The following is a conversation with Chamath Palihapitiya,

a venture capitalist and engineer,

founder and CEO of Social Capital,

previously an early senior executive at Facebook,

and is the co-host of the All In podcast,

a podcast that I highly recommend for the wisdom

and the camaraderie of the four co-hosts,

also known as besties.

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And now, dear friends,

here’s Chamath Balahapatiya.

You grew up in a dysfunctional household on welfare.

You’ve talked about this before.

What were for you personally, psychologically,

some difficult moments in your childhood?

I’ll answer that question in a slightly different way,

which is that I think when you grow up

in a household that’s defined by physical abuse

and psychological abuse,

you’re hypervigilant all the time.

And so it’s actually easier for me to point to moments

where I was happy,

or I felt compassion,

or I felt safe.

Otherwise, every moment,

I’ll give you a couple of examples.

Like, I was thinking about this a while ago.

There was a tree outside of my apartment

where we lived when I was growing up.

And my father would sometimes would make me go outside

to take the tree branch that he would hit me with.

And so you can imagine if you’re a 10, 11-year-old kid

and you have to deal with that, what do you do?

Well, a hypervigilant child learns

how to basically estimate the strength of these branches.

How far can he go before it breaks?

You have to estimate his anger

and estimate the effective strength of branches

and bring back something.

Because I remember these moments where if it was,

he would look at it and then he would make me go out again

and get it, get a different one.

Or there was a certain belt that he wore

that had this kind of belt buckle that stuck out.

And you just wanted to make sure

if that was the thing that you were gonna get hit by,

that it wasn’t the buckle facing out

because that really hurt.

And so you became hyper aware

of which part of the buckle was facing out

versus facing in in those moments.

And there are like hundreds of these little examples,

which essentially I would say the through line

is that you’re just so on edge, right?

And you walk into this house

and you’re just basically trying to get to the point

where you leave the house.

And so in that microcosm of growing up,

any moment that’s not like that is seared in my memory

in a way that I just can’t describe to a person.

I’ll give you an example.

I volunteered when I was in grade five or six,

I can’t remember which it was,

in the kindergarten of my school.

And I would just go and the teacher would

ask you to clean things up.

And at the end of that grade five year,

she took me and two other kids to Dairy Queen.

And I’d never gone to a restaurant, literally,

because we didn’t have the money.

And I remember the first time I tasted this

Dairy Queen meal, it was like a hamburger, fries,

and a Coke, and a Blizzard.

And I was like, what is this?

And I felt so special, because you’re getting something

that most people would take for granted.

Oh, it’s a Sunday, or I’m really busy,

let me go take my kid to fast food.

I think that until I left high school,

I think, and this is not just specific to me,

but a lot of other people,

it’s you’re in this hypervigilant loop,

punctuated with these incredibly visceral moments

of compassion by other people.

A different example, we had such a strict budget,

and we didn’t have a car.

And so, I was responsible with my mom

to always go shopping.

And so I learned very early on how to look for coupons,

how to buy things that were on sale or special.

And we had a very basic diet,

because you have to budget this thing really precisely.

But the end of every year where I lived,

there was a large grocery chain called Loblaws.

And Loblaws would discount a cheesecake

from 7.99 to 4.99.

And my parents would buy that once a year.

And we probably did that six or seven times.

And you can’t imagine how special we felt.

Myself, my two sisters, we would sit there,

we would watch the New Year’s Eve celebration on TV,

we would cut this cheesecake into five pieces.

It felt like everything.

So that’s sort of how my existence

when I was at that age is,

for better or for worse, that’s how I remember it.

The hyper-vigilance loop, is that still with you today?

What are the echoes of that that’s still with you today,

the good and the bad?

If you put yourself in the mind of a young child,

the thing that that does to you

is at a very core basic level, it says you’re worthless.

Because if you can step outside of that

and you think about any child in the world,

they don’t deserve to go through that.

And at some point, by the way, I should tell you,

I don’t blame my parents anymore.

It was a process to get there,

but I feel like they did the best they could.

And they suffered their own issues

and enormous pressures and stresses.

And so I’ve really, for the most part, forgiven them.

How did you, sorry to interrupt, let go of that blame?

That was a really long process where for,

I would say the first 35 years of my life,

I compartmentalized and I avoided all of those memories.

And I sought external validation.

Right, going back to this self-worth idea.

If you’re taught as a child that you’re worthless,

because why would somebody do these things to you?

It’s not because you’re worth something,

you think to yourself, very viscerally, you’re worth nothing.

And so then you go out and you seek external validation.

Maybe you try to go and get into a great college.

You try to get a good job.

You try to make a lot of money.

You try to demonstrate in superficial ways

with the car you drive or the clothes you wear

that you deserve people to care about you,

to try to make up for that really deep hole.

But at some point, it doesn’t get filled in.

And so you have a choice.

And so for me, what happened was

in the course of a six month period,

I lost my best friend and I lost my father.

And it was really like the dam broke loose

because the compartmentalization stopped working

because the reminder

of why I was compartmentalizing was gone.

And so I had to go through this period of disharmony

to really understand and steel man his perspective.

And can you imagine trying to do that,

to go through all of the things

where you have to now look at it from his perspective

and find compassion and empathy for what he went through?

And then I shift the focus to my mom.

And I said, well, you were not the victim, actually.

You were somewhat complicit as well

because you were of sound mind and body

and you were in the room when it happened.

So then I had to go through that process with her

and steel man her perspective.

And at the end of it, I never justified what they did,

but I’ve been able to forgive what they did.

I think they did the best they could.

And at the end of the day,

they did the most important thing,

which is they gave me and my sisters a shot

by emigrating, by giving up everything,

by staying in Canada

and doing whatever it took between the two of them

to sort of claw and scrape together enough money to live

so that my sisters and I could have a shot.

And I’m very thankful for them.

Could they have done better?

Obviously, but I’m okay with what has taken place.

But it’s been a long process of that steel manning

so that you can develop some empathy

and compassion and forgive.

Do you think if you talk to your dad

shortly after he died and you went through that process,

or today, you’ll be able to have the same strength

to forgive him?

I think it would be a very complicated journey.

I think I’ve learned to be incredibly open

about what has happened

and all of the mistakes I’ve made.

I think it would require him to be pretty radically honest

about confirming what I think he went through

because otherwise it just wouldn’t work.

Otherwise I would say, let’s keep things where they are,

which is I did the work with people that have helped me,

obviously, but it’s better for him to just,

kind of hopefully he’s looking from some place

and he’s thinking it was worth it.

I think he deserves to think that all of this,

because I think the immigrant challenge,

not even the immigrant challenge,

the lower middle class challenge,

anybody who really wants better for their kids

and doesn’t have a good toolkit to give it to them,

some of them just, they choke up on the bat.

They just get so agitated about this idea

that all this sacrifice will not be worth it,

that it spills out in really unproductive ways.

And I would put him in that category.

And their self-evaluation, introspection,

they have tunnel vision,

so they’re not able to often see the damage that did.

I mean, I know, like yourself, a few successful people

that had very difficult relationships with their dad.

And when you take the perspective of the dad,

they’re completely in denial about any of it.

So if you actually have a conversation,

there would not be a deep honesty there.

And I think that’s maybe in part the way of life.

Yeah, and I remember pretty distinctly after I left

and in my middle 30s, where by all measure,

I had roughly become reasonably successful.

And my dad didn’t particularly care about that,

which was so odd because I had to confront the fact

that whether it was a title or money or press clippings,

he never really cared.

He moved on to a different set of goals,

which was more about my character

and being a good person to my family

and really preparing me to lead our family

when he wasn’t there.

And that bothered me because I thought I got

to the finish line and I thought there was going to be

a medal, meaning like, I can tell you, Lex,

he never told me that he loved me.

I’m not sure if that’s normal or not.

It was my normality.

And I thought there’s gonna be something, some gold star,

which never appeared.

And so that’s like a hard thing to kind of confront

because you’re like, well, now what is this all about?

Was this all just kind of a ruse?

But then I realized, well, hold on a second.

There were these moments where in his way,

again, putting yourself in his shoes,

I think he was trying to say he was sorry.

He would hold my hand and he would interlock the fingers,

which I felt is, that’s a really intimate way

of holding somebody’s hand, I think.

So I remember those things.

So these are the things that are just etched in,

at least in my mind.

And at the end of it, I think I’ve done a decent job

in repairing my relationship with him,

even though it was posthumous.

It does make me wonder in which way you and I,

we might be broken and not see it.

It might be hurting others and not see it.

Well, I think that when you grew up

in those kinds of environments,

and they’re all different kinds of this kind of dysfunction,

but if what you get from that is that you’re not worthwhile,

you’re less than many, many other people,

when you enter adulthood or semi-adulthood

in your early 20s, you will be in a cycle

where you are hurting other people.

You may not know it.

Hopefully you find somebody who holds you accountable

and tells you and loves you enough through that.

But you are going to take all of that disharmony

in your childhood and you’re gonna inject that disharmony

into whether it’s your professional relationships

or your personal relationships or both

until you get to some form of rock bottom

and you start to repair.

And I think there’s a lot of people that resonate with that

because they have each suffered their own things

that at some point in their lives have told them

that they’re less than.

And then they go and cope.

And when you cope, eventually those coping mechanisms

escalate and at some point it’ll be unhealthy,

either for you, but oftentimes it’s for the people

around you.

Well, from those humble beginnings,

you are now a billionaire.

How has money changed your life

or maybe the landscape of experience in your life?

Does it buy happiness?

It doesn’t buy happiness,

but it buys you a level of comfort

for you to really amplify what happiness is.

I kind of think about it in the following way.

Let’s just say that there’s a hundred things on a table

and the table says, find happiness here.

And there are different prices.

The way that the world works

is that many of these experiences are cordoned off

a little bit behind the velvet rope,

where you think that there’s more happiness

as the prices of things escalate.

If you live in an apartment,

you admire the person with the house.

If you live in a house,

you admire the person with the bigger house.

That person admires the person with an island.

Some person drives their car,

admires the person who flies,

who admires the person who flies business class,

who admires the person who flies first to private.

There’s all of these escalations on this table.

And most people get to the first five or six.

And so they just naturally assume that items seven

through a hundred is really where happiness is found.

And just to tell you the finish line,

I’ve tried a hundred and back

and I’ve tried two more hundred to it.

And happiness isn’t there.

But it does give you a level of comfort.

I read a study and I don’t know if it’s true or not,

but it said that the absolute sort of like maximal link

between money and happiness is around $50 million.

And it was just like a social studies kind of thing

that I think one of the Ivy Leagues put out.

And underneath it, the way that they explained it

was because you could have a home,

you could have all kinds of the creature comforts,

you could take care of your family,

and then you were left to ponder

what it is that you really want.

I think the challenge for most people is to realize

that this escalating arms race of more things

will solve your problems is not true.

More and better is not the solution.

It’s this idea that you are on a very precise journey

that’s unique to yourself.

You are playing a game of which only you are the player.

Everybody else is an interloper.

And you have a responsibility to design the gameplay.

And I think a lot of people don’t realize that

because if they did,

I think they would make a lot of different decisions

about how they live their life.

And I still do the same thing.

I mean revert to basically running around

asking other people, what will make you like me more?

What will make me more popular in your eyes?

And I try to do it, and it never works.

It is just a complete dead end.

Is there negative aspects to money?

Like for example, it becoming harder

to find people you can trust?

I think the most negative aspect is that it amplifies

a 360 degree view of your personality.

Because there are a lot of people and society tells you

that more money is actually better.

You are a better person somehow.

And you’re factually more worthwhile

than some other people that have less money.

That’s also a lie.

But when you’re given that kind of attention,

it’s very easy for you to become a caricature of yourself.

That’s probably the single worst thing that happens to you.

But I say it in the opposite way.

I think all I’ve ever seen in Silicon Valley as an example,

is that when somebody gets a hold of a lot of money,

it tends to cause them to become exactly

who they were meant to be.

They’re either a kind person,

they’re either a curious person,

they’re either a jerk,

they’re either cheap.

They can use all kinds of masks,

but now that there’s no expectations

and society gives you a get out of jail free card,

you start to behave the way that’s most comfortable to you.

So you see somebody’s innate personality.

And that’s a really interesting thing to observe

because then you can very quickly bucket sort

where do you want to spend time

and who is really additive to your gameplay

and who is really a negative detractor to your gameplay.

You’re an investor, but you’re also a kind of philosopher.

You analyze the world in all its different perspectives

on all in podcasts, on Twitter, everywhere.

Do you worry that money puts you out of touch

from being able to truly empathize

with the experience of the general population,

which in part, first of all on a human level,

that could be limiting,

but also as an analyst of human civilization

that could be limiting?

I think it definitely can for a lot of people

because it’s an abstraction for you to stop caring.

I also think the other thing is that you can very quickly,

especially in today’s world, become the scapegoat

just to use a Girardian, like Rene Girard.

If you think about mimetic theory in a nutshell,

you know, we’re all competing for these very scarce resources

that we are told is worthwhile.

And if you view the world through that Girardian lens,

what are we really doing?

We are all fighting for scarce resources,

whether that’s Twitter followers, money, acclaim, notoriety,

and we all compete with each other.

And in that competition, you know, Girard writes like,

the only way you escape that loop

is by scapegoating something or somebody.

And I think we are in that loop right now

where just the fact of being successful

is a thing that one should scapegoat

to end all of this tension that we have in the world.

I think that it’s a little misguided

because I don’t think it solves the fundamental problem.

And we can talk about what the solution

to some of these problems are,

but that’s, I think, the loop that we’re all living.

And so if you become a caricature

and you feed yourself into it,

I mean, you’re not doing anything to really advance things.

Your nickname is The Dictator.

How’d you get the nickname?

We’re talking about the corrupting nature of money.

That came from poker.

In a poker game, you know, when you sit down, it’s chaos,

especially like in our home game,

there’s a ton of big egos.

There’s people always watching, you know,

rail-birding the game, all kinds of interesting folks.

And in that, somebody needs to establish hygiene and rules.

And I really care about the integrity of the game.

And it would just require somebody to just say,

okay, enough.

And so, and then people were just like,

okay, stop dictating.

And that’s where that nickname.

So who to you, speaking of which,

is the greatest poker player of all time

and why is it Phil Hellmuth?

Exactly.

You know, Muth probably knew this question was coming.

Here’s what I’ll say.

I think Hellmuth is the antidote to computers

more than any other player playing today.

And when you see him in a heads-up situation,

so I think like he’s played

nine or 10 heads-up tournaments in a row,

and he’s played like basically,

call it 10 of the top 20 people so far,

and he’s beaten all but one of them.

When you’re playing heads-up,

you know, 1v1,

that is the most

GTO understandable spot,

meaning game theory optimal position.

That’s where computers can give you an enormous edge.

The minute you add even a third player,

the value of computers

and the value of their recommendations

basically falls off a cliff, okay?

So one way to think about it is

Hellmuth is forced to play against people

that are essentially trained like AIs.

And so to be able to beat, you know,

eight out of nine of them

means that you are playing so orthogonally

to what is considered game theory optimal,

and you’re overlaying human reasoning,

the judgment to say,

well, in this spot, I should do X, but I’m going to do Y.

It’s not dissimilar in chess,

like what makes, you know, Magnus Carlsen so good.

You know, sometimes he takes these weird lines,

he’ll sacrifice positions,

you know, he’ll overplay certain positions

or certain, you know, bishops versus knights

and all of these spots that are very confusing.

And what it does is it throws people off their game.

I think he just won a recent online tournament

and it’s like by move six,

there is no GTO move for his opponent to make

because it’s like out of the rule book.

Maybe he read some game.

You know, I read the quote,

it was like he probably read some game

in some bar in Russia in 1954, memorized it.

And all of a sudden by six moves in,

the computer AI is worthless.

So that’s what makes Helmuth great.

There is one person that I think is superior.

And I think it’s what Daniel also said,

and I would echo that because I played Phil as well,

but Phil Ivey is the most well-rounded,

cold-blooded, bloodthirsty animal.

He’s just, and he sees into your soul, Lex,

in a way where you’re just like,

oh my God, stop looking at me.

Have you ever played him?

Yeah, yeah, we’ve played.

We’ve played and you know, he crushes the games.

Crushes the games.

So what does feeling crushed mean and feel like in poker?

Is it like that you just can’t read at all?

You’re being constantly pressured?

You feel off balance?

You try to bluff and the person reads you perfectly?

That kind of stuff?

So this is a really, really excellent question

because I think this has parallels

to a bunch of other things.

Okay, let’s just use poker as a microcosm

to explain a bunch of other systems or games.

Maybe it’s running a company or investing, okay?

So let’s use those three examples,

but we use poker to explain it.

What does success look like?

Well, success looks like you have positive expected value.

Right, in poker, the simple way to summarize that

is your opponent, let’s just say you and I are playing,

are gonna make a bunch of mistakes.

There’s a bunch of it that’s gonna be absolutely perfect.

And then there’s a few spots where you make mistakes.

And then there’s a bunch of places in the poker game

where I play perfectly and I make a few mistakes.

Basically your mistakes minus my mistakes is the edge, right?

That’s how poker works.

If I make fewer mistakes than you make,

I will make money and I will win.

That is the objective of the game.

Translate that into business.

You’re running a company, you have a team of employees,

you have a pool of human capital that’s capable

of being productive in the world and creating something.

But you are going to make mistakes in making that.

Maybe it doesn’t completely fit the market.

Maybe it’s mispriced.

Maybe it actually doesn’t require

all of the people that you need, so the margins are wrong.

And then there’s the competitive set

of all the other alternatives that customer has.

Their mistakes minus your mistakes is the expected value

of Google, Facebook, Apple, et cetera, okay?

Now take investing.

Every time you buy something,

somebody else on the other side is selling it to you.

Is that their mistake?

We don’t know yet.

But their mistakes minus your mistakes

is how you make a lot of money

over long periods of time as an investor.

Somebody sold you Google at $40 a share.

You bought it and you kept it.

Huge mistake on their part, minimum mistakes on your part.

The difference of that is the money that you made.

So life can be summarized in many ways in that way.

So the question is, what can you do

about other people’s mistakes?

And the answer is nothing.

That is somebody else’s game.

You can try to influence them.

You could try to subvert them.

Maybe you plant a spy inside of that other person’s company

to sabotage them.

I guess there are things at the edges that you can do.

But my firm belief is that life success

really boils down to how do you control your mistakes?

Now this is a bit counterintuitive.

The way you control your mistakes

is by making a lot of mistakes.

So taking risks is somehow a way to minimize

the number of mistakes.

Let’s just say you want to find love.

You want to find somebody to be deeply connected with.

Do you do that by not going out on dates?

Yes.

Sorry, sorry.

You’re the only person that thinks that’s a yes.

I’m joking, I’m joking.

No, but you know what I mean?

You have to date people.

You have to open yourself up.

You have to be authentic.

And you give yourself a chance to get hurt.

But you’re a good person.

So you know what happens when you get hurt?

That is actually their mistake.

Okay?

And if you are inauthentic, that’s your mistake.

That’s a controllable thing in you.

You can tell them the truth, who you are,

and say, here’s my pluses and minuses.

My point is there are very few things in life

that you can’t break down, I think,

into that very simple idea.

And in terms of your mistakes,

society tells you don’t make them

because we will judge you and we will look down on you.

And I think the really successful people realize

that actually, no, it’s the cycle time of mistakes

that gets you to success.

Because your error rate will diminish

the more mistakes that you make.

You observe them.

You figure out where it’s coming from.

Is it a psychological thing?

Is it a cognitive thing?

And then you fix it.

So the implied thing there is that there is,

in business and investing, in poker, in dating, in life,

is that there’s this platonic, GTO,

game theory optimal thing out there.

And so when you say mistakes,

you’re always comparing to that optimal path

you could have taken.

I think slightly different, I would say,

mistake is maybe a bad proxy,

but it’s the best proxy I have for learning.

But I’m using the language of what society tells you.

Sure, got it.

Society tells you that when you try something

and it doesn’t work, it’s a mistake.

So I just use that word

because it’s the word that resonates most with most people.

Got it.

The real thing that it is is learning.

Yeah, it’s like in neural networks, it’s loss.

It’s a neural network, it’s loss, exactly.

Yeah, right, so you’re using the mistake

that is the word that is most understandable,

especially by the way people experience it.

I guess most of life is a sequence of mistakes.

The problem is when you use the word mistake

and you think about mistakes,

it actually has a counterproductive effect

of you becoming conservative and just being risk averse.

So if you flip it and say,

try to maximize the number of successes,

somehow that leads you to take more risk.

Mistake scares people.

I think mistakes scare people

because society likes these very simplified boundaries

of who is winning and who is losing.

And they want to reward people

who make traditional choices and succeed.

But the thing is, what’s so corrosive about that

is that they’re actually not even being put in a position

to actually make a quote unquote mistake and fail.

So I’ll give you, if you look at like

getting into an elite school, right?

Society rewards you for being in the Ivy Leagues

in a way that, in my opinion, incorrectly,

doesn’t reward you for being in a non Ivy League school.

There’s a certain level of status

and presumption of intellect and capability

that comes with being there.

But that system doesn’t really have a counterfactual

because it’s not as if you both go to MIT and Ohio State.

And then we can see two versions of Lex Friedman

so that we can figure out that the jig is up

and there was no difference, right?

And so instead it reinforces this idea

that there is no truth seeking function.

There is no way to actually make this thing whole.

And so it tells you, you have to get in here.

And if you don’t, your life is over.

You’ve made a huge mistake, or you’ve failed completely.

And so you have to find different,

unique ways of dismantling this.

This is why part of what I’ve realized

where I got very lucky is I had no friends in high school.

I had a few cohort of acquaintances,

but part of being so hypervigilant when I grew up

was I was so ashamed of that world that I had to live in.

I didn’t wanna bring anyone into it.

I could not see myself that anybody would accept me.

But the thing with that is that I had no definition

of what expectations should be.

So they were not guided by the people around me.

And so I would escape to define my expectations.

It’s interesting, but you didn’t feel

like your dad didn’t put you in a prison of expectation?

Because if you don’t have a friend,

so the flip side of that, you don’t have any other signals.

It’s very easy to believe when you’re in a cult that.

Well, he was angry.

He pushed me.

He used me as a mechanism to alleviate his own frustration.

And this may sound very crazy, but he also believed in me.

And so that’s what created this weird duality

where you were just, I was always confused about.

You could be somebody great.

He believed that you could be somebody truly special.

I didn’t believe him

because I couldn’t reconcile

than the other half of the day, those behaviors.

But what it allowed me to do was I escaped in my mind

and I found these archetypes around me

that were saviors to me.

So I grew up in Ottawa, Ontario, Canada.

I grew up right at the point

where the telecom boom was happening.

Companies like Nortel and Newbridge Networks and Mitel,

Bell Northern Research,

these were all built in the suburbs of Ottawa.

And so there were these larger than life figures,

entrepreneurs, Terry Matthews, Michael Copeland.

And so I thought I’m gonna be like them.

I would read Forbes Magazine.

I would read Fortune Magazine.

I would look at the rich people on that list

and say, I would be like them,

not knowing that maybe that’s not who you wanted to be,

but it was a lifeline.

And it kept my mind relatively whole

because I could direct my ambition in a direction.

And so why that’s so important just circling back to this is

I didn’t have a group of friends who were like,

I’m gonna go to community college.

I didn’t have a group of friends that said,

well, the goal is just to go to university,

get a simple job and join the public service,

have a good life.

And so because I had no expectations

and I was so afraid to venture out of my own house,

I never saw what middle-class life was like.

And so I never aspired to it.

Now, if I was close to it,

I probably would have aspired to it

because my parents in their best year

made 32,000 Canadian together.

And if you’re trying to raise a family of five people

on $32,000, it’s a complicated job.

And most of the time

they were probably making 20 something thousand.

And I was working since I was 14.

So I knew that our station in life was not the destination.

We had to get out.

But because I didn’t have an obvious place,

it’s not like I had a best friend

whose house I was going to,

and I saw some normal functional home.

If I had had that in this weird way,

I would have aspired to that.

What was the worst job you had to do?

The best job, but the worst job

was I worked at Burger King when I was 14 years old

and I would do the closing shift.

And that was from like 6 p.m.

till about two in the morning.

And in Ontario, where I lived, Ottawa borders Quebec.

In Ontario, the drinking age is 19.

You can see where I’m going with this.

The drinking age in Quebec is 18.

And that year made all the difference to all these kids.

And so they would go get completely drunk.

They would come back.

They would come to the Burger King.

You would see all these kids you went to high school with.

Can you imagine how mortifying it is?

You’re working there in this getup.

And they would light that place on fire,

vomit everywhere, puking, pooing, peeing.

And when the thing shuts down at one o’clock,

you got to clean that all up, all of it.

Changing the garbage, taking it out.

It was a grind.

And it really teaches you, okay, I do not want this job.

I don’t want to.

But it’s funny that that didn’t push you

towards the stability and the security of the middle class.

I didn’t have any good examples of that.

I didn’t have those around me.

I was so ashamed.

I could have never built a relationship

where I could have seen those interactions to want that.

And so my desires were framed by these two random rich

people that lived in my town who I’d never met

and what I read in magazines about people

like Bill Gates and Warren Buffett.

You were an early senior executive at Facebook

during a period of a lot of scaling in the company history.

It’s actually a fascinating period of human history

in terms of technology.

Well, in terms of human civilization, honestly.

What did you learn from that time about what it takes

to build and scale a successful tech company?

A company that has almost immeasurable impact on the world.

That was an incredible moment in time

because everything was so new.

To your point, even how the standards of Web 2.0

at that time were being defined, we were defining them.

You know, I mean, I think if you look in sort of the,

if you search in the patents, patent library,

there’s a bunch of these patents that like me and Zuck have

for like random things like cookies, you know,

or like cross-site JavaScript,

like all these crazy things that are just like

these duh kind of ideas in 2023.

We had to invent our way around.

How do websites communicate with each other?

You know, how do we build in the cloud

versus in a data center?

How do we actually have high-performance systems?

You mentioned data science, the term and the idea.

We invented this, I invented this thing

called data scientist because we had a PhD from Google

that refused to join unless,

because he got a job offer that says data analyst.

And so we said, call him a scientist

because he was a PhD in particle physics.

So he really, you know, he was a scientist.

And I said, great, you’re a scientist here.

And that launched a discipline.

I mean, a term, you know, what’s a rose by any other name,

but yeah, like, you know, sometimes words like this

can launch entire fields.

And it did in that case.

And you didn’t, I mean, I guess at that time

you didn’t anticipate the impact of machine learning

on the entirety of this whole process

because you need machine learning to have both ads

and recommender systems to have the feed

for the social networks.

Exactly right.

The first real scaled version of machine learning,

not AI, but machine learning was this thing

that Facebook introduced called PYMK,

which is people you may know.

And the simple idea was that can we initiate

a viral mechanic inside the application

where you log in, we grab your credentials,

we go to your email inbox, we harvest your address book,

we do a compare, we make some guesses,

and we start to present to other people

that you may actually know

that may not be in your address book.

Really simple, you know, a couple of joins

or some tables, whatever.

And it started to just go crazy.

And the number of people that,

you were creating this density and entropy

inside this social graph

with what was some really simple basic math.

And that was eyeopening for us.

And what it led us down this path of

is really understanding the power

of like all this machine learning.

And so that infused itself into newsfeed,

you know, and how the content that you saw

could be tailored to who you were

and the type of person that you were.

So there was a moment in time

that all of this stuff was so new.

How did you translate the app to multiple languages?

How do you launch the company in all of these countries?

How much of it is just kind of stumbling into things

using your best, like first principles, gut thinking?

And how much is it like five, 10, 15, 20 year vision?

Like how much was thinking about the future

of the internet and the metaverse

and the humanity and all that kind of stuff?

Like, cause the newsfeed sounds trivial.

I’ll say something.

But that’s like changes everything.

Well, you have to remember like, you know,

newsfeed was named and we had this thing

where we would just name things what they were.

And at the time, all of these other companies,

and if you go back into the Wayback Machine,

you can see this.

People would invent, you know, an MP3 player

and they would come up with some crazy name

or they would invent a software product

and come up with a crazy name, right?

And it sounded like the pharma industry, you know,

blow Casimab, you know, tag your best friends.

And you think, what is this?

This makes no sense.

And, you know, this was Zuck’s thing.

He was like, well, this is a feed of news.

So we’re going to call it newsfeed.

This is where you tag your photos.

So we’re going to call that photo tagging.

I mean, literally, you know, pretty obvious stuff.

So the thing, the way that those things came about though

was very experimentally.

And this is where I think it’s really important

for people to understand.

I think Bezos explains this the best.

There is a tendency after things work

to create a narrative fallacy because it feeds your ego.

And you want to have been the person that saw it coming.

And I think it’s much more honest to say,

we were very good probabilistic thinkers

that tried to learn as quickly as possible,

meaning to make as many mistakes as possible.

You know, I mean, if you look at this very famous placard

that Facebook had from back in the day, what did it say?

It said, move fast and break things.

In societal language, that’s saying

make mistakes as quickly as you can.

Because the minute you break something,

you don’t do that by design.

It’s not a feature.

Theoretically, it’s a bug.

But he understood that and we embraced that idea.

I used to run this meeting once a week

where the whole goal was,

I want to see that there was a thousand experiments

that were run and show me them all

from the dumbest to the most impactful.

And we would go through that loop

and what did it train people?

Not that you got celebrated for the right answer,

but you got celebrated for trying.

I ran 12 experiments, 12 failed,

and we’d be like, you’re the best.

Can I just take a small tangent on that?

Is that move fast and break things

has become like a catchphrase

of the thing that embodies the toxic culture

of Silicon Valley in today’s discourse,

which confuses me.

Of course, words and phrases get sort of captured and so on.

Becomes very reductive.

That’s a very loaded set of words

that together can be, many years later,

people can view very reductive.

Can you steel man each side of that?

So pro move fast and break things

and against move fast and break things.

So I think the pro of move fast and break things

is saying the following.

There’s a space of things we know

and a massive space of things we don’t know.

And there’s a rate of growth of the things we know.

But the rate of growth of the things we don’t know

is actually, we have to assume, growing faster.

So the most important thing is to move into the space

of the things we don’t know as quickly as possible.

And so in order to acquire knowledge,

we’re going to assume that the failure mode

is the nominal state.

And so we just need to move as quickly as we can,

break as many things as possible,

which means like things are breaking in code.

Do the root cause analysis,

figure out how to make things better,

and then rapidly move into the space.

And he or she who moves fastest into that space will win.

It doesn’t imply carelessness, right?

It doesn’t imply moving fast

without also aggressively picking up the lessons

from the mistakes you make.

Well, again, that’s steel manning the pro,

which is it’s a thoughtful movement

around velocity and acquisition of knowledge.

Now let’s steel man the con case.

When these systems become big enough,

there is no more room to experiment in an open-ended way

because the implications have broad societal impacts

that are not clear upfront.

So let’s take a different, less controversial example.

If we said Lipitor worked well

for all people except South Asians,

and there’s a specific immunoresponse

that we can iterate to.

And if we move quickly enough,

we can run 10,000 experiments

and we think the answer is in that space.

Well, the problem is that those 10,000 experiments

may kill 10 million people.

So you have to move methodically.

When that drug was experimental

and it wasn’t being given to 500 million people in the world,

moving fast made sense because you could have a pig model,

a mouse model, a monkey model,

you could figure out toxicity,

but we picked all that low hanging fruit.

And so now these small iterations have huge impacts

that need to be measured and implemented.

Different example is like, you know, if you work at Boeing

and you have an implementation

that gives you a 2% efficiency

by reshaping the wing or adding winglets,

there needs to be a methodical move slow, be right process

because mistakes when they compound

when it’s already implemented and at scale

have huge externalities

that are impossible to measure until after the fact.

And you see this in the 737 Max.

So that’s how one would steel man the con case,

which is that when an industry becomes critical,

you got to slow down.

This makes me sad because some industries

like Twitter and Facebook are a good example.

They achieve scale very quickly

before really exploring the big area of things to learn.

So you basically pick one low hanging fruit

and that became your huge success.

And now you’re sitting there with that stupid fruit.

Well, so I think, so as an example, like, you know,

if you had to, you know,

if I was running Facebook for a day,

you know, the big opportunity in my opinion

was really not the metaverse,

but it was actually getting the closest

that anybody could get to AGI.

And if I had to steel man that product case,

here’s what how I would have pitched it to the board

and to Zuck, I would have said, listen,

there are three and a half billion people monthly

using this thing.

If we think about human intelligence very reductively,

we would say that there’s a large portion of it,

which is cognitive.

And then there’s a large portion of it, which is emotional.

We have the best ability to build a multimodal model

that basically takes all of these massive inputs together

to try to intuit how a system would react

to all kinds of stimuli.

That to me would been a profound leap forward for humanity.

Can you dig into that a little bit more?

So in terms of, now this is a board meeting,

how would that make Facebook money?

I think that you have all of these systems over time

that we don’t know could benefit from some layer of reasoning

to make it better.

What does Spotify look like when instead of just

a very simple recommendation engine,

it actually understands sort of your emotional context

and your mood and can move you to a body of music

that you would like?

What does it look like if your television,

instead of having to go and channel surf 50,000 shows

on a horrible UI, instead just has a sense

of what you’re into and shows it to you.

What does it mean when you get in your car

and it actually drives you to a place

because you should actually eat there

even though you don’t know it.

These are all random things that make no sense a priori,

but it starts to make the person or the provider

of that service, the critical reasoning layer

for all these everyday products that today

would look very flat without that reasoning.

And I think you license that and you make a lot of money.

So in many ways, instead of becoming more of the pixels

that you see, you become more of the bare metal

that actually creates that experience.

And if you look at the companies

that are multi-decade legacy kinds of businesses,

the thing that they have done is quietly

and surreptitiously move down the stack.

You never move up the stack to survive.

You need to move down the stack.

So if you take that OSI reference stack, right?

These layers, how you build an app from the physical layer

to the transport layer, all the way up to the app layer,

you can map from the 1980s,

all the big companies that have been created, right?

All the way from Fairchild Semiconductor and NatSemi

to Intel, to Cisco, to 3Com, you know,

Oracle, Netscape at one point,

all the way up to the Googles and Facebooks of the world.

But if you look at where all the lock-in happened,

it’s by companies like Apple who used to make software

saying, I’m gonna get one close.

I’m gonna make the bare metal

and I’m gonna become the platform.

Or Google, same thing.

I’m gonna create this dominant platform

and I’m gonna create a substrate

that organizes all this information.

That’s just omnipresent and everywhere.

So the key is, if you are lucky enough

to be one of these apps that are in front of people,

you better start digging quickly and moving your way down

and get out of the way and disappear.

But by disappearing, you will become much, much bigger

and it’s impossible to usurp you.

Yeah, I 100% agree with you.

That’s why you’re so smart.

This is the depersonalization

and the algorithms that enable depersonalization

almost like a operating system layer.

So pushing away from the interface

and the actual system that does the personalization.

I think the challenges there,

there’s obviously technical challenges,

but there’s also societal challenges

that it’s like in a relationship.

If you have an intimate algorithmic connection

with individual humans, you can do both good and bad.

And so there’s risks that you’re taking.

So if you’re making a lot of money now

as Twitter and Facebook with ads, surface layer ads,

what is the incentive to take the risk

of guiding people more?

Because you can hurt people, you can piss off people,

you can, I mean, there’s a cost

to forming a more intimate relationship with the users

in the short term, I think.

You said a really, really key thing,

which was a really great emotional instinctive reaction,

which is when I said the AGI thing,

you said, well, how would you ever make money from that?

That is the key.

The presumption is that this thing

would not be an important thing at the beginning.

And I think what that allows you to do,

if you were Twitter or Google or Apple or Facebook,

anybody, Microsoft embarking on building something like this

is that you can actually have it off the critical path

and you can experiment with this for years

if that’s what it takes to find a version one

that is special enough where it’s worth showcasing.

And so in many ways, you get the free option.

You’re going to be spending, any of these companies

will be spending tens of billions of dollars

in OpEx and CapEx every year and all kinds of stuff.

It is not a thing that money

actually makes more likely to succeed.

In fact, you actually don’t need to give

these kinds of things a lot of money at all

because starting in 2023, right now,

you have the two most important tectonic shifts

that have ever happened in our lifetime in technology.

They’re not talked about, but these things allow AGI,

I think, to emerge over the next 10 or 15 years

where it wasn’t possible for.

The first thing is that the marginal cost of energy is zero.

You’re not going to pay for anything anymore, right?

And we can double click into why that is.

And the second is the marginal cost of compute is zero.

And so when you take the multiplication or, you know,

if you want to get really fancy mathematically,

the convolution of these two things together,

it’s going to change everything.

So think about what a billion dollars gets today.

And we can use open AI as an example.

A billion dollars gets open AI

a handful of functional models

and a pretty fast iterative loop, right?

But imagine what open AI had to overcome.

They had to overcome a compute challenge.

They had to strip together a whole bunch of GPUs.

They had to build all kinds of scaffolding software.

They had to find data center support.

That consumes all kinds of money.

So that billion dollars didn’t go that far.

So it’s a testament to how clever that open AI team is.

But in four years from now, when energy costs zero

and basically GPUs are like, you know,

they’re falling off a truck

and you can use them effectively for free,

now all of a sudden a billion dollars

gives you some amount of teraflops of compute

that is probably the total number of teraflops

available today in the world.

Like that’s how gargantuan this move is

when you take these two variables to zero.

There’s like a million things to ask.

I almost don’t want to get distracted

by the marginal cost of energy going to zero

because I have no idea what you’re talking about there.

It’s fascinating.

Can I give you the 30 seconds?

Sure, yes.

So if you look inside of the two most progressive states,

the three most progressive states,

New York, California, and Massachusetts,

a lot of left-leaning folks,

a lot of people who believe in climate science

and climate change,

the energy costs in those three states

are the worst they are in the entire country.

And energy is compounding at three to 4% per annum.

So every decade to 15 years,

energy costs in these states double.

In some cases and in some months,

our energy costs are increasing by 11% a month.

But the ability to actually generate energy

is now effectively zero.

The cost per kilowatt hour

to put a solar panel on your roof

and a battery wall inside your garage,

it’s the cheapest it’s ever been.

These things are the most efficient they’ve ever been.

And so to acquire energy from the sun

and store it for your use later on

literally is a zero cost proposition.

So how do you explain the gap between the cost going up?

Great question.

So this is the other side of regulatory capture, right?

You know, we all fight to build monopolies.

While there are monopolies hiding in plain sight,

the utilities are a perfect example.

There are a hundred million homes in America.

There are about 1700 utilities in America.

So they have captive markets.

But in return for that captive market,

the law says need to invest a certain amount per year

in upgrading that power line,

in changing out that turbine,

in making sure you transition from coal to wind or whatever.

Just as an example,

upgrading power lines in the United States

over the next decade is a $2 trillion proposition.

These 1700 organizations have to spend,

I think it’s a quarter of a trillion dollars a year

just to change the power lines.

That is why, even though it costs nothing to make energy,

you are paying double every seven or eight years.

It’s CapEx and OpEx of a very brittle old infrastructure.

It’s like you trying to build an app

and being forced to build your own data center.

And you say, but wait, I just want to write to AWS.

I just want to use GCP.

I just want to move on.

All that complexity is solved for me.

And some law says, no, you can’t, you got to use it.

So that’s what consumers are dealing with,

but it’s also what industrial

and manufacturing organizations,

it’s what we all deal with.

So how do we get rid ourselves

of this old infrastructure that we’re paying for?

The thing that’s happening today, which I think is,

this is why I think it’s the most important trend

right now in the world,

is that 100 million homeowners

are each going to become their own little power plant

and compete with these 1700 utilities.

And that is a great-

In the United States or globally?

No, just deal with the United States for a second,

because I think it’s easier to see here.

100 million homes, solar panel on the roof.

And by the way, just to make it clear,

the sun doesn’t need to shine, right?

These panels now work where you have these UV bands

that can actually extrapolate beyond the visible spectrum.

So they’re usable in all weather conditions.

And a simple system can support you collecting enough power

to not just run your functional day-to-day life,

but then to contribute what’s left over back into the grid

for Google’s data center or Facebook’s data center,

where you get a small check.

The cost is going to zero.

How obvious is this to people?

You’re making this out?

Okay, so, because this is a pretty profound prediction.

If the cost is indeed go to zero,

that, I mean, the compute,

the cost of compute going to zero, I can-

So the cost of compute going to zero is-

Can kind of understand,

but the energy seems like a radical prediction of yours.

Well, it’s just naturally what’s happening, right?

Now, let me give you a different way of explaining this.

If you look at any system,

there’s a really important thing that happens.

It’s what Clay Christensen calls crossing the chasm.

If you explained it numerically,

here’s how I would explain it to you, Lex.

If you introduce a disruptive product,

typically what happens is the first three to 5% of people

are these zealous believers,

and they ignore all the logical reasons

why this product doesn’t make any sense,

because they believe in the proposition of the future

and they buy it.

The problem is at 5%.

If you want a product to get to mass market,

you have one of two choices,

which is you either bring the cost down,

low enough, or the feature set becomes so compelling

that even at a high price point.

An example of the latter is the iPhone.

The iPhone today, the 14 iPhone,

costs more than the original iPhone.

It’s probably doubled in price over the last 14 or 15 years,

but we view it as an essential element

of what we need in our daily lives.

It turns out that battery EVs and solar panels

are an example of the former,

because people like President Biden,

with all of these subsidies,

have now introduced so much money for people

to just do this,

where it is a money-making proposition

for 100 million homes.

And what you’re seeing as a result

are all of these companies

who want to get in front of that trend.

Why?

Because they want to own the relationship

with 100 million homeowners.

They want to manage the power infrastructure,

Amazon, Home Depot, Lowe’s.

Just name the company.

So if you do that and you control that relationship,

they’re gonna show you…

For example, Amazon will probably say,

if you’re a member of Prime,

we’ll stick the panels on your house for free.

We’ll do all the work for you for free.

And it’s just a feature of being a member of Prime.

And we’ll manage all that energy for you.

It makes so much sense.

And it is mathematically accretive for Amazon to do that.

It’s not accretive for the existing energy industry

because they get blown up.

It’s extremely accretive for peace and prosperity.

If you think the number of wars we fight

over natural resources,

take them all off the table

if we don’t need energy from abroad,

there’s no reason to fight.

You’d have to find a reason to fight.

Meaning, sorry, there’d be a moral reason to fight,

but the last number of wars that we fought

were not as much rooted in morality as they were rooted in.

Yeah, it feels like they were very much rooted

in conflict over resources, energy specifically.

And then, sorry, just the last thing I want to say,

I keep interrupting, apologies,

but the chips,

what people want to say is that,

now that we’re at two and three nanometer scale

for typical kind of like transistor fab, we’re done.

And forget about transistor density,

forget about Moore’s Law, it’s over.

And I would just say, no, look at teraflops.

And really, teraflops is the combination of CPUs,

but much and much less important,

and really is the combination of ASICs,

so application-specific ICs, and GPUs.

And so you put the two together,

I mean, if I gave you a billion dollars five years from now,

the amount of damage you could do, damage in good way,

in terms of building racks and racks of GPUs,

the kind of models that you could build,

the training sets and the data that you could consume

to solve a problem,

it’s enough to do something really powerful.

Whereas today, it’s not yet quite enough.

So there’s this really interesting idea that you talk about

in terms of Facebook and Twitter,

that’s connected to this,

that if you were running sort of Twitter or Facebook,

that you would move them all to like AWS.

So you would have somebody else

to compute the infrastructure.

It probably, if you could explain that reasoning,

means that you believe in this idea of energy going to zero,

compute going to zero,

so let people that are optimized in that do the best job.

And I think that’s a, you know,

the initially in the early 2000s

and the beginning of the 2010s,

if you were big enough scale,

oh, sorry, everybody was building their own stuff.

Then between 2010 through 2020,

really the idea was everybody should be on AWS

except the biggest of the biggest folks.

I think in the 2020s and 30s,

I think the answer is actually

everybody should be in these public clouds.

And the reason is the engineering velocity of the guts.

So, you know, take a simple example,

which is, you know,

we have not seen a massive iteration in database design

until Snowflake, right?

I think maybe Postgres was like

the last big turn of the dial.

Why is that?

I don’t exactly know,

except that everybody that’s on AWS

and everybody that’s on GCP and Azure

gets to now benefit from a hundred plus billion dollars

of aggregate market cap,

rapidly iterating, making mistakes,

fixing, solving, learning.

And that is a best in class industry now, right?

Then there’s going to be

all these AI layers around analytics

so that app companies can make better decisions.

All of these things

will allow you to build more nimble organizations

because you’ll have this federated model of development.

I’ll take these things off the shelf.

Maybe I’ll roll my own stitching over here

because the thing that where you make money

is still for most people

and how the apps provision an experience to a user.

And everybody else can make a lot of money

just servicing that.

So they work in a really,

they play well together in the sandbox.

So in the future, everybody just should be there.

It doesn’t make sense for anybody, I don’t think,

because if you were to roll your own data centers,

for example, like Google for a long time

had these massive leaps where they had GFS and Bigtable.

Those are really good in the 2000s and 2010s.

And this is not to throw shade at Google.

It’s very hard for whatever exists

that is the progeny of GFS and Bigtable

to be anywhere near as good

as $100 billion industries attempt to build that stack.

And you’re putting your organization

under enormous pressure to be that good.

I guess the implied risk taken there

is that you could become the next AWS,

like Tesla doing some of the compute in-house.

I guess the bet there is that you can become

the next AWS for the new wave of computation

if that level, if that kind of computation is different.

So if it’s machine learning,

I don’t know if anyone’s won that battle yet,

which is machine learning centric compute.

Well, I think that software has a very powerful property

in that there’s a lot of things

that can happen asynchronously

so that real-time inference

can be actually really lightweight code deployment.

And that’s why I think you can have

a very federated ecosystem inside of all of these places.

Tesla is very different

because in order to build the best car,

it’s kind of like trying to build the best iPhone,

which is that you need to control it

all the way down to the bare metal in order to do it well.

And that’s just not possible

if you’re trying to be a systems integrator,

which is what everybody,

other than this modern generation of car companies have been.

And they’ve done a very good job of that,

but it won’t be the experience

that allows you to win in the next 20 years.

So let’s linger on the social media thing.

So you said if you ran Facebook for a day,

let’s extend that.

If you were to build a new social network today,

how would you fix Twitter?

How would you fix social media?

If you wanna answer a different question

is if you were Elon Musk, somebody you know,

and you were taking over Twitter, what would you fix?

I’ve thought about this a little bit.

First of all, let me give you a backdrop.

I wouldn’t actually build a social media company at all.

And the answer is, the reasoning is the following.

I really tend to believe, as you probably got in a sense,

of sort of patterns and probabilities.

And if you said to me,

probabilistically answer where are we going

in apps and social experiences,

what I would say is, Lex,

we spent the first decade building platforms

and getting them to scale.

And if you wanna think about it,

again, back to sort of this poker analogy,

others’ mistakes minus your mistakes is the value.

Well, the value that was captured was trillions of dollars,

essentially to Apple and to Google.

And they did that by basically attracting billions

of monthly active users to their platform.

Then this next wave were the apps,

Facebook, QQ, Tencent, TikTok, Twitter, Snapchat,

that whole panoply of apps.

And interestingly, they were in many ways

an atomized version of the platforms, right?

They sat on top of them.

They were an ecosystem participant,

but the value they created was the same.

Trillions of dollars of enterprise value,

billions of monthly active users.

Well, there’s an interesting phenomenon

that’s kind of hiding in plain sight,

which is that the next most obvious atomic unit

are content creators.

Now, let me give you two examples.

Lex Friedman, this random crazy guy,

Mr. Beast, Jimmy Donaldson,

just the two of you alone added up, okay?

And you guys are going to approach

in the next five years a billion people.

The only thing that you guys haven’t figured out yet

is how to capture trillions of dollars of value.

Now, maybe you don’t want to,

and maybe that’s not your stated mission.

Right, right, but let’s just look at Mr. Beast alone

because he is trying to do exactly that probably.

Yeah, and I think Jimmy is gonna build

an enormous business.

But if you take Jimmy

and all of the other content creators, right?

You guys are atomizing what the apps have done.

You’re providing your own curated newsfeeds.

You’re providing your own curated communities.

You’re allowed, you let people move in and out

of these things in a very lightweight way.

And value is accruing to you.

So the honest answer to your question

is I would focus on the content creator side of things

because I believe that’s where the puck is going.

That’s a much more important shift

in how we all consume information and content

and are entertained.

It’s through brands like you.

Individual people that we can humanize

and understand are the filter.

But aren’t you just arguing

against the point you made earlier,

which is what you would recommend

is the invest in the AGI, the depersonalization?

Because they could still be a participant.

In that end state, if that happens,

you have the option value of being an enabler of that.

You can help improve what they do.

Again, you can be this bare metal service provider

where you can be a tax.

You can participate in everything that you do,

every question that’s asked, every comment that’s curated.

If you could have more intelligence

as you provide a service to your fans and your audience,

you would probably pay a small percentage of that revenue.

I suspect all content creators would.

And so it’s that stack of services

that is like a smart human being.

How do you help produce this information?

You would pay a producer for that.

I mean, maybe you would.

So back to your question.

So what would I do?

I think that you have to move into that world

pretty aggressively.

I think that right now you first have to solve

what is broken inside of these social networks.

And I don’t think it’s a technical problem.

So just to put it out there,

I don’t think it’s one

where there are these nefarious organizations.

That happens.

Brigading X, Y, Z, that happens.

But the real problem is a psychological one

that we’re dealing with,

which is people through a whole set of situations

have lost belief in themselves.

And I think that that comes up

as this very virulent form of rejection

that they tried to put into these social networks.

So if you look inside of comments on anything,

like you could have a person that says on Twitter,

I saved this dog from a fiery building

and there would be negative commenters.

And you’re like, well, again, put yourself in their shoes.

How do I steel man their case?

I do this all the time.

I get people throw shade at me.

I’m like, okay, let me steel man their point of view.

And the best that I can come up with is,

I’m working really hard over here.

I’m trying, I played by all the rules

that were told to me.

I’ve played well, I’ve played fairly,

and I am not being rewarded in a system of value

that you recognize.

And that is making me mad.

And now I need to cope and I need to vent.

So back in the day, my dad used to drink.

He would make me go get things to hit me with.

Today, you go to Twitter, you spot off,

you try to deal with the latent anger that you feel.

So a social network has to be designed in my opinion

to solve that psychological corner case

because it is what makes a network unusable.

To get real density, you have to find a way

of moving away from that toxicity

because it ruins a product experience.

You could have the best pixels in the world,

but if people are virulently spitting into their keyboards,

other people are just gonna say,

you know what, I’m done with this.

It doesn’t make me feel good.

So the social network has to have a social cost.

You can do it in a couple of ways.

One is where you have real world identity.

So then there’s a cost to being virulent

and there’s a cost to being caustic.

A second way is to actually just overlay

an economic framework so that there’s a more

pertinent economic value that you assign

to basically spouting off.

And the more you wanna spend, the more you can say.

And I think both have a lot of value.

I don’t know what the right answer is.

I tend to like the latter.

I think real world identity shuts down a lot of debate

because there’s still too much,

you know, there’s a sensation

that there’ll be some retribution.

So I think there’s more free speech over there,

but it cannot be costless because in that,

there’s a level of toxicity

that just makes these products unusable.

Third option.

And by the way, all of these can work together.

If we look at this, what you call the corner case,

which is hilarious, what I would call the human condition,

which is, you know, that anger is rooted

with the challenges of life.

And what about having an algorithm

that shows you what you see

that’s personalized to you

and helps you maximize your personal growth in the longterm

such that you’re challenging yourself,

you’re improving, you’re learning.

There’s just enough of criticism to keep you on your toes,

but just enough of like the dopamine rush

to keep you entertained

and finding that balance for each individual person.

You just described an AGI

of a very empathetic, well-rounded friend.

Yes, exactly.

And then you can throw that person, even anonymous,

into a pool of discourse and they would be better.

I think you’re absolutely right.

That is a very, very, very elegant way of stating it.

You’re absolutely right.

But like you said, the AGI might be a few years away,

so that’s a huge investment.

My concern, my gut feeling is this thing we’re calling AGI

is actually not that difficult to build technically,

but it requires a certain culture

and it requires a certain risks to be taken.

I think you could reductively boil down

the human intellect into cognition and emotion.

And depending on who you are and depending on the moment,

they’re weighted very differently, obviously.

Cognition is so easily done by computers

that we should assume that that’s a soft problem.

So our differentiation is the reasoning part.

It’s the emotional overlay.

It’s the empathy.

It’s the ability to steel man the opposite person’s case

and feel why that person, you can forgive them

without excusing what they did, as an example.

That is a very difficult thing, I think,

to capture in software,

but I think it’s a matter of when, not if.

If done crudely, it takes a form of censorship,

just banning people off the platform.

Let me ask you some tricky questions.

Do you think Trump should have been removed from Twitter?

No.

What’s the pro case?

I’m having fun here.

Do you steel man each side?

Yeah.

Let’s steel man the, get him off the platform.

Here we have a guy who is virulent in all ways.

He promotes confrontation.

He lacks decorum.

He incites the fervent believers of his cause

to act up and push the boundaries bordering on

and potentially even including breaking the law.

He does not observe the social norms

of a society that keep us well-functioning,

including an orderly transition of power.

If he is left in a moment where he feels trapped

and cornered, he could behave in ways

that will confuse the people that believe in him

to act in ways that they so regret

that it could bring our democracy to an end

or create so much damage or create a wound that’s so deep,

it will take years of conflict

and years of confrontation to heal it.

We need to remove him and we need to do it now.

It’s been too long.

We’ve let it go on too long.

The other side of the argument would be

he was a duly elected person whose views

have been run over for way too long.

And he uses the ability to say extreme things

in order to showcase how corrupt these systems have become

and how insular these organizations are

in protecting their own class.

And so if you really wanna prevent class warfare,

and if you really wanna keep the American dream alive

for everybody, we need to show that the First Amendment,

the Constitution, the Second Amendment,

all of this infrastructure is actually bigger

than any partisan view, no matter how bad it is.

And that people will make their own decisions.

And there are a lot of people

that can see past the words he uses

and focus on the substance of what he’s trying to get across

and more generally agree than disagree.

And so when you silence that voice,

what you’re effectively saying is this is a rigged game.

And all of those things that we were told were not true

are actually true.

If you were to look at the crude algorithms of Twitter,

of course, I don’t have any insider knowledge,

but I could imagine that they saw the,

let’s say there’s a metric that measures

how negative the experience is of the platform.

And they probably saw in several ways,

you could look at this,

but the presence of Donald Trump on the platform

was consistently increasing how shitty people are feeling,

short-term and long-term,

because they’re probably yelling at each other,

having worse and worse and worse experience.

If you even do a survey of how do you feel

about using this platform over the last week,

they would say horrible relative to maybe a year ago

when Donald Trump was not actively tweeting or so on.

So here you’re sitting at Twitter and saying,

okay, I know everyone’s talking about speech

and all that kind of stuff,

but I kind of want to build a platform

where the users are happy

and they’re becoming more and more unhappy.

How do I solve this happiness problem?

Well, let’s ban the sources of the unhappiness.

Now we can’t just say,

you’re a source of unhappiness, we’ll ban you.

Let’s wait until that source says something

that we can claim breaks our rules,

like incites violence or so on.

That would work if you could measure

your construct of happiness properly.

The problem is I think what Twitter looked at

was that people were active commenters

and got it confused for overall system happiness.

Because for every piece of content

that’s created on the internet,

of the hundred people that consume it,

maybe one or two people comment on it.

And so by over amplifying that signal

and assuming that it was the plurality of people,

that’s where they actually made a huge blunder

because there was no scientific method, I think,

to get to the answer of deplatforming him.

And it did expose this idea that it’s a bit of a rigged game

and that there are these deep biases

that some of these organizations have

to opinions that are counter to theirs

and to their orthodox view of the world.

So in general, you lean towards keeping,

first of all, presidents on the platform,

but also controversial voices.

All the time.

I think it’s really important to keep them there.

Let me ask you a tricky one in the recent news

that’s become especially relevant for me.

What do you think about if you’ve been paying attention

to Kanye West, a recent controversial outburst

on social media about Jews, black people,

racism in general, slavery, Holocaust,

all of these topics that he touched on in different ways

on different platforms, but including Twitter.

What do you do with that?

And what do you do with that from a platform perspective

or what do you do from a humanity perspective

of how to add love to the world?

Should we take both sides of that?

Sure.

Option one is he is completely out of line

and option two is he’s not.

Just to simplify.

So the path one is he’s an incredibly important

tastemaker in the world that defines the belief system

for a lot of people.

And there just is no room for any form of racism

or bias or antisemitism in today’s day and age,

particularly by people whose words and comments

will be amplified around the world.

We’ve already paid a large price for that.

And then the expectation of success is some amount

of societal decorum that keeps moving the ball forward.

The other side would say life, I think,

goes from harmony to disharmony to repair.

And anybody who has gone through a very complicated divorce

will tell you that in that moment,

your life is extremely disharmonious

and you are struggling to cope.

And because he is famous, we are seeing

a person really struggling in a moment that may need help.

And we owe it to him, not for what he said

because that stuff isn’t excusable,

but we owe it to him to help him in a way.

And particularly his friends.

And if he has real friends, hopefully what they see

is that what I see on the outside looking in

is a person that is clearly struggling.

Can I ask you like a human question?

And I know it’s outside looking in,

but there’s several questions I wanna ask.

So one is about the pain of going through a divorce

and having kids and all that kind of stuff.

And two, when you’re rich and powerful and famous,

I don’t know, maybe you can enlighten me

to which is the most corruptive.

But how do you know who are the friends to trust?

So a lot of the world is calling Kanye insane

or like has mental illness, all that kind of stuff.

And so how do you have friends close to you

that say something like that message,

but from a place of love

and where they actually care for you

as opposed to trying to get you to shut up?

The reason I ask all those questions, I think,

if you care about the guy, how do you help him?

Right.

I’ve been through a divorce.

It’s gut-wrenching.

The most horrible part is having to tell your kids.

I can’t even describe to you how proud I am

and how resilient these three beautiful little creatures

were when my ex-wife and I had to sit them down

and talk through it.

And for that thing, I’ll be just so protective of them

and so proud of them.

It’s hard.

Now, I don’t know that that’s what he went through,

but it doesn’t matter.

In that moment, there’s no fame, there’s no money,

there’s nothing.

There’s just the raw intimacy of a nuclear family

breaking up in that.

There is a death, and it’s the death of that idea.

And that is extremely, extremely profound in its impact,

especially in your children.

It is really hard, really hard.

Could you have seen yourself in the way you see the world

being clouded during, especially at first,

to where you would make poor decisions

outside of that nuclear family?

So like poor business decisions, poor tweeting decisions,

poor writing decisions.

I think that if I had to boil down a lot of those,

what I would say is that there are moments in my life, Lex,

where I have felt meaningfully less than.

And in those moments, the loop that I would fall into

is I would look to cope and be seen by other people.

So I would throw away all of the work I was doing

around my own internal validation.

And I would try to say something or do something

that would get the attention of others.

And oftentimes, when that loop was unproductive,

it’s because those things had really crappy consequences.

So that was, yeah, so yeah, I went through that as well.

So I had to go through this disharmonious phase in my life

and then to repair it.

I had the benefit of meeting someone

and building a relationship block by block

where there was just enormous accountability,

where my partner Nat has just incredible empathy,

but accountability.

And so she can put herself in my shoes

sometimes when I’m a really tough person to be around,

but then she doesn’t let me off the hook.

She can forgive me, but it doesn’t make

what I may have said or whatever excusable.

And that’s been really healthy for me.

And it’s helped me repair my relationships,

be a better parent, be a better friend to my ex-wife,

who’s a beautiful woman who I love deeply

and will always love her.

And it took me a few years to see that,

that it was just a chapter that had come to an end,

but she’s an incredible mother

and an incredible business woman.

And I’m so thankful that I’ve had

two incredible women in my life.

That’s like a blessing.

To what it’s hard.

So with Nat, it’s hard to find a person that has that.

I mean, a lot of stuff you said is pretty profound,

but having that person who has empathy and accountability.

So basically that’s ultimately what great friendship is,

which is people that love you, have empathy for you,

but can also call you out on your bullshit.

She’s a LeBron James-like figure.

And the reason I say that is I’ve seen

and met so many people.

I’ve seen the distribution on the scale

of friendship and empathy.

She’s the LeBron James of friendship.

She’s a goat.

Well, what’s so funny is like,

we have a dinner around poker

and it’s taken on a life of its own,

mostly because of her, because these guys look to her.

And I’m like, whoa, whoa, whoa.

She’s taking like, her registers are already full.

She’s thinking of all kinds of crap with me.

But it’s a very innate skill and it’s paired with,

but it’s not just an emotional thing,

meaning she’s the person that I make all my decisions with.

These decisions we’re making together as a team.

I’ve never understood that.

You know, there’s that African proverb,

like go fast, go alone, go far, go together.

And Lex, since I was born, I was by myself

and I had to cope.

And I didn’t have a good toolkit to use into the world.

And in these last five or six years, she’s helped me.

And at first my toolkit was literally like sticks, you know?

And then I found a way to, you know,

she helped me sharpen a little rock

and that became a little knife, but even that was crap.

And then she showed me fire and then I forged a knife.

And that’s what it feels like.

Where now this toolkit is like most average people.

And I feel humbled to be average

because I was here, down here on the ground.

So it’s made all these things more reasonable.

So I see what comes from having deep,

profound friendships and love

to help you through these critical moments.

I have another friend who I would say

just completely unabashedly loves me.

This guy, Rob Goldberg.

He doesn’t hold me accountable that much, which I love.

Like I could say, I killed a homeless person.

He’s like, ah, they probably deserve it.

You know, whereas Nat would be like,

that was not good, what you just did.

So, but I have both.

I mean, I have Nat every day.

You know, Rob, I don’t talk to that often,

but to have two people, I had zero.

I think most people unfortunately have zero.

So I think like what he needs

is somebody to just listen.

You don’t have to put a label on these things.

And you just have to try to guide

in these very unique moments

where you can just like deescalate

what is going on in your mind.

And I suspect what’s going on in his mind,

again, to play armchair quarterback, I don’t know,

is that he is in a moment

where he just feels lower than low.

And we all do it.

We’ve all had these moments

where we don’t know how to get attention.

And if you didn’t grow up in a healthy environment,

you may go through a negative way to get attention.

And it’s not to excuse it, but it’s to understand it.

That’s so profound, the feeling less than

and at those low points going externally to find it

and maybe creating conflict and scandal

to get that attention.

The way that my doctor explained it to me is

you have to think about your self-worth like a knot.

It’s inside of a very complicated set of knots.

So it’s like some people don’t have these knots.

It’s just presented to you on a platter.

But for some of us, because of the way we grow up,

it’s covered in all these knots.

So the whole goal is to loosen those knots.

And it happens slowly, it happens unpredictably,

and it takes a long time.

And so while you’re doing that,

you are gonna have moments where when you feel less than,

you’re not prepared to look inside and say,

actually, here’s how I feel about myself.

It’s pretty cool, I’m happy with where I’m at.

I have to ask on the topic of friendship,

you do an amazing podcast called All In Podcast.

People should stop listening to this and go listen to that.

You just did your 100th episode.

I mean, it’s one of my favorite podcasts, it’s incredible.

For the technical and the human psychological wisdom

that you guys constantly give

in the way you analyze the world,

but also just the chemistry between you.

You’re clearly, there’s a tension,

and there’s a camaraderie that’s all laid out on the table.

So I don’t know the two Davids that well,

but I have met Jason.

What do you love about him?

I mean, I’ll give you a little psychological breakdown

of all three of these guys.

Sure.

Just my opinion.

Yeah. And I love you guys.

Would they agree with your psychological breakdown?

I don’t know.

I think that what I would say about Jekyll

is he is unbelievably loyal to no end.

And he’s like any of those movies

which are about the mafia or whatever,

where something bad’s going wrong

and you need somebody to show up, that’s Jekyll.

So if you killed the said proverbial homeless person,

he would be right there to help you.

He’d bury the body. Yeah.

But he’s the one that he’ll defend you

in every way, shape, or form.

Even if it’s not, doesn’t make sense in that moment.

He doesn’t see that as an action

of whether it’ll solve the problem.

He sees that as an act of devotion to you, your friend.

And that’s an incredible gift that he gives us.

The other side of it is that Jekyll needs to learn

how to trust that other people love him back

as much as he loves us.

And that’s where he makes mistakes

because he assumes that he’s not as lovable

as the rest of us.

But he’s infinitely more lovable than he understands.

I mean, you have to see Lex, he is unbelievably funny.

I mean, I cannot tell you how funny this guy is.

Next level funny.

Yeah, his timing.

Timing. Everything, everything.

Charm, the care he takes.

So he is as lovable, but he doesn’t believe himself to be.

And that manifests itself in areas

that drive us all crazy from time to time.

Which makes it for a very pleasant listening experience.

Okay, so what about the two Davids?

David Sachs and David Friedberg?

David Sachs is the one that I would say

I have the most emotional connection with.

He and I can go a year without talking

and then we’ll talk for four hours straight.

And then we know where we are.

And we have this ability to pick up

and have a level of intimacy with each other.

And I think that’s just because I’ve known David

for so long now.

That I find really comforting.

And then Friedberg is this person who I think similar to me

had a very turbulent upbringing,

has fought through it to build an incredible life

for himself.

And I have this enormous respect for his journey.

I don’t particularly care about his outcomes, to be honest.

But I just have, I look at that guy and I think,

he did it.

And so if I didn’t do it,

I would be glad that he did it.

If it makes any sense.

And you can see that he feels like his entire responsibility

is really around his kids.

And to kind of like give a better counterfactual.

And sometimes I think he gets that right and wrong.

But he’s a very special human being that way.

On that show, the two of you have a very kind of,

like from a geopolitics perspective,

I don’t know, there’s just a very effective way

to think deeply about the world,

the big picture of the world.

He’s a very systems level thinker,

which I really, really like.

That’s a good way to put it, yeah.

Very, very.

Absolutely.

Very systems level.

So looking at everything.

And he’s very rooted in a broad body of knowledge,

which I have a tremendous respect for.

He brings all these things in.

Sachs is incredible

because he has this unbelievable understanding of things,

but it has a core nucleus.

So Freeberg can just basically abstract

a whole bunch of systems and talk about it.

I tend to be more like that,

where I try to kind of, I find it to be more of a puzzle.

Sachs is more like anchored in a philosophical

and historical context as the answer.

And he starts there,

but he gets to these profound understandings

of systems as well.

On the podcast, in life,

you guys hold to your opinion pretty strong.

What’s the secret to being able

to argue passionately with friends?

So hold your position,

but also not murder each other,

which you guys seem to come close to.

I think it’s like strong opinions, weakly held.

So I think that they’re-

Wait, is that a haiku or is it?

Can you explain that please?

You know, like, look, today, you and I,

what have we, we steel man,

like the two sides of three different things.

Now you could be confused

and think I believe in those things.

I believe that it’s important

to be able to intellectually traverse there,

whether I believe in it or not.

And like steel man, not strong man.

That’s a really-

But we intro those things by saying,

let us steel man this position.

Sometimes you guys skip the-

We skip, you’re right.

We edit those things out

and sometimes we’ll sit on either sides

and we’ll just kind of bat things back and forth

just to see what the other person thinks.

So that’s how, like, as fans,

we should listen to that sometimes.

Like, so sometimes,

because you hold a strong opinion sometimes.

Like, for example, the cost of energy going to zero.

Is that, like, what’s the degree of certainty on that?

Is this kind of like you really taking a prediction

of how the world will unroll?

And if it does, this will benefit a huge amount

of companies and people that will believe that idea.

So you really, you’re like,

you spend a few days, a few weeks with that idea.

I’ve been spending two years with that idea.

And that idea has manifested into many pages and pages

of more and more branches of a tree.

But it started with that idea.

So if you think about this tree,

this logical tree that I built,

I would consider it more of a mosaic.

And at the base or root,

however you want to talk about it,

is this idea, the incremental cost of energy goes to zero.

How does it manifest?

And so I talked about one traversal,

which is the competition of households versus utilities.

But if even some of that comes to pass,

we’re going to see a bunch of other implications

from a regulatory and technology perspective.

If some of those come to pass,

so I’ve tried to think sort of this,

you know, six, seven, eight hops forward.

And I have some, like to use the chess analogy,

I have a bunch of short lines, which I think can work.

And I’ve started to test those by making investments,

tens of millions over here to a hundred millions over there.

But it’s a distribution based on how probabilistic

I think these outcomes are

and how downside protected I can be

and how much I will learn,

how many mistakes I can make, you know, et cetera.

And then very quickly over the next two years,

some of those things will happen or not happen

and I will rapidly re-underwrite.

And I’ll rewrite that tree

and then I’ll get some more data,

I’ll make some more investments

and I’ll rapidly re-underwrite.

So, you know, in order for me to get to this tree,

maybe you can ask, how did I get there?

It was complete accident.

The way that it happened was I have a friend of mine

who works at a great organization called Fortress.

His name is Drew McKnight.

And he called me one day and he said,

hey, I’m doing a deal, will you anchor it?

We’re going public.

And it’s a rare earth mining company.

And I said, Drew, like if I’m gonna get tarred

and feathered in Silicon Valley

for backing a mining company.

And he said, Chamath, just talk to the guy and learn.

And the guy, Jim Latinsky blew me away.

He’s like, here’s what it means for energy

and here’s what it means for the supply chain.

Here’s what it means for the United States versus China.

But Lex, I did that deal and then I did seven others.

And that deal made money, the seven others did not.

But I learned, I made enough mistakes

where the net of it was I got to a thesis

that I believed in, I could see it.

And I was like, okay, I paid the price.

I acquired the learning.

I made my mistakes.

I know where I am at.

And this is step one.

And then I learned a little bit more.

I made some more investments.

And that’s how I do the job.

The minute that you try to wait for perfection

in order to make a bet either on yourself

or a company, a girlfriend, whatever, it’s too late.

So if we just linger on that tree,

it seems like a lot of geopolitics,

a lot of international military even conflict

is around energy.

So how does your thinking about energy

connect to what you see happening in the next 10, 20 years?

Maybe you can look at the war in Ukraine

or relationship with China and other places

through this lens of energy.

What’s the hopeful, what’s the cynical trajectory

that the world might take with this drive

towards zero energy, zero cost energy?

So the United States was in a period of energy surplus

until the last few years, some number of years in Trump.

And I think some number of now the current administration

with President Biden.

But we know what it means

to basically have more than enough energy

to fund our own domestic manufacturing and living standards.

And I think that by being able to generate this energy

from the sun, that is very capex efficient,

that is very climate efficient, gives us a huge tailwind.

The second thing is that we are now in a world,

in a regime for many years to come

of non-zero interest rates.

And it may interest you to know

that really the last time

that we had long dated wars supported

at low interest rates was World War II,

where I think the average interest rates

was like 1.07% in the 10 year.

And every other war tends to have

these very quick open and closes

because these long protracted fights

get very difficult to finance when rates are non-zero.

So just as an example, even starting in 2023,

so the practical example today in the United States

is President Biden’s budget is about 1.5 trillion

for next year.

That’s not including the entitlement spending, okay?

Meaning Medicare, Social Security, right?

So the stuff that he wants to spend

that he has discretion over is about 1.582 trillion

is the exact number.

Next year, our interest payments

are going to be $455 billion.

That’s 29% of every budget dollar is going to pay interest.

So you have these two worlds coming together, right, Lex?

If you have us hurtling forward

to being able to generate our own energy

and the economic peril that comes

with trying to underwrite several trillion dollars for war,

which we can’t afford to pay when rates are at 5%,

means that despite all the bluster,

the probabilistic distribution of us engaging in war

with Russia and Ukraine seems relatively low.

The override would obviously be a moral reason to do it

that may or may not come

if there’s some nuclear proliferation.

But now you have to steel man

the other side of the equation,

which is, well, what were to happen

if you were sitting there and you were Putin?

Let’s steel man setting off a tactical nuke someplace.

Okay, I’m getting calls every other day

from my two largest energy buyers, India and China,

telling me, slow my roll.

I have the entire world looking to find the final excuse

to turn me off and unplug me from the entire world economy.

The only morally reprehensible thing

that’s left in my arsenal

that could do all of these things together

would be to set off a tactical nuke.

I would be the only person since World War II

to have done that.

I mean, it seems like it’s a really, really,

really big step to take.

And so I think that X of the clamoring for war

that the military industrial complex wants us to buy into,

the financial reasons to do it

and the natural resources needs to do it

are making it very unlikely.

That is not just true for us.

I think it’s also true for Europe.

I think the European economy is going to roll over.

I think it’s going, I see a very hard landing for them,

which means that if the economy slows down,

there’s gonna be less need for energy.

And so it starts to become a thing

where a negotiated settlement

is actually the win-win for everybody.

But none of this would be possible

without zero interest rates.

In a world of zero interest rates, we would be in war.

So you believe in the financial forces

and pressures overpowering the human ones?

I believe in the invisible hand.

I really do believe in the invisible hand.

Even in international war?

More so there.

I think the invisible hand,

and by the invisible hand for the audience,

I think really what it means is

the financial complex and really the central bank complex

and the interplay between fiscal and monetary policy

is a very convoluted and complicated set of things.

But if we had zero interest rates,

we would be probably in the middle of it now.

See, there’s a complexity to this game

at the international level

where some nations are authoritarian

and there’s significant corruption.

And so that adds, from a game theoretic optimal perspective,

you know, the invisible hand is operating in the mud.

Preventing war.

The person that is the most important figure

in the world right now is Jerome Powell.

He is probably doing more to prevent war than anybody else.

He keeps ratcheting rates.

It’s just impossible.

It’s a mathematical impossibility for the United States

unless there is such a cataclysmic

moral transgression by Russia.

So there is tail risk that it is possible

where we say, forget it, all bets are off.

We’re going back to zero rates.

Issue a hundred year bond.

We’re gonna finance a war machine.

There is a small risk of that.

But I think the majority of outcomes

is more of a negotiated settlement.

So what about, I mean,

what’s the motivation of Putin

to invade Ukraine in the first place?

If financial forces are the most

powerful forces, why did it happen?

Because it seems like there’s other forces at play

of maintaining superpower status on the world stage.

Yeah.

It seems like geopolitics doesn’t happen

just with the invisible hand in consideration.

I agree with that.

I can’t beg to know, to be honest.

I don’t know.

But he did it.

And I think it’s easier for me

to guess the outcome from here.

It would have been impossible for me to really understand.

It is what got him to this place.

But it seems like there’s an end game here

and there’s not much playability.

Yeah.

I feel like I’m on unsteady ground

because there’s been so many experts

at every stage of this that have been wrong.

Well, there are no experts.

Well, on this.

There are no experts, Lex.

I understand this.

Well, let’s dig into that.

Because we just said Phil Hellmuth

is the greatest poker player of all time.

He has an opinion.

Yeah.

He doesn’t, they would be mistaken.

Phil, are you an expert at poker?

Phil has an opinion.

Ivy has an opinion as well on how to play all these games.

Meaning an opinion means here’s the lines I take,

here are the decisions I make.

I live and die by those.

And if I’m right, I win.

If I’m wrong, I lose.

I’ve made more mistakes than my opponent.

I thought you said there’s an optimal.

So aren’t there people that have a deeper understanding,

a higher likelihood of being able to describe

and know the optimal, the optimal set of actions here

at every layer?

Well, there may be a theoretically

set of optimal decisions,

but you can’t play your life against a computer.

Like meaning the minute that you face an opponent

and that person takes you off that optimal path,

you have to adjust.

Yeah.

Like what happens if a tactical nuke?

It would be really bad.

I think the world is resilient enough.

I think the Ukrainians are resilient enough to overcome it.

It would be really bad.

It’s just an incredibly sad moment in human history.

But do you wonder what US does?

Is there any understanding?

Do you think people inside the United States understand?

Not the regular citizens, but people in the military.

Do you think Joe Biden understands?

Do you think-

I think Joe Biden does understand.

I think that-

You think they have a clear plan?

I think that there are few reasons

to let the gerontocracy rule,

but this is one of the reasons

where I think they are better adept than other people.

You know, folks that were around during the Bay of Pigs,

folks that hopefully have studied that

and studied nuclear de-escalation

will have a better playbook than I do.

My suspicion is that there is a,

in an emergency break glass plan.

And I think before military intervention or anything else,

I think that there are an enormous number

of financial sanctions that you can do

to just completely cripple Russia

that they haven’t undertaken yet.

And if you couple that with an economic system in Europe

that is less and less in need of energy,

because it is going into a recession,

it makes it easier for them to be able to walk away

while the US ships a bunch of LNG over there.

So I don’t know the game theory on all of this,

but does it make you nervous

that or are we just being temperamental?

It feels like the world hangs in a balance.

Like it feels like, at least from my naive perspective,

I thought we were getting to a place

where surely human civilization can’t destroy itself.

And here’s a presentation of what looks like a hot war

where multiple parties involved in escalating,

escalation towards a world war

is not entirely out of the realm of possibility.

It’s not.

I would really, really hope that he is spending time

with his two young twins.

Well, this is part of what I-

I really hope he’s spending time with his kids.

Agreed, but not kids, not just kids, but friends.

I’m not sure that he may not have friends,

but it’s very hard for anybody to look at their kids

and not think about protecting the future.

Well, there’s partially because of the pandemic,

but partially because of the nature of power,

it feels like you’re surrounded by people

you can’t trust more and more.

I do think the pandemic had an effect on that too,

the isolating effect.

A lot of people were not their best selves

during the pandemic.

From a super heavy topic, let me go back to the space

where you’re one of the most successful people in the world.

How to build companies, how to find good companies,

what it takes to find good companies,

what it takes to build good companies.

What advice do you have for someone

who wants to build the next super successful startup

in the tech space and have a chance to be impactful,

like Facebook, Apple?

That’s, I think that’s the key word.

If your precondition is to start something successful,

you’ve already failed

because now you’re playing somebody else’s game.

What success means is not clear.

You’re walking into the woods.

It’s murky, it’s dark, it’s wet, it’s raining.

There’s all these animals about.

There’s no comfort there.

So you better really like hiking.

And there’s no short way to shortcut that.

So-

Isn’t it obvious what success is?

Like success is scale, so it’s not, what are the-

No, I think that there’s a very brittle, basic definition

of success that’s outside in,

but it’s not, that’s not what it is.

I know people that are much, much, much richer than I am,

and they are just so completely broken.

And I think to myself,

the only difference between you and me

is outsider’s perception of your wealth versus mine.

But the happiness and the joy that I have

in the simple, basic routines of my life

give me enormous joy.

And so I feel successful,

no matter what anybody says about my success

or lack of success.

There are people that live normal lives,

that have good jobs, that have good families.

I’ve had this like idyllic sense,

like I see it on TikTok all the time, so I know it exists.

These neighborhoods where there’s like a cul-de-sac

and these beautiful homes and these kids are biking around.

And every time I see that, Lex,

I immediately flashback to what I didn’t have.

And I think that’s success.

Look at how happy those kids are.

So no, there is no one definition.

And so if people are starting out

to try to make a million dollars,

a hundred million dollars, a billion dollars,

you’re gonna fail.

There’s a definition of personal success,

but there’s also some level of,

that’s different from person to person,

but there’s also some level of the responsibility you have

if there’s a mission to have a positive impact on the world.

So I’m not sure that Elon is happy.

No, in fact, I think if you focus

on trying to have an impact on the world,

I think you’re gonna end up deeply unhappy.

But does that matter?

Like why does your own personal happiness matter?

It may happen as a byproduct,

but I think that you should strive

to find your own personal happiness

and then measure how that manifests

as it relates to society and to other people.

But if the answer to those questions is zero,

that doesn’t make you less of a person.

No, a hundred percent.

But then the other way,

is there times when you need to sacrifice

your own personal happiness for a bigger thing

that you’ve created?

Yeah, if you’re in a position to do it,

I think some folks are tested.

Elon is probably the best example.

And it must be really, really hard to be him.

Really hard.

I have enormous levels of empathy and care for him.

I really love him as a person

because I just see that it’s not that fun.

And he has these ways of being human

that in his position, I just think are so dear

that if he never, I just hope he never loses them.

Just a simple example, like two days ago,

I don’t know why, but I went on Twitter

and I saw the perfume thing.

So I’m like, ah, fuck it.

I’m just gonna go buy some perfume.

So I bought his perfume, the burnt hair thing.

And I said, and I emailed him the receipt

and I’m like, all right, you got me for a bottle.

And he responded in like eight seconds

and it was just a smiley face or whatever.

Just deeply normal things that you do amongst people

that are just, so nobody sees that, you know what I mean?

But it would be, he deserves for that stuff to be seen

because the rest of his life is so brutally hard.

He’s just a normal guy that is just caught

in this ultra mega vortex.

Why do you think there’s so few elons?

It’s an extremely lonely set of trade-offs.

Because to your point, if you get tested,

so if you think about it again probabilistically,

there’s 8 billion people in the world.

Maybe 50 of them get put in a position

where they are building something

of such colossal importance that they even have this choice.

And then of that 50, maybe 10 of them are put in a moment

where they actually have to make a trade-off.

You’re not gonna be able to see your family.

I’m making this up.

You’re not gonna be able to see your family.

You’re gonna have to basically move into your factory.

You’re gonna have to sleep on the floor.

But here’s the outcome, energy independence

and resource abundance and a massive peace dividend.

And then he says to himself, I don’t know that he did

because I’ve never had this.

Yeah, you know what, that’s worth it.

And then you look at your kids and you’re like,

I’m making this decision.

I don’t know how to explain that to you.

You wanna be in that position?

There’s no amount of money

where I would wanna be in that position.

So that takes an enormous fortitude

and a moral compass that he has.

And that’s what I think people need

to appreciate about that guy.

It’s also on the first number you said,

it’s confusing that there’s 50 people or 10 people

like that are put in the position

to have that level of impact.

It’s unclear that that has to be that way.

It seems like there could be much more.

There should be, there’s definitely people

with the potential.

But think about his journey.

His mom had to leave a very complicated environment,

moved to Canada, moved to Toronto,

a small apartment just north of Bayon Bloor,

if you’ve ever been to Toronto.

I remember talking to her about this apartment.

It’s so crazy because I used to live

like around the corner from that place

and raise these three kids and just have to.

So how many people are gonna start

with those boundary conditions?

And really grind it out?

It’s just very few people in the end

that will have the resiliency to stick it through

where you don’t give into the self-doubt.

And so it’s a really, it’s just a really hard set

of boundary conditions where you can have 50

or 100 of these people.

That’s why they needed to be really,

they need to be really appreciated.

Yeah, well, that’s true for all humans

that follow the thread of their passion

and do something beautiful in this world.

That could be on a small scale or a big scale.

Appreciation is, that’s a gift you give

to the other person, but also a gift to yourself.

That somehow it becomes like this contagious thing.

I went to this, you are so right.

You’re just like, my brain just lit up

because yesterday I went to an investor day

of my friend of mine, this guy, Brad Gerstner.

And on the one very reductive world,

Brad and I are theoretically competitors, but we’re not.

He makes his own set of decisions.

I make my own set of decisions.

We’re both trying to do our own view

of what is good work in the world,

but he’s been profoundly successful.

And it was really the first moment of my adult life

where I could sit in a moment like that

and really be appreciative of his success

and not feel less than.

And so, a little selfishly for me,

but mostly for him as well,

I was so proud to be in the room.

That’s my friend.

That guy plays poker with me every Thursday.

He is crushing it.

I, it’s awesome.

And that’s the, it’s a really amazing feeling.

I mean, to linger on the trade-offs,

the complicated trade-offs with all of this,

what’s your take on work-life balance

in a company that’s trying to do big things?

I think that you have to have

some very, very strict boundaries,

but otherwise I think balance is kind of dumb.

It will make you limited.

I think you need to immerse yourself in the problem,

but you need to define that immersion with boundaries.

So if you ask me, what does my process look like?

It’s monotonous and regimented,

but it’s all the time except when it’s not.

And that’s also monotonous and regimented.

Um, and I think that makes me very good at my craft

because it gives me what I need

to stay connected to the problem

without feeling resentful about the problem.

Which part, the monotonous all-in nature of it,

or the, when you say hard boundaries,

essentially go all out until you stop,

and you don’t stop often.

I’m in a little bit of a quandary right now

because I’m trying to redefine my goals.

And you’re catching me in a moment where

I have, even in these last few years of evolution,

think I’ve made some good progress,

but in one very specific way, I’m still very reptilian.

And I’m trying to let go.

Which way is that exactly?

If you can-

You know, in my business, it really gets reduced

to what is your annual rate of compounding?

That’s my demarcation.

You know, Steph Curry and LeBron James, Michael Jordan,

it’s how many points did you average?

Not just in a season, but over your career.

You know, and in their case,

to really be the greatest of all time.

It’s points, rebounds, assists, steals.

There’s all kinds of measures to be, you know,

in that pantheon of being really, really good at your craft.

And in my business, it’s very reductive.

It’s how well have you compounded?

And if you look at all the heroes

that I have put on a pedestal in my mind,

they’ve compounded, you know,

at above 30% for a very long time, as have I.

But now I feel like I really need to let go

because I think I know how to do the basics of my job.

And if I had to summarize like an investing challenge

or investing, I think really it’s, you know,

when you first start out investing,

you’re a momentum person.

You saw it in GameStop,

just a bunch of people aping each other.

And then it goes from momentum

to you start to think about cash flows.

You know, how much profit is this person gonna make?

Whatever.

So that’s like the evolution, you know?

This is the basic thing to,

this is a reasonably sophisticated way.

Then a much smaller group of people

think about it in terms of macro geopolitics.

But then a very finite few crack this special code,

which is there’s a philosophy

and it’s the philosophy that creates the system.

And I’m scratching at that furiously,

but I cannot break through and I haven’t broken through.

And I know that in order to break through,

I gotta let go.

So this is the journey that I’m in as in my,

in my professional life.

So it is an all-consuming thing,

but I’m always home for dinner.

You know, we have very prescribed moments

where we take vacation.

The weekends, you know, like if I,

I can tell you about my week if you’re curious,

but it’s like-

I would love, I would love to know your week.

It’s since it’s regimented and monotonous.

I woke up, I wake up at 6.45,

get the kids, go downstairs.

We all have some form of, you know,

not super healthy breakfast.

I make a latte.

I’ve become in, and the latte is like,

I have a machine.

I measure the beans.

You know, I make sure that the timer is such

where I have to pull it for a certain specific ratio.

You know, just so you know, 20 grams,

I got to pull 30 grams with the water.

And I got, you know, I got to do it in 30 seconds, et cetera.

So you’re a coffee snob.

It helps me stay in rhythm.

Sure.

Before I used to have another machine,

I just pushed a button.

But then I would push the button religiously

in the exact same way.

You know what I mean?

Okay, can I say actually on that topic,

you know, the morning with kids

can be a pretty stressful thing.

Are you able to find sort of happiness?

Is that also that morning is a source of happiness?

It’s great.

My kids are lovely.

They’re maniacs.

I just see, you know, and maybe I don’t,

I’ve never asked Friedberg this,

but I’ll just put my words.

I see all of the things in moments

where there was no compassion given to me.

And so I just give them a ton of love and compassion.

I have an infinite patience for my children,

not for other kids.

Yes, of course.

But for my kids.

So anyway, so we have a breakfast thing.

And then I go upstairs and I go,

I change and I work out from eight to nine.

And that’s like the first 15 minutes

I walk up on a steep incline, you know,

12 to 14%, you know, three and a half

to four miles per hour walk.

And then, you know, Monday’s a push day,

Tuesday’s front of the legs,

Wednesday’s pull, Thursday’s back of the legs.

Eight to nine.

Monday, I always start,

I talk to my therapist from nine to 10.

So as soon as I finished working out,

I get on the phone and I talk to him.

And it helps me lock in for the week.

And I’m just talking about the past.

And it’s just helping me.

The recent past?

Usually, sometimes the recent past,

but usually it’s about the past past.

Something that I remember when I was a kid.

Because that’s the work

about just loosening those knots, you know?

So I put in that hour of work, respect that hour.

Then I’m in the office.

And then it’s like, you know, I go until 12, 15, 12, 30,

go home, have lunch, like a proper,

like go home, sit down, have lunch with Nat, talk.

She leaves her work and we talk, how are we doing?

You know, just check in.

Our youngest daughter will be there

because she’s one and she’s making a mess.

And then I’ll have another coffee.

That’s it, my limit for the day.

Oh, no more caffeine.

That’s it.

And then I go back to the office

and I’ll be there until six, seven sometimes.

And I do that Monday, Tuesday, Wednesday, Thursday.

Monday, Tuesday, Thursday, Friday,

I’m allowed to have meetings.

Wednesday, nothing, it’s all reading, must be.

Unless it’s a complete emergency,

it has to be kind of a full reading.

Reading is a bunch of blogs, YouTube videos.

So no, try not to do any talking.

No talking, it’s like being in silence,

being present, thinking about things.

By the way, how do you take notes?

Do you have a-

A sketch, I have a pad and I write stuff down.

Sometimes I go to my phone.

I’m a little all over the place.

Sometimes I do Google Docs.

I don’t have, this is one thing

I need to get better at actually.

But typically what happens is

I actually do a lot of thinking in my mind

and I’m sort of filing a lot of stuff away.

And then it all spills out and then I have to write.

And then that gives me a body of work

that I can evaluate and think about.

And then I usually put it away.

And a lot of the time it goes nowhere.

But every now and then I come back to it

and it just unlocks two or three things

and I have a sense of how else I’m thinking about things.

And then Friday at the end of the day,

Nat and I talked to a couples therapist.

And that’s about checking out properly.

So it’s like, okay, now it’s like focusing.

The weekend is family, being present, being aware.

And if there’s email, obviously.

If I have to do meetings from time to time, no problem.

But there’s boundaries.

Checking out properly.

Oh man, that is so powerful.

Just like officially transitioning.

Yeah.

So these are really important boundaries

so that I can be immersed.

And what that means is like, look,

on a Saturday afternoon, on a random day,

she’ll be like, where’s Chamath?

And I’ll be up in my room.

And I’ve found a podcast talking about like a thesis,

which is like ductal cancer in situ

because I’ve been fascinated about breast cancer surgeries

for a while and learning about that.

And she’s like, what are you doing?

I’m like, I’m listening to a podcast about thesis.

And she’s like, what’s that?

And I’m like, ductal cancer in situ.

She’s like, okay.

And so I have time to continue

to just constantly learning, learning,

putting stuff in my memory banks to organize into something.

And that’s a week.

But then in these fixed moments of time,

phone down, everything down.

We go on vacation, we go on a boat,

we go to whatever, where it’s just us and the kids.

Is there a structure when you’re at work?

Is there a structure to your day in terms of meetings,

in terms of South Side of Wednesday?

You know, cause you’re-

Have to keep meetings to less than 30 minutes.

Have to.

And, you know, oftentimes meetings can be as short

as like 10 or 15 minutes because then I’m just like, okay.

Cause I’m trying to reinforce that it’s very rare

that we all have something really important to say.

And so the ritual that is becomes really valuable

to get scale is not the ritual of meetings,

but the ritual of respecting the collective time

of the unit.

And so it’s like, you know what, folks,

I’m gonna assume that you guys are also tackling

really important projects.

You also wanna have good boundaries in this immersion.

Go back to your kids and have dinner with them every night.

It’s not just for me, it’s for you.

So how about this?

Why don’t you go and do your work?

This meeting didn’t need to be 30 minutes.

It could be five.

And the rest of the time is yours.

And it’s weird because when people join that system

at Social Capital, they just,

it’s like FaceTime and it’s like, let me make sure,

and let me talk a lot.

It’s like, I don’t say anything.

I respect the person that says nothing for two years

and the first thing that they say is not obvious.

That person is immensely more valuable

than the person that tries to talk all the time.

What have you learned from your,

so after Facebook, you started Social Capital,

or what is now called Social Capital.

What have you learned from all the successful investing

you’ve done there?

About investing or about life?

Or about running a team?

I’m very loath to give advice

because I think so much of it is situational,

but my observation is that starting a business

is really hard, any kind of business.

And most people don’t know what they’re doing.

And as a result, we make enormous mistakes.

But I would summarize this,

and this may be a little heterodoxical.

I think there are only three kinds of mistakes.

Because if we go back to what we said before,

in the business, it’s just learning.

You’re exploring the dark space

to get to the answer faster than other people.

And those, the mistakes that you make are three.

Or the three kinds of decisions, let’s say.

You’ll hire somebody and they’re really, really,

really average, but they’re a really good person.

Oh yeah.

You’ll hire somebody and they really weren’t candid

with who they are and their real personality

and their morality and their ethics

only expose them over a long period of time.

And then you hire somebody and they’re not that good.

Morally, but they’re highly performant.

What do you do with those three things?

And I think successful companies have figured out

how to answer those three things,

because those are the things that, in my opinion,

determine success and failure.

So it’s basically hiring and you just identified

three failure cases for hiring.

But very different failure cases

and very complicated ones, right?

Like the highly performant person

who’s not that great as a human being.

Do you keep them around?

Well, a lot of people would err

towards keeping that person around.

What is the right answer?

I don’t know, it’s the context of the situation.

And the second one is also very tricky.

What about if they really turned out

that they were just not candid with who they are

and it took you a long time to figure out who you were?

These are all mistakes of the senior person

that’s running this organization.

I think if you can learn to manage those situations well,

those are the real edge cases where you can make mistakes

that are fatal to a company.

That’s what I’ve learned over 11 and a half years, honestly.

Otherwise, the business of investing,

I feel that it’s a secret.

And if you are willing to just keep chipping away,

you’ll peel back enough of these, you know,

layers will come off and you’ll see it,

the scales will come off and you’ll eventually see it.

I really struggle with,

maybe you can be my therapist for a little bit,

with that first case which you originally mentioned.

Because I love people, I see the good in people,

I really struggle with just a mediocre performing person

who’s a good human being.

That’s a tough one.

I’ll let you off the hook.

Yeah.

I think that those are incredibly important and useful people.

I think that if a company is like a body,

they are like cartilage.

Can you replace cartilage?

Yeah.

But would you if he didn’t have to?

No.

Okay, can I play devil’s advocate?

Yeah.

So those folks, because of their goodness,

make it okay to be mediocre.

They create a culture where,

well, what’s important in life,

which is something I agree in my personal life,

is to be good to each other, to be friendly,

to be good vibes, all that kind of stuff.

You know, when I was at Google,

just like the good atmosphere,

everyone’s playing and just, it’s fun, fun, right?

But to me, like when I put on my hat

of like having a mission and a goal,

what I love to see is the superstars that shine in some way.

Like do something incredible.

And I want everyone to also admire those superstars.

Perhaps not just for the productivity’s sake

or performing or successful company’s sake,

but because that too is an incredible thing

that humans are able to accomplish, which is shine.

I hear you, but that’s not a decision you make.

Meaning you get lucky

when you have those people in your company.

That’s not the hard part for you.

The hard part is figuring out what to do

with one, two, and three.

Keep, demote, promote, fire.

What do you do?

And this is why it’s all about those three buckets.

I personally believe that folks in that bucket one,

as long as those folks aren’t more than 50 to 60%

of a company, are good, and they can be managed

as long as they are one to two degrees away

from one of those people that you just mentioned.

Yeah, yeah.

Because it’s easy then to drag the entire company down

if they’re too far away from the LeBron James,

because you don’t know what LeBron James looks

and feels and smells and, you know.

So you need that tactile sense

of what excellence looks like in front of you.

A great example is if you just go on YouTube

and you search these clips

of how Kobe Bryant’s teammates described,

not Kobe, but how their own behavior, not performance,

because there was a bunch of average people

that Kobe played with his whole career,

but their behavior changed by being somewhat closer to him.

And I think that’s an important psychological thing to note

for how you can do reasonably good team construction.

If you’re lucky enough to find those generational talents,

you have to find a composition of a team

that keeps them roughly close to enough of the org.

That way that group of people can continue to add value

and then you’ll have courage

to fire these next two groups of people.

And I think the answer is to fire those two groups of people.

Because no matter how good you are,

that stuff just injects poison into a living organism

and that living organism will die when exposed to poison.

So you invest in a lot of companies.

You’ve looked at a lot of companies.

What do you think makes for a good leader?

So we talked about building a team,

but a good leader for a company.

What are the qualities?

When I first meet people, I never ask to see a resume.

And when I’m meeting a company CEO for the first time,

I couldn’t care less about the business, in fact.

And I try to take the time to let them reveal themselves.

Now in this environment, I’m doing most of the talking.

But if this were the other way around

and you were ever raising capital and you said,

Schmoth, I’d be interested in you looking at this business,

I’d probably say eight to 10 words for hours.

Let me just listen.

Prod, you know, I throw things out.

Prod, and I let you meander.

And in you meandering,

I’m trying to build a sense of who this person is.

Once I have a rough sense of that,

which is not necessarily right, but it’s a starting point,

then I can go and understand

why this idea makes sense in this moment.

And what I’m really trying to do

is just kind of like unpack where are the biases

that may make you fail.

And then we go back to you.

The thing that Silicon Valley has the benefit of though

is that they don’t have to do any of this stuff

if there’s momentum,

because then the rule book goes out the window

and people clamor to invest.

So one of the things that I do,

and this is again, back to this pugilism

that I inflict on myself,

is I have these two things that I look at.

Thing number one is I have a table that says,

how much did we make from all of our best investments?

How much did we lose from all of our worst investments?

What is the ratio of winners to losers over 11 years?

And in our case, it’s 23 to one.

On billions of dollars.

So you can kind of like, you can see a lot of signal.

But what that allows me to do is really like say,

wait a minute, like we cannot violate these rules

around how much money we’re willing to commit

in an errant personality.

The second is I ask myself,

of all the other top VCs in Silicon Valley,

name them all, what’s our correlation?

Meaning when I do a deal,

how often does anybody from Sequoia, Excel,

Benchmark, Kleiner, you name it,

do it at the same time or after and vice versa?

And then I look at the data

to see how much they do it amongst themselves.

What’s a good sign?

I’m at zero, as virtually close to zero as possible.

And that’s a good thing.

Well, it’s not a good thing when the markets are way,

way up because it creates an enormous amount of momentum.

So I have to make money the hard way.

I have to, you know,

cause I’m trafficking in things that are highly uncorrelated

to the gestalt of Silicon Valley,

which can be a lonely business,

but it’s really valuable in moments where markets get

crushed because correlation is the first thing that causes

massive destruction of capital, massive.

Because one person, all of a sudden,

with one blow up in one company, boom,

the contagion hits everybody except the person that was,

you know, not.

And so now those are like more sophisticated elements

of risk management, which is again,

this pugilism that I inflict on my,

nobody asks me to do that.

Nobody actually, at some level,

when the markets are up, really care.

And when markets are sideways or when markets are down,

I think that that allows me to feel proud of our process.

You know?

It allows you to think a lot outside of the box.

It’s lonely because you’re taking risks.

Also your public personality.

So you say stuff that if it’s wrong,

you get yelled at for being,

I mean, your mistakes aren’t private.

No.

And that’s something that has been a really,

really healthy moment of growth.

It’s like an athlete.

You know, if you really want to be a winner,

you got to hit the shot in front of the fans.

And if you miss it,

you have to be willing to take the responsibility

of the fact that you bricked it.

And over time, hopefully there’s a body of work

that says you’ve generally hit more than you’ve missed.

But if you look at even the best shooters,

what are they?

52%.

So these are razor thin margins at the end of the day,

which is really, so then what can you control?

I can’t control the defense.

I can’t control what they throw at me.

I can just control my preparation

and whether I’m in the best position

to launch a reasonable shot.

You said that the world’s first trillionaire

would be somebody in climate change in the past.

Let’s update that.

What’s today, as we stand here today,

what sector will the world’s first trillionaire come from?

Yeah, I think it’s energy transition.

So energy, so the things we’ve been talking about.

Yeah.

Really?

So isn’t that, okay.

Well, I think the way that I think about.

So this is a single individual.

You see their ability to actually build a company

that makes huge amount of money

as opposed to this distributed idea

that you’ve been talking about.

I’ll give you my philosophy on wealth.

Most of it is not you.

An enormous amount of it is the genetic distribution

of being born in the right place and blah, blah, blah,

irrespective of the boundary conditions

of how you were born or where you were raised, right?

So at the end of the day,

you and I ended up in the United States.

It’s a huge benefit to us.

Second is the benefit of our age.

It’s much better and much more likely to be successful

as a 46-year-old in 2023 than a 26-year-old in 2023.

Because in my case, I have demographics working for me.

For the 26-year-old,

he or she has demographics working slightly against them.

Can you explain that a little bit?

What are the demographics here?

In the case of me,

the distribution of population in America

looks like a pyramid.

And in that pyramid,

I’m wedged in between these two massive population cohorts,

the boomers and then these Gen Z and millennials.

And that’s a very advantageous position.

It’s not dissimilar to the position that Buffett was,

where he was packaged in between boomers beneath him

and the silent generation above him.

And being in between two massive population cohorts

turns out to be extremely advantageous

because when the cohort above you transitions power

and capital and all of this stuff,

you’re the next person that’s likely gets handed it.

So we have a disproportionate likelihood to be,

we are lucky to be older than younger.

So that’s an advantage.

And then the other advantage that has nothing to do with me

is that I stumbled into technology.

I got a degree in electrical engineering

and I ended up coming to Silicon Valley.

And it turned out that in that moment,

it was such a transformational wind of change

that was at my back, right?

So the wealth that one creates

is a huge part of those variables.

And then the last variable is your direct contributions

in that moment.

And the reason why that can create extreme wealth

is because when those things come together

at the right moment, it’s like a chemical reaction.

I mean, it’s just crazy.

So that was sort of part number one

of what I wanted to say.

The second thing is when you look then

inside of these systems

where you have all these tailwinds, right?

So in tech, I think I benefit from these three big tailwinds.

If you build a company or are part of a company

or a part of a movement,

your economic participation tends to be a direct byproduct

of the actual value that that thing creates in the world.

And the thing that that creates in the world

will be bigger if it is not just an economic system,

but it’s like a philosophical system.

It changes the way that governance happens.

It changes the way that people think

about all kinds of other things about their lives.

So there’s a reason I think why database companies

are worth X, social companies are worth Y,

but the military industrial complex is worth as much.

And I think there is a reason why that if you, for example,

were to go off and build some newfangled source of energy

that’s clean and hyperabundant and safe,

that what you’re really going to displace

or reshape is trillions and trillions of dollars

of worldwide GDP.

So the global GDP is, I call it 85 trillion, right?

It’s going at two to 3% a year.

So in the next 10 years,

we’ll be dealing with $100 trillion of GDP, right?

Somebody who develops clean energy in 2035

will probably shift 10% of that around, $10 trillion.

A company can easily capture 30% of a market,

$3 trillion.

A human being can typically own

a third of one of these companies, $1 trillion.

So you can kind of get to this answer where it’s like,

it’s going to happen in our lifetime,

but you have to, I think, find these systems

that are so gargantuan and they exist today.

It’s more bounded because price discovery takes longer.

In an existing thing, it’s more unbounded

because you know what it is.

You know the tentacles that energy reaches, right?

Of that $80 trillion of worldwide GDP,

I bet you if you added up all the energy companies,

but then you added up all of manufacturing,

if you added up all of transport,

you’d probably get to like 60 of the 80.

Do you have an idea of which energy,

which alternate energy, sustainable energy,

is the most promising?

Well, I think that we have to do a better job

of exploring what I call the suburbs of the periodic table.

So we’re really good in Seattle, the upper Northwest.

We’re kind of good in Portland,

but we’re non-existent in San Diego,

and we have zero plan for North Carolina through Florida.

Yeah, so is that a fancy way of saying

nuclear should be part of the discussion?

I think nuclear, I think room temperature semiconductors,

I’m not convinced right now

that the existing set of nuclear solutions

will do a good job of scaling beyond bench scale.

I think there is a lot of complicated technical problems

that make it work at a bench scale level, even partially,

but the energy equation is gonna be very difficult

to overcome in the absence

of some leaps in material science.

Have you seen any leaps?

Is there promising stuff?

Like you’re seeing the cutting edge

from a company perspective.

Yeah, I would say not yet, but the precursor, yes.

I have been spending a fair amount of time,

so talking about like a new framework that’s in my mind,

is around these room temp superconductors.

And so I’ve been kind of bumbling around in that forest

for about a year.

I haven’t really put together any meaningful perspectives,

but again, talking about like trafficking

in companies and investments that are very lonely,

but they allow me to generate returns

that are relatively unique and independent.

That’s an area where I don’t see anybody else

when I’m there.

I’ll give you another area.

You know, we, I think, are about to unleash

in a world of zero energy and zero compute costs,

computational biology will replace white chemistry.

And when you do that, you will be able to iterate on tools

that will be able to solve a lot of human disease.

I think like, if you look at the head

of like the top 400 most recurring rare diseases,

I think like half the number, 200,

is specific point mutation,

is just the mis-methylation between C and T.

I mean, that’s like, whoa, wait,

you’re telling me in billions of lines of code,

I forgot a semicolon right there.

That’s causing this whole thing to miscompile.

So I just got to go in there and boop, and it’s all done.

That’s a crazy idea.

That was a C++, C throwback for people

that don’t know what I said.

There’s two people who are clapping.

Two people there, everybody else is like,

what, this is not a pipe, what are you talking about?

Makes perfect sense.

But, but.

So that, couldn’t that be a truly, a source of a huge,

the computational biology unlocks,

I mean, obviously medicine is begging for.

The thing with energy, though,

is that the groundwork is well laid.

And talking about sort of like the upper bound

is well defined.

The upper bound in medicine is not well defined

because it is not the sum total of the market cap

of the pharma industries.

It is actually the sum total of the value of human life.

And that’s an extremely ethical and moral question.

Isn’t there special interests that are resisting

moving, making progress on the energy side?

So like governments, and how do you break through that?

I mean, you have to acknowledge the reality of that, right?

I think it’s less governments.

In fact, like I said,

I think President Biden has done a really incredible job.

Well, Chuck Schumer really has done a really incredible job

because, so just to give you the math on this, right?

Like back to this,

so 3% of everything is of a market or zealots.

But when you get past 5%,

things tend to just go nuclear to 50, 60%.

The way that they wrote this last bill,

the cost, I’ll just use the cars as an example.

The cost of an average car is 22 and a half thousand.

The cost of the cheapest battery car is 30,000.

And lo and behold, there’s a $7,500 credit.

And it’s like to think the invisible hand

didn’t know that that math was right,

I think is kind of a little bit malarkey.

And so the battery EV car

is gonna be the same price as the thing,

and it’s gonna go to 40, 50%.

So we’re already at this tipping point.

So we’re kind of ready to go.

In these other markets,

it’s a little bit more complicated

because there’s a lot of infrastructure

that needs to get built.

So, you know, the gene editing thing, as an example,

you know, we have to build a tool chain

that looks more like code that you can write to.

Facebook has written in, I think, PHP originally,

which is, I’m still a big fan of.

Sometimes you have to use the ugly solution

and make it look good

versus trying to come up with a good solution,

which will be too late.

Let me ask you,

you consider a run for governor of California

then decided against it.

What went into each of these decisions?

And broadly, I just have maybe a selfish question

about Silicon Valley.

Is it over as a world leader for new tech companies?

As this beacon of promise of young minds

stepping in and creating something that changes the world?

I don’t know if those two questions are connected.

So it’s not over,

but I think it’s definitely,

we’re in a challenging moment because,

so back to that analogy of the demographics,

if you think about the,

like if you bucketed,

forget like our relative successes,

but there’s a bunch of us in this mid-50s

to mid-30s cohort of people

that have now been around for 20 years,

15 years to 25 years that have done stuff, right?

From Andreessen to Zuck to Jack Dorsey, et cetera,

Elon, whatever, maybe you throw me in the mix,

David Sachs, whatever, okay?

None of us have done a really good job

of becoming a statesman or a stateswoman,

and really showing a broad empathy and awareness

for the broader systems.

So Silicon Valley is to survive as a system.

We need to know that we’ve transitioned

from move fast and break things

to get to the right answer and take your time

if that’s what it means.

And so we have to be a participant of the system.

And I believe that.

And I think that it’s important to not be a dilettante

and not be thumbing your face to Washington

or not push the boundaries and say,

we’ll deal with it after the fact,

but to work with folks that are trying to do the best,

again, steel men, their point of view.

Work with them, potentially run for office.

So potentially like be, understand the system.

Be a part of their system.

It makes me sad that there’s no tech people

or not many tech people in Congress

and certainly not in the presidential level,

not many governors or senators.

Well, I think that we also have roughly,

our rules will never allow some of the best

and brightest folks to run for president

because of just the rules against it.

But if-

Oh, you mean, yeah.

I mean, look, I think David Sacks

would be an incredible presidential candidate.

Now, I also think he’d be a great governor.

No, he was born in South Africa.

I think he’d be a great governor.

I think he’d be a great secretary of state.

I mean, he’d be great at whatever he wanted to do.

Friedberg wasn’t born here.

So there’s a lot of people that could contribute

at different levels.

And I hope that…

By the way, the other thing I like about the pod is like,

I also think it helps normalize tech a little bit

because you just see like normal people

dealing with normal situations.

And I think that that’s good.

It is a really normative place.

It’s not the caricature that it’s made out to be,

but there is a small virulent strain of people

that make it caricature-like.

Well, that’s in one direction.

What do you think about the whole culture of,

I don’t know if better terms, but woke activism?

So sort of activism, which in some contexts

is a powerful and important thing,

but infiltrating companies.

I’ll answer this in the context of Rene Girard.

So like he says that people tend to copy each other.

And then when they’re copying each other,

they’re really what they’re doing

is they’re fighting over some scarce resource.

And then you find a way to organize against the group of you

against the person or a thing that you think

is the actual cause of all of this conflict

and you try to expel them.

The thing that wokeism doesn’t understand

is that unless that person is truly to blame,

the cycle just continues.

And that was a framework that he developed

that he’s really conclusively proven to be true

and it’s observable in humanity, in life.

So these movements, I think the extreme left

and the extreme right are trying to interpret a way

to allow people to compete for some scarce resource.

But I also think that in all of that,

what they don’t realize is that

they can scapegoat whoever they want,

but it’s not gonna work

because the bulwark of people in the middle

realize that it’s just not true.

Yeah, they realize, but they’re still,

because in leadership positions,

there’s still momentum and they still scapegoat

and they continue.

And it seems to hurt the actual ability

of those companies to be successful.

In fairness, though,

if you had to graph the effectiveness of that function,

it’s decaying rapidly.

It’s the least effective it’s ever been.

You’re absolutely right.

Being canceled five years ago was a huge deal.

Today, I think it was Jordan Peterson on your podcast.

He said, I’ve been canceled and it was amazing.

He said 38 times or 40.

He said some number, which was a ginormous number,

A, that he kept account of it

and B, was able to classify it.

I’m like, what classifier is going on in his mind

where he’s like, ah, that’s an attempt to cancel me,

but this one is not.

But my point is, well, it’s clearly not working.

And so the guy is still there

and the guy is putting his view out into the world.

And so it’s not to judge

whether what he says is right or wrong.

It’s just to observe that this mechanism of action

is now weakened.

But it’s weakened because it’s not the thing

that people think is really to blame.

Yeah.

You’ve been canceled on a small scale a few times.

So that’s not, I’m sure it didn’t feel small.

Actually, it wasn’t small.

I’m trying to minimize it.

Did that psychologically hurt you?

Yeah.

It was tough.

In the moment, you don’t know what’s going on.

But I would like to thank a certain CEO

of a certain well-known company.

And he sent me basically like a step-by-step manual.

Does it involve mushrooms?

No.

No, and he was right.

The storm passed and life went on.

Is it, I don’t know if you can share

the list of steps, but is the fundamental core ideas

that just life goes on?

The core fundamental idea is like you need to be willing

and able to apologize for what is in your control,

but not for other people’s mistakes.

Your mistakes, yes.

And if you feel like there’s something,

then you should take accountability of that.

But to apologize for somebody else,

for something that they want to hear,

isn’t gonna solve anything.

Yeah, there’s something about apologies.

If you do them, they should be authentic

to what you actually want to say

versus what somebody else wants to hear.

Otherwise, it doesn’t ring true.

Yeah, and people can see through that.

And people can see through it.

And also, what people see through is not just the fact

that your apology was somewhat hollow,

but also that this entire majority of people

now walked away.

The mob was like, okay, thanks.

And then people are like, oh, so you didn’t care at all?

This was like, and so then it reflects

more probably on them.

Yeah.

I know you said you don’t like to give advice,

but what advice would you give to a young person?

You’ve lived an incredible life

from very humble beginnings, difficult childhood,

and you’re one of the most successful people in the world.

So what advice, I mean, a lot of people look to you

for inspiration.

Kids in high school or early college

that are not doing good

or are trying to figure out basically what to do

when they have complete doubt in themselves.

What advice would you give them?

It is really important that if somebody that you respect,

and I’m gonna, just for the purpose of this,

put myself in that bucket.

And if you’re listening to this,

I wish somebody had told this to me.

We are all equal.

And you will fight this demon inside you

that says you are less than a lot of other people

for reasons that will be hard to see

until you’re much, much older.

And so you have to find either a set of people

far, far away, like what I did,

or one or two people really, really close to you.

Or maybe it’s both that will remind you

in key moments of your life that that is true.

Otherwise, you will give in to that beast.

And it’s not the end of the world

and you’ll recover from it.

I’ve made a lot of mistakes,

but it requires a lot of energy.

And sometimes it’s just easier to just stop and give up.

So I think that if you’re starting out in the world,

if you’ve been lucky to have a wonderful life

and you had wonderful parents,

man, you should go and give them a huge hug

because they did you such a service

that most folks don’t do to most kids, unfortunately.

And it’s not the fault of these parents,

but it’s just tough, life is tough.

So give them a kiss and then figure out a way

where you can just do work that validates you

and where you feel like you’re developing

some kind of mastery.

Who cares what anybody else thinks about it?

Just do it because it feels good.

Do it because you like to get good at something.

But if you’re not one of those lucky people,

you can believe in your friends

or you can just believe in me.

I’m telling you, preserve optionality.

How you do that is by regulating your reactions to things.

And your reactions are going to be largely guided

in moments where you think that you are not the same

as everybody else.

And specifically that you are less than those people

and you’re not.

So just save this part of this podcast

and just play it on a loop if you need to.

But that is my biggest learning is I am equal.

I’m the same as all these other people.

And you can imagine what that means to me

to go out in the world, to see people

and think, okay, I’m the same as this person.

I’m as good as them.

And you could imagine what you’re probably thinking

of what I’m thinking is not that thing.

Right, you’re probably thinking, man, this guy, yeah,

this guy, I’m so much better.

No, I am fighting this thing all the time.

Well, I’ve also met a bunch of folks

who I think is a counter reaction to that.

Once they become successful,

they start developing a philosophy that they are better

or even some people are better than others,

which I understand, there’s LeBron James

versus other people and so on.

But I always really resisted that thought

because I feel like it’s a slippery slope.

They’re not better.

They have mastery in a thing

that they’ve fallen in love with.

Yeah.

I’m trying to develop mastery in a thing that I love.

I love the art, I love investing.

It’s like solving puzzles.

And I love that.

I love trying to develop mastery in poker.

I really love that.

I’m learning how to be a parent to a teenager

because I finally have one.

It’s all new stuff to me and I’m learning.

That’s what it’s all about.

Yeah, so you don’t wanna think you’re lesser than

and you don’t wanna think you’re better than

because those both lead you astray.

I’ve never thought I was better than.

I manifested better than

because I was trying to compensate for feeling less than.

My goal is just to feel like everybody else feels

on the presumption that everybody had a normal life.

Given your nickname is The Dictator,

do you trust yourself with power?

Like if the world gave you absolute power for a month?

No.

No, because I think that I’m still riddled with bias.

I don’t deserve that position.

And I would not want that weight on my shoulders.

I had a spot actually where it was a very

important and big poker game.

And it was a spot where I was in the pot.

And it was a really large pot.

It was like a million dollar pot.

And I had to make a ruling and the ruling was in my favor.

And I was just beside myself.

Because I don’t play, I play for the challenge.

I like to get pushed to the limit of my capabilities.

I wanna see, can I think at the same level of these folks?

Because these guys are all experts, they’re all pros.

And I get enormous joy from that challenge.

And I like to win, but I like to win just a small amount.

You know what I mean?

And then I never wanted to win in that way.

But because it was my game, I had to make this call

on a million dollar pot and I wanted to just shoot myself.

I just was like, this is gross and disgusting.

And he was a complete gentleman,

which made it even worse.

So I do not want absolute power.

Well, those are the people you do want to have power

is the ones that don’t want it,

which is a weird system to have.

Because then you, in that kind of system,

don’t get the leaders that you should have.

Because the ones that want power

aren’t the ones that should have power.

That’s a weird, weird system.

What do you think?

Let me sneak this question in there.

What do you think is the meaning of life?

I don’t, well.

Why are we here?

You ever look up at the stars

and think about the big why question?

I think that it’s a chance to just enjoy the ride.

I don’t think it really,

I don’t believe in this idea of legacy that much.

I think it’s a real trap.

So do you think you’ll be forgotten by history?

I hope so.

I really, really hope so.

Because if you think about it,

there are two or three people

that are remembered for positive things,

and everybody else, it’s all negative things.

And the likelihood that you’ll be remembered

for a positive thing is harder and harder and harder.

And so the surface area of being remembered is negative.

And then the second, what will it matter?

I’ll be gone.

I really just wanna like have fun,

do my thing, learn, get better.

But I want to reward myself by feeling like,

well, that was awesome.

Like I’ve told this story many times,

and I have put, again,

my own narrative fallacy on top of this,

but Steve Jobs’s sister wrote this obit

in the New York Times when he died.

And she ends it by saying his last words were,

oh, wow, oh, wow, oh, wow.

That seems like an awesome way to die.

You’re surrounded by your friends and family,

not the fact that he died, obviously,

but in a moment where what I read into it

was your family was there.

Maybe you thought about all the cool shit

that you were able to do.

And then you just started the simulation all over again.

And so just on the off chance that that’s true,

I don’t wanna take this thing too seriously.

You know what I mean?

Just enjoy it.

So you’re not afraid of it, the end?

No.

Could end tomorrow, could end right now.

So every day you can go, and you’re happy.

You’re happy with the things you’ve done.

Yeah, there are obviously things I want to do

that I haven’t done.

But there are no gaping things.

I’ve really, really, really been in love.

Total gift.

There have been moments where I’ve really, really felt

like everybody else.

There have been moments where I had deep, deep, deep joy

and connection with my children.

There are moments where I’ve had incredible giggling fun

with my friends.

There’s moments where I’ve been able to enjoy

really incredible experiences, wine, food, all that stuff.

Great, I mean, what more do you want?

Like I could keep asking for more,

but I would just be a really crappy human being

at some point.

You know what I mean?

It’s enough.

Yeah, yeah.

It’s enough.

Yeah. It’s enough.

This life is pretty beautiful

if you allow yourself to see it.

It’s really great.

And it’s better than it’s ever been.

Yeah.

For most of us, actually.

Yeah, pretty nice.

You know, and all of the like, you know,

millennials and Gen Zs,

you’re about to get a boatload of money from your parents.

And you better figure out how to be happy

before you get that money.

Yeah.

Because otherwise you will be miserable.

Get a lot of Dairy Queen.

No, that only worked the first time.

It worked two times in grade five and grade six.

My God, that next year.

Flex, I worked my ass off.

I’m like, but I could never bring myself to ask her.

And then she did it.

And I was like, man, this woman’s a Ms. Bruni.

This woman’s a gem.

Yeah, but the third time it faded.

Isn’t that the sad thing about life?

You know, the finiteness of it, the scarcity of it.

Without that, we perhaps wouldn’t,

ice cream wouldn’t be so damn delicious.

Chamath, you’re an incredible human.

I definitely recommend that people listen to you

on all platforms.

Just, we’re very lucky to be able to get your wisdom.

I agree with, I’ve talked a lot about you

with Andrej Karpathy, who’s somebody I really respect.

And he just loves the shit out of you

in how much you, how deeply you understand the world.

That’s a huge honor.

He’s an incredible human being, so that’s.

And a different, yeah, speaking of semicolons,

there’s some human beings that understand everything

at the very low level and at the very high level.

And those people are also very rare.

So it’s a huge honor, and also a huge honor

that you would be so kind to me,

just like in subtle ways offline,

that you would make me feel like I’m worthwhile.

Well, can I just say something as just a layman listener?

What you do, just so I could give you my version,

is that you take things and people,

so ideas and people, that are mostly behind a rope,

and you demystify it.

And what that does for all of us is it makes me feel

like I can be a part of that.

And that’s a really inspiring thing

because you’re not giving advice,

you’re not telling us how to solve the problem,

but you’re allowing it to be understood

in a way that’s really accessible.

And then you’re intellectually curious in ways

that some of us would never expect that we were,

and then you kind of end up in this rabbit hole.

And then you have the courage to go and talk to people

that are really all over the map.

Like for example, when I saw your Jordan Peterson example,

you went there, like you talked about Nazism,

and I was just like, man, this is a complicated argument

these guys are gonna tackle.

And it’s just, it’s really, really impressive.

So I have an enormous amount of respect for what you do.

I think it’s very hard to do what you do so consistently.

And so I look at you as somebody I respect

because it just shows like somebody

who’s immersed in something and who’s very special.

So thank you for including me in this.

I’m gonna play that clip to myself privately over and over

just when I feel low and self-critical about myself.

Thank you so much, brother.

This is incredible.

Thanks, man.

Thank you for listening to this conversation

with Chamath Palihapitiya.

To support this podcast,

please check out our sponsors in the description.

And now let me leave you with some words

from Jonathan Swift.

A wise person should have money in their head,

but not in their heart.

Thank you for listening and hope to see you next time.

♪♪♪