A (2:38)

Big news of the week is probably the quasi nationalization of the entire technology industry by Donald Trump. Emily, can you like bring me up to speed here? Because I'm not sure I understand what's going on.

B (2:54)

So, yeah, the conventional wisdom of the week is that Donald Trump is practicing some kind of state funded shakedown capitalism. The example earlier this week was the announcement that the US is going to take a 15% cut on chip sales to China, that Nvidia and Advanced Micro Devices sell into China, that the US government will take a 15% share. It's really not clear why this policy would exist.

A (3:27)

It's also just to be clear, it's also not clear whether this policy is even constitutional. There is like an actual clause in the Constitution saying you can't implement an excise tax, a tax on exports, and this very much looks like a tax on exports. So plan B, I think is to do what he's doing with intel, which Elizabeth, apparently is what he wants intel.

C (3:53)

To basically give the US Government some equity. And he's been calling for the ouster of their CEO because of his ties to China.

A (4:01)

Oh, wait, he doesn't want to buy the 15% stake, really? He just wants it for free.

C (4:06)

Yeah, that's my understanding of it. Yeah.

B (4:08)

There's been reporting, I don't think the White House has confirmed that the Trump administration wants to take partial ownership of Intel.

A (4:17)

Yeah, I definitely read the, you know, we want an equity stake in intel bit, but I thought at least they would do that in exchange for throwing more money into intel and hopefully maybe bringing Intel.

C (4:31)

Like you think Donald Trump is a, you know, a rational president who thinks about this as an investment in an American company, but he has not behaved that way up to this point.

B (4:42)

Like, we saw this with U.S. steel, the White House uses leverage, aka can Nippon buy U.S. steel? And they have control over that. And so if they want that deal to happen, if U.S. steel and Nippon want the deal to happen, the White House says, okay, well, we want a golden share in the company. There's no like, and we'll give you money. So why would there be. And we'll give you money with Intel. You know, it's more like we'll allow you to operate. And that's why people are calling it, you know, state funded capitalism, socialism, whatever.

C (5:14)

Somebody called it Cosa Nostra capitalism, which is sort of, what, it's just mob behavior.

A (5:19)

If you want to sell your chips to China, you need to pay me.

B (5:22)

You want to operate your restaurant in our neighborhood, you must pay tribute every week.

A (5:26)

And honestly, I feel like Tim Cook got this right. Right. Instead of paying 15% of all of his exports to China, he just presents Trump with a gold plaque and that's gotta be cheaper.

B (5:39)

The move, and I wrote about this a few weeks ago with my colleague Eleanor Hawkins. But I mean, the move is you, like Apple and other companies, you announce that you're investing in the United States. Often you repackage things you're already doing. I think Apple has done this and. And sort of like package it as like, we're doing this now because the White House, you know, wants us to do more manufacturing in the US and look, we're working with Corning to make our glass in the US when in fact, Apple's been doing that all along. And then the White House gets something for a press release or a ceremony, an award in the case of Apple. But I guess some companies are less successful, and then they wind up, you know, you wind up hearing this stuff.

A (6:21)

But, I mean, we don't know what it means, right? What this is. One of the things that's super interesting about all of this is that it's a little bit like all of those promises of hundreds of billions of dollars of investment in the US that were made by Japan and Europe in order to get their trade deals. They're like, promises. And no one can agree on what was promised or how it was promised. And kind of no one really believes that it's ever going to happen. And it's certainly not even really enforceable. Like, there's nothing that the European Union can do to force European companies to invest in the United States. And so it all just lives in the world of vibes and sound bites. And I. There is a part of me that wonders whether Donald Trump has got his vibe and his sound bite now from Nvidia, saying, like, we're going to take 15% of your H2O exports, and if it never actually happens, then no one's going to be too upset. But then there's another part of me that says, Donald Trump has this massive stack of chits from all the big law firms. We have talked about this on the pod. Like, we are going to give you a gazillion hours of pro bono work for reasons. And I'm sure that at the top of that list of things that he's going to ask Kirkland and Nellis to paper up is like, find a way to get 15% of Intel's chip sales to China.

C (7:47)

I think it's easier with the European handshake deals for Trump to kind of ally whether or not they actually go through, because how are people going to really keep track of that. But Nvidia is a public company, so if suddenly they're getting, you know, 15% off the top of revenues, I think people would notice. Or if they weren't.

A (8:08)

Well, the revenues are going to be the revenues, and then the remittances to the government are going to be the remittances to the government. And then the big question is whether they break down those remittances to the government. And there's like a specific type line item outwith the, you know, normal taxes that says, you know, special Trump tribute that we have to pay in order to sell our chips to China. And I suspect that Nvidia won't do that.

C (8:35)

Well, as a. As a former equity analyst, you would notice a remittance was just completely outsized. And I think a 15% take of revenue would be. You would notice it in that line, whether they broke it out or not.

A (8:48)

Well, it's not 15% of all revenue. Yeah, it's just. It's just the H2O chips, and it's only the H2O chips that has been sold to China. So that's a small fraction of their total revenue.

B (8:58)

I just want to interject and say that I've only read about this and I thought it was H20, and I feel just. Thank you for bringing into my Life that. It's H2O chips.

A (9:09)

They're quite liquid assets.

B (9:10)

You know, I've been thinking a lot about this, but I haven't articulated yet. So I'm debuting it here, the articulation. But I mean, for the past decades, the US has been cutting taxes in the Trump administration more than the latest to do it, especially on companies. But like Trump's policy is, is raising taxes. It's just. It's raising taxes. This 15% cut of the H2O chips is. I mean, a tax.

C (9:36)

Yeah. Is nothing.

B (9:37)

Tariffs are a tax. I mean, so their plan is just tax companies, tax people, and do it in these, like, weird ways without Congress.

C (9:45)

Trump is, again, Trump is economically illiterate. He can't hold more than two ideas in his head at once. And so this sort of counterbalancing of anything that he might be doing to boost the economy with the stuff that he's doing to crash. It just doesn't think about it that way.

A (10:01)

I actually give him more credit than that for this one. I think there's something important going on here, which is that there are two different types of taxes. Broadly Speaking, historically speaking, 99.9% of taxes have been the taxes that are imposed by Congress and get passed by Congress because Congress has the power of the person that's in charge of the budget and yada, yada. Right. And what Trump loves to do when it comes to passing his big, beautiful bill and all the rest of it is announce massive, great tax cuts. And Congress passes the tax cuts, and all of the members of Congress can go back to their districts and say, I gave you a tax cut and I gave you a tax cut. And everyone is happy with that. Now, in Trump 2.0, we are seeing massive tax hikes, as Emily says, but only in the kind of things that can be unilaterally imposed by the executive branch without going through Congress. Yeah. One of these, I think, Emily, you've hit on something really important here, is that all of these tax hikes that Trump is doing, which are actually kind of fiscally important, are constitutionally incredibly dubious. And the whole edifice of these tax hikes could come crashing down at any minute.

B (11:10)

Yes.

C (11:10)

I still think it's a little simpler than that. He's expressed admiration for China in different places because he likes the way that the state controls, you know, it's a company is internally, he's a little bit of a control freak. This is why, you know, the tariffs don't make any sense. It's just that if he thinks that he people owe him something or a company owes him something, and he conflates himself with the US Government all the time, he doesn't really understand why he can't go to these companies and say, you know, give me some of this money.

A (11:39)

And the fact is that the proof of the pudding is that he can. Like, he's going ahead and he's doing it. And they're saying, yes, like, you know, he went up to Jensen Huang at Nvidia and said, I want 20% of your chip sales to China. And Jensen had two choices. He could either say, fuck off. That's illegal, or he could say, let's shake on 15. And he said, let's shake on 15. All of these corporations are choosing to deal with Trump instead of fighting Trump. And at least if you judge by the state of the stock market right now, that seems to have been the correct decision.

B (12:18)

I want to just think out loud again. So President Trump, the White House is meddling in the business of private companies, like calling for Jan Hatzis, the economist at Goldman Sachs, famous economist at Goldman Sachs, to be fired, saying that Goldman CEO David Solomon should just stick to DJing and meddling with Coca Cola's formula, whatever The White House presidents do meddle with companies like the Biden administration in a very different, much more orderly way, tried to get companies to do what it wanted, like, for example, with some signature legislation. I think we talked about this. I definitely wrote about it. They tried to tie money funding to, you know, for companies to do manufacturing stuff, to whether or not the companies had, like, a plan for, like, childcare for their employees, stuff like that, and everyone or the CHIPS Acts.

C (13:15)

I thought that was a false equivalency, though, because all of those Biden administration plans were incentives. They were saying, you know, we will invest more money if you do this. I don't think that's the same thing as saying, do this or we'll hurt your business. It's a difference between creating an incentive.

A (13:33)

And it's like getting. Not getting shot in the kneecap is an incentive.

C (13:37)

Sure, extortion is incentive, but you know.

B (13:40)

What I'm saying, right? Yeah, I guess that's the difference. It was more carrots than sticks, as they say.

A (13:45)

The other big difference between what Biden was doing and what Trump is doing is that Biden at least made a good faith effort to be corporation agnostic, that he would pass laws that applied to everyone. And if you happen to be a massive great chip maker that made, you know, LLM trips or whatever, like, you would get billions of dollars of subsidies. Trump is very explicitly targeting individual companies. He's like, Apple this, Nvidia that, intel this, USD, all that, and that kind of picking and choosing that. I want you to be a national champion. I want to take 15% of your equity. I want you to pay me tribute, and I will give you an exemption to the tariffs. I won't give you an exemption to the tariffs. And all of this kind of stuff, it's all done on the basis of his personal relationship with the CEOs of these companies. And we have seen this parade of CEOs passing through the White House over the past six months, gripping and grinning and saying lovely things about the President in a way that I literally can't think of a single CEO who did anything like that with Biden.

C (14:59)

It's crazy that the libertarians in Congress are not howling about this. All the free market people who kept calling Biden a communist, you know, but.

A (15:10)

This is actually fascinating to me because I think this is, you know, how they said that, you know, only Nixon could go to China. I feel like this degree of state control of the economy and the government interfering very explicitly with individual corporations and picking and choosing winners and making Direct investments and twisting CEO arms and all the rest of it could not be done by a Democratic president. And I think that as we, you know, like in, in a weird way now, I think we've talked about this in the past. Trump is a Peronist in many ways. And I think this is a clear example of the way that he can, just like Peron, he can be kind of like left wing populist and right wing at the same time. And this is all of these kind of economic policies are exactly the kind of thing that we are familiar to people who have been watching Latin America over the past 50 years. But it's kind of unusual for people who expect the Republican Party to be the party of free market capitalism. Trump is not and never has been a free market capitalist.

C (16:26)

I think that gives him too much credit for consistent ideology.

B (16:31)

But, well, if you go back to how his father made his money, Suzanne Craig lays out in her book, it was all based on a government program that he was taking advantage of as a homebuilder. So I feel like the understanding of how, how the government can confer benefits on private market companies and make people rich is deeply embedded in his DNA.

A (16:53)

Probably Donald Trump, Elon Musk, Peter Thiel, they're all really good at making billions by selling shit to the government.

B (17:01)

But so how do we think these, this. I think people also call it like a command economy, you know, like where the White House sort of tells companies what they can and can do and confers, you know, benefits and privileges on them.

A (17:15)

Soon they're going to like release a five year plan.

B (17:18)

How do we think that's going to impact businesses going forward? Is this like knee jerk? I don't want to say like this seems bad for a business trying to operate and make decisions for itself, but maybe there's an upside downside that I'm not.

A (17:33)

I think it all depends how long it lasts. I think, I think that if this is a weird aberration and that if in three and a half years we revert to some kind of status quo ante, then this will just be some like cute, weird historical blip in terms of the history of American capitalism. But if this winds up effectively creating institutions that can be co opted by all politicians and all presidents and every future president is going to be like, well, if Donald could do this, then I can do this, then that will radically change the nature of American capitalism. And I have no idea which one is more likely.

C (18:24)

I'm a little bit optimistic on this one. I think even if Republicans stay in power, they wouldn't produce necessarily a president like Donald Trump. I think he's sweet, generous.

A (18:36)

I think that's right. But by the same token, I think that the powers that Trump has abrogated for himself in terms of controlling private corporations are definitely powers that almost every president in history would have loved to have, and just none of them thought it was possible.

B (18:56)

One thing I think about a lot is that companies hate when the government interferes in so many ways with regulations, with standards. I mean, they were celebrating Trump for promising to tear down a lot of the rules and regulations set by Biden and presidents before him and administrations before him, in terms of like, environmental regulations, drug safety, health. Like all that stuff is ongoing. Like the White House is not interfering in those kinds of things. Financial regulation, out the window, all fine.

A (19:33)

What they're losing on one type of government interference, they're gaining on another. So like net net, they're winding up ahead.

B (19:40)

Net net, they're winding up ahead. And they prefer it this way. They prefer like laissez faire on financial regulation and health regulation and environmental regulation and just pay like a tithe or whatever to the administration in exchange. Because maybe that stuff is more expensive, they think, or, you know, more harmful to their bottom lines.

C (19:58)

So they think the bribes are cheaper than the regulation would be.

B (20:01)

Maybe. That's what I've been wondering. I don't want to say the bribes. I mean, whatever. This this podcast is brought to you by Progressive Insurance. Do you ever think about switching insurance companies to see if you could save some cash? Progressive makes it easy. Just drop in some details about yourself and see if you're eligible to save money. When you bundle your home and auto policies, the process only takes minutes and it could mean hundreds more in your pocket. Visit progressive.com after this episode to see if you could save Progressive Casualty Insurance Company and affiliates. Potential savings will vary. Not available in all states.

A (20:47)

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C (22:31)

So if you live in New York, you've probably already heard this story, but there was a great New York magazine cover story this week about something that happened a few weeks ago where two guys who are crypto magnates or consider themselves that William du Plessis and John Welts basically kidnapped an acquaintance of theirs in the crypto world and held him hostage at a soho based townhouse that they were renting and tortured him for his crypto wallet, which he did not actually give up to them and he somehow managed to escape, found a cop on the sidewalk and now these two guys are in trouble. But this is an ongoing problem for people with crypto wallets and I didn't.

A (23:16)

Realize how in the past year or two it's become a big thing of how in France especially, did two different men in France actually got kidnapped and had a finger sawed off in an attempt to have their crypto credentials, you know, given up. I thought actually that this would have been like an attempt to saw off the finger and like in the movies, and then use it for the fingerprint in the, you know, cold storage on the USB key. No, it wasn't. It was just like literally we're going to take a video of sniffing off the finger and the, you know, man screaming in agony and I'm going to send the finger to the relative and say, give up the credentials. This is the New York magazine piece, does a good job of explaining this. If you are in this world where the banks have been disintermediated and you don't have someone else holding your money for you, you hold your money. And if you are a crypto bro who drives around in Lamborghinis and makes it very obvious and has, you know, it makes it very obvious that you are worth hundreds of millions of dollars in crypto, then probably you are smart slash stupid enough not to just keep it all in a Coinbase account that can be hacked, but you keep it, like, offline in some kind of cold storage. There's a USB key or something, and that is your wealth. And, you know, the XKCD web comment, famously, years ago, was like, you can talk about hackers spending huge amounts of time with phishing attempts and password cracking and all the rest of it to try and hack into people's crypto. Or you can do what was known as a $5 wrench attack, which is you bash someone with a $5 wrench until they give you their password. And the $5 wrench attack was this kind of theoretical thing that people were worried about until it became reality. And you are seeing these kidnappings, these very violent kidnappings, of which the one in New York, for all of its salaciousness, was not remotely the most violent all over the world. And it's really, really hard to defend against. You know, if you have a large fortune in crypto, then your choices are basically, number one, don't spend any of the money and don't show off and make sure that no one knows that you have it, which kind of defeats the purpose of having a large fortune in the first place. Number two, hand over your large fortune to some kind of financial services company, which, again, is like anathema to the whole thing that crypto folks believe in. Or number three, spend a huge amount of money on bodyguards and personal protection because you need that just to keep yourself from being kidnapped. Emily is rolling her eyes. She's like, cry me a river.

B (26:11)

No, no, I just. I guess. I wonder. I mean, these are horrible stories. I don't advocate for kidnapping.

A (26:20)

I'm glad we cleared that one up. Emily, I was worried there for a minute that you were pro kidnapping.

B (26:26)

I just. Well, first, I mean, maybe to unpack it first, like option two, that you just laid out that this is so hard. It doesn't seem that hard to just, if you have a lot of crypto, put it with a financial services company that could do a better job protecting it than you can. Seems like, just do that. Get over whatever principle you have. It seems simple.

A (26:49)

I think that's correct.

B (26:50)

One, and then two, I just. How common is this? Like, these are horrible stories, thus they get lots of news coverage.

A (26:59)

But.

B (27:00)

And then I was like, how common is Kidney Rich people have gotten kidnapped for a long time. Our friend of the pod, Taffy Brodess, or Achner, just wrote like, a big New York magazine story about, you know, a Friend of the family of hers that got kidnapped in the 1970s, I feel like.

A (27:15)

Got kidnapped in the 70s, though. Like, the 70s was definitely the big decade for kidnapping.

B (27:21)

It was a big time for plane hijacking and kidnapping and so forth. But I was looking, I found some UN estimated from 2017 that said 8,000 kidnappings for ransom globally that year. I mean, it's really hard to find data because rich families don't talk about it, but rich people get kidnapped. It's a thing, you know. So this is just like a new spin on it is what I think.

C (27:42)

The idea is that, you know, particularly for these people who are already pretty paranoid and they're keeping their crypto in, you know, a cold wallet or something like that, you know, especially if they're sort of public or they're in the crypto world, they're networked with other people who do this, which is how these guys found their victim, who initially they were friendly with. And they were all a little bit paranoid.

B (28:02)

Yes.

C (28:03)

So they invited the victim to come stay with them, and the victim did because he thought they were all friends. And they decided that because he was a foreign national that he was the enemy and they began torturing him. So I think the people tortured him.

A (28:16)

I mean, I have to say, they tortured him in, in this, in. In this kind of weird way of we are going to throw like hookers at you and give you lots of drugs to smoke and actually allow you to come and go from the house and in fact, at one point fly back to Italy and come back.

B (28:32)

I have questions about that. How is that being kidnapped if you're allowed to leave the country?

C (28:37)

Whilst they were holding his. They were holding his crypto wallets hostage, and they were like, well, if you go through this hazing and do this, we'll give it back to you. But then I guess it escalated. And then the most amazing detail about this to me is that these guys had this sort of posse of young women who all worked at the Brandy Melville store down the street.

A (28:59)

Okay, so, Elizabeth, you need to clear this out for me because I am woefully under educated when it comes to the whole Gen Alpha phenomenon that is Brandy Melville. Who or what is Brandy Melville?

C (29:12)

So Brandy Melville is a fashion brand that's very popular with, you know, tweens and teen girls. And it's, it's. Because it's like, it's very. How do I describe this? Like, you know, kind of skimpy clothing, but it's, it's cutesy. It's. It's a lot of, like, pink and.

B (29:27)

Lace and stuff for skinny girls.

C (29:29)

Yes, that's you. And so the Brandy Melville in soho apparently also employs a lot of people who are modeling part time. So these guys would just go around the corner and invite all the Brandy Melville girls over to a party. And there was a scene where one of them was poking this guy, the victim, with a cow poke. And he was screaming. And she later said she was like, oh, I thought this was just a prank.

B (29:53)

Poor Brandy Melville girls.

C (29:54)

And there are reports that everyone in the Brandy Melville store was very sad the day after this happened.

A (29:59)

Little did we know before we, like, entered this week that we would be talking about the intersection of severed digits and Brandy Melville that somehow.

B (30:14)

But so do you. Do you think. You do think this is a problem just to wrap up in an orderly way? Is this a real problem, the wrench stuff?

A (30:22)

I think, actually, Emily, you have persuaded me that option two of just give all of your crypto to a trusted financial institution and let them look after it for you is a simple and effective solution to this problem.

B (30:44)

Are there any catches there? Like, do. Is it hard to do that? Like, is your crypto not safe at Coinbase at a large scale or not want to take it? Like, what are the.

A (30:56)

So, I mean, you know, it's. I'm not talking Coinbase. I'm not saying, like, keep your crypto online at Coinbase. I'm saying give your cold wallet to your private banker who will put it in a safe.

B (31:10)

Oh, like literally a safe. Yeah, just put it in a safe.

A (31:13)

You remember safety deposit box boxes? They're still a thing, especially in Switzerland.

B (31:18)

Oh, okay.

A (31:19)

And the downside and the thing about safety deposit boxes is the bankers are very careful to never know what is in them. So, yeah, I think there are ways of doing it, but the risk is always that your holdings come to light, that the banks have reporting obligations to various authorities, and that therefore various government taxing authorities that you don't particularly want to know about your crypto are going to find out about your crypto and then they're going to start taxing you on your crypto, which you don't want to do because you're a libertarian.

B (31:55)

So there are complications. It's not as simple as put it in the bank or put it in a box. Like, there are things to think about, definitely.

A (32:03)

Especially if you don't like paying taxes, which I'm just going to come out and say that crypto people, even more than normal people, don't like paying taxes.

C (32:10)

Also there's just the OPSEC thing of don't ride around in a Lamborghini and say, I got this because I made so much money in crypto. Which seems like what a lot of these people are doing.

B (32:20)

Or show up at the club with so much money to spend that they're scrambling to find expensive bottles for you.

A (32:26)

Oh my God, that was such an amazing the clubs were like, oh no, we're running out of like $500 bottles of champagne that we can sell for $10,000. Yeah, amazing. But yeah, like what is the point of owning an expensive monkey JPEG if you can't use that as your avatar on Twitter? That Slate Money is sponsored this week by Life Kit. Everyone can use a little help to shape the direction of their lives. From fitness routines to mental resilience, or navigating personal goals to tackling burnout. That's what the Life Kit podcast from NPR is here to do. If you're looking to move with more intention or just need thoughtful guidance on Living Better, LifeKit delivers strategies to help you make meaningful, sustainable change. LifeKit offers real stories, relevant insights and clear takeaways to help you meet those large and small decision making moments with confidence and clarity. With trusted voices and expert advice, you will be able to take the next step, however big or small. Listen to Life Kit to hear thoughtful conversations that unpack the emotional and practical side of personal wellness along with actionable guidance. Get help with your relationships, your finances, parenting, your career. Then walk away with a game plan you can implement right away. Life Kit isn't just another podcast about self improvement. It's about understanding how to live a little better. Starting now. Listen now to the Life Kit podcast from npr. Slate Money is sponsored this week by Quint. Why drop a fortune on basics when you don't have to? Quint is a company that has high quality fabrics, classic fits, lightweight layers for warm weather, all at prices that make sense. Honestly, they're just downright low. I have a bunch of Quint stuff, including not just clothes, but table linens, napkins, anything you want that is like you want high quality, but you want it to be at a very affordable price. There's a very large chance the Quince will have it in beautiful, simple, timeless colors. Quince has the closet staples you'll want to reach for on a daily basis, like cozy cashmere and cotton sweaters from just $50, breathable flow knit polos and comfortable, lightweight pants that somehow work for both weekend hangs and dressed up dinners. The best part? Everything with Quince is half the Cost of similar brands. By working directly with top artisans and cutting out middlemen, Quintz gives you luxury pieces without the marker. Keep it classic and cool with long lasting staples from quince Go to quince.commoney for free shipping on your order and 365 day returns. That's Q-U-I-N-C-E.com money to get free shipping and 360 days. 65 day returns. Quince.com money Emily, is Chrome your default browser?

B (36:00)

Of course. Yes, definitely. For the past, I don't even know year, a long time. Chrome is my default. It's my life.

A (36:08)

How, how much of your life is spent in or on Chrome?

B (36:12)

Oh my God, so much of my life. I just got a new work laptop and I was like, ugh, I'm gonna have to transfer all. I'm going to have to. It's going to forget everything. All my password. Nope, it's all working fine. Chrome knows me very well. Knows everything about me. Yeah, it's. It's everything to me. This is the saddest, the saddest soliloquy of my life. My web browser is everything to me. It knows my passwords.

A (36:41)

Oh, wow.

B (36:41)

It remembers me everywhere I go on the Internet. I'm like, oh no, do I have to look up what my password is for this site? And Chroma's like, we got you, girl.

C (36:49)

You don't even need an AI bot. You have Chrome.

B (36:51)

I don't need an AI bot, I have Chrome. But the AI bots need Chrome, which is why we're talking about it, right?

A (36:58)

So, no. So Chrome, as we all know, is one arm of the Google empire. Google owns, well, I guess we should call it Alphabet. Right? Alphabet owns a huge number of bits and pieces, including YouTube and Android and what's the self driving? Waymo.

B (37:17)

Yes, Waymo.

A (37:19)

And one of the remedies that was mooted as a potential remedy for the antitrust case that is currently wending its way through the courts against Alphabet would be to force Alphabet to divest Chrome. And the interesting thing about Chrome is that Chrome in and of itself doesn't have any revenues attached with it. Like, Emily, how much have you ever paid to have Chrome on all of your devices?

B (37:50)

I mean, in terms of my soul, apparently a lot. But in terms of dollars, nothing. It's free. That's crazy.

A (37:58)

So Chrome is an expensive thing to maintain. It's a very sophisticated piece of software. It has no revenues associated with it. And so the standard move from the Google defenders has always been to say well, divesting Chrome would be terrible because it's an important part of the Internet and we, Google, are subsidizing it to the tune of billions of dollars a year, and we're giving it away for free. And that's great for the world and there's lots of positive externalities there, but no one else would be able to afford to do this. And it would be terrible if it tried to live on its own, because who is going to subsidize all of these billions of dollars? Enter Perplexity AI, which in a kind of mischievous press release basically said, and. Or possible, like, they gave three different exclusives to three different organizations at exactly the same time, saying, exclusive. We are bidding $34.5 billion for Chrome. This is not a realistic bid in any way, shape or form. Obviously it's not for sale, but they're basically saying this thing has a lot of value. And oi, Mr. Antitrust Judge, when you finally rule on this, yeah, there are companies out there who would be happy to pay for Chrome. And then, of course, everyone immediately phoned up Sam Altman and said, would you pay for Chrome? He's like, yeah, I'd pay like double.35, $4 billion. So, given the weird math of AI valuations, the amount of money that Chrome loses every year is nothing compared to the amount of money that OpenAI loses every year. And the reach that Chrome gives you is astonishing. You basically wend your way into Emily Peck's very soul. And Perplexity has its own browser called Comet, but about eight people use it, and it's very hard for Perplexity to scale Comet, whereas if they just buy Chrome, then, boom, overnight they become the biggest AI company in the world.

B (40:01)

Yeah, I mean, Chrome loses money, but it's a integral part of the search business for Google.

C (40:06)

Right.

B (40:07)

It's driving all of that revenue. Because I'm. I'm going to Chrome every day. It's. It's like my work interface and I'm like typing whatever I need to type right into the little box, you know. And Google makes lots and lots of money that way. So I feel like to say that Chrome loses money isn't true. It's like the tool they use to make money.

A (40:23)

But Google makes money if you use any other web browser too, and use it to Google.

B (40:28)

That's true. Yeah, that's true, true, true. And I think what you're saying about AI companies need something like Chrome to get. Actually, I don't know if that's true, because do AI AI companies need A Chrome that has a huge user base to get more people using their technology. I don't know. I mean, Perplexity does, but like ChatGPT doesn't. It's.

A (40:50)

Well, no, ChatGPT is the one exception. Right. ChatGPT is the only AI company that really has that massive 700 million strong user base. I think all of the other ones could really use Chrome. And OpenAI of course, would love it too.

B (41:04)

Right?

C (41:05)

Yeah. There was one of the tech experts interviewed in one of the pieces we read in the prep said that, you know, the end goal of all these companies is to eventually create a system where you are displacing search altogether in its traditional form and that you never have to go to a website again. You just ask a question, you get sort of perfect results back.

A (41:24)

Exactly like what we had just very in the big picture was the first World Wide Web as envisaged by Tim Berners Lee, which was just sites linking to other sites. And you would do this thing called surfing the Internet where you would go to a page and you would read what was on that page and then you would click on the link and then the link would take you to a new page and you'd read what was on that page and then you click on the link on that page and so on and so forth. And you, you know, you would find yourself. And we had, in one of four corners of the Internet and it was lots of fun. And that whole model of surfing the Internet basically got replaced by search and also to a certain extent by social media. So instead of clicking on various different websites, you know, now we just scroll TikTok mindlessly or if we want to find something, we search for it instead of like just clicking on links. And then conceptually speaking, it kind of makes sense that way. If the, if the browser is the window to everything that is possible on the Internet, then it makes sense for AI to be completely integrated into that browser so that whatever it is you want just comes straight out of the AI and if it needs to, from whatever it is on the Internet. And that's kind of what Comet promises. And I know I don't actually use Comet myself, I know a couple of people who do. It's like, it seems like an amazing thing, like the AI is just living in your browser. Wherever you go, wherever you browse, it's always there. Reading things, understanding things, pointing to places, helping you do whatever you're trying to do. I think the execution is still a little bit early days, but you'd expect that because AI is early days. And eventually I do think it's entirely plausible that Chrome will have AI built into it. And the only real question is, is this going to be a massive advantage for Gemini and Google and Google's AI and DeepMind and all of this sort of Google AI universe, or is this something that other AI companies like perplexity or Claude or whoever can actually compete with?

C (43:37)

Well, Chrome already has, you know, Gemini built into it, and that's the first result you get most of the time whenever you Google something.

A (43:43)

No, no, we see. No, that's. That's Google Search. That's not Chrome. Now I think that's an important distinction. Like, if you go to Google search, then Google search will like, Google will throw up AI results. But Chrome is like the things that people use chrome for is 100 times bigger than search. Right? We are recording this podcast in Chrome. There's no search involved.

B (44:08)

But I have been thinking a lot about search lately. I mean, ever since ChatGPT first dropped, I did a what next TBD on how AI completely. And everyone's talked about how AI has completely disrupted search and Google has seen search traffic decline because as More people use ChatGPT specifically to search for things, and I use ChatGPT now to do searches I would have done on Google, but it's not there yet as a complete replacement. Like, first, I feel like I'm often using ChatGPT just like I use Google Search or Chrome. So I'm like, why am I doing it here? It's not totally clear to me. It doesn't always Surface link. So then I wind up having to double check things with Google Search to really see if something is true or not. Do you know what I mean?

A (44:56)

And although perplexity, to be fair to it, is slightly better, is it that than ChatGPT is. But yeah, like, you know, for something simple, like yesterday I wanted to know, when did Leo Sianichek write Kachika Banova? And like, you can Google that, but then you get a whole bunch of ads and craft and the Google UX is now messy enough. If you go to the google.com homepage, Marissa Mayer is like rolling over in her grave somewhere. Like, if you go to the google.com homepage, which used to be this incredibly clean white thing with nothing but a search bar, there's. Now you just open it up and there's full of like news stories. Who the hell is asking for news stories on the homepage? But they're like, oh, no, this is all part of some business development strategy. You go to the ChatGPT homepage and that is, you know, the Marissa Mayer dream of plain white nothingness. And all you get to do is just write something in and create your own world.

B (45:54)

Yeah, Google search got to go on for like decades without anyone really challenging its dominance. And so yeah, AI and ChatGPT have really challenged it. And as the decades rolled on with Google search, it got more messy like you're saying. And there were signs that like search was eroding. Like Amazon is a place where people go to search for things. They don't start at Google necessarily straight to Amazon to find things.

A (46:17)

Amazon is so bad.

B (46:18)

Not a good user experience at all. Yeah, but, or Netflix or, you know, there's just a lot of other places now to search. That's everyone's complaint. Like it's hard to really search the Internet because there are all these walled off corners. And I guess theoretically ChatGPT or ChatGPT.

A (46:34)

Is actually terrible at search. Like for instance, partly because the New York Times is suing ChatGPT. If you are searching for anything where the answer is at the New York Times, you will not find that answer on ChatGPT.

E (47:02)

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A (47:36)

I want to move on to a numbers round because I have a related number people. I'm going to do one of those rare third segment to numbers round segues. My number is 404. And that is the error code that you are going to get after August 25th if you click on any of the links on the Internet that have been shortened using the Google URL shortener. You know how it was like tiny URL and bitly and all of those T co there's a lot of them. But one of the biggest for many, many years was goo gl and I'm sure to this day there are still lots of Goo GL links dotted around the Internet. As of August 25, none of those links are going to work anymore.

B (48:31)

Oh no, that's not good for the information age.

A (48:34)

Exactly.

B (48:35)

That's going to bury a Lot of things. Why are they doing that?

A (48:37)

Google just kills things. It's like killing Google reader. They build things and then they kill things and then they break the Internet and they are, you know, doing that thing that they promised they wouldn't be when they went public. Elizabeth, you have a number?

C (48:51)

Yeah, My number is 15 and that's dollars. And that's the entry fee for the Crater of Diamond State park in Arkansas where you can go basically mine for.

A (49:01)

Diamonds like with a shovel. What?

C (49:03)

So you, you, they have a whole operation where you can pan like you basically, you know, fill a bucket with some dirt and you go over to this old timey kind of tray of water and you sift it out and look for the diamonds. So a New Yorker named Michera Fox just found a 2.3 carat white diamond there. And she went there explicitly to find a diamond for her engagement ring. And so she camped there for a little under three weeks and she found a 2.3 carat white diamonds. She's been looking for that and wow, that's crazy.

B (49:37)

So is she gonna sell it or use it for her?

C (49:40)

She's gonna use it for her engagement ring. And the sort of experts say it's probably worth between 10k and 50k. What?

B (49:48)

That's amazing.

A (49:49)

But how much does she have to spend to get it cut?

B (49:53)

That's a good question. Yeah, that is a good question. I'd sell it and buy a cheaper one.

A (49:58)

Well, diamonds are all basically worthless diamond. A two carat lab grown diamond. You know, nowadays if you can go straight to the source in China. There was a really good FT article about this a couple of weeks ago. You know that most lab grown diamonds are grown in China these days and they cost roughly $15 a carat is the cost of making a lab grown diamond.

B (50:18)

But then they sell them for more, right?

A (50:20)

Well, yeah, but the polishing is more expensive than the growing. So polishing and cutting adds a lot. Emily, what's your number?

B (50:26)

My number is 21,000. That's dollars. $21,000 is how much in medical bills were racked up by a woman in Massachusetts who was treated for rabies after a bat flew into her mouth.

A (50:42)

Oh, oh, Emily, did you need to.

C (50:48)

No, I feel like that was probably equally unpleasant for the bat.

B (50:53)

This woman was out hiking with her father. Erica Kahn is her name in Massachusetts. I read about this on KFF Health News. Medical bill of the week or something like that. They were out hiking, hiking and the woman had just gotten laid off. And instead of taking the cobra health insurance. She was like, I'm young. What could go wrong? What are the chances? What could go wrong? Was that a bat. And apparently bats don't normally fly into people's mouths. We have bats where I live and they fly all around but they don't fly at you. Something probably is wrong with a bat.

A (51:25)

Has broken echolocation because that mouth is not gonna feed the bat.

B (51:30)

I guess she screamed and that's when it took its shot. Anyways, her dad is a doctor and said you need to get rabies touch. So she did. Before she went to the doctor, she was like, let me get some health insurance last minute. I'm sure that'll all work out fine.

A (51:45)

Having eaten a bat turns out to be a pre existing condition.

B (51:50)

So while that's illegal because the Obamacare fixed the pre existing condition thing, but there was some clause in the health insurance that it didn't kick in for 30 days. So she got all these bills. And the moral of the story is take the COBRA insurance. And also the end kicker quote of this story, which we can put in the show notes if you want, is I know what bats taste like now.

A (52:13)

Wow.

C (52:13)

Chicken.

B (52:14)

Chicken. No, it's an earthy, sweet kind of flavor.

A (52:18)

I had no idea that we were going to end up with the taste of bats. But this podcast winds up in weird and strange places. I don't know whether to thank you for that or not Emily, but I will thank Jessamyn Molly for producing. I will thank Jenna Roth for producing. I will thank all of the lovely listeners out there who are wonderful and send us emails about weather, travel broadens the mind and many other things. Thank you all. The email address, as ever is sleepmoneyleep.com and we will be back here next week with more sleep money. Listen.

D (53:04)

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