All-In with Chamath, Jason, Sacks & Friedberg - E92: Adam Neumann's second act, a16z's $350M bet, housing policy, Inflation Reduction Act & more

J. Cal, what’s it feel like to be a guest on your own podcast

today? I’m excited. Oh, god. So delightful. You did a great job

by the way. Really like the punch up to the formatting where

you actually put the questions in. Yeah, I think it’s cuz I

want us to all agree on the stuff we wanna grok on, you

know? In a professional TV show, they would have pre-interviews

with everybody, get all their positions, then they put the

positions into the document and they, you know, they basically

do what’s called a pre-interview. Or here’s

another idea. You could do your job. Well, I mean, do your job.

How about that? How about you try that? Yeah. Or, you know,

or how about I turned you three miserable **** into actual

likable people in 91 episodes which nobody thought was

possible. I actually think I’m becoming less likable the

longer I’m on this **** show. I think that correlates with all

of us. All of our likability is just

We’ll let your winners ride. Rain Man, David Satterthwaite.

And instead, we open source it to the fans and they’ve just

gone crazy with it. Love you guys. Queen of Kinwan. Hello

and welcome to the All In Pod. I am your moderator for today

out of the hot seat doing the easy beat, Dave Friedberg. I’m

joined today by our esteemed panel. Back from his European

shopping spree, our national treasure, America’s favorite

dictator, Chamath Paliapatiya. Chamath, how are you feeling?

I’m feeling great. Jet lagged. You’re okay. You’re recovered.

Yeah. I’m a little, I’ve got, I got a little head cold though.

Oh, well, sorry to hear that. Hope it’s not COVID 2.0. No, I

tested. I’m COVID negative. Thank god. Okay. Also with us

as usual from his emergency bunker ahead of the US Civil

War, the Rain Man, David Sachs. How are you, David? Good. Happy

with the late start this morning, I’m sure. And of

course, everyone’s favorite ski bum, producer of the Woodstock

of Tech Conferences, the one and done All In Summit in Miami,

Jason Calacanis. Jason, what’s it like to be a guestie today?

Oh, it’s so delightful. When you said you wanted to moderate

that to me was chef’s kiss. I get to, I get to comment and not

be the moderator. I love it. Yeah, so we’re mixing it up a

little bit today. I’m going to take the lead. J Cal is going to

sit back. I’ll say a couple of words before we start because I

think last week we got a little nasty. Definitely heard that

from listeners. You know, and so I want to kind of just address

it real quick. And then we can kick off the show. I think it’s

important to say that none of us really started out doing this

pod as a job or thinking that it would become a real regular

thing, right? We started doing it for fun, ad hoc from time to

time. And then it became this thing that people listen to. And

it became this thing that we started doing every week and

people actually cared about it and suddenly became this real

obligation. It’s almost like we got pregnant and had a baby and

now it’s like four men and a baby. And so, you know, I think

we all feel this like, you know, challenging obligation that

we never expected to take on. It’s like taking care of the

show, taking care of the pod. And we all have like different

points of view on what we want the pod to be and what we want

it to become. J Cal cares about, you know, getting up in the

rankings and listening to the audience and ultimately has

shared that he wants to monetize, you know, at points.

We’ve not always agreed on different points about that.

You know, Tamath has the things he wants to bring to the table.

Zach says things he wants to talk about. And so, you know,

it’s really difficult kind of running the pod, managing the

pod with four very different points of view, very different

perspectives on what it is we all want to kind of get out of

this over time. And I think it causes us to get really

frustrated with each other. We end up having real fights. You

know, you have the biggest fights with your best friends.

You know, you really let loose and lash out. I think last week

I listened back, I was pretty contemptuous in my kind of

retort to J Cal about hitting up on the inflation topic. And I

want to apologize to J Cal for doing that. I think it was, you

know, I think, yeah, I think it was a little rough. But at the

same time, I just want to point out like, you know, we’re going

to keep doing the show. Because I think, you know, as much as we

all disagree, as much as we fight, and as much as we may

even start to dislike each other, and not get along, I

think it’s really important that we keep doing this. And I

think restating that commitment and trying to do better is

really important. So you know, we’re going to try different

stuff out, try and find ways to find common ground and keep

doing the show productively with each other. As one experiment

this week, I’m going to moderate and we’re going to, you know,

try and take it that way. But you know, I just wanted to say

those few words before we kick this off, guys, because I thought

it was important, especially after the last couple of weeks,

I think it’s been a bit of a struggle. We’ve been having a

tough time. And I just want to be open about it. And you know,

highlight that, you know, as an example, you can fight with

people, you can disagree with them, and you can still keep

trying. And I want to set that example. I want us to keep doing

that. So anyway, just I would just like to say, apology

accepted. And I thought that was a lovely opening. One thing I

would just punch up there is, the real reason we did this was

because we missed each other, we missed hanging out with each

other. And then this is, you know, something that’s become

more successful than any of us ever imagined. It’s got an

audience size that is just, you know, hard to imagine how many

people are listening to this, which then does put a little bit

of pressure on it, we want it to be great for the audience. And

I just want to say, like, I don’t take it personally, when

we when we battle on stuff, even with politics and sacks and

stuff like that. I respect each of you, you are each brothers to

me, I love each of you deeply. And when we fight and things

don’t work out, I look at it as like personal growth or

progress towards some other goals that we each have. The

amount of support I’ve gotten in my career, from David Sacks

and Chamath has been unparalleled. David Sacks was my

first LP, he encouraged me to create my first venture fund.

Chamath supported supported me relentlessly in my career, showed

up for me every event I ever did. And I tried to do those

same things for them. You and I haven’t done much business

together, Friberg, but I’m enjoying the business that we’ve

started. Yeah, starting to and I showed up for both of your

events when you needed me. Yeah, doing some syndicates with

you. And I love doing this each week. I love doing this each

week. Yeah, it’s like, like, I think my point was, it’s a lot

easier to be friends and have wine together and play poker

together than it is to do a job together. And this has become

really a job. And so you know, you can have really good

friends. And then you try and start a company together or do a

job together and you can hate each other. I think it doesn’t

mean that you guys stopped being friends or that we should stop

doing the work. I think we should still keep trying to do

the work, figure out a way to make it work. So anyway, that

was the point I wanted to make. And that’s the end of my my

statements. Okay. Those weren’t prepared. Those are just a

reaction to yours. I don’t know if I say anything, but I doubt

it. Okay, let’s have any emotions right now. Zack, what

are you feeling? Yeah, I mean, Chamath, do you think grass fed

is better or the regular?

Saxon, I were texting while you guys were, we’re hugging it out

talking about different kinds of jerky.

While we were jerking each other off, you guys were

researching jerky. Great. Okay. I was recommending built on to

him. Oh, great. Awesome. Speaking of jerky, let’s get

into Adam Newman. Oh, okay. So now Hey, okay. So first thing to

talk about today, and I kind of wanted to take it in a little

bit of a different direction that I think all the other tech

media have kind of addressed this, you know, Adam Newman is

back, he raised $350 million from Andreessen Horowitz, there

was announcement this week for his new company called flow,

which as we understand it, is trying to develop residential

apartments, you know, in the same sort of vibe, quality, and

attention to experience as maybe was intended with we work. And

flow, you know, seems to have started originated with Adam

doing a bunch of acquisitions of real estate with his own

capital. And now he seems to have turned this into a real

business and raise money from Andreessen. So there’s all the

commentary and joking about Andreessen putting this money in

Are they crazy, as well as all the, you know, commentary about

Adam Newman, how could anyone back him, the guy was so awful

the first time around, let me just do a quick round the horn

with you guys, you know, initial reactions to the to the

Adam Newman deal. And then I’d love to talk about founders

having a second act. Because, you know, Adam happens to be

high profile. So his failure was high profile, but a lot of

founders have a failed, low profile first experience and

come back and kick ass the second time around. And

investors have taken notice of that. And so I’d love to go

there. But maybe we just do a quick reaction. J. Cal, I know

you’ve talked about this on your other show, maybe you can kind

of give us your quick commentary on on the opportunity

of the transaction. And what are people talking about with

respect to this, this deal happening,

you know, people are wondering why he’s able to raise money.

And what I always tell founders is when you see these like weird

fundings, and you can’t get your heads around them, it’s

typically has to do with track record and credible audacity,

Trump’s prior blunders. So say what you will about Adam Newman,

he is audacious, and he has credibility, people forget his

origin story, they only remember the Masa Yoshisan $4

billion. And what happened and what he did with that, and that

was a complete clusterfuck. It went off the rails, he did all

kinds of inside dealing. And it was it was madness. But before

that, he did Green Desk, he was a bootstrapped entrepreneur. And

then he created the category defining co working space,

which to this day, when you say I need to get an office, the

first thing people say is get a we were just like they say,

take an Uber, just like they say, Google it, just like, you

know, any other verb that we talk about. And so it’s very

easy to dismiss him and say, the tech industry has no morals,

they just back they’ll back anybody. He has a publicly

traded company that’s in the market right now, he defined the

category, and he also put $300 million, apparently of his own

money at stake to buy these apartments. So I think it’s, I

would say the bet makes sense to me. And I think it will make

sense if we go into the bet, which I’d love to hear everybody

else’s thoughts on. It’s an audacious bet, because housing

is one of the hardest industries to tackle. And he already did

it for commercial. So why wouldn’t he be able to do it for

residential sex? Did you see this opportunity in the market?

Didn’t? Did you guys take a look at it? Or have any points of

view on it?

No, I mean, we, we don’t write $350 million size check. So it’s

just not something that we’re going to take a look at. For

that matter, we don’t really do non software investments. We

don’t do, you know, in the physical world type investments.

And I’ve kind of learned that doing anything in the physical

world with atoms is 10 times harder than doing anything with

bits. So, you know, one of my takeaways over the last few

years is, you know, we tend to like pure software models, not

even hybrid or tech enabled models, because it really does

take a 10x entrepreneur to do anything in the physical world.

So we, you know, we, software is kind of our knitting, and we

like to stick to that. In terms of, you know, Andreessen

Horowitz, making this investment, here’s right, or your

larger topic of repeat founders, look, most startups fail. And

most founders or good founders have an entrepreneurial streak

in them. And so you combine those two things, and there’s

gonna be a lot of repeat second time founders, people who are

fundamentally entrepreneurial, and their first thing doesn’t

work out, I think that that can be a positive thing to invest

in, because they’ve gotten some of their mistakes out of the

way. And they’ve learned from that experience. So I think the

question we would just ask is, what were the learnings? And

did they conduct their failed startup honorably? You know,

like, if they lie to investors, or misled investors, then

obviously, we don’t want any part of that. But I don’t think

most failures are like that. And, and so as long as the

founder, I think conducted themselves, honorably had some

good learnings, it’s certainly not a disqualifier for their

next startup. I mean, Chamath, you’ve been open in the past

about startups that waste money and do the kind bars and red

brick, you know, offices, and, you know, easy living at the

office. There’s no better example of over the top

exuberance as there was at WeWork, right? I mean, does that

indicate to you that this guy doesn’t have a clue in terms of

how to be prudent with investors capital, and it’s not backable?

Or how do you think about it? I have a couple thoughts. The

first is that WeWork is a really interesting business. But

that business had been built many times before, and it’s

called the REIT. And I think what Adam was able to

arbitrage was a period of time where he pitched a non real

estate investor, a technology company that was really just a

real estate investment trust. And that’s why he was able to

get these incredibly heady valuations. I think the peak

valuation of WeWork was like 45 or $50 billion. But what

happened, which is that when WeWork ultimately went public,

the collective intelligence of the public markets imposed a

REIT based valuation model on WeWork, and it is now a $3.6

billion public company. And I don’t think you can dunk on Adam

for that. It’s hard to build any kind of company, let alone a

$3.6 billion company. And he was instrumental in that. So he

should get some amount of credit. But the reality was

that he was pitching people that didn’t want to hear about a

business that was a real estate investment trust, they wanted to

hear about some technology and all of these other things. But

ultimately, when you stripped it away, it was a REIT. Now you

started again, and from the outside in not knowing anything,

because we don’t know anything. What it looks like is the

beginnings of another REIT, except focused on residential,

right. So when you buy hundreds or 1000s of apartments, but

again, same pig different lipstick. The issue at hand,

though, is that, again, he has found a technology investor to

buy a technology story. And again, time will tell whether

there is a technology business here. But if it ultimately is an

amalgamation of a bunch of apartments with some sort of,

you know, interconnected technology that helps enable a

better community or what have you, those kinds of REITs have

also been built before and REITs are valued in a very

structured way on this thing called FFO funds from

operations. And you know what the upper bound of valuation is,

which is if you go and you know, look in the stock market, the

most valuable REIT in the world is a company called prologis.

They have about a billion square feet under management,

they’re about $100 billion company, we work has about 45

million square feet under management, there are $3.6

billion company. So if you just interpolate from those two data

points, on the residential side, Adam’s gonna have to buy, you

know, if you think an average apartment is 1500 square feet,

he has to buy, you know, 665,000 more apartments. In order for

that to be prologis scale, you know, I don’t know to invest at

a billion dollar valuation, or 1.5, or two, or whatever the

number turns out to be, make sense if you think the upper

bound is unlimited. But if you think the upper bound is three

or 4 billion, the only reason to do it, by the way, it still

makes sense for unreason to do it. And this is why I think

people get tilted. Because now this comes to my second point,

which is that what Adam Newman is able to take advantage of is

a very obvious, powerful understanding of the venture

capital business model that other founders don’t, especially

the ones that dunk on him. And let me just explain this. We

talked about this last week, the only mistake I think that

SoftBank really made was a velocity of money mistake, which

is not setting the investment cycle of their vision fund to be

10 years instead of five. Well, every other fund has a five year

investment cycle to including ahs. And so when you have 10s of

billions of dollars under management, guys, guess what,

they have the same problem SoftBank did, except with just a

different quantum of capital. They want velocity of money. And

so if a founder comes and asks for $350 million, it actually in

a perverse way makes your life easier. Because now that’s

saying yes once versus saying five or six times to people

asking for $50 million, or heaven forbid 350 times for

people asking for a million dollars. And so if you’re if

you’re in that seat, come up if you’re in the investor seat, are

you putting all that capital once with the one guy who’s

managed that money before? Or do you want to find the guy who

has it or the guy who has it? You have to understand the

Andreessen business model and recent Horowitz business model

is to become Blackstone. But for technology,

you have like 30 billion aum now, right?

Right, which is still, you know, a drop in the bucket and

something like that. So if you if you look at Blackstone, right,

a trillion Blackstone is 100 plus billion dollar market cap

company, right built on three pillars, credit, private equity

and real estate, you can make the argument that technology is

near is as important as those three categories. And so, you

know, if I think it’s pretty obvious that Andreessen is

trying to build a publicly ownable security that

represents all things in technology. So again, I don’t

think that they’re necessarily out to generate massive returns

for LPS. They want to become a credible, reliable institution

for to absorb hundreds of billions of dollars.

And so ultimately, the objective, you think is to

end the monetize their, their ultimate goal is to is for

Andreessen and Horowitz to monetize the equity of Andreessen

Horowitz of the management company. Yeah, that’s the goal.

And that’s a that’s a, by the way, that’s a laudable goal.

It’s really hard to build a business. They built an

incredible business, and then they should get credit for that

tax. Do you agree?

Well, I mean, they are they, I think she must write that their

stated goal is to build like a larger institutional VC type

investor. I mean, doesn’t Andreessen have a portrait of

JP Morgan hanging on his wall or something? I mean, they want

to turn VC from being like a little craft business is

something larger, more institutional. So yeah, I’m sure

they jump at the chance to write a $350 million check if they

believe in the company. But can I shift this conversation just

for a second. So I’ve done a lot of commercial real estate

investing. I think there are reasons to think that flow,

this new company could actually be better than we work. And let

me just explain. So with we work, you know, if you talk to

commercial office space, owners, landlords, about we work like

10 years ago, what they would have told you is, yeah, look,

that model is great. But we want tenants who are high credit

and sign long term leases. Why? Because they’re not worried

about what happens in a bull market, they’re worried about

what happens in a recession, and they want to make sure they

can cover their bank debt. So landlords have always cared not

just about rents, but also about having high credit long term

leases. What we work basically did is arbitrage that, of

course, it was a much better deal for startups. Because if

you’re a startup, you don’t have to go through a complicated

process on a lease, you could just go month to month at a we

work and you’d be willing to pay a premium for that. So we

worked business work great during an upmarket because they

would rent space for say 50 bucks a foot, lease it for 100.

And they would capture the spread. The problem is the

business was highly levered to a boom cycle. And at the first

recession or bus cycle, all of a sudden, they’re gonna have

massive vacancy because everyone can leave. And all of a sudden

their rents go below their the rents are collecting go below

the rent, they’re paying and the arbitrage goes away. They

magnified that problem by making two mistakes. Number one,

they signed a lot of top of market leases, right, they were

signing leases at $100 plus per foot in hot markets. And the

other thing is, they didn’t seem to have a lot of financial

discipline. You know, I guess that show kind of makes fun of

these sort of Bacchanalian parties they had, and so forth

like that you can get away with a lack of spending discipline if

you’re a 90% gross margin business like a Google, but when

you’re a real estate business, who’s got real cogs, not having

spending discipline is actually a problem. So for all those

reasons, I think we were kind of contained the seeds of its own

implosion inside of their model, and they needed to manage or

mitigate those risks a lot better. That’s not to say,

though, that it wasn’t a great product. I mean, for every

reason, the early was an amazing product.

Yeah, I mean, in the early days, so to your point, they were

taking under market, like really low cost per square foot space,

like in the tenderloin, and then selling it for, you know,

Bryant and third street rents, right? I mean, that was the

arbitrage and it worked. It’s only they lost that discipline

sounds like in the second half of the company’s history, right?

But I think it’s interesting about flow is that it’s sort of

multi family, these apartment type buildings, those tend to

be, you know, let’s call it one year leases anyway, and they’re

owning them. They’re not leasing from a landlord. They’re

basically so Chamath’s right, it’s basically a standard

apartment replay, where Newman is going to create a consistent

experience and brand across the country. I’m not sure that’s

really been done before where there’s like a brand for

apartment living. It’s never been done. Yeah. And so

actually, it’s pretty simple in terms of measuring if it’s

going to work or not, which is simply can Adam Newman deliver

lower vacancy rates and higher rents, and then you know, buy

apartment buildings at market prices. So in other words,

that’s the arbitrage is can he extract more rent and less

vacancy from apartment units by creating this national brand,

and this experience, but this is what we do with financial

discipline. Yeah, go ahead. This is my point. Everything you

talked about is how we would actually do a teardown of any

other read that was looking for money, David, you know, we would

look at what is the FFO? Ultimately, it’s like, you know,

what’s the implied cap rate? And what’s the FFO? Can you get

paid for owning this? How much do you have to spend? And can

you get paid? And this is where this is where I think like, you

know, trying to then, you know, so if, if, if on the if on the

inside of it, what what instead, it was not that, but it was

pitched as some, you know, convoluted technology play, it’s

a little bit harder to believe. Again, we don’t know the

details. So maybe this play. Sure. Actually, what I would say

building on sacks and schmutz, if they are going to do 700,000

apartments, you can actually put some numbers on this, you know,

700,000 apartments, you think they can get extra 100, maybe

150 bucks out of a renter, I think they could for like that

experience, right, people pay a little bit, they’re not going to

pay 300 more 400 more, because then they would just get a

larger apartment. And you know, they could spend that money

because it would be better spent. They have 700,000 of

those, you’re talking about a billion dollars in revenue a

year, that’s what 700,000 apartments, okay, 10 times

profits, you know, whatever $10 billion valuation, if

interest in hearts is buying in at 1.5, or two, like Jamal

saying is probably correct, somewhere in that range, they

bought 20%. Okay, yeah, maybe they get a six or seven bagger

out of this, but it’s a six or seven bagger on a big number

  1. It’s not like a 20 x or a 50 x. And you also get the

branding, which I would not under value here of being the

firm that backs bad boy, entrepreneurs, and is like

willing to go there and support. I think it’s a real

positive for Andreessen. It’s like, look, yeah, I do. You

know, you just raised a ton of money. Well, guess what, you

got to put that money out, because it’s not as if they’re

going to think to themselves, oh, I really only want to run

this fund over three years instead of two. They’re not

thinking that they’re like, I want to keep going out because

I think their business model works by taking as much oxygen

in the room as possible, which means to be actively

fundraising. Always. That’s it’s tied. It’s true of

Blackstone. It’s true of Apollo. It’s true of Carlisle.

It’s true of KKR, any of these publicly traded investment

managers, they live and die by their ability to constantly be

raising funds, which implicitly means you have to constantly be

writing funds, the returns decay, but that’s okay, because

now you’re feeding your you know, you’re taking money from

pension funds and other institutional limited partners

who are fine, because their hurdle is like six or 7%. So if

you deliver 11%, you still look like a genius, because you can

absorb so much money. So Andreessen wins by showing that

Adam Newman goes and picks him. Andreessen wins because they

have the ability to write a $350 million check. Andreessen

wins because they have $350 million less that they have to

actually put into the hands of other entrepreneurs. Now they

can do it with just one check. So it’s a multifaceted win for

them. And it’s a multifaceted win for Newman. I think there’s

also brand value for the entrepreneurs that have had

failed startups or issues with their first startup imploding,

and knowing that there’s still a second bite at the apple. I

remember a survey and I just tried to pull it up, but I

couldn’t find it. So I may be wrong on this. But first round

capital years ago surveyed or did an analysis of all the

investments they had made. And I think one of the biggest

predictors of success in a startup was that it was the

founder’s second startup. And so if you’ve had failings the

first time around, you’re more likely to have learned from

those failings to improve your performance the second time

around. And so as an entrepreneur, I looked at

Andreessen Horowitz after this investment and think, you know,

these guys will still back, you know, great entrepreneurs, even

if things went sideways, or there was an issue the first

time. And you’ve got, you know, the ultimate kind of case for

that. Okay, speaking of Andreessen, I’m going to move us

along. You guys wanted to cover this topic, not my favorite

topic. Just because I want to be careful about you guys decide

what you want to say. But I’m going to bring up the Andreessen

NIMBYism thing in Atherton. You guys wanted to cover this,

right? Yeah, thumbs up. Sure. I mean, I mean, it’s like, okay,

well, I mean, everybody’s talking about why wouldn’t

everyone’s talking about it? Okay. So during COVID, Mark

Andreessen wrote a an essay called build. And I’m going to

read an excerpt, he says, you don’t just see the smug

complacency, the satisfaction with the status quo, and the

unwillingness to build in the pandemic or in healthcare.

Generally, you see it throughout Western life, and

specifically throughout American life, you see it in housing, and

the physical footprint of our cities, we can’t build nearly

enough housing in our cities with surging economic potential,

which results in crazily skyrocketing housing prices in

places like San Francisco, making it nearly impossible for

regular people to move in and take the jobs of the future. And

then last week, Mark and his wife, Laura submitted a letter

to the town of Atherton, to fight against multifamily

housing, saying I’m writing this letter to communicate our

immense objection to the creation of multifamily overlay

zones in Atherton, please immediately remove all

multifamily overlay zoning projects from the housing

element, which will be submitted to the state in July, they will

massively decrease our home values, the quality of life

ourselves and our neighbors, and immensely increase the noise

pollution and traffic. sex. I’m just gonna hand the mic over.

Well, I mean, I’m happy to defend the residents of

Atherton on this. I’m going to take the contrarian standpoint,

but I was gonna do the same. I thought you guys were gonna

match it. So well, look, I mean, do we have a problem where

housing is too hard to construct in the state of

California? Yes. And there’s a bunch of reasons for that the

permitting process is Byzantine, it takes years, all

those delays cost money, the tenant rights movement has gone

so far that landlords basically can’t, you know, it’s almost

impossible to evict anybody. And that makes it so no one wants

to be a landlord, no one wants to build these multifamily

buildings, or buy them. And then you know, you’ve got like

all these taxes. So you’re just in California, in San Francisco,

for example, they just passed a 6% transfer tax, where if we

talked about in the show, and they basically just took 6% of

my home, and there’s like nothing you can do about it. So

there’s a lot of reasons why people don’t want to invest in

more housing in California. And I think that this Atherton

example is sort of cherry picked, because what this is,

is really zoning, you know, there are these suburbs, and

it’s not just Atherton, I mean, you got the East Bay as well,

where people live in these areas that are zoned for single

family residences, as opposed to multifamily. And that

determines the character of the neighborhood. Now, if you go buy

a house in one of those neighborhoods, with that zoning,

then that’s what you expect to be the case. I mean, you have to

spend more money buying a house in that neighborhood, because

you’re investing in the character of that neighborhood.

So it is unfair to the residents of that neighborhood for a

developer to come along and say, hey, I’m going to change the

character of this place. So I can make money, I’m going to

take a bunch of single family lots, turn them into multifamily

apartment complexes or something like that. So I can

understand why the residents would be against that. So I

would differentiate between legitimate reasons for zoning

and then things that the state or cities have done to undermine

the market for housing, basically creating frictions or

impediments in the market for housing. Now, it is the case

that as cities get bigger and need to free up land that you

might need to rezone, but the areas that you should look at

for that should make sense, right? I mean, I don’t think you

go off to Atherton and change the character of that

neighborhood so that you can buy five more units. Yeah, I

mean, you should, you should look at like, why not look at

the areas around, say, public transit, like the BARTs and so

forth, where you could basically go up around there, and it

would make sense for the neighborhood. I mean, the

example I would give to kind of paint an extreme picture is

let’s say you own a farm in the countryside, someone buys the

farm next to you, and then decides they want to build a 50

story tall skyscraper next to your farm, you would have a

serious objection because I think that the I mean, look,

look at the town of Venice in Italy. I mean, Chamath, you’ve

been there recently, but, you know, communities, local

communities can define the character of their community by

making zoning laws that, you know, allow a small city to

remain like a small city. I’ve also always been against this

notion that we should allow any developer to build any size

building anywhere they want in San Francisco, which has been

an ardent cry from Silicon Valley progressives for years

that we need to let them build, let them build. But at the end

of the day, I moved to San Francisco 22 years ago. And it

was a small quaint city, it felt like a small city. And

building skyscrapers made it more congested, made it less

inviting, made it feel more industrial. And it wasn’t

appealing to me as a resident. And I think that residents need

to have the right to define what they want their community to

be. The question it brings up then is, where do you build

because all residents everywhere would want to block

family housing, multifamily housing, skyscrapers. So I mean,

Chamath, I don’t know if you have a point of view to counter

what we’re saying. But you know, how do we think about solving

this problem at scale, if everyone wants their local

communities to remain quaint, and interesting and not be built

out? Well, I think I think that’s true for people who can

afford really nice homes in the suburbs, right? But there are a

lot of people that live in highly dense housing in urban

environments. And I think that’s where we need to focus. First,

if you look at the data, California needs to build three

and a half million extra homes by 2025. That’s a rule, right?

That’s like a so David’s right, like focusing on a town with a

population of 7000 people is not going to solve the three and a

half million homes we need to build. And it brings up a bigger

question, which is then who is going to pay for all the

physical infrastructure that’s going to be required, let’s just

say you’re able to actually double the population of

Atherton to 14,000. Well, you know, I live near that area. So

what I’ll tell you is, Atherton has bad flooding, David, you

know, sacks actually used to live near there, too. So sacks

can can confirm this. You know, depending on when it rains, huge

pockets of water just collect everywhere that infrastructure

is bad. There are no sidewalks, right? So you kind of walk just

on the road. Cars whipping by, you know, could pick you off at

any moment. Now, those were decisions that, as David said,

the residents of that town made decades ago because of the

lifestyle that it created. And they traded away a highly dense

urban environment. Whereas if you just moved a mile, you know,

south, there are parts of Menlo Park and parts of Palo Alto

that are already in a situation to absorb very dense housing

where you could put that extra seven or 8000 people pretty

easily in a much what do you what do you do when those

people in that neighborhood in Menlo Park say I don’t want

another apartment building here. I want it to be down the road

in Atherton, right? How do you resolve this conflict? And I

just want to remind everyone in September, Cal, I think I’m

signed these bills, right? He signed 31 affordable housing

bills, which mandate by zip code and by city and by town,

the building of affordable housing to create equity in this

problem, or which basically means all these cities and all

these towns are now scrambling to figure out how do we meet our

state mandated objectives of new affordable housing in our zip

code, or in our town? And by the way, look, coming real

soon. Yeah, I mean, look, the and I think exactly as you said,

what will happen now as it goes to some state commission, and I

think that state commission can issue some sort of penalty or

something. So, you know, it’s, it’s, I think the the residents

will pay for that freedom, if you will, to not have that

building happen. But again, I just go back to it doesn’t solve

the crux of the problem. The crux of the problem is we need

to solve this housing crisis in the order of magnitude of

millions of homes. Okay. And so millions of homes can only be

absorbed mostly in cities. So the real conversation and you

know, is I have more sympathy for the residents of Atherton

than I do for residents of the city of San Francisco. Okay,

because there is dense housing in San Francisco, there already

is an infrastructure, social services that were designed and

built, there are sidewalks. Again, simple example, there are

stoplights, you know, in San Francisco, that a lot of these

towns don’t actually have. Now, again, that was a decision they

made 50 years ago, and they would have to change that

decision. But my point is like, there are there are places that

are already shovel ready. And the real question is, why can’t

we build hundreds of 1000s of units. And so this is a good

article to write, because it’s a Tony neighborhood. And you

know, there’s a few 1000 folks. But I think the real issue won’t

get solved until we figure out how to green light hundreds of

1000s and millions, because we are three and a half million

homes short. J. Cal, what do you think? I mean, are you?

Well, you know, the the truth here is that this is not about

Atherton, this is every town, every city in California is

fighting all development, because if you fight the

development, well, yeah, you would obviously have less

traffic and supply and demand your homes become more valuable.

The place that’s fought it most of all is San Francisco in the

city, where you cannot convert homes, you cannot take your

Victorian and make it into a townhome. And then if you look

at what’s actually happening here, what they’re fighting

against, and you know, this is the hypocrisy of it is, you

know, these are townhomes, this isn’t like a 20 story, you know,

giant apartment building, their townhomes, and they’re going to

be $3 million each. And they’re not going to be for scary people

and criminals and ruining people’s quality of life. It’s

going to be the venture partner or the receptionist, not even

the receptionist gonna be a venture partner, it’s going to

be a CTO at a tech company who’s going to be able to buy this,

and then be that much closer to work. And so it does reek of

hypocrisy. And there’s a really simple solution here, which is,

you know, there are Caltrain stations up and down the

peninsula, there are, you know, in some places, you have other

municipal transportation along those corridors, they should

build up and they should build 10 story apartments, etc.

Redwood City did this recently, we’ve all been there and seen

the apartments, they’re just they’re 60 cal, you’re talking

about you’re talking about the exact kind of solution we need

because instead of trying to solve 100 units here or there,

Redwood City did an incredible job, they solved it in the scale

of 10s of 1000s of units. And it completely changed the downtown

of Redwood City. It is awesome. And it’s awesome. Incredible.

Afraid of so what is incredible afraid of this is NIMBY ISM at

its worst, in my mind, I’m not going to specifically make it

about Marc Andreessen. I think everybody, you know, has the

right to live in the neighborhood they want, they get

to state their feelings. I think what we need to do is convince

people. And I think there’s two really good arguments here.

Number one, do you want your chef, you’re saying convince

people, convince people to let their neighborhoods change,

because to let them evolve modestly to have homes that

their own children, or their own chefs and housekeepers and

associates, we all know people in the in the area who have

bought apartment buildings for their nannies, because you

couldn’t get a nanny, or you couldn’t get a chef. So you you

bought some unit in Redwood City, and you rented it for your

nannies or whatever, like, we don’t know people that have not

everyone. I do. I know multiple, or who have considered it. And

so that’s the way you would convince NIMBY people to evolve

here. And then there’s a second one. This has to do with work

from home. When you commute, you know, the issues of domestic

violence, depression, drug abuse, substance abuse, alcohol

abuse, all of that goes way up. And it’s it’s somewhere between

30 and 40 minutes of a commute, you start to see people’s

quality of life seriously deteriorates. And so if we want

people to come back to offices, which Apple just mandated last

week, everybody’s coming back three days a week, like it or

not, Tuesday, Thursdays, and you pick the other Wednesday, you

want to come to work, I guess. If we want people to come back

to work, but yeah, we’re gonna have to build some taller homes.

The CEOs, the founders of the companies, the founders of the

venture firms, it’s not about Marc Andreessen, it’s about

everybody. They don’t have to commute, the office is within

walking distance or a bike ride of their office. People need to

start thinking about their nanny, their chef, their

firefighter and their employees. Jason, I may have

misread it, but it wouldn’t have solved the problem for the

nanny, the chef, the teacher. No, this would be $3 million

units. No, it wouldn’t even be that because the way that it

read, because I read it, said that it, you would have

qualified it by building what’s called an ADU on your property.

Yes. So, that’s another solution. So, people would have

built it for their grandmother or their in-law. A lot of

people are doing that, by the way. So, my point is the law,

the law as proposed was already hacked. And so, it would never

have accomplished what you were saying. I think the answer to

what you’re saying is what Redwood City did. It’s what

towns all around the country should be doing, which is like

in and around particularly like transportation hubs, you should

be green lighting a lot of dense housing. But Jason, those are

not ADUs that sit on a property. No, no, no, no, no.

Those are, those are $500,000. And by the way, those also

require not just the infrastructure, but it also

requires the financing and all of the, you know, the banks and

construction. The market’s there to construct it. That’s not a

problem in California. The opposition is the problem, which

is why the federal, I’m sorry, the state government’s getting

involved and superseding or trying to supersede what

happens on a local level. That’s why Gavin Newsom is

passing these things is because each town is refusing to do it.

But another possible solution is if Atherton is so good at

blocking this stuff, and they have so much money, let them

pay a penalty and have Redwood City or San Carlos or another

neighborhood, Millbrae, that wants money, and they want to

build up. Millbrae is building, because that’s where the BART

station ends, is it Millbrae? They’re building up there.

What you’re describing, like, are all these contortions and

what should be a more free market for housing construction.

I mean, the reality is, we’ve done so many things to distort

the market.


With these labyrinthine permit process processes that delay

projects for years and years, to, you know, to all the taxes

and other rules.

Well, they fight it, they fight it with all these environmental


Zoning is a little different. Yeah. So the nimbyism factors

into the permitting process. But, but I would, again, I would

differentiate zoning. But my point is just, we’ve like, so

broken the free market for housing, that we then come along

and say, see, the free market’s not working, we need more

government mandates. Look, is this happening in Miami? No, go

to Miami, there are cranes everywhere. They’re building

they’re building multifamily or exactly. So in these, frankly,

red cities, red states, which are much more lightly regulated,

they’re building a lot more. But at the same time, it’s not

and in New York, which is constrained, so you have to

build up. Yeah. But Houston has no zoning.

Yeah, New York City has always had a very non sentimental view

towards construction. The city has always said, Okay, if you

want to build something bigger and better, you can tear it down

and start over. I mean, they have like air rights and so on

that you have to respect, but but New York City has never

they by and large, they don’t constantly label buildings as

historic and say, you can’t touch them and things like that.

It’s New York City has always wanted to keep being dynamic and

growing. So there are other places that just don’t have this

problem. And they’re able to achieve this growth without

building an apartment complex, like in the lot next to you, if

you live in the suburbs, and have a single family residence.

I mean, so I just think like, you know, the politicians in

California have so thoroughly broken the market for housing.

And now, what happens is, you get an article like this,

that’s basically scapegoating the residents of a suburb as

being the source of the problem when they didn’t create this


They’re just fighting to keep the status quo. So they’re

perpetuating it, I would say.

But you know, like, so first of all, I have no special love for

Atherton, Toronto. I lived there for a couple years. And it’s

kind of like a Stepford community. I mean, I had to move

back to the city. Well, I’m like, you know, somehow, I’m

just more comfortable stepping over dirty needles and


You’re voting with your dollar.

I moved back to San Francisco, but look, it’s like a really

weird place, because it’s like Al Pacino and the devil’s

advocate. Go ahead.

In addition to there being no sidewalks, there’s literally no

offices, there’s no grocery store, there’s no commercial

real estate of any kind. There is no downtown there is there,

you know, so I don’t know, like, where the hook is that you would

all of a sudden put an apartment complex. I mean, you’re

literally going to be building it in someone’s backyard.

So the character of that neighborhood just doesn’t

support it. And I think, you know, people coming together to

form their own cities, you know, under the principle of

subsidiarity, should be allowed reasonable freedom to basically

construct a city as they want in the way that they want to live.

And there are other cities that competition, Friedberg, there’s

other cities that competition, Houston has no zoning,

essentially. So you can if you have a lot and you want to make

it into a school, or a hotel or a restaurant, you can do it.

And then outside of Austin, you kind of have that same thing,

people build all kinds of weird compounds and stuff. Are you

guys following? So it’s a competition between those

cities. And I think San Francisco is losing. Yeah. Are

you guys following any of the startup cities that are being

built, where there’s like a new city being built from the

ground up? And any of those seem like pull the sack? I mean, I

don’t know the names of any of them. But cul-de-sac is one.

Yeah. I mean, are these real? Are these real projects? Are we

going to see these emerging like next gen cities that, you

know, could be viable places to move to and live? Or is it

really just about, you know, transforming some of these cities

that are less regulatory? And that’s ultimately what will win

in the market. You know, part of why the the regulation has

gotten so perverted in a lot of these towns is because you’ve

been able to gerrymander how you know, these public school

districts get funded. Yeah. And so you know, why folks are so

protective of it is, is again, and and, you know, to, to

underscore one of Saksa’s points, this is much more

prevalent in democratic states and democratic cities where,

you know, coastal elites have really gerrymandered these

school districts. And that’s a large reason why they, they

don’t want a lot of building, they want to protect the tax

base, and they want to be able to funnel those specific tax

dollars into a few schools for their kids. And that’s it. Yeah.

And so it’s, it’s actually a really good point. People don’t

know this undercurrent, which is, oh, it is. By the way, this

is the dirtiest little secret in these democratic states.

Again, mostly democratic. But if you look inside of

California, and a couple of other states, how horrendously

gerrymandered it is, so that you can basically redistrict in a

way to cordon off tax dollars to only then send to one or two

public schools that sit inside of your area, your zip code,

because that’s what the law says. It’s a zip code oriented

scheme is perverse, it’s created incredibly horrible incentives

for people. So now David is right, which is that there’s a

there’s a contortion of laws that come together, that

underlie some of these decisions that then manifest in

a petition like this, and etc, they all need to get cleaned up.

And Chamath it’s, it’s, it’s even worse than that, because

the same people who have rigged it so that all their tax dollars

stay in their non development community, then they’re

overfunding their public schools, they could have easily

afford private, but they’re using all that money for just

their private school, and the one in the town next to it, East

Palo Alto, whatever, they have no money. And then these people

have the audacity to fight against school choice, so that

those poor people can take tax dollars, and then pick a better

school. So it’s hypocrisy all the way up and down. And you

know, I think this is why people are largely moving to

different places around the country. And it’s a competition

between states and cities. Okay,

we’re gonna go from super local to global. You know, this is a

topic I wanted to talk about today, because I want to bring

together a couple of breads, and get your guys’s take on, you

know, all of these things kind of coming together and what it

means for foreign policy, and how things might play out on the

global stage in the next, you know, call it years to decades,

Xi Jinping, it’s been reported this week, is taking a trip to

Saudi Arabia. You know, this is just a few weeks after Joe

Biden made his trip to Saudi Arabia, I’ll read a just an

excerpt, he’s going to end his more than two years of

self-imposed, in person diplomatic isolation, and his

first trip is going to be to Saudi Arabia. You know, this is

from unnamed Saudi sources. So it’s unclear. This isn’t an

official statement. This is just reporting. You know, the Wall

Street Journal reported in March that after six years of

negotiations, China and Saudi Arabia are getting close for

China to start paying, paying yuan for oil that they would be

buying from the Saudis. So there’s an important kind of

economic tie up that may be emerging that that could affect

the US dollar and the the importance of the US dollar on

the global economic stage. And meanwhile, this week as well,

it’s been reported that China is doing military exercises with

Russia, inside Russia. So there is an extension of China and

their influence, and their economic tie ups and their

military activity with both China, sorry, with both Russia

and Saudi. I also want to highlight another important

point that came out this week, Saudi Aramco reported their

earnings, the largest earnings ever for a company $48 billion

of net profit in a quarter. That is more profit than Microsoft,

Apple, Facebook and Tesla combined. In a single quarter.

It is the most profitable business. And Saudis have been

very public about their intention of divesting their

interest in Saudi Aramco, which is their state owned and state

run oil company, and moving into other businesses. Over the

past couple of months, it’s been reported that they’ve

accumulated a nearly $100 billion equity portfolio, owning

stocks like Alphabet, zoom, Microsoft and others. It’s also

been reported that they own over $160 billion of US treasuries.

So the US is very dependent in the private equity community in

the VC community and in the public markets on Saudi dollars.

Saudis have been large holders of US dollars. And now through

China, it looks like the Saudis may be having a tie up that

brings them closer to China it through this trade relationship

with the yuan and the visit from Xi Jinping, while China is

actively exercising, you know, their military inside of Russia

is the future, a China, Russia, Saudi axis, and should we be

concerned and should we be changing any of our tactics on

foreign policy, David Sachs, as this, you know, set of threads

plays out over the next couple of months and you know, going

Yes, I think we do need to make some changes finds backing away

from this now, but in his first year, he declared the Saudis be

pariahs and he did push them into China’s arms. What was the

point of that? Biden recently had to go to the Middle East to

basically beg Saudi Arabia to increase their production of

oil. So he’s already acknowledged that policy didn’t

work. And one of the reasons it didn’t work is because

simultaneously with declaring these allies to be enemies, he

basically restricted us to energy production, which is, you

know, strategically undermined. So

and the US has military bases in Saudi Arabia, very strategic

assets for the US military.

Yeah, let’s listen, we sell them weapons, the US relationship

with Saudi Arabia is always going to be complex. They’re a

complicated friend to have, but it’s much better to have them as

a friend than basically drive them into China’s arms. And the

reality is, whatever you think about the regime there and how

oppressive it is, first of all, we don’t get to choose the

people running these countries. That’s the lesson we should have

learned over and over again from all these failed regime change

operations. Second, do we have any reason to believe that if

that regime got toppled, it would get replaced with

something better. I think we all know that if the regime there

fell, it would probably be replaced with something

fundamentalist that we would like even less. And certainly,

if another nation were to basically dominate the region,

like Iran, that would be worse for us as well. So our

relationship with them is complicated, but ultimately,

they should be, I think, allies of the United States, and we

should not be working over time to push them into China’s arms.

And I think similarly, with Russia, we’ve basically declared

ourselves to be engaged in this proxy war with Russia, which

strategically, there’s just nothing in it for us. You can

sympathize with the people of Ukraine all you want. I mean,

it’s dangerous.

You’ve said that in the past. And I think the question is,

does this China military exercise in Russia indicate an

escalation of our conflict with China to you? You know, or is

this something that, you know, just kind of par for the course

in terms of, you know, neighbors, you know, conducting

Mearsheimer, just an article in foreign affairs talking about

the Ukraine war reminding us that it’s still going on. I

think people somehow think that this war is just stable, and

it’ll settle into forever war status, kind of like, like

Afghanistan, these conflicts in the Middle East, and it’s

going on forever. It’s actually very dangerous, it can always

escalate out of control. And as long as it’s going on, I think

we just have to remember that it’s going on, it poses a huge

global risk. And I would say that one of the things that,

again, we should be aware of is this idea that even though we

have problems and conflicts with multiple nations, we still

don’t actually want to push them into each other’s arms. Again,

the Soviet Union and China during the Cold War being the

key example. I mean, this principle of geopolitics goes

back 1000s of years to the Romans, right? Divide et impere,

divide and rule, you do not want to unite your enemies. And

what we’ve done here is we keep pushing them together. You know,

China and Russia, historically have not been friends. They

share long borders together, neighbors generally have

problems with each other. These are nations with serious

conflicts or differences of interest. And we’ve made it

really easy for China to turn Russia into the junior partner

in that relationship.

Tomas, do you think US foreign policy needs to change and that

we’re setting up this, you know, access of conflict, this

access of allies, that we don’t want to have the allies? And

you know, would you kind of advise and also, you know, do

you get concerned about this oil yuan trade, where there may be

some, you know, economic tie ups that that really could

affect, you know, the dollar as a reserve currency?

Look, a couple things. I think it’s really dramatic to kind of

paint it in the stark kind of like bipolar terms. I think we

are post all of that. So I understand how in the Cold War,

it was easy to fall into binary definitions of good and evil

one and zero us versus them team A versus team B. But in

2022, I don’t think that’s how things work anymore. We’re in a

highly interconnected, highly global world. It’s very

complicated. Dollar flows are real time. They’re massive.

Cooperation is real time. It’s all over the world. It’s with

every country. So it allows every country actually the first

chance that they’ve ever really had to maximize their own

potential for their own citizens. And that’s really what

every country’s goal is. Right. And so in that lens, look what

just happened today. gasprom said they’re going to shut off

Nord Stream one just for a few, you know, a few days, right. But

as a result of that EU net gas has just gone absolutely

nuclear and just close at all time high 14 x 14 x where it was

pandemic, right? You know, price per unit for a year ahead.

So if you so if you take a step back, we are at max energy

production with all of the capacity all around the world 100

plus odd million barrels a day. Okay, global productivity

absorbs that there is very little room right now to expand

that without pushing the date in which that capacity is

available out until you know, 2028 to 2030. So effectively a

decade from now. So if you’re in this situation, and you’re a

country with vast natural resources, of which I’ll just

remind us America is one. I think the most important thing

you can do for your own citizens is to monetize these

petrochemicals. Now, get it out of the ground in a reasonable

way, sell them in the marketplace, because there’s

demand for it. Take that money and reinvest it in your people.

And I think if you look at it that way, the best run countries

are responding to this moment in time, like any company would,

how do you maximize demand and sell the product you have to the

most number of customers globally. And so I think the

Middle East is doing an incredible job the US by the

way, by passing the IRA. Finally, I think is on the right

footing because we can talk about this in a moment. But the

path to permitting and the path to clean up and by the way, it

puts fossil fuels on a level playing field with with clean

energy alternatives, emerging alternatives. Yeah, the best

thing that could have happened. Okay. So I think we’re all

behaving in a very rational, market focused way. And so I

would focus less on trying to dramatically kind of resolve

these things as a few countries versus everybody else. I don’t

think that’s what’s happening. Yeah, now it’s more complex,

much more complicated than that. But I think the simple

explanation is people with resources in the ground of the

country in which they rule, have a responsibility, if they

believe that there’s market demand to absorb that, so that

they can take the revenue that comes from it and reinvest it

in their people. That is true for the United States. It’s true

for Saudi Arabia. It’s true for every country in the world.

Yeah, I mean, Saudi Arabia is clearly making these

investments, right? Not just on Yeah, by the way, I mean, but

also housing and new industry and education. And then by the

way, and Saudi Arabia is becoming much more liberal as a

result to write the education standards. Yeah. And if you look

at the investment, like, you know, you didn’t, you didn’t

need to go to Dave Swenson, and understand portfolio allocation,

although I think the guys in Saudi are smart enough to have

probably done it. But if you’re, if you have a lot of money

coming from one kind of business, and you need to make

sure that you can diversify so that you can reinvest over a

long period of time. If you look at countries that had huge

petrochemical related revenue flows, the Nordics, what did

they do, they stood up these huge sovereign wealth funds. And

those sovereign wealth funds went abroad, and they bought all

kinds of non correlated assets to those petrochemicals. That is

the same thing that Saudi is doing. Financial security for

their people. But it’s like, it’s like, what is the furthest

uncorrelated asset from oil? It turns out it’s Apple, Facebook,

meta and Google. And US US Treasuries. Yeah. Yeah. Uber.

Hey, Jacob. So Jacob, let me let me ask this contrarian question

for you. Because you often talk about the authoritarianism of

these states, Saudi, China, Russia. You know, it seems to me

as we observe what’s going on in Saudi, and maybe the case

could be made in China, to some degree, although there are

steps taken back, but also in Russia, that the US influence,

the economic and the political influence associated with these

these foreign policy conversions, could they maybe be

driving these business, these countries to be more liberal,

you know, we’re seeing in Saudi now, of course, that women can

drive that there’s new industry that there’s education that

there’s a technology industry booming, that the you don’t need

to have a turnover of government and a turnover of what is often

classified as authoritarian regime, for the operating model

to be influenced by the West in such a way that change happens

more slowly. And you do see liberalism emerge in these

countries with better educational standards, more

equality, more, more human rights. And so do you think

we’re kind of because you often kind of paint a picture that

it’s bad guys versus us? You know, do you not think that

we’re making an influence on these places locally, and that

we’re seeing? Well, I would take exception to like, it’s bad guys

versus us. I don’t I don’t think we want to create a legion of

dictators. And nor do I think that’s what this is, I would

actually agree with sacks, we should be embracing these folks

and having strong relationships with them, even though we are

fundamentally different operating systems for our

countries, democracy, we should be embracing. Sorry, you think

we should have a relationship with Putin, just 100%. I mean,

and we did, right? I mean, Obama was making some progress

on that. And we we did some great work. When, and obviously,

Trump has a very, very long standing, very deep. We don’t

know exactly how deep relationship with Putin. And we

did great work with we did. I mean, they did the he did his

pageant over there. I’m making some jokes. They bought a lot

of apartments. That was a joke. Okay, just a little joke there.

But who knows? We’ll find out over time, I suppose. Okay. But

we did great work with China in terms of containing North

Korea’s nuclear ambitions, right. And so there are things

we can collaborate on. I think the most important thing,

though, is that while we are embracing them, building fabric

between them, communication, trade, whatever it is, we are

not relying on them. And that’s really what we have to look at

when it comes to the kingdom. Because if not for the fact that

the kingdom won the you know, born on top of, you know, oil

fields, lottery, we would not be in a deep relationship with

this country. They’re living under a 10th century, you know,

rule in terms of how they treat women, gay people, etc. And the

human rights is an important issue. And we wouldn’t have a

deep relationship with them if we didn’t have to do with the

oil, but we do. And so what I think we really need to be

focusing on here is maintaining great relationships with them.

Yeah, we don’t want to drive them to each other’s arms. But

to Chamath’s point, I don’t think they’re creating the

legion of doom to take on the US, I think they’re just doing

what’s in their economic interest. And we need to do

what’s in our economic interest, which really is investing in

nuclear investing in solar batteries, wind, and even

different rituals. And in the interest of the free world and

Europe, exactly. And if we are independent of them, then we

don’t have to go over there and kiss the ring. Like Biden had

to do, we don’t have to, you know, deal with excuses. When

they do horrible things like murder, Khashoggi, or, you know,

just this past week, they put some Al Shihab in jail, she’s a

PhD student from the University of Leeds. She’s now going to go

to jail for decades, because when she went back to Saudi

Arabia on vacation, this happened last week, gentlemen,

because she retweeted people. And so these human rights

violations, the murder of Khashoggi, all these things add

up the Uyghurs, etc. And we’ll have a better ability to

negotiate and lead them as the shining city on the hill when we

work on being that shining city on the hill. And we’re not

dependent on them. And that’s really what I think we have to

focus on is reducing the dependency on these countries. I

think we all agree on whether it’s medical devices, PP drugs,

making our iPhones or oil to keep us right and then sort of

Europe. And that’s where nuclear comes in.

Speaking of reducing dependency, you know, Joe Biden signed the

inflation Reduction Act, some people have said this is the

most important bill signed in years, if not decades, by, you

know, passed by US Congress signed by a president, because

it touches on so many points that folks believe will really

move the needle with respect to climate change. Chamath, I think

you made an interesting point in our group chat. And I think

maybe we should start there, which is, you know, at the end

of the day, the systems of industrial production on planet

Earth, were made in such a way that we never accounted for the

costs of the external output of these systems, meaning we can

burn fuel, put co2 into the atmosphere or put methane into

the atmosphere in the case of animal agriculture. And we get a

low cost product that we consume. And ultimately, no one

specifically pays for the cost of the carbon going into the

atmosphere, which I, and you know, many scientists would

argue, is having an anthropogenic effect on the

warming of the planet and more catastrophic weather and all

these other risks that we’re now facing. And so the idea was,

you know, first principles, you should tax people for tax

industry tax businesses for the production of atmospheric carbon

that causes an effect that we’re all going to have to pay to

repair over time. So you know, is that a point of view that you

hold Chamath because you know, you kind of brought this up in

our group text, but that’s the that would be the ideal scenario

to resolve climate change is if you just tax carbon, we kind of,

you know, have a real solution here. And that this whole bill

is ultimately, you know, meant to kind of resolve the fact that

we simply cannot find a way to a carbon tax.

I actually think that what this bill did was killed the idea of

a carbon tax. I think it makes it completely unimportant, and

it’ll never see the light of day. Why? I think it’s because

in the absence of what we did in the IRA, there wasn’t a clear

way of doing exactly what you said, which is letting people

figure out what the equivalent trading price would be for

burning a pound of coal versus, you know, generating the energy

needed to run something off of nuclear, there was no market

clearing function for that. And the reason is because you

couldn’t get an equivalent amount of capacity effectively

available online so that they could compete one for one. What

we did through this IRA was essentially use money to create

so many subsidies, and then to also greenlight the way that

incremental fossil fuel projects would come to market. So that

now they actually going to be put on a level playing field in

the broad open market so that they can compete. When that

happens, I think you will make those trade offs better

yourself. And as a result, I don’t think that there will be a

necessary offset mechanism that will be required. Because this

plan will still get us to about 40% of the way there where we

want it to be by 2030, which is still a pretty decent leap

forward. There is no plan that gets us to where we all need to

be anyways. And I think that the appetite to go from this plan

to where we need to be doesn’t really exist. So I think that

we’re just going to have to kind of grit our teeth, get through

the implementation of the IRA, and realize that this is the

beginning of a probably 100 plus year project, nothing’s going

to get solved by 2050. Maybe you’ll see something done by

  1. Probably not. It’ll probably be a 2150 2200 kind of

an objective. And in that lens, I think like a whole bunch of

business models got turned upside down. So I think carbon

markets and carbon trading are not going to be the thing that

we thought it was going to be. I think stuff like direct air

capture, again, are going to be toy projects off to the side. I

don’t think those are those are not those are not going to be

credible businesses, totally like we thought they were going

to be. Instead, the raw tonnage of dollars will do what America

was able to do for solar and PV over 2000 to 2022, which is

just crush the cost per watt into the pennies so that it can

be equivalent to hydro coal and nuclear and put everything on a

level playing field, and then allow the market to figure out.

Yeah, I mean, there’s a lot of other stuff in this bill. I want

to highlight for you guys. I don’t know if any of you looked

at the CBO. So the CBO, the Congressional Budget Office,

anytime a bill is being voted on, they do an accounting

analysis on how much spending and how much revenue there will

be as a result of this bill for 10 years. Awesome. Yeah, I

checked it out. And so yeah, if you look at every year for the

next 10 years, the CBO score for this bill is that we’re going

to spend an incremental we’re going to increase the deficit by

$330 billion for the next five years. And then we’re going to

decrease the deficit by 320 billion in the five years after

that. So the net effect over 10 years is we’re only spending

$17 billion on the on the bill. And then on the revenue basis,

the expectation is we’re going to generate 67 billion in

revenue in the first five years, and then another 20 billion in

the in the back five years. So this is actually being

accounted for and presented as deficit reduction. And that’s

because there’s 87,000 new IRS agents being hired to go out and

audit people and find new revenue. And there’s a 15%

corporate minimum tax being imposed on all companies. And

what this means is that companies, public companies,

private companies doing over a billion in revenue, historically

pay taxes on a book basis. Now they’re paying taxes on a

financial statement basis, meaning the actual accounting

that they present to their shareholders.

Can I can ask you guys a question? How much was given to

the IRS?

Yeah, yeah, 10s of billions. Yeah,

80 billion. How much do you think it would cost? I don’t

know, pick your pick the pick the most excruciatingly

expensive third party outsourcing firm you could

Okay, to build an entire system to basically automatically

review every single tax return and throw exceptions and machine

learn and machine learn what fraud look like or what

misrepresentation let’s say $5 billion, it’d be the most

expensive, it’d be the most expensive piece of software

ever written. And this is what was so kind of like that was the

only part of the bill that made less sense to me, I think

like, if you put really smart computers on the case, or gave

it to deep mind at Google and said, Can you guys build this

system, or machine learning and AI, you’d be done acts and a

simpler tax, which I guess this is trying to do, but you know,

free bird, when I looked at this, and you sent it, my

initial reaction was, you know, this old adage, it’ll be

impossible for these guys to find 87,000 humans that want to

work at the IRS. Number one, by the way, there’s a funny video

on the recruiting that’s been going on for that. But yeah, go

ahead. Yeah, it’s pretty good. I mean, you know, they were

asking for people who were ready to like have guns and like

be put their body in harm. And as I get the I was like, that

can’t be real. Anyway, the greatest this is what I got from

this Excel spreadsheet. The greatest tool for writing

fiction is not Microsoft Word. It’s Excel. Like, there is no

way this thing is netting out to zero. Like this thing’s gonna

cost us a fortune. Government is in shambles. We don’t know

what we’re doing. I thought that the links you sent for the

podcast with the pros and cons of the carbon tax was really

interesting. Because it is so complicated. When I heard these

tax experts explaining how you would implement a carbon tax,

and the import and export and then how often it would have to

be tweaked. And then who decides what your carbon footprint of

your watches and and where did the minerals come from to make

the watch and who gets paid on carbon, it just seemed to me

there’s a fool’s errand. It’d be much better to just what if

your watch is made from diamond and not carbon? Well, in that

case, you should just pay a million dollars because you are

the latest coastal elite. And we should just start with yachts

and watches. What I realized was what we really need to focus

on and you tell me if what you think, Friedberg, instead of

doing this carbon tax, which seems incredibly elegant, but we

all know is impossible to get consensus across hundreds of

governments and locales to negotiate this, it’ll never

happen, at least not effectively. And in real time,

wouldn’t it be a much better technique to do what we do in

venture, which is here are the biggest problems in the world.

Here are the which in this case would be the biggest emitters.

Here are the best solutions. Here are the teams working on

the best solutions. Let’s give the teams working on the best

solutions money to work down that list. And if it happens to

be, you know, ships coming from China, you know, with a bunch of

containers on and container ships, we measure that and you

know, the the thing I’ve learned after the first six months of

investing in carbon because we have a syndicate now at Molly

wood who’s working with me on this climate syndicate, we

couldn’t find a lot of great investments. You know, that made

sense that weren’t, you know, asset heavy, but then we

started to find, we found two great monitoring companies, and

they’re monitoring air pollution, and they’re

monitoring ship pollution. And we made investments in both of

those. And that seems to be where we’re at is we should be

monitoring and figuring out where the carbon is and then

trying to solve it based on which ones are the easiest to

solve. Let me just say two things on that Bill Gates has

done a great job of this, you can read his latest book or go

to Gates notes. And he’s done exactly what you described,

which is break it all down, show what we should do. And

that’s actually how he’s investing his own money. He’s

putting his money where his mouth is. So there’s a really

good blueprint for this. He’s done the best job of anyone

I’ve seen. The issue with the carbon tax is you have to come

up with a consistent, reliable way of measuring the carbon. And

then you have to do it consistently and broadly. How do

you miss you know, if you miss one factory or another, then

you have to ratchet up the price over time. So first thing

is the challenge of how do you agree on measuring? Second is

how do you agree on broad accountability? Third thing is

how do you ratchet the pricing over time? Fourth thing is how

do you deal with the offshoring problem? As soon as you start

taxing companies in the US for carbon emissions, all the

production is going to go offshore where they’re not

taxing for carbon emissions. And there’s no way to account for

what they’re doing offshore. And this has been the challenge

with China. There is there is because part of your first

problem. Yeah, sorry, let me just hit the final one. We’ll

come back to it. But the final big one is just the equity and

carbon tax. People have said that the ultimate increment in

cost of production is going to adversely affect lower income

people because they cannot afford the price of some stuff

going up by 25 to 50%. And it’s really, you know, a luxury,

good, luxury, kind of privilege to be able to pay for the

incremental cost of stuff to account for the carbon offset

needed. So that’s, that’s the set of issues that have been

pushed back against the carbon tax. And it’s why it’s been

impossible to get implemented, and to really get into market.

Sorry, come on, go ahead.

No, I was just gonna say part of the problem in all of those

issues, if you offshore is still that there’s people pushing for

what’s called the scope three accounting, which is like, you

know, you got to go back to your supplier and your supplier,

supplier, and your supplier, supplier, supplier, and where

does it it’s impossible, where does it end? It’s, it’s not

credible. So, you know, I think that the bill has actually

cleaned up a lot of future question marks about what we

have to do as a country to go about doing our part for climate

change. And I think it probably creates a reasonable blueprint

for everybody else. And now they’re gonna have to do some

version of the same thing. And what’s amazing is that if we

actually pass this framework, which is still yet to be

written around how to make permitting more seamless and

efficient for these hydrocarbon projects, it will really

unleash a massive torrent of both revenues back to the

United States. It’ll increase our national security. And it’ll

allow us to really kind of put a dent in this thing, because

it’ll pull forward the amount of competition that it creates to

actually get off those hydrocarbons, which is a

alternative, I got, I got a notice from someone who’s an

investor. And so there’s a lot of climate tech funds now, a lot

of funds, J. Cal, you said you got a syndicate and carbon, but

there’s a lot of funds and a lot of investors that are putting a

lot of capital just into early stage climate technologies,

which travels everything from energy to materials to food, to

industrial and manufacturing, and so on. And I got a note from

one of these, these, these companies, a startup that

highlighted that the dollar 25 per gallon credit, a tax credit

for, you know, clean production of fuel, which kit which has to

demonstrate a 50% emissions reduction in the manufacturing

process will now make this startup profitable. And by the

way, you get an extra penny per gallon for every 1% reduction in

emissions below that 50% threshold. And so there’s a lot

of startups that I’m hearing about that their unit economic

models were questionable before. Now, because of this

bill, they are flipping profitable. And so I personally

think we are going to see a significant influx of venture

capital and support for a lot of these climate tech and you know,

new energy material and manufacturing projects that

otherwise may have been held back, because the subsidy will

kickstart. The question for me that I still don’t have a good

answer to is are they sustainable? Over the long run,

if this bill gets shut down or repealed, and the funding sources

stop and the subsidies stop? Do these businesses survive? Or

are we simply creating regulatory capture models like

we did with other energy products in the past and with

food? If you’re not contribution margin positive today, free this

bill in climate change. And the bill is the only way that you

get there. You’re doing you just don’t know. Great point. Yep.

sacks. The biggest line in this bill is the corporate minimum

tax. I don’t know if you saw this, but 15% minimum tax

applied to the accounting profit reported by any company

over a billion dollars. And they’re estimating it’ll

generate 313 billion of incremental tax revenue over the

next 10 years. Do you have a point of view on whether this

corporate minimum tax is going to cause an issue with startups

and companies going public or the valuation in the public

markets? Or is this just you know, hey, this should happen.

It doesn’t matter. I mean, I don’t know if you spent much

time on this. Well, no, I mean, I think the the issue here is

that why is it that these companies are able to pay so

little taxes? Well, the reason is because there’s a zillion

loopholes and incentives and tax breaks in the existing code

that they’re taking advantage of. I mean, these large

companies have lots of accountants and lawyers, they’re

not deliberately violating the law, they’re scrupulously

adhering to it and taking advantage of it. So it’s all

these tax breaks that they’re able to use to pay no taxes.

Well, what does this bill do? You talk about the spending on

climate, you know, the 386 billion, most of it is tax

incentives, and some block grants. So this is now the

preferred form of, you know, quote, unquote, spending in

these bills are tax credits and incentives. This is the way

they’re going to change people’s behavior. So in other

words, the bill on the one hand is complaining that

corporations don’t pay enough taxes, because there’s too

many tax breaks, while the other hand creating a whole

slew of new tax breaks. So there’s a little bit of a

contradiction there. Again, why are companies paying no

taxes because of the last 10 bills tax breaks that we’re

supposed to move the behavior of businesses and consumers

in a certain direction. So just recognize that that’s the

case. I think you also made a really good point about the

phantom deficit reduction here. So like you mentioned, and

we see this in lots of bills, all the excess spending, all

the deficit spending occurs in the first five years, and all

the deficit reduction occurs in the last five years,

something always intervenes to prevent the savings.

It’s like startup projections, right, sex?

Yeah, it’s like we’re a sales guy, we’ll cut the budget next

year, you know, and so just to give one example of this, so

this ACA subsidy extension, so this is the Obamacare

subsidies, about 60 something billion a year, they’re

extending it for three years, but they’re assuming it’s

going to die at that point, as opposed to keep being extended.

And no one’s going to want to vote to make that go away in

three years, just like they don’t want to vote to make it

go away now. So if you extend that subsidy, three years from

now, just that one item alone, makes the deficit reduction of

this bill go from 305 billion over the 10 year period, to

negative 155 billion. So just that one item, if you continue

it, and don’t sunset it, just that one thing makes this a

hugely deficit, not reducing bill, but deficit increasing

bill. And so you wonder what problem is this bill really

solving? And they can’t seem to agree on that. I mean, first,

they’re telling us, it’s a deficit reduction bill, then

they’re telling us it’s a climate bill, then they’re

telling us it’s an inflation reduction bill. It seems to me

that if they’re really proud of this and believe in it, they

would choose a name for the bill that actually reflected what it

was, well, all bills would be named something for everyone’s

sex. I mean, like, that’s how all these bills get in order to

pass a bill bipartisan bill, you got to give something to

everyone. I mean, but this is mostly you know, this is mostly

a climate related bill. You know, this is mostly this is

mostly tax breaks, and block grants.

I mean, there’s a huge tax issue with the the IRS agents

that are corporate minimum tax, but there’s also a huge

component on prescription drugs. Chamath, I don’t know if you

spent any time looking at this, but

Sorry, just on the IRS agent, kind of say add one detail on

that. Yeah. So the claim of the administration and the sponsors

of the bill is that this would not increase taxes on any one

sort of middle class. And so the Republicans, I think this is

one of the few politically smart things they did. They introduced

an amendment, basically prohibiting these new 87,000 IRS

agents from conducting audits of anyone making less than $400,000

a year, which was what Biden said, you know, he wouldn’t

increase taxes on anyone below 400,000. That amendment was

rejected on straight party lines. So this idea, yes, it’s

called the Crapo amendment, it was 5050. And Vice President

Harris had to come in and make the tiebreaking vote. So

obviously, they know that there’s gonna be a lot of net new

audits on people making less than four. Yes, exactly. So my

understanding of this is it’s like small business owners,

people who run a small business and a service business. And are

they really accounting for their books correctly? Are they

really expensing the right things, etc? Are they accounting

for? They’re gonna get whammy by this, because look, let’s face

it, billionaires are already getting audited. You know, Elon

had a tweet saying, Listen, I get audited as a matter of

course, every year, you know, these people already have. So

yeah, dude, I use a big four accounting firm. Yeah. I mean,

the amount of I have a partner is crazy. I have a partner like

Anderson that is literally like, you know, covers a fortune

500 fucking company might as well be in your office, put them

in your your your put them in your unit. I mean, by the way,

sacks sacks is right. Like, if you look at them, you know, the

ultra wealthy, I think it would be I would be shocked if any of

those folks were actually evading taxes at all, because

it’s impossible the way that this infrastructure runs, like,

you know, you’re getting k ones from Blackstone, what are you

gonna do to change that? Like, totally, you know, like, do you

guys even know the pin number of your bank card? I have no

idea. So like complicated. Yeah. Okay, so so my point is, I

don’t think that if there is if there is cheating of taxes,

it’s happening at that level. What’s happening at that level

are much more structural issues like carried interest, which

they decided not to touch, or in a state law trust in a state

law. Those are those. No, I don’t think that this is my

point. It’s not mistakes. There’s nobody with a pencil

really filling out a k one for Bill Gates, dummy. That’s my

point. No, I know. But people can make mistakes. What if a k

one gets left off? That’s what I’m saying is when they find

usually easily found to happen doesn’t happen. I’ve had my tax

return. It’s done by an accounting firm. And I just

signed it. I don’t know. I know that what I’m talking about is

what are the IRS people going to find is you know, I’ll tell

you what they’re going to find. They’re going to find a lot of

guests, they’re going to find a lot of middle class and upper

middle class folks. And they’re going to have to focus on them

because individually, it may not represent a lot. But when you

multiply it by the number of people inside the United States,

and this is what the Wall Street Journal and a bunch of

other folks have been saying now, when you apply 87,000

people and task them incrementally with doing a job,

it’s not going to touch these folks that are already audited,

it’s going to touch the folks that are not audited. And by

and large, a much much larger majority of middle income and

upper middle income people are not audited, which is why I

think you could spend a lot less than $80 billion and just

build software that guarantees only those that should be

audited are and uses machines to help figure out these leaks

or start simplifying the tax code. Because when you add this

15% minimum, Friedberg, what is that going to do to the strategy

of a public company? Okay, so we should show less earnings put

more to work, oh, we’re not going to be able to depreciate

this or, you know, whatever. I mean, it’s going to create all

these actually third order impact impacts that we don’t

know. Well, I think sax’s point is important, which is one that

we don’t yet have insight into, which is what is this going to

cannibalize? Because ultimately, if there is a

minimum tax, it doesn’t make sense to pursue incentives that

create a tax break today. And therefore those incentives won’t

be invested in whatever those incentives are, I don’t know

what they are, you know, low income manufacturing zone

development or whatever, who knows, you know what they are,

you know, come and build your business here and get tax

breaks, etc, etc. local, state and federal tax breaks. If

those start to get written over, then there’s going to be

really adverse effects. And I think that that’s something to

watch. I don’t understand it well enough. Certainly, I’m not

an accountant. But I would be kind of worried about and

keeping an eye on that front. I do think the bigger question,

which is a biotech one, the prescription drug price cap

minimizes the profits that a number of pharmaceutical

companies will be making. It gives authority to go and

negotiate prices. This is the second largest line in the bill.

And there was a survey done by health on an R&D

survey, which said, Will you guys reduce your, your

investment in new drug development. And I think that

they came based on this bill. And I think that they came up

with some estimate that there would be two, the number two,

fewer drugs that would be kind of, you know, made available

per year, because of reduced spending, as a result of the

price cap, which basically reduces revenue, which will, in

essence, reduce R&D investment. You know, guys like Bernie

Sanders will say, Hey, that’s not true, all that money is

going to share buybacks and dividends, and so on. But it is

a fact that those share buybacks and those dividends will still

continue. And if they are reduced, so will the R&D

expense. And if the R&D expense is reduced, fewer drugs will

come to market. And so you know, there’s also a question mark.

And people will debate this for the next decade, which is how

much will this prescription drug price cap actually have an

effect on R&D investment and ultimately on new drugs that

come to market. My personal opinion, sorry, let me just say

my personal opinion is I don’t think that this will have a

huge effect. I think this is an excellent part of the bill. I

think that the government should have authority to go and

negotiate. They’re the largest buyer of these drugs. And

typically, when the US government, the federal

government steps in to be the largest spender on a particular

line, the cost of that line balloons, like we’ve seen in

healthcare, like we’ve seen in education, and like we’ve seen

in military and defense spending. And so I’m hopeful

that this will actually provide a more effective market force

in allowing the biggest customer in the market to negotiate

prices. And that the the VCs instead of making 48% IRR,

they’ll ultimately make 28% IRR on the investments that they’re

making in biotech startups. Well,

hold on, what exactly does it mean for the government to

negotiate prices, as opposed to the government just to fix

prices? I mean, is this price fixing? Well, in this, in this

example, he thinks the right answer if they’re the largest

single largest customer sacks, right? I mean, you know, and

then they are the market. I mean, what’s the right thing to

do? Well, I mean, you’re you’re saying that these drug companies

are going to make a lot less money. Well, obviously, that’s

going to have a downstream impact in the willingness to

fund new drugs, new investment, new R&D. Yeah, now no one likes

pharma companies. So I’m not defending exorbitant profits or

whatever. But I don’t really know what it means for the

government to say they’re negotiating. I mean, the

government just tells you what it’s going to be. That’s price

fixing. And these companies are going to adjust. Yes, the

government will pay less money in the near term. In the long

term, there could be reduced investment in R&D. I think

there’ll be a balance of, you know, do you don’t want to

benefit? Don’t all governments I know that you’re close to some

of these drug companies, don’t all governments negotiate the

purchase of these drugs. And then if they don’t like the

price, there are alternative drugs. And they’ll say, hey,

listen, your drug is too expensive compared to these

other two solutions. So we’re going to buy this one primarily

for our universal healthcare. There’s an interesting thing

that happens, which is that there’s a there’s these drugs

that are proprietary and under patent, okay? These could be

chemical drugs, or they could be biologics, okay. And

eventually, what happens is when they go generic, then folks

will step in and make lower cost versions of those generics

like, you know, I mean, I’m on a stat and I think a couple of

you guys are on a stat and like, I don’t, it’s, it’s Lipitor,

but it’s not Lipitor, right? It’s a tour of a stat. And it’s

like some generic drug that I just take, okay, as an example.

And there’s a lot of folks that make that and the cost of those

pills basically go to zero. But there’s a bunch of categories,

particularly for biologic drugs, where it’s very different,

it’s very difficult to make out what’s called the biosimilar.

This is a generic drug. So long and short of it is there’s all

these classes of drugs that kind of like standalone without

enough competition. And I think there are two ways to solve

this problem. One is where the government steps in, which I

think is good, but the better way has already is already been

happening in the United States. So, you know, there’s a

nonprofit, which is a collective between a bunch of hospitals

called civic up. And I think that’s a really interesting

example. And what those guys do was they said, we’re just going

to create our own generic drug manufacturer, and we’re going to

make the drugs we want, we’re just going to make them super

cheap. And, you know, they’re, they’re in the midst right now

of completing a massive facility. I think it’s in

Virginia, where they’ll be able to make as much insulin as is

needed for the entirety of America, for no more than 35

bucks a dose. That gangster, that’s gangster, it’s super

gangster, make our own. And by the way, when California said

they’re going to make their own, what they really meant was that

they’re going to go and RFP it out. And my hope is that they

end up going with somebody like civica, who has the experience

of actually building it. Otherwise, it’s just going to

California is just going to waste hundreds of millions of

dollars proposal if you don’t know what RFP is request for

proposal. Yeah. But there are these emerging nonprofits that

are basically doing the work of the government. I think that’s

a better solution to what sacks is actually a petition, right?

Yeah, it’s kind of creates competition. Yeah, competition.

We got to move along because I think

job Friedberg, right, just one moderator to another exceptional

job. You know, I appreciate it. I think one of the interesting

things sitting in your seat, J. Cal is you see everyone else’s

face. And you see the boredom and the annoyance that people

experienced during the pod. Watch the eye rolls, right? For

a drink. I think I think Chamath is eating Funyuns sacks and

no jerky jerky jerky. Okay, you shouldn’t be don’t tube in on

the podcast, please. Yeah, no. And I think that the don’t what

the challenge Jeffrey to have been on this podcast. What is

it? No, that was a CNN anchor who on zoom accidentally. No, he

masturbated on a zoom call with his the fuck does that have to

do with beef jerky? You said jerking and I just I said I was

eating jerky dummy. You said you were jerking something.

That’s all I heard. I’m sorry. Oh, by the way, so I am no

longer fighting with Phil Hellmuth. I oh my god guys still

blocked. No, so I was so mad at him. Okay, so you know, I

finished I finished this transaction. I finished I

finished the fucking transaction to sell the warriors. You know,

this is this is a six month ordeal. Okay, I started in

November, right? I’m starting to sell things. I decide I’m

going to sell the warriors. I sell it to a large private

equity fund in November, December, and then we had to

wait for them to close the second fund and then we sold the

rest of it and it closed in June or July. And then I put out

this tweet, right? Like thanking everybody and thanking

Hellmuth the same line in which I I’m like I thank Peter Thiel

and I thank Joe Lacob. Everybody is happy except for

Hellmuth who called me and is angry and he’s like II. You

know, he had this issue with how it was characterized that

how he had introduced me or something where he wanted credit

for having done the first tweet of the tweet storm. He should

have been higher up or you know and I was like, well, Phil, what

if it hadn’t made me money? Would you have just made me

whole? Like what would you have done? Like it’s like you were

like the architect of this thing. Anyways, I was so mad. I

just said, I’m not talking to this dipshit anymore. I’m done

with him. I’m done. I’m breaking up with him and he would call

me when I was in Europe and I would ignore and I would get

this incredible enjoyment from just pressing to to voicemail.

He would send me text messages, ignore. And then I I mean this

is always happens this way. I did it once and Nat caught me.

She’s like, why did you ignore his phone call? And I said, I

hate Phil. I’m done with Hellmuth. I told her the story.

She got so **** mad at me and then I had to send this text.

I’ll just read you the text because I think it’s just so

**** hilarious. I was going to ignore you for the rest of my

life. Based on your tantrum with me earlier this year. But

Nat has convinced me to see where you are coming from in

part. Anyways, we’re good. Call me later. He called me one

second later. I was waiting. He had your text window open. I

could just picture Nat. He’s your friend. Why do you gotta

be? You’re such a jerk. He’s your friend. You have no

friends. All of your friends are going away. Anyways, I’m

back in the good with me. I’m back in the good. Okay. Well,

you gotta play poker. Um we do need to get a poker game.

Before we wrap, Saks is going to give us instead of doing

science corner, we’re going to do Mar-a-Lago corner. Uh tell

us what it’s like Saks. Yeah, what is Mar-a-Lago like? You’ve

had your membership now for 18 months? Never been there. Never

been there but no, I wanted I wanted to um I want to give a

shout out to this article because last week I took some

heat because somehow I guess you’re not allowed to question

anymore the rectitude of the FBI. J Edgar Hoover’s FBI. We’re

not allowed to question anymore or a lot of people feel that

way. There was an article that came out in real clear

investigations just I think yesterday and what it exposed

is pretty amazing. The group, the unit within the FBI that

conducted the raid on Mar-a-Lago is the the same group

that conducted the investigation into Trump back in

2016 that lied to the FISA court that had its members, its

leaders, Peter Strzok were fired for basically wrongdoing

whose members are actually under investigation right now

by the special counsel John Durham and you’ve got people

who are on probation right now. So, this is the same unit

that basically conducted the raid on Mar-a-Lago. So, I think

there’s still more to come out about this but it’s just

amazing to me actually that Christopher Ray, the head of

the FBI, Americ Garland, the head of the DOJ thought that

this wouldn’t create the appearance of a conflict of

interest or impropriety. The fact that you’ve got the same

unit that previously was disciplined for wrongdoing in

an investigation of Trump is the one conducting the raid on

Mar-a-Lago. So, pretty amazing. J-Cal, retort. I’m sorry, what

we’re talking about. No, I’ll tell you. So brutal. No, I just

want to make a couple of child actors. Oh, they’re on camera.

Look at these props. Amazing. Good work. Nice props. Oh,

beautiful. Sax, what you’re seeing there. Hold on, Sax.

Before you get back to Trump, what you’re seeing there is a

family unit. This is when a family gets together and

expresses love towards each other but continue about

Mar-a-Lago. No, that’s wonderful. That’s wonderful.

That’s wonderful. You could take a picture of this and you

could send it to your friends on Christmas. Alright, Jason,

you you are you do not accept the real clear investigation

report that maybe there is some long term. I’ll um I have uh

actually some feedback. It’s nothing to do with Sax. I just

think a lot of times I get positioned as sometimes when

I’m moderating, I like to challenge Sax. Last week, I

chose to stay out of it. I let him go and I think one of the

reasons people didn’t like your comments last week, Sax was

other than, you know, JR Grover being dead for 50 years,

putting that aside and it being irrelevant. I think the reason

people didn’t like it was because I didn’t come back at

you and question some of the things you were saying and so I

think they felt it was an unbalanced discussion. They

expect me to do that but I don’t want to be pinned as the

adversary to to Sax’s positions in every case because I’m an

independent. I’m a moderate. I voted Republican. I voted uh

Democrat my whole life. I voted for both of those parties but I

do think that what’s happening here is you know, Trump is

under five different investigations. He’s got a

career of doing disgraceful, criminal, fraudulent things and

I feel very bad for GOP friends. Uh I feel bad for

Republicans because they have to carry water for him and it’s

they they put themselves in this really difficult position of

defending him and you know, we’ve talked on this podcast

about January 6th. We talked about voter fraud. My good

friend, one of my besties, David Sax said he doesn’t

believe that the election was there was election fraud and he

doesn’t he he thought January 6th was disgusting. I’m not

speaking for you. That’s what you said and so I think you

know, the fact that the Republicans feel the need to

defend him constantly is one of the big problems here and I

think on the other side, the fact that the media is forcing

Republicans to defend him and creating this narrative and

this hysterics like, oh my god, see espionage act. He’s doing

espionage. This might be very simple. Trump lied, cheated,

stole his whole career from Trump University to what’s

happening with you know, the Trump Corporation now uh with

the CFO and his nonprofit. This is his life is a history of

grifts and crimes and unethical behavior. What the GOP needs to

do is stop defending him and just let him go off into the

sunset as sex pointed out last week and that’s what this

podcast needs to do. Because there’s no reason for me to sit

here and do the left wing talking points or for you know,

sacks to do the right wing talking points. The fact is

first principles, Trump’s a grifter. He’s a democrat. That’s

it. My point is not to defend every shady deal that Trump’s

ever done or even to defend Trump at all. My interest is

having a DOJ and FBI that’s not politicized and is not used as

a political weapon or to pursue political targeting or

vendettas and the reality is at some point we’re gonna move

past Trump as a country but the precedents that are created now

are gonna stick with us for a long time and the reality is we

should not have an FBI and a unit within the FBI that is

pursuing these political vendettas and in this article by

Real Clear Politics, the amazing thing, yeah, the amazing

thing is Christopher Wray prohibited this unit from

seeking warrants from the FISA court. So he knew there was

enough misbehavior last time to basically prohibit them but

seems to me that’s a very narrow takeaway. It seems to me

that the takeaway should be we don’t allow this unit to pursue

Trump again because they committed so much wrongdoing.

Yeah, it’d be cleaner to have a clean unit, right? Why wouldn’t

they do that? Yeah, if that’s if it’s true, because that is

from a biased source and if it is true, that’ll be good. I

mean, Real Clear Politics is kind of like a politico. Look,

guys, this has been a lot of fun. J Cal, thank you for

letting me sit in your seat today. Yeah, we did great.

Awesome. You know, I appreciate that. It was it was a lot of

fun. Maybe Sax would like to have a run in the seat at some

point here. He doesn’t. But for your as your guest moderator

for today, I’m Dave Friedberg and this is your All In Pop.

Thank you. Bye-bye.

We’ll let your winners ride. Rain Man, David Sacks.

And instead, we open source it to the fans and they’ve just

gone crazy with it. Love you, Wes. I’m the queen of quinoa.

Let your winners ride. Besties are gone. That’s my dog taking

a notice in your driveway.

Oh, man. We should all just get a room and just have one big

huge orgy because they’re all just useless. It’s like this

like sexual tension that they just need to release somehow.

You’re a bee. We need to get merch.

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