A]

No, no, no. It was like getting hypnotized and I just pulled myself out. I got like pulled in for a second.

[E]

Next topic.

[A]

Next topic for sure. Oh my God. Strong first topic. I didn't know you guys were going to go all in, so to speak. Topic 2, Chinese open source models appear to be catching up with the US Frontier models. Let's start with a GLM 5.2 released by China Z AI. This is a frontier class open source, free to download anywhere Model 744 billion parameters, 1 million token context window and it's under the MIT license. If you don't know what that is. Open source licenses have very super open source. It's super open source. Thank you.

[E]

The most open source.

[A]

The most open source of all open source. If you open it up, you can use it however you like, you can fork it, you can build your own company based on that. No regional restrictions, no API, fully self hostable. No Dario, it's just yours.

[B]

It's just yanking your chain.

[A]

It's yours, it's just yours.

[B]

And you just gotta, you just gotta reference the. You just gotta reference the license. That's it.

[A]

Yeah, you shout out the license and you're good. Scored 51 points on the Artificial Analysis Intelligence index. That's the highest score of any open weight model ever. Stacks up nicely next to the frontier models. Bgpt 5.5 on the frontier swe coding benchmark. That's a software one trails cloud opus 4.8 by less than 1 percentage point. API usage cost obviously much cheaper. 85% cheaper in fact than GPT 5.5 for comparable performance. Z AI founder told Elon Musk Open Weight fable capabilities will be here sooner than Q1 2027. Gavin in other words, all this hand wringing, all of these legal restrictions, self imposed restrictions are now completely or close to completely moot if they're going to have a model in Q1. Does this six months even matter? Does six months in the grand arc of AI matter or not? And what does this mean for frontier models?

[C]

I do think how good GLM 5.2 is has challenged some of my beliefs. And there was a great post from a TPU engineer that for sure distillation has happened. There's been an immense amount of distillation, no question.

[A]

Please explain to the audience what that means.

[C]

Distillation is when you have a. Like we all have seen videos of these Chinese iPhone farms. Just picture a farm like that. Tens of thousands of phones, iPads and computers that are asking the cloud API through masked accounts very specific questions. And then these what's called reasoning traces are being harvested because if you're on the API you get to see every token and those reasoning traces are then fed back into the model during the reinforcement learning process and probably during the pre training process. And that is a way that you can get really, really close to the frontier at a fraction of the cost. And this is for sure going on and has gone on for a long time. I do think it's a cheat sheet.

[D]

It's a cheat sheet for other models to catch up.

[B]

It would be like asking Google every question you could ever imagine, every search imaginable, getting all the results and then putting your own search engines together to make it very simple.

[C]

Exactly. But now that this model is so good, it is good enough to do its own RL and you know, the kind of cat may be out of the bag now. I don't think we really know how good Mythos is. We don't really know how good the next OpenAI model is. We haven't seen the next SpaceX model. So maybe that gap opens up again. But either way, I profoundly believe the future is composable models. And you are going to every enterprise, you're going to have what Andrej Karpathy called a council of LLMs. You're going to have, you know, you're going to have Grok, you're going to have Anthropic, you're going to have OpenAI, Google, you're going to have at least two of those. I would argue Grok should always be one of the two because of its dedication to the truth. And it will tell you as a business owner a politically inconvenient truth that you need to know for your data. But you're also going to have your own open weights model that you are old on your data and you're going to put those two together, the frontier models in your own model and you are going to get, you know, real Pareto dominant outcomes. And you know, half the queries are going to be go to the open source model, maybe 85% and only the hardest ones are then maybe they all go to open source first and only the hardest ones are then checked by the frontier models. So I think this is the future, it's coming. And a misconception that a lot of people have is that open source models are, you know, somehow bad for AI. They're awesome for the AI infrastructure providers. They just shift economic value from the margins of the frontier labs to the infrastructure. And that's not bad for AI.

[D]

That's great for them.

[C]

It's great for them. But I do think there's still a role for these frontier models and it may be true. To date, frontier tokens are capturing 90% of the economic value and open source tokens are probably 80% plus of tokens processed. And those ratios may be here to stay. But I just think composable models are the future.

[B]

What does that mean, composable model?

[C]

A composable model where you have. If you're a corporation, if you're. Is there, is there a new name for your super secret startup? Travis? What's a new name?

[B]

The name is called Adams. It's not super secret, it's super awesome.

[C]

Super awesome. Super awesome for your super awesome startup, Adams. Which, man, loads of people have been calling me to say how, like they've been in the, you know, they've spoken to you and yeah, investor. The. Your dog is hunting with investors, Travis.

[B]

All right, fair enough, Fair enough.

[A]

Okay.

[C]

You're going to have a router and every query that somebody comes in, every task that needs to be done at your company, that router is going to send it to, you know, your URL SFT version, of course, Point two or Nematron.

[B]

Yes.

[C]

Then at some point in the workflow, a frontier model may or may not come in to kind of check it, add to it. And that's what I mean by a composable model. When you have kind of, you know, kind of a symphony of models working together with kind of the frontier models being, you know, maybe the. But that's what I mean when I say composable.

[B]

Yeah. Understood. Thank you.

[A]

Sachs, formerly Aizar and now running PCast. What are your thoughts on China's ascension in open source? And we're still looking for our open source champion, obviously here in the US but feels like, oh, man.

[C]

Can I just say one thing? Nvidia is the American open source.

[A]

Thank you.

[C]

They can release GLM 5.2 or better whenever they want.

[A]

Okay, but why haven't they done that? They don't want to screw their customers too much of a conflict to be like pushing it out there too often.

[C]

All of the above. Who knows? We'll see.

[A]

Okay.

[C]

Yeah.

[A]

And you got to be delicate there. I see. Okay, so I'll say it, not you. Jensen does it. Yeah. I mean, it's a classic channel conflict, right. You don't want to compete with your customers. And he is competing with Elon on self driving now. And Elon's making his own chips.

[C]

So I think these frontier model companies should think very, very carefully about Asics and the incentive that creates for Nvidia on the model perspective.

[A]

If OpenAI, which launched their jalapeno chip this week and announced it being built by, I believe, Broadcom, and they are saying, hey fu to Jensen and Nvidia and they already were full contact with him don't be surprised if Nvidia says, you know what, we kind of like the area you're operating in now that you're going to make chips and maybe OpenAI sells those chips to other people. Don't be surprised if Nvidia starts an OpenAI competitor. You heard it here first on all in Sax. Did you want to jump in there?

[E]

Sure. I mean, look, I think that China's been good at open source for a while here. There's nothing new about that, but there are a few things that are significant about GLM 5.2. So the first one is it is now, like you said, the best open weight model for coding, software engineering and long context agent work. And you gave a couple of the SWEBENCH scores. I mean, it was just a tick below Opus 4.8 and it was right up there with GPT 5.5. So if you compare this to, again, the state of the art of the frontier models from Anthropic and OpenAI, it is right there with the previous model. But you have to remember now that the current model, Fable for anthropic and 5.6 for OpenAI, is now in a little bit of a purgatory because of all the reasons we covered last week. Now, look, like I said last week, I ultimately blame Dario and the way he communicated and the way that he primed officials to be on a hair trigger with respect to these models. And when the government got a credible report about a jailbreak from, you know, one of Anthropic's own most trusted partners, you're going to say roll that back. But that is the situation we're in right now is that fable has been rolled back and GPT 5.6 is trying to navigate these new approval hoops. So we now have a Chinese open weight model that is as good as as the currently available models from OpenAI and Anthropic. And look, this is a point I've been making really since I joined the administration is that we are in a very competitive situation with China. I've been saying this from the beginning. Our whole AI strategy from the get go was about winning this AI race, defining it as a race as being globally competitive and we cannot afford to do things unnecessarily that slow our companies down.

[C]

David, can I ask, do you think Dario got exactly what he wanted? It seems to me there's some chance. This has been a very calculated strategy to provoke the US government into doing what they just did. And this is what he wants. He has a regulatory moat now he can keep his future models behind this, you know, give it out to Glass Wing, use it to distill it for him, for themselves. Do you think this is what they wanted?

[E]

I think that on a certain level it is what they wanted because they've been advocating to have a federal regulator, basically a new agency. In fact, Dario posted a blog just a few weeks ago saying he wants an FAA for AI. They wanted government approval, a government approval process for AI models. And so in a sense, they've gotten exactly what they wanted. Now, that being said, I don't think they're happy about the fact that that fable has been rolled back. So in a sense, you could say that Dario got hoisted on his own petard here, or it could be a FAFO situation. But look, my view on it is we should not reward Daario by giving him exactly what he's always craved, which is some sort of labyrinthine government approval process that does reward regulatory capture. So I hope that that very soon. Now, I do think that as long as Anthropic has resolved the jailbreak issue, then I do think they should be allowed to come back to market. And similarly for OpenAI, I don't think we should be delaying them unnecessarily. We do not have months to give away in this race. And let me just say one other thing, which again is something I've been saying for months, which is with respect to risks, like cyber, it is undoubtedly a risk, but what is the response to that? The only thing you can do is go out and find all the vulnerabilities first yourself. The white hats. Have the white hats find all the vulnerabilities and do a big upgrade cycle, roll out the patches before they can be exploited. The reality is that if you just clamp down in a way that doesn't even allow these models to be used, the Chinese are going to have these capabilities imminently anyway. They're already at Opus 4.8 level. And the founder of Z AI, he said that before Q1, they'll have Fable level capability. I believe them. Because, look, the Chinese have been, I'd say, nine months behind our models, plus or minus three months, depending on capability. But it's when they know there's been a breakthrough around something like cyber, they can deploy more resources against that particular problem and catch up faster. Like I said, we're on a shot clock here. I've been saying for months that we're on a shot clock. We have to do smart things. We can't just slow everything down because that will not Slow down the Chinese. They're not under our jurisdiction. We have to basically get these tools in the hands of our cybersecurity industry. They're the force multiplier, they're the enabler. We have to basically go out and this big upgrade cycle quickly because we only have a few months left.

[D]

They're six months behind on the model and they're 24 months behind on the silicon, yet they're only a few months behind in total. So what game are we playing? This is insane. We are going to lose if we keep doing this stuff to ourselves.

[E]

So let me make a point about that. So, on the silicon, there's been a huge push in China by the government to push their AI labs to develop and train on Huawei chips. And look, you can take these claims with a grain of salt, maybe they're not true, but it was claimed that Deepsea V4 was trained on Huawei chips. And now Z AI, they are saying that the GLM5 family was trained entirely on clusters of Huawei Ascend 910B chips. So now look, maybe they're lying. Maybe they smuggled in some Nvidia chips. But the claim is that this was all done on indigenous chips. And what I believe is that China is engaged in a strong indigenization push right now. They want to prop up Huawei as the national champion. They want all their companies using Huawei chips. They still need to scale some of the manufacturing, but they're going to do that pretty quickly. And then what they're going to do is they're going to take these Huawei chips, they're going to take these Huawei optimized models. Remember that GLM 5.2. The inference is optimized for the Huawei chips. Okay, we know that. And they are basically going to package these things up. They call it AI in a box. They're going to sell it at a fraction of the cost globally, which is

[A]

what they do with every technology. Right. Better, cheaper, faster or almost as good.

[E]

And that's another thing, as I've been saying since the beginning of this administration, we have to be pro export because China is going to be there within one or two years. As I said, we're going to be kicking ourselves because we could have had the whole global market to ourselves. We invented reasons not to sell abroad to our friends and partners. And now China is going to be there imminently.

[A]

Yeah, and with that lower price tag, when you play with this new gl, you get some really interesting responses. I asked it about the country of Taiwan was not pleased and didn't give me an answer. I asked it about Tiananmen Square. No answer as well. I'm using the hosted version at Z AI, but when I asked it places to visit in Paris, it did an exceptional job. Except when I said make these ideas into an infographic and make me like a three day agenda, it was like, hey, we don't have enough time to do that. And it said use the other model because this model's too busy. But you can go play with it@Z

[E]

AI just on a point about the censorship. So there's no question that these Chinese models have, you could say censorship and there's political bias in there out of the box. But American companies have taken Chinese models and then essentially worked around and basically fixed the censorship inside their own forked version. So for example, Perplexity did this very early on with Chinese models. They showed that you could put back the content on Tiananmen Square and things like that. So I think jcal, you're absolutely right about the censorship, but it's not a fatal problem. It's something that American companies can fix when they take an open source model and fork it and customize it.

[A]

Yeah, in the hosted version you're not going to get a great answer of what agenda you should use for tourism in the great country of Taiwan or your visit to Tiananmen Square. All right, let's keep moving here on the dock at Micron Smash their earnings. If you don't know Micron, they are one of only three companies on earth that make high bandwidth memory. These are specialized chips, they sit on top of the Nvidia GPU and their entire 2026 supply is sold out and has been for some time. SK, Hynix and Samsung also make HBM. Micron smashed earnings revenue up 4x4x year over year 9 billion to 42 billion. Beat expectations by 16%. Big jump in guidance for Q4. 50 billion versus 43 billion. Their stock is up 10x. Shout out to Gavin in our 2025 prediction show he gave a call on HBM makers like Micron as the best performing asset since that time. Micron up 14x.

[C]

I'm not crying in my soup.

[A]

You're not crying in your soup. We got a ton of information here. I think this I'll just end on the Apple price increases. Everybody knows Apple has been really been a beneficiary of the run local models movement that I'm part of and people are buying 128 gig 256 gig MacBook Pros, Mac Studios. But the gig is up apparently because now Apple, which had not passed on those costs to customers, is having to pass those increases on. So everything from, you know, the new MacBook Neo, which is their 699 laptop, you know, kind of competing with Chromebooks, is now 799 up 14% and Mac Studio up 25%. The costs are just going to be very significant. Inflation has come to the desktop. Your thoughts Gavin, on Micron and the impact on the industry. And is this a temporary bottleneck or does this mean everybody has to get into this business quickly?

[D]

No.

[C]

Well, one DRAM is the most important bottleneck. There's a whole segment of people on X who are very focused on bottleneck bottlenecks. I call them the Bottleneck Bros. They'll do some work with Claude, find some esoteric Japanese company. The bottleneck that matters is DRAM and DRAM and HBM dram. This is the most important bottleneck simply because memory capacity and bandwidth are foundational to the performance of every AI model. So this is the most important bottleneck. Elon is focusing the terafab on memory because he sees it as the most important bottleneck. Not lasers, not capacitors, not power supply semiconductors, not nand, flash, not hdds, dram. And I think this bottleneck is going to be with us for a while and it is kind of astonishing. So a few thoughts. What was important about the quarter? They announced that they have these SCAs, these supply chain agreements that have a floor and a ceiling for prices with increasingly large group of large customers. And this covers essentially 50% of their revenue I think, which is four customers. And the floor pricing in these new contracts is ahead of prior cycle peaks from a gross margin perspective. And so this is really I think pretty maybe end up being very transformational for the industry. Most other parts of the semiconductor supply chain have rerated, you know, lam research, you know, the wafer fab, equipment suppliers, you know, they all trade at huge premiums to DRAM relative to prior cycles. And their business models have improved but you know, so has the industry structure and business models of dram because HBM DRAM is increasingly a customized chip. But as far as other people being able to do this, look, CXMT is going public in China. They may be the cure for Apple's ills. They will flood the market with to some degree cheap consumer grade dram. But for the DRAM you need in these AI servers there are three companies that can make it. It's really hard to do this is as close to magic as science can get. And I think terrafab is going to be an important part of this solution. But these stocks still trade are cross sectionally cheap relative to the rest of AI. Something I've been thinking about, memory is DRAM is probably going to be 30 to 40% of all hyperscaler capex next year. Hundreds of billions of dollars that are spent going straight to dram. It's wild, it's. But this may actually be very valuable for society because it is probably going to inflate the costs of building a gigawatt data center to the point where even for the hyperscalers, economics matter who are caught in this prisoner's dilemma. And this may give us as a society time to adapt. To adapt what our friend Brad Gerstner calls the social contract. So the high iPhone prices, one CXMT is coming for consumer grade DRAM. But two, this may be good for AI, it may be good for us as a society.

[A]

And making it is just really pure silicon. Right? Like making memory. It's just this incredibly refined silicon and that might be the pre bottleneck.

[C]

Yeah, making the HBMD RAM, making what Nvidia calls SoCam, making LPDDR. These are the types of DRAM that are really hard to make. Not consumer grade dram. And they are increasingly what you need in these AI data centers.

[A]

Yeah, semiconductor grade.

[E]

Yeah, yeah. So my understanding of HBM stands for high bandwidth memory. Again this is part of the, you know, the GPUs that go in the data center to run AI is that you take the DRAM wafer or die and you actually stack them. I think HBM3 is like 8, it's stacked 8 dies high, but now they're increasing to 12 and even 16 and to basically stack them and then package them all together. That's an advanced technology in and of itself. So you're seeing now like Gavin saying there's only three companies that can do it. But also this is creating significant price pressure for all the consumer electronics businesses. Apple had huge news today where they announced massive price increases. And again it's because DRAM now is less available because it's just being hoovered up by all the data centers. And if you're a data center and you need to buy GPUs again, those chips, they're using immense amounts of DRAM because again one HBM chip is using multiple like stacks of DRAM. So it's just getting slurped up and then it takes a couple of years to ramp up new capacity. So these companies are going to do that, but that could take a while. We saw that in New York. Remember that was that Micron plant that was had just broken ground and then got shut down the same day because of some crazy environmental issue. So it's not easy to ramp this stuff in the U.S. although Micron is the one provider that's in the U.S. sK Hynix in South Korea, Samsung's in South Korea too. But anyway, we're going to see again more of this AI flation they're calling it. You know, it's just another reason I hate AI is it is in this narrow area of consumer electronics where there's competition for dram, it is leading to price inflation.

[C]

Now Microsoft raised the price of the Xbox. You know, it's coming for the Switch, it's coming for the PlayStation. You know, there's demand destruction because of prices in consumer whereas AI demand is relatively price insensitive. David, I would modify one statement. It's hard to build in Micron. It's hard to build a new fabric in a deep blue state. You can build fast.

[E]

Why were they trying in New York? It's kind of crazy.

[C]

You know, New York gave them all these incentives but it doesn't, none of those incentives matter. It's a little bit like solar power. You can be as pro environmental as you want, but if you can't build and install solar because of regulations, it doesn't matter. So you know, maybe that Micron plant ends up getting, you know, built. In my home state of Texas, the

[A]

incentive game has kind of flip flopped. It's like it used to be the states recording the factories and the fabs. Now it's the fabs are like which state can actually build this? We'll pay you whatever you want. Just tell us where to send the envelope, we'll drop a couple of envelopes off. It's not a problem.

[E]

Gavin, can you say how long it's going to take to stand up the fab at terrafab?

[C]

Well, I mean if it was a normal fab, it would be a two, three, three and a half year process. But you know, we've seen what Elon has done to other construction processes and you know, he's starting with some advantages with the intel partnership. So I don't think anyone knows. But based on past history, he's probably going to stand up Terrafab faster than other fabs have been stood up. But this is really hard. It's really hard. It's the intersection of magic and science. You can't Believe how complicated this is. So it's going to be hard. But you know, he has a track record of doing, you know, what Jensen called impossible. Superhuman. And so we'll see, we'll see how long it takes.

[E]

You know, one other point here that I guess is it might be relevant to SpaceX AI, although don't have to limit it to this, is I think there's an assumption that over time it would get cheaper and easier to stand up new data centers. Right. But what you're saying is actually it might be getting harder, it might be getting more expensive. Expensive, right, because there's competition for these components. The memory's getting more expensive. I'm not sure that the GPUs are getting any cheaper. I guess some of the transformers, the switchgear and the energy might be getting cheaper. And then the entitlements are getting harder and the political situation is getting harder. There's very few places you can even stand up new data centers. So is it the case that actually it's going to get more and more

[C]

expensive to 100% so to stand up a 1 gigawatt data center, $35 billion in semiconductors, Nvidia semiconductors, and it's $25 billion of power and cooling equipment. And that is clearly inflationary because a lot of that 25 billion is the human labor required to install it. So the calculation that needs to be done for Orbital compute is it's 35 billion of silicon in each space and you know, and in literally outer space and orbit in our ground. But if you can get the cost of launch significantly below that $25 billion, then the math starts to really math. And when starship is reusable, it's going to cost $5 billion to put a gigawatt of compute into space. And something that drives me crazy as people picture these Pentagon sized data centers. No, it's racks in space linked with lasers. It's kind of a virtual data center in space.

[E]

Wait, 5 billion. Is that 5 billion of launch cost or what?

[C]

5 billion of launch costs. Now you're 5 billion 40 billion to put the gig into space. You're at 60 billion terrestrially. And the 25 billion that is power and compute is clearly inflationary. And so it may be that in three or four years it's 70 billion versus 40 billion. And that 5, as Starship becomes rapidly reusable, is likely deflationary. So this is the economics that underpin Orbital Compute from first principles. And then on an ongoing basis you're maybe paying a billion dollars A year for the power to run those chips and cool them.

[D]

If I had to make a guess, I think what's going to happen is that since 2021, about 40% of all data centers get contested, right? I think that number is going to go up. So Sachs, I suspect that whatever forecasted energy consumption that we are looking at in AI is grossly imbalanced. There is very, very meager supply and there's effectively infinite demand. So that probably pulls forward the economic equation to want to go to space. But then again, that's going to prefer SpaceX and their compute stack and their compute decisions over the hyperscalers and over anybody else. And so you're going to have a cost of an output token, I think, terrestrially, particularly from the hyperscalers, be a little economically lopsided versus SpaceX once they get it to scale. Now that's the key statement. Whatever's left on the ground though, will be incredibly, incredibly valuable. It'll be a diamond. These are diamonds. And the thing is you have to find reasonable size, right? You can't have a 10 kilowatt diamond. That's like a little pebble of nobody cares. But if you're in the reasonable hundreds of megawatts to gigawatts maybe. Man, those are like hope diamonds. Those are just lock them down, which I own.

[A]

Travis, There was a interesting trademark filed this week. So more in the investigator, investor, investigator of the Tesla Plus SpaceX marriage that everyone seems to believe is going to happen.

[D]

You can say that you can give

[A]

me credit for it, of course, yes, as Chamath has architected in his in his high perch. But this trademark came out.

[B]

How cool would that be? How cool would it be for those two?

[D]

It's going to happen. It's going to happen. Be amazing, it'll be incredible. And if you're lucky enough to be an owner of both.

[A]

Oh, everybody's the bottom, Chamath.

[B]

Everybody, everybody can decide to be an owner.

[D]

Jason. Jason. I'll be, I'll be making love to myself when this happens.

[A]

There'll be no so no different than any other Thursday

[D]

on the top and the bottom.

[A]

The top and the bottom. Just like any other Saturday night. Here's the trademark for Megapod that came out. This is a filing date of 618 2026. So a very recent June 18th. Modular data center hardware for artificial intelligence computing comprised of network of computer servers, computer hardware for artificial intelligence processing, computer network hardware, electric power data distribution units and cooling systems sold as a unit self contained modular computing hardware systems for artificial Intelligence workloads, yada, yada yada, essentially.

[D]

Well, just to explain what this is.

[A]

Well, yeah, let me just, let me just.

[B]

By the way, that description makes. I don't know what it. I still don't know.

[A]

Essentially what people are saying is this is going to be a giant battery pack with GPUs at the supercharger stations, which have already been approved. That's the back channel. Chamath, go ahead.

[D]

You have a couple of issues right now to turn on compute terrestrially. So assume you have land, that's relatively straightforward, assuming you can get it zoned. Less straightforward, assuming you can get power, very difficult. Then you have a very critical design decision. So all of these folks publish these things called the basis of design. And your bods essentially tell you, here's the anthropic Spec, here's the OpenAI spec, here's the core weave spec, here's the aws spec, here's GCP. And you get these 50 and up to upwards of 500 page documents of all these technical details. The issue that we have is, I don't know if you guys have used OpenAI or Anthropic recently, where you get the whole thing of like, come back later, right? Yes, that come back later is completely unacceptable. It just means that they have no compute. So in trying to find.

[B]

Surge pricing is coming.

[D]

Yeah, let's go. So in trying to find this solution, what is happening is these basis of design, the restrictions, the specificity is being relaxed. And one of the key constraints is we've moved to an architectural model from Google and Nvidia that has said, look, we have to liquid cool these racks. These are very complicated, big girth supercomputer racks essentially. And now we're also going back and saying, you know what, maybe some of these older stuff that's a little bit less proficient and a little bit less useful, but we can air cool them is useful. And everybody's like, yeah, you know what? We should try to use everything that's available in that second class. What some very smart people are doing are like, wow, well, here's a shipping container that you can just drop on a concrete pad somewhere, plug in the power and let it rip. And so, Jason, what you're seeing is that level of investment that's happening. So there are companies, you know, like Dell makes these racks, companies like Vertiv makes these modules. And I think if Tesla can make them available, folks like us for my data center project, we would be enormous buyers of these things because we would just literally prefab them in a warehouse, right? Get the chips, prefab them, truck them to the place, crane em in, turn it on, off to the races you go. You have like a 90 day build cycle, which is unheard of. So that's where these megapods are coming from. I hope it's not entirely consumed by Tesla and SpaceX internally.

[A]

Well, that's. The rumor is that he's going to put them at a supercharging network where he has a lot of land and he's got power there already. And those are lightly used in some cases.

[D]

You know, there are other requirements. The problem with some of these things is that you need to have certain levels of access. There are certain infosec requirements, there are certain liquid cooling requirements that make many of the workload applications unfeasible at a place like a supercharger center, where random bumble are like traipsing around.

[A]

Security guard, put an optimus.

[B]

So guys, I've got 500 properties with lots of energy, lots of mechanical cooling systems and lots of LNG access. Or sorry, not lng, natural gas, sorry, already piped in. So on all the stuff I'm doing on robotics, AI, physical AI, we're literally looking at putting some of our compute into our kitchens.

[A]

Compute kitchens.

[D]

You're going to be able to buy small modular. Let's put data center in a quote.

[B]

But it doesn't matter. Like I just go buy the GPUs and I just set it up in a kitchen, right?

[E]

It's like bitcoin mining.

[D]

Hold on.

[E]

It'll be like a bitcoin miner.

[D]

No, hold on, hold on, hold on. It's not that easy, okay? Like if you guys want to build a cloud and contribute it to a pool, you're going to have to sign up for liquidated damages. And you're not going to sign up to these SLAs.

[B]

I'm not a hyperscaler. I'm just using it for myself.

[A]

Yeah, rack and stack.

[D]

Oh, okay, sure, you can use it for yourself. I'm saying the more interesting opportunity is

[B]

when whatever Travis says. Let's talk about the interesting stuff.

[D]

No, no, I'm just saying, like what I thought you were going with this. Travis is like you could build a synthetic pool and contributed to Neoscaler. And all I'm saying is to do that is a leap of things that you'd have to do that you probably don't want to do because it veers you away from what you're at.

[B]

I think the security thing is the main issue around Non data center type real estate, to be honest. It's the big one. Look, you've got to do liquid cooling, you got to do mechanical systems for air cooling. You have energy. There's a lot of things you got to do. But assuming you even had all that. The architecture of a data center is set up like they have man traps, right where you go into a room, the door closes behind you that you got into with your fingerprint. Then you go into the next part of it again with your fingerprint. Only when that door closes like, well,

[C]

just curiosity, how much does one of those mantraps cost? Like why can't you put some of those in your baby?

[B]

You could.

[A]

Are you interested in putting in a mantra? Just trying to help trapsome men.

[B]

I'll try to interpret where chamat's going a little bit is like a megapod that's sitting at a chart. Like a public charging situation because of the physical access of it. Like there's probably some stuff you've got to do if you're going to resell it. But if you're going to use it for yourself, you can use it for yourself.

[D]

The real value I think in the Travis example, which I find super exciting, is if you can contribute it to a distributed training pool or a distributed inference pool that has a lower sla, which is more of how this community based oriented work. Jason, I think you've talked about Bittensor. I think Venice is a project. I think Pluralis is another project. Travis, that's where I think it's super exciting. Where.

[B]

But, but the one thing I'll just throw out there, guys, the distributed training stuff. If these things are far away from each other, meaning not right next to each other, they're so less efficient. Like the efficiency drops dramatically. You want these things to be right next to each other physically. You get like multiple orders of mag. At least an order of magnitude type efficiency maybe plus plus plus it's a big deal. So like you could have two. We have two of our facilities.

[A]

From one GPU to the other is super important. And if it's on a peer to peer network, it's going to have lag. It's going to take my time.

[B]

Even if it's on your own fiber connected like two kilometers away, you're screwed. It's not a thing.

[C]

This is 100% true. But everything that cuts against training works for inference. Respect latency is super important. And I do think you know a distributed inference. Distributed inference costs are coming.

[B]

I get that.

[C]

That's interf on like what Tomas said, in all of this, like one, I mean there is actually a startup that is trying to put four GPU units with kind of a battery on people's houses and give them a discount on their power. And then you can do inference for that neighborhood from those four GPUs and it's like lock sealed so nobody can get in. But there's another dynamic that I think we should talk about with all of this and can play into. The megapods and other people are kind of working on data centers. Crusoe is working on modularly assembling data centers, kind of like a data center. And think of it as like an 18 wheeler, what do you call those things? The 18 wheeler shipping container, whatever it is. But that is the disaggregation of inference into pre fill and decode. When a model is answering your question, it's doing two things. The pre fill part is understanding the question and its answer thus far. And think of that as the more you can remember, the bigger your memory capacity. Literally the more words you can remember, the better. Decode is the process of generating the next token. And that is a memory bandwidth bound problem. And think of it as the faster you can speak, the better. And these two types of inference are increasingly being disaggregated. And Chamath was an investor in Grok, which Nvidia bought and they're going to use this. Cerebras is the other solution today that is available. And you can put Grok or Cerebras decode, you know, optimized chips. They would both say you can do more than decode on them. And that's true in front of old Nvidia GPUs like H100. So you can, you can lift H1 hundreds, A1 hundreds out of some old data center, put them in one of these mega megapods, you know, a rack in a shipping container, put a Grok or a Cerebrus in front of it and you can get a very competitive solution. And so I do think the disaggregation of inference. We're going to be using GPUs for seven years, 10 years, 12 years. And that's great because it lowers the cost to finance them, which makes this AI revolution more financeable. Chamath, you want to riff on grok? Should we?

[D]

I really agree with everything. You're incredibly well steeped in this space. It's so exciting. I don't have any investments or anything in the distributed compute space, but at the intersection of competing against China, having a vibrant American open source community having a bunch of distributed models for purposes of free speech and otherwise that Travis mentioned earlier. I do think this idea of distributed inference has a real place in the American ecosystem. I don't exactly know where and how and how homeowners would get paid, but whoever figures that out as a Pan American idea, I think is really onto something.

[C]

It'd be awesome.

[A]

And yes, Travis obviously slower, but people are contributing compute to this. That's like kind of surplus computer or compute that's available.

[B]

Recycling unused compute. Recycling unused compute.

[A]

And then there's Targon, which is just straight up, people are putting. And you can rent H2 hundreds by the hour for three bucks, four bucks, and it's permissionless. Anybody can contribute provided. And this is kind of the magic of Bittensor is there are validators that make sure you're putting in what you're saying you're putting into the network. And so if somebody just had the hardware and Tesla said from now on, every powerwall, and I don't put it past him to do this, you buy a powerwall, we give you a discount on it. Every powerwall has our GPUs in it. Part of the offering is you can't buy a powerwall without putting GPUs in it. And when you're not using it, we will pay you for your battery. And you put a Starlink on your roof. And now you've got a distributed system where you get a couple of these power oils with their own silicon in it and a Starlink. And now Elon's created an infinite number of home battery backup systems. People get their battery system for free. He gets the exclusive for 20 years.

[D]

You guys see that? There's a rumor that Elon's going to

[C]

buy T Mobile, by the way, just because Cerebrus Cerebras has blown up and gone through deal price. We should talk about Cerebras a little.

[A]

So Cerebras had an incredible IPO. Give us an update on where these IPOs are happening. Obviously SpaceX had an incredible IPO, but has retreated from this, you know, otherworldly $200 share price. So to the extent you can talk about these two, as well as the two IPOs to come, $4 trillion in backlog. We've obviously got OpenAI and Claude. I'm sorry, anthropic, which makes Claude. Both of those would be worth a billion plus. You put all this together, 4 trillion of new offerings plus Cerebras in there in the mix. How does the market manage this Much new inventory being put on the market. Obviously, the flow to SpaceX is notably small, but over time, people like yourselves and other insiders, founders fund, et cetera, will be unlocked and have the ability to distribute to their LPs. So this is going to be a moving target, I think, in terms of share price. And can the market absorb this? Where does the money come from retail? Or does it come from people selling their Bitcoin and moving it over to something more exciting? What's the dynamic here in the market? I know we're in uncharted territory, Gavin.

[C]

Well, for sure, there's no precedent for any of this, but a few things I would say, like just in no particular order, I. Anthropic is worth $3 trillion today, and it's very important.

[A]

Did you say anthropic is worth $3 trillion?

[C]

Yeah, I think that is roughly where it would probably trade as a public company and.

[B]

Wow.

[C]

Yeah, I mean, look, they're going to do. They're going to end this year. Oh, man, they're going to end this year. Well over a hundred billion. What's the 28 number? 3 trillion? Is it 200, is it 300 billion? It's probably not going to trade it 10 times that number. And it will be very profitable at that scale because it'll be inference dominated and people reporting they have 85% gross margins on inference. But in terms of the market absorbing this, the market's already absorbed it. It's just shifting from private to public. And so in the scale of global capital markets, these seem like really big numbers. You're just moving from the private markets to the public markets, which are even bigger. As far as SpaceX specifically, I think one of the more important things is Everybody who's a SpaceX investor or employee has had a chance to sell every six months for the last 10 years. So they may not be the wall of liquidity that some people are thinking about. I read this New York hedge fund short report that you could just short SpaceX on the lockup because so many people are going to sell really well. Everybody who's on the cap table, they had an opportunity to sell and almost half the employees at SpaceX bought on the IPO. Now, I do think cerebras.

[B]

But Gavin, one thing though, I gotta say so I've had SpaceX since 2018. What, what? But their little liquidity thing every year, like last year, it was like 350, 350 billion last year. So you got an 8x in one year, you could have a lot of people selling. Right. They were doing little 20% up, 30% up clips for many years. And then an 8x ER could create

[C]

that liquidity, maybe, but we'll see. That's possible. But the employees are buying at the new price and they're probably at some level one of the biggest pools of ownership that's going to unlock. And then I do think a lot of people probably own SpaceX through SPVs and those probably don't unlock or get distributed anytime soon. So I just, I would be careful with assuming. I don't think Elon's a seller of his 50.

[B]

No, he's definitely not, obviously. Yeah. And a lot of us aren't sellers, you know, and that's great. Yeah, yeah.

[C]

I mean, a lot of people who had large space expositions were large buyers on the IPO on Cerebras. So Cerebras has had a tough two days since they reported their first quarter as a public company. And I think there are two things that are worth discussing here. One is there is a whole generation of portfolio managers. There's a lot of people who are advocating for kind of squeezing the blood out of the stone on IPO prices. And the flip side of that is that there are a lot of portfolio managers who if a stock breaks deal price, they sell it no matter what. They consider it a promise that was broken. And so this is what has happened with Cerebras to some degree over the last two days. And this may seem irrational, but there are people who run giant funds who I know personally where if a stock breaks deal price, they sell no matter what. And so if stock breaks deal price, it can sometimes go to places you wouldn't think it would go. And this means that shorts, if a stock gets close to deal price, they short it because they want to break deal price. And then, you know, they make a quick 10 or 20% so it becomes a pylon because you have this price insensitive selling that can be triggered. And this is what has happened to Cerebras. You know, people talk about hate sale, hate selling, but they broke deal price. And so just if you're going public and you're listening to this, tell your bankers price this in such a way that we're not going to break deal price in our first nine months as a public company. And that's what I always advise everyone to do. And I think it's important. But I also think, you know, it takes companies a while to learn how to tell their story and communicate to public markets. It's a very different audience than VCs. And the way, like the way I would have respectfully told the Cerebras story, because what happened to Cerebras is they reported a quarter and they're growing fast, but relative to the rest of AI, they're not growing that fast in the March quarter. So what I would have said is we signed this transformational, you know, 20, $25 billion, I don't know the exact number contract with OpenAI in December, December of 2025. We immediately ordered more wafers from Taiwan. Semi it takes 100, it takes four months from when we make that order. Taiwan says yes, they start producing. Takes four months to make the chip. Then it takes us two months plus or minus to turn that chip into a server. And then if we're lucky and we can find the power, it takes us a month to energize that chip and start making tokens with it. So the first time you're going to see the impact of, of this OpenAI deal at the earliest is probably around Labor Day. So you'll see a little bit of it in the third quarter. But then it really, it starts to build and just like really simple math. So like let's just use some rough numbers. Let's say, let's take some Nvidia numbers. It takes some 35 billion to bring on a gigawatt and 15 billion that you can generate 15 billion in token revenue and cloud revenue out of that gigawatt. IT and somebody on the call talked about adding 50 megawatts a month. If they could add 50 megawatts a month in 2027, forget 26, that means they exit the year at roughly a $9 billion cloud computing run rate and we're at less than 40 billion of market cap. Now that is going to be really hard to do and they've never done anything like that before. But I would focus as an investor. I think what matters here is not where they sit competitively, not what new demand they can bring on, but just how quickly can they bring on power. And listen, outside of the hyperscalers, the only companies that have ever brought on more than a gigawatt, I think are Coreweave, Crusoe and SpaceX. AI to bring it on 600 megawatts. It's really hard. And that is what I'm focused on as an investor. How many megawatts can they bring on? Because we know what they're going to monetize at and that is the question. And we'll see.

[D]

I think that's well said.

[A]

Yeah. The other companies that have had this happen of late, I guess Rivian and famously chamath Facebook traded below IPO price in the first year, I think. And so this isn't necessarily mean a bad company. It just means a lot of hype or maybe going for it in the IPO and pricing it to perfection. And it can go one of two ways. You can either grossly underprice, grossly overpriced, and it's really hard to get right. And this is why doing auctions or.

[B]

Yeah, auctions are the way. Auctions are the way. And so it's not hard to price if you just do it the way it's supposed to be done. It's hard to price when you're. When you want it to be a certain number.

[D]

Yeah. And you have many mouths to feed and that influences the price.

[C]

I don't think that happened here. I think there was a good faith effort to price this thoughtfully, but just it was such an in demand ipo. I think it was a hard IPO to price.

[B]

Gavin. You just auction it. I think that's different than underwriting it. You're underwriting, but the bankers, I think they just need to get more in the mode of just doing the auction.

[A]

Final topic was this $3 trillion or actually now it's your $3 trillion call on anthropic would make it like 6 trillion in offerings. What do we think broadly in the market?

[C]

It's not in offerings because they're going to offer a small slice of that.

[A]

Sure.

[C]

And that small slice is very easy to absorb. In the context I believe we have no precedent. We'll see. I might be wrong, but it's not hard for global capital markets to absorb 50 billion of an offering. It's not like, it's not like somebody has to come up.

[A]

Yeah, it's a 5% load is 150 billion.

[D]

There's enough.

[B]

Guys, remember. Remember when 15 billion used to be a whole lot of money?

[A]

Yeah.

[B]

How weird is what's going on? How.

[A]

By the way, where's all this money coming? Oh yeah. Where was it all this time?

[C]

Can we just reminisce, Man? We got my. When I was at Fidelity, my, my colleagues and I, we got pilloried. I think we priced Uber at 14 billion and we got pilloried in the press for not knowing what we were doing. And it was seen as, you know. Then of course, like six months later, I think you guys did around at what like 42 billion or something. But it's like yeah, 14 billion. That was groundbreaking for a private company back then.

[B]

Yeah, for sure it was 17, but that, you know, 17. No, you're right.

[C]

I wanted 14. And we had like a big negotiation and we ran.

[B]

We ran an auction. No, we just ran an auction.

[C]

Yeah, you wanted 20 and maybe we landed at 17.

[B]

What we did. What we did was every person who want to be involved had to fill out a sheet of how much money. They put it at 10, 11, 12, 13, or all the way up to 20. And then we just did the Dutch auction. We said, we want to clear one and a half bill. We just did the auction and cleared it. Went back to people and said, hey, you're not going to get it. You have another shot. They update their Excel sheet and it just moves the number up a little bit and then you close it down. But, yeah, it started that round started at. I think it was 9 or 10 or something like that. Ended up at 17.

[A]

Thank you for your service.

[B]

Yes, it used to be. It used to be that. That was a lot of money, and that was unheard of at the time. And that was. Well, look, it was 10 years ago when we used to walk to school uphill, both ways.

[C]

Yes.

[A]

We used to have to. Yeah, we used to eat potatoes with no butter, just hot potatoes. Sometimes we were lucky that they were cooked. I love that sometimes they were raw. No, my dad would tell me that story. It's a famous John the Beard story. He'd say his mom would put like

[C]

four

[A]

potatoes in the oven. They'd wrap him in tinfoil, one in each pocket because they couldn't afford gloves. So you put your hands in your pocket with the hot potatoes. You get to school, you eat one for breakfast, one for lunch. Him and his sister Johanna, God rest her soul, my aunt, who died too young, and they would just go eat these potatoes. That was their life, walking to school. Yeah.

[B]

And our kids are trying to both ways.

[A]

Yeah, they're trying to get the new iPhone. 16 or 17, I don't know.

[B]

Remember when. Remember when it used to be hard to raise $5 billion?

[A]

Oh, my Lord.

[B]

Crazy. Remember when we started, it's hard to

[A]

raise 1.5 million, dude, I remember.

[B]

Yeah, I remember when it was hard to raise. Anyways, we don't have to do this. It's okay. We already sound like grandpas. It's fine.

[A]

It was so hard to raise that first 1.5.

[B]

It's just. We don't need to go there. It's so funny, though.

[A]

What's with this art piece, Gavin behind you. Is that like an art piece or. You made it.

[C]

Yeah, no, this is. I'm staying at a rented house in Atherton.

[A]

Oh, okay. There you go. It's just a Arabian art. All right everybody. For the dictator Jamal Palai Hapitiya. And for David Sacks TK gb We'll see you next time on the all in podcast. Bye bye. Great job everybody. Let your winners ride Rain Man David Sack.

[E]

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

[B]

Love you.

[A]

Besties are gone. That is my dog taking it.

[B]

Notice your driveway.

[C]

Oh man.

[B]

My habit will meet me at 1.

[A]

We should all just get a room and just have one big huge orgy

[B]

Cuz they're all just useless.

[A]

It's like this like sexual tension that

[D]

they just need to release somehow.

[E]

Your be we need to get merch.

[C]

It.

[B]

I'm going all in.