Vinod Khosla
Appearances
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
It's likely as of this morning, the reinsurance websites are all saying it's probably a 40 to $50 billion loss event, which still exceeds the state's reinsurance capacity. So you can kind of think about Florida state's reinsurance thing being effectively bankrupt. It doesn't really have the capacity to underwrite the insurance anymore.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
So the real question for everyone is, is the federal government gonna have to step in and start to support the price of homes.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
The total value of all mortgages and homeowner mortgages in Florida is $454 billion. And those people typically have a debt to equity ratio probably on the 50 to 80% range. So if the value of your home dips by 25%, because everyone starts selling their homes, leaving Florida, or they can't get insurance,
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
then the people that live in Florida, most of them have their net worth tied up in their home, are going to see their personal net worth wiped out or cut in half. So it's not just an economic problem. It's a social problem that now there are so many people that have put their entire net worth into their home.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
The value of their home is written to a point that it no longer makes sense given the frequency at which homes are going to get destroyed.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
No. It's totally viable. It's just the question is what are you willing to – At what price?
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
Will you pay 5% of your home value for insurance every year? Will you pay 2%, 3%?
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
It becomes very, very untenable. Well, it used to be 1 in 500 years. Now it's probably 1 in 15, right?
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
Well, I mean, you saw that the range at which these events can happen is all over the place. And the challenge is the events are getting more significant because of this warm ocean weather that we see, this warm ocean temperature.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
An investment in climate resilience, that's right.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
That's right. And that's what happened in California. And by the way, State Farm left a lot of California.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
What is this?
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
I need to get a plug in because I want to be found. Go to Arrow One and buy Supergut Bars, $3.99.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
Going in one anyways, we ended up getting the for most homeowners, when the cost of insurance gets to a certain threshold, you don't have budget for it, you can't afford it. And so that's a lot of why the insurers leave, they'll underwrite anything at any price, but they just know that most consumers can't afford it. Here's some other interesting statistics, related but unrelated.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
In the early 1900s, the city of Phoenix, Arizona averaged five days a year of temperatures of 110 degrees or warmer. By the 2010s, Phoenix averaged, during the 2010s, 27 days a year where the temperature was 110 or higher. Since 2021, Phoenix averaged- 100 plus days. 42 days. And in 2024, it's been 70 days so far this year that the temperature is over 110.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
So this is affecting, and so there's increased risks in California with wildfires, increased risk with hurricane. There are a lot of these factors, and I have friends that work in reinsurance and in the insurance markets.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
Jason, it's called a mutual. And those are like a good chunk of the industry are mutuals where it's the shareholders are the members and they all share the risk and the ownership.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
So if you do proper underwriting, what's happened in the last couple of years is all the reinsurance companies and all the insurance companies have had to re underwrite the rates that they charge for insurance, because the frequency of a disaster has gone up. And the new price that they should be charging is so high, it doesn't matter how the capital structure is set up.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
It's simply, there's, there's one big event that's going to cause a big wipeout for a large number.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
That's right.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
I think they're different, but Florida is like, I mean, I don't know how you do the math on, I just don't know what you do on a trillion dollars of real estate value with half a trillion of mortgages. when you have real exposure on loss more frequently than one in 100 years, to your point, they need to be repriced.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
And how do you reprice those homes in the significant level that they need to be repriced without causing massive economic and social consequence? That's what's kind of, I think, challenging me in thinking about what's the path here.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
Did we predict that they would win the Nobel Prize at the time?
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
There's been a long challenge in biochemistry on understanding or predicting or visualizing the three-dimensional structure of proteins. Because remember, proteins are produced by long chains of amino acids. And those amino acids are kind of create like a bead, beaded necklace. And then the whole necklace collapses on itself in a very specific way.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
And check out Gronk. I'm running a GoFundMe. A GoFundMe? Yeah, go to GoFundMe slash Freedberg. For what?
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
And that three-dimensional molecule, that big chunky protein does something structurally, physically. And so trying to understand the shape of a protein is really hard. I mean, we've used kind of x-ray imaging systems to try and identify it and tried to build models to identify how does that quote protein folding work?
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
How do those amino acids collapse on each other to create that three-dimensional construct? And I don't know if you guys remember in the early 2000s, there was a Stanford folding at home distributed computing project. Do you guys remember this? Yeah.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
Exactly right, yeah. So it was like, it ran on the background of your computer, it used your CPU cycles when you weren't using your computer, and it tried to model protein folding. And so this has been a problem that folks have tried to tackle with compute for decades to figure out the 3D structure.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
This is so important because if we can identify the 3D structure of proteins and we can predict them from the amino acid sequence, we can print out a sequence of amino acids to make a protein that does a specific thing for us.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
And that unlocks this ability for humans to create biomolecules that can do everything from binding cancer, to breaking apart pollutants and plastics, to creating entirely new molecules, to running, in some cases, like what David Baker did at University of Washington, he shared the Nobel Prize, creating micro motors, mini motors, from proteins that he designed on a computer.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
And so this becomes, I think this great, like big Holy grail in biochemistry and the alpha fold project at deep mind inside of Google solve this problem. And, and by the way, since, since then they've come out with alpha fold three, they've launched a drug discovery company called isomorphic labs, where they're basically predicting molecules that will do specific things for a target indication.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
Uh, and then they use the alpha fold models to actually design and develop those molecules.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
And there have been literally dozens of companies that have been started since DeepMind was published, and probably several billion dollars of capital that's gone into companies that are creating new drugs, creating new industrial biotech applications, using this protein modeling capability that was unleashed with DeepMind a number of years ago. So it really has transformed the industry.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
It'll be a couple years before we see it transforming the world, but it's an exciting kind of thing, yeah.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
Anyway, congrats to the teams. Congrats to Demison Jumper. Yeah. I mean, it's just great. And David Baker at the Baker Lab in University of Washington.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
I think we've talked about this. I mean, look, I've shared in the past, my belief that companies that are big, that have excess capital, that then invest that excess capital in R&D can be a net benefit for all of us. Look at Bell Labs. Bell Labs had a monopoly on
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
through their association with at&t with developing radar microwave the transistor integrated circuitry information theory everything that is the basis of the internet computing even nuclear technology and so on it's because they had this extraordinary capital flow from the scale of the business and they were able to invest in r d similarly google acquired
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
and invested for many, many years in DeepMind. And we just talked about how Demis and team won the Nobel Prize for the work that they did. And they, by the way, published the protein structure for 200 million proteins for free out of that service. I just want to zoom out for a minute and talk about the fact that this isn't about
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
you know, whether Google has a monopoly in search that prohibits competition or in ads that prohibits competition, but is it really worth penalizing any company that's big? Particularly, do we lose the benefit of those big companies investing in technology that pushes us forward? Google also invested in Waymo for years and years and years.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
which arguably spurned and drove investment from many other companies in self-driving technology. And if Google hadn't done that, would self-driving have taken off the way it did? I don't know. Same with Kitty Hawk and Larry's investment in eVTOLs, and that spawned a lot of eVTOL investing.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
And similarly, if you think about Amazon and their investment in AWS, where they were burning cash for many years, That turned out to spawn arguably a lot of interest and investment in cloud. And so I don't think that these big companies are bad just because they're big. I think we should take apart the monopolistic antitrust actions and behaviors that they take and then identify ways to remedy
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
those behaviors, versus just saying anyone or anything that's big should be taken apart. Because there is a tremendous benefit to be gained from the R&D dollars that they all put into things that, you know, move the whole industry forward. And I think that leadership is important and needed.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
Otherwise, if you got a bunch of startups that are trying to get $10 million checks from VC is I'm not sure they're going to build a Waymo. And I'm not sure they're going to build Amazon cloud. And I'm not sure they're going to build a deep mind you know, protein folding company and publish it for free. So I don't know, that's just my point of view. What's the likely?
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
We should think about this stuff.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
Well, I think if you'll remember when we talked about this a couple months ago, the sea surface temperature was at kind of a record high in the Atlantic. And warm ocean temperatures drive moist air up that evaporates. The warmer the air, the faster the evaporation. And that starts to cause the movement of the air, which drives ultimately the hurricane.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
And then the hurricane sucks up more warm, moist air from the ocean and it creates a feedback loop. So the more energy you have in the ocean, the more likely you are to accelerate wind forces in storms.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
And that's why you get these massive hurricanes that suddenly form seemingly overnight and go, like in the case of Helene, that hurricane went from a cap two to a cap four or a cap five in like 48 hours. because of the energy that's stored up. And 90%, here's an interesting stat, 90% of the energy that we get from the sun is absorbed and stored in our oceans.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
The other kind of fact that's playing into this, if you pull up that nature article, and this is something that I think you guys may remember we talked about. So this was an article that came out, a paper, a science paper that came out a couple of months ago. And in this paper,
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
For a venture firm to return capital, they need to have at least one or two big winners.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
And so if that winner needs to be a 10X or a 20X or a 30X of the fund, because most of the investments in the fund are not going to work, you need to be able to enter at a reasonable price and there needs to be enough opportunity relative to the capital trying to invest in that opportunity out there for it to make sense. So in a market where there is excess venture capital,
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
where valuations are at a premium, and where you don't see the exit path, the M&A or the IPO events that make sense that you can actually realize that model, you should take less capital and make fewer, surer investments. And I think that that's what some folks have realized.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
They don't wanna be chasing highly valued inflated opportunities and they don't wanna be putting capital into tier B or tier C opportunities just for the sake of deploying capital. This is a really interesting moment where you can kind of see who are the right folks in terms of thinking long-term in Silicon Valley, long-term in terms of building an investment practice and private venture.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
And maybe who are folks that are trying to build their AUM stack. And folks who have done reasonably well, like Founders Fund has probably the most exceptional track record in Silicon Valley as a venture firm. They are very cognizant of the market conditions. And I think that they're being very smart.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
By the way, the other thing I've heard from LPs is they're similarly trying to find more concentrated capital themselves. So they're trying to put more capital to work in fewer managers. And so there's a real wheat from the chaff moment happening in Silicon Valley venture right now. What I think a couple of years ago was, hey, everyone's going to go do a startup.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
A few years ago became everyone's going to go do a venture fund. And now I think the froth that has occurred because of that is being cleared out.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
the scientists identified that removing sulfur dioxide from cargo ships that travel across the oceans is actually causing accelerated warming in the oceans. And the reason is that the sulfur dioxide forms cloud formations as they travel across the oceans. And those cloud formations reflect sunlight.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
And in the absence of those cloud formations, that sunlight makes its way into the ocean and you get more ocean warming. And by their estimation, removing sulfur dioxide, which causes acid rain, and that's the reason it's been pushed to be removed, and they started removing it in 2020, 2021 from cargo vessels. By removing sulfur dioxide, we are now gonna see a doubling
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
of the rate of warming of the oceans in the 2020s and going forward.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
Zero.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
No, like 5%. I think that's very unlikely. Because someone said that that was... That was a there was some code that enabled that in the early version of the app. And then some other people audited it. And they said they did not find evidence that there was any technology. And Apple's got a very good audit system for this.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
That's roughly it. And... What is the pollution again?
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
Yeah, that goes into the fuel of cargo vessels. And a couple of years ago, they started to implement these mandates that sulfur dioxide no longer be used in the fuel. As a result, when sulfur dioxide is emitted from these vessels, it goes into the atmosphere and it actually triggers cloud formation. So now you have these clouds that are forming. And Nick's going to pull up this image right now.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
Yeah, here you can see that. So all of these tracks... are these cargo vessels moving across the ocean. And as they move across the ocean, they create cloud cover, that cloud cover actually reduces the warming in the ocean because it reflects sunlight. So now that sunlight energy gets absorbed into the ocean.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
So this is another driving force that some people are now speculating, maybe accelerating the warming of the oceans that we're seeing, which drives this extreme storm and hurricane events. And so this becomes a more frequent event. Now, a lot of people- So sorry, can I ask you a question?
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
You know, there's the polling data.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
I didn't see her interviews. Okay. I saw some excerpts on Twitter.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
Yeah.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
No, I'm just thinking it seems like Sacks, if she comes and has a conversation, you'll be respectful?
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
He wanted that.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
I agree. I was wearing back to him his style. He likes to come out. He likes to do his thing. That's exactly what he wanted.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
Yeah, so in addition- No, no, I'm asking you the question.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
Um, so yes, we are no longer reflecting as much sunlight. And so for several decades, we had bad fuel sources. We had artificial cooling.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
Oh, well, the argument is that we've actually been warming the atmosphere, which we have been. We can see the data that shows that everywhere all over the earth, not just about sunlight coming in on the oceans and not just ocean warming. But the atmosphere is warming. The planet is warming. And so this is by blocking the sunlight above the oceans, we were artificially dampening that effect.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
and we were reducing the amount of heat energy that was getting into the oceans. So now by taking that away, we're seeing the heat energy in the oceans accelerate, and now the oceans are getting much, much warmer.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
Well, I mean, let's talk about economics, right? So what how much real estate do you guys think is on the Florida coastline? What's the real estate?
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
Right, so what happens typically when storms hit land is they no longer have that hot ocean pumping energy back into the storm that keeps the feedback loop going. So the storm cycle starts to break down. All hurricanes, when they hit land, they start to break apart. And so the category which measures the wind speed actually reduce it. This is just a natural thing that happens.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
But this was a category five hurricane when it made landfall, I believe it was category four. So, you know, it was a massive hurricane as an approach.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
Yeah, so that's right. But what happened when Helene hit North Carolina, it was not a cat four. What happened is, as that storm moved inland, it hit the mountains and the first mountains it hit are on Western North Carolina. That area is elevated, there's mountains there. So when a heavy hot storm runs into cold mountains, all the moisture dumps out.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
It's like it runs into it and suddenly everything precipitates out of that storm. And that's why some parts of Western North Carolina got like 18, some people measured as high as 30 inches of rainfall in a couple of hours. So this insane dumping happens when that hot air hits a cold region and suddenly everything, all that warm moisture precipitates out and dumps to the ground.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
So it ran into a mountain. It's effectively why everything fell out of North Carolina.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
Who did it, Sachs?
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
Well, isn't there a lot of geoengineering conspiracy theories going on in your cohort? I don't think so.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
There's a lot of theory online that there's a ton of late geoengineering being run by government agencies to drive these storms.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
Are you Alex Jones? Is that what we're doing? Well, no, I'm not saying Alex Jones.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
OK, so so let's just talk about the hurricane.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
Yeah. Putting particulates in clouds to accelerate precipitation. is, I mean, we've done that for a hundred years. You know, you can do, you can increase the precipitation rate when there's already clouds that have formed, but that has nothing to do with creating 200 mile an hour wind speed.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
That requires an extraordinary amount of energy, all of this energy, but the oceans are like giant batteries. And when a hurricane gets going, that battery is accelerating the hurricane, and the hurricane sucks up more power from the battery, and it creates this incredibly dynamical system. There is no human-created energy system that can form a hurricane.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
A hurricane is an extraordinarily powerful natural phenomenon that arises from the amount of energy that can come out of very, very, very hot oceans, relatively speaking. So that's really where these hurricanes are coming from. Now they're going to be more frequent if the ocean temperatures remain elevated as they seem to be and continue to be elevated.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
And this can be a function of generally the temperatures warming on earth, generally the removal of sulfur dioxide, generally these El Nino La Nina cycles. There's a lot of factors, but it seems to be the case that we are having a very significant trend of continuously warmer oceans.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
And those continuously warmer oceans means that we're going to have what used to be called a one in 500 year storm, which is what Asheville is being termed at, one in 500 year. These sorts of storm events can happen every couple of years. And we're now looking at one in 100 year events happening every two to three years. in the United States with the hurricane activity that we've been seeing.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
Let's talk about the economics. There's $500 billion to $1 trillion of real estate value on the Florida coastline. And what used to be a one in 100 year event, the average Florida homeowner historically has been paying about 1% of the real estate value in insurance.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
So now if your real estate is likely to be wiped out one out of every 20 years, instead of one out of every 500 years, the cost of insurance gets to the point that it is untenable for most people to pay for their insurance. Florida has a state-backed reinsurance provider called the Florida Hurricane Catastrophe Fund.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
And this fund issues debt to meet its coverage demands because it reinsures insurance companies in order to incentivize them to come into the state and underwrite homeowners insurance.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
That's right, and what's happening is they would normally underwrite that risk. They would say, this is gonna cost, you're gonna lose the value of your home every 100 years or every 200 years.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
But now, the models are showing, because of the frequency of these sorts of hurricane events and the severity of the hurricane events, that maybe you'll lose the value of your home once every 20 years or once every 30 years. And no consumer is going to be willing or able to pay that much for the insurance on their home.
All-In with Chamath, Jason, Sacks & Friedberg
Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
So the state over the last several years has had to step in and effectively subsidize the insurance. And now the state reinsurance vehicle only has statutory liability maximum of $17 billion in a single hurricane season. Now, I think they got lucky with Milton today, but some were estimating that the Milton losses were gonna be in excess of 100 billion, bigger than Katrina.