All-In with Chamath, Jason, Sacks & Friedberg - E115: The AI Search Wars: Google vs. Microsoft, Nordstream report, State of the Union

I had this thing with my oldest son where, I don’t know if it’s all kids, but he’s 13.

He doesn’t know how to answer the phone.

Not to save his life.



He picks up the phone.



And so I said, listen, from now on, when you call me, I expect a certain way that you pick

up the phone, and that’s going to be practiced by how you interact with anybody else.

And vice versa as well.

If I call you, you have to pick up the phone.

And if you don’t, I’m hanging up right away.

So yesterday, he calls me, and I’m like, Chamath speaking.

You know, it’s like, hello, Chamath speaking.


Hi, hon.

He calls back, hello, Chamath speaking.


Hug up again.

We did this three more fucking times.

And then finally I said, when will you get it through your head?

Can you please just answer?

Like, if I say hello, Chamath speaking, hey, dad, it’s your son, or hey, dad, it’s me.

And it’s unbelievable.

And he’s like, well, none of my friends pick up the phone like this.

And I’m like, oh, my God, like, don’t they think they need to have verbal communication


It’s unbelievable.

And then when I call him, he picks up the phone.



Not even hello.



What is that?

It’s like a grunt.

Minimal effort.

It’s like the minimum number of syllables.

It’s embarrassing.

Are you kids like this?

Or is it just my kid?

Actually, I don’t think I’ve heard him pick up the phone.

I need to test that.

I’m going all in.

Don’t let your winners ride.

Rain Man, David Satterthwaite.

I’m going all in.

And instead, we open-sourced it to the fans, and they’ve just gone crazy with it.

Love you guys.

Ice Queen of Kinwan.

I’m going all in.

J. Cal was on Twitter calling me out for not denouncing the Chinese balloon as strong

enough language.

Although, I don’t think he understood the language I was using.

Did you understand what the word errant means?

What did you think it meant?

You know, I do understand the word errant.

Is it like a teaching moment for you?


It generally means straying off-course.


And traveling in search of adventure, at least according to Merriam-Webster.

So I just thought maybe you’re being a little…

But I know you’re a dove.


But I was a little dovish thinking they were just off-course.

I think you’d think they were off-course, or they were doing it deliberately.

You buy that it was off-course?




J. Cal, go.




So I knew J. Cal would have to join in this nationwide panic over this balloon.

Oh, I didn’t panic.

I have no panic over it.

I just don’t know what the word errant means.

It had a Minolta camera attached to it.

J. Cal, I’ve got some really bad news for you.

There are these things called spy satellites.

No, we know about those.

And they can see everything.

Oh, I know.

It’s obvious people, they’ve been sending these balloons over here for a while.

I just thought you were framing as it was errant.

As in it like…

Well, we don’t know.


Do you think it was…

I’m sincerely asking, do you think it was errant?

It was an accident?

Well, here’s the thing.

It’s such a harebrained scheme to send a balloon flying over American territory that the Occam’s

Razor explanation here is that they somehow lost control over it.

And these things are not steerable.

So my guess is that it probably wasn’t deliberate just because of how stupid a plan it would

be and how obvious it would be.

But it could be.

I don’t really know.

What I do know is that the whole nation got in a lather and a tizzy and started hyperventilating

about this balloon.

And it just shows how reflexively hawkish the media is.

It’s like, hey, can we just wrap up this war in Ukraine before we start another war with

an even more formidable superpower?

The balloon got more attention than us blowing up Nord Stream.


Okay, well, hold on.

We’re going to jump into it.

No, what I would say about that is the media insight is the valid one.

I was just responding to the errant and I was curious if you actually thought it was

an accident.

I don’t think it’s an accident.

I don’t think there are accidents.

Well, I think it clearly was off-course and problematic.

So I don’t know about the intentionality of it.

I think it very well could have been intentional, but I tend to think because it’s such a stupid

harebrained scheme, like I almost given the benefit of the doubt, not because they’re

not capable of spying.

I’m sure obviously they’re spying on us, just like we’re spying on them is what we both


But it seems like such a stupid way, because you’re going to get caught.

It’s a made for TV moment.

You have to understand the nature of live television and why the media overreacted to


It’s ongoing.

So because it’s not final, it’s like a live event occurring, like when kids are trapped

in a mine.

Those are the best stories for CNN, because you can keep updating people and people keep

turning the TV on to check on the status.

So this one was just made for CNN, because obviously we’re going to shoot the thing down.

And obviously you can interpret into it if it’s an accident or not, and it just gives

them something to talk about on a slow news week.

But it is interesting.

I think your point that is interesting is, is the Nord Stream story correct or not?

Why is that not being covered?

It’s not being covered, because there it’s not an ongoing story.

So that just shows you

No, I don’t think that’s right.

I think it’s not being covered, because the mainstream media already took a side on this.

Oh, so remember, cynical?


Well, it’s not it’s not just cynical.

So when when Nord Stream got blown up, the administration came racing out with the line

that the Russians did it, that they this was self sabotage.

And by the way, the media repeated this endlessly.

This was the media line.

And it never really made sense to anyone who’s paying attention.

Because first of all, this was an economically vital asset to Russia.

Second, it was their main source of leverage over Europe was their control over the gas


So the idea that they would shoot themselves in the foot that way, just to somehow what

show how crazy they are, it never really made sense to anyone who’s paying attention.

And the fact that the administration, the media so quickly raced to that conclusion,

suggested that it was maybe a cover story.

Because if we had nothing to do with it, you would just be more neutral and say, yeah,

we don’t know what happened.

But they had to, like, promote this line that all the Russians did it, which just never

made any sense.

And now Cy Hirsch has come out with this story.

So it laying out in great detail how we did it.

It’s not just saying we did it.

It’s laying out who did it and how and the steps and all that kind of stuff.

And just so you guys understand who this guy is.

He’s this legendary Pulitzer Prize winning journalist.

He’s like 86 years old or something like that now.

But he broke during Vietnam, he broke the story of the My Lai massacre, which the military

denied until he proved it.

He broke the story during the Iraq War of the Abu Ghraib prison abuses, which again,

the media, the military denied until it was undeniable.

He’s Pulitzer winning is all you really need.


And here he is, basically, another covert military action.

And look, we don’t know for sure whether it’s true or not.

But it looks it looks pretty bad.

Do you think that Europe knew Do you think that the Europeans were told that the Americans

were going to go and blow this thing up?

If that’s true.

The administration has said clearly, this is a false story.

It was pure fiction.

I think the specific quote was this is pure fiction.

The Ukraine would be the most likely person to do this.

They don’t have the capability.

You got to look for means, motive and opportunity.

They don’t have the opportunity to go down there and place a bomb?

I don’t think the Ukrainians have the capability to do an undersea mission like that.

Oh, interesting.

The Norwegians do.

And the story maintained that we did it with them.

The British do.

We didn’t say whether they were involved or not.

So no, my guess is that if this was a covert US activity, it was kept to a very small group,

which is why it’ll be hard to prove more definitively than that.

The other side of the argument is, this is such a provocation.

And the administration saying it’s fiction.

So what is your response to that sex?

Like, would the US do something so provocative?

Or would they have somebody else do it?

And would Norway do something so provocative?

It seems an extremely, it seems like an extremely offensive technique, as opposed to just backing

the Ukraine to defend itself against Russia’s invasion.

Here’s the thing.

Before the invasion, Biden at a press conference said that if the Russians invade, Nord Stream

would be no more.

And they asked him, well, how can you make sure of that?

That’s a deal between Germany and Russia.

We’re not involved.

And he said, we have ways.

We have ways.

Just trust me, it’ll happen.

And apparently, Victoria Nuland, who’s our Deputy Secretary of State, said something

very similar about how we would stop Nord Stream if the Russians invaded.

And then after Nord Stream got blown up, Blinken at a press conference said that this was a

wonderful opportunity, and was extolling all the benefits of this.

And then Victoria Nuland at a congressional hearing said that I’m sure we’re all very

glad that it’s a hunk of metal at the bottom of the sea, again, extolling all the benefits.

And we’ve discussed the benefits on this program of now we’ve shifted the European dependence

on Russian gas to a dependence on American gas.

So the fact of the matter is, the administration kind of telegraphed what they were going to


They had the capability to do it.

And they had the motive to do it.

So it’s certainly a plausible story.

You’re right that we can’t know for sure.

It’s a single source story.

You don’t believe it.

You don’t believe the administration.

It’s a single source story that depends on the credibility of Cy Hirsch.

But as it stands right now, whose story do I think makes more sense?

Probably Cy Hirsch’s.

You believe Cy Hirsch or the spokesperson of the CIA who wrote, the claim is completely

and utterly false.

Just to be clear.

Well, these same people denied Abu Ghraib, they denied Milai, they deny everything.

They deny that NATO expansion has anything to do with the breakout of this war.

Yeah, I mean, this is one of those situations where we can’t possibly know.

Yeah, you make a good point, Jay Cowell, which is this, if true, and look, I’m not saying

I don’t know if it’s…

You’re leaning towards believing it.

I lean towards thinking it’s more plausible than not.

Because also, like who else could have done it and who, again, who had the motive, means

and opportunity.

But you make a great point, which is, if we did it, it’s an incredibly provocative act.

It’s basically perpetrating an act of war against a country that has thousands of nuclear


Biden promised us at the beginning of this war that he would keep us out of being directly


So this would directly contradict what he said at the beginning of this war.

So I think it’s a very scary situation here.

Yeah, no.

And if the US didn’t do it, like, why don’t we find the real killer?

I actually have this.

I have the theory.

Here’s my theory.

The CIA knew how to do it.

Biden wants to do it.

The Republicans want to do it.

Obviously, the people who are the most pro stopping Nord Stream have been the Republicans.

They’ve led this charge even more than the Democrats.

So it’s a bipartisan issue.

Stop Nord Stream.

Bipartisan issue, hands down.

I think the CIA probably knew how to do it.

And just like we equipped the Ukraine to do it, we might have facilitated the Ukraine

and a collaborator, UK, Norway, some freelancers.

You know, we have those freelance former Navy SEALs that operate.

Perhaps the CIA just said to the Ukraine, here’s a, you know, black ops group.

If you wanted to engage them, you could feel free to do so, which would then split the

difference between what Psy is saying, what the CIA is saying, which is typically where

the truth lies is probably between what this investigative journalist of note has said

and what the CIA is denying.

The CIA probably has plausible deniability.

That’s my prediction.

Well, if you could find a source for that story, Jay Cowell, that lays out in the same

level of detail that Hirsch has laid out in terms of the meetings that occurred, what

was approved, when, how they did it, uh, the, you know, uh, when they did it, uh, the explosives

they use, the divers they used.

It goes into a fair amount of detail.

Incredible detail.


I mean, down to what explosives, right?

But you’re, you’re trying to put what you just said, which is basically you inventing

a story on the same level as Hirsch’s story.


I understand.

But he actually has a lot of detail in his story.


He had, he had umpteen sources.

So there was a lot of people that were willing to tell this story.

No, no, I don’t think that’s actually the case.

I don’t think he has umpteen sources and there’s no, on the record, there was one main source,

there was one main source, but who provided a ton of detail.

I don’t know exactly how much he was able to directly corroborate with other sources.

I don’t know that.

The other thing I wonder, Sax, is he, with this one source story, he has a collaboration

with the New Yorker and anybody would, if this was a really well-sourced and you could

back it up kind of story, they would love to have the ratings for this story.

This is a blockbuster story.

Or as happens a long time, which we learned, was it through the Valerie Plame affair, which

is that these major news publications will sometimes have a back channel back to the

national security apparatus when they have something like this.

And the message was, you can’t hit print on this.


In which case,

That’s a possibility too.

He goes and just self-publishes himself, which wasn’t really even an option a few years ago.


So, I mean, this is the Rorschach test of Rorschach tests.

You have the media, you’ve got the CIA.

It’s fodder for a great movie.

What I go back to, Jay Cal, is I think you can lay out some theories about, let’s say,

you know, the Poles did it, or maybe Ukrainians with the British or something.

Yes, you could lay out those theories, but the media wasn’t willing to entertain any

of those theories when this news broke.

What did they do?

They blamed the Russians.

And that story made no sense, but they said it so definitively.

They just reported it.

I’m looking for, Nick, if you could pull up the source of the administration blaming the


I just want to make sure we’re accurate.

Biden did it at a press conference.

Yeah, I just want to make sure.

He said it was sabotaged by the Russians.

Now, they didn’t push it that hard.

What was interesting is the Biden administration said it, but they didn’t keep coming back

to it.

But the media really ran with it.

And when people on both the left and the right, like people like Jeffrey Sachs on the left

and Tucker Carlson on the right, basically started to question whether the US could have

done it.

They were accused of being conspiracy theorists.

Putin, Stooges, and all the rest of it.

And now all of a sudden, here comes Seymour Hersh with a pretty detailed story lending

credence to that point of view.

It just may indicate we don’t know everything that’s going on with this war.

And I think the longer this goes on, the more dangerous it is.

Freeberg, do you have any thoughts on geopolitical issues and who might have blown up Nord Stream?

What are your sources saying, Freeberg?

What are your sources in Science Quarter saying?

Speculation is best left to the future.

I don’t know about the whole speculating on what could have been done in the past by someone.

Those are conspiracy theories and a little dangerous.

No, they’re not actually conspiracy theories because Nord Stream was blown up.

You understand that, right?

Like there’s no doubt that it was blown up.

No, I’m saying Jekyll’s theory.

Oh, yeah.

Jekyll’s theory is just a story with no evidence.

I think you’ve got to bring data to the table.

Pure speculation.

By the way, speaking of which, Radek Sikorski, who is a Polish diplomat, I think he was like

their foreign minister.

When Nord Stream blew up, he tweeted a photo of it saying, thank you, USA, which was one

of the reasons why people thought that, okay, like, yeah, of course the US did it.

Who has the capability to do it?

Who has the motive to do it?

Who said they were going to do it?

And who benefits?


Who benefits?

Who was conducting NATO exercises in that region three months before the thing blew



Yeah, exactly.

And Jeffrey Sachs pointed that out on, I think it was a CNBC interview before they basically

stopped him because he’s not allowed to talk about this on, you know, network TV apparently,

but he basically pointed out there were like US radar signatures in the area.

President Joe Biden declared that, this is from Bloomberg, that a massive leak from the

Nord Stream gas pipeline system in the Baltic Sea was an intentional act and that the Russian

statements about the incident shouldn’t be trusted.

It was a deliberate act of sabotage.

And now the Russians are pumping out disinformation lies, Biden told reporters Friday at the White


So he didn’t exactly say the Russians did it.

He just said, it’s an act of the media.

What’s that?

The media did.

You could do one of these montages where it was like, sure, Russian sabotage.

In fact, go to Matt, but he just didn’t say it was sabotage.

He said it was an act of sabotage.

If you actually look at what Biden said, everything he said is absolutely true.

If the US also did it, correct.

Every single sentence that Joe Biden said is 100% true, whether we did it or whether

Russia did it.

It was a deliberate act of sabotage.

Think about it.

If we did it, we know they didn’t do it.

And then we have to be like careful about suggesting they did it.

Well, what are the Germans think?

Because this is the Germans pipeline.

So if we blew it up, that’s also an, uh, explain to me your thinking on the chessboard of our

relationship with Germany.

If we blew it up, would they not also see that as a hostile act?

This is why I asked if Europe knew, because I think you have to tell Germany that it’s

going to happen.

And I think the quid pro quo with Germany is some amount of guaranteed supply that the

US directs into Europe so that they know that their longterm LNG supply is intact so that

they become ambivalent, right?

There’s a point of indifference where the Germans say, okay, we don’t know when this

thing is going to get turned back on and we don’t know what the implications of it


Here’s what our demands are, meaning our energy supply, our energy needs are.

And so as long as the United States can say, look, worst case, we have stuff in the, you

know, SPR that we can give you.

There’s probably a point of indifference where the Germans say, okay, we’re just going to

turn around and not say anything.

And I’m curious, did the Germans say anything when this happened?

No, not that I know of.

I’m looking for the, I was literally just typed to Nick, what was the German’s position

on this?

Interesting too.

That’s a tell.

Well, yeah.

If you’re breaking this down like a poker hand, we’re trying to figure out if you construct

this hand, right?


It’s like, you know where both of these folks are, right?


There was a really interesting video that a guy named Matt or failure who puts together

these really funny videos that he put together these montages of media reactions to things.

And what he shows is that, you know, you can have like 20 different media outlets and they

all use the exact same words.

And when he clips it together, you can see the reading from somebody’s talking points

and it’s not really clear who, and, and basically if you look at his video here on who blew

up Nord Stream Pipeline, you see that there was like a party line from the mainstream

media on this stuff.

North stream too.

We, we will bring it into it.

How will you, how will you do that?

I promise you we’ll be able to do it.

Someone blew up Russia’s Nord Stream Pipeline.

I mean, we’d have to conclude without the evidence that it’s most likely Russia.

Russian sabotage on its own infrastructure.

The common sense matter.

I think it’s Putin’s way of sending a message.

What Putin is saying to us by blowing up his pipeline is, look, I can blow up a pipeline.

Everyone knows that Putin did this himself.

Who are these talking heads?

Smoking gun without the direct proof.


I think logic and common sense will tell you that without the evidence, Russia was behind

the incident.

You can say it for sure.

Who sabotaged the Nord Stream 2 pipeline?

This is nonsense.

Come on.

That’s hysterical.

You know, it’s these talking heads who have no firsthand experience and they’re more than

willing to comment on this stuff.

It’s hysterical.

It’s fantastic.

It’s fantastic.

It’s unbelievable.

All his videos are like that, where he has one on the Hunter Biden laptop as well, where

again, he’s got like 20 different talking heads and media outlets, all portraying it

in exactly the same language.

Isn’t that how this works, Zach?

For the Sunday morning shows, you hear the same narrative from each side.

How does that actually get coordinated?

Each side builds those bullet points, emails their, what do they call them?


They email all the surrogates and say, just keep saying these things over and over again

to codify.

Yeah, it’s a WhatsApp group.

It’s a WhatsApp group and they’re just like, say this over and over again.

How does it work, Zach?

I think it’s partly talking points, memos that go out to chat groups.

I think it’s also just people looking on Twitter and then there’s like certain key nodes that

they follow and they know, okay, this is the party line because such and such key person

is saying it and they take their cues.

It’s that memetic, mememic effect that you guys always talk about.


Yeah, the memetic.

The thing to understand is that all of the prestige outlets repeat the same party line

and have the same perspective.


You got to do your own search for information.

This is the beauty of Substack actually.

This is why Substack is so important is it actually gives you an alternative.

It’s disruptive.

Yeah, it’s pretty disruptive.

It gives you an alternative because like you’ve got 10 different mainstream media networks

or newspapers and magazines, but they all have exactly the same talking points except

maybe Fox News is kind of the one exception.

Although even Fox on the whole Nord Stream thing, you saw that Fox can be pretty militaristic

and they had the same generals basically blaming the Russians for this on Fox.


Germany’s position is just, hey, everybody, this is sabotage.

So that’s it.

But who did the sabotage?

I think you asked a really good question there about the German interest in this.

Right now, the German economic interest and the German foreign policy interests are not


What’s clearly best for the German economy is to have cheap natural gas powering its

industries, even if it comes from Russian pipelines.

And they no longer have that anymore.

In fact, they may never have that again.

So they’re going to pay a very high price economically, maybe forever.

And remember, their whole economy is based on industry.

They’re a very industrial power.

So if this war drags on for a long time, I think Schultz might be in some political trouble

precisely because he’s gone along with the Americans on this.

And there is a growing political opposition to this war inside of Germany.

War fatigue is a real thing.

And this thing’s got to wrap up at some point.

Any final thoughts, Friedberg?

You didn’t get too involved in that conversation.

But what is any game theory from you?


Okay, there you have it, folks.

Sultan of Science checking in.

What’s the problem?

You don’t want to criticize the establishment?

What do you mean, Sachs?

It’s always very personal with Sachs.

You predicted.

Why don’t you have my position on this?

Is it because…

No, I’m just trying to understand because…

I’m not pro-establishment.

I think you know that.

I’m just analytical around the fact that I think there’s a strong orientation towards conflict.

And I think there still is.

I don’t think that there’s much of an incentive or a motivation to back down

because this conflict creates a significant amount of debt owed back to the U.S.

It creates a potential future asset stream.

It creates a realignment of power.

Everyone’s looking externally as internal economic conflict and wealth disparity issues arise

and economic growth is challenged and inflation is soaring.

It’s a great place to address one’s energy.

So I think all of this stuff is detailed analytical shenanigans around who’s saying what or who’s doing what.

I think the underlying thesis and the underlying river that’s flowing

is one that’s looking for external conflict.

I think the same is true with the U.S. and China.

You’re talking about the military-industrial complex is going to benefit massively from this.

The longer this drags out, the more the conflict in Taiwan heats up,

the more we’re going to invest in our military.

We often talk about these things as if they’re top-down, master-plan driven.

And as we all know, they’re more Ouija board driven.

It’s a bunch of guys that got their hand on the Ouija board

and they all just had a little too much caffeine.

In this case, I think it’s just more about everyone’s a little anxious.

The anxiety’s leading to a desire for more conflict.

We’re not happy at home.

If you’re happy at home, you’re not looking externally for conflict.

That’s true in nearly every developed nation on earth today.

That’s it. I don’t know. It’s pretty simple.

I like your position.

It’s a great take. I think it’s a great take, actually.

I think there are a lot of interests who benefit from war

and I think the foreign policy establishment is funded by those interests

and it’s kind of wired for war, at least in terms of the reflex, right?

Even something as relatively harmless as a balloon,

that becomes like a casus bella.

It’s like people are ready to go to war against China over that.

I saw a couple military leaders give a talk a few months ago.

It’s in a private thing.

So it wasn’t on public record.

With the establishment?

No, yeah, I was at the establishment gathering.

Oh, this is the Illuminati?

Did you genuflect twice going in?

Because that’s the tradition.

You do one genuflect on each knee,

then they give you the bag of capitalism.

With the Illuminati logo on the side for your fund.

What was striking to me in this particular thing

where these guys were being interviewed on stage,

at like a dinner thing,

and they were so oriented around their next steps in escalation.

And I think it speaks to the point, Zach.

None of them were thinking about where are we at today?

How do we deescalate?

What is this going to get?

There was no conversation at all from anyone

about resolution or deescalation.

With every single one of them,

it was all about my orientation for getting bigger,

going deeper, going harder, going stronger,

making this thing bigger.

And I think that was really scary to me.

Because I didn’t hear anyone having a conversation around

how should we even consider whether or not this doesn’t get bigger.

Everyone was thinking,

assumptively, it was going to get bigger.

I like the Ouija board.

You have to follow the financial incentives.

When the last time we looked at this, right,

Leon Panetta and all these other guys who were screaming for war,

they were getting paid by the military-industrial complex.

I remember when Lloyd Austin was nominated as defense secretary.

He had some conflict issues

because he was just on the board of Northrop Grumman

or one of these big military-industrial companies.

And so, of course, these generals have to push for war

because as long as they’re girding for war,

they’re guaranteed to have, for them,

a very lucrative job once they leave the military.

The Ouija board, though, Saks, and I’ll throw it to you.

Maybe you can keep this metaphor going.

The media’s got their hands on it.

They want ratings.

You have the energy-industrial complex in this German conflict

who seeks to benefit massively if people invest in renewables

or you find other, you know, oil, you know, off Norway.

Norway’s oil is one of the largest reserves that’s untapped.

So, you have this Ouija board, media, energy,

and the military-industrial complex all moving in at once.

Maybe you can speak to that analogy.

That’s right. Now, everyone wants to move it

to the side of the Ouija board that says escalate.

There are very few people that have the energy

to move it to the other side that says de-escalate.

It’s not profitable.

De-escalation means less energy, more less investment.

So, yeah, you’re going to go escalate.

You know who warned us about the military-industrial complex?


Dwight D. Eisenhower, Supreme Allied Commander in World War II,

wins the war, patriot, war hero, top general,

becomes president, Republican president,

and his departing address warns us that, yes,

we need a defense industry, but they become a vested interest

in favor of foreign interventions in war.

It was 1961 he did this.

Where’s the interest on the other side of it?

I can tell you this.

The American people don’t want to be in a war with Russia.

I don’t even think most of the American people

want to send $100 billion over there.

They want to send $100 billion to their cities

to fix crime and all the other problems.

Homelessness, everything, yeah.

If you’ve never seen that farewell address from 1961,

it is well worth watching.

You can find it on YouTube.

Just search for military-industrial complex Eisenhower.

And this is a person who was part

of the military-industrial complex saying,

watch out for this.

It was a very prescient warning.

In view of which he spoke.


He was in the machine.

He helped build the machine.

Welcome to the All In Podcast.

With us again, David the Dove Sacks,

Chamath Palihapitiya, and the Sultan of Science,

who is on his podcast.

Oh my God, so many podcasts you’re doing.

The Sultan of Science is in hot demand.

What are all these podcasts you’re doing, Freeberg?

All these science podcasts pulling you in.

I did a podcast with Brian Keating last week

who was really kind enough to reach out.

He’s had some awesome guests.

He’s a cosmologist at UCSD, professor down there.

And we were supposed to record that day.

And then we canceled, I think, last minute, right?

Yeah, yeah.

So I was only supposed to be on with him for an hour.

And I’m like, oh, well, my next thing just got freed up.

So ended up doing like three hours.

It was, I was so, I was like exhausted that day.

So I look really hungover on the video.

And probably.

It’s par for the course.


But no Lex Friedman for you.

So Chamath and I have done Friedman,

Lex Friedman, but you have not.

Has he invited you yet, Lex?

Has Lex invited you?

No, no, he’s not.

Where’s my invitation?

Where’s my invitation?

I don’t know what’s going on here.

Collect all four, Lex.

What are you doing?

All right, let’s.

No Davos and no Lex Friedman.

Wait, what’s going on?

You would never.

Am I too anti-establishment?

What’s going on?

No, I’m too anti-establishment, Alex.

That’s, you know, you’ve mistranslaterized me.

Nobody, nobody’s inviting this quartet to anything.

Full stop.

We’re not doing all in live from Davos.

It’s not happening, folks.


They don’t want that heat.

I agree.

I’m with Groucho Marx.

I don’t want to be part of any club that would have me as a member.


I don’t want to go to any of their establishment summit.

And they also don’t want you there anyway, so.

Yeah, I’m over it.

It works out for everybody.

It does fill me with like a rage where I actually might agree to doing the all in summit again.


By the way, proposal coming your way this weekend.

If you want to really, really, really thumb your nose at the establishment.

Yes, let’s do it.

Set it during the exact same dates and times as an establishment conference.

Oh, the all to Davos?

And then invite all the best guests so that they come to ours.

Just a suggestion for you guys.

Force them to choose all Ted?

Ted’s not relevant now.

You know how Vanity Fair does their new establishment conference?

You could call it the anti-establishment.

Oh, that could be a tagline.

Let’s come up with a tagline that just tweaks everybody.

We should create a list.

We should create the anti-list.

You know, they have their like establishment list.

We should have the anti-list.

That’s a good point.

I like the anti-establishment.

Start with them.

I have a great Vanity Fair establishment thing story.

Oh, good.

I snuck on that list.

They put me on that list a decade ago.

Let me find a link.

Go on.

Keep talking.

And the most incredible thing about it is that when you go to the event, which is kind

of a cool event, we all had photos taken by Annie Leibovitz.


And I have a montage of some of the people that took photos that day.

That’s pretty cool.

Me, Aaron Levy, Priscilla Chan, Bezos, bunch of people.

I was about to say, this is when you had the dad bod and no fashion sense?


It was like, yeah.

Oh, look.

He looks great.

Here it is.

Basically, I had no stylist.

I had a bad haircut.

I was wearing shitty, torn-rimmed glasses.

It was like a year or two post-Facebook.

It was not a good look for me.

That’s not that bad.

I’ll show you the picture.

Is that Tom Ford?

That was your Tom Ford face.

That’s definitely Tom Ford.

He’s doing the jeans blazer thing, which is like a really tired look for a silken top.

Pretty skinny jeans, though.

It was like a little loose.

Pretty skinny jeans, yeah.

Pretty sharp looking.

That was in 2011.

Not bad.

Not bad.

That’s not so bad.

Just don’t pull up the Chamath pictures when he’s wearing his Macy’s shirt.

If you do the Google search, you put the images before 2011, you will find Chamath photos that

are regrettable.

Dude, at Facebook, I wore the same thing every day for four years, five years.

This is brutal.

Oh, my God.

What is …

That’s also Tom Ford.

We got to break this down.

See, this is when the sweater game was not tight.

This is like sweater 1.0 games.

I didn’t know what I was doing back then.


Take these pictures off, please.

Look, he’s also got the watch subtly peeking out.

This is back when he was like, oh, I got a Rolex.

That’s a petite, but anyways, yeah.

This is when the watches were only five figures.

Out of zero.

Out of zero.

The watch got to six or two, but yeah, same story.

Same, same, Jake.

Same, same.

Same, same, same.

All right, well, listen.

Listen, I got an Apple Watch and I’m going to upgrade.

Oh, jeez.


That’s a dad vibe.

Go teach your mom.

There’s the dad vibes.

Yeah, yeah, yeah.

Oh, he’s going to … There’s the dad vibes.


That must have been from …

Yeah, that was-

… Mayfield?

13, 14 years ago.


God, you had no style.

I really didn’t.

It was rough.

I really didn’t.

It’s rough.

I mean, don’t pull up pictures of me.

I was fat.

I was eating egg sandwiches all over the internet.

Oh, my God.

Yeah, chubby Jay Cal.

Oh, man.

Look at that face.

There he is.

Ooh, that’s plus 20 pounds.


Let’s keep this going.

Search wars.

Microsoft versus Google.


It’s been a rough couple of days for Google.

We’ve all seen it.

Google and Microsoft both did live demos of their new generative AI, yada, yada, yada.

You guys all know about chat GPT, but now Bing is integrating it into their search engine,

getting there before Google, and Microsoft CEO Satya Nadella, he is going ham.

He looks great.

He’s fit.

He’s wearing a tight t-shirt.

And he is saying he’s going to make Google dance, dance, Google dance.

He is getting up in their business.

And listen, he is in a distant second place.

So it makes sense.

On the other hand, Google’s AI demo was, frankly, a bit of a disaster, poorly received, stock

to drop 12% since this event.

And their presentation did not include the chat barred in search because it wasn’t working.

It seems like there was an error in it when they said, what new discoveries from the James

Webb Space Telescope can I tell my nine-year-old?

And barred answered that it took the first pictures of a planet outside our solar system,

which is false.

Which, of course, we all know about chat GPT.

It’s only right half the time, and it’s a little woke on the margins.

So anyway, there was a screenshot circulating today, which is probably false, but it says

the following.

Me and a bunch of co-workers were just laid off from Google for our AI demo going wrong.

It was a team of 168 people who prepared the slides for the demo.

All of us are out of jobs.

I can’t imagine that’s real.

But if it was, that would be a hardcore moment for Google to fire a bunch of people for screwing

it up.

Listen, you worked in the belly of the beast, Freeberg.

What are your thoughts on being poking the tiger and telling Google, dance, you know,

Sundar dance?

You know, what’s interesting is Google’s had like an incredible AI competency, particularly

since they bought DeepMind.

And it’s been predominantly oriented towards kind of, you know, internal problems.

You know, they demonstrated last year that their AI improved data center energy efficiency

by 40%.

They’ve used it for ad optimization, ad copy optimization, the YouTube follow video algorithm.

So what video is suggested to you as your next video to watch, which massively increased

YouTube hours watched per user, which massively increased YouTube revenue.

You know, what’s the right time and place to insert videos in YouTube or insert ads

in YouTube videos.

So, you know, autofill in Gmail and Doc.

So so much of this competency has been oriented specifically to avoid this primary disruption

in search.

Obviously, now, things have come to a bit of a point because, you know, this alternative

for search has been revealed in chat GPT.

And you guys can kind of think about search.

And you know, we’ve used this term in the past, Larry and Sergey, the textbook that

they read, you know, one of the original textbooks that’s used in internet search engine technology

is called information retrieval, information retrieval.

So information retrieval is this idea that, you know, how do you pull data from a static

data set, and it involves scanning that data set or crawling it, and then creating an index

against it.

And then a ranking model for how do you pull stuff out of the index to present the results

from the data that’s available based on what it is you’re querying for, you know, and doing

that all in a 10th of a second.

So you know, if you think about the information retrieval problem, you type in the data or

some rough estimation of the data you want to pull up, and then a list is presented to


And over time, Google realized, hey, we could show that data in smarter, quicker ways, like

if we can identify that you’re looking for a very specific answer, we can reveal that

answer in the one box, which is the thing that sits above the search results.

Like if you said, What time is it?

You know, what, when does this movie show at this theater, so they can pull out the

structured data and give you a very specific answer rather than a list from the database.

And then over time, there were other kind of modalities for displaying data, that it

turns out, were even better than the list, like maps, or shopping, where you can kind

of see a matrix of results, or YouTube, where you can see a, you know, longer form version

of content.

And so these different kind of, you know, information retrieval, you know, media were

presented to you.

And it really kind of changed the game and created much better user satisfaction in terms

of getting what they were looking for.

The challenge with with this new modality is it’s not really fully encompassing.

So if you can kind of think about the human computer interaction problem, you want to

see flight times, and airlines, and the price of flights in a matrix, you don’t necessarily

want a text stream written to you, to give you the, you know, the answer that you’re

looking for, or you want to see a visual display of shopping results, or you do want to see

a bunch of different people’s commentary, because you’re looking for different points

of view on a topic, rather than just get an answer.

But there are certainly a bunch of answer solutions for which chat dbt, type, you know,

natural language responsiveness becomes a fantastic and better mode to present answers

to you, then the matrix or the list or the ranking and so on.

Now, the one thing that I think is worth noting, I did a back of the envelope analysis on the

cost of doing this compared to chat GPT.

So, so Google makes about three bucks per click, you can back into what the revenue

per search is a bunch of different ways.

One way is three bucks per click about a 3% click through rate on ads.

Some people estimate this is about right about 5 cents to 10 cents revenue per search

done on Google, or anywhere from one cent to 10 cents, even if they don’t click the

ads, because one out of 100 people click an ad.

And that’s where the money comes from.

So let’s just call it five cents, right.

And you can assume a roughly 50% margin on that search, which means a 50% COGS or cost

of goods, or a cost to run that search and present those ads.

So you know, right now, Google search costs them about, you know, call it two and a half

cents per search to present the results.

A recent estimate on running the GPT three model for chat GPT is that each result takes

about 30 cents of compute.

So it’s about an order of magnitude higher cost to run that search result than it is

to do it through a traditional search query today, which makes today today.

That’s right.

And so, so that’s the point, like it has to come down by about an order of magnitude.

Now, this is a this then becomes a very deep technical discussion that I’m certainly not

the expert.

But there are a lot of great experts that there’s great blogs and sub stacks on this,

on what’s it going to take to get there to get a 10x reduction in cost on running these


And there’s a lot related to kind of optimization on how you run them on a compute platform,

the type of compute hardware that’s being used all the way down to the chips that are

being used.

So there’s still quite a lot of work to go before this becomes truly economically competitive

with Google.

And that really matters.

Because if you get to the scale of Google, you’re talking about spending 8 to $20 billion

a quarter just to run search results and display them.

And so for chat GPT type solutions on Bing or elsewhere to scale, and to use that as

the modality, you’re talking about something that today would cost $80 billion a quarter

to run from a compute perspective, if you were to do this across all search queries.

So it’s certainly going to be a total game changer for a subset of search queries.

But to make it economically work for, for these businesses, whether it’s Bing or Google

or others, there’s a lot of work still to be done.

The great part about this Chamath is that Bing gave 10 billion to our friend Sam and

to invest in Azure, which now has the infrastructure and will be providing the chat GPT infrastructure

to startups or corporations, big companies, and small like so that $10 billion should

do enough to grind it down between software optimization, data optimization, chip optimization

and cloud optimization.

Yes, you would think so or no.

The ability to run this at scale is going to happen because we’re getting better and

better at creating silicon that specializes in doing things in a massively parallelized


And the cost of energy at the same time is getting cheaper and cheaper along with it.

When you multiply these two things together, the effect of it is that you’ll be able to

run these models, the same output today will cost one one 10th as long as you ride the

energy and compute curve for the next few years.

So that’s just going to naturally happen.

I have two interesting takeaways.

And one is maybe a little bit of a sidebar.

So the sidebar is, if you guys were sitting on top of something that you thought was as

foundational as Google search back in 1999, would you have sold 49% of it for $10 billion?

Hard no.

I think the answer is no.

I think the answer is no.

Not in an environment where you have unlimited ability to raise capital.

This is something that we’ve said before, which is that chat GPT is an incredibly important


But it’s an element of a platform who will get quickly commoditized because everybody

will compete over time.

And so I think what Microsoft is doing is the natural thing for somebody on the outside

looking in at an entity that has 93% share of a very valuable category, which is how

can I scorch the earth.

And so Microsoft effectively for 10 billion, but almost 50% of a tool.

And now we’ll make that tool as pervasive as possible so that consumer expectations are

such that Google is forced to decay the quality of their business model in order to compete.

So that as Friedberg said, you have to invest in all kinds of compute resources that today

are still somewhat expensive and that will flow into the PNL.

And what you will see is that the business quality degrades.

And this is why when Google did the demo of Bard, the first thing that happened was a

stock went off 500 basis points.

They lopped off $100 billion of the market cap.

And people were looking in reaction to, Oh my God, this is not good for the longterm business.

Explain why it’s not good for the longterm business on a mechanical basis.

When you get an answer, you don’t have to click the links.

No, right now, if you look at Google’s business, they have the best business model ever invented

on earth ever for a for profit company.

It just rains money.

This is a business that this year will do almost $100 billion of free cash flow.

It’s a business that has to find ways and we kind of joke, but they have to find ways

to spend money.

Otherwise they’d be showing probably 50 or 60% EBITDA margins.

And people would wonder, Hey, wait a minute, you can’t let something like this go unattended.

So they try to do a lot more things to make that core treasure look not as incredible

as it is.

They have 120 billion of cash.

This is a business that’s just an absolute juggernaut.

And they have 10 times as many employees as they need to run the core business.

I don’t know what that is, but my point is that it’s an incredible business.

So that business will get worse.

If Microsoft takes a few hundred basis points of share, if Meta takes a few hundred basis

points of share, if Tencent does, if a few startups do, Quora, by the way, launched something

called Po, which I was experimenting and playing around with last weekend.

If you add it all up, what Satya said is true, which is even if all we do collectively as

an industry is take 500 or 600 basis points of share away from Google, it doesn’t create

that much incremental cost for us.

But it does create enormous headwinds and pressure for Google with respect to how they

are valued and how they will have to get revalued.

And that’s what happened.

So the last thing I’ll say is the question that I’ve been thinking about is what does

Sundar do?


So what’s the countermeasure?

Yes, this is what I was going to get to.

I think the countermeasure here, if I was him, is to go to the board and say, guys,

we’re going to double TAC.


So TAC is the traffic acquisition cost that Google pays their publishers.

It is effectively their way of guaranteeing an exclusivity on search traffic.

So for example, if you guys have an iPhone, it’s Google search.

That’s the default search in the iPhone.

Google pays Apple.

This year, this renegotiation for that deal could mean that Apple gets paid $25 billion

for giving away that right to Google.

So Google does all these kinds of deals.

Last year, they spent, I think, $45 billion or so.

So about 21%.

In a way, when you think about that, Shamath, Google basically paid Apple, which was working

on search technology.

They were working on a search solution.

They paid them to stay out of the business.

And they’re paying everybody.

So I think the question for Google is the following.

If you think you’re going to lose share, and let’s say you go to 75% share, would you

rather go there and actually still maintain your core stranglehold on search?

Or do you actually want 75% share where now all of these other competitors have been seeded?

Well, you can decay business model quality and still remain exclusive if you just double

the TAC.

And what you do is you put all these other guys on their heels because as we talked about,

if you’re paying publishers two times more than what anybody else is paying them, you’ll

be able to get publishers to say, hey, you know what?

Don’t let those AI agents crawl your website because I’m paying you all this money.

Remember that, right?

So do not crawl in robots.txt equivalent for these AI agents.

And I think that that’ll put Microsoft and all these other folks on their heels.

And then as you have to figure out all this derivative work stuff, all these lawsuits,

people will look pristine because they can say, I’m paying these guys double because

I acknowledge that this is a core part of the service.

So that’s the game theory, I think, that has to get figured out.

But if I was Sundar, I’d double the TAC.

I love the second part because, hold on, let me get sexier.

I love the second part, Chamath, because in this clip I’m about to show, Neelay Patel

from The Verge did an awesome interview with Satya.

And he basically would not answer this question, at least to my satisfaction, which is, hey,

what did the publishers get out of this?

You’ve ingested our information.

How do we get paid?

Watch this clip.

It’s very telling.

In the answer or even in the chat session.

But if I ask the new bang, what are the 10 best gaming TVs, and it just makes me a list,

why should I, the user, then click on the link to The Verge, which has another list

of the 10 best gaming TVs?

Well, I mean, that’s a great question.

But even there, you will sort of say, hey, where did these things come from?

And would you want to go dig in?

Even Search today has that.

We have answers.

They may not be as high-quality answers.

They just are getting better.

So I don’t think of this as a complete departure from what is expected of a search engine today,

which is supposed to really respond to your query, while giving them the links that they

can then click on, like ads.

And Search works that way.

In my mind, there’s a terrible answer.

He needs to address how they get paid.

He punted the answer and just said, hey, listen, Search works this way.

Will the rights to the data, will Google just say to Quora, hey, we’ll give you a billion

dollars a year for this data set, if you don’t give it to anybody else?

They should.

Saks, the strategist, let me hear your strategy here.

You’re now CEO of Google.

What do you do?

I think there’s maybe even a bigger problem before that, which is, I think the whole monetization

model might change.

So the reason why Google monetizes so well is, it’s perceived as having the best search.

It gives you a list of links, and a bunch of those links are paid, and then people click

on them.

Now, I think when you search an AI, you’re looking for a very different kind of answer.

You’re not looking for a list of 10 or 20 links.

You’re just looking for the answer.

Where is the opportunity to advertise against that?

Maybe you can charge an affiliate commission if the answer contains a link in it, or something

like that.

But then, you have to ask the question, well, does that distort best answer?

Am I really getting the best answer, or am I getting the answer that someone’s willing

to pay for?

This is your key insight.

The fact is, if Google gives you an answer, you don’t click on ads.

Google has had a very finely tuned balance between, hey, these first two or three paid

ads, these might, the paid links, might actually give you a better answer than the content

below them.

In this case, if the chat GPT tells you, hey, this is the top three televisions, these are

the top three hotels, these are the top three ways to write a better essay, you don’t need

to click.

You have now been given an answer, and the model is gone.

The paid link is still a subset in that case.

At Google, we used to have a key metric was the bounce back rate.

Explain what a bounce back is, yeah.

When a user clicks on a result on the search results page, we could see whether or not

they came back and searched again.

That tells you the quality of the result that they were given, because if they don’t come

back, it means they ended up getting what they were looking for.

Ads that performed better than organic search results, which means someone created the ad,

paid for it, and the user clicked on it and didn’t come back and came back with less frequency

than if they clicked on an organic result, that meant that the ad quality was higher

than organic quality.

The ad got promoted to sit at the top, and it became a really important part of the equation

for Google’s business model, which is how do we source, how do we monetize more search

results where we can get advertisers to pay for a better result than what organic search

might otherwise show?

It’s actually better for the user in this case than, say, just getting an answer.

For example, I’m looking for a PlayStation 5.

I don’t want to just be told, hey, go to Best Buy and buy a PlayStation 5.

I want to be taken to the checkout page to buy a PlayStation 5, and I am more likely

to be happy if I click on a result and it immediately takes me to the checkout page,

and Best Buy is really happy to pay for you to get there, because they don’t want you

looking around the internet looking for other places.

We can’t convolute all search queries.

Not all search queries are, hey, what’s the best dog to get to not pee on the floor, or

whatever kind of arbitrary question you might have that you’re doing research on.

Many search queries are commerce intention related.

I want to buy a flight to go somewhere.

I want to book a hotel to go somewhere.

I want to buy a video game system, etc.

That series of queries may have a very different kind of modality in terms of what’s the right

interface versus the chat GPT interface where, yeah, there’s a lot of kind of organic results

that people sift on the internet for today.

The question earlier can be resolved by Google doing a simple analytical exercise, which

is what’s it going to cost us and what’s going to give the user the best result.

That’s ultimately what will kind of resolve to the better business model.

It’s really measurable.

I think on Chamath’s point, today Google pays Apple $15 billion a year to be the default

search engine on iPhones on the Safari browser.

That’s only about a quarter of Google’s overall tack.

The majority of Google’s traffic acquisition cost is actually not being paid for search.

A good chunk of that is being paid to publishers to do AdSense display ads on their sites,

and Google’s rev share back to them for putting ads on their sites.

The tack number, I think maybe you kind of want to move the needle, but the majority

of Google searches don’t come through the default search engine that they pay Apple

to be on.

It might move the needle a bit, but I don’t think it really changes the equation for them.

My comment is more tack has to become a weapon on the forward foot, number one.

So if you’re going to spend 21% of your revenue on tack, you should be willing to spend 30

to 40% to maintain the 93% market share.

I don’t think what you want to see is your profit dollars decay because you lose share.

It’s rather better for you to spend the money and decay your business model than have someone

decayed for you in general.

At this point, Apple is really the only tack line item for search.

I understand.

I’m not talking about today.

I’m saying take that idea.

You have an entire sales team whose job it is right now to sell AdSense.

You have an entire group of people who know how to account for tack and how to think about

it as a cost.

But if you’re basically willing to say, out of the $100 billion of free cash flow, I’m

willing to go to 80 or 70 billion of free cash flow combined with the 100 billion of

short and long-term investments I have, and I’m going to use it as a weapon.

I’m going to go and make sure that all of these publishers have a new kind of agreement

that they signed up for, which is, I’ll do my best to help you monetize.

You do your best by being exclusive to our AI agents.

You deprive other models of your content on your pages because that will get litigated.

There is no way, just like, again, if you say, do not crawl, you’re not allowed to crawl

if you’re Google or Microsoft researchers.

This is going to happen for these agents.

It’s unrealistic to expect that it won’t.

My point is, Google should do this and define how it’s done before it’s defined for them

because right now people are in this nascent phase where everybody thinks everybody’s going

to be open and get along, and I just think that that’s unrealistic.

It’s a really important kind of philosophical question.

First off, Google today, just so people know, on AdSense is typically paying out $0.70 on

every dollar to the publisher.

It’s a pretty generous, and it’s the way they’ve kind of kept the competitive moat wide and

kept folks out of beating them on third-party ad network bids because they bid on everything

and they always win because they always share the most revenue back, so they own that market.

With respect to acquiring content, the internet is open.

It’s an open protocol.

Anyone can go to any website by typing in the IP address and viewing the content that

a publisher chooses to make available on that server to display to the internet, and there’s

a fair use policy.

That’s not true.

You can type in any IP address.

I think 15 or 20 or 30% of the pages on the internet right now are apps that are closed.

Facebook’s closed.

Instagram’s closed.

I’m talking about the open internet, right?

So, like, the content on the open internet.

But I’m saying the open internet matters less and less.

Yeah, I don’t know.

I mean, look, you’re right.

Maybe there’s the enhancement of the models, but my point being that if the internet is

open and you and I spent a billion lifetimes reading the whole internet and getting smart

and then we were the chatbot and someone came and asked us a question and we could kind

of answer their question, because we’ve now read the whole internet, do I owe licensing

royalty revenues to the knowledge that I gained, and then the synthesis that I did, which ultimately

meant excluding some things, including some things combining certain things.

And the problem with these LLM, these these large language models, is that you end up

with 100 million, a billion plus parameters that are in these models that are really impossible

to deconvolute.

You don’t know, we don’t really understand deeply how the neural network is, the model

is defined and run based on the data that it is constantly kind of aggregating and learning


And so to go in and say, hey, it learned a little more from this website and a little

less from that website, I’m not saying the practical impossibility, I’m saying when you

look at transformer architecture today, every LLM that you write on the same corpus of underlying

data for training, we’ll get to the same answer.

So my point is today, if you’re a company, the most important thing that you can do,

especially you have a $1 trillion plus market cap, that could get competed away, is to figure

out how to defend it.

And so all I’m saying is from the perspective of a shareholder of Google, and also from

the perspective of either the board of director or senior executive or the CEO, this should

be the number one thing that I’m thinking about.

And my, my framing of how to answer that question is build a competitive mode around two things.

One is at the end, which is how much money and what kind of relationship do I have with

my customers, including the publishers?

And can I give them more so that number two is I can affect who they decide to contribute

their content to.

So you’re right.

Let’s assume that there are five of these infinite libraries in the world.

You mean non public content?

How important and also public?

How important is it if Cora says, you know what, guys, I’ve done a deal where my billions

of paid views and all of that really rich content core has incredible content.

Google’s paying me 2 billion a year.

And so I’ve decided to only let Google’s AI agents crawl it.

And so maybe when there are questions that Cora is already doing an phenomenal job of

answering, I think it does make a difference that Google now has access to Cora’s content

and others don’t, right?

For a hot minute, they did have access to the Twitter firehose.

And that was the premise was we could get this corpus of data that we can have in a

very limited, restricted way.

They pay Twitter a lot of money.

I don’t think that those deals exist anymore.


I mean, you guys might know better than I do, but I don’t think they exist anymore.

First, we’re at your mouth.

I think you’re right.

And maybe, David, I think you’re being too forgiven.

These models know where they got the data, and they can easily cite the sources, and

they could easily pay for it.

And if you want to say something, hold, go ahead.

You’re absolutely right.

The video in the Wall Street Journal, where Satya was interviewed, showed a demo.

And you’re exactly right.

They actually showed, Jason, in the search results, yes, the five resources, but it made

no sense, because it’s like, how do you know that those are the five most cited places

that resulted in this?

Well, by page rank technology, or the authority of the website, or the author.

But let’s pause for a second here.

There is a company called

I’m not an investor.

None of us are.

It’s a former Googler.

They have 78 employees, I think, according to LinkedIn.

I just typed in one of the best flat panel TVs.

Here’s the result.

And as you see, sentence by sentence, as it rewrites another person’s content, it links

with a citation, just like the Wikipedia does.

And when you scroll to the bottom of it, it tells you, hey, this is from Rolling Stone.

This is from Best Buy.

This is from Ratings.

And if that answer is good for you, and you trust those sources, those people should get

a commission.

Every time there’s 1,000 searches, and you come up, you should get $1 every time your

data was used.

And if not, these sites should sue the daylights out of Google.

And for Google to say they can’t do it, is hogwash.

They contributed.

Why isn’t it fair use?

It’s not fair use, because in fair use, you have the ability to create derivative works

on future platforms.

And you are taking this person, the original content owner’s ability to exploit that.

And you are co-opting it.

And you’re doing it at scale.

And that is against fair use.

You’re not allowed to interfere with my ability to make future products, David.

You know, this is an attorney.

The problem with that IP lawyer, sorry.

All right.

Well, I play one on TV and this podcast.

The problem with that idea, just from a product perspective for a second, is that if you limit

how they can tokenize to just being all entire sentences, the product will not be that good.

Like the whole idea of these LLMs is that you’re running, you know, so many iterations

to literally figure out what is the next most best word that comes after this other word.

And if you’re all of a sudden stuck with blocks of sentences as inputs that can’t be violated

because of copyright, the product will not be as good.

I just don’t think it’ll be as useful.


These are also not deterministic models and they’re not deterministic outputs, meaning

that it’s not a discrete and specific answer that’s going to be repeated every time the

model is run.

These are statistical models.

So they infer what the right answer could or should be based on a corpus of data and

a synthesis of that data to generate a response to a query.

That reference, that inference is going to be, you know, assigned some probability score.

And so the model will resolve to something that it thinks is high probability.

But it could also kind of say, there’s a chance that this is the better answer, this is the

better answer, and so on.

And so when you have like you have in the internet competing data, competing points

of view, competing opinions, the model is synthesizing all these different opinions

and doing what Google search engine historically has done well, which is trying to rank them

and figure out which ones are better than others.

And that’s a very dynamic process.

And so if as part of that ingest process, one is using some open, openly readable data

set, that doesn’t necessarily mean that that data set is improving the quality of the output

or is necessarily the answer from the output.


Let me just give everybody a quick four factor education on fair use.

And here it is from Google’s actual website, because they deal with this all the time.

And when you look at that, the nature and purpose and character of the work, including

whether such use is not profit or educational purposes.

So that first test of fair use is, hey, if you’re using it educationally, and you want

to make a video that is criticism of Star Wars prequels, or how to shoot a shot like

this Quentin Tarantino, if it’s educational, it’s fine.

And courts typically focus I’m reading here from Google on whether the use is transformative.

That is whether it adds new expression or meaning to the original or whether it merely

copies the original.

It’s very obvious that this is not transformative.

They’re just rewriting it.

The nature of the copyright is pretty transformative to me.

I don’t think so.

Not at all.

They’re coming out with entirely new content.

They’re just rewriting it.

They’re not actually adding anything to it.

Transformative would be fine.

If a human does it, it’s not.

It’s pretty transformative, come on Jekyll, it’s pretty cool.

Listen, Jekyll, I think the rights issue, I think the rights issue is just like the

cost issue, which is a problem today, maybe, but it’s gonna get sorted out.

But here, let me finish.

The new technology waves that are this powerful, don’t get stymied by either chip costs or

legal rights issues.

They do by the way.

You’re 100% wrong.

It’s gonna get worked out.

YouTube got stopped dead in their tracks.

And the only way YouTube and Napster got stopped in the tracks, I predict this is gonna get

stopped dead in its tracks.

With YouTube level, near death experience losses.

Napster was pure piracy.

This is different.

And Google was enabled piracy and then they had to build tools to fight against it.

I deeply disagree with Jekyll.

I deeply disagree with you.

I disagree with both you guys.

You guys think that all that cost is going to stand in the way of the AI.

No, it’s going to stay standing in the way of what’s going to happen to AI is already


AI is happening.

Let’s move the conversation forward.

I actually, I want to tell you my point.

I would like to make my point.

We don’t need your amateur lawyer opinions.

I am going to give my point.

I don’t give a shit if you want it or not.

The effect of 500 bucks an hour for pretending to be a lawyer on TV.

I’ve heard this point of view before from you.

Here it is.


Take it easy, Mr. Sub.

Better call Jekyll.

This is the time you’ve done this.

The effect, listen to this, the effect of the use upon the potential market for or value

of the copyright work, uses that harm, the copyright, listen to this, very important.

When the AI takes over the world like Skynet, Jekyll’s going to be like, I thought we’d

stop this with rights.

Listen to this.

AI’s not going to be stopped, but companies using AI to steal content will be.

The effect of use, uses that harm the original copyright owner’s ability to profit from his

or her original work by serving as a replacement for that work are less likely to be fair uses.

This is the one.

Okay, great.


You made your point.

You made your point and you may be right.

I’m sorry.

Do we need to get to Marjorie Taylor Greene for you to have a good show?


Let’s queue up Marjorie Taylor Greene.

No, no.

How much did you raise for her?

I have something, I have another aspect of the AI thing I want to talk about besides

just this like internal rights issue that you’re going on and on and on.

So I had an interesting AI experience this week and I think we’re all going to start

having these stories.

Oh, you use the AI to make a script of how to talk to your kids?

No, every week there’ll be some new like use case that you see that you’re kind of blown

away by.

The use case I saw this past week in a product demo was they were showing me like an example

spreadsheet, like a very complicated Excel spreadsheet modeling and financial asset.

And they had a plugin to a chat GPT type AI.

And so they just asked it, they typed in, what does this spreadsheet do?

And it spit out like a one paragraph explanation of what the spreadsheet did.

And it was really good.

I mean, because me just eyeballing the spreadsheet, I could not have figured out like instantly

what that thing did.

It would have taken me like a while to figure it out.

It told me here are the key inputs, here are the key outputs.

So that was number one.

Then they did something I think even more interesting, which is they said, give me the

formula that tells me when the yield is above 2% and this and that and that.

And the chat GPT spat out a formula that was like perfect Excel logic.

That was something that, you know, you or I could never figure out, right?

You need like a super pro user of Excel to basically know how to do this stuff.

So it spit it out and like, boom, it worked instantly.

They copy and pasted the spreadsheet and you could basically like the spreadsheet was much

more advanced now.

So what it got me thinking about is that we’re going to have these little assistants everywhere.

You combine that power with say, speech to text, right?

Because we could have just talked to it, the speech to text would transcribe the instruction,

spit it back out.

And you’re going to have these like little personal digital assistants in applications.

I think, you know, it’s pretty obvious to see how AI could replace call centers with,

you know, having the frontline call center operator be, instead of being a human, it

could be like an AI.

But this is actually even before that.

Like you could actually, I think in every single application that we use, there’s going

to be an AI interface and like a, it is probably gonna be voice-based where you can just say

to it, Hey, I’m trying to accomplish this.

Like how do I do it?

Can you just make it happen?


And it’s going to be really powerful.

I have an idea.

I was hanging out with Andre Karpathy and I gave him this following challenge.

There I was.

So there I was.

I said, if you had to build Stripe, I said, how many engineers do you think it would take


And how long would it take you to build a competitor?

I was just, it’s just a thought exercise, you know, it would take hundreds of millions

of dollars and years.

Now imagine you could, you were feeling threatened by Stripe.

Imagine you’re a large company, Visa, MasterCard, just as an example, you can now actually get

one or two really smart people like him to lead an effort where you would say, here’s

a couple hundred million dollars to compete with Stripe, but here are the boundary conditions.

Number one is you can only hire five or 10 engineers.

And so what you would do is you would actually use tools like this to write the code for


And the ability to write code is going to be the first thing that these guys, that these

things do incredibly well with absolute precision.

You can already do unit testing incredibly well, but it’s going to go from unit testing

to basically end to end testing.

And you’ll be able to build a version of Stripe extremely quickly and in a very lean way.

So then the question is, well, what would you do with the two or 300 million you raised?

And my thought is you use it again as tack.

You go to customers, you go to customers and you’re like, well, listen, if Braintree is

going to charge you one basis point over Visa, MasterCard, and, or sorry, a hundred basis

points and Stripe will 50.

You know what?

I’ll charge 10.

Margin destruction, margin destruction, and this is going to make everything so interesting.

You can take any business that’s a middleman business.

I think this is the point, any middleman business right now that doesn’t have its own competitive

mode can be competed against because now you can take all of those input costs that

go into human capital.

You can defer that, have a much smaller human capital pool and push all of that extra money

into traffic acquisition.

This goes to the Silicon Valley of being more efficient.

This is going to lead to that.

The net benefit of all of this is economic productivity because the end customer that’s

using that tool that you just mentioned, they now have a lower cost to run their business

and their total net profits go up.

And this is what happens with every technology cycle.

It always yields greater economic productivity.

And that’s why the economy grows.

And that’s why I just want to say this is so important.

That’s why technology is so important to drive economic growth, not debt.

We’ve historically used financial engineering to drive economic growth, but technology and

innovation drive this.

What about China?

What about China?

Wait, what are you talking about?

What we’re describing here is, is AI making it harder and harder to make humans productive.

No, it’s going to augment human talent.

It’s going to make superhumans.

One human can do the coding that 20 humans would do before.

Assuming they’re skilled enough to use the AI.

Guys, go back to traditional capitalism.

Chat prompts are easier than programming.

Go back to traditional capitalism for a second.


Because the Stripe example is another good one.

So if you have this business model, right, how does the ecosystem get efficient, right?

How do we create more opportunity to use Freeberg’s language?

Well, the only way that it really happens, how does cost go down, is that certain entities

become big enough that they can drive the prices down, right?

An Uber, a DoorDash or whomever says, yes, I need payments capability.

So Braintree, give me your best bid., give me your best bid.

Adyen, give me your best bid.

Stripe, give me your best bid.

You compete it down, right?

Amazon comes in.

Walmart comes in.

They do it in physical CPG goods.

They do it online.

They do it for all kinds of technologies.

But you’ve never had an internal form that can create hyper-efficiency and basically

create customer value like this thing can.

Because this thing can allow a billion, ten person companies to get created that can do

the work of 10,000 people.

That’s what’s so cool.

Hold on.

Let me show you two things.

These are two aha moments I had this week.

This first one is called Galileo AI.

It was just a tweet.

You describe the design of an app.

And here they say, an onboarding screen of a dog walking app.


You type that in and it gives you a welcome screen.

That’s like a 7 out of 10.

Then it says, oh, a way for people to change their name, phone number, password.

You know, that classic screen on any app, I need to change my thing.

Boom, it gives you that.

Well, then at the same time that people are making text to UX, user interface, beautiful


This stuff will get dumped into Figma.

But then there’s GitHub Copilot, which if you haven’t seen, we all know it here.

GitHub Copilot.

GitHub is bought by Microsoft.

Another one of Satya Nadella’s incredible acquisitions.

This guy’s like the new Zuckerberg.

I mean, what an incredible person to come after a bomber who is just so effective at

what he’s doing.

As you’re writing your code, it fills in your code.

It knows what you’re writing, just like in an email.

And it’s a smaller subset of information than email.

Email, you could write anything.

You could be, you know, talking to a lover or a business person, whatever.

But here, when you’re doing programming, it’s a much finer dataset.

These two things are going to come together where you’re going to be able to build your

MVP for your startup by typing in text and then publish it.

You’re not going to need a developer for your startup.

That is transformative in the world.

Let me ask you guys a question.

Do you think that this leverage, and I argue this is all about like leverage.

It’s one person can generate X units of output more.


Do you think that this commoditizes and puts at risk sacks in particular, like all of enterprise

SaaS, because it becomes such a commodity to basically build a business that does something


Or does it create much higher returns for investors because you invest so much less

capital to get to a point of productivity with that business or revenue of that business

than was needed before?

I’m not sure.

I tend to think that if it gets easier, then everything becomes more competitive.


I don’t know.

So value gets competed away.

By the way, I would slightly disagree with the characterization.

Does this scare you as an investor?

I don’t know.

For example, in that demo we just saw, what does the AI do?

It exports the new design assets to Figma format because that’s the standard.

Yeah, it just makes you faster.

If you can create a SaaS product that becomes a standard, everyone’s still going to want

to use it.

There’s really good reasons for that.

I don’t know.

I don’t think business software is going away.

I also don’t think that you’re not going to need to hire engineers because Copilot is

just going to do it for you.

I think what Copilot will do is make your typical engineer more productive.


They had some graphs around how Copilot reduced coding time by 50%.


So I think you’ll be able to get a lot more out of your developers.

I think that’s sort of the key, is a lot of the drudgery work gets taken care of.

The answer, Freeberg, to your question is I think more startups, more niche startups

will make better products and then you’ll just have many more folks making SaaS for


Are those ventures?


Because they don’t get big enough, right?

I mean, in that case…

Well, entry price matters.

It’ll be poorer returns.

Well, entry price matters, too.

If you’re investing at $5 million like I do in companies when they’re just on napkins and

back of envelope, there’s plenty of room.

If you have a $200 million exit, that’s a 40x.

There could be a lot of new categories, too.

Like, a lot of new categories.

A lot of new categories.

There could be a lot of traditional industries.

There’s a lot of traditional industries that get disrupted.

Like, we’re thinking about just software displacing software.

It could be software displacing industries that aren’t even software yet.

Video games.

I think the entire video game industry is going to get completely rewritten with AI

because you’re not going to have a publisher anymore that makes one game that everyone


You’re going to have tools that everyone creates and consumes their own game.

You guys want to watch this cool clip?

It’s 58 seconds long.

Go ahead.

This is music.

Clip day here on All In.

But I thought it was really cool.

Is this AI turning you into Eminem?

This is what the world’s waiting for.

I hope it’s you doing an Eminem song.

It’s not me.

I’m naturally Eminem-like, but this is a…

Only in your anger.

This is the future rave sound.

I’m getting lost in an underground.

This is the future rave sound.

I’m getting lost in an underground.

Is that Eminem?

It looks like it’s Eminem.

It’s David Guetta.

David Guetta playing Eminem, a track with Eminem’s voice, right?

And the track just became hugely viral.

This is something that I made as a joke, and it works so good, I could not believe it.

I discovered those websites that are about AI.

Basically, you can write lyrics in the style of any artist you like.

So I typed, write a verse in the style of Eminem about future rave.

And I went to another AI website that can recreate the voice.

I put the text in that, and I played the record, and people went nuts.

That is nuts.

It’s nuts.

And the crowd went wild for it.

So awesome.

So here it is, folks.

Whoever makes the best Friedberg Eminem hybrid rap with David Sachs as the hype man is getting

a free VIP ticket to All In Summit 2023.

I think we need an AI performance at All In Summit 2023.

A thousand percent.

You and I are so in sync these days, Friedberg.

There are going to be a lot of interesting mashups that get created.

Like, for example, you’d be able to create a movie where, let’s say you want to make

a Western, and you want John Wayne to star in it.

I mean, obviously, you’ve got to get the rights from the Wayne estate.

But no actor ever goes away.

There’s going to be a database of all of them.

But if you wanted to make it…

Sachs, it’s going to be better.

You’re going to be writing the script.

As you write the script, the AI is going to be showing you that scene in real time.

And you don’t have to publish it.

It’ll just change in real time.

Think about what that would do for Star Wars.

Just like Instagram and TikTok basically democratize everyone’s ability to create and publish content.

This takes it to a whole other level where the monopoly that big production houses have,

because they have the big budget, so they can afford to make a big movie.

If that cost of making a $10 million movie goes to $10,000 or $1,000 of compute time,

anyone sitting in their studio in a basement can start to make a movie.

And it really changes the landscape for all media.

Not just movies, music, video games.

And ultimately, the consumers themselves can create stuff for their own enjoyment.

And maybe the best of those products win.

But having free individuals create their own content…

Here’s what’s going to happen.

The movie industry will just become a lot more like the music industry.

I mean, remember, anyone can really create a song now.

And they do.

And people do go viral on TikTok and all that stuff.

It’s on Spotify.

Did you guys see this article in the New York Times that was kind of throwing some shade at the CEO of Goldman Sachs, David Solomon?


I did see the headline.

You look great in the picture, but I didn’t read it because I figured it’s hate.

They were talking about his side gig as being a DJ.

But specifically, they called out a potential conflict of interest.

And it’s related to this.

Because I guess he had gotten a license to a Whitney Houston song.

And he remixed it.

And released it on Spotify.

And her biopic is about to come out.

And they thought that there could be this perceived conflict because Goldman works on behalf of the publishing company.

And my thought was along the lines of what you guys said.

Like, why is this a story?

Meaning, David Solomon should be able to go to any website, license the song, make it, and then submit it back to them for them to approve.

Because the quote in here that matters is the company that licensed it said,

We are in the business of making sure this body of music stays relevant.

So obviously you want Whitney Houston songs, Michael Jackson songs.

You want John Wayne.

You want these people to live on in culture because it’s part of our culture.

Look at this subhead.

David Solomon brushes off DJing.

The better way to maximize it would be like this.

Go and use it.

Create a derivative work.

Let us see it if we like it.

Should be able to just give that back to Eminem.

If Eminem is cool with it, he should be able to ship it and just be done.

What a non-story like the New York Times is just so anti-billionaire.

So David Solomon brushes off DJing as a minor hobby that has little to do with his work at the bank.

But his activities may pose potential conflicts of interest.

It’s like, what are they writing about?

Is there not something more important than this?

Do we think that David Solomon or any CEO of any major bank on Wall Street would put their job at risk running one of the 20 or 30 most important institutions in the financial architecture of the world to license a Whitney Houston song that they can play at Coachella?

I mean, does that pass the smell test?

No, no.

And just for the record, iconoclastic David Solomon, you’re going to be doing the opening night DJ set for All in Summit 2023.

The grift is on.

Let’s get him.

If the New York Times hates him, you got anybody the New York Times hates on, you got a slot.

You got a slot.

That’s it.

That’ll be our lens here.

Dave Chappelle?

Dave Chappelle, for sure.


I mean, he looks good.

It looks like he’s living his best life.

He’s a finance nerd.

Does this just like offend them somehow?

It just like offends them that a corporate CEO could be a DJ.

Well, that anybody’s happy.

I think it’s kind of cool this guy DJs.

Punk rock.


Let him do his thing.

I’ve always wanted to be a DJ.



DJ Polly Hoppitya.

Spin the one and twos.

You could be DJ one night at the All in 2023 after party and we’ll use AI to help you out.

Sadly, when I should have been learning how to DJ, I was playing the violin.

You should get up there and Urkel your violin under a DJ set.

That would be next level.

I played violin for 10 years.

We can play a duet together.

I played for 14 years in an orchestra.

In an orchestra?

I played in an orchestra.

Oh my God, I never knew this.

Never again.

This is all kind of revelations happening here.

By the way, here was my most, pull up that first chat GPT I gave you.

This was an aha moment.

Me and Sax were doing our weekly mastermind group.

Sax and I get together.

We kind of like co-mentor each other.

Here was something that blew us away during our mastermind group.

This was a chat GPT.

I did this one because I was trying to figure this out.

How do I make my spouse and kids feel heard?

And in chat GPT gave us a great one.

Give them your full attention.

Number two, empathize.

Number three, validate their feelings.

There you have it, Sax.

Just put that at your separate team, you’ll be fine.

Let me use this as an example.

So that’s obviously the aggregation and synthesis of lots of different self-help websites.

How do you describe attribution of that answer to a particular content publisher?

Honestly, serious question.

Fair use.

Derivative work.

I think in this case it would be compassionate.

No monetization opportunity there.

There’s no monetization.

Yeah, you say that because you hate content providers.

But here, I tell you, this is compassionate publishing.

I think the GPT, the chat GPT should be given a pass.

You have weird blinders on on this one, Jay Cal, to be honest.

No, they know who they got it from.

It’s a synthesis of lots of websites.

It’s a very smart synthesis.

You can build the software.

It’s not pulling a result from someone’s website.

It’s like read hundreds of websites and it’s like averaged them.


How do you pay for the average?

That’s complete bullshit.

They could say, as we ingest this stuff, tag it.

It’s not bullshit.

That is how it’s being done.

And then you could publish it.

When you publish it, you say, hey, where did we source this from?

Very simple.

Is that what you’re saying?

No, I’m saying it’s not bullshit.

That is what you said is exactly how it’s being done.

And Jay Cal, let’s say that the AI is using 100 different websites

and synthesizing 100 websites.

What’s the incentive for the marginal 100th website to say,

well, opt me out unless you pay me?


Right, so that’s the shakedown.

Google or OpenAI will just be like, okay, fine.

We’ll just work with the other 99.

And this is why content providers is my best piece of advice.

You ask the question, I’ll give you the answer.

Content providers, as a group, need to get together

and fight for their rights in unison.

You are nuts.

New York Times, Metacritic.

Fight for the right to party?

No, fight for the right to get paid and to survive.

I’ll tell you what I think is going to happen.

And say, as a group, either give us these terms or don’t index us.

You’re trying to unionize all the content creators.

Yes, absolutely unionize all of them.

They should be a united front like the music industry.

Why do you think the music industry gets paid by Peloton and anybody else?

It was easy.

Because the five of them get together and they fight.

There’s five of them and you can organize,

but there’s millions and millions of publishers.

I think the point here is that technology is fundamentally deflationary.

Here’s the next great example where the minute you make something incredible,

costs go down, but also, frankly,

revenue and profit dollars go down in the aggregate.

Doesn’t mean that one company can’t husband a lot of it

and do incredibly well like Google has done,

but it’s just going to fundamentally put pressure on all these business models.

I’ll tell you.

I think it’s important for Google to take…

Go ahead, Freeberg.

Google should go and they should cannibalize their own business

before it is cannibalized for them.

Freeberg, final word.

Here’s another way to think about it.

I think that if this goes as we all predict

and everyone’s saying it’s going to go,

it is more likely than not that many of these

quote, content publishers that aren’t adding very much marginal value

are going to go away.

That you could see the number of content sites

offering self-help advice and how to do this and how to do that.

95% of them go away

because all of that work gets aggregated and synthesized

and presented in a really simple, easy user interface

that makes them completely oblivious.

And I’m not discrediting the value that many content publishers provide,

but the requisite at that point

to be valued as a quote, novel content producer

is going to go way up.

The offset to that though,

is it’s so much easier to create content because of the AI.

Totally true.

We have this company, Copy AI,

where even before this chat GPT stuff,

you would just go there and say,

I want to write a blog about X, Y, and Z.

You just give it a title and it spits out a post

and then they’ll actually give you 10 different blog posts

and then you just select the one that is the direction you want to go

and you keep doing human selection on it.

But how does new intelligence get put back into the system?

That’s based on an existing corpus system.

No, you have like a corporate blog,

so you publish it to your corporate blog.

No, no, my point is,

if there is now some new information in the world,

who is going to add that to the corpus

if everybody is just stealing content and rewriting it?

Humans have always had a desire to create.

Most people create for free.

There’s a head of the long tail that actually gets compensated.

The rest of the long tails traditionally got nothing

and they do it because they want to create.

And now the creation is going to explode because it’s so easy.

Beethoven listened to Haydn

and then Beethoven wrote novel symphonies

and his symphonies were incredible

and he built on the experience of listening to Haydn.

The same is true of how content is going to evolve

and it’s going to evolve in a faster way because of AI.

And this content is not just being retrieved and reproduced,

it’s being synthesized and aggregated

and represented in a novel way.

Hold on, I want to answer to that.

I want to answer that, please.

If ChatGPT takes a Yelp review

and a Condé Nast Traveler review

and they represent it based on the best content

that’s out there that they’ve already ranked

because they have that algorithm with PageRank

or Bing’s ranking engine,

and then they republish it,

and then that jeopardizes those businesses.

That is profoundly unfair and not what we want for society.

And they are interfering with their ability

to leverage their own content.

It is profoundly unfair

and those magazines and newspapers need to…

You’re going to get steamrolled.

What’s that?

You’re going to get steamrolled.

It’s possible.

YouTube is a great example.

YouTube was going to get shut down.

Sequoia and the YouTube founders sold it to Google

because they were so scared of the Viacom lawsuit

and how well it was working against them.

They thought,

this business will never fly

if we don’t have a big partner like Google

to support the lawsuit.

They won the lawsuit or they settled it

because they were able to do Content ID

and allow content creators.

The only reason YouTube exists is…

Hold on, let me finish.

It’s because they let content creators

watermark and find their stolen content

and then claim it.

And when they claim the stolen content,

they were able to monetize it.

That’s what’s going to happen here.

There’ll be a settlement

where they are going to be able to claim their content.

I will bet anything.

I will bet any amount against your…

Let’s go better.

Let’s get it back going.

Your premonition here, Jay Cal.

Okay, let’s make a bet.

Propose a bet.

Propose a bet.

You’ve seen these AIs that generate images, right?

Like Stable Diffusion and like Wall-E or whatever.

You literally just tell it,

I want this image in this style

and boom, it’s done.

And it would take an artist weeks to produce that.

And you can do it in five seconds

and you could tell the AI, give me 20 of those

and then you just keep iterating

and in five minutes, you’ve got something mind-blowing.

So the fact that it’s so much easier to create content,

you can do the same thing with the written word.

The people who need to be compensated, Jay Cal,

if they don’t get what they want,

they may just go away,

but there’ll be 10 times or 100 times more people

waiting in a place to replace them.

Here’s how wrong you are.

Thank you for bringing up this example

so that I can prove how wrong you are.

Getty Images is suing Stable Diffusion at the moment.

Here is what the dipshits at Stable Diffusion did.

They train their AI on Getty Images

with the watermarks on them and they’ve been busted

and they are dead to rights now

and they are going to pay $100 million or more

to Getty Images for stealing their content

and allowing it to be republished in a commercial setting.

Those images don’t look too good to me.

Over time, this will get resolved, Jay Cal.

Stable Diffusion copied the Getty Image watermark

and put it on a reproduced work.

Okay, I think Stable Diffusion’s bigger problem

is they can’t do noses and ears and eyelids.

That looks like the bigger problem to me.

Anyway, shout out to Stable Diffusion

for stealing Getty Image content.

By the way, Mozart influenced by Haydn, not Beethoven.


By the way, there’s a really interesting topic about AI

that we don’t have time to get to this week,

but I think we should put it on the docket for next week,

which is should AIs be trained to lie?

Super important.

That’s happening right now.

Or have opinions.

The last thing I’ll say on this, from my perspective,

maybe we can jump on after this,

is this is the best thing that could happen

for all of the monopolists in technology

because Microsoft taking 500 or 600 basis points of share

is the best way to ensure that the FTC

has zero credibility in going after Google

or anybody else in tech.

All of those things, I think, are DOA.

So in some ways, actually, Google leaking

5% or 6% of the market share is a really good thing

because the FTC is rendered toothless

in making any claim.

Assuming they understand that.

That’s such a good point.

I mean, it’s kind of a good news, bad news scenario

with this whole thing.

The good news is that the Google monopoly

has finally been cracked.

The bad news is that it’s Microsoft

and even a bigger monopoly, that’s the one that’s done it.

But it just shows how vulnerable

all these big tech companies are.


Yeah, TBD.

And they may all end up competing with each other.

What’s great is everyone’s got a tactical nuclear weapon now

and we don’t know where it’s going to get pointed

and who’s going to set it off and where.

Like, the weaponry has completely changed.

Yeah, the weaponry totally changed.

And to prove how wrong you guys are,

here is the verge on the CoPilot.

Here’s the other lawsuit.

Open source writers.

Nick, are you feeding him this nonsense?

Is that what’s going on?

I’ve been tracking this.

You people haven’t.

You guys need to watch what’s happening right now.

CoPilot, GitHub, ChatGPT, and Microsoft

are being sued by developers

because CoPilot was built off of stolen content.

These lawsuits are just beginning

and it’s going to result in licensing fees.

This will be a transitory effect

and it won’t change the dynamics

of where this is going over the long term.

It’ll change the dynamics of YouTube in the long term,

so let’s keep going.

I don’t know, they’re doing pretty good.

We have a portfolio company called Sourcegraph,

which is building a code writing AI.

Why don’t you just put your logo page up

if you’re going to go through the whole portfolio?

No, they’re building something similar.

It’s opt-in.

You just opt-in to the, you know,

you just get all your customers to opt-in to it.

You want to just get paid to play.

Let’s move on to State of the Union.

All right, what do you want to move on?

You want to do the crackdown?

You want to do the Twitter execs?

I think Zach’s point about AI ethics

would be a great chat.

Let’s talk about it next week, though.

Yeah, I think it deserves more time.

The State of the Union,

I don’t know about you guys,

but I found it one of the more profoundly

disappointing, saddening States of the Union

I’ve ever seen.


Unpack that.


I think it was, you know,

we often kind of focus on the one-year cycle

of what the State of the Union says,

but I think what’s more important

is how much the data that’s coming through

in the State of the Union

supports the more scary long-term cycle.

I’ve talked about this a lot

on How Scared I Am

about kind of where we’re headed

with respect to the US’s ability

to fund its financial obligations.

And the scary moment at the State of the Union

besides Biden’s inability to kind of

articulate much very well,

which was honestly a really

discouraging sight to see,

was, you know,

when he talked about where, you know,

the Republicans are trying to cut

Social Security and Medicare,

the US Treasury put out a projection,

which I tweeted last week,

originally shared on Twitter by Lynn Alden.

This is the US Treasury’s forecast

of debt held by the United States over time.

And the assumptions in this forecast

are we’ve got a certain amount of debt today,

and we’re running Social Security

and Medicare forward without cuts.

And so what happens as we make

these Social Security and Medicare payments,

and we accrue and pay interest

on the debt that we hold today,

and we don’t change the tax rates

in this country, and this is what happens.

So it’s a runaway kind of debt scenario,

and the US, by definition,

has to default at some point

because you cannot tax every dollar

of the economy at 100% at some point.

And so, you know,

there are two ways this can go.

The first way is you have to cut back

on these major kind of, you know,

expense commitments that naturally

balloon over time,

and that is Social Security and Medicare.

And the other one

is that you just tax a lot more,

and when you tax a lot more,

economic growth gets affected,

and it makes it really hard

to eventually pay off that debt,

and the debt continues to spiral.

So I think what we saw was,

number one, the announcement by Biden,

hey, Republicans are the ones

who want to cut Social Security and Medicare,

and they all screamed,

and they said, no way, no way,

we’ll never do that,

and a lot of them did interviews afterwards

and said it’s total BS

that Biden would say that,

which I think supports

what the polls have shown,

which is on both sides of the aisle,

people do not want to see

Social Security and Medicare

cut in any way right now.

That means you can’t,

and you guys saw what happened in France

where they pushed back

the retirement age by two years,

and there was effectively riots

across the country.

I don’t know if you guys saw this

a few weeks ago, we didn’t talk about it,

but it was pretty brutal, pretty ugly.

And so this is a real cost

that’s coming bare.

It’s coming bare in the United States,

not just with the publicly funded

Social Security and Medicare programs,

but also with a lot of the private pensions

that are going to need to get bailed out

with the same federal money

because they’re not going to let

those things go bankrupt,

and that’s another trillion plus of liabilities.

So that cost is going to balloon,

and the only solution at that point

is to introduce massive tax hikes.

And so they propose this billionaire tax,

this tax on unrecognized capital gains.

It is literally,

if you keep Social Security and Medicare

where they are,

and you don’t pay down the debt,

and you don’t grow the economy fast enough,

you have to introduce

significant tax hikes across corporate

and the individual taxpayer base.

And so it really, again, if you zoom out,

it really indicates this steepening curve

that the US has to climb its way out of.

And as you tax more,

there’s less to invest in the economic growth.

The government is a far worse investor

in economic growth than the free market,

and that means that we can’t grow our way out

and grow GDP enough

to ultimately cover our debt obligations.

And this is what Dalio’s book

that I mentioned in 2021

was so kind of importantly sharing.

This is a multi-hundred year cycle,

and the last couple decades get really nasty.

And this chart,

which is a forecast from the actual US Treasury,

highlights the problem.

And the comments made at the Congress,

in front of the Congress this week

by the President of the United States,

indicates how serious of a problem

this is going to be

because no one wants to cut

these major cost obligations

that we have coming due.

And so…

What are you talking about?

Aren’t you and the Republicans,

you want to cut Medicare and get rid of it?

Is that what Biden said?

You guys want to get rid of it?

Hell no.

Okay, what was that kerfuffle about?

With your…

Who’s the person on your squad

who was yelling and screaming out

at the President of the United States?

Oh, that doesn’t matter.

That was just sort of…

But who was screaming at him?

Who was that person?

Let me tell you what happened

at the State of the Union

is that Biden was basically

trying to take a page

out of Bill Clinton’s playbook.

When Bill Clinton lost the midterms in 94,

he basically triangulated to the center

and he did two things.

He started going for kind of small ball.

He started playing small ball politics.

It was like school uniforms

and things like that

that were relatively unobjectionable

and that regular middle-class people

could get behind.

And then he basically posed

as the defender of entitlement programs.

Back then, in 96,

he ran against Dole by portraying Dole.

He went all the way back

to Dole’s vote against Medicare.

This is what the Biden team is teeing up

for the reelect in 24

is they’re talking about things like

curbing ticket master fees

and fixing right turn red lights.

I mean, seriously,

like total small ball, okay?

They’re going to try and pretend

like he wasn’t the most radical

tax and spend progressive

over the last two years

that we’ve really ever had

in American history.

They’re going to try

and make everyone forget that

and just talk about

the small, objectable stuff.

And then he’s also going to, again,

pose as the stalwart defender

of entitlement programs

that are very popular.

And partly, they’re doing this.

They’re already, I think,

getting ready for DeSantis on this

because if you read

some of the political analysis on this

and Josh Barrow had a good column

and Andrew Sullivan had a good column

talking about this,

that way back when DeSantis

was in Congress

and he was like a backbencher,

he voted for, you know,

some Republican budgets,

a Paul Ryan budget

that had some of this

entitlement reform in it.

So they’re going to try

and portray him

as against entitlement reform.

Now, I don’t think it’s going to work

because all he had to say

is like, listen,

that was a long time ago.

I wasn’t voting

for cutting entitlements.

I just voted for my party’s budget.

That’s irrelevant.

I can tell you

I will not cut entitlements.

So any smart Republican

is going to take

entitlement reform off the table

because it is a total third rail

and they will lose.

And I think Trump

had the right instincts on this

and I’m sure that any major Republican

will have the right instincts on this.

And you can see,

you see the way

they’re throwing Rick Scott

under the bus.

Rick Scott had this proposal

about having


go from being

sort of permanently entitled

to being something that

gets voted on every year.

And the rest of the Republican caucus

is like, hell no,

we’re not touching that.

And they can’t run away

fast enough from Rick Scott.

So Freiburg is right.

There is no appetite

for entitlement reform.

And I would tell

any Republican

if you want to do

entitlement reform,

it’s got to be bipartisan.

You’ve got to do

what Ronald Reagan did,

which is join hands

with Tip O’Neill

and Moynihan

and you jump off the cliff together.

Do not stick your neck out on this.

Jamal, any thoughts

on the State of the Union

writ large?


Marjorie Taylor Greene

yelling liar at the president?


Okay, well,

that’s the most boring

segment of the show.

I mean, like,

both sides

engaged in a lot of,

like, weirdness.

I mean,

Biden was, like,


at various points

in his speech.

It was quite bizarre.

And you’re right.

There were some Republicans

in the audience

who were braying

like jackasses.

And it’s unfortunate

because I think

Utterly, utterly disappointed.

I think if the Republicans

had just calmed down,

I think


sort of weird


where he was, like,

practically yelling,

it was like Abe Simpson,

you know,

old man yelling at the cloud.

Yeah, they

they do a good job

of, like,

right at the moment

of self-immolation,

they let him off the hook.


It’s really incredible.



they have no impulse control.

Right when they could just

be quiet,

sit there,



and let Biden

do the damage to himself,

they just cannot.

I like McCarthy.

I like McCarthy

telling Margie Telegreen,

shh, shh,

and Mitt Romney

telling that other liar guy

to get the hell out of here.


it’s always been hard

to control backbenchers.

This is the reality.

That does not speak

How do you,

how do you guys feel about

being taxed on

your change in net worth

from year to year?

You mean a wealth tax?

Wealth tax, yeah.

If it’s a,

if it’s for billionaires,

totally cool.

If it’s for centi-millionaires

or deca-millionaires,

absolutely off the table.

Tear cut off, huh?

We want those people

to grow their wealth

and invest.

The billionaires, yeah,


Is that what you think

is coming, Friedberg?


So hard to execute on.

What are you supposed to do?

I would love to see a website

where you have a piece of yarn.

You know those,

those sites where you have,

and then you have like

a little pin

and you kind of push the pin out

and the other one has to go in.

You can’t have it all.

You can’t have low taxes

and have these entitlement programs

and have this level of spending.

It’s impossible.

You have to tax.

That’s the only way.

Or you have to cut

the entitlement programs

or you have to cut the spending.

Well, you’re,

you’re right about that, Friedberg,

but let me tell you why

the American people

think it would be ridiculous

to cut their entitlements.

They’ve watched

as Washington spent

$8 trillion.


On forever wars in the Middle East.

They just watched

as Biden spent trillions

enriching the pharma companies

on a fugazi that didn’t work.

They’ve just watched

as hundreds of billions

went to climate special interests

of the Democratic Party.

Did you just say the vaccine

went to fugazi?

We talked about that.

Let me bring it back up.

Just say it.

No, don’t say it.

They’ve watched

as trillions.

Hold on.

They’ve watched

as trillions of dollars

have gone to the donor class

and they

are going to rise up

and say the hell with you

if you cut off

our social security

that we paid into

for decades

while enriching

all these special interests.

And I don’t buy them in one bit.

I don’t advocate

for any of these points.

And the bailouts

of corporations

in the great financial crisis.

You’re right.

I think it’s just an analytical

I think it’s just

an analytical certainty


you know,

you got to zoom out

and stop thinking about

the yearly cycle

and the election cycle

on this stuff

and just look at where we’re headed

over a multi-decade cycle.


And there’s just no resolution

to this problem.

What happens if there is a wealth tax?

Based on the way

we’re all oriented right now.


If there is a wealth tax,

let’s just say on billionaires

or percent of billionaires.

Let me just say one thing.

Sorry, Jacob,

but let me just say

What would they do?

Would they leave the country?

Go to Puerto Rico?


That did happen in France,

by the way.

I think 40% of the people

that were taxed left

and then they came back.

It would violate

our constitution.

That’ll be,

it’ll be litigated

for sure.

If you can get the cost

of energy in this country

to drop by 50 to 75%

and you can increase

energy capacity

by 10 to 20 fold,

then you have a fighting chance

because you can actually

grow the economy

out of the problem.

And that’s really where

I am optimistic

and excited about opportunities

like Fusion

and you guys can make fun of me

all you want.

But if we can get to a point

where we can increment

energy capacity

by an order of magnitude,

there is economic growth

that will arise from that

from all these new industries

and these production systems.

And that’s how we can

grow our way

out of the debt,


tax problem

where one of those three things

has to give

in the absence of that.

You know what the cheapest

source of energy is?

I’m generally excited.

You know what the cheapest

source of energy is today?


It’s three cents

a kilowatt hour.

Fission, you mean?

No, it’s Fusion.

It’s the sun

using solar panels.

There it is.

Yeah, the problem, Chamath,

honestly, let me just say

this one thing.

The problem is

can you scale

energy capacity by 10x?


That’s enough.

And that’s the real


while creating jobs.

That’s the real

techno-economic question, right?

I posted a link

in my reading list today

this week.

You guys can go look at it.

The most prolific distribution

of fusion technology

is China

actually deploying

solar on every single

rooftop in China.

The United States

could do it too

and you will

10x the power


Well, yeah.

I mean, they are



They’re increasing their

I mean, look,

they’re adding

and they want to

create intellectual


I love

these different forms

of fusion.

I just think it’s a


trodge to get it

because even

I’m not betting on it.

I’m just saying

there is a

I’m just agreeing with you.

I’m just building on your

point to say

it’s actually happening.

Fusion is

what is actually

creating abundant

zero-cost energy



And so look,

if we can increase

energy capacity

in this country by 10x,

energy production

capacity by 10x,

by putting solar

on every rooftop.

If we can,

we have a path out of

the entitlement,


debt problem.


one of those three things

is going to give

and it’s going to be ugly.

The thing that we are

lacking right now

is not actually

the generation capability,

which is incredibly cheap,

but it’s really

scalable storage.

And once we figure

that out,

which is actually

the real technical bottleneck

to abundant

zero-cost energy,

we’ll have

your boundary condition met

and we’ll have it

well before

different forms of fusion

are commercializable.

France had

an exodus

of an estimated

42,000 millionaires


2000 and 2012.

And really,

and before

Macron killed it.

They only had the

wealth tax for 12 years

and then they

reversed it.

They were just losing

their tax base

so violently

they had no choice.

That’s what’s

going to happen

in California

if they move forward

with this.

It’s happening

in California already

without the wealth tax.

It’s happening already

and now you look at it.

They’re stupidly

saying that

this wealth tax

is going to have

a 10-year look forward.

So everybody I know

is at least talking about,

hey, could this happen

in the next 10 years?

Because if it might

happen five years from now,

we’ve got to leave now

because if I wait

They’re going to chase you.

They’re going to chase me.


Specifically you.

They hate you.

No, I mean,

it’s a problem.

It is a serious problem.

But let me tell you,

I mean,

to Freeberg’s point,

it’s not just Ray Dalio,

the great

political satirist

Pedro O’Rourke

who died last year.

He wrote


American politics

is defined by the formula

X minus Y

equals a big stink

where X


what people want

from government

and Y

equals what they’re willing

to pay for government.

And that difference

is basically the big stink

and the job of politicians

is to manage

that stink.

And the problem is

the politicians

have not been doing

a good job managing it

and they increasingly

do a worse job

managing it.

So yeah,

at some point

it’s going to blow up.

You guys want to hear

a statistic?

I was pulling this

out the other day.

You know what the

budget per capita is

of the city of San Francisco?

So how much the city

spends per year

divided by the number

of people that live in the city?


we know it’s a couple

of billion dollar budget.

We know only a couple

of hundred thousand

billion dollar budget.


And it’s 800,000 residents?

It’s $18,000

per citizen per year.

That’s how much

the city of San Francisco


A third of that


by the way,

30% of it goes to,

or 25% goes to

public health care.

So it’s a $15,000

budget per capita.

It is more

than every single


of the union

on a per capita basis

except Oregon

and North Dakota

which have very weird



San Francisco

spends more

than every other

state per capita.

It spends more

in aggregate

than 16 US states.

And the federal

budget per capita

is $15,000.

The federal government’s

budget per capita

is $15,000.

So San Francisco

spends more than

15 states

and spends more per capita

than every other state

except two

and spends more than

the federal government

per capita.

And I think that really


and you need to tax

the base to do that,

and now we are seeing

San Francisco is

the largest population

of exodus,

a population exodus

of any city

and business exodus

of any city

in the United States.

That is your predictor.

That is your predictor

of where this goes.


in Miami, Florida,

by contrast,

has no state

income tax.

They just rely on

property tax and sales tax

which California

does as well.

There is a

income tax

and cap gains tax

of zero

in Florida

and they seem

to make it work.

880,000 people

was the peak

in San Francisco




And then in



So 10%

and it’s gone

even further

in 2020.

Some people think

it’s down to 650 now.

I think it is.

Hard to track,

but yeah.

Well, you have a lot

of people who owned


a well-heeled

group of individuals

living there,

and a lot of them

just still have their


but they’ve left

and then they’re

in the process

of selling their



the point is

increasing the tax rate

is a great

short-term solution,

but over the long


if that budget

per citizen

isn’t brought in line,

there is no way

to tax the base


without causing

the tax base

to leave.

Forget about

where this has


And so something

has to give.

Or you have to

have a miracle,

like an energy miracle,

but, you know,

we’ll all

keep investing

for that.

All right,


this has been

an amazing,

amazing episode

of the

All In Podcast,

115 episodes

for the


sultan of science,

and for the


David the Dove


I am the

world’s greatest


and I’m going

all in.

We’ll let your

winners ride.

Rain Man,

David Sachs.

I’m going

all in.

And instead,

we open-sourced

it to the fans,

and they’ve just

gone crazy with it.

I’m the queen

of quinoa.

I’m going

all in.

Let your

winners ride.

Let your

winners ride.

Let your

winners ride.

Besties are gone.

That’s my

dog taking a

notice in your

driveway, Sachs.

Oh, man.

We should all

just get a room

and just have

one big huge orgy

because they’re

all just useless.

It’s like this

sexual tension,

but they just

need to release


Wet your


Wet your feet.

We need to get


Besties are gone.

I’m going

all in.

I’m going

all in.

I’m going

all in.

I’m going

all in.

I’m going

all in.

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