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All-In with Chamath, Jason, Sacks & Friedberg

Mag 7 sell-off, Wiz rejects Google, UBI, Kamala in, China's nuclear buildout, Sacks responds to PG

Fri, 26 Jul 2024

Description

(0:00) Bestie intros: Nostracanis appears! (3:50) Wiz turns down Google's $23B offer, intends to IPO (13:30) CrowdStrike's rough week (17:51) Market update: Mag 7 sell-off? (22:47) Sam Altman's UBI study was a mixed bag (42:02) Succession IRL: Rupert Murdoch's children are in a legal battle over the future of his media empire (48:35) Biden out, Kamala in: Hot swap complete, speed-run primary subverted (1:03:08) Antisemitism rising, Josh Shapiro as a VP candidate (1:08:37) Sacks responds to smear campaign (1:26:46) Science Corner: China's nuclear buildout 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/@theallinpod 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.cnbc.com/2024/07/23/google-wiz-deal-dead.html https://cloudedjudgement.substack.com/p/clouded-judgement-71924-big-tech https://www.cnbc.com/2024/07/12/snowflake-shares-slip-after-att-says-hackers-accessed-data.html https://arstechnica.com/information-technology/2024/07/crowdstrike-blames-testing-bugs-for-security-update-that-took-down-8-5m-windows-pcs https://www.crowdstrike.com/blog/falcon-update-for-windows-hosts-technical-details https://www.cnn.com/2024/07/23/business/delta-flight-cancellations/index.html https://www.google.com/finance/quote/CRWD:NASDAQ https://www.google.com/finance/quote/SPY:NYSEARCA https://www.google.com/finance/quote/TSLA:NASDAQ https://www.cnbc.com/2024/07/23/alphabet-set-to-report-q2-earnings-results-after-the-bell.html https://www.google.com/finance/quote/VIX:INDEXCBOE https://public.websites.umich.edu/~mille/ORUS_Health.pdf https://www.nytimes.com/2024/07/24/business/media/rupert-murdoch-succession-fox.html https://apnews.com/article/fox-news-dominion-lawsuit-trial-trump-2020-0ac71f75acfacc52ea80b3e747fb0afe https://www.nytimes.com/interactive/2024/07/22/us/politics/kamala-harris-democrats-endorsement-list.html https://www.predictit.org/markets/detail/7057/Who-will-win-the-2024-Democratic-presidential-nomination https://thehill.com/homenews/campaign/4790684-kamala-harris-polls-donald-trump-wisconsin https://www.nytimes.com/2024/07/05/us/politics/biden-interview-stephanopoulos-abc.html https://www.politico.com/news/2024/07/03/biden-no-ones-pushing-me-out-00166497 https://www.axios.com/2024/07/23/inside-harris-sprint-democratic-nomination https://www.politico.com/news/2024/07/21/why-biden-dropped-out-00170106 https://apnews.com/article/biden-election-trump-democrats-329071c25dfaaae583b5f06184586267 https://x.com/JoeBiden/status/1815080881981190320 https://x.com/paulg/status/1816334112086712830 https://x.com/paulg/status/1771640321446683060 https://www.sec.gov/files/litigation/admin/2017/33-10429.pdf https://x.com/mwseibel/status/1816542692727488784

Audio
Transcription

0.269 - 5.633 Unknown

Oh, no. Gosh, I'm having some technical difficulties, Freeburg. There's something happening. Oh, you got a bit?

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5.993 - 8.195 Jason Calacanis

Oh, there's a bit coming. Something's breaking in. What's happening?

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8.555 - 22.645 Nostradamus

Oh, no. My camera. It's not working. But I sense something is happening, guys. It's like a transformation I'm going through. You're not going to believe it. Yes, it is I, Nostradamus. I'm here. I'm here. Nostradamus has arrived.

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24.52 - 50.231 Nostradamus

predicted the hot swap sacks can i get my flowers now from you sacks you need to bring i give you i absolutely give you credit for that you also predicted a speed run primary which is the opposite of what happened okay so one out of two is not bad though nostracanis did not account for the democratic party being run by the deep state huh but i'm having a vision producer nick

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50.956 - 81.198 Nostradamus

There's a vision for you coming in to view. Yes, your uncle has been bought out of the all-in podcast that's going full MAGA. And he got the $25 million buyout deal. And he gave you 20%. We're leaving. We're going to start a new podcast. And Jared Kushner is the new moderator here. Oh, no, wait. It's J.D. Bauer. No, it's Alex Jones. Starting next week, Alex Jones, the new host. Oh, wait.

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81.879 - 84.661 Nostradamus

I'm going away. Don't say I can't be successful.

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91.227 - 101.154 David Sacks

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.

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103.792 - 120.547 Unknown

All right, let's get started here. We've got a full docket. We've got civil wars. Everything is going down in all inland. It is episode 189. You're not done with us yet, folks. The world's number one podcast is still publishing. The world is still spinning.

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121.087 - 123.708 Jason Calacanis

Hey, did you announce that you've moved to Texas?

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123.768 - 144.038 Unknown

I did. I did. I did a little tweet. We moved to Austin a little earlier this year. We have a horse ranch. And, you know, we've always wanted to move to Austin. We looked during the pandemic. Thanks for asking, Chamath. And we wanted to have a ranch and horses and live a more homesteading lifestyle. And obviously a lot of our friends are in Austin.

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144.158 - 153.49 Unknown

So I'll still be spending a lot of time in the Valley in New York, like I always do in Miami. But the home base and the girls are going to school in Austin.

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154.35 - 156.412 Jason Calacanis

How is it going so far? It's super hot, isn't it?

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156.572 - 177.507 Unknown

The summers are hot, but most people decamp. So we'll decamp for Tahoe or Park City or something during the summer months and the winter months to go skiing and get a little lake time or whatever. And yeah, we're really, really excited. We found an incredible horse farm and we're going to raise animals and horses and just enjoy these last years with the girls.

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178.584 - 189.599 Unknown

While, you know, some big announcements coming in terms of my accelerator and my investing in startups in Austin. So I'll save those announcements for maybe the fourth quarter, some big announcements.

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190.506 - 212.116 Unknown

will happen and um yeah i'm just super excited obviously i'm gonna miss you know the weekly poker game but i will be back uh on the regular and we'll just do a double session play friday saturdays we'll do you got to get this for two days in a row we'll just do a full friday session everybody take my fridays i'm sad to see you go The one thing I'm sad about is like missing the Thursday game.

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212.597 - 213.638 Unknown

But I'll be back regular.

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213.798 - 225.451 Friedberg

Don't forget Science Corner today. We got a great Science Corner lined up. Absolutely. Sax is looking forward to it. Sax has been texting me all week about it. He's like, I can't wait for Science Corner. I'm thrilled. He was shaking nervously. He's ready.

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227.737 - 251.241 Unknown

Zach does not look amused. All right, let's get started. Wiz has declined Google's $23 billion offer and it intends to IPO. Some big news there. Last week, we talked about Google offering to acquire this cloud security startup for $23 billion. CNBC reported Wiz declined Google's offer. Wow, that's big time because Wiz was valued at $12 billion in its most recent funding round.

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251.581 - 275.538 Unknown

They've got about $500 million in ARR. So this $23 billion is a massive, massive 50 times current revenue, 23 or so times forward-looking revenue. They think they'll hit a billion in ARR. This is a company that was founded in 2020. And just so if you don't know what they do, they help people secure their data in clouds like AWS, Azure, Google Cloud, all that good stuff.

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275.658 - 296.351 Unknown

But high growth SaaS businesses are trading at a 10X forward revenue multiple. There's the chart. This is obviously an absurd premium. And two potential reasons that I can think of, and I'm curious, your positions, gentlemen, of why they would do this. I guess, Chamath, there's two reasons.

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296.551 - 316.055 Unknown

One, they think they can grow this company at a high percentage, maybe fill in that premium Google was willing to pay. Or maybe they're scared that they can't get this deal through you know, regulators, what's your take here? And then we'll go talk about the wider cloud and Google Cloud and AWS in a moment. But what's your initial take here of why they would do this?

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316.795 - 351.501 Jason Calacanis

I actually wonder whether this deal would have had more probability of happening had the whole AT&T snowflake leak not happened. Because I think that when you have moments like this, there's a non-trivial possibility that it supercharges sales even more. I think the reality is that if you're a hyperscaler, so if you're Amazon or Google or Microsoft, your business is pretty fragile and brittle if

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353.294 - 373.547 Jason Calacanis

The services you provide or the services that third parties like Snowflake provide through you are not reliable. And so I've never heard of a business that has generated so much ARR so quickly. I mean, from zero to half a billion dollars in four or five years. I mean, how do you even build the product surface area quick enough to capture that much revenue?

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374.127 - 388.499 Jason Calacanis

I think it just goes to show you how bad security is in the cloud and how needed it is. So it doesn't surprise me that Google... wouldn't buy something like this. I think Amazon and Microsoft would probably want something like it as well.

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389.119 - 405.707 Jason Calacanis

I suspect that if you had to guess why they said no, is because they thought that they could grow revenue much faster because of recent events, as well as their own just natural momentum. And I think that if this thing had not happened, I wonder whether they wouldn't have just sold.

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406.407 - 428.644 Unknown

All right, Sax, I want to get your take on this after showing you a couple of charts here. Google's cloud revenue growth has been absolutely stunning. Here is a chart. They're gonna hit, gosh, in the first half, they did almost 20 billion. So they're on a run rate of $40 billion this year. Last year, they did 33. Back in 2017, they only did four.

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429.145 - 451.318 Unknown

And if you compare this to Amazon's AWS, again, these are cloud services. People can buy, compute in the cloud. AWS, if you look at those first seven years, The crack all-in research team put these side by side. Google is tracking almost identical in revenue to AWS's. Interestingly, Meta and Apple do not have a competitor here.

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451.458 - 468.449 Unknown

You said on this podcast, Shamath, I think last year, that would be a pretty bold move by Apple to have a cloud computing platform since they have all the app developers involved. Sax, what do you think of this just tremendous run by Google Cloud, also known as GCP in the industry?

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469.531 - 485.86 Chamath Palihapitiya

Well, all the cloud service providers are doing extremely well. I mean, cloud is still the future of software and the cloud service providers are still growing really strongly. On Wiz, I think the most likely explanation is that they just want to keep building this as a standalone company. I think they're probably also worried that they can't get the deal through.

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485.98 - 509.875 Chamath Palihapitiya

The multiples that we have right now are not that insane. I mean, I think the long-term median software multiple is around a seven. So, you know, you see here the mid-growth median 7.7. We're about tracking at... the historical pre-COVID mean. And we had that really frothy, bubbly period in 2020 and 2021, and that's clearly over.

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536.891 - 556.83 Chamath Palihapitiya

I mean, I don't know if it's still growing at 100%, but I mean, I guess they're projecting... Even 50%, yeah, would be... Yeah, they're projecting a billion in ARR next year up from, what is it, roughly 500%. like that offer may not be that crazy. Again, you know, you're getting 10 times at a 30% average growth rate.

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556.93 - 572.138 Chamath Palihapitiya

So, you know, let's say they get to a billion in ARR next year and then they're forecasting, you know, whatever it is the year after, you know, the 23 may be reasonable. So I can see why these guys would just want to go for it if they think they're building a big standalone company.

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573.178 - 591.304 Unknown

Freiburg, let's talk a little since you were a Googler at some point. This GCP product, maybe you could tell us a little bit about, and I know you know some of the people running it, how meaningful this is becoming to Google or how much of a priority it is. YouTube, obviously, Android priority is there at the company.

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591.364 - 598.247 Unknown

Then you have like the Next Year Down, Nest, Waymo, you know, some of those other projects. But how important is GCP right now to Google?

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599.548 - 614.974 Friedberg

Well, GCP in the last quarter did $10.3 billion in revenue, which is up from $8 billion in revenue the year before, in the same quarter the year before. And importantly, in this past quarter, they're running at a $1.2 billion operating profit out of GCP.

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615.934 - 627.479 Friedberg

So, you know, if you kind of think about what cloud margin should be over time and kind of call it 20% to 30% margin, this cloud business could be generating $20 to $30 billion a year of free cash flow. Hmm.

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628.502 - 643.281 Friedberg

Now in the last year, if you kind of look at, or even if you look at the last quarter annualized, Google is generating currently about $60 billion a year in free cashflow as an overall organization, Alphabet is. And they have over a hundred billion in cash.

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644.142 - 670.244 Friedberg

So, you know, what can I do to accelerate this cloud outcome given the risks, the challenges, the slowdown with respect to the core consumer business, cloud and AI-based tools really is where it's at. And so Google's asking this important strategic question, I would imagine, what can we do to accelerate outcomes in the cloud? And what can we do that is going to be big enough to matter?

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671.345 - 684.194 Friedberg

And what can we do that is going to pass antitrust muster? So we can actually get it through antitrust authorities. So cloud security kind of comes top of mind. It's a fast growing segment as evidenced by the results with Wiz.

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685.054 - 706.634 Friedberg

And it's an opportunity for Google to cross sell and to secure more enterprise customers and theoretically cross sell more enterprise revenue by getting folks on a platform that Google could now offer. I would imagine that what Sachs is saying is probably right. I have absolutely no sense of what these individuals and board members at Wiz are thinking, but I think what Sachs is saying is right.

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706.674 - 717.627 Friedberg

This is an incredibly fast growing business. Peter Thiel made the comment once, which I think is totally right. Either the buyer pays way too much or the seller sells way too early.

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718.808 - 735.359 Friedberg

When you have a fast-growing business like this, it's really an important question to kind of acknowledge that if Wiz continues to grow at this rate, it's conceivable they could be in the range of a Palo Alto Network's $100 billion market cap in a couple of years, given this momentum and if you progress it forward.

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735.859 - 753.128 Friedberg

So if I was them, I would ask that question, could we reach 100 billion if we feel reasonably confident? This may be a risk worth taking. And what's the downside, right? The downside is they go public next year anyway, and maybe they're only valued at 15 billion or 20 billion. There's not a lot of downside from this offer and certainly seems to be quite a bit of upside.

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753.428 - 773.317 Friedberg

But I think for cloud, the thing to watch is what they're gonna do next. Google wants to accelerate beyond AWS. They wanna become the leader. And they're gonna look for other sizable transactions that will pass antitrust muster. And so I think you could see them perhaps looking at some public M&A in the same space. And I wouldn't be surprised to see them start to get active in that sense.

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773.357 - 794.244 Unknown

YouTube and GCP are the two money printing machines inside the organization that have actually paid off. Android's paid off in terms of dumping more search from the default search buttons or boxes. But I guess to steal me on the other side, if you're on the board and you want your cash You get 100% of it. You take no risk.

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794.484 - 814.958 Unknown

And what if Google decides they're going to make this product free and bundle it, as we saw Microsoft do in a number of cases, and they just Microsoft Teams this or Internet Explorer it? I guess that would be the risk is if Google feels some vendetta here and puts this product out for free. As you alluded to, Chamath, it was a big week for cybersecurity.

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814.998 - 836.99 Unknown

CrowdStrike had a really rough week last week when they knocked out eight and a half million Windows machines. Just to briefly explain what happened here, obviously, Wiz is cybersecurity and so is CrowdStrike. CrowdStrike, instead of working on data sets in the cloud, they work on securing your laptop, your desktop, your servers, all that kind of stuff. for threats, and they did an update.

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837.23 - 857.584 Unknown

And when they did their update, a sensor configuration update, as they called it, to Windows machines, they basically bricked them. And this wasn't a cyber attack. They're a cybersecurity company. They weren't attacked. They updated it, and it crashed all these machines. And these machines all needed to have a hard reset by IT. It wasn't something that could just be field swapped, apparently.

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857.704 - 879.865 Unknown

People had to go back to their offices in some cases. Delta was hit hardest. They canceled over 6,000 flights. And there's a Department of Transportation investigation going on now. Shares are down 25% since Friday. So that represents $24 billion in market cap. CrowdStrike CEO has been clowned for his apology and explanation.

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879.885 - 895.428 Unknown

And the good news, though, is they sent everybody an Uber Eats gift card. So I'm super happy about that. Shamath Sachs looking at this. And dovetailing with the last story, this is going to be an ongoing story and one of the big trends in our industry. Yeah.

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896.553 - 920.601 Jason Calacanis

major outages like this? I think the reality is that that code is still really brittle and there's gaping holes everywhere. And I suspect that the reason why foreign adversaries don't hack us is because we could hack them back. And so I think it's almost like a mutually assured destruction is the only reason why these things stay up every day. So at some point, we're going to write better code.

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920.701 - 923.482 Jason Calacanis

Maybe these AI agents will do it and there won't be like

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924.142 - 946.361 Jason Calacanis

memory leaks and all this other random stuff but in the meantime i think you just have to assume that everybody will get access to all of your information and that eventually everything is hacked and everything is leaked yeah and act accordingly and act accordingly yeah assume every the worst conversation you ever had on social media or on dms is going to come out

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947.608 - 952.675 Unknown

All right. I think we've kind of finished this one. Anybody have any thoughts on this CrowdStrike thing? It seems like it's over now.

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952.855 - 971.18 Chamath Palihapitiya

I don't have a lot to say about them, except actually this is that that company has some murky connections to the deep state. And yeah, well, apparently their fingerprints were all over, you know, Hillary's bleach server. Then there's been other reports, which I don't know exactly what to make of.

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971.22 - 985.165 Chamath Palihapitiya

I can say this, that in the wake of this, Elon announced that he was removing CrowdStrike from any of his company's servers. Similarly, I had my IT department check and make sure that we didn't have it running anywhere and we don't. I'm just going to be frank. I don't trust this company.

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986.525 - 990.411 Unknown

All right. There you have it. Deep state. Tinfoil hat.

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990.732 - 991.432 Chamath Palihapitiya

Deep state.

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991.632 - 993.433 Unknown

Deep state accusation.

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993.453 - 997.255 Chamath Palihapitiya

I'm going to wear a tinfoil hat today. I forgot. You believe what you want. That's what I believe.

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997.515 - 1003.038 Unknown

There's a first I'm hearing about it. I don't have my tinfoil hat here. But who knows? I guess.

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1003.538 - 1006.279 Chamath Palihapitiya

Use their products if you want to. Use their products if you want to.

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1006.299 - 1012.723 Unknown

There you have it, folks. And Saks puts his endorsement behind Palantir. Definitely not deep state Palantir.

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1014.252 - 1020.521 Chamath Palihapitiya

Look, there's no question that Palantir sells into the deep state, but I don't know that that makes a deep state.

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1021.442 - 1024.426 Unknown

They're on your team as opposed to the other team.

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1024.567 - 1033.507 Chamath Palihapitiya

No, I'm not on any team in respect of I don't really understand what you're saying there. I'm just goofing. I have shares in the company. I think it's a good investment.

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1034.067 - 1040.713 Unknown

Oh, okay. There you have it. All right, let's go to the stock market. It just had its first day. I've got to get a tinfoil hat for a bit here.

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1040.753 - 1055.766 Chamath Palihapitiya

One thing I want to say, none of us are at any risk of running Palantir on our servers, okay? Absolutely. CrowdStrike is running in the background of many, many companies who may not even be fully aware of it. And they were certainly surprised when all those airlines' computers went down, right?

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1056.407 - 1064.556 Chamath Palihapitiya

So my only point is maybe you should make sure about whether you're running their products or not and then make a conscious decision whether you think that's a good idea. That's all.

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1064.736 - 1085.175 Unknown

That's all. Just a little tip from the more you know from Davidson. Jake, I'll move on. I'm trying. That's good. I'm trying my best. The stock market just had its worst day since 2020 on Wednesday. Clearly, this is because of the January 6th insurrection. The NASDAQ, which is the most tech... I'm joking. The NASDAQ, which is the most tech-heavy, fell 3.6%. S&P down 2.3%.

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1085.575 - 1108.992 Unknown

A bunch of the magnificent seven companies were in the red. But you got to put this in context. NASDAQ and S&P still up around 15% for the first half of the year. Record-setting territory. Obviously, if that holds up or increases... There's a lot of theories about this that people are rotating out of the Mag7 tech stocks, which were a place that maybe got a little overheated with the AI bubble.

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1110.236 - 1138.896 Unknown

Here's the top gainers that are not in the max seven, as you can see, financials, energy, materials. Over the last six months, S&P financials up 11, S&P energy nine, S&P materials 9% as well. Broader index up 11, as we said. Tesla dropped 12% after missing on earnings, but they had a massive run up earlier this year. Google dropped 5%. I guess YouTube was what most people pointed to.

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1138.956 - 1160.289 Unknown

Their revenue came in lower than expected. So maybe some softness in the advertising market, which would then correlate with consumers. NVIDIA down 7%, Meta down 6%. Chamath, any thoughts here on what we're saying? You talked a lot about the consumer weakening on an episode about six weeks ago, I believe. So is this just the manifestation of that prediction you made?

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1160.889 - 1183.987 Jason Calacanis

Not this specific thing. I think that when you see... a broad-based set of revenue misses, that that will kind of mean that the consumer is really under pressure. I still think that that's more in the fall, but we're headed in that direction. I think what happened here is that the market is just priced to perfection, and all of a sudden, we had all kinds of volatility.

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1184.127 - 1209.081 Jason Calacanis

You had the former president almost assassinated. You have the current sitting president resign. You have a somewhat convoluted process to pick who replaced him that at a minimum was opaque. And all of these things create doubt and anxiety in people the people that own financial assets. And so if you saw the volatility index, the VIX, that has spiked.

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1209.802 - 1229.26 Jason Calacanis

And so whenever you see that stuff happen, people go risk off, right? And when you go risk off, what do you sell? You sell the things that are deepest in the money where you think that they probably don't have that much more room to run. And that was the MAG7. And so what you actually saw was a huge rotation out of those companies into everything but those seven names.

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1230.936 - 1251.813 Jason Calacanis

And I think that that's a pretty reasonable thing to do. So I think we're in the part of the cycle where people are getting a little bit more sober and risk managing. We're also in the middle of the summer where a lot more vacation is taken, which how it manifests is that people tend to be, frankly, more risk off and be more liquid because a lot of people are in and out of the office.

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1253.41 - 1269.358 Jason Calacanis

And I think the real setup is for what happens in September. Maybe there's a cut, which will help. Maybe there isn't, which won't help. And then the whole consumer cycle, the consumer credit cycle, that doesn't look good, to be honest. And so I think the fall is going to be complicated.

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1269.538 - 1288.509 Unknown

Yeah, absolutely. What an eventful week on a political front. We'll get towards that in a moment. But Freiburg, your thoughts here, is it just people trimming their perfect positions and maybe a dispersion going out, people wanting to own some other assets that maybe have been undervalued in this market cycle?

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1289.269 - 1312.7 Friedberg

No, I think it's definitely this mini AI bubble deflating a bit. And transactions are, let me get out of some of these high multiple tech stocks that are expected to grow rapidly because of AI and shift more into stable market recovery. Interest rates are going to get cut, type trades that will benefit there. So I think it's just a rebalancing.

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1312.72 - 1328.922 Friedberg

And as a result of the high concentration of the MAG7 and the S&P and in the Qs, the indices look like they're coming down, but Yeah, there's obviously a lot of complexity in what's going on in the economy right now. But I do think that that's been a big trade for PMs, for portfolio managers over the last couple of weeks.

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1329.622 - 1340.995 Unknown

Makes sense. Yes, Axe, if you owned a bunch of NVIDIA and it ran up, Meta, Google, Apple, other companies that ran way up, you might want to trim your position here and deploy capital and balance things out. Yeah.

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1342.102 - 1353.143 Chamath Palihapitiya

Sure. I just don't want to overreact or overread into one day in the market. I mean, today's up, yesterday was down. These are blips in the grand scheme of things. Even a 2% to 3% move is just not that unusual.

0
💬 0

1353.615 - 1380.526 Unknown

Yeah, especially given the context. But definitely something worth keeping an eye on is what the earnings reports will say for Q3 and Q4, and those will come out towards the end of the year. Okay, some interesting news. Sam Altman did a UBI experiment a couple of years ago. He put 14 of the $60 million into this experiment that was done by a firm called Open Research.

0
💬 0

1380.566 - 1405.566 Unknown

That's a nonprofit group that was founded in 2015 out of an accelerator called Y Combinator. First, I'm hearing of that one. Well, here's the experiment they did. This took place between November of 2020, October of 2023, 3,000 low-income adults in Texas and Illinois making just under $30,000 a year on average. were selected. 1,000 participants received $1,000 a month for three years.

0
💬 0

1405.806 - 1430.842 Unknown

So on top of the $30,000, they got $12,000 a year tax-free. So that's nearly a 50% pay increase for doing no more work. 2,000 control participants received $50 per month over the same period. And the research collected and studied a bunch of data. They did blood draws to do health impact. They had a custom app that tracked time usage, work, play, et cetera.

0
💬 0

1431.542 - 1448.771 Unknown

And they checked everybody's credit reports and bank balances. So broadly speaking, the research found almost no lasting impact on everything they tested from overall health to work to education. And here are the quotes directly from the paper, and I'll get the gentleman's take on this. UBI, super fascinating, obviously.

0
💬 0

1448.811 - 1467 Unknown

The cash transfer resulted in large but short-lived improvements in stress and food security. We find no effect of the transfer across several measures of physical health. We also find that the transfer did not improve mental health after the first year, and by year two... we can, again, reject very small improvements.

0
💬 0

1467.4 - 1473.484 Unknown

Final quote, we also find precise null effects on self-reported access to health and physical activity.

0
💬 0

1473.524 - 1489.152 Jason Calacanis

I find this so fascinating and reinforces a bunch of intuition that I think we would probably all have. Have you guys seen these studies where when somebody has an amputation or they get paralyzed, they study their

0
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1490.293 - 1513.995 Jason Calacanis

three levels of happiness, their interim level of happiness, and then they just kind of mean revert to their natural state of happiness, independent of what physical calamity they may have gone through. And when you were talking about it, Jake, I was reacting in the same way, which is in the absence of, I think, purpose and community, I think children in many cases,

0
💬 0

1516.272 - 1542.379 Jason Calacanis

it just doesn't meaningfully shift any of these curves that really matter. I think your happiness levels mean revert. I think your health levels mean revert. So it's great to kind of confirm at least my intuition, which is that UBI is a wonderful idea that I think doesn't really understand how humans are both motivated and wired.

0
💬 0

1543.44 - 1560.396 Friedberg

Freeberg, your thoughts? Yeah, so I definitely agree. I think I've talked about this. We talked a little bit about it with Jonathan Haidt. There's some great studies that have shown in the past that the change in income is a better predictor of happiness than absolute income. Eventually everything normalizes. So I think UBI makes no sense for three reasons.

0
💬 0

1560.896 - 1580.411 Friedberg

The first is this normalization of spending level. So once you've kind of had this increase, you have a moment of happiness and then you actually start spending differently or spending more. And effectively every human has one innate trait. desire. And desire is what drives humanity. It's what drives progress. It's what pushes us forward.

0
💬 0

1580.451 - 1600.845 Friedberg

Because no matter what our absolute condition, it's our relative condition that matters relative to others, or relative to ourselves in the past, or prospectively in the future. And so we always want to improve our condition. So a UBI-based system basically gives a flat income. So the only way for it to really work is if you increase the income automatically by, say, 10% a year.

0
💬 0

1601.325 - 1623.31 Friedberg

So in a UBI world, no amount of money will actually make someone satisfied or meet their minimum thresholds because those minimum thresholds will simply shift. And the second issue is just the net economic effect. If we gave 350 million Americans a thousand bucks a month, that's $350 billion a month. That's $4 trillion a year.

0
💬 0

1624.171 - 1643.268 Friedberg

Our prospective budget for next year is $7.3 trillion at the federal level. So that's already more than 50% of the total projected federal budget next year. finding the mechanism for funding this at scale is not what this study actually looked at. Because if you look at it, the net effect would be inflationary.

0
💬 0

1643.668 - 1661.549 Friedberg

And that's the third major reason is that ultimately this would have an inflationary effect. Anytime we've stimulated the economy with outside money, with government driven money, We see mini bubbles emerge and we see an inflationary effect. So look at COVID. There were all these little bubbles that popped up in the financial markets. We had NFTs, we had crypto.

0
💬 0

1661.909 - 1668.997 Friedberg

We had all these sort of new places that money found its way to. And then we had an aggregate inflationary effect. Food prices are still up 30, 40% since COVID.

0
💬 0

1671.38 - 1688.254 Friedberg

And so net net, I think that the study provides an interesting insight into the micro effects, the psychological effects, the social effects, but the macro effects are what is so like simply arithmetically obvious, which is inflation, and an inability to actually fund this at scale. And fundamentally, people want to work.

0
💬 0

1688.795 - 1696.401 Friedberg

So they'll take that money, and then they'll go find ways to work and generate more money. And you have this inflationary effect. So I think that net UBI does not make sense.

0
💬 0

1696.701 - 1715.323 Unknown

SACS participants were 5% more likely to start a business by the third year. Maybe that was the most encouraging part of this. People worked slightly less, 2% decrease in labor participation, but that seems negligible. People in their 20s had a 2% increase in enrolling in post-secondary education. Again, very tiny impact.

0
💬 0

1716.564 - 1732.112 Unknown

There were major benefits to stress and mental health in year one, but by year two, as we talked about, it reverted to the baseline. How do you think about UBI in a world where, let's say, I don't know, we lost a large amount of jobs in a short period of time because of AI?

0
💬 0

1732.132 - 1740.436 Unknown

So in that hypothetical situation, and we hit 20 or 25% unemployment from the historic low we're at now, how might you think about UBI?

0
💬 0

1741.021 - 1745.846 Chamath Palihapitiya

Well, that's positing a future that I don't think is going to happen, at least not anytime soon.

0
💬 0

1745.866 - 1747.427 Unknown

That's why I'm trying to give you a hypothetical.

0
💬 0

1747.607 - 1768.502 Chamath Palihapitiya

Yeah, no, I don't really buy that. And so I think this whole idea of UBI is premature and very expensive, and it doesn't work. I mean, I think what we saw from the study, just to echo what Freeberg said, is that cash transfers don't work. We saw this in the Great Society, just handing people money doesn't solve poverty. It actually traps people in conditions of dependence.

0
💬 0

1769.002 - 1792.111 Chamath Palihapitiya

We also saw during COVID that all those STEMI checks, it might have had a macro effect in the economy of kind of boosting the economy during what could have been a COVID depression. However, at an individual level, what did we see? We saw people quitting or quite quitting their jobs. They spent more on leisure, alcohol, and meme stocks. In other words, it wasn't tremendously productive.

0
💬 0

1793.312 - 1801.42 Chamath Palihapitiya

So I think that what we've seen in the past is just handing people money doesn't create the types of outcomes that people want.

0
💬 0

1802.401 - 1809.348 Unknown

Is all this virtue signaling, Sax? Is it virtue signaling? Kinda. Kinda. I'm kind of getting that tone from you.

0
💬 0

1809.388 - 1832.086 Chamath Palihapitiya

Yeah, I think it's a combination of virtue signaling combined with, let's assume that you want to become the first AI trillionaire, and people are concerned about job loss, you're going to virtue signal in the direction of, well, let's just give everyone money. And a lot of people in power will love that because it creates a lot of dependence.

0
💬 0

1832.826 - 1841.111 Chamath Palihapitiya

So it serves the interests of tech moguls and people in the government, but I don't think it serves society.

0
💬 0

1841.291 - 1859.04 Chamath Palihapitiya

And I think one of the most interesting data points in the study, please confirm if I get this right, but what it said is that the people who got the $1,000 a month UBI saw their incomes rise to $45,000 on average, while the control group who only got $50 a month increased their average income to $50,000. Actually, just shy of $51,000.

0
💬 0

1860.805 - 1881.903 Chamath Palihapitiya

So the people who didn't get the larger stimmy actually genuinely bettered themselves over the course of the study, while the ones who got the 12,000 a year stayed in place. And that's kind of what you'd expect, right? Which is if you just hand people money without having to work, it doesn't motivate them to work harder. It actually motivates them to do less.

0
💬 0

1882.183 - 1899.097 Chamath Palihapitiya

And let's say that you're in a point in your career where you need to learn, you need to get mentorship, you need to advance yourself. By giving people UBI, you could be kicking out those bottom rungs of the ladder where the work isn't necessarily that fun, but you're picking up very important skills that are gonna help you rise up in the ladder. And you're not doing-

0
💬 0

1899.858 - 1908.463 Unknown

Like sending your kids to be a cashier at a restaurant or a bus boy or a waiter, like that teaches them a work ethic. I was a dishwasher. I did hard work as a child.

0
💬 0

1908.583 - 1931.092 Chamath Palihapitiya

I was a bartender. I mean, look, these are all jobs that have dignity. I mean, I think work has dignity and you need people to start somewhere. And if you just give them the STEMI or the UBI... It demotivates them from starting their careers and you trap people at this lower level. So I just don't think you're doing anyone any favors by doing this.

0
💬 0

1931.272 - 1943.08 Unknown

And I just want to say, you know, my production company is in full swing and we are actually working on a remake of Cheers with David Sachs. Yeah, as the bartender, as the lead character. It's a really great show.

0
💬 0

1944.036 - 1966.684 Unknown

Looking at the back of the envelope math here, I had the crack research team take a look at this welfare, $1.1 trillion budget in 2023, eight different federal agencies, Medicare, I'm sorry, Medicaid was in there as well. Unemployment, $33 billion paid across, 1.8 million participants last year. Food stamp safety, 113 billion. We put all those numbers together.

0
💬 0

1967.584 - 1982.803 Unknown

And we've got about 100 million people participating in these programs in some way for $1.2 trillion per year. This is all back of the envelope. It's imperfect. But that turns out to be about 12K each, which is exactly what the study did. So not perfect math.

0
💬 0

1982.983 - 1998.014 Jason Calacanis

But that's totally reasonable. I grew up on welfare. Yeah. And we needed it to make ends meet. And we would have completely fallen through the cracks without it. And so I'm glad that I was able to be raised in a country that has welfare.

0
💬 0

2000.444 - 2014.295 Unknown

I guess my question to you, Chamath, is do you think all these agencies put together with all this administration and all this complexity, would it be better if we take something from this UBI of maybe consolidating down?

0
💬 0

2014.855 - 2021.08 Jason Calacanis

No, because I think you need to be motivated, as Zach said. And so even though we got...

0
💬 0

2022.515 - 2049.212 Jason Calacanis

support from i grew up in canada so the canadian government there was still an expectation where certain things were not covered and you still had to work and so you had to find motivation to pick yourself up and go out and get a job and it just so happened that in our situation even welfare and what my mom made as a housekeeper and then as a nurse to say it wasn't enough and my dad didn't have a job so i went and i started working at burger king and to sax's point

0
💬 0

2050.157 - 2069.889 Jason Calacanis

It's pretty eye-opening when you're 14 years old and you're working the night shift and people come in after going to the bars, they're drunk, they're puking all over the place. Sometimes you see people that go to your own high school And it's a little bit embarrassing because you're working while they're going out. But at the end of the day, it was very motivating. And I think Sax is right.

0
💬 0

2069.969 - 2080.656 Jason Calacanis

If you take that away from people, I think that you end up with a worse society. I don't think that you have a motivated group of people that want to go and better themselves. I think they just become really lazy.

0
💬 0

2081.036 - 2103.119 Unknown

I think it's well stated. And I think the pressure cooker that immigrants are under or people who have tough situations, it can create the diamonds. And man, I do think a lot of the folks here on this podcast went through that pressure cooker and it does create a chip on your shoulder. And when people criticize these entry-level jobs, I'm and they're, oh, they're not sustainable.

0
💬 0

2103.159 - 2106.822 Unknown

Well, we do have a safety net in both countries, Canada and the US.

0
💬 0

2107.182 - 2133.248 Jason Calacanis

I think the problem is not the entry-level job. I think it's the expectation of people. And Freeberg just mentioned this, but what you have is that there is this desired doom loop that we've fallen ourselves into, where what social media does is amplify in many cases, a fake perception of what your neighbor has that you don't have. And so you're in this constant desire doom loop.

0
💬 0

2133.288 - 2147.733 Jason Calacanis

So if you go to a job and you're expected to work for four years, I'm just going to make up a number before you get promoted. And the perception is that your neighbor is getting promoted after eight months, you're going to be mad and you're going to be angry and you're going to feel like life isn't working out for you.

0
💬 0

2148.693 - 2165.608 Jason Calacanis

And we have to figure out a way of resetting that back to normal so that you know that that is a lie that is being told to get clicks and likes. And the real truth is you're going to have to just put your nose down and grind at something to get what you want. And life is not perfect and it's complicated and it's messy.

0
💬 0

2166.989 - 2178.147 Unknown

And we need to do a better job of that. Let me ask you a question, Freeberg. If you were going to do a 2.0 of this study, I was thinking about it. you know, where do you go from here? I just had this idea, like, well, what if you put like

0
💬 0

2179.286 - 2188.354 Unknown

half of the money into like a perfect portfolio wealth front, one of those services, and allow people to take out maybe 5% of it every year, some sustainable amount.

0
💬 0

2188.374 - 2209.669 Unknown

So they see, you know, and get some education around that, or maybe put the money into a business formation fund, people can apply to get grants to, you know, maybe form a business and you kind of reframe how this UBI is distributed with milestones and maybe some education baked into it. That was my thought on where to go next with it.

0
💬 0

2209.689 - 2212.811 Unknown

Do you have any thoughts of where you would do a 2.0 test of this?

0
💬 0

2212.891 - 2228.936 Friedberg

Or would you just... Well, that's not UBI, right? And what you're describing, I think, exists. And there are incentives and programs and opportunities out there. People can... sign up with Roth IRAs, they can contribute some percentage of their paycheck to a 401k if they have a job that has a 401k set up for them.

0
💬 0

2229.336 - 2249.962 Friedberg

There's a lot of systems and mechanisms out there and you get tax breaks for doing that. So there's mechanisms and incentives out there to do that sort of thing. The concept with UBI is can you pay people a flat amount of money so that they don't have to work and then they end up being able to explore and do other things with their life as the robots and AI does everything for them.

0
💬 0

2250.644 - 2270.677 Friedberg

And I've just always been of the belief that I don't think that there's this natural border that we hit beyond which humans don't work. I think that AI based tools and automation tools are the same as they've always been. When we developed a tractor, people didn't stop farming. They could get much more leverage using the tractor and farm more and new jobs and new industries emerge.

0
💬 0

2270.717 - 2289.707 Friedberg

And I expect that the same thing will happen with this next evolution of technology and human progress. Humans will find ways to create new things, to push themselves forward, to drive things forward. and for the natural market-based incentives that fundamentally are rooted in this internal system of desire will create new opportunities that we're not really thinking about.

0
💬 0

2289.727 - 2305.631 Friedberg

So I don't believe in this idea of UBI and some utopian world where everyone's happy not working and letting machines do everything for them. I think that the fundamental sense of a human is to find purpose and to realize that purpose, to drive themselves forward and progress themselves. And I think that that's always gonna be the case.

0
💬 0

2305.691 - 2329.878 Jason Calacanis

The closest thing to leisure and leisurely pursuits that we have today in modern society is the Nepo baby. And if you look at the, no, but, and if you look at the Nepo baby, they're the most miserable group of people I've ever met. They're so unhappy with themselves. And so, and part of it is because they've only ever lived a life. Shout out to Alex Soros. No, I'm not name-checking anyone.

0
💬 0

2329.898 - 2350.87 Jason Calacanis

I'm just saying when I observe it, I think that you can see it right in front of you, which is that there's just so much inherent unhappiness because you're not motivated to do anything. And then that's amplified typically by... guilty parents because they've been working so hard. I don't think you need to run a second study.

0
💬 0

2351.31 - 2375.128 Jason Calacanis

A different version of an idea that friend of the pod, Brad Gerstner, is working on, which I think deserves a shout out, is this idea of giving every kid when they're born a retirement account. I think that that's a really interesting idea where you give them some amount of money and it just matures inside of an index fund that gets unlocked for you when that kid is 65 or 70 years old.

0
💬 0

2376.129 - 2389.852 Jason Calacanis

That's great because it helps you have a soft landing in retirement. I think that that's very humane and a right thing to do, but it doesn't rob you of that motivation to work in your 20s, 30s, 40s, and 50s. And that's a much better idea than UBI.

0
💬 0

2389.892 - 2413.672 Friedberg

And I think, by the way, it's really important to state that UBI can be more of a trap than a benefit. It takes away the opportunity for individuals to progress. Because you no longer have a system that says you progress, you get richly rewarded. It ultimately drives to an outcome where you spend all the money and distribute it equally so everyone ends up having some sort of stasis.

0
💬 0

2414.313 - 2431.042 Friedberg

And I don't think that that's really human nature. I do think that systems and government programs that support people's ability to succeed, to work hard, to work smart, to progress while providing these necessary safety nets is a better solution. There's no right or wrong way. It's a very complicated system that's needed.

0
💬 0

2431.062 - 2431.162 Unknown

Yeah.

0
💬 0

2431.562 - 2441.212 Friedberg

And I don't think that this like this UBI concept, it's fairly naive. And I think that you'll see it play out at both a micro and a macro scale as being, I think, net net negative.

0
💬 0

2441.472 - 2452.363 Unknown

Yeah. You know, just wrapping up here so we can get on to the rest of the very juicy docket we have today. It does seem demotivating to just have money drop in your head. That's why I like my experiment. I was referring to Freeberg with

0
💬 0

2452.943 - 2468.751 Unknown

just forcing people, not like having these programs that you have to go find out about and have the social capital and fabric around you that you know about small business loans, et cetera. But hey, these three things are happening to you right now. This money has been put into your account automatically and you can decide what to do with it.

0
💬 0

2468.771 - 2474.294 Unknown

And just raising the education level and empowering people is a much better idea.

0
💬 0

2474.634 - 2485.696 Friedberg

I feel like whatever the education system is, schools or whatever, like actually teaching the vocational skills or the skills on how to succeed in the workplace. Like here's how you go get a job. Here's how you build a business.

0
💬 0

2485.916 - 2487.057 Unknown

Here's how you start something.

0
💬 0

2487.077 - 2503.06 Friedberg

Those are the sorts of skills that are not taught in the educational system that I think are generally lacking. And then people kind of learn a bunch of history or some algebra or whatever they learn in school. And they pop out the other end and it's like, okay, go figure out how to survive. Go figure out how to get a job. Go figure out how to build a business.

0
💬 0

2503.2 - 2522.511 Unknown

To just build on your idea, we need more healthcare workers. If you paid somebody $1,000 a month and you paid for their school for one year to become a nurse, doctor, nurse practitioner, whatever, that would actually have a dramatic impact and solve a problem for our society while not giving a handout. I think we all agree on this one. Let's keep moving through this amazingly juicy docket.

0
💬 0

2522.851 - 2548.714 Unknown

All right, there is a battle. right now for Rupert Murdoch's media empire. The Times reported on a behind-the-scenes fight for control of Fox News, Wall Street Journal, New York Post, and just tons of TV networks in Australia, the UK. I think we all know the News Corp holding set, a bit like the TV show Secession, which makes sense because they based it on the Murdoch family. It turns out

0
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2549.474 - 2568.599 Unknown

This article in the Times is based on a sealed court document that was obtained by them. Murdoch, to remind you, is 93 years old now, and his trust would have given control to his four eldest children. However, he changed the trust to ensure that Lachlan Murdoch, who is more conservative and

0
💬 0

2570.362 - 2593.517 Unknown

would take over these assets as opposed to James, Elizabeth, and Prudence, who are more moderate than Laughlin. And they are engaged in a massive court case now that's going to start in September. The trust is irrevocable, but it contains a provision allowing for changes so long as they're made, quote, in good faith and with the purpose of benefiting all members.

0
💬 0

2593.597 - 2621.69 Unknown

So Rupert argued that the change is in the best interest of James, Elizabeth, and Prudence. as it keeps them formally separate from Fox News without having to worry about its political point of view. Fox News obviously has massive influence and has been a bit of a disaster over the last couple of years. They did the largest settlement ever in a defamation case with Dominion. It's $787 million.

0
💬 0

2622.21 - 2641.794 Unknown

You remember Tucker Hannity, Laura Ingraham, all of them privately trashed the people who lied about the Dominion case on Fox News, and that all got shown in text messages, and it was a disaster for them. Sax, any thoughts on this and how this collection of assets and the GOP have collaborated over the years?

0
💬 0

2642.014 - 2652.971 Chamath Palihapitiya

I wouldn't necessarily call it collaboration. I call it a market position. I mean, Fox News has carved out a powerful and profitable market niche by being the one cable news network that appeals to conservatives.

0
💬 0

2654.002 - 2676.038 Chamath Palihapitiya

Now, if, you know, let's say the more liberal members of the family like James take over and change the content and the programming to serve their own political views, they're going to lose viewership. They're going to lose their audience. It would be a foolish idea just from a business standpoint. So I think that Lachlan is the right choice. I've met Lachlan before, by the way. Nice guy.

0
💬 0

2676.977 - 2695.398 Chamath Palihapitiya

look, I think a pretty mainstream conservative type of guy, he's clearly the right guy in the family to run this. And the siblings, I think, could really screw it up. And I'm talking about not just from a content standpoint, I'm talking about from a a revenue and profit standpoint if they take it in a different direction.

0
💬 0

2695.938 - 2723.014 Chamath Palihapitiya

I would already say that Fox News has a market position problem, which is that Rupert is very much a neocon, and neoconservatism is on the way out in the Republican Party in favor of a more populist conservatism that you see with Trump or now his running mate, J.D. Vance. Rupert and Fox waged a really strong campaign to keep JD Mance off the ticket, obviously lost that battle.

0
💬 0

2724.455 - 2746.962 Chamath Palihapitiya

Rupert fired Tucker, by far their highest rated and most profitable host ever. And it was over, again, this populism versus neoconservatism direction. So I think that Fox already has a problem where they are becoming misaligned with their audience. And regardless of what you think of the politics, that's as bad for business.

0
💬 0

2747.422 - 2759.285 Chamath Palihapitiya

It'll be really interesting to see if Laughlin will realign things in a more populist direction, but definitely going in a liberal direction that like James or the other siblings want to go in, that would be a disaster.

0
💬 0

2759.705 - 2764.646 Unknown

Freeberg, Chamath, any thoughts on this media empire and secession planning?

0
💬 0

2766.533 - 2789.284 Jason Calacanis

Man, I think probate and wills and trusts are of the devil's making. Nothing good comes out of these things. And I don't know, I just think some of these assets should just be left to shareholders. Just sell them. Or just sell them and take the money, give it to the kids. Hopefully you raise good kids. They can all go and pursue their own path.

0
💬 0

2789.824 - 2815.561 Jason Calacanis

Because again, I think the point is like the path and the journey is the fun and these kinds of battles are really brutal. And I'll tell you, to me, the thing that I'm sad when I hear this whole thing is like you have four siblings that I'm guessing grew up together. And now are they ever gonna talk to each other again? Or is it like three versus one or two versus two?

0
💬 0

2815.581 - 2829.996 Jason Calacanis

And I just think that that's ugly over what? Power and money? If I was the father, I would have sold the asset, given the money to the kids or to charity or whatever. And hopefully they would have found happiness in a different way.

0
💬 0

2830.404 - 2843.788 Friedberg

But that is what they did with the Disney deal. They took the cash and they distributed it to the kids. So they each got a pretty big windfall. And then I think the concept was this remaining asset would be managed over the long term. Maybe I'm speaking out of school a bit, but I thought that's what happened there.

0
💬 0

2844.408 - 2856.312 Unknown

They did sell Fox, the studio, and the library. And that brings X-Men, Fantastic Four, Wolverine back together with the Avengers, which is most important.

0
💬 0

2856.592 - 2858.133 Jason Calacanis

Clearly they didn't.

0
💬 0

2860.111 - 2881.27 Jason Calacanis

it's all coming back together now they just got to get sony to give up i mean we want to talk about interesting ip marvel just sold these characters to the highest better in perpetuity such a crazy weird deal but it's like it's like me saying you know i uh i've collected some really nice belts and so i'm just gonna have like a death match between my five kids to see who gets the best belt

0
💬 0

2881.778 - 2888.981 Unknown

Yeah, I just, I mean, and it's not even about money, actually, because they have enough. No, it's about being picked.

0
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2889.461 - 2911.474 Jason Calacanis

No, and it's about being picked. Yes. Imagine if your father picks your sibling and not you. Why would you do that? Yeah. Like, is the asset so important? As Zach said, these are self-managing because business people will make rational business decisions. So put it in the hands of a rational business person. Keep the family intact because if you lose the family, what do you have?

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2911.494 - 2913.075 Jason Calacanis

That's what I don't get.

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2913.095 - 2936.451 Unknown

That's what I don't understand. We might as well just go to our next topic. Joe Biden has been hot swapped as Nusha Anas predicted. The speed run primary, maybe that's been subverted. As we all know, Joe Biden formally exited. What's your version? Maybe it has been subverted. Maybe possibly could have been subverted, inadvertently knocked over, forgotten. It could be an oversight.

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2936.872 - 2962.592 Unknown

Anything's possible. Joe Biden formally exited the presidential race on Sunday after donors and party leadership politely asked him to enjoy his retirement. Nope, they shivved him. By most insider accounts, Biden was not happy about the decision and felt betrayed. Nonetheless, public has backed his VP, Kamala Harris, who appears to have already wrapped up the nomination.

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2963.133 - 2985.326 Unknown

Survey conducted by AP on Monday suggested that Harris already had the endorsement of enough delegates to secure the nomination in the first round of convention voting. So this won't be official until the DNC. That starts August 19th in Chi-Town. So far, no one has stepped forward as a rival for Harris. And in fact, many of her would-be competitors have already endorsed her.

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2985.906 - 3011.991 Unknown

That includes Shapiro, Pennsylvania's governor, Newsom, California's governor, Pritzker, Illinois' governor, and Whitmer, Michigan's governor. All of those, I guess, potential VP candidates. She is now the 90% favorite to get Democratic nomination. I'll stop there and ask our panelists what they think of this turn of events. Shamath, do you want to start us off?

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3012.471 - 3037.873 Jason Calacanis

I mean, I don't think the process was super open and transparent and Democratic, but I don't think they had much of a choice. And I think we've talked about that because too much of the money would have had to essentially been returned. And I don't think you can fight a federal election in 2024 with one hand tied behind your back. So she was the de facto nominee when the rumor started.

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3039.794 - 3059.008 Jason Calacanis

And now I think the whole point is to figure out where does she stand? I think the thing that she will have to overcome is that these last three years, three and a half years, she's been relatively under the radar. MIA, some might say. And I think that now there's this whole controversy.

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3059.028 - 3074.882 Jason Calacanis

I don't know if you guys have seen this, where she was named the border czar, but then she was not the border czar. And I think there's a mainstream media, it's sort of fighting with itself from six months ago about the whole thing. But the point is that we don't know what she believes, and we don't yet have a sense of her

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3077.153 - 3102.439 Jason Calacanis

agenda really you know and i think that over these next two months it'll be up to her to really create a very clear case of what she believes in and then it'll be really interesting to see who she picks as her vp candidate and then people i think will be in a position to judge and i think that that's what you know what if i've been kind of like reading the tea leaves from the folks that i've talked to is sort of what they say which is tbd and we need to figure out where she's at

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3103.717 - 3135.578 Unknown

Freeberg, your thoughts on this unbelievable 10 days in the history of our country where the president was nearly murdered by an assassin and Joe Biden resigns and a 39-year-old political neophyte venture capitalist is picked as VP? I mean, this is consequential. What are your thoughts on this? 10 days. Well, that's a lot of stuff.

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3135.598 - 3157.297 Friedberg

I think we talked about that last week, but the Kamala Harris de facto nomination that took place over 48 hours, I think was a little bit shocking to a lot of people I've spoken with that there wasn't a bit more of a process to identify a nominee besides Kamala that effectively the party lined up. Now, what I think is

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3158.669 - 3174.724 Friedberg

is relevant here is that for the first time, it's exposing people to the way the electoral process actually works in the United States, that it's not a direct democracy where every individual in this country votes for their federally elected people. Remember, the United States was set up as a federated republic.

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3175.365 - 3193.55 Friedberg

that there was meant to be these states, the states were in a federation, and then the states would elect electors that would go and figure out who should be the president, who should run the federal office, and the states would elect their representatives, their congresspeople, to go represent them in the federal government.

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3194.191 - 3209.915 Friedberg

And so I think a lot of people, you know, whether it's just without thinking about it, or based on precedent, assume I get a vote and who gets to be president. What you get to have is a vote and who gets to be the delegate to represent your state in picking the president.

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3210.655 - 3230.925 Friedberg

And so this process where delegates very quickly fell behind Kamala Harris, because of the significant coalescing of power and influence within the party's the two major parties in the United States, has, I think, exposed a lot of people to the lack of a democratic process for federal executive role in this country.

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3231.345 - 3235.77 Friedberg

And I think that's a little bit shocking to people, but it is the way that the nation was set up.

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3236.291 - 3241.837 Unknown

And the same thing with the popular vote versus Electoral College, right? People keep getting confused by that.

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3242.478 - 3257.808 Friedberg

That's right. And in this very unusual condition where a candidate who's earned all of these delegates drops out of the race, it's shocking and surprising to people that they don't get to go and make a vote again individually. And I think it feels unfair. And I think that a lot of people are feeling that way.

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3257.828 - 3269.516 Friedberg

I do, however, think that pretty quickly there's a lot of people who are anyone but Trump that are going to rally behind her. And she seems to be polling well in the polls that have come out in the last couple of days here. All right.

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3269.656 - 3293.521 Unknown

Let me hand it off to Sachs then. You had a situation where Trump was the runaway favorite and this unbelievable unity at the RNC. And immediately after the RNC, the Democratic Party hot swaps Biden for Kamala, and they've got a lot of great VP picks that they can choose from.

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3294.182 - 3314.792 Unknown

Mark Kelly looking like the possibility, which would obviously give them a lot of support in Arizona and with moderates and law and order folks. So Sachs, we're looking at essentially a dead heat. Some polls have them tied. Some polls, Reuters, Ipsos has Harris with a 2% lead. CNN has Trump with a 3% lead.

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3315.312 - 3331.017 Unknown

What's your take on, forget about how we got here, you know, how does this affect the race itself? This is a dead heat now. What are your thoughts on the race going forward? Who's the VP pick that you're most worried about going up against the Republicans?

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3332.301 - 3352.325 Chamath Palihapitiya

Well, look, this clearly reshuffles the race to some degree. I don't think it's a dead heat. The polling shows that Trump is still ahead in most of the swing states. But look, Harris has more upside than Biden does because she can actually campaign. I mean, Biden clearly was a surefire loser. And that was exposed in the presidential debate.

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3352.365 - 3370.987 Chamath Palihapitiya

And that's why there was a total panic in the Democrat Party. After that debate, they're like, we got to get someone new. And they drove him out. I do want to just say a word about that process. Hmm. Throughout that process, remember, it started with Biden doing that Stephanopoulos interview. He said that even God Almighty won't get me out of this race. Then he said, nobody's pushing me out.

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3371.067 - 3395.869 Chamath Palihapitiya

I'm not going anywhere. I'm campaigning next week. He expressed that what was happening in the party was a revolt against him. And then, boom, all of a sudden, he's out. And all we really know from the public reporting is that Nancy Pelosi said, Joe, we can do this the easy way or the hard way. And he was out again, less than 24 hours after he said, I'm in and I'm campaigning next week.

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3396.229 - 3417.187 Chamath Palihapitiya

And even his surrogates on the Sunday morning shows were saying that he's definitely in the race. The White House staff didn't know. His campaign staff didn't know. It kind of came out of the blue. It's a very strange process. And it happened via him just posting a photograph of a letter that was on personal stationery, not even like an official... White House memorandum.

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3417.767 - 3427.078 Chamath Palihapitiya

And we didn't get an update. We didn't hear directly from the president about one of the most consequential decisions of his life and of his presidency until Wednesday.

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3427.198 - 3430.702 Unknown

Well, he did have COVID. So that for an 80 year old is pretty hard. Yeah.

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3430.962 - 3446.115 Chamath Palihapitiya

Fair enough. That was the story. But still, I mean, for us to be left in the dark wondering what was really going on for three days, it was very strange. It certainly was not what you would call a democratic process. There was no speed run primary as you wanted, Jason. There was no open convention.

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3446.435 - 3461.387 Chamath Palihapitiya

What happened is the delegates fell in line instantly, as I predicted, because I said that they would not be able to handle the chaos, that they wanted to basically fall in line immediately and end the chaos. And they fell in line behind Kamala Harris, who has never gotten even one primary vote.

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3461.927 - 3466.43 Unknown

Who worries you most as a VP candidate? Give us that, because we understand that. I'll be honest with you.

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3466.65 - 3483.239 Chamath Palihapitiya

Who's the scariest? The scariest, the one I would pick, is Josh Shapiro. He's the governor of Pennsylvania, rising star. Look, if he can deliver Pennsylvania for the Democrats, that's powerful. Because one way for Harris to eke out a victory is...

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3484.58 - 3508.352 Chamath Palihapitiya

If Shapiro can get her Pennsylvania, and then if she sort of tacks back to appealing to the Arab and Muslim vote in Michigan, to eke out Michigan and then ekes out Wisconsin with just one point. In other words, if she can hold on to the blue wall, and then she loses the swing states that Trump is very much ahead in, like Arizona, Nevada, Georgia, North Carolina.

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3508.872 - 3534.942 Chamath Palihapitiya

she can still win this election by 270 electoral votes to 268. It'd be the closest margin in presidential history. So that's the scenario. And it's probably her best path to victory is to win by one electoral vote. That's the scenario I'd be most worried about as a Republican. Now, the other candidate you hear a lot about Is Mark Kelly, the senator from Arizona, who on paper looks fantastic.

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3534.982 - 3540.291 Chamath Palihapitiya

He's an astronaut. His wife was a victim of a gunshot. Moderate, right?

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3540.491 - 3541.213 Unknown

Super moderate.

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3541.713 - 3566.209 Chamath Palihapitiya

I personally don't think he is that moderate, but I think he presents as one and he's, he's made noises. He comes across as tough and comes across as, as someone who's wanted to be tougher on the border, which is a huge weakness for Harris. Yeah. If he can deliver Arizona, then he becomes a strong contender, but I'm not sure that he can. So if it were me, I'd probably go with Shapiro.

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3569.631 - 3592.923 Unknown

Chamatha, obviously, even in this heated thing, the good news is that both sides are going to accept the election results. We have that fairness and that honorability in both parties where we'll accept even a close election. There'll be no drama after it. But what's your thought on the strongest ticket? Do you think Shapiro? Do you think Kelly? CNN said, hey, and this went viral.

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3593.203 - 3610.7 Unknown

Do we think a Jewish vice president, the country's ready for it? They got kind of dragged for that. What do you think is the right VP pick here, Chima? What do you think the right VP pick here is? And which one is the scariest to a Trump-J.D. Vance ticket, which is a very strong ticket in and of itself?

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3612.66 - 3645.899 Jason Calacanis

So if you look at Trump's VP pick, it's about aligning a philosophy. Donald Trump created the MAGA movement, this populist conservative right-wing movement. And I think J.D. Vance has an opportunity now to carry that torch post-Donald Trump. And that is an ideology that spans states. I think this idea that you pick somebody because they can deliver a state is pretty misguided.

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3645.979 - 3668.665 Jason Calacanis

I just don't think that that in reality is what happens. So I think that Kamala has to decide what she stands for and figure out whether she needs somebody on her flank that represents a slightly different set of ideas that will then maximize her appeal or she wants to double down. And then she has to pick somebody that sort of like aligns with her philosophically.

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3669.79 - 3696.701 Jason Calacanis

And again, I would just say that it's not super clear yet what she thinks. I think that Joe Biden was more of a traditional centrist that had to appeal to the progressive left in order to get his work done. So that kind of makes sense. You can understand it. You don't have to agree with it, but it's pretty obvious. I don't know where she's at politically. So I think that that's the first thing.

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3696.741 - 3715.71 Jason Calacanis

She needs to explain herself. Is she a centrist? Is she more of a moderate Democrat? Is she more of a progressive Democrat? And then we can then understand who the best person to align her with should be. But if I was in the Democratic kind of like- Star chamber.

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3716.371 - 3727.864 Jason Calacanis

Yeah, I would kind of try to figure that out first, because I think the Donald Trump pick makes a lot of sense, because it basically moves the Republican Party in a very firm direction. That die is cast for the Republicans for many years to come now.

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3728.465 - 3743.928 Unknown

Okay, Freeberg, your thoughts. Who is the VP candidate? What do you think of this race and give us a prediction. You know, you're, you're famous for your incredible insights and predictions in politics. Give us your prediction of river. Who should you pick? Who will she pick?

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3745.249 - 3762.34 Friedberg

I think there's a lot of talk about Roy Cooper in North Carolina. Saxon mentioned Cooper, but sounds like could be in the running and could be a leading contender for the slot. I think the Harris Trump poll is,

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3764.781 - 3788.715 Friedberg

is not out or there's a recent one that shows harris yeah 44 48 trump in the lead in north carolina so there's uh some some room there if you can get the governor in that spot that's a lot of uh electoral votes In terms of who I think should be, I'm not sure. But I do think that might be a top contender from folks I've talked to.

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3789.135 - 3795.638 Unknown

Any thoughts on Shapiro and CNN's positioning that the country's not ready for a Jewish vice president?

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3796.164 - 3809.793 Friedberg

So, you know, I was shocked recently to hear about a board, a pretty, you know, important board because it represents a large organization. And there was an individual on the board who was supposed to be elected chairman. They went in for the vote.

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3810.293 - 3831.426 Friedberg

And in that board meeting, this individual who happens to be Jewish, there was a conversation that ensued about you can't be the chairman at this time because having a Jewish chair would be really difficult in this current climate. And I was shocked to hear this. You know, it was... It was not expected by folks going into the meeting. Things were supposed to be quite different in the vote.

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3831.466 - 3836.689 Friedberg

And ultimately, the decision was made that a Jewish person should not be the chair of the board at this time.

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3837.009 - 3853.077 Friedberg

J. Cal, to your question, I think that behind closed doors, these are the sorts of conversations that are going on, that there's a perception, given the Gaza conflict, that there is a risk of having Jewish leadership being put into powerful positions right now, Jewish leaders being put into powerful positions. Wow.

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3854.11 - 3857.752 Chamath Palihapitiya

That is shocking. That's insane. It's deranged.

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3857.912 - 3883.871 Unknown

It's just, this is, this is, what is going, what? This is just, yeah, it's shocking and deranged. And the anti-Semitism right now on social media and what we're seeing online is just absolutely heartbreaking and infuriating in equal parts. Saxon, anything you want to add to this as we wrap up our... What the... Well, I mean, just talk about Shapiro, Sachs. Is the country ready for this?

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3884.171 - 3889.236 Unknown

You saw the CNN clip and, you know, sort of... Can I just ask a question?

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3889.296 - 3894.222 Jason Calacanis

I'm sorry. Go ahead. What does it solve? What does it accomplish?

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3895.709 - 3922.224 Unknown

Less heat coming into that board. Less protests. Less protests. The protesters now have, I guess, what I would read into this, correct me if I'm wrong here, Freeberg, is the protesters have now won in that they've intimidated people to an extent that they don't want to go near Jewish leadership. Am I interpreting correctly a possibility here? Sorry, say that again, the protest or the what?

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3922.484 - 3936.296 Unknown

So these protests, the Gaza conflict have reached a point where people do not want to have Jewish leadership because it would be polarizing and create more protests. That's right.

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3936.616 - 3951.284 Friedberg

And that's the conversation that I hear going on behind closed doors or I'm hearing about. And so, you know, it's almost like a cancel culture against Jews because of the risk of a Jewish person being in a leadership position that could drive.

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