Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey AI transcript and summary - episode of podcast All-In with Chamath, Jason, Sacks & Friedberg
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Episode: Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey
Author: All-In Podcast, LLC
Duration: 01:24:19
Episode Shownotes
(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
Summary
In this episode of 'All-In Podcast', the hosts analyze the recent hurricanes, focusing on their escalating impacts linked to climate change, including projected economic damages of $145 billion to $160 billion. They discuss advancements in protein folding technology with AlphaFold and the implications of antitrust actions against Google. Emerging trends in venture capital and the increasing use of TikTok for news consumption among young people are addressed. The episode also touches on the evolving political landscape as it relates to electoral dynamics.
Go to PodExtra AI's episode page (Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey) to play and view complete AI-processed content: summary, mindmap, topics, takeaways, transcript, keywords and highlights.
Full Transcript
00:00:00 Speaker_05
Alright, 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.
00:00:13 Speaker_05
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 and hey, subscribe to our YouTube channel.
00:00:27 Speaker_05
We're gonna do some sort of crazy event for the million subscriber party. We're like 300,000 away gentlemen. This is nuts, huh? you imagine this thing made it to 200 episodes.
00:00:40 Speaker_03
We have all in.com. How much do we spend on this? This is great.
00:00:42 Speaker_05
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 believe it out. I got it for we're selling.
00:01:00 Speaker_05
And that's a million dollar domain, just so we all know, five letters in the dictionary. So good for branding.
00:01:06 Speaker_01
Good job, Jake. Thank you, my friend. Yeah, now we have all in.com slash tequila.
00:01:10 Speaker_05
Oh, I love it. Exactly. Exactly. And you can yum yum. I got you sax.com didn't know you have the domain name. So yeah, yeah, I negotiated that for you.
00:01:18 Speaker_03
Wow, we have all the way back to Episode One. This is incredible.
00:01:22 Speaker_05
Oh, the new website.
00:01:23 Speaker_03
Yeah, this is great.
00:01:25 Speaker_05
Oh, can I tell you if I said
00:01:28 Speaker_01
all in.com all in.com. That's our website. It's like this thing is real.
00:01:32 Speaker_05
Yeah, it's like a real thing. After four years, we got our together. This looks great. Here we go. And I want to give a shout out to podcast AI one of our
00:01:41 Speaker_05
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.
00:01:49 Speaker_05
And I am of course, your executive producer for life and the moderator of the 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.
00:02:05 Speaker_05
What are you doing?
00:02:07 Speaker_04
What is this?
00:02:08 Speaker_05
I'm just giving a quick plug for Founder University.
00:02:09 Speaker_04
I need to get a plug in because I want to be found. Go to Arrow One and buy Super Gut Bars, $3.99.
00:02:14 Speaker_00
You can pick them up this afternoon. Rain Man, David Sacks.
00:02:34 Speaker_02
Speaking of that, your people use me in an ad, Reedberg, so don't talk about plugs.
00:02:40 Speaker_01
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? For one plug on the show, yeah.
00:02:49 Speaker_05
For Glue AI?
00:02:50 Speaker_01
Yeah.
00:02:51 Speaker_05
right? That's awesome for glue AI.
00:02:53 Speaker_02
And if you haven't tried super got free birds team literally made an advertisement me talking about super got it didn't tell me and we're still hiring.
00:03:02 Speaker_05
So okay, well, there you have it. So go to founder dot university to apply for my 12 week program.
00:03:07 Speaker_04
I'm running a GoFundMe. GoFundMe. Yeah, go to GoFundMe.
00:03:11 Speaker_05
So for once, more Xanax to deal with your panic attacks. All right, let's get started. Enough of the shenanigans hurricane season is
00:03:21 Speaker_05
upon us as freeburg have predicted Hurricane Milton made land fall on Wednesday evening, along the west coast of Florida, as many of you know, it's been downgraded.
00:03:33 Speaker_05
It started as a category five, potentially, then a category three, and then it looks like it's a category one now. So I guess these things are quite random. Leading up to Milton, those 6 million Floridians across 15 counties were ordered to evacuate.
00:03:47 Speaker_05
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. So far, the death toll is at four, but it's expected to rise sadly.
00:04:00 Speaker_05
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.
00:04:14 Speaker_05
These are also beyond the tragic human losses are economically staggering.
00:04:20 Speaker_05
In terms of the losses, Accuweather estimating the total economic damage could be between 145 and 160 billion propellant and Moody estimates the property damage alone could be as high as 26 billion.
00:04:32 Speaker_05
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.
00:04:42 Speaker_05
And let's just start with the science angle, I guess, before we get into the other political and insurance issues.
00:04:49 Speaker_04
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
00:05:05 Speaker_04
The warmer the air, the faster the evaporation and that starts to cause the movement of the air which drives ultimately the hurricane and then the hurricane sucks up more warm moist air from the ocean and it creates a feedback loop.
00:05:18 Speaker_04
So the more energy you have in the ocean, the more likely you are to accelerate wind forces in storms.
00:05:24 Speaker_04
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 cap five in like 48 hours. because of the energy that's stored up.
00:05:40 Speaker_04
And 90%, here's an interesting stat, 90% of the energy that we get from the sun is absorbed and stored in our oceans.
00:05:46 Speaker_04
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.
00:05:54 Speaker_04
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,
00:06:01 Speaker_04
the scientists identified that removing sulfur dioxide from cargo ships that travel across the oceans is actually causing accelerated warming in the oceans.
00:06:13 Speaker_04
And the reason is that the sulfur dioxide forms cloud formations as they travel across the oceans. And those cloud formations reflect sunlight.
00:06:22 Speaker_04
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.
00:06:38 Speaker_04
And they started removing it in 2020 2021 from cargo vessels by removing sulfur dioxide, we are now going to see a doubling of of the rate of warming of the oceans in the 2020s and going forward.
00:06:51 Speaker_05
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.
00:07:01 Speaker_05
And so we're now choosing between pollution of the air, or overheating of the oceans. Am I correct in summarizing that?
00:07:10 Speaker_04
That's roughly it.
00:07:13 Speaker_01
What is the pollution again? Sorry, I just don't understand. It's sulfur dioxide. Sulfur dioxide.
00:07:18 Speaker_04
Yeah, that goes into the fuel of cargo vessels. A couple of years ago, they started to implement these mandates that sulfur dioxide no longer be used in the fuel.
00:07:28 Speaker_04
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.
00:07:40 Speaker_04
Yeah, here you can see that so all of these cracks 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.
00:07:53 Speaker_04
So now that sunlight energy gets absorbed into the ocean. So this is another driving force that some people are now speculating may be accelerating the warming of the oceans that we're seeing, which drives these extreme storm and hurricane events.
00:08:07 Speaker_04
And so this becomes a more frequent event. Now, a lot of sorry, can I ask you a question?
00:08:11 Speaker_03
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?
00:08:27 Speaker_04
Yeah. So in addition, no, no, I'm asking.
00:08:30 Speaker_03
Yeah, I'm asking you the question. Is that true or not?
00:08:33 Speaker_04
Um, so yes, we are no longer reflecting as much sunlight. And so for several decades, we had bad fuel, artificial, we had artificial cooling, we had an artificial cooling.
00:08:45 Speaker_03
And now we take but that's counter to the narrative of what we all think is happening.
00:08:50 Speaker_04
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.
00:09:00 Speaker_04
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. and we were reducing the amount of heat energy that was getting into the oceans.
00:09:14 Speaker_04
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.
00:09:21 Speaker_01
Much faster. Right. So the pollution was good? Turns out it was good.
00:09:24 Speaker_05
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.
00:09:37 Speaker_05
So this is a multi factored system that we're dealing with Friedberg. 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?
00:09:47 Speaker_04
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 value?
00:09:56 Speaker_03
Sorry, Friedberg, 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?
00:10:03 Speaker_04
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.
00:10:11 Speaker_04
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 reduces this is just a natural thing that happens.
00:10:22 Speaker_04
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.
00:10:31 Speaker_03
So we should not we should not dismiss it because my understanding was Helen was cat for when it like hit North Carolina. But I read yesterday that happened.
00:10:42 Speaker_03
Yeah, what happened with Helen was it was killed or is cat three when it hit Tampa or something? Is that not? Yeah.
00:10:48 Speaker_04
Yeah, so that's right. But what happened when Helene hit North Carolina 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.
00:11:03 Speaker_04
There's mountains there. So when a heavy, hot storm runs into cold mountains, all the moisture dumps out. It's like it runs into it, and suddenly everything precipitates out of that storm.
00:11:12 Speaker_04
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.
00:11:20 Speaker_04
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. So it ran into a mountain. It's effectively why everything fell out in North Carolina.
00:11:33 Speaker_01
So you're saying that it wasn't Democrats who basically...
00:11:38 Speaker_02
I blame Putin. Putin or Kamala?
00:11:41 Speaker_04
Who did it, Sax?
00:11:42 Speaker_01
I thought Nancy Pelosi cast a spell or something.
00:11:45 Speaker_04
Well, isn't there a lot of geoengineering conspiracy theories going on in your cohort? I mean, what's your... I don't think so.
00:11:52 Speaker_01
But Vinod wants us to be very clear that we need to stop all this disinformation that somehow Democrats are behind that storm.
00:12:01 Speaker_04
Well, there are we can assure everyone that there was just a presentation online that there's a ton of laser geoengineering being run by government agencies.
00:12:10 Speaker_01
These people are taking that seriously.
00:12:12 Speaker_05
Well, I mean, the the origin of this, though, free bird 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.
00:12:26 Speaker_05
We saw that with the Dubai floods, they said that that might have been caused by overseeding of clouds, which they're doing there.
00:12:32 Speaker_05
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?
00:12:47 Speaker_04
Are you Alex Jones? Is that what we're doing?
00:12:49 Speaker_05
Well, no, we're not saying Alex Jones, but I'm just saying that's the origin of where people are kind of building on this. There have been the amount.
00:12:55 Speaker_04
Okay, so so let's just talk about the hurricane.
00:12:58 Speaker_05
The amount of teeing it up for you to debunk is what I'm doing here.
00:13:00 Speaker_04
Yeah, putting particulates in clouds to accelerate precipitation. is I mean, we've done that for 100 years, you know, you can do, you can increase the precipitation rate when there's already clouds that have formed.
00:13:12 Speaker_04
But that has nothing to do with creating 200 mile an hour wind speed, that requires an extraordinary amount of energy, all of this energy that the oceans are like giant batteries.
00:13:23 Speaker_04
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.
00:13:36 Speaker_04
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, you know, that's really where these hurricanes are coming from.
00:13:47 Speaker_04
Now they're going to be more frequent if the ocean temperatures remain elevated as they seem to be, and continue to be elevated.
00:13:53 Speaker_04
And this can be a function of generally the temperatures warming on Earth, generally the removal of sulfur dioxide, generally these El Niño-La Niña cycles.
00:14:03 Speaker_04
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.
00:14:10 Speaker_04
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 years.
00:14:21 Speaker_04
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.
00:14:28 Speaker_05
I think a lot of the conspiracy theories are built on actual experiments that happen. This one, Project Stormfury, I'm sure you know about, was to try to modify hurricanes by putting in some chemicals that would freeze them and dull them.
00:14:42 Speaker_05
So they're kind of building on this.
00:14:44 Speaker_02
Break it apart.
00:14:45 Speaker_05
Yeah, break it apart. know, there, there, there have been experiments here with altering weather, altering hurricanes, but that doesn't mean it's Putin Pelosi, or, you know, the Illuminati.
00:14:56 Speaker_03
So let's get let's get back to brass tacks.
00:14:58 Speaker_04
So let's talk about the economics. So there's there's 500 billion to a trillion dollars of real estate value on the Florida coastline.
00:15:05 Speaker_04
And what used to be a one in 100 year event, the average Florida homeowner historically has been paying about 1% of their real estate value in insurance.
00:15:12 Speaker_04
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.
00:15:26 Speaker_04
Florida has a state-backed reinsurance provider called the Florida Hurricane Catastrophe Fund.
00:15:32 Speaker_04
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.
00:15:41 Speaker_03
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.
00:15:56 Speaker_03
And then when they give you that insurance, they then want to lay that risk off and go to reinsure. Is that the cycle?
00:16:02 Speaker_04
That's right. And what's happening is they would normally underwrite that risk, they would say this is going to cost, you're going to lose the value of your home every 100 years or every 200 years.
00:16:11 Speaker_04
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.
00:16:23 Speaker_04
And no consumer is going to be willing or able to pay that much for the insurance on their home. So the state over the last several years has had to step in and effectively subsidize the insurance.
00:16:34 Speaker_04
And now the state reinsurance vehicle only has statutory liability maximum of $17 billion in a single hurricane season.
00:16:44 Speaker_04
Now, I think they got lucky with Milton today, but some were estimating that the Milton losses were going to be in excess of $100 billion, bigger than Katrina.
00:16:51 Speaker_04
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.
00:17:01 Speaker_04
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.
00:17:09 Speaker_04
So the real question for everyone is, is the federal government going to have to step in
00:17:13 Speaker_03
and start to support the price of homes 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, California with wildfires, Arizona, there's there and Texas, there's going to be no way to create a clear demarcation of who gets a bailout and who doesn't mean which which will mean that everybody will get a bailout or nobody gets a bailout.
00:17:37 Speaker_03
That's right. And if everybody gets a bailout, and if you think about how systematically unpredictable, at least in the southern states, The weather is you're going to be talking hundreds of billions of dollars a year.
00:17:47 Speaker_04
Probably the total value of all mortgages and home homeowner mortgages in Florida is $454 billion. And those people typically have, you know, a debt to equity ratio, probably on the 50 to 80% range.
00:18:00 Speaker_04
So if the value of your home dips by 25% because everyone starts selling their homes, leaving Florida or they can't get insurance.
00:18:06 Speaker_04
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.
00:18:14 Speaker_04
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, 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.
00:18:27 Speaker_03
And that's probably the reason why they'll have to do it because they'll exactly but then that calculation will have to happen for every single homeowner in every single state at Where this is a, this is an issue.
00:18:38 Speaker_01
Yeah. Are you saying the entire Florida coastline is no longer economically viable?
00:18:43 Speaker_04
No, it's totally viable. It's just the question is, what are you willing to ice?
00:18:46 Speaker_01
At what price? At what price?
00:18:48 Speaker_04
Will you pay 5% of your home value for insurance every year? You know, will you pay 2%, 3%?
00:18:54 Speaker_01
If the expected life of a house is 20 years, then no, that's not, that's not viable.
00:19:00 Speaker_04
It becomes very, very untenable. Well, it used to be one in 500 a year. Now it's probably one in 15.
00:19:05 Speaker_01
Does this apply to the entire coastline or just parts of it?
00:19:08 Speaker_04
Well, I mean, you saw that the range at which these events can happen is all over the place. And the and the challenge is the events are getting more significant. Because of this warm ocean weather that we see this warm ocean temperature.
00:19:20 Speaker_05
So we're gonna see more of the free bird 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.
00:19:34 Speaker_05
So we might
00:19:35 Speaker_04
be looking at investment in climate resilience. That's right. Yeah.
00:19:38 Speaker_05
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 to sacks because Florence got a lot of electoral college votes, doesn't it?
00:19:52 Speaker_05
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.
00:20:02 Speaker_01
And is anyone talking about a federal bailout? What is that? This is something you're predicting.
00:20:06 Speaker_03
I think what Freebrook is saying is that there's a, there's a pretty obvious parade of parables here where the question will have to be answered one way or the other.
00:20:14 Speaker_03
Because if you only have a $17 billion reinsurance fund and there's 50 billion of damage, somebody is 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.
00:20:27 Speaker_04
That's right. And that's what happened in California. And by the way, State Farm left a lot of California.
00:20:32 Speaker_03
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
00:20:45 Speaker_03
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.
00:20:55 Speaker_03
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. But in order for us to get home insurance, you have to now go through a risk assessment.
00:21:09 Speaker_03
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?
00:21:20 Speaker_03
It was a beautiful, you saw our house, it's a beautiful wood shake roof and we had to remove it and the two choices were a $350,000 like iron roof. Composite materials, yeah. Or like 70K for composite and it's like, this is insane.
00:21:34 Speaker_03
And the cost of insurance was just egregious in the absence of
00:21:40 Speaker_04
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.
00:21:47 Speaker_04
And so that's 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.
00:21:55 Speaker_04
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.
00:22:12 Speaker_04
Since 2021, Phoenix averaged 42 days, and in 2024, it's been 70 days so far this year that the temperature is over 110. So this is affecting, and so there's increased risks in California with wildfires, increased risk with hurricane.
00:22:27 Speaker_04
There are a lot of these factors, and I have friends that work in reinsurance and in the insurance markets.
00:22:32 Speaker_03
And- 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.
00:22:44 Speaker_03
And they profiled this retired woman who was an insurance adjuster or something, 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.
00:22:57 Speaker_03
Even with solar panels, even with storage, you need to basically lean on the grid. The grid now just charges you an exorbitant amount of money. These folks were paying thousands of dollars a year. If you imagine the trifecta,
00:23:12 Speaker_03
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. Yeah.
00:23:27 Speaker_05
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.
00:23:39 Speaker_05
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
00:23:51 Speaker_05
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.
00:24:06 Speaker_05
I wonder if this is an opportunity Chamath if you think about historically how insurance worked, it worked in communities where people would help each other out, do barn raising kind of events when somebody had a problem.
00:24:21 Speaker_05
So if we just put on our entrepreneurial hats here,
00:24:24 Speaker_05
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.
00:24:41 Speaker_05
Do you think there's going to be a new business opportunity here.
00:24:45 Speaker_04
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.
00:24:56 Speaker_03
Those things work because you have broad geographic coverage. If you had to go just into Malibu and self insure, the rates would literally be greater than the value of the home, right?
00:25:08 Speaker_04
No one would pay into it.
00:25:09 Speaker_04
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.
00:25:21 Speaker_04
And the new price that they should be charging is so high, it doesn't matter how the capital structure is set up. It's simply, there's, there's one big event that's going to cause a big wipeout for a large number of
00:25:31 Speaker_03
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 are massively overpriced.
00:25:43 Speaker_04
That's right.
00:25:44 Speaker_03
Because I think when you actually account for the climate damage and the long-term financial stability of the insurers and the reinsurers,
00:25:55 Speaker_03
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.
00:26:09 Speaker_03
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
00:26:22 Speaker_03
extreme weather conditions, 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.
00:26:35 Speaker_03
There's a lot of folks that will not have adequate coverage. So I just think these are disasters waiting to happen, unfortunately.
00:26:44 Speaker_05
Yeah, it's, in fact, there's a movement right now, lot of people even have means are renting their homes.
00:26:52 Speaker_05
And so in the real estate market, what are your thoughts on that just renting versus buying now becoming like something that, you know, people in the in the top half of homeowners or potential homeowners are now electing to not own their home and rent.
00:27:09 Speaker_05
Have you been monitoring that?
00:27:10 Speaker_01
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.
00:27:22 Speaker_01
Low-end or medium, you know, to families. I thought that's what was going on. I hadn't heard that at the high end of the range that people were riding.
00:27:30 Speaker_05
Well, if you think about it, like there's, there seems to be a cap when you have a $10 million home of what you can possibly rent it for.
00:27:37 Speaker_05
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 here.
00:27:46 Speaker_03
Are you are you long real estate in Florida or coastal California if you could, or do you treat them differently?
00:27:53 Speaker_04
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.
00:28:07 Speaker_04
when you have real exposure on loss more frequently than one in a hundred years, they're to your point, they need to be repriced.
00:28:14 Speaker_04
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.
00:28:26 Speaker_01
So it was a, it was a good thing that I sold my Miami place.
00:28:29 Speaker_05
Once again, great trade. Pretty awesome.
00:28:34 Speaker_01
Well done sacks it again.
00:28:36 Speaker_05
Well done. Just like.
00:28:40 Speaker_01
I really love. I love that house. Oh, I love that house.
00:28:45 Speaker_02
Where do you think I stayed when I was in town? Yeah, you're so selfish. I lost him.
00:28:50 Speaker_05
I lost the place to stay. I mean, the yacht access alone, being able to get out on the bay and get on a boat, the ski booze, all this great stuff. All right, let's let's keep the free bird train going here.
00:29:02 Speaker_05
Huge news alpha foe 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. They both work for Google's DeepMind, as you know.
00:29:19 Speaker_05
And Freeberg, again, Pauline getting there first, explained what AlphaFold was back on episode 14 in December of 2020. That was almost four years ago. Freiburg, maybe you could explain.
00:29:34 Speaker_04
Did we did we predict that they would win the Nobel Prize at the time?
00:29:37 Speaker_05
I believe you did. And we'll go check the receipts using the podcast AI search engine.
00:29:41 Speaker_03
It was it became it became much more likely that they would win the Nobel after they won the Breakthrough Prize. I mean, just to just to point this out. But yeah, yeah. Shout out Uri Milman. Shout out Uri and Julia. And Julia.
00:29:55 Speaker_03
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. So I think the really interesting thing is actually
00:30:11 Speaker_03
in this community, I think the breakthrough prize is actually meaningfully more relevant, and a positive directional indicator to break through science.
00:30:18 Speaker_05
Well, it's kind of like winning Sundance, or can 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.
00:30:32 Speaker_05
So, Freiburg, just explain to us why this is so important.
00:30:35 Speaker_03
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.
00:30:42 Speaker_05
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.
00:30:49 Speaker_04
There's been a long challenge in biochemistry on understanding or predicting or visualizing the three dimensional structure of proteins. Because remember, proteins are
00:31:03 Speaker_04
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 and that three-dimensional molecule, that big chunky protein does something structurally, physically.
00:31:20 Speaker_04
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?
00:31:32 Speaker_04
How do those amino acids collapse on each other to create that three dimensional construct? And if 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?
00:31:43 Speaker_05
Yeah. It would use people's machines and extra CPU, like the SETI at home project to do this. Precisely, yeah, exactly right, yeah.
00:31:50 Speaker_04
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.
00:31:58 Speaker_04
And so this has been a problem that folks have tried to tackle with compute for decades to figure out the 3D structure.
00:32:05 Speaker_04
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.
00:32:18 Speaker_04
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.
00:32:41 Speaker_04
And so this becomes, I think, this great big holy grail in biochemistry. And the AlphaFold project at DeepMind, inside of Google, solved this problem. And by the way, since then, they've come out with AlphaFold3.
00:32:53 Speaker_04
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. And then they use the AlphaFold models to actually design and develop those molecules.
00:33:07 Speaker_04
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.
00:33:25 Speaker_04
So it really has transformed the industry. It'll be a couple years before we see it transform the world, but it's an exciting kind of thing, yeah.
00:33:32 Speaker_05
not to virtue signal here, but those are plus size proteins. Now, free bird, they don't like being called chunky, plus size proteins, plus size. Yes. One, one really difficult technical question for your free bird.
00:33:45 Speaker_05
Is there any way for you to take this amazing breakthrough and make sacks interested in it? Is there any possible vector here for it to relate to sacks and get him off his BlackBerry right now? Blackberry.
00:33:59 Speaker_05
I think he's playing chess with Teal and JD 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 sacks looking.
00:34:09 Speaker_05
All right, let's keep this train moving here enough of the shenanigans.
00:34:13 Speaker_04
Anyway, congrats to the teams, the various demos. Yeah, I mean, it's just great. And David Baker at the Baker lab and University of Washington.
00:34:21 Speaker_03
Also a breakthrough prize winner. Yeah. What's interesting to me is like these two Nobels, these guys, but also Geoffrey Hinton's, you know, you're really seeing now the convergence of the hard sciences and computer science. Totally.
00:34:36 Speaker_03
In a really meaningful way. And I think that that's so interesting and cool.
00:34:41 Speaker_05
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.
00:34:58 Speaker_03
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.
00:35:07 Speaker_03
What Geoffrey Hinton did 30 and 40 years ago and 20 years ago in terms of training deep neural nets, also really amazing.
00:35:16 Speaker_05
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.
00:35:28 Speaker_02
What is that comment? It's just a straight.
00:35:30 Speaker_01
Why are you attacking Benioff? It's just a straight.
00:35:32 Speaker_02
The audience loves... What did he do wrong? It's just a joke.
00:35:36 Speaker_01
It's a joke.
00:35:37 Speaker_02
They're just jokes. Have you not learned anything from Apollo? Who attacks the people that attack you? It's not an attack. It's a joke.
00:35:44 Speaker_05
Benioff has done so much for philanthropy. Just ask him.
00:35:47 Speaker_02
If you have a sense of humor about yourself, but it's not even it's not even funny.
00:35:59 Speaker_03
If you had said something else.
00:36:01 Speaker_05
I mean, okay, give me a give me a funnier Nobel. Go ahead. runs a 300 billion market.
00:36:08 Speaker_01
Come back on the pod and explain why AI is not going to disrupt SAS. Really?
00:36:14 Speaker_03
Oh, we see he wants to be back.
00:36:15 Speaker_01
He wants to come on. We'll check in.
00:36:17 Speaker_03
We'll check in and $100 billion.
00:36:22 Speaker_02
He had a chance. That chance is closed. He shot a shot and it did not land.
00:36:26 Speaker_03
That door was closed when he insulted our guests about not being able to afford people.
00:36:32 Speaker_02
Oh my god.
00:36:35 Speaker_05
Now you're piling on anybody coming to Dreamforce 2025. Okay, let's move on.
00:36:40 Speaker_02
Anyways, leave any off alone. Leave. It's like, leave Britney alone.
00:36:46 Speaker_01
That famous meme, leave Benny off alone. It's like, how many new animes do you want to create? Every week there's got to be somebody.
00:36:54 Speaker_02
They're just jokes.
00:36:56 Speaker_01
This is when you thought he was running out of feuds, you know?
00:37:00 Speaker_02
I'm not in a feud with anybody. I'm making stupid jokes. The reason people tune in is because you laugh and learn.
00:37:06 Speaker_01
Did you guys see that tweet that somebody suggested throwing a conference with all of J-Cal's haters?
00:37:13 Speaker_02
Jason Conn? J-Conn? Jaders. Jaders convention. What is it called? Jaders? Jaders. Yeah. J-Haters. Yeah, Jason Haters. Jaders. Yeah.
00:37:26 Speaker_05
I'd like to shout out my Jaders. They're just jokes, folks. I love you, Mark. I'm penning off. Come on the pod, Zach.
00:37:34 Speaker_01
I think somebody could launch a successful summit just doing that. It's like a ready-made audience. And they're clearly passionate.
00:37:42 Speaker_02
They're clearly passionate. All the YC founders will be there. Day one Palmer lucky, you know, day two, David sacks.
00:37:54 Speaker_01
I think it would rival the all in summit in terms of the passion of the fans.
00:37:57 Speaker_02
All three of us would show up. He's so devastated. I think it's hilarious. like Betty off. I don't know. I'm trying to make a video. He's just got to have a sense of humor. Oh my god. Megan Kelly. Megan Kelly and farmer lucky. Wait, does that Kate you too?
00:38:21 Speaker_02
Why does that? Oh my god.
00:38:23 Speaker_01
Jake out was just so I was brutal to Zack in the early. Yeah.
00:38:26 Speaker_05
Why? Well, he just anyway, we'll get to it.
00:38:28 Speaker_01
But you're right. Like, you know, throwing a conference for J haters would just be a ready made. It's jitters that is an underserved and passionate demographic will be bigger than demographic just just look at sexist replies.
00:38:43 Speaker_05
Community with shared values. Hey, man, if I can get 25% of those tickets out, I'm in let's go. All right, let's keep the train moving here.
00:38:52 Speaker_05
We have an update on the DOJ is 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.
00:39:06 Speaker_05
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.
00:39:18 Speaker_05
And the DOJ is quote is from Bloomberg, considering asking a federal judge to force Google to sell off parts of its business.
00:39:27 Speaker_05
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.
00:39:39 Speaker_05
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.
00:39:49 Speaker_05
the obvious one terminating Google's exclusive agreements with hardware companies like Apple, 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.
00:40:07 Speaker_05
That's a layup as well. 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
00:40:18 Speaker_05
Sergei at the summit, but I don't think we talked to Sergei about this, because obviously, he would not be able to talk about it. So what are your thoughts here on a potential remedy?
00:40:27 Speaker_04
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.
00:40:41 Speaker_04
Look at Bell Labs, Bell Labs had a monopoly on
00:40:45 Speaker_04
through their association with AT&T, with developing radar, microwave, deep transistor, integrated circuitry, information theory, everything that is the basis of the internet, computing, even nuclear technology, and so on.
00:41:04 Speaker_04
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 and invested for many, many years in DeepMind.
00:41:15 Speaker_04
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.
00:41:27 Speaker_04
I just want to zoom out for a minute and talk about the fact that this isn't about
00:41:33 Speaker_04
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?
00:41:43 Speaker_04
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.
00:41:52 Speaker_04
which arguably spurned and drove investment for 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.
00:42:05 Speaker_04
And that that spawned a lot of eVTOL investing. 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.
00:42:20 Speaker_04
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
00:42:31 Speaker_04
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.
00:42:43 Speaker_04
And I think that leadership is important and needed. Otherwise, if you got a bunch of startups that are trying to get $10 million checks from VCs, I'm not sure they're going to build a waymo. And I'm not sure they're going to build Amazon Cloud.
00:42:54 Speaker_04
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 on math. What's the likely outcome? We should think about this stuff.
00:43:04 Speaker_05
Matthew 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.
00:43:14 Speaker_03
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.
00:43:23 Speaker_03
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
00:43:40 Speaker_03
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.
00:43:58 Speaker_03
And I think it becomes an obvious target for politicians.
00:44:04 Speaker_05
I think that's a really good 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 chat GPT every day.
00:44:18 Speaker_05
I'm doing 30, 40, 50 queries and follow-ups per day. I forced my entire team to do that as well.
00:44:26 Speaker_05
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.
00:44:37 Speaker_05
If chat GPT does build a viable competitor coexist or that siphons off search, am I wrong here?
00:44:47 Speaker_01
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.
00:44:56 Speaker_01
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.
00:45:08 Speaker_01
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.
00:45:14 Speaker_01
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.
00:45:24 Speaker_01
And it is a monopoly in the form of open AI at this point in time.
00:45:30 Speaker_05
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.
00:45:44 Speaker_05
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. Go buy the domain in chat.com and make a dedicated app just for Gemini.
00:45:57 Speaker_03
You're 100% right.
00:45:58 Speaker_05
And make it kick ass.
00:45:59 Speaker_03
You're 100% right.
00:46:00 Speaker_05
Google, you suck at apps.
00:46:02 Speaker_03
We said this when you asked about the bear case of open AI.
00:46:08 Speaker_03
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.
00:46:26 Speaker_03
I think that they, if given their druthers, they being the powers that be at Washington, 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.
00:46:39 Speaker_03
And then they'll go to meta afterwards. 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.
00:46:55 Speaker_03
And I think the most obvious thing is what you just said, Jason, which is you are the front door through the internet.
00:47:03 Speaker_03
and there is this completely new emergent technology, and where is the same response to chat GPT that you had to X, or that you had to Snapchat, or that you had to TikTok?
00:47:18 Speaker_03
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 chat GPT alternative, and get it to billions of people yesterday.
00:47:31 Speaker_03
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.
00:47:52 Speaker_05
Yeah, 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.
00:48:04 Speaker_05
Can you imagine $500 billion going into Google's coffers in YouTube shares? They have 500 billion in cash. Chama.
00:48:13 Speaker_03
I had a I talked to a company, he is the CEO of a public consumer facing company. And this was in the context of some 8090 stuff.
00:48:24 Speaker_03
And he said that he and 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.
00:48:35 Speaker_03
And they said they've had multi year roadmaps to try to build a reasonable set of tools and advertising and it's been impossible.
00:48:43 Speaker_03
And partly why is that the tools that the big folks offer are so good that they just cannibalize and run over the entire market.
00:48:51 Speaker_03
And so what they hear from CMOs is we would love to advertise on your company, your site, but A, your tools are substandard, and B, even though your inventory is cheaper, you just don't give us the same scale and breadth that we get in these other big places.
00:49:07 Speaker_03
I'm not saying that that's either right or wrong, But through the lens of probably what the DOJ sees is when a lot of these folks write letters to them talking about what they're going through. This is what they're saying.
00:49:19 Speaker_03
And I suspect that if you could actually have a more fragmented market in some of these key markets, it's going to be a little bit easier for these smaller companies to have a business. Now, you could say, well, tough luck.
00:49:32 Speaker_03
You tried and you couldn't build it. I get that argument. And I think, and I think that that at some point that is legitimate.
00:49:37 Speaker_03
But the problem is, if you're public, and you're trying to make your company profitable, what do your engineers want to work on, they want to work on consumer facing forward features.
00:49:45 Speaker_03
And so what always falls off the list, it's the stuff at the end, the attack.
00:49:50 Speaker_03
And so anyways, it's this recursive negative loop that a lot of these other companies are in, in the shadow of these big companies that I think is going to cause the DOJ to try to do something.
00:49:59 Speaker_05
know, this is a great setup for M&A. It's great setup for IPOs starting to look like and this is a multi administration case that's been going right. I think this started under Trump went into Biden and is now going to continue on to Trump or Harris.
00:50:15 Speaker_05
So what are your thoughts here, Sax?
00:50:19 Speaker_01
Well, in terms of the political environment for M&A next year?
00:50:21 Speaker_06
Yeah.
00:50:22 Speaker_01
Yeah. I mean, so obviously, it depends which administration's in power.
00:50:27 Speaker_01
a lot of Democrats, prominent Democrats in tech, like Mark Cuban or Reid Hoffman have been making the case that if Kamala is president, she's gonna be much more hospitable and friendly towards M&A.
00:50:39 Speaker_01
And they've been saying explicitly that they want Lena Khan fired. Well, in response to that, AOC just came out and said, we're gonna have a throw down if you do that.
00:50:47 Speaker_01
So I don't let go, I would not expect a substantial difference or improvement in the in the regulatory permissiveness towards M&A if we have a Democratic administration. If you have Trump in office next year, I think that
00:51:07 Speaker_01
there will be an opening up of M&A. I think the Republicans have their own issues with big tech, but those issues tend to revolve around censorship and bias and search results and LLMs, things like that, as opposed to bigness per se.
00:51:22 Speaker_01
So I think it will be easier to get M&A done next year if you have a Republican administration.
00:51:26 Speaker_05
Absolutely. I am going to be printing money in a Trump administration. It is going to be obscene how many M&A deals and IPOs are going to occur. There is such a huge backlog. But I do think that I do think the Democrats want to get this moving as well.
00:51:41 Speaker_05
And I was talking to read Hoffman, and you and Peter Thiel in the Illuminati meeting, and they voted 190 to two to replace Lena Khan in the Illuminati meeting. Chamath, why didn't you make the Illuminati meeting last week?
00:51:54 Speaker_05
I'm shocked that you weren't there.
00:51:56 Speaker_01
I'm not invited to that. People don't know that you're being facetious, Jason.
00:52:00 Speaker_05
Oh, really? They don't understand that I'm joking about the Illuminati?
00:52:03 Speaker_01
They often don't.
00:52:05 Speaker_02
Well, I'm sorry to the low IQ listeners who don't know that the Illuminati is not real. Now you're insulting the audience? No, I'm insulting the ones who believe there's an Illuminati. He's trying to sell tickets to the Jaders.
00:52:18 Speaker_02
I'm trying to sell tickets to the Jaders ball. Buck nasty, Zack nasty. Jane Cowne is the biggest hater in the tech industry. You ever see the haters ball, Saks?
00:52:31 Speaker_01
I have not.
00:52:31 Speaker_05
Chapelsia?
00:52:33 Speaker_01
No.
00:52:33 Speaker_05
Chamath, it looks like between the time we mentioned it on the pod, it's actually happening. Here it is. The jaders ball is happening. There it is. Lena Kahn, David Saks.
00:52:43 Speaker_01
Wait, why am I there?
00:52:44 Speaker_05
Because you're a headliner. You're organizing. I think you're the host.
00:52:47 Speaker_01
I'm going to be a keynote? Yeah, I'm the I'm okay. Wow. I'm the MC there.
00:52:53 Speaker_05
Look, there's there's Zack nasty. And there's Palmer lucky. You guys don't know this bit from Chappelle. The haters ball from Chanel. Oh my god. It's the funniest bit. on Chabelle show.
00:53:06 Speaker_01
It's literally I mean, I saw a lot of Chappelle shot.
00:53:09 Speaker_05
Just show the real picture, Nick. I'm on the Chappelle show. They have all of these pimps who have a yearly convention, which is their player haters.
00:53:18 Speaker_03
I've seen this. I've seen it.
00:53:19 Speaker_05
And all they do is sit there with like a toothpick in and they hate on each other and make fun of each other. I've seen this is the funniest bit in the history of the Chappelle show. All right, let's keep the train moving here. CRV is
00:53:33 Speaker_05
giving back or maybe not calling down 275 million from their LPS Charles River Ventures shout out to my pal George Zachary and Greek brother from CRB.
00:53:41 Speaker_05
Historically, they invest in early stage startups, they did DoorDash, Airtable, Twitter back in the day. They had two funds that they raised back in 2022 billion dollar early stage fund and a 500 million growth fund.
00:53:53 Speaker_05
sometimes people call that an opportunity fund or a select fund. The New York Times reported CRV is going to give back about half of that 275 million to investors or technically probably not call it down.
00:54:05 Speaker_05
The four partners at CRV gave an exclusive to the New York Times. So either getting ahead of this story, or maybe, you know, who knows what the motivation here is.
00:54:14 Speaker_05
But the reason they gave is that the market conditions for late stage have worsened dramatically. And that the valuations are still too high. Yes, the rent is too high.
00:54:23 Speaker_05
that there aren't any exit options, as we just talked about, with the administration, no IPOs, no M&A. And that VC map doesn't work in the late stage. So I'll just stop there. There's a bunch of other notes here.
00:54:35 Speaker_05
Obviously, this isn't the first time this has happened. I think founders fund cut the size of its eighth fund in half from 1.8 billion to 900 million. They didn't actually give the capital back to VCs like they're saying CRV did here.
00:54:47 Speaker_05
Again, I'm not certain if that's what's happened or not. put the extra 900 million into its ninth fund, if they decide to raise that, which I'm assuming founders fund. Well, Chamath, do you have any thoughts on this?
00:54:59 Speaker_05
I, I guess, we got two stories here. So I don't know.
00:55:04 Speaker_03
Peter Thiel did this, and he gave back quite a large piece of his fund a couple years ago, and then CRV just did it. I want to make sure I get the citation right. I think it was Thomas Lafont at COTU who said this. It was really powerful.
00:55:17 Speaker_03
It made a huge impression on me, which is that the NASDAQ creates about $800 billion of enterprise value a year.
00:55:26 Speaker_03
And he brought that up in the context of private markets have to exceed that in order for it to be a real viable alternative to just owning public indices. And so if you factor in illiquidity risk and the duration,
00:55:41 Speaker_03
You have to probably generate, I don't know, a trillion, $1.2 trillion of enterprise value in private tech every year. That just seems like it's really hard to do. Where is all of that value getting created?
00:55:54 Speaker_03
I think that venture needs to go through a phase where it re-rationalizes. This is sort of what I said at David's LP day, which is, I think that LPs have made a couple of very big mistakes.
00:56:07 Speaker_03
I think the biggest mistake that they've made is by smearing too much money across too many general partners. And I think if you had to redo it, A, it's probably a lot less money in total.
00:56:19 Speaker_03
But B, and the example I gave there was instead of giving $50 million to Kraft and $10 million to somebody else, you're better off giving $60 million to Kraft and not even having that other GP. Because that GP makes everybody's life complicated.
00:56:33 Speaker_03
They overpay, they mispay, they're probably not supposed to be a GP in the first place, and so they force returns down.
00:56:40 Speaker_03
And then when you contrast that again to a public market that is systematically creating $800 billion of enterprise value a year, this is an incredibly tough game and it's getting much, much harder.
00:56:52 Speaker_03
So I think that if you just take a step back, these are the right things to do because you're much better off having a smaller pool of capital that you can concentrate into the things that matter.
00:57:03 Speaker_03
You're probably better off having smaller teams versus bigger teams. And you're probably better off trying to forge LP relationships where they're not doing 50 fund investments because it just makes the entire industry lag public liquid alternatives.
00:57:22 Speaker_03
And I think that that's just not good.
00:57:24 Speaker_05
peanut butter gun spread a little bit then there any thoughts freeberg on this trend if we can call it that it or is this like maybe they're reacting right as the market is changing and valuations are getting more reasonable and the exit opportunities are getting more reasonable.
00:57:41 Speaker_05
It seems like this was the right reaction two years ago. But maybe it's the wrong reaction. Now. What do you think freeberg?
00:57:46 Speaker_04
for venture firm to return capital, they need to have at least one or two big winners.
00:57:52 Speaker_04
And so if that winner needs to be a 10 x or 20 x or 30 x of the fund, because most of the investments in the fund are not going to work, you need to be able to enter at a reasonable price and there needs to be enough opportunity relative to the capital trying to invest in that opportunity out there for to make sense.
00:58:12 Speaker_04
So in a market where there is excess venture capital,
00:58:15 Speaker_04
where valuations are at a premium, and where you don't see the exit path, the M&A or the IPO events that make sense that you can actually realize that model, you should take less capital and make fewer, surer investments.
00:58:31 Speaker_04
And I think that that's what some folks have realized, they don't want to be chasing, you know, highly valued inflated opportunities.
00:58:39 Speaker_04
And they don't want to be putting capital into tier B, or tier C opportunities, just for the sake of deploying capital.
00:58:46 Speaker_04
This is a really interesting moment where you can kind of see who are the right folks in terms of thinking long term in Silicon Valley long term in terms of building an investment practice and private venture.
00:58:59 Speaker_04
and maybe who are folks that are trying to build their aum stack. And folks who have done reasonably well, like founders fund has probably the most exceptional track record in Silicon Valley as a venture firm.
00:59:10 Speaker_04
They are very cognizant of the market conditions. And I think that they're being very smart. By the way, the other thing I've heard from LPS is they're similarly trying to find more concentrated capital themselves. So they're trying to put
00:59:24 Speaker_04
more capital to work in fewer managers. And so there's a real wheat from the chaff moment happening in Silicon Valley venture right now. What I think a couple years ago was, hey, everyone's going to go do a startup.
00:59:36 Speaker_04
A few years ago became everyone's going to go do a venture fund. And now I think the froth that has occurred because of that is being cleared up.
00:59:42 Speaker_05
And to just explain this math before I get Saxe's thoughts on this, if this was a $500 million fund, let's say they were putting $25 million into each, we'll take management fees out of it, $25 million into each opportunity at a billion dollar valuation, they would own 2.5% obviously of those firms.
01:00:01 Speaker_05
they need to get probably a $30 billion power law exit a 30 xax in order to just return the fund, there'll be some dilution obviously along the way.
01:00:11 Speaker_05
That's why it's not 20 x. And the number of companies that go from a billion to 30 billion per cycle is incredibly low Uber, Coinbase, Airbnb. It's a really short list, huh? sex in recent history. I mean,
01:00:30 Speaker_01
look, just just go back to the CRV thing. You said at the outset of the conversation that this was either a growth fund or an opportunities fund. That makes a really big difference. Explain, please.
01:00:40 Speaker_01
Because well, an opportunities fund typically exists to back up your winners. In other words, if the venture fund is producing some big winners, the opportunities fund exists to deploy more capital into those into those companies.
01:00:55 Speaker_01
As opposed to a growth fund, which is you'd be underwriting brand new companies from scratch. Typically an opportunities fund is limited to companies that you're already an investor in through your venture fund. So that makes a big difference.
01:01:06 Speaker_01
I mean, if CRV has a billion dollar venture fund and only a $500 million opportunities fund, it may just be the case that they don't need all of that capital to back up the winners. They can do their pro ratas out of the main fund.
01:01:18 Speaker_01
So I suspect that that might be what's going on. I actually think this is a pretty good time to have a growth fund. a lot of the why? Yeah, well, because a lot of the crossover capital has left the ecosystem.
01:01:29 Speaker_05
Okay, a few years and that sort of cohort? Yeah, she's on?
01:01:35 Speaker_01
Yeah, well, tiger and, and soft maker still around, but there are other very large investors, hedge funds, and so on, who had come into the ecosystem with billions of dollars a few years ago. And now they've left.
01:01:48 Speaker_01
And some of those funds that you're talking about, like tiger used to be $10 billion funds. Now they're $2 billion.
01:01:52 Speaker_05
Right, they've been right size. They're not violently doing I mean, the the tiger deals, my understanding was they weren't joining the board and a lot of the cases and they were outsourcing the diligence. And that was a pretty violent pace.
01:02:03 Speaker_05
I don't know.
01:02:03 Speaker_01
Yeah, this is the best time in probably five years to have a growth fund. interesting. But to your point about the size of the venture fund, the bigger the venture fund, the bigger the winner that you need to make that payoff, obviously, yes.
01:02:15 Speaker_01
And so because of the power law, so to take an example, I don't know, let's say you've got a billion dollar venture fund. Let's say that at IPO, you own 10% of whatever that that winner is.
01:02:28 Speaker_01
And because of the power law, your fund performance is really determined by your best outcome, right? Yep. So
01:02:35 Speaker_01
in order to take a $1 billion venture fund and say, deliver a three x, you know, so 3 billion of returns, and your best company you own 10% of that implies you have a $30 billion winner in that fund.
01:02:49 Speaker_01
And there are precious few outcomes where you have a $30 billion IPO, right?
01:02:55 Speaker_05
Yeah, I mean, happened very often on two hands the last cycle, right? Like I just did, you got you got Uber, you got Robin Hood, you got Coinbase, Stripe will eventually come out. You got SpaceX. Well, that was two cycles ago.
01:03:08 Speaker_01
So I mean, yeah, you're going to need to have a meaningful ownership position and a massive company in order to make a fund that big payoff. The data that I think LPs look at shows that smaller venture funds tend to perform better for this reason.
01:03:21 Speaker_01
500, 600 million dollar funds So yeah, I personally wouldn't want the pressure of a billion dollar venture fund, that would be really hard.
01:03:30 Speaker_01
As a five or $600 billion venture fund, you kind of need to have or want to have like a decacorn outcome to make that a great fund. But to have to have a $30 billion plus outcome, it's it's even more difficult.
01:03:44 Speaker_05
Moving on, Pew just published some really interesting research on TikTok. If you don't know the Pew study, they've been doing it for decades. It's very well respected and bipartisan or nonpartisan.
01:03:55 Speaker_05
Four in 10 US adults aged 18 to 29 are now regularly getting their news from TikTok. Here's some charts for you to take a look at.
01:04:04 Speaker_05
As you can see, the younger generation is really spending a lot of time on tik tok and getting a lot of their news there.
01:04:10 Speaker_05
I know this because yeah, I've talked to a bunch of kids about this and people that use tik tok 52% are regularly getting their news from the platform and that number has skyrocketed compared to other social platforms. Take a look at this chart.
01:04:26 Speaker_05
Here's x 59% of people say they get their news at x it's really a news platform. So that makes total sense. look at Facebook, it's you know, 48% right now Reddit 33% YouTube 37% in 2024 Instagram 40% but tick tock 52 up from 22%.
01:04:37 Speaker_05
So it's no longer just dancing. And this is the reason I think many people in the government
01:04:49 Speaker_05
were concerned about the attack vector that the CCP would have in the United States since they still control the company for services like Snapchat, LinkedIn and WhatsApp and next door.
01:05:01 Speaker_05
It's below 20 below 30% get their news from their their shirt truth social their sacks 57% of people get news there and rumble 48%. So what's your takeaway from from this just sacks
01:05:15 Speaker_05
looking at it and this impact that TikTok has is concerning on a national security level since the algorithm is a black box and you could tweak it if you really wanted to, to really change sentiment and young people are obviously very impressionable on this platform and they're big users of it.
01:05:32 Speaker_01
Well, I thought there was other data in this study that should calm people's fears that TikTok would somehow be used as a political weapon.
01:05:40 Speaker_01
So in the same survey you're talking about, 95% of adults that use TikTok say they use it because it's entertaining. So that's the main reason people use it.
01:05:50 Speaker_01
And only 10% of accounts followed by US adults post content related to political or social issues
01:05:56 Speaker_05
Okay, that's hosting and the main reason, right?
01:05:59 Speaker_01
Yeah, but so so basically, you're 90% of the accounts that get followed aren't even posting political or social issues. They're there for entertainment as people watching dance videos as people. Yeah, that's watching.
01:06:12 Speaker_01
I mean, the main thing I use it for is to watch wrestling highlights. So you're wrestling? Yeah, I'm a wrestling fan. What? Yeah. You're into this kabuki theater of wrestling.
01:06:25 Speaker_05
This is new information.
01:06:27 Speaker_01
Yeah, I get my WWE on on Tick Tock.
01:06:32 Speaker_05
Yeah. Are you a Hulk Hogan guy? Are you an Undertaker guy? Vince McMahon?
01:06:37 Speaker_03
I mean, Jimmy Superfly snooker. Who are you, Andre the Giant?
01:06:41 Speaker_01
The crazy thing is I know all those names, but.
01:06:43 Speaker_03
I also love the Road Warriors, Ultimate Warrior I loved. I was a huge wrestling fan. That was the one thing that my dad and I bonded over. We would watch wrestling every Saturday. Sax, did you ever watch the specials on Saturday night? Oh, yeah.
01:06:59 Speaker_01
Oh, those are so great. That was the era of Hulk Hogan, for sure. Saturday night's main event. Randy Savage is great. Yeah, I mean, look, my all time favorite was Stone Cold Steve Austin. Stone Cold is great. I marked out the hardest for Austin.
01:07:14 Speaker_03
He was anti-woke before anti-woke became a thing.
01:07:17 Speaker_01
Totally.
01:07:18 Speaker_03
This is crazy. You guys are into wrestling. I love wrestling. I'd say Flair was number two for me.
01:07:24 Speaker_05
Wait, wait, hold on. Have you gone to a wrestling event in person, Sax?
01:07:27 Speaker_03
Did you only like the WWF at the time or did you like the NWA as well?
01:07:31 Speaker_01
They're moments. When Hogan turned heel and joined the, was it the NWO? That was like a big moment.
01:07:40 Speaker_05
I'm a big Andy Kaufman wrestling fan. That was my only interest is when Andy Kaufman came in there. and trolled them.
01:07:48 Speaker_01
But have you been Hoffman? Yeah, that was like in the 1970s, wasn't it?
01:07:52 Speaker_05
Or it was the late 80s. Remember, he was on Jerry Letterman with Jerry Waller. And he he comes to a wrestling match sacks in the south.
01:08:03 Speaker_01
I grew up in my hometown of Memphis.
01:08:05 Speaker_05
Right. So he goes there, and he gets in the ring. And he says, all of you rednecks, I want to show you some new inventions. This is called soap. And this is called the washcloth and you use it to clean yourself.
01:08:21 Speaker_05
And he's like just mocking the Southern accent and Jerry Lawler. I remember Jerry Lawler smacks him and on Letterman. Oh, it's the greatest.
01:08:29 Speaker_01
It was a huge deal. I mean, where I grew up, because this was like on the local news. Yes. When I grew up in Memphis, there was no professional sports teams. Okay.
01:08:38 Speaker_01
All we had was the Memphis state basketball and wrestling every Monday night, the Mid-South Coliseum. That was it. That was like professional sports. in Memphis.
01:08:49 Speaker_05
You also had probably like some state fairs or, you know, like best goats, best sheep or something.
01:08:55 Speaker_01
Lawler was so popular that he could have been elected mayor. In fact, I think there was talk at one point of him becoming mayor. Wow.
01:09:02 Speaker_05
I mean, the intergender champion, Andy Kaufman.
01:09:05 Speaker_03
Did you, uh, did you guys like Mouth of the South?
01:09:08 Speaker_01
Jimmy Hart. Oh, yeah, of course. Yeah, he was amazing. He was like the main heel manager for a while.
01:09:14 Speaker_06
Yeah.
01:09:14 Speaker_01
Okay. For the WWE took over, I guess it's called WWF back then. But there were all these little fiefdoms and kingdoms. And Mid South wrestling was like one of those kingdoms. And Lawler was like the king of it.
01:09:26 Speaker_01
And then you had all these guys come in and out and wrestle.
01:09:29 Speaker_05
Friedberg, you ever watch wrestling? And what do you think of this tick tock survey? I don't watch wrestling. Okay, very good. And tick tock survey, anything where you know, any thoughts? Looks like they gathered some reasonable data. Okay, there you go.
01:09:43 Speaker_05
There's there's your point.
01:09:45 Speaker_01
My point was that it's mostly an entertainment app where people go to watch dance videos, wrestling clips, style influencers, and so on.
01:09:54 Speaker_01
And I think that this idea that it's somehow a propaganda tool around, you know, programming our youth, I think that's a moral panic that's been exaggerated.
01:10:02 Speaker_03
What do you think the odds are that TikTok is hacked to allow you to passively listen even when the app is not being used?
01:10:09 Speaker_04
Zero.
01:10:11 Speaker_06
You think it's not definitively zero?
01:10:13 Speaker_04
No, like 5%. I think that's very unlikely. Yeah. Because someone said that that was That was a, there was some code that enabled that in the early version of the app.
01:10:25 Speaker_04
And then some other people audited it and they said they did not find evidence that there was any technology and Apple's got a very good audit system for this.
01:10:31 Speaker_03
Did those same people audit WhatsApp? And then it turned out that it was passively listen? Yeah, does WhatsApp passively listen? It's one of the it's one of the most well known breaches. Well, maybe they do.
01:10:43 Speaker_05
Maybe it's 100% certain that the CCP is using it because they this people have tracked already journalists using it.
01:10:49 Speaker_05
So if they've already done it, it's 100% I don't know about the passive listening, but any thoughts on 50% plus of young people getting their news here? Chamath any news on that?
01:10:58 Speaker_05
I mean, obviously, we don't have evidence that it's being used currently to manipulate people, but it's over 50% of young people are now getting their news there. or say they're getting their news.
01:11:07 Speaker_01
I've had more than 50% of young people are getting their news from podcasts and those podcasts get chopped up and clipped and then people watch them on tik tok for sure. That's how it's happening.
01:11:17 Speaker_05
There are a lot of people who think this show is a tik tok show. don't know it's a big show.
01:11:22 Speaker_03
We'll have to prepare for a brave new world in the following way. There was an article, I think it was in the Wall Street Journal, that said that Russia and Iran were paying low-level street criminals to create chaos.
01:11:37 Speaker_03
Okay, and I read that article and I thought, okay, well, what does this mean if you actually extrapolate this, which is that the hot wars are very complicated, not worth doing. These disruptive fissures are the better way to sow chaos.
01:11:55 Speaker_03
And it occurred to me then that tying this back to something that we saw before, it does make sense for a lot of folks to sponsor a lot of long tail content that say a lot of different things. I think that that just is pretty obvious.
01:12:10 Speaker_03
And so I think that if you put these two ideas together, it stands to reason that a lot of people will be paying influencers a lot of money to create all kinds of content that is specific to a perspective that they have.
01:12:24 Speaker_03
And then on top of that, if you can algorithmically amplify one over the other, know, you're, you're going to have issues. Is it the biggest issue in the world? Probably not.
01:12:35 Speaker_05
Probably wouldn't swing an election, but it would cause chaos. And we just had the Southern District of New York
01:12:42 Speaker_05
target that Russian, Russia Today was giving $10 million to four podcasters, they didn't even know they were getting paid by the Russians, they just picked them because they liked their opinions.
01:12:51 Speaker_05
And they gave them 100,000 an episode to promote pro Russian positions.
01:12:56 Speaker_01
If the Russians were actually doing it, it's the stupidest use of $10 million ever. Because great. Those podcasters already had their own channels, they're already putting out lots of content. And this other content is a drop in the bucket.
01:13:08 Speaker_01
I think Jamal, the issue with what you're saying is just, there is so much content out there already. People create it for free people create it, you know, because they're they have a career in it.
01:13:19 Speaker_01
There's a whole long tail of influencers, there is so much content out there already, through podcasts, through websites, it's all being chopped up, that trying to do it as some sort of
01:13:30 Speaker_01
disinformation strategy, I think is very hard to do, because it's just when there's billions and billions of impressions, any effort that you try to engineer ends up just being a drop in the bucket. I agree. Yeah, it's definitely a drop in the bucket.
01:13:44 Speaker_01
But yeah, it makes sense in theory, it's very hard to do in practice.
01:13:47 Speaker_05
Yeah, the goal is not to win any specific argument. It's to create mistrust in the entire news ecosystem in the information system so that people give up trying to figure out what the truth is. And that's what the rush is doing that on their own.
01:14:04 Speaker_05
Yeah, I mean, you could argue that was creating the distrust, as are the Russians paying off podcasters.
01:14:10 Speaker_01
Okay, let's get $10 million going to accomplish anything if that story is even very simple question.
01:14:15 Speaker_05
Great question. May I answer it? conspiracy theory, not a conspiracy there at all. These were very low level mid like, you know, tier B, CD podcasters.
01:14:27 Speaker_05
If you give them $100,000 per episode, they can spend more money buying cameras, promoting their shows hiring people. So you're just finding people and dropping money on their heads so they can do more of the same. So it's a very smart strategy.
01:14:39 Speaker_05
In fact, I think
01:14:41 Speaker_01
I think it's the stupidest thing I've ever heard that they took podcasters who are already successful and paid them to release content through a less watched channel.
01:14:49 Speaker_05
That's the yes, it was it was just more about getting the money to produce more content.
01:14:53 Speaker_01
And then they in these guys are on these guys already live streaming like 24 seven.
01:14:58 Speaker_05
Oh, there's a puppy. Oh, here he goes. Freeberg trying to win more people over with this puppy love. Unbelievable. This guy is absolutely ridiculous. Unbelievable. All right, listen, let me give sax some red meat here.
01:15:12 Speaker_05
He got he got his little steak tartar with my Russia today story that you little amuse bouche. And now I give you your tomahawk. You're ready sacks. You want your tomahawk? You want it rare? Here it comes. 2024 election update.
01:15:27 Speaker_05
The betting markets and polling indicate a really tight race, but maybe Trump is surging this week. Polymarket, which is a betting market, has Trump 55 to 45 versus Kamala Kalshi. Another betting market, 52-48 Trump.
01:15:43 Speaker_05
Bovada and points bet those are offshore booking and poly market is also offshore. 5248 Trump, Nate silver friend of the pod. His algorithm has it 5347. Kamala real clear polling. That's an algorithm has Kamala with a two point lead.
01:16:01 Speaker_05
New York Times Sienna, Kamala with a three point lead, Reuters, Ipso, pretty well trusted three point lead for Kamala, NPR, PBS, Marist poll has Kamala with a two point lead.
01:16:12 Speaker_05
So sport books and betting markets are favoring Trump slightly, while the polls are slightly favoring Kamala. Sachs, I sliced it up nice for you. You got nice 10 slices of meat here, which slice you going for?
01:16:28 Speaker_01
Well, I think your recitation of the polls there kind of mixes up a couple of things. There's popular vote polls, and then there's electoral college, which goes state by state.
01:16:37 Speaker_01
If you look at pretty much now all the main pollsters, you look at Tony Fabrizio, you look at RealClearPolitics, they're now showing
01:16:45 Speaker_01
that Trump is winning the electoral college right now, he is up in almost every swing state, including, I think, Michigan, which is pretty surprising. Clearly, there's been a huge swing towards Trump over the last week or two.
01:16:59 Speaker_01
And look, there's still 25 days to go. So anything can happen. I don't want to overstate this. But yeah, this is a good example, right here, showing that I think colleges is 296 to 242. What is Fabricio?
01:17:11 Speaker_01
He's just a Republican pollster, but his accuracy is pretty high.
01:17:14 Speaker_05
I've never heard of Fabricio.
01:17:16 Speaker_01
Well, another guy who I think is more neutral is Mark Halperin, who is a pundit who has been very accurate this election cycle. Remember, he's the one who broke the scoop that Biden would be replaced by Harris. And he even said exactly what happened.
01:17:32 Speaker_01
And he predicted it down to the day. He was exactly right about that. And if you follow his account, he is now saying that both
01:17:41 Speaker_01
Republican and Democrat insiders that he talks to are both saying the same thing, which is their internals are now showing Trump ahead in every swing state or almost every swing state. And things seem to be breaking Trump's way right now.
01:17:55 Speaker_01
Again, there's 25 days left. But if you're wondering why is Harris all of a sudden doing interviews, it's because their internals started showing that she was in trouble. So they decide to get her out more.
01:18:07 Speaker_05
Or is it the other way? Is it that her Howard Stern interviews or whatever are causing her to lose votes?
01:18:12 Speaker_01
Well, yeah, exactly. Which one is it, do you think?
01:18:15 Speaker_05
Because I don't know when, I don't have the dates of all these polls versus that.
01:18:18 Speaker_01
No, I think it's what I predicted a couple of months ago. It's the doom loop. So what I said two months ago is that if Harris gets behind, she's going to have to abandon this sort of basement strategy of not doing interviews.
01:18:29 Speaker_01
She's going to have to start doing interviews. The problem is she's not good at interviews. And if she does more interviews, she's going to fall further behind in the polls. and it could cause a doom loop. So that's where we appear to be right now.
01:18:39 Speaker_01
I said that on August 30.
01:18:41 Speaker_03
Okay, to Matthew, that's, I think that Donald Trump has basically stuck to his strategy, which is he is a generational retail politician. I just heard parts of what he did with Andrew Schultz, another great sort of, you know, podcast.
01:19:02 Speaker_03
I think David's right that the editing and the massaging of the Kamala Harris talking points are galvanizing the people that have already decided and turning off the people that have already decided to vote for Trump.
01:19:16 Speaker_03
And she's losing the folks in the middle. And so this is what's causing her to have to be out there. And, and she's going to have to deliver a very crisp message.
01:19:27 Speaker_03
And I, and I think that right now, it's been a little bit lacking, which is why you're seeing the polls, at least the electoral college, which is really what matters at this point, turn Trump
01:19:39 Speaker_03
So she's going to have a bit of an uphill fight between here and November. The other thing I'll say is that if you've seen what's happening in the appellate court, it's not clear whether the Trump case is going to get overturned before the election.
01:19:53 Speaker_03
But if that does, that could be very meaningful momentum for him.
01:19:59 Speaker_03
And then I think the third thing is that we should now buckle in because if the last two elections are any guide, there are going to be a bunch of spanners in the works between now and November. What did you say?
01:20:12 Speaker_05
Spanners?
01:20:13 Speaker_03
Spanners in the works. Yeah.
01:20:15 Speaker_05
What does it mean? What do you call it wrench in the system? You mean like an October surprise? You mean like some crazy turn of events? Okay. Freeberg, any thoughts here? Would you like to Rorschach test this and see what you want in the numbers?
01:20:27 Speaker_05
Or do you have some objective thoughts here? What what's your, what's your take?
01:20:32 Speaker_05
You know, there's a polling data, or Yeah, where we're at in the election, you're pretty open ended here, you can look at the, you can make a note on overall what you see between the betting markets and the polls and that disparity, you could just talk generally about where you think we are, you could talk about Kamala on Howard Stern and doing a bunch of interviews with friendlies.
01:20:54 Speaker_05
Where are you at right now?
01:20:55 Speaker_04
I didn't see her interviews. Okay. I saw some excerpts on Twitter.
01:20:59 Speaker_01
Oh, boy.
01:21:01 Speaker_04
Yeah.
01:21:01 Speaker_01
Let me just follow up on a point Chamath made. Chamath said that she had to be crisp. If you look at any of these interviews, they're the opposite of crisp.
01:21:08 Speaker_01
She's asked softball questions by like Stephen Colbert saying, why are you running for president? How are you different than Joe Biden? And she doesn't have good answers. She starts free associating.
01:21:19 Speaker_01
She gives these very long winded answers that don't go anywhere. She says she can't think of a single way she's different than Joe Biden when pushed on that. It's very strange.
01:21:28 Speaker_05
These are the most favorite shows. I wish you would do some challenging shows. I think she's got to do Joe Rogan, all in. And what would be another good podcast for Dutra? If she really wanted to, like, do the adversarial thing or something?
01:21:42 Speaker_05
adversarial, just come to all in. Come and have a conversation. Come and have a normal conversation here. Yeah.
01:21:48 Speaker_04
No, I'm just thinking like, it seems like Sacks, if she comes and has a conversation, you'll be respectful?
01:21:56 Speaker_01
Yeah. This whole idea that I didn't treat Cuban respectfully is nonsense. Just watch the tape. I don't even keep all that. I know, but somebody asserted that.
01:22:06 Speaker_05
No, I mean, the all if you look back on every single presidential related one we did here, they were all respectful. And they were all conversations. I think the Cuban one dipped because of both of you into a bit more of a debate.
01:22:19 Speaker_05
And it was a lot more crossover than he wanted that. That's what I agree back to him to come out.
01:22:26 Speaker_04
He likes to do his thing.
01:22:27 Speaker_05
Yeah, that's exactly what you look at all the other ones. I'm trying to think of a moment where it If you look at the other, Dean B. Phillips, Chris Christie, Vivek. Boring, gotta go. Love you guys.
01:22:38 Speaker_02
We're all interested. All right, we'll see you guys later.
01:22:40 Speaker_05
This has been another amazing episode of the All In podcast. Episode 199. Make sure you go to allin.com slash meetups. Make sure if you're starting a company, you go to founder.university.
01:22:51 Speaker_05
If you're an engineer, please go to, I'm doing whatever the fuck I please. David Sachs, make sure you go to. Super good. glue AI if you're an engineer, and if you like potatoes, go to a hollow calm and order your potatoes pre order a subscription.
01:23:06 Speaker_05
I mean, if we're doing it, it's awesome. Let's see everybody next time on the all in.
01:23:28 Speaker_00
Open source it to the fans and they've just gone crazy with it.
01:24:00 Speaker_02
We need to get