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All-In with Chamath, Jason, Sacks & Friedberg

Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey

Fri, 11 Oct 2024

Description

(0:00) Bestie intros! (3:18) The science behind Hurricanes Helene and Milton (14:59) The economics of intensifying natural disasters (29:03) AlphaFold creators win Nobel Prize in Chemistry (35:17) The Jayter's Ball (38:53) Google antitrust update: DOJ is going for a breakup (53:32) VC giveback: CRV will return ~$275M of a $500M fund to LPs (1:03:44) New TikTok survey shows increased usage as a news source (1:15:26) Election update: Are polling problems causing a strategy shift for Kamala Harris? Follow the besties: https://x.com/chamath https://x.com/Jason https://x.com/DavidSacks https://x.com/friedberg Follow on X: https://x.com/theallinpod Follow on Instagram: https://www.instagram.com/theallinpod Follow on TikTok: https://www.tiktok.com/@theallinpod Follow on LinkedIn: https://www.linkedin.com/company/allinpod Intro Music Credit: https://rb.gy/tppkzl https://x.com/yung_spielburg Intro Video Credit: https://x.com/TheZachEffect Referenced in the show: https://allin.com/meetups https://youtube.com/@allin https://allin.com/tequila https://allin.com https://x.com/Ry_Bass/status/1844367980249178396 https://www.newsweek.com/hurricane-helene-update-economic-losses-damage-could-total-160-billion-1961240 https://www.climate.gov/news-features/blogs/enso/september-2024-enso-update-binge-watch https://www.nature.com/articles/s43247-024-01442-3 https://x.com/vkhosla/status/1844166857655533811 https://www.aoml.noaa.gov/hrd/hrd_sub/sfury.html https://www.nature.com/articles/d41586-024-03214-7 https://www.bloomberg.com/news/articles/2024-10-09/us-says-it-s-weighing-google-breakup-as-remedy-in-monopoly-case https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rtKjE02hAh_k/v0 https://x.com/AOC/status/1844034727935988155 https://www.nytimes.com/2024/10/02/technology/crv-vc-fund-returning-money.html https://www.axios.com/2023/03/03/founders-fund-slashes-vc-peter-thiel https://www.pewresearch.org/short-reads/2024/09/17/more-americans-regularly-get-news-on-tiktok-especially-young-adults https://www.pewresearch.org/data-labs/2024/10/08/who-u-s-adults-follow-on-tiktok https://www.wsj.com/world/europe/russia-pays-criminals-to-sow-mayhem-in-europe-warns-u-k-spy-chief-21ab960c https://x.com/iapolls2022/status/1844418916107341948 https://x.com/2waytvapp/status/1844803367740096811 https://x.com/DavidSacks/status/1829383729284067659

Audio
Transcription

0.029 - 24.773 The Host

All right, everybody, welcome back to the number one science, politics, technology and business podcast in the world for five years running. We're about to hit our fourth anniversary here, episode 200 is coming up. And a bunch of lunatic fans are getting together, you can join them all in.com slash meetups. Holy cow, we got the domain name All In? Fantastic. Go to allin.com slash meetups.

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25.133 - 39.841 The Host

And hey, subscribe to our YouTube channel. We're going to do some sort of crazy event for the million subscriber party. We're like 300,000 away, gentlemen. This is nuts, huh? Can you imagine this thing made it to 200 episodes?

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39.861 - 42.664 David Friedberg

Wow. We have all in.com. How much did we spend on this? This is great.

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42.824 - 65.884 The Host

I negotiated it. I got it. It took me two years and I got a sick deal on it. I don't even want to say because I, you know, I don't want to change it, but I think I got it. Don't say, I'll just say you bleep it out. I got it for, And that's a million dollar domain, just so we all know. Five letters in the dictionary. So good for branding.

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66.104 - 70.107 Chamath Palihapitiya

Good job, Jacob. Thank you, my friend. Yeah, now we have allin.com slash tequila.

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70.367 - 78.172 The Host

Ooh, I love it. Exactly, exactly. And you can yum yum. I got you sax.com, didn't I? You have the domain name sax.com. I negotiated that for you.

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78.392 - 81.534 David Friedberg

Wow, we have all the way back to episode one. This is incredible.

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82.495 - 83.235 The Host

Oh, the new website?

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83.676 - 84.776 David Friedberg

Yeah, this is great.

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85.217 - 86.798 The Host

Oh, can I tell you, if I may-

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88.649 - 92.233 Chamath Palihapitiya

Allin.com. Allin.com. That's our website. It's like this thing is real.

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92.353 - 109.069 The Host

Yeah. It's like a real thing. After four years, we got our shit together. This looks great. Here we go. And I want to give a shout out to Podcast AI, one of our... Remember those fake all in episodes that became a startup podcast AI and they built our website for us. So shout out to the team over there. All right, ladies, let's move on.

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109.329 - 127.214 The Host

And I am of course, your executive producer for life and some moderate podcast. And if I may just a tiny plug. If you're a founder, we are having our ninth cohort of founder University. It's a 12 week course I teach on starting companies. What are you doing?

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127.274 - 127.935 Vinod Khosla

What is this?

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128.035 - 129.836 The Host

I'm just giving a quick plug for Found University.

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129.856 - 134.44 Vinod Khosla

I need to get a plug in because I want to be found. Go to Arrow One and buy Supergut Bars, $3.99.

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134.62 - 143.227 David Sacks

You can pick them up this afternoon. Let your winners ride. Rain Man, David Sasson.

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154.576 - 159.338 Jason Calacanis

Speaking of that, your people used me in an ad, Breedberg, so don't talk about plugs.

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160.759 - 168.802 Chamath Palihapitiya

A few weeks ago when I shouted out that Glue.ai was hiring engineers, we had like 100 applications just from that. From Glue.ai looking for engineers? From one plug on the show, yeah.

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169.242 - 169.843 The Host

For Glue.ai.

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170.183 - 170.343 Chamath Palihapitiya

Yeah.

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171.124 - 180.929 The Host

Right. That's awesome for glue AI. And if you haven't tried SuperGut, Freedberg's team literally made an advertisement with me talking about SuperGut and didn't tell me.

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181.349 - 182.509 Jason Calacanis

And we're still hiring, so.

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183.01 - 187.031 The Host

Okay, well, there you have it. So go to founder.university to apply for my 12-week program.

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187.051 - 192.994 Vinod Khosla

And check out Gronk. I'm running a GoFundMe. A GoFundMe? Yeah, go to GoFundMe slash Freedberg. For what?

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193.114 - 212.937 The Host

More Xanax to deal with your panic attacks? All right, let's get started, everybody. Enough of the shenanigans. Hurricane season is... Upon us, as Freeburg had predicted, Hurricane Milton made landfall on Wednesday evening along the west coast of Florida, as many of you know. It's been downgraded.

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213.497 - 235.268 The Host

It started as a Category 5, potentially, then a Category 3, and then it looks like it's a Category 1 now. So I guess these things are quite random. Leading up to Milton, though, 6 million Floridians across 15 counties were ordered to evacuate. That's a lot of people moving out. And it was a pretty powerful storm. It ripped off the roof of the Tropicana Field in Tampa.

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236.409 - 261.445 The Host

So far, the death toll is at four, but it's expected to rise, sadly. And just two weeks ago, Hurricane Helene swept through six southern states, killing over 220 people, tragically, devastating western North Carolina, and entire towns were wiped out. These are also, beyond the tragic human losses, are economically staggering in terms of the losses.

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261.845 - 282.138 The Host

AccuWeather estimating the total economic damage could be between $145 and $160 billion from Helen. And Moody estimates the property damage alone could be as high as $26 billion. Tons to get into here. FEMA, Starlink, saving the day, tons of stuff. But Freeberg, back on episode 182, you predicted this would happen. What's causing all this?

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282.318 - 288.823 The Host

And let's just start with the science angle, I guess, before we get into the other political and insurance issues.

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289.783 - 312.743 Vinod Khosla

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.

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312.763 - 324.054 Vinod Khosla

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.

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324.694 - 346.479 Vinod Khosla

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.

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346.759 - 360.227 Vinod Khosla

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,

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361.42 - 382.247 Vinod Khosla

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.

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382.567 - 406.242 Vinod Khosla

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

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407.043 - 410.786 Vinod Khosla

of the rate of warming of the oceans in the 2020s and going forward.

0
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411.307 - 429.663 The Host

Let me pause there for a second just to make sure people understand what you're saying. Emissions from cargo ships block sunlight, which then of course reduces the heat absorbed by the oceans. And so we're now choosing between pollution of the air or overheating of the oceans. Am I correct in summarizing that?

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430.871 - 435.154 Vinod Khosla

That's roughly it. And... What is the pollution again?

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435.435 - 438.377 Chamath Palihapitiya

Sorry, I just don't understand. It's emissions. Sulfur dioxide.

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438.657 - 459.918 Vinod Khosla

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.

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460.238 - 476.415 Vinod Khosla

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.

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476.836 - 490.867 Vinod Khosla

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?

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491.047 - 506.313 David Friedberg

Does that mean that we're mean reverting? Meaning if we improve the quality of the fuel source that are used in shipping, doesn't that then mean that we're reverting back to what would have happened in the absence of these dirty fuel sources?

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507.313 - 511.735 Vinod Khosla

Yeah, so in addition- No, no, I'm asking you the question.

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511.755 - 512.315 David Friedberg

Is that true or not?

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513.255 - 522.707 Vinod Khosla

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.

0
💬 0

522.887 - 529.035 David Friedberg

We had an artificial cooling and now we take, but that's counter to the narrative of what we all think is happening.

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530.316 - 550.623 Vinod Khosla

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.

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551.323 - 560.929 Vinod Khosla

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.

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561.149 - 564.071 Chamath Palihapitiya

Right, so the pollution was good? Turns out it was good.

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564.091 - 582.019 The Host

That's the paradox here, is that it was creating a blocker for sunlight, and to your point, Chamath, exactly. Like, shouldn't we just be going back to what was normal? But at the same time, in the same system, we had heated things up. So this is a multifactored system that we're dealing with Friedberg.

0
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582.099 - 587.721 The Host

And I guess the takeaway from all of this is that we got to be really careful with what we do with the environment, right?

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587.861 - 596.083 Vinod Khosla

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?

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596.283 - 602.965 David Friedberg

Sorry, free work, can you just anchor this? Like, was it that it was supposed to be a category five, and now it's a category three when it hit land?

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603.502 - 622.769 Vinod Khosla

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.

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622.829 - 632.314 Vinod Khosla

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.

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632.414 - 648.224 David Friedberg

We should not dismiss it because my understanding was Helen was cat four when it like hit North Carolina. But I read yesterday that- What happened with Helen was it was cat four- That Milton is cat three when it hit Tampa or something. Is that not right? Yeah.

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648.624 - 669.027 Vinod Khosla

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.

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669.127 - 688.836 Vinod Khosla

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.

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689.197 - 693.039 Vinod Khosla

So it ran into a mountain. It's effectively why everything fell out of North Carolina.

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693.4 - 696.522 Chamath Palihapitiya

Wait, so you're saying that it wasn't Democrats who basically...

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698.57 - 701.453 Jason Calacanis

I blame Putin. Putin or Kamala.

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701.533 - 702.414 Vinod Khosla

Who did it, Sachs?

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702.574 - 705.376 Chamath Palihapitiya

I thought Nancy Pelosi cast a spell or something.

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705.597 - 712.002 Vinod Khosla

Well, isn't there a lot of geoengineering conspiracy theories going on in your cohort? I don't think so.

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712.163 - 724.073 Chamath Palihapitiya

But Vinod wants us to be very clear that we need to stop all this disinformation that somehow Democrats are behind that storm. We can assure everyone that it was just precipitation.

0
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724.093 - 730.758 Vinod Khosla

There's a lot of theory online that there's a ton of late geoengineering being run by government agencies to drive these storms.

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730.778 - 733.58 Chamath Palihapitiya

People aren't taking that seriously.

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734.141 - 752.27 The Host

The origin of this, though, Freeberg, is people have done experiments for decades on trying to control the weather or you know, alter the weather. And they're doing that in the Middle East by seeding clouds and creating more rain. We saw that with the Dubai floods, they said that that might have been caused by overseeding of clouds, which they're doing there.

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752.35 - 765.614 The Host

And then there have been experiments, just to, you know, for the crazy laser people conspiracy there, it's there a sun x, there actually have been experiments with lasers, you know, being shot into hurricanes and storms, correct?

0
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767.898 - 771.621 Vinod Khosla

Are you Alex Jones? Is that what we're doing? Well, no, I'm not saying Alex Jones.

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771.661 - 775.684 The Host

I'm just saying that's the origin of where people are kind of building on this. There have been the amount.

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775.764 - 778.105 Vinod Khosla

OK, so so let's just talk about the hurricane.

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778.305 - 780.767 The Host

The amount of teeing it up for you to debunk is what I'm doing here.

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780.907 - 796.401 Vinod Khosla

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.

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796.881 - 815.793 Vinod Khosla

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.

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816.273 - 833.301 Vinod Khosla

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.

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833.341 - 849.871 Vinod Khosla

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.

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850.352 - 868.328 Vinod Khosla

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.

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868.528 - 884.225 The Host

I think a lot of the conspiracy theories are built on actual experiments that happened. This one, Project Storm Fury, I'm sure you know about, was to try to modify hurricanes by putting in some chemicals that would freeze them and dull them. So they're kind of building on this.

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884.245 - 884.825 Jason Calacanis

Break it apart.

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885.085 - 897.052 The Host

Yeah, break it apart. There have been experiments here with altering weather, altering hurricanes, but that doesn't mean it's Putin, Pelosi, or the Illuminati.

0
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897.092 - 898.992 David Friedberg

Let's get back to brass tacks.

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899.093 - 911.618 Vinod Khosla

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.

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912.358 - 931.443 Vinod Khosla

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.

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932.623 - 941.566 Vinod Khosla

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.

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941.586 - 961.672 David Friedberg

You should explain the loop here, which is you go and get a mortgage. The bank says you need to get insurance if I'm going to lend you the money to buy the home. So then a bunch of insurers need to decide that they're willing to underwrite that area. And then when they give you that insurance, they then want to lay that risk off and go to reinsure. Is that the cycle?

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962.133 - 971.42 Vinod Khosla

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.

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971.721 - 988.391 Vinod Khosla

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.

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989.131 - 1011.297 Vinod Khosla

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.

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1011.837 - 1029.221 Vinod Khosla

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.

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1029.701 - 1035.863 Vinod Khosla

So the real question for everyone is, is the federal government gonna have to step in and start to support the price of homes.

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1035.883 - 1043.989 David Friedberg

Because if they don't- Well, it's a terrible precedent to set because if you do it for Florida, then you'll have to do it in Texas and Louisiana and Mississippi.

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1044.009 - 1045.21 Jason Calacanis

And California with wildfires.

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1045.23 - 1063.222 David Friedberg

And California and Arizona and Texas. There's going to be no way to create a clear demarcation of who gets a bailout and who doesn't, which will mean that everybody will get a bailout or nobody gets a bailout. That's right. And if everybody gets a bailout, and if you think about how systematically unpredictable, at least in the Southern states,

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1064.605 - 1068.088 David Friedberg

the weather is, you're gonna be talking hundreds of billions of dollars a year, probably.

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1068.728 - 1085.723 Vinod Khosla

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,

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1086.463 - 1100.926 Vinod Khosla

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.

0
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1101.327 - 1107.388 Vinod Khosla

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.

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1107.668 - 1117.752 David Friedberg

That's probably the reason why they'll have to do it because they'll... But then that calculation will have to happen for every single homeowner in every single state at where this is an issue.

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1118.312 - 1123.158 Chamath Palihapitiya

Yeah. Wait, Freebird, are you saying the entire Florida coastline is no longer economically viable?

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1123.763 - 1127.366 Vinod Khosla

No. It's totally viable. It's just the question is what are you willing to – At what price?

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1127.726 - 1128.326 Chamath Palihapitiya

At what price?

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💬 0

1128.767 - 1132.91 Vinod Khosla

Will you pay 5% of your home value for insurance every year? Will you pay 2%, 3%?

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💬 0

1134.151 - 1140.195 Chamath Palihapitiya

If the expected life of a house is 20 years, then that's not viable.

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1140.375 - 1145.039 Vinod Khosla

It becomes very, very untenable. Well, it used to be 1 in 500 years. Now it's probably 1 in 15, right?

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1145.059 - 1147.581 Chamath Palihapitiya

Does this apply to the entire coastline or just parts of it?

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1148.732 - 1160.875 Vinod Khosla

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.

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1160.895 - 1175.178 The Host

The only good news, Freiburg, is that now people are building the first couple of floors in high rises in Miami and homes on stilts with concrete and with resistant, you know, saltwater resistant material. So there is a counter to this. So we might...

0
💬 0

1175.878 - 1177.839 Vinod Khosla

An investment in climate resilience, that's right.

0
💬 0

1177.859 - 1202.369 The Host

Yeah, so it might actually be an opportunity to upgrade all these homes to resistant ones using another set of technologies. But the bailout is really interesting too, Sax, because Florida's got a lot of electoral college votes, doesn't it? Like, I hate to bring this back to politics, but, you know, promising people bailouts is how these politicians seem to be getting votes these days.

0
💬 0

1202.389 - 1204.15 Chamath Palihapitiya

Yeah, but is anyone talking about a federal bailout?

0
💬 0

1204.93 - 1226.978 David Friedberg

I think what Freebrook is saying is that there's a pretty obvious parade of terribles here where the question will have to be answered one way or the other. Because if you only have a $17 billion reinsurance fund and there's $50 billion of damage, somebody's going to have to come in and cover the gap. And if it's the insurance companies, expect your insurance premiums to double or triple.

0
💬 0

1227.554 - 1232.28 Vinod Khosla

That's right. And that's what happened in California. And by the way, State Farm left a lot of California.

0
💬 0

1232.42 - 1244.476 David Friedberg

This is what I was going to say. Most of these big insurance companies have already done the calculus to realize that these regions are no longer profitable enough to justify the downside risk. That's the bigger problem. So then the ones that are left

0
💬 0

1245.197 - 1262.862 David Friedberg

are insolvent reinsurers or insurers that are just funding short-term ARBs because they know that the odds are they're going to get wiped out, so they'll price gouge effectively. So, you know, a different example is that here where I live in Menlo Park, we're not in a floodplain, we're not in a fire region, none of that stuff.

0
💬 0

1263.562 - 1281.914 David Friedberg

But in order for us to get home insurance, you have to now go through a risk assessment. And in our specific case, we were like, hey, what should we do with our roof? And they were like, you got to take the roof off if you want home insurance. We're like, well, home insurance is probably a good thing to have. Was it a wood shake roof? You saw our house.

0
💬 0

1281.974 - 1299.765 David Friedberg

It's a beautiful wood shake roof, and we had to remove it. And the two choices were a $350,000 iron roof. Composite materials, yeah. Or like 70K for composite. And it's like, this is insane. And the cost of insurance was just egregious in the absence of...

0
💬 0

1300.726 - 1315.314 Vinod Khosla

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.

0
💬 0

1315.834 - 1341.504 Vinod Khosla

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.

0
💬 0

1342.665 - 1352.152 Vinod Khosla

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.

0
💬 0

1353.033 - 1369.265 David Friedberg

Even if you don't get affected by a wildfire or disaster, when that article was in the Wall Street Journal, I think it said that the number of average days above 100 was like 100-something. Yes, that's right. And they profiled this retired woman who was an insurance adjuster or something,

0
💬 0

1370.256 - 1392.15 David Friedberg

And the whole point of the article was not that her house was destroyed or at risk, but the cost of electricity has gone just absolutely sky high. Even with solar panels, even with storage, you need to basically lean on the grid. And the grid now just charges you an exorbitant amount of money. And so these folks were paying thousands of dollars a year. So if you imagine the trifecta,

0
💬 0

1392.95 - 1405.904 David Friedberg

You have all of this climate risk that could destroy your home. You're paying an enormous premium for home insurance, and then you're paying an enormous premium for electricity from the mainline power utilities. It's not sustainable.

0
💬 0

1407.468 - 1430.2 The Host

And just for background, FEMA manages something called the NFIP, National Flood Insurance Plan. And it's historically about 50% cheaper than private flood insurance. They have 4.7 million active policies providing 1.3 trillion in coverage. But they instituted a new risk assessment system and that caused rates to increase and

0
💬 0

1431.874 - 1448.952 The Host

Yeah, it's because of all this, the policies have decreased over the last couple years, meaning less people have flood insurance at the same time that these things are getting worse. And so, yeah, this is a really tough issue. I wonder if this is an opportunity, Chamath.

0
💬 0

1450.854 - 1463.395 The Host

if you think about historically how insurance worked, it worked in communities where people would help each other out and do barn raising kind of events when somebody had a problem. So if we just put on our entrepreneurial hats here,

0
💬 0

1464.542 - 1483.328 The Host

If you look at the cost of insurance, if 100 different people bundle the cost of their homes together, put money into some sort of platform, like an Uber, Airbnb marketplace, and there was some management structure here of self-insurance, because I know some people are doing self-insurance for healthcare at their companies for this kind of thing. Do you think there's going to be a new...

0
💬 0

1484.168 - 1485.409 The Host

business opportunity here.

0
💬 0

1486.429 - 1496.474 Vinod Khosla

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.

0
💬 0

1496.514 - 1508.98 David Friedberg

Those things work because you have broad geographic coverage. If you had to go just into Malibu and self insurer, the rates would literally be greater than the value of the home, right, no one would pay into it.

0
💬 0

1509 - 1525.749 Vinod Khosla

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.

0
💬 0

1526.43 - 1530.892 Vinod Khosla

It's simply, there's, there's one big event that's going to cause a big wipeout for a large number.

0
💬 0

1531.434 - 1543.782 David Friedberg

My personal belief is I think that the real estate markets in some of these places are meaningfully mispriced. And specifically what I mean is that they're massively overpriced.

0
💬 0

1543.982 - 1544.362 Vinod Khosla

That's right.

0
💬 0

1544.482 - 1568.716 David Friedberg

Because I think when you actually account for the climate damage and the long-term financial stability of the insurers and the reinsurers... I don't think that many of the markets that have seen these crazy sky-high prices, I'll name two to be specific, West Palm Beach and Malibu. So both ends of the coasts. These things just don't make sense.

0
💬 0

1569.216 - 1583.743 David Friedberg

And I think people view these things as investments, but on the West Coast, when you deal with things like soil erosion and other things, I think it's a calamity waiting to happen. And I think on the East Coast, when you factor in the extreme weather conditions.

0
💬 0

1584.043 - 1603.888 David Friedberg

Even Jason, your comment about rebuilding these homes in a more foolproof way doesn't solve it because you won't be able to rebuild the entire state. There's a lot of people that just can't afford it. There's a lot of folks that will not have adequate coverage. So I just think these are disasters waiting to happen, unfortunately.

0
💬 0

1604.668 - 1629.986 The Host

Yeah. And Sachs, there's a movement right now A lot of people, even of means, are renting their homes. And so in the real estate market, what are your thoughts on that? Just renting versus buying now becoming something that people in the top half of homeowners or potential homeowners are now electing to not own their home and rent. Have you been monitoring that?

0
💬 0

1630.006 - 1647.289 Chamath Palihapitiya

I honestly hadn't heard that. I mean, the trend that I thought was happening was that you had these big funds, like BlackRock or whatever, buying up huge numbers of homes and then running them to… Low-end homes, yeah. Low-end or medium, you know, to families. I thought that's what was going on. I hadn't heard that.

0
💬 0

1648.123 - 1672.391 The Host

at the high end of the range that people were running well if you think about it like there's there seems to be a cap when you have a 10 million dollar home of what you can possibly rent it for and it's it's the the prices are now making more sense to keep more sense to keep your money in the market or in other places and then rent i'm just hearing are you are you long real estate in florida or coastal california if you could or do you treat them differently

0
💬 0

1673.482 - 1694.756 Vinod Khosla

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.

0
💬 0

1694.816 - 1706.144 Vinod Khosla

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.

0
💬 0

1706.832 - 1709.174 Chamath Palihapitiya

So it was a good thing that I sold my Miami place.

0
💬 0

1709.895 - 1714.138 The Host

Once again, Sachs makes a great trade. Pretty awesome.

0
💬 0

1714.178 - 1716.34 Chamath Palihapitiya

Well done, Sachs. You top ticked it again.

0
💬 0

1716.38 - 1719.723 The Host

Well done, Sachs. Just like...

0
💬 0

1720.871 - 1725.075 Chamath Palihapitiya

I really love that house. You love that house?

0
💬 0

1725.395 - 1729.099 Jason Calacanis

Where do you think I stayed when I was in town? You're so selfish.

0
💬 0

1729.199 - 1756.14 The Host

I lost a place to stay. I mean, the yacht access alone, being able to get out on the bay and get on a boat, the ski dudes, all this great stuff. All right, let's keep the Freiburg train going here. Huge news, AlphaFold creators just won a Nobel Prize in Chemistry. Two members of Google's DeepMind AI research team, Demis Hassabis and John Jumper, received this year's Nobel Prize in Chemistry.

0
💬 0

1757.23 - 1774.18 The Host

They both work for Google's DeepMind, as you know. And Freeberg, again, all in getting there first, explained what AlphaFold was back on episode 14 in December of 2020. That was almost four years ago. Freeberg, maybe you could explain.

0
💬 0

1774.2 - 1777.361 Vinod Khosla

Did we predict that they would win the Nobel Prize at the time?

0
💬 0

1777.381 - 1782.803 The Host

I believe you did. We'll go check the receipts using podcast AI search engine.

0
💬 0

1783.303 - 1808.403 David Friedberg

It became much more likely that they would win the Nobel after they won the breakthrough prize. I mean, just to point this out. Yeah, yeah. Shout out, Yuri Milman. Shout out, Yuri and Julia. And Julia. Because when those guys won that award for 2023, and you heard the extent of what they've done, it was almost like obvious that they were going to win Nobel after the fact.

0
💬 0

1808.443 - 1818.512 David Friedberg

So I think the really interesting thing is actually... In this community, I think the Breakthrough Prize is actually meaningfully more relevant and a positive directional indicator to breakthrough science.

0
💬 0

1818.532 - 1835.843 The Host

Well, it's kind of like winning Sundance or Cannes. You win the Palme d'Or, you become a favorite to win at the Oscars, right, in the Academy Awards. So that's actually interesting. The regional or more industry-centric award could lead to the next one. So, Freeberg, just explain to us why this is so important before we go on.

0
💬 0

1835.863 - 1841.786 David Friedberg

I just think it's much more rigorous than the Nobel. I think the Nobel can be a little bit gamed, I think. Oh, interesting. Okay.

0
💬 0

1842.806 - 1848.668 The Host

What do you think, Freeberg? Explain to the audience why this is important and what's transpired since we talked about it four years ago.

0
💬 0

1849.428 - 1874.624 Vinod Khosla

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.

0
💬 0

1874.644 - 1892.417 Vinod Khosla

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?

0
💬 0

1892.457 - 1903.408 Vinod Khosla

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.

0
💬 0

1903.428 - 1910.137 The Host

Yeah. It would use people's machines and extra CPU, like the SETI at home project to- Precisely, yeah.

0
💬 0

1910.157 - 1924.986 Vinod Khosla

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.

0
💬 0

1925.006 - 1938.055 Vinod Khosla

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.

0
💬 0

1938.515 - 1960.472 Vinod Khosla

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.

0
💬 0

1961.092 - 1982.191 Vinod Khosla

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.

0
💬 0

1982.211 - 1986.575 Vinod Khosla

Uh, and then they use the alpha fold models to actually design and develop those molecules.

0
💬 0

1987.802 - 2006.772 Vinod Khosla

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.

0
💬 0

2007.052 - 2012.235 Vinod Khosla

It'll be a couple years before we see it transforming the world, but it's an exciting kind of thing, yeah.

0
💬 0

2012.575 - 2030.386 The Host

not to virtue signal here, but those are plus size proteins. Now free, but they don't like being called chunky, plus size proteins, plus size. One, one really difficult technical question for your free bird. Is there any way for you to take this amazing breakthrough and make sacks interested in it?

0
💬 0

2030.426 - 2052.881 The Host

Is there any possible vector here for it to relate to sacks and get him off his BlackBerry right now? Blackberry. I think he's playing chess with Teo and J.D. Vance is watching them play chess. I think that's what's going on right now. It's really hard. I mean, the poor audience here is watching Zach looking down. All right, let's keep this train moving here. Enough of the shenanigans.

0
💬 0

2053.721 - 2061.446 Vinod Khosla

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.

0
💬 0

2061.486 - 2080.458 David Friedberg

Also a breakthrough prize winner. Yeah. What's interesting to me is like these two Nobels, these guys, but also Jeffrey Hinton's, you know, you're really seeing now the convergence of the hard sciences and computer science. In a really meaningful way. And I think that that's so interesting and cool.

0
💬 0

2081.398 - 2089.996 The Host

I think in the group chat, Chamath, you had an interesting, hey, maybe there should be a computer science award. for a Nobel Computer Science Award.

0
💬 0

2090.176 - 2106.967 David Friedberg

And- I actually think it's the opposite now, which is that it's amazing to see folks using computers to improve our understanding of the natural sciences. And I think that that's a really great place to be. So what Demis and John and David are doing in the life science is amazing.

0
💬 0

2107.007 - 2116.215 David Friedberg

What Jeffrey Hinton did 30 and 40 years ago and 20 years ago in terms of training deep neural nets, also really amazing.

0
💬 0

2116.495 - 2127.784 The Host

All computer-based. Yeah, all computer-based. And in related news, Benioff just nominated himself. for excellence in CRM management. So congratulations to Benioff on nominating himself for a Nobel.

0
💬 0

2128.145 - 2129.686 Jason Calacanis

What is that comment? It's just a stray.

0
💬 0

2130.026 - 2132.528 Chamath Palihapitiya

Why are you attacking Benioff? It's just a stray.

0
💬 0

2132.668 - 2136.171 Jason Calacanis

What did he do wrong? It's just a joke.

0
💬 0

2136.211 - 2137.251 Chamath Palihapitiya

It's a joke.

0
💬 0

2137.772 - 2144.337 Jason Calacanis

They're just jokes. Have you not learned anything good? When you attack the people that attack you. It's not an attack. It's a joke.

0
💬 0

2144.357 - 2151.061 The Host

Benioff has done so much for philanthropy. Just ask him. If you... Oh, my God. Dude, he's doing the best he can.

0
💬 0

2151.081 - 2158.224 Jason Calacanis

He's doing a great job. This is how I got drunk with Paul. What are you doing? Exactly. Can you people have a sense of humor about yourselves?

0
💬 0

2158.264 - 2160.945 David Friedberg

No, but it's not even funny if you had said something else.

0
💬 0

2161.766 - 2168.089 The Host

I mean... Okay, give me a funnier Nobel. Go ahead. Benioff runs a 300 billion market cap company.

0
💬 0

2168.149 - 2173.892 Chamath Palihapitiya

He's chomping at the bit to come back on the pod and explain why AI is not going to disrupt SaaS. Really?

0
💬 0

2174.432 - 2175.753 David Friedberg

Oh, is he? He wants to be back on the podcast.

0
💬 0

2175.773 - 2177.794 Chamath Palihapitiya

He's texting me. He wants to come on. Okay, cool.

0
💬 0

2177.814 - 2179.095 David Friedberg

We'll check in in $100 billion.

0
💬 0

2182.096 - 2186.619 Jason Calacanis

He had his chance. That chance is closed. He shot his shot and it did not land.

0
💬 0

2186.959 - 2190.661 David Friedberg

That door was closed when he insulted our guests about not being able to afford the Disney course.

0
💬 0

2190.681 - 2194.784 Jason Calacanis

When he called the all-in people whores. Oh, my God.

0
💬 0

2195.444 - 2201.808 The Host

Now you're piling on. Anybody coming to Dreamforce 2025? Okay, let's move on. Sorry. Anyways, leave Benioff alone, G. Leave Benioff.

0
💬 0

2203.411 - 2207.433 Jason Calacanis

It's like, leave Britney alone, that famous meme.

0
💬 0

2207.553 - 2214.497 Chamath Palihapitiya

Leave Benioff alone. It's like, how many new enemies do you want to create? Every week there's got to be somebody.

0
💬 0

2214.517 - 2215.158 Jason Calacanis

They're just jokes.

0
💬 0

2216.957 - 2219.058 Chamath Palihapitiya

Just when you thought he was running out of feuds, you know?

0
💬 0

2220.078 - 2226.519 Jason Calacanis

I'm not in a feud with anybody. I'm making stupid jokes. The reason people tune in is because you laugh and learn.

0
💬 0

2226.679 - 2232.701 Chamath Palihapitiya

Did you guys see that tweet that somebody suggested throwing a conference with all of J. Cal's haters?

0
💬 0

2233.241 - 2245.772 Jason Calacanis

Jason Conn? J. Conn? Jaders. Jaders convention. What is it called? Jaders? Jaders. Yeah. J haters. Yeah. Jason haters. Jaders. Yeah.

0
💬 0

2246.033 - 2253.799 The Host

I'd like to shout out my Jaders. They're just jokes, folks. I love you, Mark. I'm penny off. Come on the pod, Zach.

0
💬 0

2254.239 - 2262.726 Chamath Palihapitiya

I think somebody could launch a successful summit just doing that. It's like a ready-made audience. And they're clearly passionate.

0
💬 0

2272.555 - 2273.356 David Sacks

David Sachs.

0
💬 0

2274.197 - 2277.42 Chamath Palihapitiya

I think it would rival the All-In Summit in terms of the passion of the fans.

0
💬 0

2277.48 - 2281.724 Jason Calacanis

All three of us would show up. J. Cal would be so devastated. Keynote one.

0
💬 0

2281.804 - 2282.485 Chamath Palihapitiya

Are you kidding me?

0
💬 0

2282.725 - 2283.726 Jason Calacanis

I think it's hilarious.

0
💬 0

2284.367 - 2286.208 Chamath Palihapitiya

Freeberg. I'd have to keynote. Paul Graham.

0
💬 0

2289.241 - 2303.23 Jason Calacanis

I like Benioff. I'm not trying to make enemies with Benioff. He's just got to have a sense of humor. Oh, my gosh. Megan Kelly. A special fireside chat. Megan Kelly and Farmer Lucky. Wait, does Zuck hate you too? Why does Zuck hate you? Oh, my God.

0
💬 0

2303.29 - 2306.472 Chamath Palihapitiya

J-Cal was just so... I was brutal to Zuck in the early days. Brutal, yeah.

0
💬 0

2306.773 - 2309.074 The Host

Why? Well, he just... Anyway, we'll get to it later.

0
💬 0

2309.094 - 2318.86 Chamath Palihapitiya

But you're right. Like, you know, throwing a conference for J-haters would just be... J-haters? That's like a ready-made... J-haters. Jaders. That is an underserved and passionate demographic. It would be bigger than 10.

0
💬 0

2318.9 - 2320.2 Jason Calacanis

Passionate demographic.

0
💬 0

2320.3 - 2345.768 The Host

Just look at Sachs' replies. Community with shared values. Hey, man, if I can get 25% of those ticket sales, I'm in. Let's go. All right. Let's keep the train moving here. We have an update on the DOJ's antitrust suit with Google. Looks like they're going for the breakup, as Chamath predicted. You remember the Bloomberg report back in August. We covered it in episode 192.

0
💬 0

2346.409 - 2366.531 The Host

Google was found liable for maintaining a monopoly in search and digital ads. Now the DOJ is working on the remedy, right? Okay, they're guilty. So now comes time for the remedy. And the DOJ is quote is from Bloomberg, considering asking a federal judge to force Google to sell off parts of its business.

0
💬 0

2367.111 - 2388.684 The Host

And according to this filing, the DOJ is specifically considering structural remedies that would prevent Google from using products such as Chrome, Google Play, that's the App Store on Android, and Android itself to advantage Google search. 32 page document released by the DOJ lays out several options and we'll go through them and talk about them here.

0
💬 0

2389.881 - 2408.776 The Host

The obvious one, terminating Google's exclusive agreements with hardware companies like Apple. They're the default search engine there for $30 or $40 billion a year. Samsung, that's a layup. Separating Chrome and Android, my God, that would be drastic, ripping that out of the Google ecosystem, prohibiting certain kinds of data tracking. That's a layup as well.

0
💬 0

2409.376 - 2427.526 The Host

Or other behavioral and structural changes for the company. I'm going to pause there, Friedberg, and get your thoughts on this as a former Googler and you interviewed. Sergey at the summit, but I don't think we talked to Sergey about this, because obviously, he would not be able to talk about it. So what are your thoughts here on a potential remedy?

0
💬 0

2427.886 - 2444.771 Vinod Khosla

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

0
💬 0

2445.791 - 2471.348 Vinod Khosla

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

0
💬 0

2472.088 - 2491.176 Vinod Khosla

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

0
💬 0

2493.305 - 2511.527 Vinod Khosla

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.

0
💬 0

2512.168 - 2528.486 Vinod Khosla

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.

0
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2528.947 - 2550.66 Vinod Khosla

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

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2551.32 - 2565.543 Vinod Khosla

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.

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2565.583 - 2582.449 Vinod Khosla

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?

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2582.609 - 2583.97 Vinod Khosla

We should think about this stuff.

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2584.61 - 2590.474 The Host

You kind of know this one. Pretty good with these predictions. Tell us we'll be sitting here five years from now, what will have occurred?

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2594.58 - 2618.154 David Friedberg

Unfortunately, not what Freeberg just said. It'll be the opposite. There'll be some form of forced remedy. I'm sympathetic to Freeberg's argument. I don't think that it's really a good thing in the end because I do think there are some incredible examples of Google specifically reinvesting in a way that's really added value in the world. I think the problem though is that

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2620.541 - 2643.803 David Friedberg

The technology innovation cycle has gotten too elongated. So you're not seeing creative destruction be the natural force that keeps all of these companies in their own swim lanes. And so they are allowed to become too amorphous and too profitable. And I think it becomes an obvious target for politicians.

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2644.143 - 2665.408 The Host

I think that's a really good point. observation there about the timeline of this, because if you look at this, I have started now, and I know many people are starting their search journey on Claude and ChatGPT every day. I'm doing 30, 40, 50 queries and follow-ups per day. I force my entire team to do that as well.

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2666.189 - 2684.877 The Host

And so just as there's an actual viable competitor to Google, this action has reached, I don't know, the halfway mark, this is going to wind up being completely meaningless sacks. If chat GPT does build a viable competitor coexister that siphons off search, am I wrong here?

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2687.438 - 2707.688 Chamath Palihapitiya

Well, It is ironic that frequently the government takes actions on these monopolies at precisely the moment they're subject to the greatest disruption. Totally. The same thing happened with Microsoft in a way. But it was still a good thing that the government acted when it did because there was a risk of Microsoft porting over its desktop monopoly into this new era of the internet.

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2708.048 - 2723.634 Chamath Palihapitiya

I think it's still a good thing to be looking at breaking up Google. I actually think that would be good. At the end of the day, it might even be good for shareholders. This thing should be probably three separate companies like we've talked about in our previous show. But it is true that Google is facing the most existential threat to its search monopoly.

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2724.014 - 2729.438 Chamath Palihapitiya

And it is a monopoly in the form of open AI at this point in time.

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2730.239 - 2752.738 The Host

I have one final thought here, a piece of advice for Sergey and the team over there. And I told Sergey directly, they have to get good at making apps. To go use ChatGPT, you take out the app and it's a wonderful, beautiful experience. When you go try to figure out how to use Gemini, it's like shoehorned into search results. And then it's like some subdomain. That's why people aren't using it.

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2752.818 - 2759.524 The Host

Go buy the domain in chat.com and make a dedicated app just for Gemini. And make it kick ass.

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2759.964 - 2760.505 David Friedberg

You're 100% right.

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2760.525 - 2761.766 The Host

Google, you suck at apps.

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2762.807 - 2785.441 David Friedberg

We said this when you asked about the bear case of OpenAI. If the DOJ is going to go after Google, and by the way, the interesting thing, Jason, and I mentioned this to you, is that in the same article that floated the trial balloon about this remedy of a Google breakup, the headline in the Wall Street Journal, which I think was very purposeful, said Google and Meta.

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2786.141 - 2801.773 David Friedberg

So I think that they, if given their druthers, they being the powers that be in Washington, will probably want to take a run at both of these companies. They'll start with the one that they think they can disassemble the quickest, and then they'll go to Meta afterwards.

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2802.934 - 2821.567 David Friedberg

My strong advice to Meta and Google is if this is going to happen, you got to go out kicking and punching and fighting and scratching. And I think the most obvious thing is what you just said, Jason, which is you are the front door to the internet.

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2823.041 - 2850.617 David Friedberg

and there is this completely new emergent technology, and where is the same response to ChatGPT that you had to X or that you had to Snapchat or that you had to TikTok? Because if it's gonna happen, it's gonna happen, and then you might as well just go for it. Build the apps, make them kick ass, make the ChatGPT alternative, and get it to billions of people yesterday.

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2851.937 - 2872.93 David Friedberg

That would be the most logical game theory thing to do to build up a pool of users that you will rely on when the DOJ tries to come with some consent decree or whatnot. So this is the time to build up the assets now as aggressively as possible. Yeah.

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2873.19 - 2892.411 The Host

And selling YouTube would be the ultimate. I know that the ad networks you pointed out for your blog are connected, but if they distributed They spun out. I'll give you something about the ad thing. Can you imagine $500 billion going into Google's coffers in YouTube shares? They would have $500 billion in cash, Chamath.

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2894.24 - 2914.248 David Friedberg

I talked to a company, the CEO of a public consumer-facing company, and this was in the context of some 80, 90 stuff. And he said that he and two other CEOs, the three of them, you guys would all know, these are very big companies, the three of them combined are particularly large.

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