All-In with Chamath, Jason, Sacks & Friedberg
DOJ targets Nvidia, Meme stock comeback, Trump fundraiser in SF, Apple/OpenAI, Texas stock market
Fri, 07 Jun 2024
(0:00) Besties intros! (2:10) Responding to recent media coverage (17:58) DOJ/FTC strike deal to target Nvidia, OpenAI, and Microsoft (32:40) Meme stocks are back: Keith Gill aka Roaring Kitty resurfaces, disclosing nine figure position in GameStop (58:36) Citadel and BlackRock back TXSE to take on NYSE and Nasdaq (1:02:34) Apple to announce OpenAI iPhone deal at WWDC (1:09:07) Science Corner: Alarming ocean temps continue, what to expect for hurricane season Follow the besties: https://twitter.com/chamath https://twitter.com/Jason https://twitter.com/DavidSacks https://twitter.com/friedberg Follow on X: https://twitter.com/theallinpod Follow on Instagram: https://www.instagram.com/theallinpod Follow on TikTok: https://www.tiktok.com/@all_in_tok Follow on LinkedIn: https://www.linkedin.com/company/allinpod Intro Music Credit: https://rb.gy/tppkzl https://twitter.com/yung_spielburg Intro Video Credit: https://twitter.com/TheZachEffect Referenced in the show: https://www.youtube.com/watch?v=dQQhAg0mfF8 https://x.com/vkhosla/status/1769529054955446533 https://x.com/vkhosla/status/1796293773389127987 https://x.com/shaunmmaguire/status/1796415146077954329 https://x.com/DavidSacks/status/1798100723617698097 https://x.com/SawyerMerritt/status/1798779830521000426 https://www.nytimes.com/2024/06/05/technology/nvidia-microsoft-openai-antitrust-doj-ftc.html https://www.wsj.com/tech/ai/ftc-opens-antitrust-probe-of-microsoft-ai-deal-29b5169a https://companiesmarketcap.com https://www.youtube.com/watch?v=F9cO3-MLHOM https://www.politico.com/news/2024/05/29/newsom-california-artifical-intelligence-regulations-00160519 https://www.reddit.com/user/DeepFuckingValue https://www.wsj.com/finance/regulation/e-trade-considers-kicking-meme-stock-leader-keith-gill-off-platform-f2003ec4 https://x.com/TheRoaringKitty/status/1789807772542067105 https://www.google.com/finance/quote/GME:NYSE https://www.youtube.com/watch?v=M-VO6dtFRes https://www.wsj.com/finance/regulation/keith-gills-gamestop-trades-pose-conundrum-for-market-cops-70cc5301 https://www.macrotrends.net/stocks/charts/GME/gamestop/revenue https://www.wsj.com/finance/stocks/gamestop-burned-andrew-left-in-2021-hes-betting-against-the-stock-again-4377cecb https://www.nytimes.com/2022/05/18/business/melvin-capital-gamestop-short.html https://www.instagram.com/tim.naki/reels https://www.wsj.com/finance/regulation/new-texas-stock-exchange-takes-aim-at-new-yorks-dominance-e3b4d9ba https://listingcenter.nasdaq.com/assets/Board%20Diversity%20Disclosure%20Five%20Things.pdf https://www.bloomberg.com/news/articles/2024-06-05/why-is-apple-aapl-teaming-up-with-openai-both-companies-need-each-other https://x.com/leonsimons8/status/1793319395080520036
All right, everybody, welcome to the world's greatest podcast. With me again today. The world's number one podcast. Yes, the world's number one podcast. We came in eighth last week, I think, for those of you looking at the iTunes rankings, which is absurd. We've only got to beat Ben Shapiro. Number eight across all of Apple? Something like that.
Yeah, whatever their top episodes are on the weekends. Well, that means we crushed on Spotify then.
Probably, yeah, I would guess. I don't know all the rankings, but... And I guess on YouTube, we got labeled with some COVID thingamajig. I mean, what is going on at YouTube? What a joke.
Like, literally, you're labeling COVID at this point? I mean... What a joke. Oh, my Lord. So... I guess we have to, at the top of the show, talk about the fundraiser. And I guess this, like, Vinod Khosla came in hot this week and attacked the besties. Let's play the clip.
What is your sense of the shifting winds in the valley around politics? I think for a very long time, the valley was seen as sort of a liberal bastion. But, you know, if you listen to Elon Musk or you listen to All In podcast and that gang and others, it seems to be shifting potentially towards former President Trump.
Is that just a small pocket or do you think that that's a real shift in terms of the way the valley is thinking politically?
The first thing I would say is All In Podcast and some of the supporters there are not based in the Valley. I would say there's a bunch of MAGA extremists in every part of society. And I hope we can prevent them from destroying democracy, which is probably the most important issue we face.
All right, Snacks. Why are you destroying democracy?
Now, that's a good bit, Jacob. That's good.
Rain Man, David Sack. And it said, we open sourced it to the fans and they've just gone crazy with it. Queen of Kinwa.
All right, David. If Vinod was at the conference, he got a little chippy here. Maybe he got a little bit out of line. He was a little bit out of line. What's your take?
A little bit. A little bit. A little bit. Well, first of all, Vinod should realize we're not MAGA extremists or extremists of any sort because he's at all in Summit last year. He was great. Yeah, we like what he had to say. Productive. And I certainly don't dispute his expertise and track record in tech. But in addition to that, then he's saying that we're not based in Silicon Valley.
We're not from Silicon Valley. We've all been here for decades. And then he doubled down on that in a tweet. So that's a bizarre statement. Maybe he thinks he gets to define people in or out of Silicon Valley. I don't really understand it. But to be frank, this is one of a series of statements that he's made recently that I can only – call insulting and childish.
First, he had this tweet that he said that Trump supporters were lacking in empathy and caring. Then he had another tweet where he said that Trump supporters weren't teaching good values to their kids. This caused Sean McGuire, who's a partner at Sequoia, to quote tweet him saying that, I think that I'd rather raise my kids to grow up to take after Ivanka Trump than Hunter Biden.
And that got something like 20,000 likes, and it was one of those brutal ratios I've ever seen on a tweet. So in any event, I mean, this is just one in a series of partisan tweets. And look, I think you can take whatever position you want on a political candidate. I can understand if he doesn't like Trump. A lot of people don't. He's raising money for Biden. That's fine. Doesn't bother me at all.
Yeah, he just had a fundraiser like two weeks ago or something.
Right, exactly. That's not an issue at all. But what I do take offense at is labeling millions and millions of ordinary Americans as somehow lacking in empathy, lacking in caring, not being good parents, because you don't like their support for Trump.
Yeah.
And I think that that is a statement that, frankly... reeks of being cocooned in an elite bubble for way too long. And let me just explain. If you look at where Trump's support is strongest, it's really in middle America, in sort of the heartland of America of what- Basically, the part of America that Coastal at least dismissively refer to as flyover country. Sure.
And it's a lot of the industrial Midwest. And frankly, that part of the country has not had the same type of economic experience that we've had in Silicon Valley. Of course. They have not been beneficiaries of globalization.
Or equities, you know, and they're in the working class, and the working class in the factories got gutted, yeah.
Well, yeah, look, if you're in one of the handful of export industries in America, and I'm talking about if you're in Hollywood or you're in big finance or you're in software, then globalization has been great for you because it has created huge global markets for our products. However, if you're in an industry that has to compete with global exports, then it's been very bad with you.
And blue collar workers have been hurt, labor's been hurt, people who work with their hands have been hurt. They have not benefited in the same way from the system that we've had in this country for the last 30 years. So you can understand why they would not be so enchanted with elite thinking.
And I think to then label those people as lacking in caring or empathy or not being good parents because they haven't had the same economic ride that you've had for the last 30 years. It's a blind spot. You are the one who is fighting a legal battle to kick some of those people, the public, off a public beach.
The surfers at his beach, yeah.
kick the public off of the public beach in front of your beach house. And then you're saying they're the ones lacking in empathy. Dude, look in the mirror.
Yeah, I mean, listen, the great irony of this is, as you know, the Democrats were supposed to be the party of the working people and Biden was supposed to be the pinnacle of that, like fighting for unions, fighting for the working person. And so they've just lost that whole thing.
And I'll say like, it feels like a lot of people are tilted because they defeated Trump and now he's back. And so that tilts a lot of people. There was a lot of effort, a lot of energy, and a feeling of success that Trump was ousted. And the fact that the guy is now the frontrunner to be president again can be very tilting after feeling like you've already won the battle. And guess what?
It's back. I will also defend Vinod real quick. I'll say, having known Vinod for a long time, he's an investor with me. He's a guy I've come to appreciate and think highly of. We had him at the summit. It was great at the summit. It was great. It was awesome. If you listen to his thing, he said the listeners of the pod and then he said MAGA extremists. So they're not based in Silicon Valley.
I think he was referencing that the listeners of the pod are not based in Silicon Valley and they are MAGA extremists.
Yeah, I couldn't hear.
I think what he meant to say was and some of the supporters there are not based in Silicon Valley, meaning like the supporters.
Chamath, your thoughts on Vinod's comments?
Yeah, I think Vinod's comments are a microcosm of something that's a little bit bigger than just him and I think is roughly emblematic of the mainstream media, which is I think the four of us have found over the course of these last four years doing the podcast a rhythm. where there's a whole diversity of views. We've always respected each other. We've learned from each other.
And each of us have taken turns expressing something that the others have ended up converging on. That's not a holistic statement on every issue, but it has happened. And that's an incredible example of how you should figure things out from first principles, especially things that matter. And I think this is the first time, and you know, look, David said this a few years ago.
He said, Sachs did, that the course of elections will be driven by podcasts. And I didn't give that a full enough weighting at the moment when he said it. But I think what I'm realizing is it's not necessarily just that podcasts will frame elections, but it's the counterfactual, which is that it fills a vacuum.
And I think what you're seeing right now are the reactions of people that have thrived in what used to work, which was a traditional media infrastructure that would shape how people were supposed to think.
But then all of a sudden, if you can have a platform like this, where people just talk from first principles, respectfully, and then the chips are going to be what it is, and people will come to their own conclusions, I think that that's what people are reacting to.
So I think what Vinod is reacting to is this sort of discomfort where you see four reasonable, intelligent people all of a sudden talk open-mindedly about what's happening in the presidential election. And what you leave out is the planted orthodoxy of what you're supposed to think. And that's disconcerting to him.
It's disconcerting and confusing maybe to Sorkin, who I think is a wonderful reporter and a thinker. It's disconcerting, Jason, to every single media outlet over the last week that's breathlessly been trying to get me or Saks to have an opinion on this. And the reason I've deleted all of these emails is they don't get a chance to frame what we think. Mm-hmm.
You can listen to the podcast and know what we think. This is the future of how smart, reasonable, moderate people should make decisions. It is an example. Talking to somebody you disagree with does not make your opinion bastardized. It actually makes your opinion valuable.
There are these simple truths to living a productive life that if you want to embrace, you need to find friends that you can trust. Even on issues when you disagree, you can hear them out. So that's what's happening right now. And I think that that's why we all need to sort of stand together and lock in arms and just keep moving forward. It is something really important here that's happening.
And I think that's why the media and these opinion makers are losing their minds.
Friedberg, your thoughts on this? You're friends with Vinod, as you mentioned, and you've always said to me and in our personal discussions that the reason you do this pod is because you really want to set an example of how to have great conversations and learn from each other and the tone of what we do here. So your thoughts on this?
The unfortunate reality in a voting system, an election cycle like we're in, Vinod went and did a fundraiser. It's public, but he did a fundraiser for Biden a few weeks ago. And he wants to win the election. He wants to make his horse win. There's a lot of reasons why I'm sure Vinod has chosen that person to be his horse.
And so when you get on the playing field, you got two teams and only one team wins. So everyone pulls out all the stops to win. One of the things that is done is unfortunate and it over time causes an erosion and a hardening into a kind of polarity between all people, which is that you call the other side wrong or bad or extreme. The term that he used, which really I think
personifies the problem is he said their listeners are their MAGA extremists. Extremists being the word, right?
MAGA just means make America great again, which I think everybody wants to make America great again.
Whatever. The extremism phrase is used by both parties to describe the points of view of the other side. And what I think is lacking is a reshifting of the perspective to say their views are valid. I acknowledge their views. I hear them. I know why they feel that way. I'm understanding where that group of people are coming from.
And to have that acknowledgement unfortunately softens and weakens your position and ability to go out and win an election. And so both sides harden themselves and use terms like this. to try and discredit the other side. So it's unfortunate to see, I think we all understand where someone who's trying to win a battle on the field is coming from when they're trying to do this.
But I do think that what is deeply lacking in the erosion that's arisen is because we can't say, I hear you, I see the problems, I recognize you as people just like us, you have kids, your families, and you have a different point of view on the policies that will work and the individual that will realize those policies.
I also think it's important to make sure that we reiterate again, at the sake of being pedantic, the facts, which is this is a nonpartisan show. And it is a platform that has showcased and given time to Democrats and Republicans and independents. And they've all taken us up on it. So that thought by Vinod is incredible. at best, incomplete, and more appropriately, just stupid and factually wrong.
That's a good point. Larry Summers spoke at the same conference that Vinod did.
Larry Summers, Dean Phillips, Bobby Kennedy, Chris Christie. I mean, this is a spectrum of people that we are bringing on. Cheryl Sandberg. Cheryl Sandberg. You can hear from them. Jared Kushner. Jared Kushner. You can hear from them in an unfiltered way and come to your own conclusion. That's why we were number eight last week. That's the exact reason why.
And I think that that's very scary because instead of power brokers being able to filter an opinion, you now have an opportunity to just hear it for yourself, discuss it amongst your friends and come to your own conclusion. So we have always been bipartisan here and we will continue to be bipartisan.
The second thing is, and I just want to say this again, I have asked the White House for President Biden to come on the show. Oh, come on the show, please. Yeah. Yeah.
Yeah, we've offered the exact same thing.
We are just waiting. People really don't want me to be friends with you guys. They want me to end my friendship with you, Chamath. They want me to end my friendship with you, Sax. And these are people who are mutuals, I just want to say. And I want to just tell them all equally to go f*** themselves here. You can bleep out the F word.
Like, I'm not picking my friends based on their political parties or their leanings or who they're supporting for president. The way I look at this, Sax, is at this point, we're all Americans. We're in this together. America survived Trump's presidency. America's going to survive Biden's presidency. The democratic process, it is very messy. Everybody gets to have a voice.
And let's just pause for a second here and open up the aperture. Let's be thankful that everybody gets to have a say. Let's keep it from getting personal. Half the humans on this planet Earth do not have a voice. The one thing that's trending in the wrong direction globally is people living in a democracy. It's the one thing not getting better. We have a lot of work to do in this country.
We have to respect each other, like we try to do here on this podcast. And we have to talk about the important issues. We all agree the budget's out of control. We all agree the education system sucks. We live in a multipolar world. We have to figure that out. when we should go to war, when we shouldn't, when we need to stay out of things. These are complicated issues.
And name calling in this presidency is not as important as tackling these issues together as Americans. I hope everybody can keep that in mind. So let's debate this. May the best candidate win. And then let's move on and let's solve some problems here. Okay.
And it's getting very personal. Well said. Really well said.
I know I'm really hurt by this because I tell you personally, it's very hurtful to me because I value our friendships and they're picking on the wrong guy because you're the most loyal guy.
And so it's kind of like it's going to be the least effective.
Well, you still care what they think, J. Cal. That's the problem. So they can get to you.
You can ask me if I do that. Don't tell me what I think, Sax.
You can ask me. Okay.
I actually care about people. Do you still care about what they think? The two of you bicker like brothers.
No, we do.
But I know I just have to retrain Sax that he can't tell me what I think.
Retrain, okay.
Yeah, no, because you do that. You put words in my mouth.
For all listeners, I just want you to know they've been bickering like this for 20 years. So it's the funniest thing.
Here's the point. It happens even worse offline when we're not on the show. It's unbelievable.
Non-stop. You're ruining it, J. Cal. You're just ruining it right now.
No, here's the thing. I respect... All of my friends, and I like having a diversity of opinions. That makes life more interesting for me. And then to tell me I can't be friends with this person, that person, the way I grew up, my dad had a bar. Hells Angels, cops, firefighters, just everybody was allowed to come and hang out at the bar. We're here. We're having a discourse.
Everybody's welcome for a seat at the table.
LGBTQ, were they allowed?
All of them, the entire rainbow.
What people haven't figured out yet is cancel culture is over. Virtue signaling is over.
Absolutely. DEIs over all this nonsense.
It's off-trend, not on-trend. And the people who are still tweeting these blanket statements and they're trying to demonize the entire other side with unfactual, unfounded potshots are just making fools of themselves. And you can see that in the reaction on X. All right, let's move on. We have some breaking news here. Oh, no. Just to put things on a happier note.
What happened? Did Uber get bought by Tesla?
Tesla just launched the Tesla mezcal.
Oh, breaking news story. Hold on. It's a breaking news story. Tesla has launched mezcal.
In that beautiful lightning bottle. I just ordered my bottle of this like two seconds ago while we were doing the show. Uh-oh. Because this sold out in like two hours before. And now the bottles of the original Tesla tequila go for like $2,000 now on eBay.
Breaking news.
So get yours now if it's still... Smokey Moscow.
There you go. Wait a second. Is this going to compete with the all-in? A little bit. A little bit. Uh-oh. Well, it'll be all sold out by the time we launch our ball.
We're both going to be sold out.
We're both going to be sold out. See that? Everybody can win. It's not a zero-sum game. Everybody can secure the bag. All right, let's get into the docket. Enough of the self-referential.
We're all influencers now. Did you guys see my deck this month? We're all influencers now.
We're all influencers. Absolutely. Absolutely. There's a lot of federal regulation going on around AI, as we know, regulatory capture. Shout out to our guy, Bill Gurley, who did a great talk last year about this. On Wednesday, the New York Times reported that the DOJ and the FTC had struck a deal on how to go after AI incumbents. Here's the terms of the deal. And again, this is all breaking.
The DOJ gets to investigate whether NVIDIA violated antitrust laws. They didn't specify what they're going after here, but it could include the NVIDIA use of CUDA software to lock customers into using their GPUs, or maybe how NVIDIA distributes their GPUs to customers. There's a lot of regulation around that. And the FTC takes the lead on looking into OpenAI's conduct in Microsoft's AI deals.
Obviously, there's been a ton of those including acqui hires, etc. And then just this morning, the Wall Street Journal reported that the FTC had opened a probe into Microsoft's deal with inflection AI. That's the one if you remember, where they bought the staff and then did some fakaka crazy commerce deal where they give them a bunch of money, I guess to bail out the investors.
And that one is as conflicted up and down as you could possibly imagine. They note Microsoft structured that deal in a way that could avoid regulatory scrutiny. You heard that here first, actually. We talked about this concept of a shadow acqui-hire on this very program when we saw it, because we'd never seen a deal like that. It includes that $650 million licensing fee. All right.
There's tons of other angles here. But let's start with you, Chamath. What are your thoughts on this regulatory capture and Nvidia's ascension? For those of you not watching, it's almost become the largest market cap company in tech. Actually, today, Nvidia passed Apple for a moment in time. So this is pretty crazy what we've seen with Nvidia. And here we go, regulatory capture coming in hot.
Chamath, your thoughts? I have two thoughts. They're sort of mixed emotions.
The first is, I think the DOJ and the FTC are totally way out of their ski tips on this. This is a totally nascent industry. We don't have any good examples of end-user use cases, either in the enterprise or amongst consumers. We only have 18 months of spend history. It is true that we've spent probably $750 billion to a trillion dollars collectively now on things with the AI label.
But it is also true that that's probably generated less than $10 billion in revenue. So I don't see what they're exactly investigating. in an extremely immature market where we haven't yet seen one cycle of boom and bust so that we know what we're actually dealing with. So it's way too premature and it's just people afraid and tilting at windmills. The second part, the part that's mixed though is
We are seeing a clever form of deal-making that these huge hyperscalers are doing to work around the traditional constraints that you've had on businesses. Jason, you and I worked at AOL in a moment where AOL paid a very dear cost for essentially round-tripping revenue. Yep.
Microsoft had to go through a huge DOJ inquiry and a settlement decree, and they were in the penalty box for most of Steve Ballmer's tenure as a CEO. A lost decade, yeah. And the handcuffs came off when Satya took over that business.
So I think what I'm trying to say is folks have become extremely sophisticated at replacing roundtripping with these complicated TAC 2.0, whatever you want to call it, credit-oriented deals. They'll finance you to buy their own chips. All of this stuff... has to be scrutinized a little bit more. So that part I support. But all of a sudden, launching an antitrust investigation makes no sense.
So I really think the inquiry should be coming from the SEC about, is this real revenue?
That's actually the key issue. And this goes to Chamath, what we talked about. If we're going to police something, tactics... makes sense, not future competition, which has been Lena Kahn's sort of approach to this. And she's only going to be in the position for another couple of months if the election goes the way it's going. So this might all be moot.
Freeberg, I want to get your thoughts on this. We had that great talk, 2,851 miles from Bill and regulatory capture at the summit. You can look, it would be in the show notes if you haven't seen it. It's great talk.
Freeberg, your thoughts on this? I don't know what regulatory... capture NVIDIA? Are you talking about regulatory capture of NVIDIA?
Just regulatory capture in the framing of AI? Is it too early? Hey, we're like, in the we're not even in the first inning here. And already, we're going to start investigating everybody.
And it just seems pretty sure one of the silly aspects is they just passed this law in California, Newsom warns against perils. of over-regulating AI. Oh, good. Governor Newsom warned on Wednesday against stifling the burgeoning AI sector. I mean, Newsom is well-informed by the tech community. Sure.
And he's also an intelligent person, so I don't think he'd kind of fall quickly in line on this one. But the way that the statutes were written is there's a definition on the size of a model which in and of itself is very quickly changing. As we know, we've seen recently significant reductions in model size that actually improve performance overall of the model for specific applications.
And it's very likely we end up seeing a lot of more smaller targeted models being used in specific applications instead of one massive general purpose model being used, or networks of smaller models, which is what really where I think the industry is going. And if that's where things go, then the statute doesn't even matter. It makes no sense anymore.
And that shows you, I think, how quickly things are changing. They go and they get, quote, experts' opinions. In a couple of months, those experts come back. They're like, here is the size of a model that you need to be regulating. And then the legislators run and they write the code. They pass the statute. And all of a sudden, it doesn't even make sense anymore.
So yes, I don't think we really know where this technology is all falling out at this point. And I think it's very difficult to have the government kind of reach in too quickly to try and identify what they should and shouldn't be allowing to happen from a free market perspective.
Your thoughts, David Sachs, especially in light of the fact that looking like we're going to have some regime change in Washington and the FTC is going to turn over, obviously, if that happens.
Well, look, I agree with you guys that this is just too soon to be opening these investigations. It's true that OpenAI and NVIDIA have leads in their respective markets, but that's all it is at this point. It's way too early in the development of these markets to say that these are clearly monopolists. There's still a lot of competition going on. If a few years from now,
NVIDIA still has whatever, 85%, 90% market share, and no one's even close to catching up. Then maybe you consider it a monopolist. Same thing with open AI. But it just seems very early to be rushing into investigations of these companies. I mean, the AI market is what, 18 months old, two years old maybe at most? Yeah.
I'd say two is a good way to look at it.
Yeah. So it's just very early to be doing this. Look, I think this is of a piece with... Remember that executive order or whatever that... Remember when the White House issued that 100-page-plus... executive order on AI regulation, we covered it on the show. And we also thought that was too soon.
And we thought that if the internet had been regulated in that way in, you know, circa 1995 or 1997, it never would have blossomed the way that it did. You know, you want to give these markets some time to play out before you bring down the heavy hand of regulation on them. So it just seems to me like the administration is getting carried away here with this desire to regulate this new space.
And I mean, frankly, it's of a piece with, I would say, an innovation hostile agenda. You also have the attacks on crypto. You just had Biden veto a bill that would have finally given crypto a regulatory framework in the US. It passed with 60 votes in the Senate, including Democrats like Chuck Schumer. And it still wasn't good enough.
Oh, and it was based on a framework, I think that came from the SEC. But Biden is basically in the Elizabeth Warren camp that he's going to give no quarter to crypto. So you've got hostility to AI. You've got hostility to crypto. You've got hostility to M&A. No one can get an M&A deal through right now. You put all these things together.
Plus, you've got hostility to options as compensation in terms of the 25% unrealized gains tax. You add up all these things, and again, I think this is an agenda that does not benefit Silicon Valley at all.
Well, and if you want to understand why people are coming to your fundraiser tonight, if you put all this together, it doesn't take a genius to figure out that if you're a venture capitalist or an entrepreneur and you want to see M&A and you want to see entrepreneurship and you want to see your companies thrive and you want to see your employees get rich and have options, Biden is basically handing the election to Trump.
It's like he's doing everything he can to basically alienate Silicon Valley.
And capitalism. And you're exactly right. And innovation. I wouldn't even say it's Silicon Valley. It's like if you're going to go and build things, that are at the bleeding edge. You know, the government used to be the most critical supporter of that, right?
If you think about space or defense, these are areas, the internet itself, the government was the partner of private industry to make sure that there was no regulation and that like really, really forward-looking innovation could happen. That should be their role.
And this speaks to this desal versus acceleration movement that we see here in Silicon Valley and this is what we see in Texas. Florida, UAE, Riyadh, Doha. There are places in the world, Singapore, where people are accelerating innovation. And this is what humans want. Not just entrepreneurs, not just venture capitals. All of us want to see an acceleration of innovation.
Everybody wants to see prosperity. And if you put yourself up as the de-sell candidate, we're not going to allow M&A. We're going to screw with options. We're going to do all this stuff. People are just not going to vote for you. And people want crypto legal. So take the memo.
I mean, the fact that the Democrats can't field a candidate that aligns with what humanity wants is absolutely mind boggling. This is why I think Biden's getting hot swapped this month. You heard it here first. Gavin is going to be running for president. It's going to be Trump and Gavin. They are hot swapping Biden after this first debate. Biden is going to get demolished by Trump in the debate.
It's going to be elder abuse. He's getting wiped out and hot swapped. You heard it here first.
Well, there's a lot of conspiracy theorists online who agree with you. A lot of tinfoil hat speculation that he's going to get switcheroo. Hot swap. But look, I mean, I think you make the correct point, which is, you know, I didn't really think about it this way, but you're right. Biden is the decel candidate. And nobody wants that.
Also, Trump has shown a learning curve where he recently has been saying positive things about crypto. Yeah. And he's always, I think, been more pro-economic growth. He was a real estate developer from the private sector. He actually understands the economy. So there's no question that he would be more pro-innovation, much more pro-innovation than Biden.
And to your point about this is one of the reasons why people are coming to the fundraiser, I had someone from the campaign said something very interesting to me. She said that we've never seen this many new donors at an event before. So we're turning out the new donors for this reason. And we're not gonna be intimidated by people calling us names. It's like, look, in any normal election,
people in an industry would vote for the candidate who they see as most aligned with what is good for them, their families, their industry.
If you made a list, let's just make the list here right now. Make the list of things Trump is in support of, right? And Republicans are in support of right now. They're going to be pro M&A. They're going to be pro crypto. They're going to be pro less taxes. They're going to be pro law and order. You know what? That's where I align. Those are the things I want.
So if you just list the issues for me, despite how I might feel about Trump and some of the things he's done, he checks off all my boxes. He checks off all my boxes. And I think that's what's happening here. And people were scared to come out and say, this person checks off all my boxes. The Democrats need to realize they're out of sync with America.
They're out of sync with powerful people in America, especially the donor base. They're the decel party now. And they just have to flip this thinking. They're going to get demolished. It is going to be a landslide at this point.
People want jobs and prosperity. From your lips to God's ears. Do the hot swap. I mean. I don't really have a lot more to say.
I think you make a great point. Take the win. I mean it. And crypto is such an obvious win. And you know what? Trump's anti-EV right now. He's been wailing on EVs. I guarantee you that's the next thing. I bet you next week he comes out. Next week, within the next two weeks, here's my prediction. Trump says, you know what? EV is not so bad.
Remember, he's been saying EVs, nobody wants these things. We're subsidizing. I bet you next week or maybe in 30 days, I'm making a prediction here. You bank the prediction. In 30 days, Trump comes out magically in support of EVs.
Well, I just think that his point is that people shouldn't be forced to buy EVs.
Right.
I mean, I don't think he's against them per se. I think he's against people being forced.
Look, I think that what the new administration, hopefully, or what Trump should propose is effectively a modus vivendi with big tech, where the point is that if you stop censoring our people, if you stop censoring conservatives, if you restore the civil liberties of the average American to say what they want online, to...
basically bank online, to stop essentially deplatforming and censoring people, then we will let you innovate. We'll let you do M&A. We'll let you get back to business. That basically is the basis for a peace agreement between big tech and the Republican Party.
Yeah. And by the way, I'd say in the next... 30 to 60 days, you're going to see 10 incredibly high profile people come out in support of Trump if Biden isn't swapped out. And when I say high profile, I have the inside line on this extremely high profile people, not just Doug Leone, not just David Sachs and Chamath Bhaiyapatiya.
It is going to be about 10 high profile people who are much higher profile, respectfully, than Chamath and Sachs and Doug Leone. So just wait for it, folks. You cannot be a decelerist in, you know, this world. Let's keep moving. Roaring Kitty, aka Keith Gill, just disclosed a nine figure position in GameStop. Yes, we're back to where this podcast started.
We're talking about GameStop and stonks as crazy as it is. And a E trade is considering suspending his account. This is going to take a little bit of background. I apologize here. I don't mean to deplatforming him. Here we go again. Quick background. You remember the first basically viral moment for this podcast, this AI moment, I remember I was in Tahoe skiing, was the GameStop saga back in 2021.
Thousands of retail investors following this individual, Keith Gill, were posting in this subreddit called WallStreetBets, if you're not familiar, and they created a massive short squeeze, and they sent the stock flying. Robinhood halted the trading. Remember, Vlad came on. That one all went crazy. We covered that all. And then Keith Gill went silent for the past three years on Twitter and Reddit.
He said nothing. Then on May 12th, he posted this meme on X, which has been viewed 28 million times. Now, if you don't know this meme, this is the lean forward meme when you've got a game controller in your hand. It is a way to signal like, hey, we're getting to the boss level. It's going to get exciting. Here's your GameStop chart, folks. You see that first peak?
That's when we reported on it back in 2021. And here we go again.
It just had to slow right down for three years and bink. popped up again.
So GameStock stock tripled at the posting of that meme. Why is this important? Well, he has a huge position. He increased it from 200,000 shares, basically to 5 million, had 120,000 call options. Jamal will comment on all this in a moment. If he exercised all these calls, Gill could own an additional 12 million shares. Here's Gary Gensler, who was on CNBC Wednesday trying to
like calm the markets down and or try to get control of this craziness. Here's the clip.
I say to you, look, I want to put up a I want to put up a cryptogram and it's of a chair leaning up, which we know from video game playing means, come on, this is the ninth inning. Get ready. And we know that I'm a person who happens to like the stock of GameStop. This is the single. Come on, get ready. Is this something hypothetically that is that the SEC should worry about? It's a
Look, again, it's not so hypothetical because you're describing things that are in the public domain and the public is interested in. But generally speaking, you have to make sure that you don't mislead the public and that you don't in any way do things in the markets that may be... or manipulative or misleading. And so that's the key thing in our capital markets.
No, the key thing is if you can cure it with disclosure. This is Brandeis. You know if they disclose that this is something that they call action, then you can't go after them.
disclosure is one really key part of our capital markets. When you buy the stock of a company, you expect that they give you full and fair disclosure. That's, by the way, not what you're getting right now in this crypto field. So I just, you know, cautionary tale there, that disclosure. But disclosure doesn't necessarily protect a bad actor if they're manipulating a market.
Chamath, you've You've had a lot of comments on the markets and specifically this one over the years. What are your thoughts? Is posting this meme stock manipulation or disclosure?
No, he's posting a meme. Okay, thank you. He put a picture on the internet. Okay. I mean, again, this is like the problem that we have, which is that he disclosed his position in a different way. Now, we don't know whether that disclosure is accurate because I think it was just a screenshot of like some statement inside of a Reddit thread, right? And then that got posted many times elsewhere.
Is this accurate? I don't know. Because he has no obligation as an individual to do any of this stuff. Because he's not running a hedge fund and he's not running other people's money. Now, if he was acting in concert with other people, you could say, hey, hold on a second.
If you're repping not just your money, but other people's money and you did this, then there's probably a disclosure obligation there. But at the end of the day, this is a guy that acted and basically created hype. And right now, the SEC does not have a framework to deal with that because the rules that existed didn't understand social media and whatnot. And he's also not a regulated entity.
He's just an individual. Now, if it turns out that he was selling while he was posting this stuff and trying to manipulate the market in some way, obviously they could find issue with that. But just for him being a credible influencer, and creating momentum for an underlying position, that in and of itself is not illegal.
Sacks, I think we have to go to Judge Sacks here. Judge Sacks, what is your verdict? Are memes stock manipulation? Judge Sacks.
No, I don't see any manipulation there. Like Jamal said, he's just posting a meme. Not guilty. Not guilty. What I see in that clip is Jim Cramer trying to stir up an SEC investigation of Keith Gill. For what? I mean, what exactly has he done here?
This is kind of... The Wall Street Journal as well. If you look at the Wall Street Journal today, there's an entire article basically with the headline, is what Keith Gill is doing illegal.
And I think you can view this in a different lens, which is here is an individual that is totally outside of the establishment that however he's done it, has gotten a hold of hundreds of millions of dollars, maybe even now billions if the stock keeps going. And I think that that for the establishment that controls those pipes, very disconcerting.
Right. If he was one of those apex predators on Wall Street, if he was one of those major hedge funds that donates a lot of money to the political elite, in other words, if he was a well-connected political player, I doubt anyone would be asking these questions.
Freiburg, you got thoughts on this? Market manipulation or meme, stonk, fun, good times. You're buying GameStop. You're buying AMC. Buyer beware. You're in on the joke. What are your thoughts?
Nick, can you pull up the image? I'm going to talk about the stupidity of buying the stock of this company at this valuation. This is a company. And then I think we can talk about whether that's even relevant, which I think indication is it's not. GameStop finished the year 2023 fiscal year with Sales of 5.3 billion down from 5.9 billion the year before. So sales declined by 12% in the year.
They have $5 billion in revenue selling games?
Adjusted EBITDA for the year was $65 million. And they have about 1.2 billion in cash. Currently, as of today, the market cap is about $13.5 billion. So that makes it about a $12.5 billion enterprise value. 12 and a half billion divided by 65 million of EBITDA means that this stock is currently trading at about 192 times EBITDA.
A business that is profitable and you can say that the profits are stable and predictable and is likely not gonna grow very much will typically trade for seven to 12 times EBITDA. And the stock is trading at 192 times EBITDA and the revenue is declining 12% a year.
So I'll just point out, like, I don't think that there's anything about the actual performance of the underlying business and the security that you are buying or selling when you are making a decision about whether or not to buy or sell the security. And I think that that's the real question. It does that even matter? Clearly, it doesn't. Let people have fun. Let them go to Vegas.
Let them play in the roulette table. They know what they're getting into. The disclosures are all there. All the SEC filings are there. All the financials of this business are there. What you're actually buying is publicly viewable. You can look at it. You can make an investment decision as an individual investor and trader.
And you want to blow your money trying to see when the social trends are going to shift one way or another. Let it be your decision.
I think this is well said. If you're buying NFTs, if you're buying stonks like this, if you're playing poker in a, if you're playing bomb pots, look it up, folks, if you don't know what bomb pots are, and you're going crazy playing bomb pots for eight hours like we did the other week, you're there to gamble. If you are playing bomb bots, this is the bomb bots of the stock market.
Have fun, go crazy. If you're buying NFTs, if you're buying crypto and the latest token, you know what you're getting into.
There's no law, there's no law that defines why you should or should not buy a security with respect to the diligence you have individually done to determine whether the underlying business is worth the price you're paying. The law says that the businesses
that are listing their securities for public trading have an obligation to make disclosures on their financials and any other material events to the public. And they do that through the SEC filing process. That's all out there. And then what you as an individual do with it is up to you. Enough with the nanny state. Go ahead, Sachs.
So when's the right time to put a short on this company?
By the way, to not invest through advice. The stock is up 40% today. And then there's these reports that came out yesterday on a bunch of very big hedge funds that put very big short positions yesterday on the stock. And it's up 40% today. So we're all going to get margin calls. So this is where you see the same thing that happened last time where... What was that guy's name? The... The capital.
Melvin. Melvin. Melvin. Melvin. Melvin. Melvin. Melvin. Melvin. Melvin. Melvin. Melvin. Melvin. Melvin. Melvin. Melvin.
Melvin.
Melvin. Melvin. Melvin. Melvin. Melvin. Melvin. Melvin. Melvin. Melvin. Melvin. Melvin. Melvin.
They bid up the stock to levels that realistically it's not worth that much. Disconnected from reality. It basically creates a short squeeze. So the stock flies up.
Yeah.
Then the hedge funds know it's overvalued. So they basically put new shorts on.
Yeah.
And then they do the next short squeeze.
And they'll do something that's even more dangerous, which is they can get synthetically short. So they'll, they'll add leverage to this, using all kinds of esoteric derivatives that other banks on Wall Street will happily sell them. And then when those are disclosed, then the Redditors can just pump it even more, which causes massive margin calls.
So I think, I think the thing that Friedberg, you're saying, though, this is this existential thing that comes back, it's happened in NFTs, it's happened in the dot com bubble, it happened in SPACs, it's happened in crypto. Are we supposed to protect people? And then the question is, who is the we?
And are you supposed to say, if you're an adult and you can read, then read the disclosures and you're on your own. That's what the SEC says. And that's what the rule of law has been. And so this is going to be an interesting test because instead of an organization, it's going to be a person, in this case, Keith Gill, who will be the face of what happens to the stock.
Because if a bunch of people all of a sudden plow into this thing, and then it goes to five, It'll be really interesting to see the reaction. Hey, you should have saved us. How could this happen? You know, he dumped this on all of us. And the answer is no, he did not.
Where was the government to save our day? Where was the government to protect consumers?
Enough with the nanny state.
That's the next cycle of the story. The next cycle of the story is where was the government?
And you showed how the government protected everybody, which was you showed the revenue and the profits and the margins, which is publicly available.
And you did it in two minutes. I mean, anybody can look at your analysis and see.
You didn't even use a sophisticated model. You used probably the calculator app on your freaking Mac to figure out that it was 192 times. No, he did the back of the envelope. No, no, no. I'm sure he used the calculator app. Actually, I have the Casio.
The whole point is you can figure out that there's no logical justification for this company using one Google search and the calculator app on your Mac.
It's on you. I think the question is, should we make all sports betting legal and all online casinos legal? So if you follow this to its natural conclusion, let people do what they want. Why are all of the other gambling industries so tightly regulated? And why do we protect consumers?
I think there's a big difference. Well, because we need a stock market. We need the ability for companies to go public. It just so happens that you can get this weird effect where some stocks can become meme stocks. But that doesn't mean you want to design the entire... system of securities laws around one or two meme stocks.
The fact of the matter is that investors are sufficiently protected by robust disclosure requirements that apparently GameStop has followed. All that information is out there. You basically dismantled the company in like two minutes. So anyone watching this show has all the information they need not to buy this stock at 190 times earnings, okay, if they choose to follow that information.
The other thing that you're saying, which is really important, is you have to remember what the capital markets and the stock market is there for. It's not meant for this. This is a small little cul-de-sac, but the overwhelming majority of the capital markets and the equity markets is to allocate excess capital to good ideas. That's what is usually happening.
There's a bunch of us that will put a bunch of our money into things because we think it's the right thing to do. And that is the overwhelming majority of what is happening in the stock market every day. And David's right. Every now and then, one of these things randomly comes up. And every period of time, there'll be a few parts of the market that go crazy.
But the reality is that's not what the overwhelming majority of the actions and that's not why the security is also there.
Have you guys seen this guy? His name is Tim Nacky on Instagram. So what this guy did, this guy's incredible. So this guy went out and he basically bet 10 cents in online blackjack because he's legally allowed to do it where he lives. I think he's in Australia or something. Oh, yeah. That's 10 cents for every follower he has on Instagram.
So over the last couple of months, he's been racking and racking up the bets. And he ended up doing these $100,000 plus bets because he got over a million followers. He ran this thing up to over a million bucks and he quit. But now he's formed like a blackjack syndicate. So everyone wants to kind of pile in and bet with him.
I think that there's this really interesting phenomenon of like social betting. Everyone wants to be in a group together. He's got hundreds of thousands of people that have put money in. This is so great. And then he goes and does this online gambling. Nick, pull the video up. I just sent you. Watch how this guy, and he's so entertaining. He's awesome.
Oh man, this could be deadly for Saks. Saks didn't know about this.
72 going to Blackjack and betting 10 cents for your Instagram follower. I've got there are 940,000 of your weapons with us now. So a $94,000 bet coming right up. All righty, ladies and gentlemen, we have a $94,000 hand going on the line for the 940,000 of your weapons with us. 90 on the button, 2K. Each of the side bets, this bloke definitely gloves up both hands on the golf course.
Never has a plastic hand stood down such an impact on my life. I'm not healthy. Four is gross. Seven versus six. That might be a double down. What are we doing, Sax?
Are we doubling down, Sax? What are we doing?
I'll take three.
That's a double down.
Double down.
That's a double down. That's a double down.
Yeah.
Definitely double down.
God damn you. Go 10 for me here.
818!
We'll take the 818!
We will take the goddamn 818!
And give it to these punting lords! A glorious day for the 1010 with the 1010 on! Can I get the job done again? That'll do! That's awesome! You little f***ing beauty! I will see you tomorrow, you smug son of a b****!
Oh my God, this is so great. This guy is so good. Sax, do you know about this?
That's some serious degeneracy. It looks so fun though.
Look at Sax.
One hand a day. One hand a day.
There's only one a day? Oh, my God.
And every day his follower count goes up. So every day he bets more. And then you're following. And he ran this thing up to a million approximately. Oh, so good. I haven't seen Sax this awake during the pod. You don't get the 10 cents. He keeps it for himself. He started this just by betting his own money. And he would put 10 cents down every day for how many followers he had. Okay.
And so he started betting more and more of his own money.
So now he's got a follower count that he can put on his hands. Is it still all of his money that he's betting?
So then as of a few weeks ago, or like two weeks ago, he stopped betting his own money. He took the million off the table. He called it a day and he set up a syndicate. And now people send their own money in and now he's betting the syndicate's money. I love this. And he does one hand a day and he keeps racking this thing up.
It's just... What happens when he loses? Is there a day where he's lost a lot of money? Oh, dude, you got to watch it.
Man, that would be a good losing video. It's so funny.
I want to see what happens when he loses like a big number.
Can we get this guy at the All-In Summit? He plays online blackjack, right? So... There's always like a fake dealer and he has all this hilarious commentary on the fake dealer and what they look like. Sax is texting people to set up an account in a VPN right now.
I'll be honest with you, this may get me back on Instagram. This is so juicy.
We should get this guy out to the summit. This guy's got to come to the summit and do a live hand with Mr. Beast. Big shout out. Is he on TikTok or no? I think he only does Insta. Yeah, Tim Nack. I haven't seen Sax listen to Freeburg on this podcast more than he just did. That was incredible. You got Sax's attention. Sax, did you know you could play live online blackjack from your phone?
Did you know this?
Did not, did not know that.
This is important information for all of us.
Big day coming up. There is 514,000 of you in here now and a $51,400 bid coming up. Alright, day 60. A monumental day. We can hit the 50k button here. We will do. $50,000 on the button. We'll go $800 on the 21 plus 3. $600 on the perfect peers. This is, by far and away, the biggest bet I have put on a table in my life. We're trying to itch ourselves into gambling immortality! 14 plays 3!
No!
Oh, it's a disgusting pull on day 60 with all the marbles on the line. We will stand and look for 10, 10 and bust. 10, 10 and bust. 10, 10 and bust. Come on, 10, 10, 10.
The heroics, to be a hero again.
King, king, king.
Yes, yes, yes. Day 60. Stick that in your pipe. Smoke it! Holy s***! Pulled it off! Oh my god.
We've broken the push streak with the adventures of Tintin and you better believe that means I'll see you tomorrow and I'll be bidding even more.
This guy's got great energy. Can he do one live on the show next week?
Oh, day 55. Oh, here we go. Here we go.
Instagram follower I've got. Outrageously, there is an extra 21,000 of you in here today. So, $37,600 bet going on for the 376,000 of you legends in here now. Coming right up. Okay, day 55. I don't like this dealer. Dealer change. Dealer change. I don't like the dealer. I don't like the dealer. Oh my god, before I hit the hit button, I will say this.
Having talked to the Morning Rumble this morning, last time I spoke to the media about this journey, I broke a six-day winning streak that day and I lost. So if it happens again today, this one's on Roger Farrelly. We need to see eight or nine go low. No! Oh my god! Come on, that dealer change was so dirty. I guess you just can't win them all. But we've been on some run and I will see you tomorrow.
When we'll be bidding even more.
That dealer change was so dirty. You saw the dealer change at the last minute. He came up and they changed the dealer.
They've done that to me before.
I've been with you when they've done that. They do that every time with you. When you start running it up, they send in the dealer to ice you.
I think there's a particular dealer they've got. They do. It's like in the bullpen. The blank cooler.
We know the one. The blank cooler. I don't want to say anything, but it's the cooler. We need this guy next week on the pod to do the live bet. And then we each give him 5k. How about that? You guys in?
I've had them trot out the cooler. When I was playing craps once, I was so mad. And I was on such a heater. And what happens is You guys have seen me play craps where it's like, it's all rhythm, right? So it's like, I get the dice in a certain way. You know, I do that. And then they bring in this guy and he was like a klutz. It's like Daniel Day-Lewis in my left foot.
All of a sudden, everything is spilling everywhere. Four dice fall off the table. I got so out of rhythm. You broke the rhythm. It was so horrible. I was so mad.
Nick, I want this guy on the pod next week. We're each putting five dimes in. We got 20K from all in. Let's do it. That would be so much juice.
Oh my God, we should get him to play a special all-in hand and let him run up our capital.
On the summit, let's take the profits from the summit and do a live hand. We could put like a million bucks each on it. We double up and then we're done with the pod. We don't have to do a summit next year.
Really good idea, Jason.
Let's do it. Let's let it roll. All right. God, this is so much action for us. I don't know if we can continue, but there's more stories to come. And just buyer beware. I mean, if you're betting on this stuff, I mean, what do we have to tell you? If you're betting on GameStop. No, we don't have to tell you anything. You're an adult. You're an adult.
Go to your own job.
Well, here's something really interesting. Put on your seatbelt.
Put on your big boy pants. Don't drink and drive. Don't use drugs. That means like all of a sudden, like we need to govern how you're not a functioning adult.
By the way, if you swim in Cape Cod alone in the deep water and the kelp edge, you might get hit by a great white shark.
Or do whatever you want and please just take responsibility for yourself because it's not our job. I'm responsible for my children, not you.
Well, I mean, also, I just want to ask one question here. Is there anything with the short selling that could be more disclosure on that, Shamath? Just if the SEC was going to do something. I hear that bubble up once in a while.
Should short sellers be more disclosed? I really think that's a very good idea. I do think that there are some short sellers who are doing it because they have to hedge a position that they have. But then there are other short sellers who are doing it speculatively. And there are synthetic instruments that banks will sell you to go massively super short.
That's how you can get a situation where 140% of the stock is sold short, which shouldn't make sense. If there's only 100 shares of a company, how could it be that 140 shares are sold short? It's because you can have these synthetic derivatives.
Explain synthetic for the audience, because I don't think people know this concept.
So there are ways where if you have... a formal trading relationship with Wall Street. And you need to be of a certain size and they go through a diligence process. They give you, so I have one called an ISDA. And it's essentially an account and a framework that you negotiate with a bank
that allows you to call them and say, hey, give me A, B, or C. And other times they'll call you and say, hey, I have this really interesting way to play X, Y, Z. And one of the things that you can do with them is you can say, listen, I want to go super, super long or super, super short, a theme or a company.
And they'll create a contract between you and them that'll allow you to get that kind of exposure. Now, you're not supposed to do that on a regular basis, nor are you supposed to lever this up. This is actually what blew up a different hedge fund called Archegos. I remember we covered it. And in that, I guess what happened was the gentleman was calling many banks.
and doing all these things, and one bank didn't know what the other bank was doing, so all of a sudden there was this massive synthetic leverage that he was getting on, I think it was News Corp stock, and then they found out, then it was unwound, then he owed a bunch of money, he couldn't pay it, the whole thing shut down, the stock market went crazy.
So there does need to be that disclosure, but there isn't a rule that says that. And every time somebody tries to introduce it, the broker-dealers basically lobby and kill it.
So in a way, it's almost like a parallel universe where bets are occurring on outcomes in the stock market that are not tied to the stocks in the stock market.
Well, it is tied in the sense that ultimately it all needs to feed back to an actual physical share. And so this is where all this price behavior gets further amplified. I think the point is that these forms of expressing risk can really amplify what would otherwise happen. So in Freeberg's example, most people would sit there, get the financials.
Some would maybe say, historically, this thing looks like a short, or I wouldn't even buy it at all, right? Yeah. But other people may say, well, if I listen to the chairman and I think about the future, maybe I go long. That's a fine thing. You can enter the stock market and do that. But all this other stuff amplifies all these things to a degree that we're not really used to.
And let's be honest, the people who are betting, I'll use the word betting here, the people who are betting on these things are not looking to get a 7% return or beat the average. I mean, they're looking to double their money in 48 hours. They know what they're getting in for.
They're just walking up to the roulette table and putting 10K on black or red and then clapping and seeing five reds in a row and saying, oh, it's got to be black next. I mean, they're Phil Helmuth-ing this. They don't say that when they lose the money. No, of course not. Yeah, no personal ownership here. Well, here's an interesting thing that's sort of related.
A little bit of jurisdiction shopping or placing of companies and products continues, and Texas is very hot in this regard. BlackRock and Citadel are backing a new stock exchange to take on the New York Stock Exchange and the NASDAQ duopoly. So according to the Wall Street Journal, the exchange would be based in Texas and called the Texas Stock Exchange or the TXSE.
They've raised 120 million so far. It seems like a low number. And the general pitch here is the New York Stock Exchange and NASDAQ have become expensive and they've been increasing their compliance costs. NASDAQ has a new border Diversity target that went into effect at the start of this year, all the DEI stuff. And so this exchange is pitching itself as a CEO friendly and the anti-woke exchange.
So here's the plan timeline, file an SEC registration docs later this year, start facilitating trades next year, host the first new listing in 2026. Interesting, I guess that Citadel and BlackRock are in this group. Because they could bring a lot of business, obviously. And you know some of this other stuff that's been going on with Texas. Texas is now Tesla's corporate headquarters.
They moved it from Palo Alto in California to Texas in 2021. Your thoughts here, Chamath, on moving? Love it. Absolutely.
Okay, why?
Why do you love it so much, Chamath? Tell them.
Competition? I do think that it's hard right now for companies to get access to capital. I think more diverse and more flexible ways where smart investors can allocate their money into the ideas that they want are better. I think that the duopoly hasn't created enough competition. So the NASDAQ and New York Stock Exchange haven't innovated. And in fact, they've probably been a little regressive
in terms of filing requirements, listing requirements, in terms of board composition, they've fallen for a bunch of things that don't actually point to the economic rationale or value in a company. And so I think if you have a third player, there's a chance that more competition will create more rational behavior, which will flow into the companies themselves. So I'm a huge fan of this.
I think that the stock exchanges right now are too brittle. And that large reason is because there's only two of them.
Freiburg, any thoughts for you about more options?
Well, I think part of this is actually, there's been these rules imposed by NASDAQ and New York Stock Exchange that have tried to enforce upon the listed companies, rules and regulations that are not tied to securities. laws, including some of these aspects of diversity of your board.
And I know that there have been a lot of public company board members and CEOs that have quietly tried to push back on these rules, that they're imposing social systems upon, you know, what is effectively a regulated exchange. And so there's certainly like an interest and a pushing for a competitive marketplace for exchanges.
There was a survey done recently that showed, I got to find some of this data, but it showed the cost of going public on NASDAQ, Amex, or the New York Stock Exchange was about $7.4 million. Cost of going public through an over-the-counter bulletin board listing service was about $2 million.
And then there's these additional kind of rules that are being imposed if you want to be listed on the big boards. So clearly there's interest and it's great to see a competitive market emerge. By the way, there have been other attempts. There's that long-term stock exchange. You guys remember that a couple of years ago that was meant to kind of incentivize long-term holdings.
There was two other equity security exchanges, efforts made in the last couple of years that didn't take off. So this isn't super novel in terms of like seeing a new challenger exchange step up, but I think more competition is always better.
All right. In other news, Apple and OpenAI have reportedly struck an iPhone deal. According to Bloomberg, Apple is going to announce a major partnership with OpenAI at WWDC next week. ChatGPT will be integrated into iOS, which means Apple is outsourcing its AI chatbot, at least at the start.
I guess you could argue it benefits both sides because OpenAI gets access to over a billion phone users and Apple gets a native integration of a top tier platform. language model. Terms are not clear, but most people think this is going to be a short to midterm deal with Apple building out its own AI chatbot in the future, but it's just not ready for primetime right now.
Also plans to make Siri AI powered and bring AI features to the Apple ecosystem. You may have heard that Apple is going to try to let Siri dive deeper into apps, i.e. if you're ordering your DoorDash or Uber Eats or an Uber or Lyft or whatever, it might actually be able to execute those things inside of an app.
Interesting line from the article, Apple executives were concerned about reputational damage from a rogue chatbot. Some people within Apple have A philosophical aversion to having a chatbot at all. Very interesting. So thoughts on this SACS? Just getting you back in the loop here.
Well, we kind of predicted that something like this could or should happen. We said that the big win for Apple in AI would be to make Siri actually work based on an LLM. Because Siri just, you know, its understanding of language historically has not been great. And that's really limited the usefulness of it. Imagine if Siri worked with the conversational abilities of ChatGPT 4.0.
If it had that level of semantic understanding, if it could talk to you the way that 4.0 can talk to you, that would make Siri really powerful. And for me, Siri is a feature I've turned off because it's so annoying. Oh, it sucks, right? It never works.
If you give it the power of the best open AI model and then the speed of running it natively on the iPhone, I don't know what they're going to do about that, but Presumably, there are things they can do to speed it up. And then you give it access to the internal APIs you're using to control apps. That could be really powerful.
Huge one in theory.
It could be an agent that you can just tell it to do things and not just ask the weather and the time and set alarms.
Well, what's really interesting, I think, about this deal, Chamath, is... Apple is having a hard time getting people to upgrade their phones, right? And people have lost faith in the stock. Now you say, hey, we're going to put a language model on here. You can make it a local language model and have it be privacy protected. So that means you need more memory on the phone.
You're going to need another chip on the phone. There's a distinct reason to upgrade now. If you had a language model on your phone and Siri was like this super Siri that actually got stuff done, I would upgrade my phone immediately. And right now I skip two or three generations. What are your thoughts on this as a way to maybe reinvigorate the iPhone franchise tomorrow? You buy it or not?
No. The problem is that we don't know what the right form factor for a super scaled consumer AI app looks like. So we've all, again, I mean, I'm not trying to be a wet blanket. It's just that when you look at what's built so far, I think most of the things we've seen are the Friendster and MySpaces of this class of app. We haven't seen the Facebooks and the Instagrams yet.
And the reason is because we haven't experimented and pushed the boundaries of the form factor. So for example, in the first phases of social networking, The idea that you would collect information about all your friends and then create something called a newsfeed was totally shocking. And I remember when we first released it, people got really upset. And then it just became this de facto.
Why were they upset about it? Tell me. Well, it's this idea that you collected this information and then you presented it about all of your friends was disconcerting initially as a feature. Now, if you don't have a newsfeed of some kind in your app, for many apps, it's DOA, right? So the same problem exists today. All we've done today is we've
replicated an existing use case with a slightly better feature here or there. Nobody has gone out and said on a blank canvas, let me completely reimagine how consumers want value with these things to enable it. And until that happens, we're just wasting time. So the idea that Apple with this thousand dollar device is all of a sudden going to figure out that this is why you're going to upgrade,
I think is pretty speculative. And I think they're going to be disappointed. I think people have realized that four generations ago was more than enough. And on top of this, the stuff that you value inside the iPhone is not what you're going to need for AI. So actually, spending a trillion billion dollars on the fourth camera lens is not going to be what solves this problem.
And so you're more likely to have a very simple earbud that is very inconspicuous and discreetly in your inner ear well speaking information to you than you are with a companion $500 phone than I think you will be with a $1,500 iPhone.
You're in the new form factor. I'm going to take the other side of the cap. I think that because you have this data on your phone, all your iMessages, all your documents, all your photos, videos, music collection. There's a unique set of data on that phone to make your personal LLM that's going to do extraordinary things for you because it's going to watch you and all your behavior on that phone.
And man, if I can have a personal LLM that's been watching me order very specific sushi rolls or where I send my Ubers, what type of Ubers I like, what music I play, I feel like that LLM personalized to me.
My point is you don't need a $1,500 device to do that.
I know, but I'm talking about the data set. So cool. Don't you agree?
Uber has the data. DoorDash has the data.
No, no, you're missing my point. The data of me clicking on the screen, that is not Apple's to collect.
It's not there.
I think they'll collect it, put it in there.
You would have to fundamentally change the SDK. The idea then that Apple can take a tax on that is outrageous. I think the whole app economy would blow up if Apple tried to do that.
I think it's the opposite. I think the app economy would thrive. You'd have this a great thing where I could tell it, order the same thing I ordered on DoorDash yesterday.
I encourage Apple to try to change the terms of service and see what happens.
Okay. Freeberg, your thoughts on this? Any thoughts? No. Okay. Well, let's get to this. It's time for Science Corner. Temperatures in the Atlantic Ocean are alarmingly high. Freeberg, a couple of weeks ago, we saw this crazy chart on the X about the Atlantic Ocean temperatures pre-hurricane Katrina right about now. And take us through this because it's very disconcerting.
There's not much to talk about except to highlight this image which shows, again, we talked about this a few months ago, hot ocean temperatures drive hurricane and tropical storm activity because as the wind, the air above the ocean starts to move,
the energy from the ocean gets pulled out, you know, like things cool down, the water cools down, but that energy actually goes back into pushing the wind to move faster and faster. And that's how tropical storms, cyclones, and hurricanes are formed, is warm ocean temperatures.
And there's been this kind of persistent warming since last year in the Atlantic in this particular region where all the hurricanes form. And normally the hurricane season starts kind of call it August to October. Right now, we are seeing temperatures that are so far beyond what we've seen any time historically.
This image that you're looking at here actually compares the ocean temperatures right now in the Atlantic to where we were at the same time period in 2005, which was a record hurricane year, obviously with Hurricane Trina, right?
And so the National Hurricane Center, a lot of the climatologists are forecasting that over the next couple of months, we could see and should expect to see probabilistically much larger, stronger, bigger, more frequent hurricanes than we've ever seen historically. So we'll see if it plays out. Just a very small tidbit of news to share. Thought it'd be worth highlighting.
Not getting a lot of mainstream media press attention, but certainly- Let me ask you to just confirm a couple of things for me, because we live in a time where people are questioning science and scientists, and we have institutions we don't trust, whether it's
three-letter agencies in Washington or scientists and all these papers being written and everything we're finding out and nobody trusts anybody and we're sort of resetting trust.
I wanna just ask you as somebody I trust as a scientist, number one, global warming, temperatures increasing, putting aside what we do about it, temperatures in the ocean, it is undeniable are increasing at a rate that you would describe as concerning. Am I correct?
We have not seen in the modern era temperatures in the ocean like we're seeing now, that's a fact. I'm not gonna do this whole big prognosis on everything all in one, because I think that's where people feel like there's room for discrediting things. Yeah, that's why I'm trying to atomize this. Yeah, we can be very specific about things. Here's an example.
So this is the sea surface temperature going back to 1981. And as you can see, at this point in the year, and the temperature oscillates because of the way the earth tilts towards the sun, And so at this point in the year, we are seeing right now sea surface temperatures that are beyond anything we've seen historically, and it is continuing to climb.
So if this does not taper off or level off, we will see record sea surface temperatures in the August to October timeframe, which will almost certainly push massive hurricane events out of the Atlantic, and they will find their way towards the continental US and Mexico.
Okay, so this is super clarifying. This should not be controversial to anybody. We have temperature readings in the ocean, and this is concerning.
Simply data. It's just data, right? It's simply data, right.
So, you know, putting aside what political party you're on and what you think about gas and oil... I will tell you there's a lot of theory.
One of the theories... So there's theories about El Nino. There's theories about climate change contributing to this. There's also a theory about sulfur dioxide that has now been banned in shipping and cargo vessels that go across the oceans. Last year, they banned sulfur dioxide use in the fuel that's coming out of these. And sulfur dioxide actually reflects sunlight.
So as it goes up into the air, into the atmosphere coming out of these ships, it actually blocks and reflects light. So that would make the oceans cooler. And so a lot of folks have said that over the last couple of decades, we've actually dampened the temperature and the warming that's happened on earth because of all the sulfur dioxide we've been putting up into the atmosphere.
But because sulfur dioxide causes acid rain, environmentalists have been pushing for years to ban sulfur dioxide. The problem is with banning sulfur dioxide, you may have this other side effect, which is now more rapid increased warming of the surface and of the oceans.
So these are complex systems and we should be delicate with them. If you were to give us a prescription here, Friedberg, What's like a basic prescription? Are we just experimenting in a way that is not advisable with, you know, this ecosystem and we should just not run the experiment? I think that might be like a non-political, non-charged way to say it.
Like this experiment is a little bit too crazy to run on the one planet Earth we have. Yeah. Which experiment? The experiment of doing things that increase global warming, which would be... You mean living? Well, yeah, I mean, burning fossil fuels, people are just acting in their own economic best interest. Yes.
And if that economic best interest increases temperature so much, do you have a fear, Freeberg, that it will compromise the oceans and damage them to a point that would be extremely concerning? I guess what I'm getting at.
There is a reduction in biodiversity that's underway. We can see that using data. But to Chamath's point, Humans have prioritized the progression of individuals forward. China had a billion people that came out of poverty in 30 years. And they came out of poverty because of the industrialization of the production of consumable goods that that population gets to consume.
They get access to more calories. They get access to more foods. They get to have cars. They get to have houses. All of that, making cement, making concrete, all of those things require industrial systems. And those industrial systems have a cost. That cost is the dollar economic cost, which we're kind of rationalizing with greater productivity. Then there's this whole cost that's externalized.
Got it.
Yeah, we understand that. Yeah, sure.
So that's the tension is like, if you're wealthy, if you're a wealthy nation, if you're the Western Europe or the United States, you get to stand up and say, stop carbon. But if you're the rest of the world, you're like, I want to have a home. I want to have a car. You want to have the same evolution stuff that America went through or Europe. I want to progress as a person.
I want to progress as a society. And that's the tension that makes this a very difficult problem to resolve, which is how do more of the world get to progress while being cognizant of the long-term effects.
This is what I'm trying to get at, Freeberg.
I am deeply optimistic. So let me just say this.
Oh, yeah. That's what I'm getting at. Are you optimistic or are you pessimistic? Tell us.
I believe strongly that there is a strong relationship between the output of atmospheric carbon and the deleterious effects we see in ecosystems. Okay. That is something I feel like is true from data. I am not, however, as pessimistic
pessimistic that the world is going to end in the next decade or two because I see improvements in productivity, meaning how many units we get out for every unit in or how many units we get out for every unit of carbon that's emitted. And those productivity, meaning better technology systems, are rapidly changing how we make things and how people are accessing goods and services.
And I think that that's why I am like, because I'm a techno-optimist, I'm optimistic about where things are headed. Gotcha.
And it is also why I get very angry and upset about any efforts or attempts to slow down the adoption of technology, because these things will pull people forward and make that happen faster without all the deleterious side effects that we've unfortunately had to do in the absence of technology.
So, Chamath, I'll pull you into here. So, based on what Freeberg is saying here, yes, these things are occurring, but the technology and the advances we're seeing in but one example, solar, and then some people might bring up nuclear and other ones. We just had Phil Deutsch at my conference this week, give a great talk on this. Solar is just getting so cheap. Batteries are getting so cheap.
Putting batteries in your home, putting solar in, you know, and then putting data centers next to nuclear things. This is all adding up to we can solve this problem. And so you too feel optimistic about this?
Yeah, totally. I think that climate change stalled when it was an emotional and philosophical rallying cry, largely of the left. when instead it became something about resilience and domestic manufacturing, both sides came together. And I think we're at a point now where the US's energy independence plus the amount of reliance on non-carbon based fuels will drive a sea change in the United States.
I think it'll be copied in Western Europe. And it's also going to be at enough of a low price point where it'll get embraced in the developing world. It's an incredible example of if you want to take an idea and a bunch of solutions and want to die on the hill of messaging and platitudes, it'll make no progress.
But if instead you're willing to be less extreme about it and actually just frame it in economic value add, All of a sudden, everybody embraces it and it just becomes obvious. So I think that we're going to do wonders over the next 20 and 30 and 40 years all over the world to push back on the general state of warming.
But I think it will have happened because the economic incentives aligned, not because of and a philosophical or emotional framing of the issue.
All right, everybody, this has been a very productive episode of the number one podcast in the world, the All In Podcast. And good luck tonight, gentlemen, with your fundraiser. I wish you great luck. David Sachs and Chamath Palihapiti, even if it's not my preferred candidate, that's totally fine. We can all differ, and you can have a great, great event tonight. Good luck. I have one thing.
Okay, go ahead, Chamath.
I have one more birthday in my family today. Making us all look bad. This is one of the most incredible people in my life. Charismatic, funny, charming, intelligent people. It is my bestie David Friedberg's birthday today.
Oh, it is? We love you, David. We love you, David. We had a nice little birthday cake at the Liquidity Summit this week for him. I had a cake made.
Thank you for showing.
Yeah, happy birthday.
And?
Here we go.
And? It's also AK-47. Alan Keating's birthday today as well. Oh, you guys have the same birthday. I love Alan Keating. Shout out to Alan Keating.
One is 45 and one is 47. What? Here we go. Oh, it's karma. Do you know the significance of that? Of course.
He's going to win all the odd number elections. And there we go. Here we go. I think it's a sign. It's a sign. Listen, I wish... Good luck to you all tonight. I hope that it goes off well for you, for you gentlemen. And listen, I would love to have Trump on the pod, would love to have Biden on the pod, like all things. We just want to have a great conversation here. We keep it respectful.
Sometimes it gets a little chippy, but we love each other and we love you, the audience, for participating in this. Don't fall for the mainstream media's nonsense in trying to divide and conquer. We got important tasks to do and problems to solve in the world. And the way we do that is through great conversations. Hopefully we set a tone an example for everybody else of just how to do that.
We still love each other, and sometimes some elbows get flown, and it's all good. Shamath, Sax, good luck tonight. Freeburg, happy birthday. Bye-bye. We'll see you all next time on the number one podcast in the world, the All In Podcast. Tell your friends about it. Love you, boys.
Bye-bye. Love you, guys. We'll let your winners ride.
Rain Man, David Saxon.
Besties are gone.
That's my dog taking a drive away.
Oh, man.
We should all just get a room and just have one big huge orgy, because they're all just useless. It's like this sexual tension that they just need to release somehow.
Wet your feet. We need to get merch.
All right, listen, thanks to our friends at 8sleep. Sax and I are both investors, and we both love the Pod4Ultra. It's an incredible company that we both backed, and they are supporting the all-in summit. And if you haven't used the Pod4Ultra or the blah, blah, blah, 8sleep, if you haven't used 8sleep, it's awesome. Go to 8sleep.com slash all-in and use the code all-in.
You'll get some sort of a discount there. Sax, you love the company. You use the product, yeah?
It's a great product, and if you sweat like a pig at night like J-Cal, it's particularly good for you. It'll keep you cool.
Absolutely. It'll keep you cool. And if you're up all night because you have so much anxiety about Ukraine, Ukraine, Ukraine, like Zach, and you can't sleep and you're doom-scrolling and tweeting all night, maybe this will help you go to bed finally, which I'm watching those tweets. You're staying up too late, Zach. Get some rest here. And use 8sleep to do it.
And thanks to our friends over there, 8sleep.com. Code Olin. You get like a free Hyundai or something like that off the price. Really good deal. And we love the company. Okay, last year at the All In Summit, we had a wonderful talk by Jenny Just, and they have a very cool program called Power Poker. They're holding a 2024 summer bootcamp and tournament for women only.
So for the ladies out there, if you want to learn how to play poker, just like the besties and Jenny Just, you can join this four-week training class, get unlimited playing time, you play in a tournament. I'm going to come and play in one of the sessions. But here's the great part. We donated a ticket because we think it's worth encouraging women to join the poker community.
And so there's a $7,500 all-in summit 2024 ticket at stake. There's only 80 spots. Go ahead and join at pokerpower.com slash summer dash bootcamp. pokerpower.com slash summer dash bootcamp. It's going to fill up quick. I know a number of the women who work at my venture firm launch have joined and they're looking forward to learning poker again, 80 spots.
I think they charge a hundred bucks just to make sure you show up and there's an all-in summit ticket there for you. You can actually see the video of this podcast on YouTube, youtube.com slash at all-in or just search all-in podcast. and hit the alert bell, and you'll get updates when we post. And we're going to do a party in Vegas, my understanding, when we hit a million subscribers.
So look for that as well. You can follow us on X, x.com slash theallinpod. TikTok is all underscore in underscore talk. Instagram, theallinpod. And on LinkedIn, just search for the All In Podcast. You can follow Chamath at x.com slash Chamath. And you can sign up for a Substack at chamath.substack.com. I do. Freeberg can be followed at x.com slash Freeberg. And Ohalo is hiring.
Click on the careers page at ohalogenetics.com. Okay, everybody follow sacks at x.com slash David sacks and check out sacks is slack killer glue at glue.ai. I'm Jason Calacanis. I am x.com slash Jason. And if you want to see pictures of my bulldogs and the food I'm eating, go to instagram.com slash Jason in the first name club. You can listen to my other podcasts this week in startups.
Just search for it on YouTube or your favorite podcast player. We are hiring a researcher. Apply to be a researcher doing primary research and working with me and producer Nick, working in data and science and being able to do great research, finance, etc. All in podcast.co slash research. It's a full-time job working with us, the besties. And really excited about my investment in Athena.
Go to Athena. Wow. FinaWow.com and get yourself a bit of a discount from your boy J-Cal. FinaWow.com. We'll see you all next time on the All In Podcast.