All-In with Chamath, Jason, Sacks & Friedberg - E66: $FB's major pullback, Rogan/Spotify mess, Xi/Putin meetup and understanding supply chain issues with Bestie Guestie Ryan Petersen (Flexport CEO)

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fact that sacks his greatest moment in life was beating Peter

TL in a multi game chess. You ever see that picture of? Yeah,

of him with his arms raised. I can’t believe he beat Pete. I

mean, tell us about that moment. Nick, show that picture of

sacks. I mean, listen, here’s what I say when I saw when I

saw that picture. I had a couple thoughts. Number one, I’ve seen

this picture somewhere else. And then number two is oh my god,

it was on NBC’s to catch a predator.

I mean, I have never seen sacks happier. I like the birth of his

children. Oh my god. This moment, I’ll tell you that was

the day of PayPal’s IPO. And so we did a party in the it was

like a keg party in the parking lot. That was the extent of the

celebration. And Peter did it off. He did a 10 game

simultaneous, which means he’s playing against 10 people at

the same time, and he goes board to board makes his move. And I

was the only one out of the 10 that beat him. And somebody I

guess on the left, I put money down, I put like 20 bucks down

or something on the game, which is a foolish thing to do against

Peter because he’s like a chess master. And and I somehow I won

and you can see I’ve got the money in my hands. Great stuff.

Look at the look on Peter Thiel’s face. It’s losing. Look

at the look on p I mean, he’s so angry. He and he but he sees

the joy in your face and he can’t process it. And look at

Max Max is to my right and roll up and they’re so pure joy.

Yeah. But this was a few seconds before Peter smashed all the

pieces off the board. And yeah, he flipped the board. He always

does that when he loses and his motto is when you call him a

sore loser. He says show me a good loser and I’ll show you a

loser. Wow, such a great line. But I just want to also comment

on the pleats on sax’s pants and how high that way

holster and the cell phone holster. Zoom in on the

cell phone holster. Is that a blackberry? It just keeps

giving. It’s a free iPhone, guys. This is like, I mean,

this is like late 90s fashion. The gift that keeps on giving.

I do have to say Roloff’s hair game. I mean, strong hair.

Roloff’s always had incredible hair. His hair is incredibly

great hair to this incredible thick. Yeah, it’s still thick

like that. Beautiful hair. Never noticed.

Rain Man, David Sacks.

Alright, everybody. Welcome to another episode of the All In

podcast. With us again today, the dictator Chamath

Palihapitiya, Rain Man, David Sacks, and the Sultan of

Science, formerly known as the Queen of Quinoa. He’s out of

that business. David Friedberg, we got a lot on the agenda.

However, one thing that we’ve had a hard time figuring out is

the state of the supply chain. And it’s confounding. It seems

like nobody knows what the hell they’re doing. But there’s one

guy who’s been on Twitter. And we happen to know him. He’s

been on my pod and Friedberg knows him. And his name is Ryan

Peterson. And he’s a bit of an expert on this. And we thought

we’d have a bestie guestie come on. We don’t do this too often.

Maybe it’s the third or fourth bestie guestie. And welcome to

the pod, Ryan Peterson from Flexport. What’s up, guys?

Thanks for having me on. What’s up, Ryan? Ryan, did you tell

Olivia you’re doing the show today? No, I didn’t tell her.

So, she’s gonna, she’s a huge fan. Oh, don’t tell her. Where

is she right now? Is she like not there? She was in the room

next door but I told her, leave me alone. I’m doing a podcast.

She knows I’m doing a podcast. She doesn’t know which one.

That’s awesome. Fantastic. She’s a super fan. She’s a very

big fan. She’s literally wearing the wet your beaks hoodie right

now. It’s awesome. Fantastic. By coincidence, she doesn’t know

I’m on the show. Fantastic. So, what you’re not gonna tell her,

right? She’s just gonna watch my next show and you’re gonna be

on it? We’ll listen to it. Yeah, we’ll probably listen to it

together tonight whenever it comes out. Ryan, what is the

state now? Should we be worried about the supply chain? Is it

getting better? Is it getting worse? What’s 2022 gonna look

like? Yeah, I mean, I think the supply chain means a lot of

things and it’ll depend what your industry is, what’s really

happening but it goes for everything from manufacturing

products, which means sourcing all the subcomponents like

semiconductors through logistics and final delivery all the way

to a customer store and where Flexport focuses on that is

sort of picking goods up from factories around the world and

delivering them into fulfillment centers all over the

world. So, kind of that global mile is what we sometimes call

it. There, you’re seeing real disruption and it starts really

with the pandemic shift in consumer behavior where people

started buying more goods because they couldn’t go to

restaurants and travel and things and so, a lot of spend

shifted onto goods and imports are up almost 20% imported

container volumes. So, that’s the start of it all and then

what we learned is our infrastructure is dilapidated

and unable to handle a 20% increase and by infrastructure,

I mean, the number of ships in the world, the capacity of

throughput of the ports, the number of trucks and

availability of trucks and chassis, which is the trailers

that haul containers around. We just didn’t have enough of

these things or the port capacity, you know, like, look

at American ports operate. This, I just learned the

statistic pretty recently and I keep saying it because it

appalls me. Our ports operate with a lower throughput and

productivity level than Mombasa, Kenya and you know, we

just do not have modern port infrastructure. Rotterdam’s

been fully automated for 20 years. So, if they want to run

24-7 and keep containers flowing through the port, they

can do that with self-driving trucks and everything. Is that

a technology issue or do you think that’s a regulatory

capture and union issue? Like a labor issue, like a labor. The

tech is there, you know, it’s existed for a long, long time.

It’s it’s really about labor getting together with

management, negotiating these things and allowing it to

happen and the the way that our our ports are run is it’s

pretty crazy when you look at it. They treat labor as a

fungible commodity is in the the port terminal operators

will say, I need this many workers tomorrow and the union

provisions that many workers but there’s different people

every day doing operating complex, you know, heavy

machinery that you can’t like the number one thing in

business is like, what did we learn today and how are we

going to do better tomorrow every day with your team? But

if it’s a new team every day, like that’s not even possible.

So, I don’t know how you can drive a productivity

improvement when it’s different workers every single day of

the week, right? So, wait, they’re not full-time

employees. They’re like staffed by the hour. They’re union

workers. They’re paid by they have annual contracts. The

union decide who goes to work every day and who gets shifts.

Yeah. And where and so they’ll show up at different

terminals and there’s like fifteen different terminals.

So, they just kind of move around do different jobs.

Essentially, what we saw it on the waterfront. Yeah. Where

like the union decides you get to work today. These other

people didn’t whatever. It’s like literally like that movie.

Yeah. Yeah. It’s literally like that. Even going further back

in supply chains to manufacturing centers. How much

are you hearing about and seeing kind of labor shortages

because people are out for COVID and hey, someone’s sick.

They got to take 10 days off. And when 10% of the employees

get sick and they lose 10 days of work, the facility sees a

decline in productivity to 70-80% of normal. And then all

of the output of that facility goes way down. Are you hearing

about more of that stuff happening, particularly during

this Omicron wave, where the real effect of that hasn’t

really hit the supply chain system yet. And we’re still

kind of seeing a buildup of demand and we haven’t really

kind of hit the problems. So, for the last 18 months, China

had this total zero tolerance policy and was very successful

in keeping COVID out of their country. And so, manufacturing

just kept running as if not no problem in China, which is the

majority of this manufacturing. With Omicron, you’re starting

to see that it is still taking hold in a zero tolerance policy.

We haven’t yet seen major shutdowns and waves of

shutdowns, but a little bit. You’re seeing that here and

there. The zero tolerance policy has shown up, for example, at

least twice where one port worker in a Chinese port got

COVID and they shut the whole port down for like three weeks.

Yeah, that’s crazy.

Which is really extreme. I mean, US workers have been getting

COVID nonstop and the ports keep operating, even though we

have lower levels of productivity, but they’ll shut

the whole port down. That happened both at Yantian, which

is the largest port in China, or second largest, and Ningbo,

which is the third largest. So, it’s been very, very

disruptive. It’s also happened at the airports over there.

So, that’s something I’ll definitely keep an eye on here

over the next couple of months, or even next several weeks.

Are we still having this like, we’re ordering too many goods

and we’re backed up? Or is it that we’re backed up for six

months just trying to fulfill all those pandemic orders?

Like, what’s the state of the backlog today, if you could

describe it?

So, volumes are high, but they’re sort of flat. They’re

year over year, they’re flat now. They’re much higher than

pre-pandemic, but they’re pretty much flat year over year.

And that’s what has me so worried here, is that you have

increasing delays, even though the input’s the same. And we

have a complex system where the same amount of input’s coming

in, but the delay’s getting longer and longer. That’s a very

worrisome sign. Like, if you’re ever building a technology

system, you’re building this system and you’re sending the

same amount of bits in and performing the job is taking

longer and longer. That would be a very alarming sign that

you’re going to want to send some of your best engineers in

here to debug the thing.

But I think we’re seeing that because a lot of companies,

people don’t realize when they buy capital equipment, like

machines that are either sold to end users or machines that are

used in their own production systems, capital equipment is

typically assembled last minute. It’s not like there are

companies that own huge pieces of equipment, and then they

ship them and they just get plugged in and turned on.

There’s usually components associated with them. And in

businesses I’ve been involved in over the last couple of

years, we’ve got a lot of lab businesses and hardware

businesses. And just getting capital equipment has been like

delays like we’ve never seen. It’s like a year to a year and

a half for something that used to take four to six weeks to

arrive, because the company that makes that equipment is

having delays with each of their component suppliers.

And then all of this stuff backs up into the system. And

it plays out where the end user is now stuck waiting a year,

year and a half, and the business doesn’t make progress.

And a lot of hardware companies in Silicon Valley right now are

facing these significant shortages, where they can’t get

the equipment they need to ship product to their customers.

And they’re sitting around burning money every month. And

so the when the result will actually show up down the road,

when all of a sudden they miss revenue three, four quarters

down the road. And that’s why I’ve been saying for, you know,

a couple shows now, that the biggest thing I’m concerned

about is when the revenue shortfall start to hit the

companies that are dependent on these supply chains, but you

don’t actually see the revenue shortfall for a couple of

quarters after the supply chain problems hit them. And just

this quarter with the quarterly earnings, we’re now seeing that

the company yesterday that reported called ingredient on

their big food ingredients company, and they just reported

how supply chain problems have now backed up to effect and the

stock was down like 10 11% yesterday. And this is like a

very stable, very mature, third largest producer of starch in

the United States, and their business got totally hammered,

but it took a while before that hit them. And so you know, it

feels to me, Ryan, I mean, correct me if I’m wrong, but

like, a lot of the the business level and market level risk

isn’t going to show up for a while after the supply chain

problems really persist within their organization.

This is the thing that has me most concerned is what’s

happened is it’s now taking 115 days on average across our

customer base, from when the factory says, hey, these goods

are ready, come pick them up to when they finally get delivered

to a warehouse in the United States, 115 days, before the

pandemic, that was 50. And 50 even felt high, like the ship is

only taking 15 days, like what the heck is going on? A lot of

inefficiency, a lot of customs processing, hard to find a

truck, etc. Even in normal times, when you go to 115, all

of a sudden, these companies are so much less agile, like

because you’ve placed the orders and you’re expecting

forecasting demand is so hard. And now you’re forecasting

demand for twice as long of a time period, you’ve already

placed all that inventory, if your demand goes down, guess

what, you’ve already ordered the goods. So I’m really worried

that we’re going to find out in six months or in some time

period in the future here, that people have ordered way too

many goods that these companies expected demand to stay high

and keep booming. At some point, consumers start going to

restaurants and start traveling a lot more, you get pre COVID

consumption patterns. And all these companies get stuck with

way too much inventory that they paid way too much to ship

and get delivered and they can’t sell it. And so I’d be

very worried for like, middle market kind of retail,

directed consumer econ, these types of businesses that aren’t

very sophisticated in demand planning and end up with way

too much inventory. I think that there’s been this weird

dispersion, actually. And I think that like the supply

chain issues are not broadly distributed. So if you bear with

me for a second, if you watch the earnings reports, I don’t

know how closely you watch them Ryan this past couple weeks,

but like, Apple and Tesla basically said, it’s kind of

reasonably well managed, particularly on the chip side.

And we see the whole thing using q4 q1 of next year. Amazon

last night basically said, Yeah, there’s some, you know,

toughness in the system, but we think it’s sort of like, you

know, reasonably achievable. And they’re past it. And so it

seems like the bigger companies who have influence, we’re able

to manage through it, these smaller companies, to your

point, who really do rely on many actors in the supply chain

have been really thrown left and right, they probably don’t

know where demand really is. So is that sort of the more

nuanced actual the way that it’s running out? Yeah. And it’s

sort of, it’s very interesting to see this flip. So pre

pandemic, the biggest companies paid the least for freight,

because they buy the most freight. So they negotiate good

rates. Now they’re paying the most. And the biggest companies

for a reason, they have the best businesses, they either have

the best margins, the best, you know, they just built something

that people want at scale to be huge. Well, when times are

tough, and you need to spend extra to prioritize your freight

to get loaded, to sign a contract and make sure that

these ship owners and airlines honor their commitments and

serve up step up. It’s the big companies that can afford it.

And so they’re not paying extra for freight. But they’re getting

around these problems. And freight is a really interesting

market, because it’s pretty inelastic, like you’re either

going to ship the thing or you’re not the whatever the

price is, you probably still shipping it. And so like, you

haven’t ever looked at an apple at this level. But I’m sure that

if you did, you’d see that it’s a percent they spend on freight

is just negligible. So if they doubled it, it wouldn’t matter.

But to Chamath’s point, it seems like and I think we’re seeing

this a lot, the bigger companies can actually afford to integrate

their supply chains, whereas before it didn’t make sense to

vertically integrate. Like I think Walmart announced that

they’ve spent like 11 or $12 billion kind of rebuilding their

supply chain themselves. Apple obviously has captive

facilities all the way down to the fab, where they’re driving

the whole supply chain from fab to components. All these Foxconn

facilities that are operated for them are captive facilities.

But Tesla, obviously, has a very deeply integrated supply chain

team, whereas GM probably relied on subs who relied on subs who

relied on subs. And that’s why GM delivered like no electric

cars, but Tesla was able to keep volume up. The guys that are

winning are the ones that are integrating supply chains.

And do you think that that kind of becomes a persistent

solution here where bigger companies, their competitive

advantage becomes, hey, we’re going to own our whole supply

chain all the way through, we’re going to own more of the

infrastructure all the way through, like Amazon’s done with

delivery vans, and ultimately be able to kind of, you know, have

a true competitive advantage because of this disruption

that’s going on right now?

Yeah, potentially. I mean, I think my vision for Flexport is

that we become that layer and we allow small businesses, medium

sized businesses to get access to world class logistic services

and get them, you know, sort of almost be a union that can

represent them at the table against these bigger guys. I

think it’s very interesting to see a company’s like the biggest

companies have gone out and chartered their own ships.


Wild experiment to watch for my sitting here with popcorn.

You’re bringing up a really important effect of all of this,

which is what happens now in six or nine months to your point,

when the consumption of hard physical assets turns towards

the consumption of services, which it typically does, right?

If you revert back to the mean here, you know, people aren’t

going to be buying as many Pelotons and all of that stuff

because they bought them all, right? They bought all the

physical goods they need. And to your point, these companies have

over ordered all this inventory. Actually, Peloton is a perfect

example, because they basically shut down their entire supply

chain last at the end of this past quarter and essentially

said, our inventory turns will be more than enough to meet,

you know, existing demand for the foreseeable future.

That’s an enormous capital problem that these companies now

all of a sudden will face, right? So like, the next step

beyond all of the supply chain issues could be, and I think

Saks has been talking about this a lot, like a pretty bad

recession, if these companies have all this inventory, and

they don’t know how to get working capital.

Yeah, it’d be really ugly. And the other factor is the price

has gone crazy. So the price of shipping a container, long run,

like I’ve been in this business and been a customer of this

business for 20 years, and you can just rule of thumb, it costs

you 2000 bucks to ship a container from China to the West

Coast. During 2016, that price collapsed. So you have these

booming bus cycles of an asset market. 2016, it was 550 bucks.

Last year was $20,000. So it’s up 10x over normal, it’s up 40x

over or more right over just a few years ago. And what that’s

done is create a real barrier to entry. Like for a DTC ecom

business, you used to be able to just go to China, find some

product, put your slap your label on it and go sell it on

Amazon, and you’re in business. And there’s like a huge number

of people doing this. Right now, you have to come up if you

want to ship 10 containers, it used to be you needed 20 grand.

Now you need 200 grand. That’s like, that’s a real barrier to

entry. So actually, I’ve talked to some companies in this space,

we’re really happy. Like if you have an established business,

you’re like, great. Now, it’s much harder for Joe Schmo to

show up in China and start competing with me. So I was

really surprised to hear that. I thought that was, I guess,

pretty sophisticated take.

What dollar point does air freight compete with containers

because when we start hearing about chips, I was always

wondering, and again, I’m no expert. But putting a bunch of

chips on a plane versus putting them in a container, given how

much those chips are valued by a Tesla, whoever’s putting them

into, you know, a car isn’t what was the break?

Certainly, but air freight price has just gone in line. And

it’s gone up five as well. And one thing to remember is that

50% of all the world’s air freight flies in the belly of

passenger planes, which should kind of horrify you if you’re

ever flying on a passenger plane from from East Asia, but

to the United States, there’s probably a whole bunch of stuff

down in that belly. And those are grounded. So the supply of

why are they grounded? Nobody’s flying to China right now.

Oh, I see. So now we’re seeing kind of the backlog play into

commodity cycles, right, Ryan. So we’re seeing like a lot of

these commodities because of these discontinuities in the

supply chains. Suddenly, commodity prices are spiking

all over the place. And I mean, do we think that that settles

down? Or do you think it kind of continues for, you know, the

foreseeable future until this all works its way out?

Yeah, I’m not the right person to ask about commodity prices.

Maybe Chamath has a view on that. But I, you know, on the

logistics market, I don’t see it sorting itself out for the

next year, the next couple of years.

In fact, you’ve you’ve warned that it might get worse, right?

You’ve I mean, I saw in Bloomberg, you said that there

could be a union strike in maybe October. What are the

prospects for that? And what happens if that takes place?

So it’s on July 1st. The West Coast Union, it’s called the

ILWU. That union extends from the southern border. So from

Mexico all the way to Alaska, and it includes Canada. So the

whole West Coast of the United States is run by this one union

at the ports. And their contract expires on July 1st. And in

years past, so the last time this happened was in 2015. This

is a contract that was signed then and extended at some point.

But in 2015, I had a three month period where nobody could

import anything on the West Coast. And some major companies

missed Christmas that year. So that’s July 1st. Typically,

these, there’s kind of slowdowns in the months leading up to

that. And we’ve already had slowdowns for a couple of years

with hundreds of ships are now waiting offshore. So yeah, I

can’t make a prediction.

This is a slowdown, basically a negotiating tactic by the


In the past, it has been I’m not convinced that that’s what

we’ve seen over the last year versus, you know, they are

there are legitimate problems, staffing, people getting COVID,


So is there a role for presidential leadership in

sorting out these union issues, or just sorting out the issues

with the port more generally, or avoiding a strike in July?

I mean, it seems to me that if Biden wants to get reelected,

this inflation supply chain issues are pretty top of mind

and in the news and are going to be on people’s, you know, you

want to be seen doing things. And I do think there are things

that can be done. So yeah, there’s a role.

And as far as union negotiations, Biden’s probably

pretty as equipped as any president’s ever been to

negotiate with the union and get them to play nice and not

screw up his reelection with a with a strike. He’s known as a

union friendly president, and go sit down and do a deal with

them where Trump would probably never be able to do a deal with

the union because they know that they’re sort of natural

adversaries. So there’s something there.

There’s a lot more to be done. And I, you know, I got some

arguments with people that are like, you know, that’s not in

the President’s power to do such and such. I’m like, yeah,

but he’s the President of the United States pick up the phone

like you can do things that aren’t legally in your power

just by asking for favors. And other people do them. And

negotiating when unions a good idea, a good example.

Convincing to change the zoning laws in LA, so you can stack

containers higher would be another Yeah, that’s not the

president of the United States jurisdiction. But if he calls

the mayor of LA or the city council,

can you explain that? So what does that mean?

So in Southern California, you can’t stack a container more

than two high in a truck yard, by law. Well, we got no place to

put these containers.

But is that is that a danger issue? Or is that like a site

issue site lines? Like what?

I see a little bit of us. I think there’s some safety

issues, although they’re stacked six high all over the world. So

that’s not that legitimate to my in my view.

And in California, it’s what four or something

to too high.

It’s too hot. Oh, wow.

At the truck yards at the port, you see them stacked up six

high, but in the truck yards to is the limit. Okay. And so it’s

a it’s also an eyesore, especially in California,

containers are a sign of free enterprise. And it’s just the

people in California can’t stand to see them. Right? They

really just object to the idea of capitalism in their

neighborhoods like that.

But there could be like some kind of temporary waiver that we

do just to get through all of this backlog, which is to say,

okay, let’s just ease all of these small little things that

slow the process down just to get all these ships, you know,

unloaded, right? Yeah, off into the world where they need to be.

And then we could revert back to what we are after things, you

know, kind of normalize. Yeah, so we did that. So like, I wrote

about this, this zoning law. And what’s what’s happening then

is if you can’t stack the container three high, there’s

nowhere to put that third container. So you leave it on

the trailer. And now you have one less trailer in rotation

servicing the port to unload. And that’s that’s true across

Southern California right now, there are 1000s of trailers

with containers on them, because they’re not allowed to stack

them, they’ll get fined if they do. So I tweeted about this. And

the the city of Long Beach actually responded. I tweeted

about it at 6am. By 3pm, the city of Long Beach had changed

the zoning law to allow stacking up to five high, I believe. I’m

told the fastest response by any government to citizen action,

like ever.

That’s incredible. You must feel great about that.

It was great. But unfortunately, only Long Beach did that LA

never followed through. Other and there’s not that many

truckyards in Long Beach. A lot of them are in Los Angeles,

Compton, Rancho Dominguez, etc. So I saw this kind of thing.

Like, yeah, Joe Biden could call these mayors and say, hey,

let’s work on this, right? Yeah, but let’s face it. He’s

super union Joe, right? Like, I mean, he wouldn’t even say the

word Tesla over the number, Jason, isn’t that more pro union

because won’t these won’t folks be working more and getting

paid more. And I don’t think there’s a reluctance to pay.

Right? Because clearly, like, you’re gonna have to put some

money into the system. And where the money comes from, we can

figure that out later. But the point is that there’s a there

should be a desire to actually get the people on the ground to

be working. There wasn’t even a third shift shift, Ryan, right?

Like that was another thing you were working on on top of the

stacking of these containers to get, you know, more of these,

you know, to alleviate the problem. You were also talking

about they don’t even have a third shift some nights, but

they seem to have added a third shift. Did that become

permanent or not?

No, they do have a third shift, but nobody’s showing up is the

problem. So truck drivers don’t work in the middle of the night

warehouses aren’t open in the middle of the night.

But is that a compensation issue? Right? Like if we paid

more folks show up, like, is that just a supply demand issue

that never underestimate incentives. There’s there’s just

a lot of factors and a lot of a lot of it is it’s so easy to

point fingers at somebody else and blame someone in the chain,

right supply chain, you’ve got all these different people. And

it’s everybody has their own opinion. You know, we at one

point, I wanted to hear what the union’s opinion was, what are

they saying? Because everyone else is calling them lazy, and

not working hard, what’s really happening. So we I said to taco

truck down to the port a couple of months ago, just because we

figured we’re getting free tacos, they’ll talk to us. And

that’s a game changer right there. Yeah, that really works.

Well, we got, they loved it. These are the only business ever

to send tacos to the port. And then they told us all about what

their viewpoint was, they viewed that the truckers are screwing

up that 50% of all the appointments, where a truck is

supposed to come and pick up a container, they’re missing their

appointments, right? And because and then and then so

that’s what sent me investigating, wait, why are

they missing the appointments? That’s when I learned, oh, they

don’t have any trailers, these chassis, because they’re stuck

under containers and can’t be unlocked. So a lot of it is

going here, it’s the supply chains kind of like this, that

metaphorical elephant in the dark room, right? And everybody

sees their own aspect of it. But you got to synthesize all those

perspectives and kind of take a systems view and see if you can

get some real understanding. I’m not convinced I have it yet. By

the way, I think it is more complex. And I’m really beware

simple narratives. If someone, even including me says, Oh, this

is exactly what’s happening. Like, there’s really a lot of

complexity in all of this, right?

And how much how much of this is sort of the the, the extreme

end of the other spectrum, which is basically the US

exceptionalism view that says, Okay, we just need to really

in house more of the stuff that we need so that we don’t

actually have to rely on some of these arcane methods of just

transporting goods for, you know, from point A to point B,

in my view, that would be a shame. If we have the best

companies in the world, who need to be able to source raw

materials, components, finished goods, anywhere on planet Earth,

and we should have a modern infrastructure that makes that

possible instead of being like, Oh, we can’t trade with the rest

of the world. So we’re going to become like, self sufficient,

you know, we might as well go back to everybody being a farmer

on subsistence farmer on our own land. Like, I think we should

have global infrastructure that’s really great and

seamless and makes it really easy. But you’re right, that

might be an end result is people can’t rely on these

supply chains and start saying, Hey, let’s manufacture at home

or let’s manufacture in Latin America. Let’s manufacture

closer to home. That to my perspective, that would be a


Well, I think the I think the prod the pendulum always starts

from one extreme to the other. And I think the the middle

ground is probably that you need to have some heterogeneity,

right? You have to have some amount of it that is not just

singularly reliant on China, maybe it’s maybe it’s the

central or Latin America, right? Some that’s domestic,

but that domestic production probably has to be subsidized

by something because we’re never going to be able to run as

efficiently and as cost effectively as, you know,

cheaper international labor, you know, unless we invent

something really, you know, incredible. So the balance is

probably in the middle. But it’s going to take us a long

time to kind of get there. I think I saw Governor Abbott was

pitching people on, hey, just send your containers to Texas

were cheaper and more central in the country. Is that true? Is

that a solution takes much longer cost much more. When if

the union goes on strike on the west coast, it’ll be one of

your only options bringing stuff through the canal. What

you’ll very quickly see is that the canal is going to back up.

Can’t move that many more ships through the canal that are

currently going to the west coast. So a lot and you’ve seen

that a lot where the bottleneck just moves for a while. Last

summer, the for example, the trains that were going into

Chicago, they were really having a hard time staffing the

railroads out there. And it was taking them a long time to

unload containers at the at the port at the terminals inland in

Chicago. And drivers, a lot of the truck drivers are owner

operators. So these are entrepreneurs are on their own

truck, work for themselves. And they were able pre pandemic to

do three loads per day at the Chicago railheads. Go drop it

off, come back at another one three times. With the delays

and the traffic jams that resulted, they were only able

to do one a day. And so you opt out, because you can go drive

for UPS or FedEx or take your truck and do something else. So

we had this huge reduction in drivers. And that’s the kind of

a feedback loop that we should all be really mindful of here,

where a problem begets more problems, and you get these

positive feedback loops in the system, that really vicious

cycles. And so you know, bottlenecks move, and you’ll see

as soon as they everybody started to ship to Houston,

guess what, Houston port won’t be able to handle the volumes

either. It’s not like it’s magically better just because

it’s a republican state or something.

Do we need more ports? Or do we just need to run them more

efficiently? And then who determines who runs the port?

Because I know that they I’ve seen some tweets of yours where

they license the government, I guess own supports, but they

license it to people to have the franchise there. More ports,

better run ports. And then what’s the business model of


I’d say better run ports is the answer. I don’t think we need

more ports. You can’t really create ports out of thin air

there’s only a handful of geographic locations that

actually make sense for a port. And we have, we have great

geography, like the San Francisco Bay, like this is

probably the best natural harbor in the world, or one of

them. And the Oakland port is perfectly fine. It’s who owns

it is the city of Oakland, or the city of Long Beach, the

city of LA. So the local cities own the ports in the United

States. That is a difference between United States and

Europe, for example, where they’re sort of national

strategic assets, they’re still government owned, but it can be

operated as a sort of public good for everybody, instead of

what are the odds, given what’s going on in Oakland, that that’s

the big priority of the mayor of Oakland to like, run a better

port, like she’s got a lot of other things on her, on her

list. And so that’s one problem with our system. And then

second, they do rent it. So the government owns it and then

rents it to a private company that operates it. And then but

those as a condition of renting the port, you must agree to

hire the ILWU. You can’t run a non union port in the United

States. Should the government buy the federal government by

the port from Oakland by the port from Long Beach, offer

them some, you know, trillion dollars or billions of dollars

and buy it out from them. It’s not a terrible idea. I mean, as

long as you’re forcing everyone to use union labor, it’s not

really like a private sector endeavors. It’s like you can’t,

especially with the way that the unions run, so you can’t do

that much. But like, here’s an example where technology could

flex what already made this technology, we could 10x the

throughput of one of these ports overnight, which is today, a

truck driver shows up looking for a specific container. He’s

like, I got this container number. So they have to make an

appointment at that hour. And as I said, they’re missing 50% of

their appointments. Well, on the back end inside the port, they

got to go find that container in this in the needle in the hay

stack and make sure it’s at the front during that one hour when

the guy shows up for it. And you could we already have this

tech to make it what we call a free flow stack, where you just

have this the truck pulls up and you give them the first the

first container off the line. And then the mobile app tells

them where to take it. And he doesn’t have to come for a

specific container. And if you did that, you just be every 30

seconds coming out of here, instead of every 1015 minutes,

you’d easily 10x the throughput. And this is we already have this

tech. So it’s a matter of implementation, deployment, and

how do you get around a lot of people that don’t really want to

see better running ports. And it’s pretty sad to sit where I

sit, they don’t benefit from better running ports, although

that’s the good point. Although at the back end, they they

suffer from higher prices and inefficiency and not getting the

things they want on time.

Well, if you listen to Elon talk about unions, and why Tesla

is not a union shop, it’s got nothing to do with wages, you

know, he said, we’ll pay you the union rate or better. And it’s

not about mistreatment, because he said, Listen, if someone

mistreats you, we’re gonna have a no assholes rule, and we’ll

get rid of them. The issue is inflexibility, right? He wants

to drive continuous process improvement at Tesla. And he

can’t do that with a union shop, because every change has to be

negotiated. And then if there is a worker who’s not living up to

the performance bar, you can’t get rid of them. And they can’t

repurpose workers and have them work a different line. So that’s

why Elon has always resisted being a union shop, not the

wages, not mistreatment, purely inflexibility. And it seems like

that’s what you’re seeing in the ports as well is we can’t drive

changes and improvements, because everything’s so highly

contractually negotiated. That’s my comment, Ryan, what do you

think about that?

No, I mean, it’s, it’s, it’s worth studying a little history

here is that, like, you know, we went through the container

revolution in the 60s and 70s, and the union agreed to it. And

they that dramatically transformed the waterfront of

these guys, like, you see the photographs from that era, they

would put it on their back, like burlap sacks full of stuff, like

hauling it on and off these, these ships, and the kind of

load them by hand, it was a real art. And it was a massive

employment driver. And by the way, we’ve still barely

recovered from this, like the West Side Highway in New York is

finally like a nice park. But it sat there for 50 years, like

dilapidated piers and ugly ass buildings. And some of those

are still there. San Francisco waterfront still mostly like

that south of the Bay Bridge, it’s still like these old

dilapidated buildings. So it’s kind of funny to see how long it

takes like that infrastructure to change. But there was, and I

don’t know, I’m not like the world’s expert on this history.

But somehow they convinced the union to adopt containerization,

which is about, it’s far more radical than anything we would

be proposing now, in how you would change their workflow, or

change their work. Like that was complete change, where it’s

really these giant automated, or these giant cranes that replace

the worker.

Couldn’t Biden deploy his commerce secretary? Or I mean,

isn’t there some cabinet official he could deputize to

say, go solve this problem, go bring the parties together?

Yeah. And I think I suspect that’ll happen over the coming

months, because July 1, is pretty bad timing for a

midterm election if they were to go on strike. And I think

he’s got a lot of incentive to make sure that he does have the

incentive. It just seems like I mean, you’ve been tweeting about

this for months, that nobody’s paying attention in the

administration. I mean, we’ve all been reading your tweet

storm saying like someone in Washington really should be

paying attention to these ideas over two administrations now,

right, right. It’s both administrations have been out to

lunch on this.

The union is a really big issue that’s going to come up this

summer. There’s in my view, an even bigger issue that’s gotten

even less attention, which is on January 1 of next year,

January 1 2023, which is tomorrow in shipping terms, that

all the ships in the world will have to reduce their carbon

emissions by 13%. And these are internal combustion engine.

There’s not right, right, right. Hold on a second. Wait, just

explain what that means. But who’s mandating that? And how is

that enforceable? And why is that have to?

It’s the International Maritime Organization. It’s part of the

United Nations. And it’s the group that is overseeing global

ocean freight. It’s the regulatory body for ocean freight

in the world. And it’s the United Nations group. So any

member state of the United Nations must follow the rules of

the IMO. And they’ve all said they will. And so the IMO has

said, all existing ships in the world must reduce their carbon

emissions by 13%. And again, it’s an internal combustion

engine, we don’t know how to make it 13% more carbon

efficient, or we would have done that already.

Can you actually buy indirect offsets? Like, can you go and

buy some Amazonian rainforest credits and offset the

No, you can’t offset it. And it’s not about the fleet either.

So some of these fleets have LNG, liquid natural gas. So the

fleet might be more efficient, but it’s no it’s down to the

individual ship. And it has to. So there is one way to reduce

the emissions of a ship. And that’s to go slower. And if you

go 30% slower, then you can achieve a 13% reduction in

reduction in carbon emissions. Well, if you look at it on a per

container basis, by the way, it’s the same amount of carbon

emitted because the ship is still carrying the same number

of containers just go slower. But it will reduce the supply of

shipping capacity and slow everything down another 30%.

That that takes place January 1 2023. It’s getting very little

attention. But to my view, it’s going to be massively disrupted

if we slow everything down, reduce the capacity of the

network that much further prices are going to go to the moon.

And it’s like really asinine law because it doesn’t actually

achieve any carbon reduction. The fuel type correct me if I’m

wrong. Is this like MGO MDO? Like it’s dirtier fuel? Is that

correct? So the same group IMO actually passed a new logic

January 1 of 2020. And it got totally it was supposed to be a

huge deal in our industry and then COVID hit and we all kind

of ignored it. But that eliminated the worst kinds of

fuel. sulfur used to be you could have this bunker fuel that

was up to 3% sulfur, she led to crazy amounts of sulfuric acid,

which is like apparently like 15 times worse than carbon as a

greenhouse gas. And so that was eliminated. And now it’s still

kind of ugly bunker fuel, but it’s not like it used to be the

reputation is probably still carried over from from pre 2020.

If you could wave your magic wand as we wrap up here and

change two or three things that to you seem like layups, and I

think you kind of hinted at them in order, what would be the

changes just based on your intuition and your knowledge of

the supply chain? What two or three things are the layups we

got to do right now?

I think first off, it’s got to start with some with metrics

like what, if you care about something, measure it, the

metric that the government’s been using for ocean freight

delays has been how many ships are waiting offshore at the port

of Long Beach. And this is like one of the most mischievous, I

don’t know if it was just like outright fraud or incompetence.

But one of the worst things I’ve seen from government in terms

of PR is they they pass this rule that the ships have to

wait 150 miles offshore, so that the carbon so that the

pollution wouldn’t hit LA like reasonable good. But then they

kept using the same metric for how many ships are waiting right

outside the port. And it went way down and they started

celebrating that success. So like, let’s actually use the

right metric, which is how long is it taking cargo to transport

you can’t just hide the ships and celebrate that there’s no

ships there. If we get the government,

you’re saying that the government pushed the ships

beyond the measurement window and then said they don’t exist.

Yes, basically, the transportation secretary and

the port of LA director got up there. This government

that’s like when I went to an XL sweater to hide my gut. And I

was like, I’m thin. Yeah, look, better to look at the scale.

So if we at least get them focused on the right metric,

which I think we have the best metric right now, we call it the

flexport ocean timeliness indicator. It’s how long is it

taking the cargo to from when the factory says it’s ready to

when it can be delivered. Now, any solution that we create,

we have a metric, we know, okay, there’s a KPI here door

door. Yeah, door to door.

You mentioned the transportation secretary was part of that press

conference where they’re taking credit for changing the metric.

So I assume that’s Buddha judge who’s in charge of dispersing

the $1.2 trillion infrastructure bill. Is there any money in the

infrastructure bill to solve this problem?

There’s, there’s $17 billion allocated to ports. I went and

read it and I couldn’t find any money that was going to be

spent on building ports. It was like, study, here’s a crazy

thing. We just had this trillion dollar infrastructure bill

that’s supposed to modernize and update the infrastructure of

the country. And it’s doing nothing to solve the most

pressing supply chain issue in the country, which the bottleneck

at the ports, which is driving inflation, which is causing

interest rate increases and wrecking the economy.

There’s a term in Washington, which is called the Christmas

tree bill. And the infrastructure bill is an example

of that, which is this is not a directed shot on goal. What this

is, is a random, you know, tree that you go and hang little

things on top of and eventually the whole thing is covered. So

it kind of looks beautiful from afar. But when you get really

close to it, it’s a little bit chaotic and you don’t understand

what’s going on. And so to your point, the fact that Ryan can

say there’s $17 billion allocated to something like

ports, but it’s unclear to him who’s an expert in the space

where that money goes and how it’s spent gives us zero chance

of figuring this out.

Yeah. I mean, it was like, it’s like things like, oh, each state

must create our supply chain readiness report about is like,

what, what are you talking about? Like, Singapore put $20

billion to build a badass automated port. Like, that’s

like a reasonable thing to do. Like, let’s spend $20 billion

to make the most automated, amazing port in the world.

There’ll be a good use of government money, but like to

then create studies and consultants, I don’t know that

any of it’s going to hit the ground and shovel.

Right. So you’re saying you’re saying that $17 billion that

goes to, you know, studies and consultants could actually get

redirected and we could pick a port where there’s an amenable

city and actually completely modernize it to set the example

of what modern shipping should look like in the United States

that at a minimum matches what’s happening in the rest of

the world.

Yeah, I think that’d be pretty awesome. And doesn’t seem to me

like science fiction, like when government wants to build a

port, who’s going to stop the government?

That seems too, too logical and too obvious, right?

Well, I could have something else compete for who gets to get

that $20 billion to be the modernized port, like,

Well, if you put it to your point, Jason, put the put the

mayors in competition and see which mayor wants us in their

backyard. Does Greg Abbott want it? Does Long Beach want it?

Does Oakland want it? Who wants to fight to be the most modern

port that should be?

DeSantis wants it. I’ll tell you that.

DeSantis, Miami. Yeah, exactly.

I’m sure DeSantis and Greg Abbott want it. I don’t know

that California’s two incredible ports want it. And those are

the two that are closest to China, by the way, spoiler


You guys remember when Google Fiber ran that competition and

they got, like, the mayor of Pittsburgh to swim in, like, a

frozen lake. And it was awesome, right?

Like, government, yeah, please bring us stuff.

So, yeah, I think I don’t have a lot of faith. Even if that

came around, it would take five, six years, right? Even if it

was done right, you don’t get a port overnight.

There are some very simple solutions like this, changing

the zoning law, adopting technology to go with a free

flow out of the port, put some metrics in here, like, have

someone focus on this.

A key part of problem solving is make sure the problem doesn’t

get worse. So let’s assign someone to go work with the

union and the and the company terminal operators, make sure

that they don’t go on strike and make sure and then someone

needs to go look at this IMO, UN thing and figure out if the

United States is really going to go through with that because

it’s pretty crazy.

Well, listen, Ryan, you’ve been incredibly generous with your

time and knowledge and your leadership watching you as, you

know, a CEO and a leader go out there on a boat and go visit

and buy the frickin tacos and actually boots on the ground

figure this out. Like the country owes you a debt, the

world owes you a debt to really keep this, you know, problem

down to first principles and figure it out. And our

government should be taking notes and really the other

leaders who are importing whether it’s Apple or Tesla, you

know, it’d be great for all of them to be supporting you. I

don’t know if they’ve reached out, but maybe the you know, a

half dozen of you can then sit with this administration and the

next one and just tell them where to point the money cannon.

Well, it doesn’t seem like they know where to point it.

We have a lot of people in Washington that listen to this

pod, please. Yes. Just reach out to Ryan and just reach out

to Ryan and have lunch and just sit there and please just goes

for these. Let Ryan buy you a taco guys. Ryan, bring your

taco truck to Washington. One of the big common denominators

of both business and politics is that leaders have to focus on

the right problems. And when they’re not focused on the right

problems, like bad things happen. And, you know, we know

that inflation is a huge problem. The Fed now is raising

rates are projecting raising rates very quickly, which is

creating, it was created a huge market downturn, it’s a very

blunt instrument, it could cause a downturn or recession. So

that’s the big problem. And yet there are specific solutions and

fixes to the inflation problem by updating or modernizing the

ports that Ryan suggested, but who’s focusing on it. And now

they’d be more strategic, right? sacks, it’d be a more

strategic sniper shot, as opposed to this blunt

instrument, like, right, exactly. So, you know, and so

what have they been focusing in Washington on? Definitely not

this, you know, absolutely. And then I see Ryan posting

suggestions on Twitter, and then all these people come in,

they’re all like fatalistic. Oh, well, the President can’t do

anything. You know, the President can emergency war

time. If there was ever a time for presidential leadership,

this would be it. What I worry about is that if you’re the

union leader, and you know that you’ve got Biden in the White

House, who’s always going to take their side? Why wouldn’t

you make your demands more unreasonable? Yeah, they should

be asking for triple time to keep it open overnight. Why

wouldn’t they? Do you really if you’re the leader of that

union? Biden’s gonna break your strike? No way. No way.

Ask for quadruple time. Yeah, just make it painful. You

shouldn’t make the most of the crisis. egregious as possible.

I mean, this is your max leverage right now. Max

leverage. Never waste a crisis. Yeah, this is your time. All

right, man. Listen, right. Thanks a lot. Great. Thanks,

my pleasure. I’m a big fan of the show. So being a guest he

means a lot to me. So thanks. Yeah. And we’ll continue the

discussion perhaps at the all in summit in May. Exactly. See

you in Miami. Facebook stock has dropped over 25% after

reporting negative user growth for the first time and not only

$10 billion or maybe even $12 billion lost a year on their

AR VR headsets and project, but also a $10 billion decrease in

projected 2022 revenue thanks to Apple’s privacy features. I

guess we got to go to PayPal drop 25% to Yeah, we have to pay

what we’ll and then Snapchat had a whipsaw back and forth. But

Chamath when you see this, you call this with your spread

trade. Maybe you could walk us through what you saw, you know,

whatever it was three, four or five months ago. And then what

you’re seeing now and at this level with $250 billion wiped

off the market cap, what do you what do you think about the

future of this as a trade and as a company? Well, I think the

trade did what it was supposed to do, which is in a period of

a lot of volatility, I saw an opportunity to, you know, just

reduce my risk exposure. Look, I’m generally long, very risky

assets, right? I mean, all of us are in the business of building

companies that have huge volatility, because all of our

companies generate earnings very far in the future. And so,

you know, in November of last year, I was trying to figure

out what I could do to shield myself. And the reason I wanted

to shield myself was because I saw Elon and Jeff in part

selling, but also I saw that clearly, we were going to go

through a period where that high growth tech was going to

trade down. So I sold some of that high growth tech. But then

I also wanted to figure out a way where I could be less

exposed to some of that volatility by continuing to

hold what I had. And the best way that I figured out how to

do that was to do the spread trade. And so, you know, what I

saw at the time was that there is one business above all

others that I think is immune amongst big tech, from any sort

of real long term issues. And that’s Microsoft. And I think

David expressed the reason well, is that it’s an enterprise

business. Now, you know, politicians generally don’t

tend to care about enterprise businesses, they have enormous

longitudinal growth in front of them. And they’re able to do

things on the margins, specifically around M&A to keep

building their business with very little oversight. And we

saw this because they had the courage to do this Activision

deal. You know, just a few weeks ago, if you could imagine

again, no other company in big tech could even dare try to do a

$70 billion acquisition because of the scrutiny.

In this climate, it was a bold move. Yes. Yeah.

I think it’s not a bold move. I actually think it says the

obvious, which is Microsoft is beyond the level of regulatory

scrutiny that the rest of big tech actually has, because they

are consumer businesses. The second safest company is Google.

And the reason is that Google has the best of both worlds.

They’re both a platform because of Android. But then where they

are at risk of being an app, they have an incredible deal

with Apple that blunts that effect. And so when Apple talks

about all their push to privacy, you still have this very

specific relationship and Facebook called it out in their

earnings release, they said, we believe that Google has

preferential treatment relative to the rest of the internet in

that Apple deal because they pay Apple 15 or $20 billion a year.

And for people who don’t know, that’s for search, the default

search on your iPhone goes to Google, Google pays $15 billion

to Apple. And the accusation explain the accusation there of

why that would give them preferential in case people

don’t care if you’re paying somebody 15 or $20 billion a

year, they’re less likely to do bad things to you, they may do

bad things to other people, but they’re not going to do as many

bad things to you. Did you believe that? Yeah, that

allegation from Zack? Yeah. Well, no, I don’t believe the

allegation. But I think that general character, that general

thing is true. Like you’re not going to screw over your

partners, you’re going to screw over other people before you

screw over your partners. Got it. Whether this applies here,

it’ll have to be borne out in some kind of lawsuit or state

AGs or blah, blah, blah. But anyways, the I think the point

is that every other company has a lot more headwinds than

Microsoft and Google and big tech. And then the third thing

is was a market observation from Gavin Baker, which I thought

was incredibly brilliant. And what he said was, when you see a

drawdown, meaning when the markets go down, it’ll affect

high growth tech first. It ended up touching a bunch of

other areas second, like biotech. But he said this key

thing, which is big tech will be the last to crack. But when

they do, they are going to get shot. And so I spent a bunch of

time just trying to figure out when big tech gets cracked,

who’s going to get cracked the hardest. And I just kind of

wanted to create a spread between those who were the most

inoculated to those that were the most at risk. As it turned

out, Netflix puked it up, Facebook puked it up. Amazon

actually got really crushed, even though this past day, they

had a pretty decent rally because of their earnings, but

they really got crushed. So in any event, the trade is what the

trade is, the bigger thing is what is going on at Facebook.

And I think what you see are three really important headwinds

that Facebook called out explicitly. One is that when

they talked about usage, kind of flattening, and starting to

decay, what they’re really talking about is tick tock. And

I think what we learned is that tick tock is an enormous threat

and a huge competitive force now in the consumer social app

ecosystem. The second is that Facebook is fundamentally an app

that sits inside of an ecosystem that is subject to the rules of

the platform owner. And that’s Apple and Google. And so this

IDFA change, so the change in how you can track advertisers,

Facebook said is going to have a $10 billion impact in 2022.

And then the third thing, which was more implicit, is in order

for them to grow, if you can’t grow organically, the only other

way to grow is inorganically. And unfortunately, as we’re

seeing, the regulatory focus on this company is really enormous.

And so it was a, you know, it was a pretty watershed moment in

I think that company’s discussion of their future. And

Mark actually kind of said that as much in the in the press in

the sacks, you look at this business, you made a interesting

observation, Facebook rebranding itself as meta before meta

exists, it may be looked at as another sort of sign that maybe

they got a little tilted, maybe what we should take on the sort

of changing the name of the company before that business

really is at scale or exists.

Yeah, I mean, it’s a bubble move. Because look, when you’re

in an up market, and the market is super frothy, we had in

hindsight, last year was a giant asset bubble funded by all this

liquidity coming out of the Fed and the federal government. So

yeah, in a bubble like that, all investors care about is the

growth story. And so Facebook went all in on the story around

metaverse. But in the cold light of day, you know, once the

once the sun came up, yeah, once the punchbowl has been taken

away, and you’re in the hangover, and you’re in sort of a

very volatile, potentially packed it in bear market,

investors go, wait a second, you know, this VR division is

losing 10 billion a year.

It might even be 12, by the way, because they said it was a

little higher. So

they lost 6 billion last year, they lost 10 billion this year.

So the losses are escalating. And so in that kind of market,

investors are like, wait a second, do I do I want to invest

in a company that whose future is that unclear? I mean, if you

look at this, at this market, we’ve seen that the growth

stocks are down 60. Today’s an update yesterday was a horrible

day. So they’re bouncing around 60 70% down off the highs in

early November, okay, but the fangs are only down like 14%,

or something like that, right. But Facebook basically took

themselves out of the the sort of the market leader bucket and

put themselves in the growth bucket.

But they’re like, treat us like Peloton. We’re speculative.

Why would why would they want to do that? You know, it’s a

terrible strategic decision, you’re saying?

Well, it was a it was a decision. It was the kind of

decision where you look back with 2020 hindsight, and you

say, look, that kind of decision could only be made in a bubbly,

frothy market, you would never make that decision in the kind

of down market you have today and other decisions look stupid

as well. So PayPal was just down 25%. Okay, why was it down?

Yeah, well, they just, well, no growth and users. It was mostly

on the forecast. And yeah, they revised their forecast down

considerably. And of course, they tried to blame it on the

economy. But other companies, you know, Amazon just had a huge

beat relative expectations. Yeah, they’re up 15% today. So

not everybody is blaming the macroeconomic picture of the way

that PayPal did any event. My point is, you go back six months

ago. And you know, what was PayPal doing? I wrote a story

for Barry Weiss, for her sub stack about how PayPal was

taking the lead in financial de-platforming. They were

working with the ADL and the SPLC to kick to identify groups

to kick off their platform. So that’s what management was

spending their cycles on figuring out how not to grow

how to kick people off their platform and trying to figure

out how to get more people on it.

Sounds familiar. Who else is trying to

it’s the kind of thing you do, when you’re in a frothy market

and your stock is up and you’re trying to find, you can waste

your management cycles on stuff like that. Now their stock is

down 25%. You have to wonder, gee, do we wish we had spent our

time on other things?

Okay, so Friedberg, I have a question for you about the

future. Obviously, Facebook has bet the farm on meta, they’re

betting on VR. And I guess eventually AR or what

collectively is called XR. And then we have news that Apple has

a seemingly brilliant goggles product coming out, developers

are getting into it, and they are the masters of hardware. So

now, Zuckerberg has decided he will be on a collision course

with a company that just took $10 billion in revenue from them

by doing the non tracking. And that is the masters of hardware.

So we have this collision course coming. And then just two weeks

ago, Google said, Hey, by the way, remember that Google Glass

thing? We’re not giving up on VR, AR either. And of course,

Microsoft, we all know, has their HoloLens. So when we look

at that four horse race, if you were to bet and rank who’s

going to win, Apple, goggles, Google Glass, whatever they’re

going to call the new thing, HoloLens and Metas Oculus, who’s

going to win? And what do you how do you look at that

competition between the big four?

I don’t know if that’s a race you want to be in.

So I like that answer. Race to nowhere.

Have you guys used the Oculus Quest device?

Absolutely. I have two of them. Try. Oh, my.

Have you played the games where you like move continuously

through space? And like, when you do that, it’s like you’re

gonna throw up, you’re gonna throw up. I mean, I’m not sure

that this notion that that becomes the new computing

modality is like a fair and true notion. And so, you know,

there may it may end up becoming kind of a niche entertainment

device, almost like a Nintendo Switch where there’s a, you

know, a mode when you’re using it, but I’m not sure it

replaces traditional static two dimensional computing in front

of you. The jury’s still out. I don’t see like a computer

sentiment that says these things will ultimately kind of

prevail over the current mode. So, you know, if it does work,

who would win? In your mind, who’s got the best chance? Well,

let’s assume we’re all going to use it every day for two hours

as our desktop, we’re going to put it on, we’re going to find

workout apps to use whatever it’s going to become. Let’s

let’s assume, you know, that I think you just answered your

own question in, in, in all of these things, when you build

hardware, I think you can take a lot of parallels from what

happened in the PC space. If you have commoditized PC

manufacturers, compact, Dell, IBM, right, their innumerable

number 1000s of companies that made PCs, the value created to

the application layer to the operating system, and the people

that can actually build ecosystems are typically the

ones that win. And the people that already have an ecosystem

and all they have to do is port somebody from, you know,

platform A to platform B has a meaningful advantage over

somebody that has to convince you to come to a new platform

altogether. And so, you know, if you’re a Microsoft, and you

have 1000s or 100s of 1000s of developers, or if you’re Google,

and you have 100s of 1000s of developers, or if you’re Apple,

and you have millions of developers, it’s just a smaller

bridge to cross in order to convince them to that for one

extra endpoint, iOS versus Android, you know, versus

Microsoft. And by the way, it seems like the obvious

transition, whereas like Facebook is like, you got to go

build all this stuff. And Apple made an incredibly important

set of decisions a few years ago, which I didn’t think a lot

of people talked about, but they had an OS tree that was

branching far too widely, right? They had a different

operating system for the phones, they had a different

operating system for iPads, desktop for watches, and they

started to try to converge and shoehorn these things into into

a set of basic primitives, so that it’s more controllable. And

I suspect the reason is because that gives them more

optionality to go into a car to go into a headset, without

having to do an entire developer, even better than that

Chamath is a great point you bring up, because they also

started investing in their own chipset. And I think all of

that chipset innovation gives them a dramatic advantage in

having smaller batteries and more processing power in a

headset if it does work, which what chips does what chip asset

does Facebook have none. So I don’t want to I don’t think we

should say that Facebook is down or not. But let’s just qualify

what we think can win. So that’s one thing. The other thing to

remember is when you look at the PC industry, how did Intel

become so dominant part of what Intel was able to do to out

compete AMD and everybody else was that program called Intel

inside, which is effectively these co marketing pass through

dollars that they would use to actually give an incentive for

Dell and for compact and for all these other folks to

basically build the spec. And that was the Wintel monopoly,

right, Microsoft and Intel. If you play that out in VR, what

you really need is just a bag full of cash. Because if you

give developers a subsidized incentive to build for your

platform, they’ll do it. So then, again, if you rank the

companies, you just need to look at how much cash do they have,

because those with the most cash. So again, I think the best

way to think about this is how many developers do you have

today? How much cash do you have today? How much cash will

you have in the future? And you can probably rank and just do a

reasonable expected value to think about who has the best

chance of winning assuming the platform is roughly equal. Now,

if the if the if the if the company on that list with the

fewest developers and the least money has a superior device, if

that device is superior enough, they can overcome those things,

right? And Facebook has the least money and Facebook has the

least if you have rough parity. I think the person with the

most money and the most developers probably has the

best chance of winning sacks. Facebook has the least

developers, they have no relationship with developers. In

fact, they kind of screwed them over with Facebook Connect a

couple times they have the least money, but they do have the

largest user base of profiles. So does that give them some

advantage here? And how would you rank who’s going to win

who’s going to lose? Well, I think it gives them an

advantage and Tomas framework of porting over their app onto

whatever the you know, dominant platform is going to be but

probably it’s the operating system players who are probably

gonna be able to extend their operating system into this new,

you know, VR, AR world, probably. What I wonder about

is, would Facebook have been better off if they were going to

run a $10 billion a year money losing division that’s highly

speculative? Would they have been better off gambling that on

building their own phone, or maybe their own like forked

version of an Android phone with and the reason why I say

that is project that I started, I was about to say. We’ve now

seen we’ve now seen let’s not redig that. Well, they’re

losing, they’re losing 10 billion a year now, because of

this one permissions change that Apple has made, right,

because they’re completely dependent on Apple’s operating

system for a big portion of their revenue. So what is their

defense against that? I mean, they’re really pretty helpless.

If you look just to make a comparison, if you look at the

strategic brilliance of Google, what was it first of all, after

they came up with this cash cow, the idea of search, and

then they combined it with the sort of keyword auction they

got from overture, they said that, listen, the next

strategic move is we can’t let anybody disintermediate us. So

what do they do, they started moving upstream. The first, the

first sort of upstream player was the portal, right? So they

start competing against Yahoo, they gave away Gmail, then it

was the browser. So it was Microsoft Explorer. So they

gave away Chrome, then it was the operating system, they gave

away Android, they said, we’re not going to let anybody else

be upstream of us. And so they started replacing all those

layers of the stack, giving away free products with free, right?

Yeah, sorry, and a good free product.

Yeah, great. I mean, all those have billions of users.

Also say a big part of the monetization lock in was Google

then extended into the publishers very quickly with the

acquisition of AdSense. And the publishers then allowed Google

to offer the greatest CPM that those publishers could have over

any other advertising network. And as a result, Google built

their network and then built their advertiser base. And they

effectively, you know, got this huge lock in. The only

disruptive threat to Google was what Facebook did, which is to

create demographic profiles where instead of targeting ads

based on keyword or search intent, you could now target

ads based on demographic and then Facebook took it a step

further and did retargeting. So basically following you across

multiple sites, but Facebook always knew. And as we just

discovered, that was always going to be a weak point for

them, because they were dependent upon hardware devices

that we’re going to let them do that tracking across apps and

across sites. And that’s why Google always had this kind of

key, you know, lock in advantage that, you know, will

persist. And the network is just so big on both sides, you can’t

compete to sacks is thought bomb. If they had invested in a

phone, let’s say they made $1,000. Let’s say they made a

phone with a bomb of $800. By the way, just remember the fire

TV. And he gave a bunch of great speeches, you can watch

these and what happened with that. And just, you know,

despite his extraordinarily large user base, his committed

loyal users, all these reasons, his magical, talented technical

team, he hired the best people. He also tried to do the same

with search, by the way, with a nine. And remember, Apple also

tried to do the same with search, all these guys tried to

kind of compete. It’s not easy to execute. Yeah, it’s not easy

to execute. And you get a lock in with the network value. But

you also get a lock in with the talent. And you know, this was a

really hard thing to pull off. And you have to get it all

right. So let me ask him off the question based on what sack

said, could that should they have deployed 10 billion into

phones? If we go back two years, and they did deploy 10

billion into phones, they take an $800 bomb, which is probably

what the best iPhone cost, I think it costs 700 for Apple to

make and they sell it for 1500. They could basically give the

phone away for half price, maybe give it away for four or $500.

That’s what fire phone was. And if they gave away for $400, and

you had to be a Facebook user, you buy it, they get the credit

card of the person that would be they could put 25 million

phones into the market every year. That’s what that’s what

Amazon thought. And I don’t think that moves the needle. So

you don’t think it would work and create a better user

experience for users, users got a better experience with the

iPhone, okay. And then they got a better experience with

Android. The window of time was in 2009 10 and 11, when there

wasn’t lock in. And, you know, I think that’s, look, that’s been

well discussed about what we were doing and what we tried to

do. So there’s no point rehashing. But why did Facebook

give that up? Because there wasn’t an initiative, right? It

was it wasn’t that it was it came down to, you know, an ask

that I made that we didn’t get, and it didn’t happen. So it

didn’t happen. We’ll leave it at that.

I’m not saying that would have been successful.

I’m just saying neither did I, we didn’t get to the starting

line. So we’ll never know.

In fact, I think it’s unlikely that it would have worked,

because I’m not sure exactly what Facebook’s value prop

would have been. My point is just if you’re going to lose $10

billion a year on a division, wouldn’t it be better for it to

be something strategically vital, as opposed to something

that feels a little bit optional,

even if the majority chances you don’t win? The question is,

if you had a 2030 35% chance of being a player in smartphones,

would you take that chance? And I think you have no choice but

to take that chance that it would be worth it the expected


Yeah, one thing I’ll say in defense of Facebook is I think

that all of this like antitrust scrutiny is a little bit

ridiculous today. And it looks pretty ridiculous. And let me

just explain why, like, it seems that capitalism is pretty much

working as intended. Because if you looked at Google’s results,

if you looked at snaps results, at Pinterest’s results, at

Amazon’s results, there is a vibrant and growing advertising

ecosystem, by no means, could you claim that Facebook has any

real monopoly on that number one. And when you fold in TikTok,

it’s absolutely true. And then if you think about the usage

curve of TikTok, there’s a check and balance there on usage.

And so anybody that thinks that Facebook is a monopoly today,

I think is a little misguided. So really, I think what

politicians need to do today, you know, February 4, is be a

little bit more honest about what they really care about,

which is really around section 230. And the misinformation

disinformation fears that they have related to Facebook’s

distribution power, because now if you’re going to try to

legislate this company, it’s really unfair, like, especially

going back 10 years to litigate an acquisition, you’d never do

that to any other company that you know, is sort of maybe on

the back half of their growth cycle, it just doesn’t make any


It would be like going after Google now for the YouTube

acquisition is like $31 billion of advertising revenue crazy,

there is a vibrant, diverse advertising ecosystem, Facebook

is not in control of that ecosystem. And so trying to

legislate them as a monopoly in that ecosystem is insane today.

What do you think, Saks? Do you think this regulation is based

on the fact that Facebook kicked off Trump and is scaring

politicians over actual competitive reality?

I think that politicians are using the threat of regulation

to try and drive the, the speech policies they want on these

social networks. That’s what’s really going on. I mean, the


So you agree with me, it’s nothing to do with the business.

Yeah, look, who should get regulated on antitrust grounds,

Apple, you know, Apple is that maybe Google, I mean, well,

they’re the big monopolists. I mean, they control the

operating system. I mean, those guys percent of search, and I

would say Amazon with respect to the verticals where they’re

competing with their own, with the basic exactly. So in other

words, when you control an operating system, and then

there’s developers or other, you know, downstream players on

that ecosystem, you have to treat them fairly, you can’t

privilege your own policy to then dominate vertical after

vertical. So yeah, there are real antitrust concerns with

those three companies, the Facebook way less so. And yet

they get the brunt of the attacks. Why? Because the

people in Washington are trying to coerce Facebook into

controlling what they call misinformation, which is really

just speech they don’t like. And that is highly inappropriate.

Perfect segue. Last week, we didn’t jump into the Rogan

Spotify debate, maybe we should have. But we’ll talk about it

now with a lot more context. Obviously, Neil Young and some

other folks that were pulling our music off, Joni Mitchell,

whatever, some actual high profile blogger said they don’t

want to be on there. And then Joe Rogan and Daniel Eck both

decided to talk about this. Joe Rogan said, Listen, I’m a

comedian, I don’t prepare for these interviews. And I just see

where they go. But this show has gotten very influential. It’s

the number one podcast in the world’s got a ridiculous

listenership. So maybe I should write about having right now,

maybe I should have it labeled. And his and maybe I should have

people on afterwards. And maybe I should do some extra fact

checking. I thought it was the best nonpology. You know,

explain ology of an apology, because he did say, I’m sorry,

if you don’t like it. But he did kind of say that he would do

better. And then Daniel X said, and then I’ll let you guys

comment. Daniel, I said, Listen, we produce shows, and we

approve guests for the ringer. And for gimlet, which we own

those studios, we license Joe Rogan, we don’t do any editing

on his show. And we will remove ones after the fact, but it’s a

licensing, they’ll therefore we’re not a publisher. I’m

curious what you thought. Friedberg on the nonpology and

culpability for someone like Joe Rogan having guests on who are

anti vax, or, you know, maybe are debatable in terms of

science. Because yeah, he is a comedian. But as he says, like

the show is kind of big now. So maybe I should do a little fact

checking. What do you think he should do when he has scientists

and people and people on I’ll make two points. One is I don’t

think that journalism is regulated, in the sense that,

you know, we have freedom of speech. So anyone can stand up

and they can say, I have this belief, or I have discovered

this fact. And you may not actually hold that belief. And

that fact may not be true. But you’re still allowed to stand up

and say it and you’re still allowed to have someone come on

and say it. And so I don’t think that there’s any disclosure

obligation, he’s putting on a show, it’s the same as any new

show or entertainment show. I don’t think that there’s a clear

line or boundary. I mean, what the heck do we do here? We’ve

all got opinions, we try and talk about the news, we talk

about our perspectives on the future, you know, what the heck

is it that we’re doing here? You know, there’s no kind of

clear line there. So I don’t think that he has any

obligations to do anything he doesn’t want to do, except if

and when his audience tells him, or the listeners that he cares

about, tell him his customers tell him, this is what we expect

and want from you. And then he responds to his customers.

That’s the way the market works. And that’s the way the

enterprise system should work. I think the separate bigger

question here, that’s really important and worth noting.

You know, and I just want to speak about this for one second,

all of the great internet companies started with this

notion that they were creating democratization, that they were

creating access to information that didn’t exist, whether it’s

access to media or access to search results or access to

content or whatever, that may not have been available to you.

And that was a driving force for the entrepreneurs and the

founders that started all these businesses. And all of them had

these very idealistic points of view that we’re not going to

censor, we’re not going to take a point of view, we’re not going

to put our foot down and say what is and isn’t going to be

displayed or shown or made available to our users, we’re

going to let users choose what they want to get access to and

what they want to hear and listen to. And in all these

cases, from Google, to YouTube, to Twitter, and now to Spotify,

the idea of being just an access, a platform for access is

proving to be wrong. All of them are de facto publishers,

they ultimately have to make decisions about what they do and

don’t let on the platform. And de facto, if you let something

on the platform, you’re giving it permission, you’re giving it

a voice, you’re giving it amplification, and you’re giving

it access. And so all of them are now getting caught up in

this problem that I don’t think anyone from Larry or Sergey, or

Jack Dorsey or Daniel ever wanted to be in, they all wanted

to be these democratization platforms. And now they’re

finding that there is no way to avoid being treated like a

publisher and a publisher has someone that’s called an editor.

And an editor decides what is and isn’t put on that publishing

platform, as has always been the case in old media. And now

in new media, they’re all kind of stumbling into this problem.

And they’re not set up for it. And it’s creating issues where

people on the right are saying you’re censoring us. And people

on the left are saying you’re not giving us access to

information we want. And it’s, you know, it’s just kind of the

I think the transition that none of them expected, but we’re all

seeing happen.

Chamath, if Daniel Lack is giving $100 million to Joe

Rogan, can he claim listen, it’s just we’re a platform when

you know, listen, we’re on Spotify as well, but they don’t

pay us. Doesn’t it change the relationship when they give him

the 100 million? Or can Daniel say, you know, intellectually,

honestly, like, hey, listen, we’re not responsible for this.

I mean, they’re backing up the brinks truck. And they’re

promoting it like heck. Are they a publisher or not in your


I read yesterday that Barack and Michelle Obama’s deal with

Spotify just expired, and they’re going to shop it. I

suspect that somebody will pay them 10s of millions of dollars

to produce content. That’s not illegal. And it’s a sign of a

free market that’s working. Spotify has a business to run.

And that business is to get content in front of the users

that are paying them a lot of money on a monthly basis to get

access to that stuff. And so who are we to say how Spotify

should run their business? I think you have a choice. Neil

Young expressed his choice. There was a person in the New

York Times, she took her podcast off of Spotify. Yep. There are

subscribers that probably left, but then there are also

subscribers that probably joined. Yep. And paid. Yeah. And

paid. And so the reality is, that’s the free market, being

allowed to choose, and being allowed to vote with their feet.

And I think that all sides of that are in the right. So I

think Spotify should be allowed to run their business. I think

Joe Rogan should be allowed to say what he wants. If Spotify

chooses to put a disclaimer in front of that podcast, that’s

their right. And that’s good, too. And if Joe Rogan decides

that he wants to have, you know, point counterpoint across

podcasts or within a podcast, that’s laudable as well. And

that should be his decision. But I don’t think people should

be forced to make these decisions by law, because I

think we get into a very slippery slope. Because you

don’t totally understand the incentives of the lawmaker

there. And we have a free market, as you’re pointing out,

the framework is working perfectly. And more people

don’t like this free market. More important than the free

market. We have a founding document of principles that we

all agree to. Yes. Yeah. And unfortunately, there’s a lot of

people who don’t agree. That says we have a right. So here

we go. Let’s go to our constitutional attorney

counselor. Take us there. If you’re talking about the

principle of free speech, there’s a lot of people who

don’t believe in it. That’s the problem. First of all, you have

this geriatric hippie. Whoa, whoa, whoa. Just Jerry, can I

finish? Let me finish my rant. You got this geriatric hit. I

love Neil Young. No, you know what happened here? Wait, sorry,

sex just there. That was J Cal seeing Oh shit, he’s gonna get

a bell claster clip. He had to interrupt you there. That’s

really brutal. J Cal. I thought you were talking. I thought

you were talking about Joe Biden. Can I explain what

happens? I think frankly, you guys are completely missing it.

The wheel of censorship broke on Joe Rogan this week. They

tried to Alex Jones him and it failed. Okay. First, you have

this geriatric hippie Neil Young, who somehow has turned

into a narc, and he plants a flag and he tries to get all

these people behind him. And the very online crowd says, Yes,

we got to cancel Rogan. And then you got Jen Psaki from the

White House, weighing in bringing in the coercive power

of the administration on the side of censorship. Okay. And

what happens? Rogan comes out with this nonpology, like you

said, and he seems so reasonable. He’s a guy who’s

inquisitive. He’s on the side of just asking questions. He’s on

the side of balance. He says, Yeah, look, I want to present

both sides of the issue. And everybody was like, there is no

reason to be censoring this guy. Rogan is an every man. And if

they would censor him, they would censor every man. And that

is why there was enormous backlash to it. And everybody

has opposed this. And so I think this is the week that this

ridiculous idea of censorship has broke. Now, it would be

nice if everybody to Chamath’s point, did agree with this

principle, but they don’t. The fact of the matter is, Jay Cowell

that censorship is now the official position of the

Democrat Party. And you see it in the poll numbers. There was a

great tweet that Glenn Greenwald Glenn Greenwald posted, where

he showed the polling numbers on this. So okay, you go back to

the days of the Obama administration, both Democrats

and Republicans agreed that the US government and tech

companies should not get involved in this type of

censorship. But today, there’s been a bifurcation. Democrats or

lean Democrats versus Republicans who lean

Republicans. It’s 6528 in favor of government taking steps to

restrict info online. And it’s 7637. Democrats versus

Republicans on tech companies. So Congress, the First

Amendment is no longer a consensus. And that is

fundamentally the issue. But I gotta tell you, I think there

is a backlash against this. And I think that most of the

country now, and I think this is where they went too far is

that Rogan is not Alex Jones. He’s not Trump. He’s not

Milo Yiannopoulos. He seems like a reasonable guy. He is the

biggest figure in independent journalism. He gets 11 million

viewers every week. And I think there’s a lot of people,

especially young people who are going, this has gone too far.

And by the way, I do not think Obama ever would have made this

political blunder of effectively denouncing Rogan

because Obama tried to appeal to young voters. And I think

Jen Psaki, by putting the administration on the side of

the censorship, they’ve made a huge mistake. And the same week,

we saw that Tucker Carlson now gets more young Democrats

listening to his show than CNN and MSNBC. And I’m telling you,

this is the reason why

Okay, Henry, you can put in the roaring crowd of applause at

this point. The best the best

You’ve got big problems. I’m telling you, Jacob, you got big


I’m an independent. Stop making me the democrat. I’m an


There are now more Tucker Democrats, okay? Among the key

young demographic.

In your writer’s room or on Tucker’s writer room? Which one?

I’m a Tucker Democrat, Jacob.

You’re a Tucker. You are. You love, you love Obama. You love

Clinton. I think what’s happening is that, I mean, and

Chamath, you’ve said this over and over again.


I’m sorry, Chamath Palihapitiya.

You had on one side, you know, the right when lost their mind

in the all right, now they’ve come a little bit more center.

And then you may not have the the democrats have lost their

minds. The fact that anybody can’t look at Joe Rogan and say

he’s a comedian. He worked on a show where they fed people

shakes of blended insects, feel factor, and he’s taking

mushrooms. And he’s like, Why are you taking me so seriously?

Well, wait, I don’t understand.

Hold on. I think you’re being super dismissive of Joe Rogan.

I think he’s actually, as Zach said, a pretty reasonable,

curious person. And then yeah, he does the stuff that

everybody else does.

He doesn’t prepare for the show. He literally said, I don’t

prepare for the show. I don’t do any preparation.

Maybe he doesn’t.

No, he said explicitly he doesn’t. And he fact checks in

real time. So you got to keep your expectation at a certain

level with Joe Rogan, I think.

I think that that’s a dig. I think that that’s implausible to

believe. I know that that’s what he said. But, you know, 11

million people a week, $100 million deal, I do suspect

that he does some sort of preparation. I don’t think he’s

a, he’s completely winging it. Okay.

He literally said he wings it. But okay.

I understand that. But I think that’s not the point.


Okay. The point is, whether he prepares or not, the excuse

isn’t sorry, the dog ate my homework. It’s Hey, listen, I

have a right to have this guy on my show. Just like I have the

right to have this other guy on my show. You can listen to

both. And then you can decide for yourself.

You could change the channel.

Okay, that’s the important point. So Jason, I would not

like try to make this whole argument about whether he was

prepared or unprepared as the excuse. It’s whether you

believe there’s a fundamental right to free speech, or

whether you believe that people who disagree, can disavow

people and get them canceled and get them.

I obviously don’t agree. I don’t agree. Anybody should be

canceled. I think he should keep going.

Whatever Rogan’s level of preparation, which I think is

actually pretty high, the people who are accusing him of

putting out misinformation are far more guilty of it

themselves. And I think one of the best points in Rogan’s

nonpology, as you called it, is he said, Listen, a lot of the

things that we used to consider misinformation are now the

truth. For example, we’ve talked about it on the show.

Yeah, well, we’ve been ahead of the curve and calling all this

stuff out. You know, we could have been accused of

misinformation. So examples, the lab leak theory used to be

considered information. The cloth mask not doing anything.

Listen, Dan Bongino was kicked off YouTube two weeks before

the CDs for saying that Dan Bongino, he’s a pretty big

conservative commentator. Okay, he’s got an audience of

millions, you can be dismissive, but a lot of people like him.

Yeah, Jake out. But look, my point is, he was kicked off

YouTube for saying cloth masks don’t work. Then the CDC comes

out two weeks later, and says the same thing, right?

I think that’s a valid point.

Yeah, well, it’s the key point.

I personally like you know, for example, we’ve talked about

this thing where like, if you look at like the top

distributed links on Facebook, who do you see Ben Shapiro?

Yeah, Dan Bongino? You know, bright Joe Rogan, right?


My takeaway with all of these things is there are people of

those things, if I listened to, I’d probably find abhorrent.

But there are people there that are probably I would be, you

know, I would, I would, I would, they would appeal to me. In all

cases, they should all exist, though, because the whole point

is let me spider my way through this stuff and figure out for

myself. Yeah, what works and what doesn’t work?

Yeah, more speech is the best counter.

The summary of this that makes the most sense is Elon tweeted

this out, Nick, you can put this because I gave you the image,

but it’s a it’s a meme of Neil Young, where it says, if you

won’t censor the guy I don’t like, I won’t let you listen to

keep on rocking in a free world.

Practical, yeah.

And, and it’s, and it’s just so true, which is like, on the one

hand, you know, you are a standard bearer. Now, maybe what

we should really do is talk about what has happened to this

boomer generation over the last 50 years, where they were, you

know, sex, drugs, rock and roll, no war in Vietnam, let’s fight

for our rights, let’s fight for equality, then punk rock, you

know, no, I’m talking about just those, those, those folks back

then, who are now 50 years later, you know, sitting on $70

trillion of wealth, and who are basically like, you can’t say

this, you can’t say that. Don’t do this. Don’t do that.

Wear masks, don’t leave your house.

You know, yeah.

Fauci is right.

They’re scared, because they’re old.

Wear masks, don’t or you’re getting a pangolin.

Yeah, you know, this is, I mean, that generation, I think we

all have some soul searching to do about what happened to that


I think they’re scared, because they’re old, and they feel like

they’re going to die from COVID.

Is it that generation, or is it the fact that every generation

rebels against the prior and ultimately becomes conservative?

And, you know, that’s the, that’s just how life goes.

I don’t think they’ve become conservative.

I think they’ve become authoritarian.

I think that what happened is they’re now in power.

The boomers are in power.

They’ve been making the decisions for the last 20 years.

I think there is enormous popular discontent with the way the

country’s been run over the last two decades, the futile,

pointless wars in the Middle East, the debt, the economy,

the unfairness that goes on and on.

And what, and especially with COVID, I mean, this COVID policy

over the last two years has been a fiasco.

And the point of this censorship of misinformation is to suppress

the debate.

I mean, what ultimately is the point on take, for example,

COVID of saying that people cannot take a point of view, it

is to stifle the debate that’s to prevent an honest debate on

these issues.

And the people have an interest in doing that are the people who

are in charge and are failing.

And if you gave people the information, they’d be voted out

of office.

If you look when I asked what are the specific claims that

either Joe Rogan or his guests made that people are objecting

to a lot of the people who are objecting and wanted him

censored, really didn’t know.

And one of them was he said early on, I don’t know for a

young person who’s in shape, if I would advise them to take the


I know a lot of people who have that position, which is like if

you’re young, and I think actually, Friedberg, you might

have said mRNA early on in this podcast is a very new


And I could see people wanting to wait and see.

Did you not say that?

I don’t want to get you canceled here.

But I think we did have that discussion, have that


That’s a valid conversation.

mRNA is a new technology, right?

Freeberg, you should think about it.

And we should be cautious.

Don’t draw me into your cancel.

That’s why I said we I just changed it to we were talking

about that.

Don’t you remember that discussion we had like, and I

asked you, I think, mRNA, what do you think of this versus the

regular one, the J&J?

I think generally, we’ve seen science being used as a way as a

term to discredit what I think would arguably and typically be

scientific principles, which is inquiry, challenging

hypotheses, and having, you know, vigorous debate to resolve

to some sort of objective truth.

Otherwise, you’re having some sort of subjective belief.

And more often than not, we’ve seen politicians and others

grab on to the term science and saying, this is science, it says

this, when in fact, the process of science is inquiry, and it is

to challenge, you know, again, a hypothesis and what might be

kind of a thesis.

So, yeah, I think generally, this has been a pretty scary

time to watch, because it’s almost like gaslighting, you

know, it’s like, hey, you know, you’re using the term science

to discredit the notion of science.

It’s been pretty brutal.

I sent you guys this, this cartoon link, by the way, it’s

so funny.

Oh, I just got an old left versus the modern left.

It’s a Volkswagen bus with a bunch of hippie dippy flowers.

And it says free speech, free love 1971.

No CIA, screw the establishment, resist authority.

And then it shows like a modern SUV with 2021.

It says masks up, I heart the CDC, obey the establishment,

no free speech, do what you’re told obey.

Basically, you have another poll you want to share sex?

Well, yeah, this is a really interesting one.

It says a majority of voters 55% say COVID should be treated

as an endemic disease, while a majority of Democrats say it

should be continued to be treated as an emergency.

And then there was a similar poll, the Monmouth poll just

came out where 89% of Republicans 71% of independents

say that it’s time we accept we accept COVID is here to say

we need to get on with our lives.

Only 40% of Democrats.

So the reality is that the rest of the country I think has

moved on, it’s ready to move on.

The split is not between Democrats or Republicans anymore.

It’s within the Democratic Party.

The Democratic Party is now divided on this question of

whether we should move on as a country past COVID.

Half of the Democratic Party still believes that COVID

should be treated as this emergency.

Do you think that it’s cut by age?

Do you think there’s a bias by age?

For sure.

For sure.

I think yes, absolutely.

Old people are more scared.

But I think I think the media and the party they’ve programmed

their soldiers to be, you know, to treat COVID as an

emergency, and they can’t deprogram them.

And this is why I think we’re seeing Tucker’s Tucker is now

the biggest demographic among young Democrats.

That’s insane to me.

It’s insane.

The idea that idea is insane.

This does not bode well for the on top of everything else

that’s happening in the country.

This is not bode well for the Democrats in November.

And then you had this crazy thing at the, you know, the

Magic Johnson party at that held my breath.

I took a picture of Magic Johnson.

I held my breath so I wouldn’t get the virus with Garcetti

and Newsom Newsom claims the new I didn’t inhale.

Yeah, exactly.

And then he says that he was only photographed at the exact

moment where he took off his mask for two seconds, you know,

you know what, if you go to the ski slopes, there is nobody

with a mask on and nobody’s enforcing it and no restaurants

and this is in democratic country.

Everybody has moved on at this point.

Everybody’s willing to why haven’t they why haven’t why

haven’t the media and the politician because they’re

virtual signaling and they want to keep power.

I don’t know.

You tell me that’s that’s that’s the point.

Well, I think they’re dumb.

They should take the position that we reopen.

Yeah, they should just take the rails but wouldn’t take in

the reopening position get you more voters at this point.

People are tired of this.

They want to move on.

It doesn’t make any sense.

They’re making a bad political decision.

I think they’re holding to their base.

That’s the point is I think I think the whole country has

moved on even most Democrats have moved on, but the

democratic base has not moved on.

And that is why, you know, Newsom and Garcetti have to

pay lip service to this.

Well, I mean, and these guys have been telling everybody

gotta wear a mask, gotta wear a mask, and they’re not

wearing masks.

And let’s face it.

They weren’t wearing masks at the front French laundry.

They have never worn masks.

They’ve been throwing their own parties with no masks.

They’re a bunch of hypocrites.

The whole lot of them.

All right.

In other news, Xi Jinping and Putin got together and they’re

apparently besties.

Here’s the quote some actors representing, but the

minority on the international scale.

I think that’s us continue to advocate unilateral approaches

to addressing international issues and resort to force.

They interfere in the internal affairs of other states

infringing their legitimate rights and interest and incite

contradictions, differences and confrontation.

The statement said, I am willing to work with President

Vladimir Putin to plan a blueprint and guide the

direction of Sino Russian relations under new historical


Mr. Xi said he added that China and Russia should act like big

countries as they intensify coordination on fighting the

Coronavirus pandemic, yada yada.

Any feedback from our squad?

I mean, you could have rewritten that press release as you know,

we will we want to try to destroy us hegemony and replace

it with ourselves.

This is the beginning of the end of US cultural and economic

influence globally, or dominance, rather influence


And I think that it’s, you know, something that we’ve talked

about quite a lot.

You know, I mentioned in the prediction episode that I

thought that Putin was going to play a major role this year.

And, and, you know, he’s clearly not just, you know, out

for his own interests, but he’s going to play a really

important role in China’s rise to economic and cultural


You agree, Chamath, is this the sign that they’re going to be

running the show?

Or does this look like something else to you?

No, no, no, I don’t think that there’s a show to run.

I think the point is that there was a first among equals for

the last many decades in the world order where, you know,

America was it was that first among equals.

And I think what they’re saying is that it’s time for that to


And, and, and they’re going to tie that to their ability to

influence foreign policy in countries the way that we have


So, you know, this is sort of basically putting a marker on

the table that says, this is going to be about, you know, a

different cohort of people that are also going to have an equal


And if you think about where this all plays out, it’s always

in economics, right?

And this is where, again, you have to think about what China

has done, which is they have while we were fighting wars,

you know, putting trillions of dollars into the Middle East,

they took their trillion dollars and bought resources all

through Africa.



They built infrastructure, they bought infrastructure all

through South America.

They put infrastructure all through Southeast Asia, you

know, that say, call it $15 trillion that we spent in one

direction, they spent another, that’s a $30 trillion gap,

that’s going to create a resource imbalance that they

will use to create even more influence in the future.

And we have to figure out a way to counteract that.

Sax, what do you think?

Is this a changing moment in the world order?

Should we be worried that these two dictators are going to act

in unison, and then maybe one gets the Ukraine, one gets


Is this like really earth shattering news?

Or do you think it’s saber rattling and not that big of a


Well, I think it’s a dramatic statement and photo that was

was put out.

It was a continuation of what we’ve seen where they have, you

know, Xi and Putin have been getting and Russia and China,

they’ve been getting friendlier and friendlier.

What saddens me and sort of sickens me as really an American

patriot who would like to see the American world order

continue is the way that we have blundered and created this

type of situation.

So, to Chamath’s point, first of all, we wasted 20 years

trying to do nation building in the Middle East, we wasted

$6 trillion on that.

How did China, you know, lose by not being part of that?

They benefited, they were building Belt and Road while we

were, you know, engaged in this foolish interventions in the

Middle East.

And now more recently with Putin, we’ve really driven Putin

into Xi’s arms because we keep threatening to add Ukraine to

NATO, which is not something that’s in America’s interest.

If we would just give up on that position, or just reaffirm

that Ukraine should not be admitted to NATO, it would

enormously help defuse tensions with Russia.

And by the way, your point that these are dictators or

natural allies, that’s not historically been true.

So, during the days of the Soviet Union, you know, you had

Nixon and Kissinger make the great opening to Mao and China,

and we were able to cultivate a relationship there because

China and Russia were natural antagonists.

And it was a major move in the Cold War that we were able to

cultivate Mao.

And we did so even though he was a dictator with blood on his


So Russia and China are not natural allies, we should be

doing a better job of not so thoroughly alienating Putin that

he is rushing into his arms.

That’s the blunder I see here.

By the way, after this summit, they’re going to meet with


There’s a tripartite think access of dictators.

This is like the Legion of Doom.

We need to be playing our cards a lot in a much smarter way.

Yeah, we need to play our cards.

What is the strategy?

I mean, look, we want the American led world order to

continue, but we got to be much more selective about picking

and choosing our battles.

Yeah, Iraq, Afghanistan, Syria, Libya, they were huge mistakes.

And now on top of it, what about Ukraine?

What’s that?

Yeah, looking forward, like you keep bringing up the past,

what’s the look forward strategy in your mind?

The look forward strategy, I think, is to diffuse and

deescalate the situation in Ukraine, exactly the way Obama

did it, which is to recognize that America does not have a

vital national interest the way that Russia does to hold on to

reaffirm that the nations of the caucuses that have border

disputes with Russia, Ukraine, Moldova, Georgia, they are not

eligible candidates for NATO at the present time, kick that

can down the road by 10 years.

Okay, we talked about that last time.

Taiwan is a much more complicated situation.

I do think we have a vital national interest there.

Got it.

Okay, so two very different situations.

I actually agree with you.


Yeah, I think Taiwan, we have to hold the line.

Yeah, we have a responsibility in the United States.

And I think we’re starting to do it.

So I think there is good news where, you know, part of the

strategic vital interest for Taiwan is because they have

critical resources that we need.

And we depend on and specifically, those are


You know, we have now I think, allocated, you know, 50 $100

billion of capital of capex across a bunch of companies

that have committed to building domestic capability.

And so we have to make sure we follow through on that, that’s


And the reason is that it gives us optionality, it allows us to

breathe, it allows us to actually make rational decisions

and be patient in our decision making.

And I think that’s going to be really important over the next

10 or 20 years.

And so we have to invest in the United States.

So the solution to all of these things is we cannot be overly

dependent on any one country, any one shipping lane, any one

product, any one natural resource, you just

can’t do that anymore.

We have to be strong at home.

And we have to build strong relationships with other


And yeah, I think I think we’ve got a an operating philosophy


All right, listen, let’s wrap there.

We’ll see everybody on the next episode for the dictator

Chamath Palihapitiya, the Sultan of Science, David Friedberg,

and the rain man himself triumphant versus Peter Thiel and

that PayPal match.

Great moment.

David sacks.

Love you boys.

Love you besties.


Oh, man.

We should all just get a room and just have one big huge orgy

because they’re all just like this like sexual tension that

they just need to release somehow.