All-In with Chamath, Jason, Sacks & Friedberg - E110: 2023 Bestie Predictions!

All right, everybody, welcome to 2023. Everybody’s well rested

and ready to take on 2023. Yes, Jamal. How was your break?


Okay, sexy poo. I know you don’t go to temperatures that are

under 57 degrees anymore. Do you have a nice break? Did you go

somewhere warm?


Okay, that’s a confirmation. Wow, man of so many words. And


I’m over cold weather vacations.

Yeah, that does happen at a certain point.

I actually went to Florida went to the free state of Florida.

Oh, really? Yes. Well, what’s going on in Florida at the turn

of the new year? I wonder that drew you down to the great state

of Florida.

We’re just freeing it up in the free state of Florida.

We have our 2023 predictions. Now, play some music and all that

kind of stuff. Producer Nick at this point. Let’s get to it.

Last year, we did.

Do you guys notice that every time we talk about something

somewhere between sort of two months to a year later, the Wall

Street Journal ends up writing a big piece about it. Think piece

about it. Yeah. So I tweeted into the group chat, like last

year, we all talked about Sequoia and distributing public

equities and how it’s very fraught and difficult. And then

today, they write this big article about how people have

just burned enormous amounts of billions of dollars that they

could have returned to LPS like these venture investors by not

distributing. It makes sense. Three weeks ago, when we did

our end of the year wrap up, my big winner for 2022 were the pot

shops, right, Citadel. And today, in the Wall Street

Journal, an article lands that these guys with 56 billion of a

um, over the last two years have made almost $45 billion of

revenues. Isn’t that incredible?

And this is what happens to math. Usually,

they are, these guys are just crushing it. And Citadel

securities did like almost, you know, seven and a half billion

of revenue. I mean, it’s unbelievable these businesses

how good they are. Yes. So let’s get into this is typical.

Chamath, if you think about journalists, they’re trying to

get into the conversations that are occurring at the bar after

the event, the late night conversation, the group chats,

well, and that’s what this podcast is. It’s the exposed

back channel, right. And so if you listen to this pod, you got

the back channel of Silicon Valley, politics, tech, science,

etc. So let’s do our predictions. In 2020, we said

our biggest political winner would be sacks. And I both said

to Santa’s Chamath says Xi Jinping and Freiburg said,

Putin, who do we think is our biggest political winner going

forward? Who do you pick sacks biggest political winner for

2023? Who will be your biggest political winner for 2023?

Well, I went a little bit outside the box here, because I

think we’re gonna have gridlock in Washington. So I’m not

expecting a ton to be coming out of Washington over the next

year. My pick for biggest political winner is Asian

American college applicants. There are two Supreme Court

decisions that the court heard on Halloween last year, there

was a lawsuit against Harvard and a another lawsuit against

UNC by a group called students for fair admissions, and that

they maintain that Harvard and UNC violate title six, the Civil

Rights Act, because Asian American applicants are far less

likely to be admitted than similarly qualified applicants

from other groups. And the federal courts in Boston and

North Carolina rejected this argument, but the Supreme Court

took up the cases. So they kind of went out of their way to hear

this. And I think that they are going to, they’re going to

primitive action, I think the majority will rule to strike

down these policies that really discriminate against Asian

Americans. And I think they’re the last group in America where

it seems to be okay to discriminate against. And I

think the Supreme Court is gonna, is gonna find that


To my authentic thoughts there, you have brought this up

multiple times on the podcast over the last two years.

I have said that this was unfortunately, affirmative

action when it started, I think had very, very good intentions.

And I still think that there’s a place for it. The problem is

that these very liberal institutions decided to play

judge, jury and executioner on which minorities counted in

affirmative action. And that’s not what the intention was. The

intention was to look at the establishment and their ability

to get their progeny into these incredible schools, even when

they didn’t deserve to be there. And so I think this was always

an issue of classism that was disguised as racism. And people

who are in the upper classes of society have always had an edge.

You had the legacy admissions into Harvard, you had people,

the Kushners very famously, right, like the $5 million check

from the father that got the son into the school, all of this

stuff, it’s all it’s been well written about. And whether or

not those things are right isn’t the point. I think the point is

that there are folks in emerging, lower middle classes

who have the potential to crush. And those kids should have a

chance. And you can’t just decide who those kids are based

on the color of their skin. And in this case, what happened was

some blacks were still allowed in some Hispanics were allowed

in but Asian Americans broadly were discriminated. And that was

a really stupid outcome. You cannot punish kids for willing

to work their ass off. And I think that that was the

unfortunate outcome of what affirmative action has become by

  1. So it is going to get repealed. The reason it’s going

to get repealed is that, you know, we have case law that very

clearly states that any institution that accepts federal

funds cannot have any form of discrimination. And this is how

these folks who have tried to repeal affirmative action have

taken up this lawsuit. And hopefully the outcome is a more

meritocratic system that also tries to create a plurality of

different people from different backgrounds. freeburger, any

thoughts? And if not, your biggest political winner for


My biggest political winner for 2023 is MBS. Mohammed bin

Salman. I think that Saudi Arabia will have the most

important year in kind of the modern era in terms of their

role. I don’t know if you guys saw this Reuters report from a

few weeks ago, but there’s kind of a deepening discussion about

the oil yuan trade, in that Saudi would sell oil to China

and they would get paid in one Saudi Arabia sits at the

intersection of the United States, Russia and China, they

have relationships with all three nations. And in the kind

of conflict and power struggle that is underway, I think that

ultimately, the direction of where global currency kind of

reserves will be taken, and the importance of these great

nations and who sits atop whom can actually be dictated and

significantly influenced by MBS this year, by some of the deals

and trades he might put in place and the kind of partnerships he

might forge. I think as a result, you will see him kind of

rise in terms of influence, not in terms of, you know, hey, the

world has accolades for this for this guy. But I think in terms

of global influence, he will rocket ship to kind of the top

because of this, this kind of jockeying he can now do between

these three great nation states, and defining, you know, what’s

going to happen with the US and what’s going to happen with

China and what’s going to happen great selection of currency

reserves. Great selection. I mean,

great selection.

The shitty thing, by the way, about your selection is that

Biden, our explicit stance is unfortunately quite

confrontational with MBS. And yeah, you saw that play out in

q4. We asked them to ease up on OPEC plus to introduce supply

cuts, and they did some nominal 100,000 barrel per day cut

didn’t do much of anything. There was an article to your

point freeberg just recently, about Saudi really doubling

down on getting the oil out of the ground and monetizing their

petrochemicals. So there’s just going to be a glut of supply in

the market. And we have the least amount of influence with

Saudi Arabia than we’ve ever had. And it seems like we could

change that if we decided to, but I think Biden has taken this

very confrontational approach, which doesn’t seem to make a

lot of sense.

Their stated intent is to diversify away from oil, and

into technology and other kind of emerging growth economies.

That’s why they funded the vision fund. That’s why MBS made

that big kind of visit to Silicon Valley a few years ago.

And there is technology that they want to import into Saudi

Arabia, they want to have ownership in around the world.

And if the US is creating a barrier for them to import us

tech into Saudi or for Saudi to kind of invest in the US, but

China and Russia have open arms. And all they want is for Saudi

to start doing trades and you want, it’s going to happen. And

I think that’s where this guy has kind of a real opportunity

to shift the global economic dynamic.

Say what you will about Trump. He had open dialogue with North

Korea, China, Russia, and the enemies close. Sure want to be

able to talk to anybody and he was able to talk to anybody. Now

you also want to be able to say, Hey, listen, you can’t dismember

a journalist like Khashoggi and you need to be able to have both

of those ideas in your head. You can’t be rigid in foreign

policy, you have to be fluid and keep people at the table

talking Chamath, who is your big political? Who do you predict

will be the big political winner of 2023? Chamath’s prediction,

everybody? Go ahead.

I really like spread trades, right? Where you go long

something and short another. So I’d like to pair my biggest

political winner with my biggest political loser for 2023. Okay.

And I am going to focus on the Republican nomination. And I am

going to go long. Nikki Haley, and I’m going to go short, Ron

DeSantis. Now let me

sex again, if you if you’re watching, you’re not watching

sex right now, he is ready to interject, go to Martha.

So I think that all of this nonsense, for example, in the

house speaker race, all of the midterm results, what it really

speaks to our people are getting exhausted with the lunatic

fringes of both parties. That’s point number one. And point so

that favors moderates as an emergent class. And point number

two is that if you look back through many, many cycles of

Republican and Democratic nominations, it is a very

negative thing to be in the lead so early going into the Iowa

caucuses in January. And so if you put those two things

together, the risk is that DeSantis decays, things emerge

people attack him because he’s the clear front runner. And the

opportunity just like it was for Trump in 16, or for Clinton,

or for George Bush, not Herbert Walker, but you know, w is to

emerge from the back. And so if I think about a moderate person

who can emerge from the back, who can consolidate the ranks,

they should probably be from the south, they will have a lot of

these purple compromises that sacks mentioned in their policy

program. And they will have a history of winning and a history

of normalcy. And so I think that of all of the places where you

could ever elect a woman as President of the United States,

I think it will come from the Republicans before it comes from

the Democrats. I mean, the Democrats are unfortunately

increasingly judgmental. And I think it’s very difficult for a

woman to emerge there. But I do think that Nikki Haley has a

shot. So I’m going to go long Nikki Haley. And I’m going to

short Ron DeSantis.

Okay, I like it a spread trade for his prediction. Well done

before sacks you interject, let me just do mine. And because

then you’ll have to interject to I was looking at Biden and Trump

and thinking, hmm, which one of these is going to have the big

win in 2023. So the two biggest I think, players, I have a

prediction for Trump. I think he’s going to lose 50 pounds on

the ozempic. Everybody loves a weight loss story. I think he is

going to be indicted by Garland. Is he on? Wait a minute.

Sorry, he’s on ozempic. No, I’m predicting an ozempic run. And

he’s going to drop 4050 pounds. Then we’re going to have a

svelte. Trump get indicted by Garland. And the debates and the

and the and the rigmarole with DeSantis, I think he’s gonna go

after DeSantis based on weight and height. And then he’s going

to win the nomination in 24. And we’re gonna have Trump versus

Biden. But this is a crazy prediction here. I think we’re

going to have a settlement. I think he’s going to agree to not

run and get the pardon. This is a crazy prediction. I know. But I

think he loses the weight. He wins the nom. He gets indicted.

And then he gets the Richard Nixon pardon, global pardon for

all of the shit he’s done. Saks, you can reply to these two crazy

predictions as much right in my

I mean, this is like proof positive that everything you

have to say about Trump is an act of projection. I mean, like

ozempic. I mean, are you talking about yourself or Trump?

Strike. Boom.

He has been ozempic and super good. Yes. Both of those things

are fasting. Have you sacked on any ozempic?

I’ve tried it.

Yeah. I think everybody should be looking into this if you’re

have weight issues. It’s a it’s a it’s a great new

I would say it even more broadly. I’ve been reading a lot

about these GLP ones. And I got to tell you, statins are a clear

wonder drug. Yes. Okay. I think that the 50 year longitudinal

data on its value is pretty unimpeachable. Metformin even

taken prophylactically has shown incredible benefits for cell

regeneration, longevity, and glucose management. And the

real look, the reality is, let’s just take a step back. The

American diet, we’re all pre diabetic. Okay, so let’s just

let’s just not beat around the bush. The way that Americans eat

and our food supply, and also probably in Western Europe, is

pre diabetic by definition, it’s shit, it’s trash. So metformin

makes a lot of sense. And again, it’s longitudinal data is

incredible. But I got to tell you, the early data on these GLP

ones are unbelievable.

It’s extraordinary. And I can tell you from firsthand

experience, I would lose half a pound a week, when I would die

it. No, but what I’m saying is, it’s beyond that. And what I’m

talking about is insulin response. It’s cardiac health.

And so if this data tracks like this, man, you just want to put

everybody on these GLP. Well, I just want to also put a

disclaimer out here, do your own research, work with your

doctors, whether it’s for metformin, or a Zempik, but I

had great results on it. I recommend if you’re struggling

with weight loss, like I did for many years, you talk to your

doctor about it. That’s it. It’s not a commercial for what Govia

or Zempik, but I do think these things are going to change the

world. Well, and they’re getting better. And it seems like

people with diabetes are on them for life. So if your question is

like, if I could do this for a year to lose weight, you know, I

think diabetics are on it for life. So when I made my decision,

again, work with your doctors, not random podcast or venture

capitalists for your health advice. I was like, well, all of

these people who have diabetes are going to on it for years,

unless it’s non toxic, go get a prenuvo scan. Just make sure

absolutely you got. So there you have it. Those are our

predictions. So if you want to respond to any, I want to I want

the sacks to react to my spread trade.

Yeah. So look, I think, you know, if you’re going on a

betting site, I think that you could place that bet that

Chamath made pretty cheaply, and probably it’s like has some good

upside to it. So I don’t criticize it as a bet. Do I

think it’s actually going to happen? No. And I think the

reason is, is this that if you look at what’s happening right

now with the speaker’s race, there’s two very clear wings in

the Republican Party, there’s the establishment wing, and then

there’s kind of this populist MAGA wing. And the candidate,

whoever it is, in 24 needs to unite those two wings. And I

think this is really the best argument for DeSantis is he’s

widely accepted by both. I think Nikki Haley’s problem is that

she’s very well regarded within the establishment wing of the

Republican Party, but she has no meaningful support within the

populist wing. And so I don’t think she’s capable of bringing

the party together, at least at this point in time, she would

have to prove let’s call it populist bona fides that she

just doesn’t have right now. So this is why I think you know,

DeSantis, he does have front runner risk. You’re right that

people are going to keep taking shots at him, as long as he’s

the front runner, but all right, let’s be capable of uniting the

party in a way that it desperately needs right now, as

we’re seeing with the Kevin McCarthy thing playing out.

Yeah. Okay, let’s go for our biggest losers. We’ll rip

through this last year. I said Biden and Trump and the

extremes. Chamath said the progressive left again, the

extreme sack said Pelosi, who just wrapped up her tenure and

Freeberg said US influence globally was the biggest

political loser. Let’s get our predictions for the biggest

political loser of 2023. Freeberg, who do you think will

be the biggest political loser of 2023? The world wants to know


I would continue my US influence, but I am going to

shift. Here’s what I think is going to happen this year. My

big prediction is based on I think the world has too much

debt. I think that the economic slowdown coupled with rising

interest rates globally and a dearth of kind of asset capital

inflows means that there’s going to be a lot of issues with a

number of debt markets around the world, particularly kind of

emerging sovereign debt. Just to give you guys a sense global

debt is about $235 trillion in public and private. You know,

that’s somewhere between five and $15 trillion of interest

payments a year, depending on what the net rate is on $96

trillion global GDP. And there’s another trillion and a half of

unfunded liabilities in the US and pensions and Social Security

and all this other stuff. I think this is the year where a

lot of the debt markets start to unravel. The primary entity that

steps in, or a political loser, I’m going to tell it one second.

This is a political Yeah, so the political ramifications. So the

political ramifications for me, I think that the, the entity

that steps in to try and support these unwinding moments is the

IMF. And I think that no matter what the IMF does, they’re going

to look bad. I think that the, you know, it’s sort of like,

like Jerome Powell, this this past year, right? Like, you

raised rates too late, you raise rates too quickly, no matter

what you do, it has some adverse effect and impact. It’s either

inflationary, or it impacts growth. And so I think the IMF

is going to get a lot of heat for either acting not too soon,

or sorry, not fast enough, or, or acting too aggressively and

causing inflation, as a bunch of these markets face credit

risk this year. So my big bet is the IMF is going to play a major

role. And we’re going to be talking a lot about the IMF

later this year, I think as a result, the IMF will get a lot

of heat, and you’ll end up seeing a lot of pressure and

political, you know, just like we blame NATO, just like we

blame, Jerome Powell, and the Fed will end up blaming the IMF

for a bunch of problems that will arise. But the natural

physics of what’s going on is the world has too much debt and

not enough growth to cover the debt, the cost of debt, that’s

Okay, and the IMF will be the political kind of, you know, hit

that’ll that’ll result a little complicated of a point of view.

But I think, yeah.

And who do you have, as your biggest political loser

prediction for 2023? Mr. David Sachs?

Well, I mean, Kevin McCarthy may not survive the week. So let me

go in a different direction. I think California is my big

political loser. And I would say in particular, the city of San

Francisco, both are going to have gigantic budget shortfalls.

So you may remember that this is back in 2021. When we had

that asset bubble, California had a surplus of 76 billion.

And then insane. And then 2022 happened. And now the state is

looking at a $24 billion deficit. Well, if we had taken

say, a third of that surplus from 21 and put it in a rainy

day fund, we wouldn’t have to worry about this deficit. But

that was never done. Newsom started handing that money out

like candy to the electorate to goose his election, his reelect

numbers and to get him past the that recall, remember, okay, so

the state never got a fiscal outlook in order. And now I

think it’s going to be even worse in 2023. And San Francisco,

the city, very similar kind of problem where its tax base is

heavily dependent on commercial real estate, which is really

suffering. So you know, the city of San Francisco in the state of

California, they’ve moved their tax base to, to highly volatile

capital gains. And with a really lousy stock market, I don’t know

how these guys gonna meet their budgets. So a lot of pain is

gonna be a lot of austerity and pain coming. That’s for sure.

And these people do not know how to manage a budget. They’re

incompetent. So you say California freebirds as IMF

Chamath, who do you think the biggest political loser for

2023 will be already gave us your prediction. Okay, and I’m

in alignment with you. I think to Santa’s peaked a little too

early and the forever Trumpers and the in the chaos is going to

be a little too much for him to handle. Okay, now we get into

what everybody wants business, business, business, biggest

business winner for 2023. Who do you have Chamath for your

biggest, biggest business winner of 2023?

I’m going to pick something out of my portfolio. I think I’m the

only non trivially large investor in both SpaceX and

relativity space. Relativity space has a huge SpaceX is

clearly just crushing on all cylinders. And they’re really

the only game in town with respect to launch capability.

And if you just Google it, you’ll see that the Europeans,

you know, have a hit or miss capability and launch, the

Russians are completely unable to do launch now because of all

of these sanctions. The private companies in New Zealand or the

United States have also had fits and starts really

incapable. Relativity, which is really which is now the second

most highly valued space business is about to do a launch

in the third week of January. And the big difference between

it and SpaceX, which is sort of why we did it. This is a early

YC company, I did the series A and kind of went along the whole

way. They have 3d printed everything. And the reason why

3d printing is interesting is you take a so if you if you

think a rocket costs $5 billion, if built by NASA, Elon was able

to take that to 100 to 500 million. And if you 3d print

everything, you can take that cost to like five to 50 million.

And so it allows you to just have this repeatability and

manufacturability. Now SpaceX also has a lot of 3d printed

parts, but relativity is entirely 3d printed. It has a

launch in three weeks at Cape Canaveral, I think. And we have

a like a $10 billion order book that gets unlocked. So I don’t

know how to see beyond a lot of these market forecasts right

now. So I’d rather pick a company, I’ll pick something in

my portfolio, if the rocket does not blow up, there’s a $10

billion order book. And this company is now on a trajectory

to be as valued as basic. And if it doesn’t his book times two,

and if it doesn’t, it goes to zero.

Freiburg, go ahead and talk your book times two or three. Let’s

see if you can one up Jamal. Which one of your investments

will be the biggest business winner of 2023? Freiburg?

I’m not an investor. My big bet is open AI. It’s just way too

obvious to be anything else this year. As you guys know, there

are dozens of startups that are being started right now, based

on an open AI demonstration of Dolly and chat GPT. I think

we’re seeing this in the enterprise and consumer markets.

I think open AI will become to some degree, maybe they could

be as many paths they could take the AWS, providing tooling and

infrastructure to all these startups that are building

applications for consumers and business users. Or they will end

up doing a massive deal with Microsoft, I think it’s

inevitable, they’re going to get a billion dollar plus investment

this year, they could power, you know, AI driven Bing search and

voice driven search. They could build their own products and

their own tools. And they’re becoming great investors. They

invested in D script, which is a product company we use here for

our podcast, which is an incredible product. And I think

that Sam Altman is a very smart and shrewd investor as well. So

for a lot of reasons, I think open AI could end up having an

amazing year this year and a lot of different paths they could

walk and we’re going to come out of this year and say they’re one

of the top tech companies in the valley.

Okay, sacks. Open AI has, of course, increased your ability

to talk to other humans. So you’re seeing a lot of big wins

there. I know. He’s, how do I talk to a child about their

college hopes and aspirations?

No, no, no. How do I talk to a child about their day?

Hello, hello, progeny of mine. How are you faring today in this


write me a script of talking to a 12 year old about their hopes

and dreams.

Say interesting using GPT for talking points on different

topics. We should try that for the pod, you know? Oh, okay,

here we go. We should have done the GPT predictions. That would

be a great answer for each of these categories.

sacks as a person on the spectrum. I’m a big fan of

sacks as a person on the spectrum. Yeah, how delightful

is this chat GPT and you know, your treatment of your


It’s great. Let me let me get to my answer here. So my answer for

the big business winner of the year is America’s natural gas

industry. And I have to admit, this is an aspect of the

Ukrainian war that I didn’t fully appreciate until I read

this New York Times article the other day about how natural gas

prices in Europe have now fallen to the level they’re at

before the war and everyone thought that there’d be this

huge shortage, and they wouldn’t be able to heat their homes.

Well, what happened? The answer is that Europe completely cut

off their dependence on Russian gas. And in fact, the Nord

Stream pipelines were blown up. So physically, they separated.

But then on top of it, they basically started importing

liquefied natural gas from the US. And here’s the key paragraph

in this article from the New York Times is that Europe

rapidly built terminals to receive liquefied gas, sweeping

away many of the usual bureaucratic obstacles, and

environmental objections. So in other words, what would normally

would have taken decades to get approvals, now was all put on a

fast track. And Europe is now completely dependent on American

natural gas. And I think this is the again, the thing maybe I

underestimated the cold hard American interest in this war is

to basically turn Europe into a vassal of America’s natural gas

industry. Previously, they were about to be dependent on Russia

and Nord Stream was going to make that situation permanent.

We’ve, you know, somebody blew up Nord Stream now they’re

dependent on American LNG, they’re going to pay higher

prices for that. But it’s, it’s been a pretty impressive win for

the American natural gas industry. And I think Biden has

really pulled a 180 here. Because you remember when he

first came into office, he canceled Keystone, he canceled

drilling, he was very tough on the oil and gas industry. I

think after he then delivered the hundreds of billions for the

climate, special interest in the Inflation Reduction Act, now he

is taking care of the oil and gas industry. I love it.

Biden. Yeah, not. And so what you’re saying is Biden

dynamically change course based on inputs like a great leader

would. Okay, well done.

Well, I don’t I don’t listen. I don’t know. Well, no, listen, I

think Biden has done something politically smart here. There’s

no question about it. I am giving him credit. Does it mean

that this war was worth it? No, I don’t. I don’t think we should

be engaging in oil wars like we did in the Middle East. So I’m

not justifying this war. But I am saying that there is a cold

hard American interest undergirding our position, which

is, it’s about LNG. It’s not it’s not just about moral


Yeah, I mean, strong start to 2023. vassal and undergirding.

My biggest predictions I’m working backwards from to here,

I think the door dashes, Airbnbs, Ubers, Etsy’s of the

world who need entrepreneurs, they need workers, they need

supply, they’ve always been supply constrained. As

unemployment becomes, let’s call it what it is sticky,

you’re going to see a lot more people participating in gig

platforms or entrepreneurial platforms that enable them to

make money. So I think they will be huge beneficiaries, especially

if they continue to lay off employees like DoorDash and

Airbnb did to right size their businesses. But my first one, my

number one is laid off tech workers. I think laid off tech

workers who get together in groups of two, three or four

developers, product managers, people who actually build stuff,

and start companies together are going to become extremely

successful. And they’re going to make incredible lemonade from

these lemons of these big tech layoffs. So I think the startup

space is again, and these laid off tech workers who choose to

take control of the destiny and starts companies are going to be

the true big winners. If you do it, do it with two or three

friends, because you’re going to need developers, you’re going to

need those those talented people in the startups that have three

founders get funded faster than the ones with one. So those are

my two winners. All right. Oh, yeah. And last year, our biggest

business winners were Chamath said SMBs, Sachs said rise to

the rest. Freeberg said Stripe. And I said Disney Millennials

and Gen Z. Let’s go on to biggest business loser for 2023.

Friedberg, who do you think will be the biggest business loser in

23 this year? In fact,

okay, so my biggest loser is the general category of capital

intensive series B3D growth businesses in the startup

landscape private companies. As you guys know, there’s been a

big shift in capital allocation. A lot of the folks

who were writing big checks into growth rounds are retreating

back to writing smaller checks and seed in a rounds, they don’t

want to write the $20 million Series B, they want to write the

$5 million seed in a round. No one wants to kind of follow the

valuation. No one wants to set the valuation for these growth

businesses. Particularly if after this round, you know, you

need another big round of capital, and no one’s sure if

someone’s going to be waiting on the other end. As a result,

we’re seeing tons of these businesses run into capital

infusion walls, they can’t pivot. I think we’ll see what we

saw in bubble, where 99 and a half percent of these

companies actually die, the half percent that we are going to

emerge as the next $100 billion enterprises, the Googles and the

Amazons of the world. So there will be light at the end of the

tunnel for the winners. But generally, there are hundreds of

companies in hardware, in sin bio in biotech and high growth

enterprise software that require significant sales investment

expense. A lot of these businesses where the capital

intensive nature of the business just doesn’t have the market for

it right now. And their end and investors are all retreating,

and they’re gonna be selective. So that’s where I think there’s

gonna be more capital intensive. By the way, seed seed and a

investing hot as a button. B just kiss. That’s what that Yeah,

that’s it.

Okay, sacks biggest business loser for 2023.

Well, I just by the way, 100% agree with what free work said,

but my biggest loser for business in 23 is the consumer.

I just don’t understand how the consumer isn’t going to finally

tap out in this economy. I mean, they they have a mountain of

personal debt, credit card debts at all time highs. I think the

average credit card rate hit 19.6% last week, and it’s

expected to rise even further. The mortgage rates are above 7%

now. So forget about trying to buy a new home, or sell your

home, and your stock portfolio is down to and now layoffs are

starting to pile up. So I just don’t understand how we’re

going to avoid a recession. And you saw, you know, Kashkari

saying that the Fed’s gonna keep raising 5.4% his prediction. You

know, I don’t understand how if rates are at five and a half

percent, that doesn’t finally break the back of this economy.

And we go into a recession.

You think sacks that the economy is actually broken right now, we

just don’t have the data because the data lag 60 days in most

people’s minds, because it does feel like the consumer is just

and real estate has just broken at this very moment.

It seems like I mean, the pain is very unequal, right. But in

the tech industry, we’ve been in a recession for a year. I mean,

like the gross stocks are down 80%. What Freeberg said is true,

no one’s going to fund these, you know, high burning

companies, there’s an enormous amount of retooling that has to

happen. Look, I think the recession is here. It’s just

very unequally


distributed. Exactly.

Yeah. Well, I mean, if you look at it, buy now pay later,

that’s a category starting to break credit card debt, as

you’re saying, hitting, you know, big,

bad records in terms of how much we love spending. Also,

people’s savings are going down. So the consumers back has been

broken. I think we’re just going to feel it in the in the first

and second quarter. Chamath, who’s your biggest business

loser prediction for 2023? The world wants to know.

Let me just build on what Freeberg and sack said for a

second before I give you my pick. Sure. I this is the

conversation you and I had when we just got on, guys, what I was

telling J Cal is at the end of q4, I did five deals. And four

were pro ratas, one was a new deal. And they were all clean

markups. So the four deals that other people put money into. And

I was looking at them, and I was trying to figure out, okay, what

differentiates these things in free birth, your point, these

were super clean startups with very clean cap tables that had

clear progress. And then conversely, I had seven converts

showed to me for companies whose valuations were anywhere between

three, and I would say 12 billion. And I did none of them.

And not only did I do none of them, nobody else did any of

them. And the problem was the real market clearing price was

80 to 90% down. And so I was like, what is going on here? So

free birth, your point, I don’t even think it’s just cash

intensive startups. I think it’s like all growth companies

are in a really bad place. I thought that this growth stuff

would get sorted out in two to three months. And now I’m

worried it’s two to three years. I think it’s toxic, toxic.

Here’s the definition of Chamath what I think has happened. And

where I think the cutoff is, is when the value the implied

market valuation of the company based on where public comps are

trading is less than the total capital preference in the

company, the total preferred stock. Wow, so many companies

now that raised 400 million or 2 billion valuation, but the

company is actually worth 300 million now, based on public

market comps. So they’re worth less than their preference

stack. So how do you sort of do that?

No, that this is why I think all these converts are getting done.

That’s where the rubber meets the road on all these deals.

Yeah, that’s right. Who does the convert benefit the convert

benefits, the VCs who want to maintain the illusory valuation

that they had before? They do that. They do that to assuage

the limited partner who gave them money, that the marks

aren’t as bad as they thought. But the people that really get

screwed, as Jason said, are the common shareholders, because

eventually those converts deals that do get done, those people

will end up owning the company, the cap table gets completely

flushed and reset, and the employees get wiped out.

Yeah. And then you got to basically take all the employees

who were there previously, who now hate the founder, and you

got to start over and give everybody new all the other


the people to do all the work and fucked and the people who do

none of the work and who just want to maintain this shell game

gets to basically live another day.

Basically, people are investing as you gave in the example

earlier, like, hey, if it’s a $3 billion company, but it’s

actually worth 750 people, instead of taking the valuation

from 3 billion to 750, we’ll say, okay, buy one share at the

$3 billion price. And we’ll give you three or four shares for

free or for a penny warrants, they’re called typically, or,

you know, just different ways to structure this. And then all of

a sudden, nobody knows the actual denominator, they may own

them 10,000 shares, but they don’t know how many shares are

actually issued because the warrants are not on the cap

table. They’re in some side document in a folder in a lawyer

or CFO’s office.

So let me let me tell you my biggest business loser. Yes,


I think that the biggest potential business loser this

year is Google search, as measured by your profitability

and engagement. I think it’s easier for me to see where the

the usage comes from, as opposed to picking open AI or chat GPT

in terms of where the usage goes to. And the reason is because I

think a lot of people don’t still fully understand how

machine learning and AI work, but just 30 second primer.

There’s two big buckets of work. There’s what’s called learning,

which is how you learn how to make predictions. And then

there’s what’s called inference, which is when you actually type

something into the search box, you get the answer. The thing

with learning, and what chat GPT is showing is that they have

learned by crawling the entirety of the web. There are five or

six other organizations that are capable of crawling the entire

web, in terms of cost in terms of compute in terms of the

quality of the transformers and the quality of the AI. And so I

find it easier to predict the decay in the quality of Google

search as that much better than everybody else, then I find it

is to predict who will win, because I think that with

enough time and money, Oracle, Microsoft, Google, the Chinese

internet companies can all compete, Facebook. And so I

think that you’ll converge on the same training, which will

lead to the same inference. And so I think consumers end up

getting confused, and we’ll end up being able to get high

quality search results for many places versus today. You know,

you wouldn’t only think that Google is the only game in town,

quite honestly, for most people. Well, I think that statistic

show that Google could lose 10 or 15% of usage to all these

other sites. And that may not make any of those sites that

relevant, but it’ll have a material measurable impact to

Google and Google’s fantastic prediction. And I think, you

know, chat, GPT, or these other ones are going to have a very

interesting marketing attack that they can do on Google is

why search when you can get an answer, right? Hey, we’ll just

give you the answer. You don’t have to search. I had so many

losers that I went through here. I’m just gonna run backwards to

them. Number five, I thought founders refused to downsize in

2022 could be big losers in 2023. Five and the rest of us

are just I’m just going to tell you my thought process. I just

don’t want to have a long hair. Number four, I thought VC funds

founded in 2020. Then I thought crypto because Gary Gensler says

it’s all stock. Then I went with you, Chamath. Number four,

Google, my god, they got so many headwinds against them with a

chat GPT. But I wound up on white collar workers with no

hard skills. Twitter going down to I think, you know, Elon said

a couple 100 people’s all you need to run Twitter. And I think

he said he has 2000 employees or something like that. He has

shown everybody, you know, hey, listen, these more can be done

with less, or these things are overstaffed in a massive way. I

think white collar workers now, the idea that you’re gonna have

four offers, and you’re gonna be able to play them off each other

is over.

When we take the show, it’s surplus elites.

Sure. White collar workers, aka surplus elites, people who

actually, you know, are mid managers who don’t, who don’t

actually code or don’t actually build a product or sell a

product don’t actually do real work. As I think many people

would frame it in the managerial class or the CEO class. Man,

they’re gonna have a hard time. And this week, Andy, Amazon,

Andy cut 18,000 white collar workers, not the blue collar,

the white collar workers in Amazon, that was a big turning

point. And Benny off. You know, he’s Ohana. He is Mahalo. He is

Aloha. He does not like to lay people off. He considers sells

for us a family. He laid off 8000.

I predicted that.

Yeah. And I mean, that is

a tweet about that. Well, I mean, the reason is pretty simple,

right? Their gross slowed down by two thirds in the most recent

quarter, but they’re still spending the same amount of

sales and marketing. So when that happens, your CAC payback

explodes, right? You go from three years payback to like 10

years. So they have to cut costs in order to rationalize your

unique economics. So and now it cascades, right? Because all of

Salesforce’s vendors are gonna be getting less money from

Salesforce. Yes, they’re tightening their belts. So then

those companies are gonna have to cut and the cycle just keeps

going and going.

Right. And everybody tightens their belts at the same time,

freezes the economy, aka recession, and and possibly

were so that mine was a surplus elite. So that’s a nice little

quartet. In 2022. Just so you know, I picked crypto. Freeberg

also picked crypto, which must have used a MasterCard and sack

said, assets classes that benefit from government dumps


Yeah. All right, let’s go to biggest business deal of 2023

is a prediction. What do we think could be the biggest

business deal? Easy, easy. This one. Okay, come on, go. Let’s go

right around here. Okay, come off quickly. Starlink will go

public. Oh, SpaceX will cut and paste the cap table. And we will

take yum, yum, it’ll be yummy and delicious. And my prediction

is that the Starlink valuation will be at least half of

SpaceX’s current private Mark 75 Billy, just 75 billion, it will

be phenomenal. And I think the reason why is that I think in

order for Elon to have complete financial flexibility and do

what he needs to do. And, you know, he talked about this on

our pod about the difficulties and the dangers of margin loans

and all of that stuff. Yes, he’s gonna create breathing room for

himself. This is the simplest and most obvious way for him to

do it. It’ll give him a ton of more dry powder. Sure. So I

think that this is

an obvious outcome in 2020. They already have a million

subscribers in their better than nothing beta as they call it. I

have two of them. I think this is a great, great. I was I was

the first one to get it for for the global 7500. So okay, I got

it for yeah. Yeah, similar. So they’re fighting in your house

in the same size. Yeah, exactly. So there you go. There is a

point. People are underestimating the TAM, I think of this

product. The TAM is not existing broadband connections. It’s

second connections. It’s connections where connections

didn’t exist. Just so you know, buses, the best in class, the

best in class broadband connection for a plane is called

ka band. And it costs 500 grand a year. That’s ridiculous. And

you can replace it for, you know, a 10th of the cost and

Starlink on a plane is dramatically better by

directionally. So I think Starlink is going to go public

and I think it’s going to be it’s going to be the best chance

that we have of opening up the capital markets in 2023.

There’s another way of saying people who own private jets, if

they are flying 250 hours a year, which will probably be a

reasonable number to 300 hours a year, they’re paying $2,000 an

hour for their internet service. That is bonkers. Okay, sax. Who

is your big deal? Biggest business deal prediction

deals. 23 prediction is, there will be a deal between Putin and

G. And they met by satellite late last week to discuss ways

to further help each other in 2023. Putin characterized it as

a no limits partnership. You may remember that the two of them

inked a $175 billion gas deal in early February last year, that

was three weeks before Putin invaded Ukraine. I think now

Russia is even more dependent on China. We’ve really driven

Russia into China’s arms. And I think there will be a big deal

not just on energy, but on agricultural products, mineral

products, and rare earth minerals that, you know,

Chamath likes to talk about, I think there could be a trillion

dollar deal between Russia and China this year, if I was gonna

go out and live and make prediction.

Okay, so there is your 2023 prediction of the biggest deal,

the legion of dictators is forming. I do think it’s it is

like, you know, that the axis of evil, this is more legion of

dictators, like, hey, let’s do business together. Freeberg, you

got a prediction for the biggest business deal of 2023. This is

really going out on a limb here.

I’ll do two real quick. The first was the similar to what

Zack said, but it’s kind of echoing what I said earlier,

which is the petro yuan trade. I think that’s the Saudi China

trade. If this happens, and oil is sold in yuan, it marks the

beginning of I think, the end of the assumption that the US

dollar is the global reserve and the risk free currency in

reserve for the world. So I think the petro yuan trade, if

you guys, here’s the Reuters article covering G’s visit to

Saudi Arabia last month, first, second week of December. Once

this gets inked, and signed, it’s a real shift. Globally, I

think the other one that I’m that I’m going to point out that

I think is a bit of a out of left field one, maybe. And maybe

I’m just gonna look like a total idiot at the end of the

year, but do a wildcard. I like it. This is my wildcard. So my

wildcard is I think Apple ends up buying something completely

out of the ordinary. And here’s why I think Apple’s core

business, they’re facing significant pressure with

respect to their relationship and ties to China. As you guys

may have seen last week, Foxconn announced that they’re actually

going further downstream in terms of their production model.

And they’re trying to diversify away from being kind of the sole

service provider to Apple. Apple, as you know, is under

such pressure to get out of China, politically, that they

started to try and invigorate activity in Vietnam and

elsewhere. So a lot of pressure on their relationship with their

low cost producer and local cost production partner. They’re also

under a lot of political pressure because of the App

Store revenues. You guys know this 30% App Store that they

take, a lot of people are calling it monopolistic and

antitrust is getting involved. So they’re feeling that pressure.

There’s also the pressure with respect to the, you know,

waning consumer demand for high end electronics. Samsung last

yesterday, or last week, or yesterday, I think announced

significant declines in consumer demand for electronics, or

their forecast as such, that has to impact Apple as well. So when

you put all of this together, right, they’re, they’re, they’re

being pressured to get out of their low cost manufacturing

center, they’re being pressured to stop making money on the App

Store, they’re being pressured, because the demand may be

waning, they have to do something big to kind of

diversify the business. So I think they might end up doing

something like buying a real content company. Maybe they do

something like buy a Disney, maybe they do something like buy

an automotive company like Fiat Chrysler. I think there are a

number of these kind of like what may seem today outrageous

deals that Apple might end up kind of being pressured into

doing so that they can get ahead of their forecast of the impact

that all these pressures are going to have on their core

business. And so I think this is something interesting to kind

of think may happen this year, I certainly have no insight, or

Intel on anything, or I could be completely wrong on this one.

But it feels like they’ve got to do something this year. I

mean, in order to keep that business growing, this is I

think, I love you, your wildcard, because the MBS China

trade, and that relationship, sure, legion of dictators, but

this one is really good. It’s hard to buy Disney monopolistic

issues, but buying a car company pretty easy. Because that’s a

fragmented market. I love this prediction. I mean, now with

Tesla, with this depressed stock price, Apple can make a run at

Tesla, they have they could almost buy it with cash. Let

alone BMW, Volvo, one of those brands they could buy easily.

What a great prediction for me. The prediction is Amazon’s

three legged stool grows into a sturdy chair chair with a fourth

pillar. For those folks who are not familiar with how Amazon has

built their businesses, there are three pillars in their

stool. ecommerce, obviously, when you buy stuff, prime

memberships, which is kind of considered a separate revenue

stream. And of course, AWS cloud computing, I think the fourth is

going to be this continuation of following the health stream,

not advertising, because that’s not a consumer based product.

That’s just the way they make money. Health is going to be a

big one for them. They obviously acquired one medical, which was

a small purchase. I think they’re going to buy Roman hymns,

they’re going to buy Peloton, they could buy a whoop, and

they’re going to go all in on health. And, you know, that

three legged stool becomes a very sturdy chair. And my runner

up is tick tock is going to divest under duress. I think

that it’s going to have to go public, and the Chinese are

going to divest their interest in it, and just take their chips,

because they’re going to be faced with the existential

threat during the political debates of the next two years,

there will be unanimous support from Democrats and Republicans

to get tick tock out of the US, therefore they divest.

Can I just test that with your with you guys, because we’ve

talked about this a lot that hey, we’re going to ban tick

tock. How many of your friends, kids or your kids do you guys

know spend hours a week on tick tock 100% lot 90% How do you

get over the political mountain of trying to ban tick tock? If

you try and ban tick tock, whoever raises their hand and

says we should ban tick tock and actually gets it done. They’re

out of office, there is going to be so much pressure and

backlash because people are hooked and love that app and use

it all the time to take that away from people will feel like

this kind of young kids that don’t have phones actually get

everything that tick tock has on YouTube shorts. So I don’t think

tick tock is that important because it is not actually there

is no sticky network effect inside that app. So there isn’t

usage that’s dependent on people, you know, or a graph

that you build. It’s a lot of passively consumed content. And

so you know, you’re you’re getting pushed a lot of

algorithm algorithmically defined content, you can do that

on YouTube. And so I actually don’t think it’s that

meaningfully important. If tick tock goes away. I think the

content creators stay. It’s harder for them to build a

business on YouTube shorts. But if you look at the men measure

the density of content inside tick tock, it exists almost one

to one on YouTube.

That’s interesting. It’s an issue. You think you think it’ll

you think it’ll be okay, if we if we cancel tick tock in the US

and we say that’s it, you can’t have tick tock anymore to

YouTube, and it’ll be disruptive, but people will

just go to YouTube and Instagram. It’s not that big of

a deal. In fact, a lot of the fit my favorites if there was a

network effect inside there, then I think people would have a

reason to complain to somebody, whether it’s your representative

or whether it’s somebody else to say, hey, don’t do this, this

would have a deleterious impact on my quality of life or my

quality of experience. And you could make that clear claim on

Instagram, Facebook, you know, Google, YouTube. But tick tock

is is much more brittle that way. And that’s why they need to

get public sooner and monetize this bloody thing. Because I

think that it’s very easy, actually, to deconstruct tick

tocks value into these other places. I can tell you my

favorite tick tock is chefs reactions. And I consume him

now on Instagram, because he posts, we just copies one to the

other. And so chefs reactions is a great example where he

actually got banned by tick tock, and then diversified on

his own. And now what he does is he publishes across multiple

streams. And if you look at all the big creators, they all do

that, because it makes no sense to actually give the power to

any one of these things. Why have a dependency? Why have a

dependency? All right, let’s keep the trains moving. Most

contrarian belief. This is the Peter Thiel award, your chess

partner, sacks, who’s winning in 2022 in chess, how many chess

games do you have going with Peter Thiel right now? And who’s

higher rated you demolished me with your Queen’s Gambit. I

played one game I got killed in seven moves. I’m ranked at 800

  1. Right now sacks is at 1800. He just walloped me. Who’s

higher rated?

You accepted the Queen’s Gambit? Well, you know, I just I didn’t

even know what it was. I was like, what opening is this?

You’re like, Queens Gambit, you’re dead.

You don’t want to accept the Queen’s Gambit. Very pleasant

game for white. I’m gonna go on a limb here, you know, and risk

being wrong. My, my prediction or most contrarian belief is

that the bromance between Biden and Zelensky comes to an end at

some point in 2023. And let me state that the part that I think

is conventional wisdom, and everyone agrees with which is

there’s going to be a massive Ukrainian counter offensive in

the spring. And I think that could go one of two ways,

either, it could make limited gains, basically, the Russians

fight them to a stalemate, or it could be successful. And they

could basically push the Russians back to the February

23rd lines and then make it play for Crimea. I predict that in

either one of those circumstances, Zelensky his

interests, and Biden’s interest will start to diverge. So in the

case of a stalemate, which I think is probably 5050 here,

Biden’s got to start going into election mode for 2024. And I

think we’re saying that we’re going to be in a recession. So I

think that if there’s a stalemate, I think Biden’s going

to tell Zelensky wrap this thing up, it’s time to negotiate, we

need to get this over with. By the same token, if the

counteroffensive successful, I think that the administration

hopefully cooler heads will prevail and not let them take

Crimea, that’s basically what they’re gunning for, is they not

only want to get back to the February 23rd lines, they want

to go all the way back to the 2014 lines of retaking Crimea. I

think that’s extremely dangerous. I think that could

precipitate a nuclear war. And I think that the cooler heads the

administration will tell Zelensky to stand down. And

that’s the right time to make a deal. So I think in either one

of these scenarios, I think you will start to see a divergence

between the Ukrainian and the American interest and that could

create a rift. And I think no one’s really predicting that.

I think this is great. This is kind of what I thought the plan

all along was, which was to deplete Putin of resources,

distract him and then get the West off of his oil and, and try

to do regime change, but do it by bleeding him. This would be

proof positive of that strategy, which is bleed him to the end,

and then sell Zelensky out. I think that’s actually, I know

that I know it’s cynical, but I think that’s what we’re doing. I

think Ukraine is a tool to deplete Putin and then maybe get

to regime change. I’m cynical as it gets with this Chamath. What’s

your most contrarian belief of 2023?

I will go and pick that inflation, which people expect

to fall off a cliff doesn’t fall off a cliff as fast or as

meaningfully as people want. And so I will explain inflation

as three different chapters. And we’ve seen the first two

chapters play out. So 2021, chapter one was all about energy

inflation. And you know, we all talked about having almost $10

gas at the pump and what does it mean for everybody and it caused

that initial spike in inflation. And then we had it come off and

sacks called this he said, you know, we’re going to have this

sort of double hump. And 2022 was really the story of goods

inflation, right? All these prices and all of these things

went up because the input costs went up, and we all had to bear

the implications of that. But then that started to ebb. Now,

if you look at the tail end of 2022, what I found super

interesting was the number of articles I saw about wage

inflation, whether that was Biden using an 1800s era law to

prevent a railroad strike, the number of states that increased

minimum wage, the trend around unionization. So in general, my

thought is that the pendulum is swinging very markedly away from

capital and towards labor. And as the labor participation rate

stays low and continues to go down. And also it’s compounded

by an unemployment rate that may go up, right people are, it’s

going to be harder and harder to get people to do the work you

need at the company you have, unless you pay them more. And if

that gets exaggerated, then inflation will stay where it is,

it won’t be as muted, and it won’t fall off a cliff as people

want to be persistent. That’s my big contrarian got a wager for

this year is that we that is inflation. We see wage

inflation that keeps inflation not going down as much as people

want. This is contrarian because everybody’s saying, hey, it’s

over, the consumer’s back has been broken, the credit card

debt is high. And everybody’s being laid off, yada, yada,

yada. Therefore, goods and services, there’ll be more

supply than demand, and the prices will lower. Very

contrarian free break. Do you have a contrarian belief for


I think my it follows my earlier points about the Saudi

China, Russian, Russia trade this year exiting 2023. It may

be the case that, you know, there’s historically been this

belief and this continuing belief that the US dollar will

always be the de facto global reserve currency. And the

current mantra is that it’s better than the rest. Everyone

else is worse off than the US Western Europe is in trouble,

Japan is in trouble, China is in trouble, everyone’s in trouble.

But if there is a coalition, an economic coalition, a scaled

economic coalition, that starts to shift the balance of power a

little bit, and the US meanwhile, is taking on

extraordinary debt load, spending $1.7 trillion in an

omnibus bill, you know, has this massive unfunded Social

Security problem coming down the pipe, and are trying to manage

multiple funded conflicts around the world. It could be that the

US dollar coming out of 2023 starts to trade more like a risk

asset, and less like a risk free asset. And so I think that

that’s my big contrarian bet is that maybe this year marks the

beginning of the end of the US dollar as the kind of global de

facto reserve currency. Based on some of these big trades that I

talked about happening. So that that would be my, my big kind of


perfectly said, that’s your contrarian bet the accent, the

Legion of dictators, the MBS is etc. They become they form a

global currency. Yeah, my term, not yours.

I’m not calling it. Yeah, I wouldn’t say Legion of dictators

and I wouldn’t say forming a global currency. But I do think

that the fact that that large economic trading models start to

be done in non dollar denominated form, got it, you

know, we can the kind of reserve status of the dollar to some

degree, not fully right, it doesn’t happen in a binary way.

And then the dollar starts to trade more like a risk asset

like other currencies do to some degree, not fully. So maybe

maybe this year, we start to see that shift.

Once again, I take the exact opposite of your contrarian

belief. I believe American exceptionalism continues to

soar, as Russia, China, Saudi Arabia, to a lesser extent,

continue to self sabotage themselves with insane wars like

Putin has done, or cutting off the heads of entrepreneurs in

China figuratively, I’m saying here, I think you cannot have

exceptionalism without entrepreneurs without people

having freedom. And I think that means American exceptionalism

based on freedom is going to continue and the legion of

dictators, I believe, are going to stab each other in the back

before they change the world or move the currency. Can’t trust

them, they’ll they’ll snip at each other. And or they’ll self


That’s actually what do you fall on our opposite?

Yeah, I think that America is really feeling its Wheaties

right now. I think that American power is immense. I think that

the superiority of our weapons in Ukraine has been one of the

big surprises of the war.

Let’s go Palmer lucky.

I don’t see the world in the simplistic good guys versus bad

guys frame that Jake out does. However, America is on turbo

right now. And yes, it is true that the bricks would love to

get off of the dollar, because we are now using the dollar and

the financial system of swift as a as a geopolitical tool and a

weapon. And they would very much like to be off of our dependence

on our currency. But I don’t think they’re anywhere close to

being able to do that yet. And like I said, America is on turbo

right now. Now, one thing one thing I want to mention this

just came out White House correspondent named Jennifer

Jacobs, just reported that the US has agreed to send Bradley

armored vehicles, basically our best tanks to Ukraine.

Previously, US officials had balked at sending armored

vehicles saying heavier weapons be too difficult for Ukraine to

operate and maintain but allies are moving to provide such

weapons. So we keep providing the Ukrainians with more and

more sophisticated weapons, more and more support. Like I said,

this is leading up to a huge Ukrainian counter offensive in

the spring. And I really don’t know what’s going to happen at

that point. I do think that the Russians will escalate. I don’t

think they can afford to lose this war. They view it as

existential. And I like I said, I hope cooler heads will

prevail. And if the Ukrainians are successful at breaking

through, I hope that the Biden administration will shut this

down before they try to retake Crimea. Because, you know, we’ve

discussed this before, I think the Russians confronted with a

choice between a total defeat, that includes losing Crimea and

their naval base at Sevastopol, and sees the Ukrainian flag

flying over their base at Sevastopol, if that’s a choice

between that, or potentially using a tactical nuke, maybe at

the mouth of the Crimean Peninsula as a firewall, I think

they could choose the nuke option. So it’s a very dangerous

situation. And, you know, very, very dynamic, there’s a lot of


All right, let’s go on to best performing asset of 2023. I’m

going with seed stage investing again. I don’t think people want

to get into these toxic cap tables at the late stage, as

Chamath pointed out. So I go with seed stage, you know, and

up to series A, the people brave enough to place bets, the

founders brave enough to start companies, I believe it’s the

best performing asset class of 2023. Chamath, who do you got?

I think that there’s still a lot of uncertainty in the world and

in the markets. And so I’m generally concerned that there’s

a lot of chop. And so I pick something that’s pretty

conservative. But I would have a combination of cash and the

front end of the yield curve. So T bills all the way up to two

year bonds. So you can generate four and a half probably by the

end of this year, 5% pretty safely owning this stuff while

you wait for things to become more certain. And the way that I

think about it is that I would rather miss the first 10 or 15%

of a rally. Once we’re really done this stuff, then try to

overcorrect and try to pick a bottom just because I think that

you could lose a lot of money. So I think the goal for this

year is to stay resilient and in the game. And so owning having

a bunch of cash on the sidelines ready to pound it in. Meanwhile,

a portion of it collecting 5% is not such a bad thing while you

wait for the bottom. Fantastic. My answer was actually very,

very similar, which is if Kashkari is right, that rates

are going to 5.4% in q1. Why wouldn’t you just put all your

money in short term T bills, you earn five, five and a half

percent risk free? Yeah, like set it and forget it. Yeah. And

that’s why capital flows are moving hugely right now from

equities into bonds. Especially if we’re going to a recession,

which is inherently deflationary.

What do you got freeberg?

forming asset class 2023.

One of the things so I think it’s inevitable that we continue

to have significant infrastructure spending from

both the stimulus and security point of view. So you know, we

kind of want to continue to stimulate the economy and

support growth, we want to continue to create jobs and

support this transition and the risk if the if the recession

predictions play out true in the job market does lucid, it’s very

tight right now. There’s going to be even more of an impetus to

continue to do infrastructure investment. But I think there’s

also these big economic transitions happening underway

right now with pharmaceuticals, with semiconductors, with

energy, there’s a lot that we’ve talked about where there’s a

security problem, and a redundancy problem. And so, you

know, there are a couple of ways to kind of play this

infrastructure spending thesis in each of those areas. I’ve

kind of highlighted four of them. One is in semiconductor

capital equipment. Okay, like 10 core applied materials that

range of businesses that provide and sell the equipment into the

the fabs and the and the organizations that build

semiconductor manufacturing facilities. The second is kind of

in oil and gas services. So similar to what Saks said

earlier, Schlumberger Baker Hughes, that class of

businesses, I think benefit in this in this environment. And

this is independent of kind of economic conditions, certainly

because these are big multi year spending projects. The third is

in the equipment to support them. So deer and caterpillar.

And then the fourth, I think is an important one. I’ll talk

about this in a minute with respect to my biggest kind of

anticipated thing for next year, which is in a pharmaceutical

infrastructure. So thermo Fisher, and there’s some company

and others like them, because there’s a lot of build out

happening to support these big transitions happening in the

modalities that are being used in pharmaceutical drugs and

diagnostics. And then I think that there’s also a couple of

these businesses that are diversified, like Danaher

Honeywell, thermo Fisher is a good example that play across

multiple of these, these opportunities. So those are

those are all great businesses to own. And you don’t need to

worry about, you know, they’re, they’re growing cash flow

positive dividend paying companies. And you don’t need to

worry about, you know, am I getting 5% or five and a half

percent based on the equity price this year, these are long

range businesses that are building real value, growing

their top line, and compounding value from within. And then

they’re acquiring a lot of smaller businesses very cheap.

I’ll say what, that’s an important trend. I’ve seen

across these companies, Danaher Honeywell, thermo Fisher, they

buy small companies, they pay very little, and they immediately

get massive return on invested capital, like they’re in the

high teens. So why get 5% on T bills, when you can get high

teens ROIC, on the management teams running these incredible

platforms. So that’s where I’m most excited for this year.

Okay, now let’s move on.

That was like a mad that was like my my mad my mad money

segment. I’ve never done the mad money segment before. But there

you guys got

worst performing asset, I went with energy because not that I

think it’s not important, but it just feels like everybody rushed

into it in 2022. So it feels like it’s overheated. And if we

are in a recession, people might lower consumption in terms of

energy and be looking for cheaper alternatives. So it

could be overheated. So I went with energy, Chamath worst

performing asset, you got one.

I think that if we’ve learned anything from the last three

years, you have to separate the valuation of a company and how

it performs in the stock market with its value in society. So

for example, if you look at zoom, zooms valuation has

cratered, but its value in society has probably continued

to go up, it’s still a massively relied upon tool. The point

is that markets do not give you credit for the value in society,

they will give you credit when you are about to over earn. But

then they’ll pull it all back when they think that you’re

going to under earn. So in that lens, I think that tech will

have a tough year. I think energy will have a really shit

year. And probably the biggest asset class that is going to get

pressured is going to be junk debt. And the reason is a bunch

of these variable rate loans, when rates are at five and 6%,

that all of a sudden are like 11 1213 14% coupons, a bunch of

companies will have trouble meeting their debt obligations

and we’ll have to restructure the debt or we’ll have to file

some tech energy performing asset for 2023.

Oh, subcategory of what Chamath just said, I think office towers

in San Francisco are that is some serious toxic debt 27%

vacancy rates and growing as Lisa’s role. I think that a lot

of these buildings, maybe virtually all of the San

Francisco downtown is going to be owned by the bank soon,

because no one real estate in San Francisco, specifically the

office towers, because no one wants to be in those those

skyscraper buildings south of market, you know, mired in

homelessness. So yeah, I mean, I think that a lot of those

buildings can be owned by the banks, there’s me some major

fire sales. Remember, this is the hottest commercial real

estate market in the country. Yeah, a few years ago, and now

it’s the worst.

Well, look, look what happened to be read. What do you think

about that crazy thing that happened with the Blackstone

read? I mean, that’s nuts. You know, what happened? Yeah,

Blackstone has a product called be read. It’s like a $70

billion exchange traded fund effectively. And what it is, is

the ability for individual investors don’t access to

Blackstone’s, you know, commercial real estate

portfolio. And they had such a massive amount of redemptions

that they had to close redemptions at the end of q4.

And they were worried that the redemptions were going to

continue to go up. These are individual investors who

basically sees the writing on the wall, as David said, and

wants their money out. And so they went to the University of

California pension system. And they essentially got a huge

infusion of capital, I think it was about $4 billion, where they

guaranteed 11 and a half percent interest to these guys

for the $4 billion. And they also posted a billion dollars of

their own equity in in the actual REIT to backstop it. So

what does it show you? I think what Saks is saying is really

right. It’s it may not just be in San Francisco. But, you know,

with all of these people either getting laid off with all of

these people now working remotely, we may finally start to

see the beginning of the reckoning in commercial real

estate, which has been an unbelievably performant asset

class up until right about now. And on top of that, you have to

factor in these much higher rates. And so these building

owners, if they financed it, which they invariably have

always financed, they have huge variable rate payments that are

due on these buildings, the rent rolls are lower, even people

like Twitter is just refusing to pay the rent. So you have to

take them to court. So it elongates when they have to pay.

And so you could miss a bunch of rent payments. And all of a

sudden, the banks could just go crazy and take ownership of

these things.

Okay. Do you have a worst performing asset class for 2023

prediction? Sultan of science, Queen of quinoa, Dave Friedberg?

It’s, it’s really simple. I’ve mentioned it before. It’s

consumer credit, we assume that raising rising rates and

inflation would taper down consumer demand, meaning

consumers buying goods and stuff. And that certainly hasn’t

happened. I’m in Vegas right now. I was in the car yesterday

and the driver grew up in Vegas. He’s like, in all the I’ve

lived my whole life in Vegas. He’s like, I’ve never seen a

December, like we just had, it was packed the entire month.

He’s like, normally in Vegas, it’s dead up until Christmas and

the New Year’s people come into town, but it’s normally dead.

He’s like, I’ve never seen such a busy month. And I think we see

this in the numbers consumers are still spending, like it’s

  1. They’re still spending like interest rates are zero, as

we talked about, consumer credit is skyrocketing, while

rates are skyrocketing. And so I think we’re going to run into a

real wall with respect to consumer credit in sometime this

year. And you’re going to see, as you guys know, this is such a

complicated, interwoven market of assets, that the way that

this this can be traded, there’s a lot of different ways to trade

it. But I think it’s going to be, in general, consumers are

not going to be able to meet their debt obligations. And it’s

defaults, could be mortgages, credit card debt, defaults are

coming. Yeah, if you’re putting the markets, the market has

priced in a bunch of this stuff, obviously, companies like a firm

and you know, the, the, what are they called buy now pay later

companies, but credit card companies, mortgages, there’s a

lot of assets that you can start to kind of pick apart, where do

you think this unravels first? How does it what gets hit

hardest? What’s underpriced and overpriced? Probably a lot of

good pair trading to do as Jamal kind of loves to talk about,

with respect to which of these are more likely or less likely

to be sensitive to this dynamic, but there’s, I think

it’s, it’s going to be a pretty ugly scene. Consumers just have

way too much debt relative to their earnings right now. And

it’s pretty nasty.

And they have some confidence that they’ll always have a job

or some way to pay their for easy payment.

I’ll say it’s hard. It’s muscle memory is serious. You know, you

come out of 2021. When you had, it’s not just stimulus checks,

it was the low interest rate and easy credit availability

everywhere. And it’s just easy to jump into getting new stuff

and cool stuff. And then when you get used to getting new

stuff every week, or every month, you kind of stick with

it. And you’re like, I don’t want to give it up just yet. I

just not just yet, not just yet. You know, and so it’s hard to

kind of step back from spending when you have a new type of

lifestyle. And I think that’s what’s going on. I think this is

an incredible observation. There’s a great tick tock of

this guy that runs car dealerships, and he sent them

out on like, how much incredible money like what a significant

percentage of people’s income they are spending on their

monthly car payments, and people buy these cars that are well

beyond what should be kind of a reasonable budget. If you were

to go to Susie Orman for a stretch, you should not buy that

freaking stretch. And this the stretching is gonna is gonna

snap this year. Yeah,

absolutely. Which brings us to the most anticipated trend. I

love it. Great one. Most anticipated trend of 2023.

Related to yours, I went with austerity. I have a friend who

sometimes flies private often. And I was talking to him about

his Christmas vacation. This friend of mine, Chamath, instead

of flying private to his vacation, he had to pick up his

kids, he had to go back and forth. He was driving his car.

That was three hour. That was you. Oh, okay. I didn’t want to

tell anyone to click. Yeah.

It was so great.

We’d normally buy private to Lake Tahoe. And he’s like, No, I

can’t go out with your skiing on Friday. I got to pick up my

kids. And then I’m driving. I said, Wait a second. How are you

doing that? He’s like, I’m driving a car. I said, What?

Who’s driving the car? He said, I’m driving the car. And that’s

why I say austerity is my anticipated trend of 2023.

I agree with you. I actually think this is a really good

opportunity to pull back on so much waste. I haven’t really

looked at my household budget and probably two or three years

didn’t even bother. Why? And then and then when I looked at

it, I was like, wow, this is really inflated to a level that

I didn’t expect. Yes. But it makes a lot of sense to live in

a more heads down austere way. I don’t know. Yeah.

Well, I mean, look at tonight’s menu. You went with duck. I

guess the olive fed Wagyu everything’s off the menu now.

No black truffles. We’re having duck. We’re down to poultry.

That’s just next week. We’re gonna have pasta. It’s okay.

Come on. austerity measures for everybody.

They call it foul for a reason. Right? Oh, God.

Saks. Do you buy into austerity where Chamath and I are austerity

belt tightening as our trends? Where were you? What’s your

trend for?

I think it’s a pretty good trend. The trend that I am going

to suggest will be to your great disappointment, J. Cal,

which is Trump’s influence in the GOP continues to wane.

You’re seeing it in real time right now. The headline is

Trump’s endorsement proves worthless to Kevin McCarthy in

the speaker bid. Even the MAGA faithful, like Matt Gaetz, like

Lauren Boebert, they are ignoring Trump’s pleas to get

behind my Kevin. And in fact, they’re kind of not just defying

him, but making fun of him. Matt Gaetz had a repost Trump

saying sad exclamation point. And Boebert was saying that

Trump needed to get behind her movement. So we have now a level

of open defiance to Trump and the GOP his endorsements just

not are not what they once were. And even if somehow, Kevin

McCarthy pulls us off. I think all that means is that Trump

gets blamed for every swampy rhino compromise that McCarthy

has to make to keep the government running over the next

two years. So it’s a lose lose.

Does that mean that populism is on the wane? Do you think like

because the it’s the electorate that got him elected in the

first place? He was not very popular with politicians, but he

was kind of an outcast when he got elected the first time. And

that may be the case now, but he still got elected because the

population loved him. People loved him. Is that going to

happen? Do you think that means that the populism is kind of

waning or the interest of the voters is waning on him? Or is

it just the political parties alignment?

Boebert only Boebert only won by a few 1000 votes. She didn’t

exactly crush it in Colorado.

I think a lot of this has to do with Trump’s personal standing

after the midterms, the candidates that he personally

picked that were all in tough races, they all basically lost.

It was about the distraction he caused by making the 2020

election such a big deal constantly looking backwards. So

I think the Republican Party doesn’t like the antics. It’s

not about the policies. I don’t think I think it’s 100% about

the about Trump’s electability and about his ability to get

things done. And it’s not really about the positions per

se. So I think freebird to answer your question, I think

that the future of the GOP will incorporate this populism, but

it’s going to find a better integration with the

establishment wing of the Republican Party. And future

candidates will have to basically satisfy both of those

wings of the party.

sex was it was a straw that were maybe the two straws that broke

the camel’s back for Republicans and Trump in that relationship

was it January six and the election denial? Like for

Republicans? Is it just like, Come on, those are the two


this constant focusing on the 2020 election first, it costs

them the cost Republicans that Georgia runoff seat with Purdue

against Warnock. Purdue won on election night, didn’t clear 50%

had to go to the runoff. This was happened the day before

January six, this happened on January 5 of 2021. That was the

first race where Trump’s antics costume. Then you had this

midterm election, where you know, all the candidates who had

to appease Trump by talking about again, the last election

instead of looking to the future, they got punished by the

voters. I think Republicans want to win. I mean, they’re tired of

losing simple. It’s that simple.

Yeah, the job of a politician is to win freeberg. You got an

anticipated trend of 2023.

I am excited about and want to share the point of view that I

think I’m selling gene therapies are becoming more mainstream. So

these are pharmaceutical modalities where we use gene

editing systems where you can actually go in and change or add

a genetic material to cells in your body to resolve things like

genetic diseases or change protein deficiencies or

introduce new proteins. And then cell therapies where we

engineer cells put in the body and those cells go and do things

like attack and destroy cancer cells. For example, there are

currently 27 FDA approved cell and gene therapies on the

market. There are over 1000 in clinical trials, many of which

are already showing extraordinary efficacy and

benefit today. These therapies cost upwards of $1 million. So I

think there’s a massive and talking about the infrastructure

investment conversation earlier, because of the number of

diseases and the number of conditions and a number of

people that these therapies can treat. I think there’s massive

infrastructure investment opportunity coming forward this

year. But also seeing these come to market come out of the

clinical trials, get FDA approved, we have to ramp up and

build up the infrastructure needed because it’s not

traditional, we make a drug in a factory and send it to people

and they get it injected. These are much more complex, they

require a much more complicated delivery mechanism, you have to

have systems to engineer cells and edit them and put them back

in your body. Those systems today take days or weeks and

cost, you know, as a result, $1 million plus per treatment. So I

think that the cell and gene therapy opportunity, you know,

the JP Morgan Healthcare Conference starts this week.

It’s the biggest biotech and healthcare conference in the

world starts in San Francisco on Monday. This is one of the

biggest areas of interest and one that everyone’s investing

against. But as these come to market, there’s, you know, we

talked about this last week, genetic diseases, types of

cancer that are going to be addressed. And I’m really

excited about seeing more of these products come to market

and seeing the whole kind of infrastructure and delivery

system change.

All right, sorry to interrupt trying to keep the trains moving

gene editing. Very good choice. All right, we end with this is a

little bit fun. Most anticipated media for 2023. These are

things we like to talk about the media here. Sometimes we

talked about White Lotus season two amazing season. And maybe

what you’re looking forward to next year. I am really looking

forward to in film Oppenheimer Christopher Nolan’s movie about

the Manhattan Project. That should be extraordinary. I loved

was Dunkirk his as well. I love Dunkirk. I like everything he

does. And when he this is him becoming like a history uncle.

I’m here for it. I’m here for Nolan becoming our history

uncle. Instead of Batman. What was the one after inception?

Oh, that was really confusing. The one with Denzel Washington’s

son with john Washington. Yes, it was. I couldn’t finish it. I

tried twice. I gotta go a third shot on that one. It was Oh,

yeah, it was it was his worst film. It was really difficult.

It was called tenant tenant tenant. Yes, about like time and

reverse. And this it was possible to follow. Did you guys

see his original film, which was incredible memento?

Of course, it was fantastic. Yeah, and then it was great.

It was enough mind mind. Yeah, it was mind bending enough that

you’re like, Oh my god, incredible. And then I think

they took it too far tenant. I tried to watch it three times.

I’m generally pretty good with these sorts of films and love

them. But oh my god, it was impossible to follow. He took it

too far. Okay, so hopefully he goes back to his roots.

In terms of TV series. I’m looking forward to secession

coming back Ashoka, who is Anakin Skywalker, aka Darth

Vader’s Padawan Ted Lasso season three coming up. Those

are for me incredible. And then on the book front, man, the

Michael Lewis book about SPF is going to be next level. I cannot

wait for that sacks. You’re a media junkie. What do you got on

your list of things you’re looking forward to or should say

what is Tucker’s writers? What do they put down?

Well, Jake, I thought you I thought that for movie, you’re

going to pick cocaine bear.

I can’t wait for cocaine.

A bear is in the woods. And a, I guess people who are trafficking

in cocaine drop their or crashes and the bear eats the cocaine

and then goes on a rampage. It’s kind of like a genre film like

in the crocodile way. By the way, I’m listening to Quentin

Tarantino’s book, by the way of criticism. Get the audio book.

You’ll like it sacks. He talks about all the films in the 70s.

Very good. Shout out to Quentin. What do you got? What do you got

on your short list? History Uncle?

Me? Yeah. What do you got? I just gave you one. But

cocaine bear top of your list. We’ll watch it.

Was on my list. And I think Marvel is doing a good job

developing a new villain to rival Thanos with this with

Kang. I don’t know what phase they’re on now. But for me

season two, and then the new Ant-Man movie. And, you know, I

thought after Thanos, he wouldn’t really be able to top

that. But yeah, they’ve come up with a really good concept, I

think, for the next, you know, 20 Marvel movies.

Well, and then it will eventually become Galactus.

Yeah, you guys have completely fucked up. You have missed the

most obvious slam. Here we go. Sade’s new album, go.

Dune, part two. Oh, I haven’t watched number one yet. I gotta

wait. What? You know, I was kind of boring, wasn’t it? My wife

wants to watch it. It is so stylistically beautiful. It is a

little boring. There’s not a lot going on slow, but it’s so well

shot. It’s a fun. It’s visually just stunning. I mean, if you

need to watch it on a big screen with big speakers, and but part

two comes out in November this year. Absolutely. That’s okay.

Right. Freeberg, tell us what documentary on veganism you

recommend and you’re anticipating for 2023. What

vegan documentary or animal abuse documentary?

I am excited about the generative AI based media that I

think is going to start to kind of rocket this year. We could

see for example, the first, you know, AI written symphony, the

first kind of AI written published novel, how interesting

would that be like a full novel published by AI, and more maybe

short films based on AI driven script. And maybe even what I’m

really excited about is these AI based interactive video games or

kind of experiences where you the user kind of get to create

and live your own world through some sort of video game type

modality. So I think AI driven media. All right. There you have

it, folks. There are

speaking of pop culture chaos, I guess. Prince Harry has a book

coming out. That’s called spare.

That’s fair. Like playing bowling.

No, but you know, like in in the English monarchy, they there’s

the air and the spare. So he’s calling himself but to me,

that’s like a weird self description. Yeah, like that’s

that’s how you see yourself as just being self deprecating. He

didn’t pick that. They paid him so much money. I heard they have

to sell 1.7 million books to break even.

But you know what it reminds me of is when Leonard Nimoy wrote a

book. I think he wrote a book called I am Spock. And then he

wrote a book called I am not Spock. Nice. He could never get

comfortable with the fact that he was just Spock. Yeah. And

there’s something weird about calling yourself spare. Like,

you know, you’re not clearly not comfortable with.

It’s like the everything. Yeah, everything they taught you

everything I learned at Harvard Business School, and everything

they don’t teach at Harvard Business School, you can you can

do both books. Alright, listen, this has been great. Breaking

news as we’re talking here chat GPT, open AI, doing a tender

offer at 29 billion.

3 billion a day. Oh, my God. It’s 29. It’s founders fund or

reportedly according to the journal, it’s founders fund

thrive capital. So founders fund does not generally do

super overpriced deals. Yeah.

Yeah, I would buy that. So I mean, come on, dude, are you

kidding me? That’s that can be a $300 billion company. That’s a

tenant, right? But that yeah, it’s a 10x from here. I wouldn’t

I would not totally could be. By the way, you guys remember that

the long way of open AI, I don’t know what the current situation

is. But it was a nonprofit. Yeah, where they said investors

put money in, but the investors maximum return was 100x on the

dollar invested. No, I don’t think nonprofit, but it’s up to

100x. No, no, that happened afterwards. It’s when they

converted to the original model. Yeah, no, the original model was

a pure

original model was a pure nonprofit where there was no

cap because there was no concept of equity. Yeah, when they

flipped, they kept everybody to 100x on the return. So the

original 100x but not anymore or still, but no, the original

money, which was like Elon’s money.

Who else put in money? Yeah, all that money came in as a as pure

nonprofit. So I don’t know how it converted. But that’s when

they or did it convert to those people who funded it originally

get any shares in the for profit, we could we could find

out probably they did. I mean, it would make sense that they

don’t know. We’ll find out. But I mean, wait, if this is a

tender offer, 27 billion, you wouldn’t buy shares at 27. So

again, like the thing that I want to impress upon you is

like, there is an enormous amount of work that they do that

that what their biggest gap to monetizing this will be finding

unique content that they learn on that nobody else has access

to. And this is why I really think it’s important to

understand, if you have enough compute, these all of these

unsupervised learning models, if you run them on the same

training set, will converge to the same answer. So you’re just

getting there first. So in order to be really defensible, you

have to get there in a unique way. And so either you’re going

to hand tune, or you’re going to have inputs that are different.

So I don’t know, I don’t know the answer. That’s why, like,

they have to answer that question in their fundraising.

And I’m sure that they did, because these are smart

investors. But that’s the big idea that you have to overcome.

And again, you have to think like, you think Google is

sitting on their hands? No, or

29 billion, like what fundamentals is that based on

like, why not 5 billion? Why not 3 billion? I mean, like, why

not 10 billion? Like what makes it double valuation? That’s what

it is. It’s all this all momentum said nothing to do with

reality, right? I mean, it this would imply at a 30 the public

comps of a Google trades at what 25 or 30 times EBITDA. So this

would imply a billion dollars in EBITDA, a billion dollars in

EBITDA, $3 million a day, they’re losing $3 million a day

on computer for reportedly $3 million a day in profit on what

a product? I don’t know, they have a

that’s not the issue. I think, look, I mean, my point was, if

these guys open up a set of tools that support all these

applications and services to emerge on top of what they’ve

built, and they’re getting red share getting payments out of

that, it’s going to very quickly turn into a real

here’s the problem. This is why that can’t happen. They don’t

have the rights to the data they built the training set on. And

the second they commercialize it, the second anybody pays

them, whoever they base this on to good conversation into

oblivion, I predict suit into oblivion. Let’s talk about let’s

let’s actually let’s talk about that in the next show. Because I

think that’s like the way that AI works. And we should probably

bring someone like Sam on to talk about it. But the way that

AI works on training data, and now people are making claims

that the training data is copyright, therefore, of course,

model output is protected, protects that copyright is, I

think, worthy of a good conversation. What’s interesting

is, you know, the early version of the of the internet was very

simple. It’s like you had this file called robux dot txt. And

you would basically be open to a crawl or not. And that’s what

would allow Google to basically go and spider your pages, right.

And so we have to replace this concept of that with this AI dot

txt. Well, you could make a claim that this is no different

than, you know, a spider crawling a web page, except that

in the in the search case, it was much cleaner, which is we’re

just going to index your page and redirect people to you. Here

it’s we’re actually going to create a derivative work because

of you and go. And I do think that that’s going to be a very

interesting legal threshold that has to get figured out.

Well, here it is, Chamath, you’re nailing it. Exactly.

It’s a derivative work. And they did not have permission to use

it. And it impedes upon the original authors, whether it’s a

photo, it’s a song, it’s a piece of code, it impedes upon their

ability to do commerce in the world, you are interfering with

their ability to monetize their content. And the percentage

you’re using is 100%. So when you get to fair use, non

commercial use is very protected, parodies protected

education’s protected. But when you dip into using the entirety

of the work, which they’re doing, and you impede upon the

person’s ability to commerce, and you confuse the public,

well, this is a test that they will fail, fail, fail.

This is why I think that most people don’t understand what AI

is. They don’t even understand the difference between training

and inference. So hopefully, there is some more understanding

of this. But if you use the same data set, you will eventually

converge to the same outputs absent of hand tuning weights,

which has its own issues, and absent any asymmetrically

different data that you have that nobody else has.

Absolutely. Yes. So if you are Apple, and you have the watch

data, or you’re Google, and you have the search data, or you’re

a weather company, you have the weather data, and you’re a

proprietary, of course, there’s a very easy solution to this

Chamath. Number one, citations, when the algorithm gives you an

answer, it should say, what were the top percentage sources of

this information? How did the AI

know? But Jason, just again, look, if you look inside of a

transformer, the problem is, okay, that you’re going to have

trillions of ranks, trillions of weights, trillions. And so how

are you going to decide how to basically draw a line under a

threshold, this was actually a useful input, and this was not.

So again, I just think that it’s hard, a very few small class of

people actually understand this, like the great person to

actually bring in to talk about this would be Andre Karp, if he

not. And I think his Andre was there, sure. And a Tesla. And but

he can say it in a very dispassionate way to explain

this to people, I think we should, we should ask him to

come on. Yeah, for sure. I mean, I can ask him. I can. I mean,

this is brand is this the law, Sachs, you’re an attorney, you

understand fair use copyright, all this stuff. The law, correct

me if I’m wrong here, Sachs does not anticipate this.

Like this, a highly specialized area, I don’t want to pretend

like I understand the law in this area. You know, I’d want to

talk to a specialist.

Yeah. Okay. Let’s have this conversation. Because I think

yeah, this is a great discussion work for us to talk about


this is probably why, by the way, they started as open

source, because it was like a slam dunk thing to make this a

nonprofit and open source everything, because maybe in

part because of these issues, but if you just let the code run

free, you probably don’t have to even deal with these issues.

Right? Well, they they closed it. Remember their claim. The

claim was this is too dangerous. Their original claim was it’s

too dangerous for people to not see the code. Then Sam flipped

on that. And he said, it’s too dangerous for people to see the

code. And it started out as a nonprofit, where the idea was

the way to keep this safe is for everybody to see the code. But

they didn’t make any money, whatever private and they flip

the decision. So keep that in mind as well. He’s a he’s a

very, very, very clever business person. He’s savvy. And, you

know, Paul Graham, when Paul Graham picked Sam to run YC,

Paul Graham said that this is the most impressive person I’ve

met since Steve Jobs. Yeah. Remember that on the pot? I do

remember that. He said something similar about Gary Tan is now

running YC starting this week. Sam Altman friend of the pot

come on all in anytime and has played in our poker game several

times. Yes, yes, we we had a tough situation there where you

interfered in a hand if you remember. All right, listen,

this is what happened. There was a Sam and I were in a hand of

poker. He raised I had to pair and I’m trying to figure out

does he have a set or is he bluffing me? I think he’s got

top pair. And you were like, Oh, look at this. And you started

commenting on the hand. Oh, my God, I made the call or not yet.

And I’m like, God, I’m like, come on. For me, LaBouche. Let’s

let’s stop talking here. Because I’m trying to unplay

hand. I’m like, okay, Sam would get and I basically came to the

conclusion Sam would get delight. Great delight bluffing

me off a hand is a risk taker. He knows I’m conservative. He

knows he’s a risk taker. I’m gonna call here with my I had

bottom two. I’m like, does he have a set and there was also

straight on the board. I’m like, fuck it. I at best I’m you know,

even money here. But there was a lot in the pot. So I was just

doing the pot odds while I’m doing the pot odds. You were

like, which is usually me. I’m usually the one being

reprimanded for talking. But it was notable. I listen. Love you

besties. Why don’t you tell people that there’s no comments

and just as a programming note, we turned off comments for a

couple of weeks on the YouTube just to see how it psychologically

affects me. And it’s for Chamath to just F with all you

brigadooners. We love you. Besties. This has been a great

episode. And his Twitter is at Chamath and he doesn’t read it

so everyone knows that Saks and I voted against turning off

comments. Just just voted in favor of whatever got Chamath

vote for the All in Summit 23. So that’s how I vote. This is

divorce trading now, but the podcast has never been better.

Besties spending time together on the slopes is the cure to all

evils. We’ll see you next time. Love you besties. Bye bye.

Love you guys. Bye bye.

Rain Man, David Saks

We open source it to the fans and they’ve just gone crazy with

it. Love you besties.

Besties are gone.

That is my dog taking a notice in your driveway.

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.

We need to get merch.

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