All-In with Chamath, Jason, Sacks & Friedberg

Industry veterans, degenerate gamblers & besties Chamath Palihapitiya, Jason Calacanis, David Sacks & David Friedberg cover all things economic, tech, political, social & poker.

E106: SBF's media strategy, FTX culpability, ChatGPT, SaaS slowdown & more

E106: SBF's media strategy, FTX culpability, ChatGPT, SaaS slowdown & more

Sat, 03 Dec 2022 09:47

(0:00) Bestie hangover!

(1:05) Analyzing SBF's media tour: his angle, media coverage, and more

(21:09) FTX culpability: media, investors, regulators

(53:41) Challenging media coverage of other countries, China's current situation, Xi Jinping's standing

(1:10:04) What OpenAI's new ChatGPT tool means for the future

(1:26:30) David Sacks on the slowdown in SaaS, use case endgame for generative AI

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I'm now recording. Jesus, you look terrible. What's going on? Did you sleep last night? Do I look tired? Do you look a little tired? Yeah, look unshaven. Yeah, what happened last night? I had a holiday party at my house last night for my office and... You look destroyed. Yeah, what's going on? I mean, did you drink? I did drink, yeah. What does vodka and oatmeal taste like? It tastes like that. It tastes like that. He had a white Russian. A white Russian people that... He's like, I want a white Russian with oatmeal. Oh my god. Actually, by white Russian is made with oatmeal. And please compliment that with a huge punch in the face. Give me five minutes. I'm going to go shave and... Let's go to the hair of the dog. Yeah. You got a little bloody Mary. You're banana, bud. Banana, man. Should I go get a beer? I might get a beer just to beat this hangover. Go do it. Yeah, go get a beer. Hang it on a little bit, I think. I'll let your winner slide. Rainman, David, South. I'm going to win. And then we open source into the fans. And they just go crazy. Love you, Wes. Queen of kilowatt. I'm going to leave. All right, listen. We have to start with scam, bank run, fraud. I mean, Sam, I've been free. I get that wrong sometimes. He was interviewed by Andrew War Sorkin, the suit, a deal book who gave him softball after softball. Then the next day, he was on Good Morning. He's a really passive aggressive right now. A little bit. I'm going to look at him. We got our friend, Nick. We got our little choppy. He's sticking the knife in. He's sticking the knife in. That's it. But, Jake, I've got a point. He's got a point. A little bit. A little bit. A little bit. Anyway, the New York Times continues to embarrass themselves by handling Sam, back and fraud with kick gloves. Wow. George Stephanopolis, my Greek brother Stephanopolis, the Spartan came in and absolutely fricassade and filet, Sam, back and freed. On Good Morning America. Very important to note that Good Morning America, the segment was between holiday cocktails and the cast of the White Lotus. And Andrew War Sorkin was at the deal book, finance conference. But you know that Stephanopolis interview was two hours, but they reduced it down to 10 minutes. So, there were probably a lot of sort of cordial conversation, banter, and then softball questions. And then he does stick the knife in and does the fricassade. But he cuts out all the other stuff. So, he just gets it down to the 10 minutes. What Stephanopolis did to him was extraordinary in that. He said over and over again, in the FTX terms of service, you cannot touch the user accounts. But you at Alameda were taking them and you were loaning them out. I don't know who is advising Sam, but Sam Bankman freed at this point, but why he is talking so much. He was also on a two hour Twitter spaces after all this. At this point, Sachs, what do you think is going on here in the mind of Sam Bankman freed? And also the media, which seems to have a very variable way of dealing with this obvious fraud and crime. Right. Okay. Well, you know, I can speculate about SPF. I think if there is a strategy here, it is this. He is basically copying two criminal negligence in order to avoid the more serious charges of fraud. And I think, again, if there's a strategy here, it is he saw himself being defined as Bernie made off 2.0 in the press. And if that image, which may well be true, cemented around him, then prosecutors would never stop. They would never accept a plea that basically gave him anything less than I made off like Senates, which would be, you know, decades in prison, maybe a life sentence. So he is out there doing what lawyers would tell you never to do, which is basically incrementing yourself, create more of a record. But he's doing it to change the public perception, maybe muddy up the public perception, get people thinking that, okay, he, you know, this, that he's a mini, he's a mini, something wrong, but it wasn't deliberate, it wasn't fraudulent, it was just basically carelessness or sloppiness, and if he succeeds in mudding the waters enough, then maybe the prosecutors will give him a plea deal that allows him to have his life back at some point. I think that would be the crazy like a fox explanation of what's happening. Now, there is, you know, an alternative explanation as well, which is I just think that these types of guys, you could call it, you know, a narcissistic fraudster. They think they can talk the way out of anything, you know? Because they have. They have. Yes, you know, what would... And they've talked their way into getting hundreds of millions of dollars of investment, billions, billions, billions, in some cases, and so they just feel, and they've been trained by employees, partners, investors, the press that they can talk their way out of, and the stuff. Yeah, well, I think, yeah, the average person is not really used to dealing with one of these personality types, who is... I mean, they clearly are smart and they're articulate, articulate, and they know what to say, and they're crafting their words. What they've learned through their life is that if they use the precise magic words with a person, they can pretty much, you know, convince them of anything, get them to do anything. And in particular, I would say investors tend to fall for this, not because investors are dumb, but because investors are so clear about what they're looking for and what they want. They're predictable. Yeah, like, you know, VCs especially, we're looking for the 100X outcome or whatever. So it's easy for this type of personality to construct a story, to essentially stroke the erogenous zones of a VC. Whoa! Yeah, and sort of trick them. And so there is probably a positive reinforcement loop that gets created in the minds of one of these people, and they start to think that they can basically talk their way out of any situation. So I think that would be part of what's going on here, and, you know, if you look at sort of the tactics that he's using to do this, you know, all of a sudden, he's trying to portray himself, you know, before this, he was portraying himself as a smart guy in the room. Now all of a sudden, it's this babe in the woods impression where I didn't know it was my subordinates. Oh, really? I wasn't really in control. That was somebody else. I could have done better. Right. Right. Each individual decision, he says, looked sensible to him. It's just that all added up to something he didn't anticipate. Like really? You know, loaning yourself a billion dollars of basically the company's money, which was basically customer money. That seemed reasonable to you. I don't know how you defend that individual decision, and there's many like that. But this is sort of the narrative that he's trying to construct. And let me stop there. But I think there's a lot more that can be said to dismantle the narrative he's trying to create. But I want to look at it. What's your take on this in the freebergroom? Can I make a comparison to SBF and Trump through the lens of the media? So if you go back to 2016, you know, Donald Trump violated every single establishment bias that these left progressive journalist elites had. And so they basically just attacked, attacked, attacked, attacked. But then you went into the election, and there was a very clear data point that said, whatever you thought was at, was at best limited, and you missed the tone of the country. Because 50 plus percent of the country held a very different view about this person. And instead of taking a step back, and then the left media, the mainstream media, re-underwriting, and learning, and then saying, you know what, mea culpa, I got this wrong, they just doubled down. And they said, no, it still doesn't meet our priors. And so we're just going to ring fence this problem and we're going to just try to destroy this issue. Because, you know, we want to control the narrative and fly result, we want to control power. Now you look at SBF, it's the exact opposite. He went to the perfect elite private high school. Then he went to one of the most prestigious elite private universities. MIT, his parents teach governance of all things at one of the most elite liberal institutions in America. Stanford. They are in the establishment of the progressive left. And what happened was he took customer funds and all of this money. He made tens of millions of dollars of political donations. He wrapped himself in this blanket of a progressive left-leaning cause called Effective Altruism. And all of the mainstream media felt for it and embraced him as well as some politicians. Because it met everything that they themselves also bought into. And now you have this cataclysmic event, a multi-deck-a-billion dollar fraud or bankruptcy, millions of customer accounts who are frozen, you know, tens of millions to hundreds of millions to billions of dollars lost and stolen from them. And they refused to reunderwrite this kid. And the reason is because in order to do so, it's like eating your own tail. And that's why they don't want to do it. And so this is why you have the media basically allowing him to do an apology tour. Now, this is his second time manipulating them. The first time he was able to manipulate them by basically being one of them. And now he's allowing them and their desire to basically protect themselves so that he can create some kind of a defense for himself. And I just think the whole thing is gross because it misses the entire mood of the nation. This is an enormous financial fraud that was perpetrated on tens of millions of people. And there's no accountability because in order to do so, the media would effectively have to admit that they missed it and they got it wrong. And they refused to do it. And I think that is the really big problem that nobody is really speaking out about. Like, well, if these folks are meant to be the last stop to make sure that there's truth and honesty and transparency in society and you can't count on them. And in fact, they're just going to reflect their own narrative. What is one supposed to do to learn the truth? In a way what you're saying, and then we'll go to your freeberg is, this fraud was encased in all the gilded facade that America hates right now. It reflects the institutional rod of America. It reflects every single aspect of institutional rod that every non-elite talks about all the time. But elites when they have those labels will refuse to give up. And just to add to that, the thing that's missing, I'd say one of the big issues with the institutional rod in our country is the lack of accountability when somebody gets it wrong. We saw this with COVID, right? The health establishment is saying that they want amnesty and landing magazine was willing to give it to them. So the point is that this class of people think that when they get it wrong, that they're the experts, but when they get it wrong, there should be no accountability. And so Jamoth, to your point, the media and these institutions are not willing to re-underwrite SBF when he's so clearly as a fraudster. Freeberg, what do you think of this theory? You had a large amount of donations to politicians. Obviously you have coming from Stanford, MIT, etc. And then you have these investments, gifts, slash advertising, slash donations to pro-publica, vox. This new publication, semaphore, the intercept that have all been uncovered now. Did he do this paying off of all the elites, you know, splashy cashy giving money to everybody because he knew he was doing a fraud and that this is evidence of this as a premeditated fraud? Or do you think this is a deranged individual who just was seeking status? I don't know. There's a video you can watch of this guy. For some reason, FTX has left up all of their videos on YouTube. From three years ago, called quantitative trading, 7.5,000 cell wall of Bitcoin on Binance. It's a 17.5 minute YouTube video of SBF trading arbitrage across markets. I think it provides probably the best natural, non-scripted insight into this guy's behavior that you could see, you know, because it's not like him being interviewed. It's just him living in his world. And he's just, you know, a mouse trying to get a piece of cheese. Like, he's, you know, he's like out there. He's scrambling around in the markets. He's finding edges. He's finding advantages. And he's clearly just taking advantage of him all day every day. That's who he is. Now, you put a person like that in an unregulated environment. And there was this clustering demand for an unregulated environment because of a lot of what you guys are saying, which is people have this disdain for the elitism and the institutional rot and all these things. So Bitcoin emerged as a solution out of 2008 to the, you know, what felt like institutional rot that governments have a key role in. But when you have no regulation and you have no trusted central authority involved, mice that are trying to find cheese will rule the day. And I think that's what happened here. If it wasn't this guy, it was someone else. It was going to be someone else. And then all of a sudden, everyone's clamoring and saying, hey, we needed the government to protect us. No one protected us. Someone's got to save us. We're the regulators. We're people that are supposed to keep an eye on this stuff. When the whole premise of so much of what was being sold was non-regulatory regimes, was openness, was peer-to-peer trust protocols, and it turns out that in that sort of an environment, the mouse that is hungriest for the cheese will get the cheese. And that's exactly what happened. And I don't know how much of it was... I don't agree with this. Him saying I'm creating intentional fraud, which certainly seems to be the case versus him saying I'm going to pay these guys. I don't know how much of it was even that intelligent. But the guy was clearly like trying to get a piece of cheese. Okay, so this chees eater, this rat, is a League of Legends expert playing on eight different monitors at a time, the cryptocurrency game, while hopped up on speed. I'm not saying that to be cruel. I'm saying that because they admitted it, they talked about it in their staff meetings, instructing their traders and team members of how to take speed. He admitted to it in an interview this week. He said that it was all legal prescription drugs, but they were taking them, yes. Yes. And literally in the same videos, you're referencing people see speed patches, or I don't even understand this, but there are patches you can put on your body to deliver speed to you at some, you know, dose or whatever, sacks you by this theory... that this isn't about the elite side of it. It's about the non-elite, the anarchy side of it. No....and this cheese eating rat was just wanted to eat more cheese. I don't buy this narrative because I see too much design intentionality between what happened. So in other words, it wasn't just a series of individual decisions that didn't add up. Many of those individual decisions by themselves were totally unjustifiable, and moreover, there were too many... there's too much evidence of sophisticated behavior here. Again, he overnight went from portraying himself as a smart guy in the room to the babe in the woods. And so, for example, when you look at the construction of all these entities and the corporate work chart, you know, of all the related entities, it's a very sophisticated attempt to obscure and construct certain, you know, protections. When you look at the way that Alameda was exempted from the normal margin requirements and FTX, there was this so-called back doors, there was intentionality there, there was intentionality in terms of who was hired to staff these organizations. Again, they... It wasn't hired. No board, no CFO. Yeah, exactly. And the guy who was in charge of compliance, like Jamal talked about in previous episode, was the guy who was involved in the ultimate bet poker cheating scandal. You know, not exactly... This super mode. Yeah, exactly. Right. Or look at this goofy goofball Caroline Ellis, who was put in charge of Alameda, right? His girlfriend. It's being done for a reason, right? He's setting it up in a certain way. And, you know, the one time I interacted with him at this tech conference, he was sitting there holding court, and he had all of his minions around him, who were following his orders. This was a guy who was controlling his business. He was making the decisions at, I think, a task level. And he knew exactly what was going on here. So look, I just don't buy. I do not buy this idea that he was like a blind mouse, who's just stimulus response, you know, in the moment. Oh my God. By the way, that wasn't my point, Sacks. My point was whether it was him, or it was going to be someone else. It was bound to happen. Not the idea. Another criminal would have emerged. That the idea that we want to have completely free, unregulated, Bahamian-based trading, you know, environments, that we can supposedly trust because someone puts on a good face when there is no real regulatory body and regulatory authority overseeing it, at some point it was going to happen. Well, no hold on. It is. Look, coinbase is a fully regulated institution. But they're regulated. They're not set up in the Bahamas and they're not unregulated. He set up and he had no oversight. He had no board. There was no regulatory regime. But how was he able? But, okay, so first of all, look, I don't think this had to happen. I think that, again, I think that excuses too much because it implies that if it wasn't SBF, it'd be somebody else. I actually think that this was a highly concerted effort. Listen, he courted regulators. He donated to politicians. He courted the media and donated to them. Yeah, he was really good at it. He was really good at it. He was actually good at it. Yeah. No one, I totally agree on that. Yeah, super smart, super connected, really thoughtful design on how he committed this. I only think an insider could have pulled off something at the scale. I think this is where Chimap, you're exactly right. I think you needed to be inside of him. He needed to be inside of him. The level of cynicism here is he knew the playbook and he admitted it. You pointed this out with the chats that were released where he said he. He, he. Yeah, look, I mean, just like that. He, he, he chat. Look how like convoluted and intertwined all these people are like gensers intertwined with the parents. Yeah. Parents apparently bundled a bunch of money to Elizabeth Warren. You know, he was dating the CEO of the business that he owned 90% in. There are all these other random shell companies that he owned 100% of where they were lending back and forth hundreds of millions to billions of dollars. Yeah. And that is a sophisticated con that you have to architect and the way that he was able to get away with it is that not a single reporter or regulator thought to dig in. And the reason I think is because he said all of the right things that wanted them to embrace him. And the reason is he admitted that this is a dumb game that we woke Westerners have to play. Like imagine the right shabbles and then everyone thinks we're a good person. Exactly. Imagine. Pull that quote up on what he said because it's actually a good. Just say it's exactly what he said. Yeah. It's the game that we woke Westerners have to play. We say the right shabbles. That's everyone likes us. He actually said the most uncomfortable thing out loud, which is look by having gone to Crystal Springs High School, by having professors, by parents that went to Stanford, by having gone to MIT, I can pull this off. That's what he said because he can go with those things because I'm a champion of effective altruism that I can justify any of these decisions, how amoral or immoral that they be because I'm trying to help, you know, my brother stand up a multimillion dollar pandemic response business. I'm trying to do this. I'm trying to do that. And all of these regulators and all of these reporters said, okay, you get the hot pass. Now imagine if you replaced him with some random kid in some developing country or even from the United States, who did went to public high school, who went to some random state school, do you think that they could have pulled any of this stuff off? No. You need the patina of the privilege class. The New York Times. That's what he had, the patina of the privilege class. Even after this fraud, the New York Times wrote more of a puff piece on him than the hit piece they wrote on Brian Armstrong last year when Brian Armstrong wouldn't tow the line on allowing politics at work. Remember that? Yeah, unbelievable. Yeah. So the big and I think what Jamal is kind of saying here is that the big enabler here is not crypto per se. It's all these institutional biases and elite biases that he was able to play into partly because he was a big insider. I mean, in a way, he monetized his parents life work. The problem that I think this allows us to put a fine point on is the following. You know, in society, we've confused a lot of people to think that the opposite of liberal is conservative or Republican. And I think that's the cycle that drives the mind virus inside the mainstream media. The problem is the opposite of liberal is illiberal. Okay. And what a liberal means is to be narrow-minded and unenlightened. It means to be puritanical. It means to be fundamentalist. And this is really what it allows us to see now. We have now had six years of data, case after case after case where if you are woke, if you are a social justice warrior, if you have the right credentials that justify your upbringing, if you have institutional bonafides that come from your parents, you get to create the narrative and you get a hall pass. And everybody else basically is at the subject and the mercy of the mainstream media. And so if you don't kiss the ring and bow down to them, they will try to destroy you or run you out of town. But if you are one of them, they will give you a hall pass. And when it's time for them to change their mind in order to tell the truth, they won't do it. And so these types of griffs will continue, as Friedberg said, because there is no check and balance without a healthy, independent media. There is no way for all of us to actually know what's really going on. Guys, some person in the media could have asked the question and dug in deeper around the connections between Alameda and FTX for the last 24 months. No, no. So could have diligence at a venture firm. At no point could any person have asked these questions and found ex employees and said, are there any unseemly connections here between FTX and Alameda? There was no disgruntled employee. I mean, every company has disgruntled employee whistleblowers. But here where there was billions of dollars being made by tens of people, not a single person who felt on the outs said anything, it was also giving millions of dollars to press out. It's the question's worth asked. And then this kid paid hush money to the mainstream media. Let me ask you a question of you guys. Do you think that it's the media's responsibility in this context? Or do you think that there should have been a regulatory authority that had oversight of this business like there is for every bank and every training operation in the United States? And every one of those businesses has a compliance officer and has regulators up the wazoo making sure that customers are kept safe and protected. Or do we think that that should should offshore vehicles be allowed like this? That allow people to operate. It's a reasonable question, but there was a chicken and egg question. We were all standing around holding our hands while the CFTC and the SEC were fighting. That's not something that consumers can be expected to adjudicate. So yes, we should have legislation that clearly defines all of this, but there were enough parameters that created regulatory frameworks where a bunch of good actors did operate in them and are continuing to do so like coin base. So I don't think this is a regulatory issue. I think that if you believe there are people who are supposed to forensically examine things and get to the bottom of things and ask hard questions, those people did none of that here. And what's even more worrisome is what they're showing is now with a massive amount of data that shows that you could ask hard questions. They don't care too because it makes them look bad. I disagree with this, I think regulators failed here because they have been reactive to crypto. They have not been proactive and they have not been clear with the crypto community that what they were doing was illegal and they should have put the regulations in quicker and they're playing catch up. But all three groups failed. The media failed, the regulators failed and VCs failed, capital allocators failed. I apparently to do diligence here and install proper governance. You cannot put a company like this, you know, in business with billions of dollars and have no board of directors or he or he lied to them. I agree with you, my point is that while regulators are basically fighting a territorial turf war, the media could have still done their job. They chose not to. Otherwise, it was worse than that because not just a case where the SEC failed to exercise any oversight of him or dig into any of these questions. He was in the room with them crafting the next set of regulations. He was working on the regulations that you're talking about that are supposedly needed. Well, breaking them. They let the fox in the hen house. He was going to craft a new type of regulatory license for these types of exchanges with the result that he was going to get one as some of his competitors weren't. This is one of the things that triggered CZ to basically, you know, do what he did, which is basically that SPF was trying to get a finance and competitors like that band while SPF would be one of the sole people to get the license. By the way, Jason, here's an example. Here's an example. We're the regulators. Jason, you just said something derogatory towards CZ. He rug pulled them. It did he do that or did he actually expose the fraud? That's what I mean by rug pulling. Yeah. He was partners with him. Well, he was partners with him. And then he realized he was weak and that he was doing some stuff that we shady and excited he would eliminate a partner who was creating regulation. A sac said, whatever you want to say, he knife. All he did was indicate a desire to liquidate his position in a token that was supposedly perfectly liquid. That's basically that caused the everything to unravel. Yeah, but these were partners, right? I mean, these were deep business partners. And they were partners, they were collaborating on these tokens together. So they weren't competitors. They weren't. Jason, like part of the big loan that initiated all of this stuff like a year and a half ago was to buy FTX off the cap table. So you know, all I'm saying is like you used words and you're framing of a guy, you know, who's built the business is like, he is this nefarious bad actor. Binance was at the access first investor. Hold on a second. But but David's right. All the guy did as far as we can tell right now is tweet. I'm selling this token because I don't believe in the capital structure of this entity. And he got those tokens by being bought out of the cap table. I know. He was partners with them. So if you if you don't like rugpulled, how about back then? These business partners, they're not partners. You still don't understand. They were. Of course I understand they had he was the first investor. So to do this, he got out. No, no, he got out. He got out and for the consideration, all along, part of the consideration were these tokens, these FET tokens. Jason, when you when Uber went public, yes. And you got distributed stock. Yeah. Did you distribute and sell Uber at any point? Previous to that I had I sold some to master. No, no, no, no, no, no, I'm asking you question. When Uber went public and you got distributed from Uber, no, your stock. So you've never sold a single share of Uber has this public. No, I sold it before. I'm sorry. But that doesn't make Jason a partner of Uber. You're just a stock holder. Yeah. This is slightly different, I think. But okay, fine. You guys, if you guys want to consider, you were the first investor in the company. They were a business. They were a startle situation, but their status at the time that CZ tweeted, wasn't they were competitors? Okay, fine. I mean, they became competitors. I agree. And by the way, to to Moss Point about this rug pulling language, I think we're getting kind of done a rabbit hole here. We got a wheel here. But CZ did perform a service in this sense. Okay, SPF claims that four billion more was about to come in. I personally don't believe that. Sounds like bullshit to me. But if it is true, that would have been a bad thing. The more money that came in to that operation, SPF proved that he was a very poor custodian of customer funds. For sure. For sure. I'm not depending on you. Yeah. But the longer this one or the more, I'm just highlighting the language that you use is sort of like, again, part of that establishment elite narrative. And I'm just questioning, you should maybe steal man. Take a second to just steal man. Yeah. A more dispassionate view, which is here's a counter party. Okay. Yeah. Who when he left the cap table was given half cash, half tokens. Okay. And he decided to sell his tokens. Yeah. And tweet it publicly and cause a run on the bank. So it was not a run on the bank. There was no bank. Where's the bank? This one on the bank language. Okay. Is something. This was in the semifor coverage. Okay. So I'm talking about the way that I have publicly. That's my point. So I'll still manage. Okay. No, no, no, no. These tokens are worthless. I need to liquidate them as fast as possible. But why would you do that publicly? Why would you do it privately? You're about to move the market. He wanted to move the market to zero. Yes. He wanted to keep him. He's letting people know why he wanted to kill his competitor. As Trimoff was just saying. He's easy. He wanted to kill his competitor. He told him I'm gonna kill him. Yeah. Say he was trying to do that. We got a backup here. Because I think we've done a lot of like 30,000 foot like lessons and like take away it's from this whole thing, but we haven't really established what it is that SBF did wrong. So I think we need to sort of take a second to unmut the waters. Okay. And part of that, I think we should start with this idea of a run on the bank because the the press who've been writing puff pieces about SBF, I'd say mainly semifor, which he was a big donor to. Yeah. We've been trying to frame it as a run on the bank. And then that implies that it's not really his fault. It could happen to anybody. Lots of banks have had this problem. Okay. First of all, they're not a bank. This actually have the legal right under certain conditions to take customer deposits and loan them out. Okay. They did not. Their terms of use did not allow that as stuff in office pointed out. SBF's answer to that was well, we had this like margin account program. There were other provisions in other terms of use. But most of the customers who lost money, the vast majority did not opt into that program. They never agreed to that. So that's that's point number one. Point number two is I think we need to look at this language of margin account. Okay. SBF's explanation of how customer money was siphoned off for his own personal use, IE, to Alameda is that Alameda had a margin account. So I think we could perform a service here by explaining why it wasn't a margin account. And you know, Chimaltz and you guys understand this really well. The way that a margin account works is the following. Okay. Because I think some of us have them set up with investment banks. You go to an investment bank, say Morgan Stanley and you over, you post collateral. You actually over collateralized. So for example, you might take a hundred million dollars of stock posted at the investment bank and then they will let you loan a certain percentage. No where near 100 percent, maybe 50 percent. And that's what you do here. So if you have a very, very liquid security, you may get 50 percent coverage, which means if you posted a hundred million dollars, you could get a 50 million dollar loan. Okay. So if you have a hundred million and Amazon stock, you're some Amazon VP, you can get 50 million loaned. And if it's a private asset, it's anywhere as high as 30 percent, 35 percent, but typically it's about 25 percent. My expectation is an illiquid token like this would have basically gotten 5 or 10 percent coverage ratio at the best of it. And then what happens is you have these maintenance values. So if all of a sudden the value of these entities multiplied by that percentage that you're allowed to loan falls below, you have to post money. That's how a margin of care works. It's just, there is no free lunch in that. Yes, exactly. There's a lot of things. Say, quite simply, very simply what I, it appears this guy did. He took customer deposits in US dollars. He then converted those dollars into some other asset and he had a mark on that asset. Let's call it a dollar a token. And then those dollars were moved to somewhere else. Because someone transferred in some other token, but that's, but we need to finish the explainer around the margin account. Okay, because what SPF did is this, he took customer deposits, gave them to himself by the alien. No, he gave, he took customer deposits in US dollars. They were wired in. He took those dollars out and he put a fake token in and he called that. That's right. And therefore he said, the balance sheet is good. But the value of that token, it turns out, isn't a dollar. It's 10 cents. That's right. It was his sort of, it was sort of his made up token that, that he tightly controlled the trading of and artificially prompted the price. And by the way, it wasn't just FTT. But yeah, but here's the thing, it wasn't just the fact that his collateral was no good. It was also the fact that, and this is from the bankruptcy filing by the, the, the, the Iran trustee guy. He specifically said that Alameda, unlike every other margin account on the platform, had the auto liquidation provisions turned off. So we have to finish the thought around how margin works. So like Tomas said, you over post collateral. And if the value of that collateral goes down or the, the, the, the position your trading account, the value of that goes down, you either have to post more collateral or they will actually liquidate your collateral to pay off the loan. So Morgan Stanley will never lose money on a margin account. Never. Like the whole point is because they don't make money on it. They loan you the money at like, you know, a few percent, it's like very cheap loan. Yeah. LiBOR Plus. Yeah, exactly. That is not a risk account to them. And so in the, in the example, let's use an example. Yes. In the, in the case of the VP at Amazon, it's got a hundred million Amazon. They have a $50 million loan if Amazon loses half its value, then that triggers the automatic selling of Amazon shares to get it back down to 50% coverage. So now you sell 25 million of Amazon shares. If the full 50 million was pulled down to get back down to 25, 50% leverage. Yes. And they don't wait until like Amazon stock is at the exact level where now the collateral equals 100% of the loan. They will keep that 50% loan to value. Yes. And by the way, you can lose your entire amount, right? So, yes. You know, this is why I'm trading on margin is so risky is that you get wiped out completely. You get wiped out very, very quickly with a small move down because they are the custodians of that Amazon stock. They are holding it for you now and they have the right to sell it to cover your margin. You're saying that governor, that basic tenant, that basic safety control was turned off by Alameda. It's even more sinister, Alameda controlled like 90 or 95% of these FTT tokens and was owned by Sam Bankman fraud. So he owned that company. Then he claims he had no operating position. The position. What should have happened is with that collateral is that as the value of their position was going down and or as the value of the collateral was going down, it should have been liquidated to pay off the margin loan. And that did not happen. And the reason it didn't happen is that Alameda got a special exception on the platform to turn off auto liquidation. Therefore, it was never a margin account. If even if it was a margin account, okay, and FTX somehow misadministered the margin account, it should never have taken other customers deposits and used them to pay back that money. What should have happened is if FTX was going to lose money on a margin account, that would hit the FTX corporate treasury, okay. And when the FTX corporate treasury ran out, the company falls for bankruptcy then and then all the other customers hold on. Their account is still there. Their money is there in segregated accounts and in bankruptcy, they get their money back. The idea that a margin account could ever cause another customer to lose money. Like whatever that is, that's not a margin. There's a great article. There's a great article. This one was a journalist that did his job properly. His name is David Z. Morris. He wrote an article in CoinDesk that summed up for anybody that's interested, all of the actual fraud and all of the crimes that were committed in excruciating detail. And what's so sad about all these interviews and this press tour is if anybody would just read this article, you can construct the right questions to ask this guy just based on this one article. But the point I wanted to make is that one of the most interesting insights was these guys had lost an enormous amount of money already in calendar year 21. And so this is what's so crazy, Jason, about you using language like rug pulling and nobody backs actually trying to be clear. You guys are giving this guy a hot pass. If any industryist reporter could have found an employee who said, wait a minute, we just blew a $3 billion hole in our balance sheet in calendar year 21. And now we're sitting here at the end of point two. It's Jamaican. Hold on a second. Hold on. I need to respond. I am not giving them a pass. And for you to blame journalists who are reflecting the crime and not putting any light on VCs and the Capitol allocators who made this investment and who did no diligence and not with governance in it is the height of arrogance. This is not the press is doing that. This is the VCs. Where's that? This is the Capitol allocators fault. They're blaming the people who are telling the story after the crime story. They're covering the story up. They're covering the story up. Jason, they're covering the story up. I'm not telling you. Can I get in here? Can I get in here? All right. Listen, Jason, I will defend you against Tomas saying that somehow you're letting SP off off the hook. I know you don't want to let SP off off the hook. However, you are letting the press off the hook. And the reason why hold on a second, the reason why you're using this inaccurate language like rug pulling and run on the bank when there was no run and there was no bank is because you've been infected by this language that the media has inserted into the discourse. The media. Listen, hold on a second, investors may have got it wrong last year. Investors may have got it wrong when they did that last round. But I think investors now understand what's happening, but the media is still covering for SPF by mis-explaining what happened. Okay. Give me a percentage act of who's to blame here. DCs who invested and didn't set up any governance regulators who did not set rules around crypto and then three of the media. What percentage out of 100% is the investors, the regulators and the press go. Three numbers. I would say that before the fraud got exposed, one third, one third, one third. One third each before the fraud got exposed, but they were all extremely and severally liable. But after the fraud has been exposed, no investor is still defending SPF. I think that the investors who were swindled by him, they feel bad about it. So 30, 30, 30 is absurd. The press had no way to know the fraud was going on. Just like the VC with the money. They wrote a bunch of things. Did it? Jason, are you stupid? Like, wasn't it your stupid journalist that exposed the fraud at Thernos? He's the guy that went and did all the work. John Kerry, you should be celebrated. Hold on a second. John Kerry, you went and found this thing. Yes. Everybody else was like, this is perfect. It meets all of our priors. Let me finish, please. It meets all of our priors. This is great. John Kerry was like, this doesn't pass. The smell test to me. Let me go do some work. And he pulled one little string and over the course of 18 months, he exposed the whole bloody thing. So hold on a second. What is incredible to me is that it was possible to expose this thing before. Nobody did. I agree with David. It's about equal responsibility before. But afterwards, the bulk of the responsibilities now sits with regulators to clean it up and journalists to tell the truth. Okay. And now may I respond to that? Since you call me stupid, you are delusional. Number one, everyone of those investors in Thernos could have taken a fucking blood test at two different places like Jean-Louis Gassier did and write a blog post and prove that Thernos didn't work. And they, with hell disbelief, investors putting in a hundred million dollars, including Rupert Murdoch, didn't even take a fucking blood test or tell one of their diligence teams to do it. The same thing happened here with the investors in FTX. They did zero diligence. They set up zero governance. This was a failure of the investors and the governance for 99% of the problem. And then regulators should have caught it. And the regulators in fact did catch Thernos. So you're completely wrong, Jamoth, again, the journalists come in after the fraud is happening. The investors and governance is responsible for stopping these things. FTX was a failure of governance and investors and so was Thernos. The end. You're completely wrong. The question is post, post exposure. Why are you guys obsessed with post? How about avoiding these things? You guys are blaming stories ongoing because you're doing journalists for something that has capital allocators responsibility. It is our responsibility to do diligence. It is our responsibility to create a board of directors that checks on Elizabeth Holmes and Sam. I didn't just agree. I just agreed with that. Nobody just agreed with that. Just call me stupid. You just call me stupid for pointing out something that you refuse to accept. What are you talking about? I'm the biggest capital allocators created this. I'm the older brother. I'm not. You didn't mean it when I rejected you. You guys are giving a pass to the investors. You're doing too hard. You're doing too hard. I'm not doing Fredo. I'm not doing Fredo. You guys are being absurd. This is what people say that we're delusion about the podcast. Don't call them dumb. The reason we're delusion about it is that we will take acceptance of this issue. It's a very miscalculation. It's a lot of stuff. You can't call dumb. Totally. He loses it. He goes berserk. You guys have a point. You have the counter-decker responsibility. He's like, don't call dumb. I'm not going to defend any single one of those investors. I mean, I think that they did a horrible job too. It's a great episode. But the reality is, just right up. But the reality is, I think that if you think that you can, if you, it's your decision to defend the mainstream media, I think that that's fine. I'm not defending them. No, you are. You said they have no response. No, I'm blaming the VCs. It's different. The copability is with the investor class that has not had proper governance and delusion. Jason, how many articles have been written excoriating them? Yeah, some. We're handling. A lot of articles. Yeah, I mean, the show. Show me the Washington College capital. No, show me the Washington College capital. No, show me the Washington College capital. New York Times that's like digging in to that malfeasance or that lack of oversight and holding them accountable in a way that you feel exposes this problem to create change. Well, if we look at Theranos, those people who invested, including Draper and just show me the examples of us. They really went after them, for sure. Yeah. What about here? Wall Street Journal. One day ago, Sequoia Capital apologizes to its fund investors for FTX loss. Venture cap, firm tells fund investors that are getting it will improve due diligence on future investments after a hundred million loss. They really got a lot of money. Let me, let me, let me read you. That's a cover story in the Wall Street Journal. I'm going to, I'm going to read you a sentence from the New York Times coverage of SBF. And Sam, I'm not afraid. I'm not afraid. Sam Bank would free this neither a visionary nor a criminal mastermind. He is a human who made the same poor choice that generations of money managers have made before him. Are you effing King? No, I'm not defending him. That's what the New York Times coverage is. Yes, you are. They also said, I am not, I'm not saying them. They're just holding me in his grasp. I'm just holding me in his grasp. And then, a similar for who was on the take who received millions of dollars of money, they're on the bank. They're on the bank. How much did they get? Where is their apology? Hold on a second. Where is their apology? Sequoia has apologized. There is their apology. Oh, it has to come. I'm not defending the press. Yes, you are. Yes, you are. I am not. I am literally telling you that the New York Times has been asleep for three years and throwing the press is always demanding an apology from everybody else. Hold on a second. The press is always demanding. The Twitter spaces yesterday did a better job of trying to ask questions and getting to the truth than a single journalist has done or the collective body of all of journalists. Absolutely. And those on Twitter spaces did a better job than Sorkin. Let me tell you why. Why no one trusted press Jason. First of all, they have an agenda. I agree with it. When they make a mistake, they never admit it. When's the last time they did an apology or retraction? When's the last time they did what Sequoia did? I don't know. And they need to apologize about New York Times. I am in agreement with you on that. But I think we have to first say, and this is where you guys have a mind spot is what is the responsibility of capital allocators and governance and regulators? I think it's one, two, three. Our industry is responsible for sending out proper governance. The regulators are responsible for making sure that scientific plans are back. And then press is a distant third. You know who I think is responsible? S, V, F, one, two, and three. And then we can talk about four, five, and six. Okay. Four, five, and six. Capital allocators, regulators, the press, a distant six. I agree. Let's go on to China. God, it's so spicy today. God, it's so hot. Sorry. I mean, I do think when we attack the mainstream media, Jason feels a little twintinge of like insecurity and illegitimacy because you were a journalist. No, I'm not a professional perception. No, I think that's bullshit. I have a, I think that you have an incredibly romantic view of the craft as you practiced it back then, which I think was full of integrity. Yes, I do. I think that true. I think that you don't adequately realize how massively the industry has changed in the last 20 years since you've become a member of that. I realize it more than you do. I fully realize that the media has absolutely become biased and have lost in some cases. Yes. I mean, if you're taking money for SPF, they are corrupt if they're taking money from SPF and then giving him kick-love coverage. Absolutely. That is the definition of corruption in my mind. What is it called when you don't take money necessarily like the New York Times and still treat them with kick-lobs? What is that? It is extreme bias. And the New York Times became incredibly biased. You think the bias, why do you think that bias exists? They were always left leaning, but I can tell you why. They, when Trump came in, a generation of new journalists became activist journalists. They didn't want to tell stories and take it straight down the middle and let the facts tell the story and let the audience make their own decision. They felt that existential risk when Trump came into office, they got Trump to arrangement syndrome. They picked aside like MSNBC and Fox did and the business model became, for the New York Times, pick aside and get the subscribers. It was a deliberate cynical choice on the New York Times part to go full MSNBC for full Fox, the two extremes in mainstream media in order to get the subs. And they literally rallied the troops there to do anti-tech, anti-Trump coverage and they became activists. And when journalists become activists, they are no longer journalists, they're activists or commentators. And that's the problem. Being presented as journalism, when in fact it's activism. And that's a problem. So just shout out to Matt Tebe who just did a month debate. That's well said by the way. Yeah, on this very topic and he has a great, great sub stack, basically saying what you're saying, Jason. And the best quote is, the story is no longer the boss. Instead we sell narrative. He's like a lifelong journalist whose father was a lifelong journalist and he understands the way the business has changed. And it's like what you're saying. And this is why independent media, whether it's sub stacks, whether it's call and shows, whether it's oil and podcasts or other podcasts, Joe Rogan, Sam Harris, whoever it is, independent voices are now what consumers are seeking out because they can sense the bias. They know Rachel Maddo and Tucker have an axe to grind and they're left and right. They didn't expect these new times Washington Post and Walsh Regional to, you know, they knew they were leaning. They didn't expect them to pick a side. Do you think we should cancel? If folks, do you think folks are better off keeping their New York time subscription or replacing that New York time subscription with a basket of sub stacks? And yeah, you answered your own question. It's the latter. I think you're on your own as a consumer now. You're going to have to, and I think this podcast and the nuance we have to shout out to Freeberg for nuance. What we've done on this podcast is to explain to people. Freeberg's not the only one with nuance. Jacob. Nobody would describe David Sacks with the word. And he's a nuanced department on this podcast. What am I? 100% he is. But you wouldn't know that because you leave when science part of the department. Okay. Sometimes new bombs. All right. I'm the truth department. The point is consumers need to become extremely literate and they have to do their own search for truth in today's age. They don't, they shouldn't trust New York times. They shouldn't trust us. They should trust themselves. They shouldn't trust necessarily the CDC or, you know, the World Health Organization. They should trust themselves and come up with their own process for figuring out the truth in the middle of this mess. By the way, this is a good reflection on what's happened with the rest of media with respect to the creator class where right, it used to be the movie studios and, you know, a handful of kind of aggregated creators that made all of the content of the record labels. And now, you know, independent artists, independent producers, independent creators. And now independent journalists are going to become the bulk of volume that's going to be consumed. It's just a different consumption model. But we've only seen half of the news here. We saw it happen with movies and we've seen this disruption happen across all of these other media classes. Journalism and what we call the press is very likely going to be kind of that next layer of disruption. I would trust having a conversation with you about science topics, overreading a science article. 100%. You know, in the New York Times, they're Wall Street Journal. If I'm being 100%. 100%. I'd prefer to talk to you about it. And if it was markets, I'd rather talk to Schumannth. And if it was SaaS, I would talk to SACs, operating a company, speaking of operating a company. Propolitics. Well, we'll see. We'll see. But I think it's about having unique insight insight, right? Like, that wasn't the case. And what's interesting is that the people who are the professionals that have the knowledge and the touch points are also becoming journalists in the sense that they're also becoming speakers of their truth, right? And I think Twitter is a good enabling platform for this. We see it on YouTube. We're like scientists are putting out their own videos or market actors, like people that are traders in the market go out and they put out their own videos and they put out their own podcasts. And I think we're probably a good reflection of that in the sense that like we are the actors in the market and we're not just the independent observer that has kind of a surface level view. We have the depth to be able to talk about the things that we choose to talk about. And I think that's where consumers find value and we'll continue to find value in terms of who the journalist or speaker is and they're going to start to trust for their information. I had no idea. I saw that interview you did with newcomer. Oh, yeah. Yeah. Yeah. I saw that. Yeah. I mean, he speaks a lot about the this phenomenon of going direct and of course, he's against it. He interprets going direct as an attempt by newsmakers to avoid answering tough questions or take tough questions. I think that's ridiculous because for example, I go on CNBC all the time. I go on Emily Cheng and Bloomberg all the time. I submit to like really tough questions. I actually like those sort of sparring sessions. Yeah. I did hard talk this week. Have you ever done that? Yeah, exactly. So that's not what's going on here. I think what's going on is we have expertise. We want to communicate them and we do feel like the media has become a very unreliable narrator. There is too much bias and so on. So not all of it is agenda. So much is pure sloppiness and there's no reason why we shouldn't go direct and people want to hear from us. The audience wants to hear from us. Same for look at Dremont. Look at Dremont in the success he's had with his pies. I've no basketball player has ever gone direct and created content like Dremont's created and it's totally changed the game. He was so clear he's like we are. I am the media now. I think that's it. JJ Reddit, old man in the three amazing podcast. I was going to tell you guys a story so I was in the Middle East last week or this week, sorry. I had this crazy experience where I was trying to understand what was going on in China. I started on CNN and the whole thing was the propaganda machine around a democratic revolt, pushing for democracy and trying to depose G. Then I moved to Al Arabia. So one channel up I went from channel 10 to channel 11 and instead what they were actually doing was interviewing people on the ground and what they were talking about was literally how these PCR tests had become far too burdensome and they just wanted it to end and more reasonable restrictions to get in and out of quarantine. Then I went from there to BBC and in BBC they had a China scholar who was talking about how for decades actually the Communist Party supports local level protests and demonstrations because they've realized that it is a part of their political system to make sure that people feel like they have a say. And I was like taking a step back and I'm like if you listen to the US narrative and even Jason like in our group chat, people for menting for like revolution and this is TNMN 2.0 and I'm like well I'm reading two other channels that tell us a completely different set of things and I just thought man people just really fit the data. Such a good point to fit their bias. Yeah, we are projecting. We want to see our revolution in China. The people in China want you to have their lives back. I would love to see more democracy in the world. Yes, guilty as charged. I would like to see people be more free in the world. Dictator. I think most people just want to improve their condition and I don't think people are as tied up on the philosophy of the government as they are about improving their condition and as long as their condition is improving, they are willing to put up with any form of government. And history shows that by the way, the conditions in China have improved better than everybody's in the lives better than anyone in 500 history. And they want 500 new people out of object poverty and that's the great success of engagement. Isolationism would not have created that amazing outcome. 500 million people going out of object. You're referring to us three. A couple of seconds. You're saying. A couple of factories is what I'm referring to. Oh, okay. If they want to build something over there, I guess that's better than us throwing open our markets and giving China MFN status to destroy American manufacturing and build up their economies so they can become a peer competitor to the United States. Yeah. I mean, this is the balance of engagement. Isolationism. If you engage too much, you give everything up. You know, sex. Which of the current Republican agenda do you disagree with most strongly, just as an aside? Most Republicans are in favor of, are you crane policy, this sort of unlimited appropriation of weapons and aid to them? Don't you disagree with immigration policy of Republicans and Democrats? Well, I have a more nuanced position on immigration, which is I think we need to have a border. It can't be just like an open border, which is the day factor policy we have now, but at the same time, I do think that we should have H1B visas and we want to, like Jamassah, we want to be an all-star team for the world. We want to have the best people want to come here. So there's a balance. It's about. And then, you know, look, I think that I was happy to see the marriage of quality bill finally passed the Senate. Yes, they did get about a dozen. 12 Republicans voted for this support. So that's great. Yeah. But that's not the majority, unfortunately. You know, look, on what I would categorize as the old social issues, you know, like A. Marriage, like Canvas legalization, I was on the liberal side. Yeah, I don't think, you know, banning abortion entirely, a total abolition is going to work for this country. I think Republicans will lose elections if they insist on that and I think they're getting that message. So yeah, I mean, look, I think that I'm always considered myself to be pretty centrist. And so you're not a globalist. You don't believe in open global markets with the US. In general, I understand the benefits of free trade. And I don't think we should be isolationist with respect to trade. I don't think that we can be a successful country if we are, we isolate our economy. So I do want to trade. However, with China in particular, I think we made a mistake in throwing open our markets to their products, giving them MFN status while they go to the North-Favorite nation, enriching them to the point where they became a peer competitor of the United States. Now, look, I understand why we made that mistake 20 years ago because everybody thought that theory was that if we help China become rich, that China would inevitably become more democratic and they'd be filled with gratitude towards the United States and it'd actually become more hospital towards us, more westernized. And I think that theory has just proven to be wrong. I mean, they have not. Or it's going very slowly. One or the other. Let's own our clips here. Here is Shamaat's prediction from episode 61. And we'll see you on the other side of this quick clip. My worldwide biggest political winner for 2022 is Xi Jinping. I think this guy is, he's firing on all cylinders and he is basically ascendant. So 2022 marks the first year where he's essentially really ruler for life. And so I don't think we really know what he's capable of and what he's going to do. And so that's just going to play out. You think he's the biggest political winner, really? Oh my God. I think it's going to be a, he's going to run rough shot, not just domestically but also internationally because you have to remember, he controls so much of the critical supply chain that the western world needs to be. I think you're completely right. I think you're completely right. I think he's losing his power. He's scared. That's why he took out all these CEOs. He's consolidating power because he fears that they're going to win too big and then displace him. And he has massive real estate problems over there that could blow up at any moment in time. He could face a civil war there. I think he's totally isolated himself. Civil war and they don't even have great major country is removing their factories and removing his dependency. What are you talking about? What are they going to, what are they going to riot with? Did you not see TNM in square? Did you not see the riots in Hong Kong? Are you not paying attention to Moth? There's been many riots in China. Jason to kill these were crushed. And that's not saying they were the actual control. He still will have massive amounts of, I believe, protests and yeah, he'll have to help you. I think the bigger risk is that China gets better for Xi Jinping but worse for everybody else in China. It's already worse for all the billionaires over there. It's worse for the tech industry. You've now got Evergrande that whole gigantic debt implosion. I think there could be contagion from China next year. I don't think she's going to lose his grip in any way. But I'm not sure China is going to have a good year next year. Wow. Nailed it. I think all three of us kind of got this right. What are you talking about? You got none of it right. I said there were going to be riots and they're going to have a recession. I mean, Jason, let's be honest. You said that they were squashed. Look, that's exactly what happened. Both things happened. I actually think I have a pretty decent ability to steal men pretty concretely the details. I think that at best when it comes to things like democracy and your belief in US exceptionalism in a specific political world, do you at best use straw men? And I think that you get very biased without seeing the forest from the trees. The reason I said that is not because I'm like, you know, some huge G supporter. I'm just trying to steal men. What happens when one individual person gets anointed leader for life of 1.3 billion people that then controls 20% of the world's GDP. There is no other single human being as powerful as him as of this month. Can I just say that this show is going to become insufferable if every time you sort of said something in the past that was sort of correct, we're going to have to replay it. I would have to replay it. I was actually playing that one for you, Sacks. I didn't use it when I nailed it. I was giving that was a softball to you, actually. I know every week, Jake, hell. All right. I was going to slow down if we play every clip that I got right. You guys are asking to pull clips all the time. I just pulled one clip about China where you nailed it. No, no, look. I think like and also look what he did. What he did, the king of pull a clip, the the Evergrand thing. Look what he did this week. They said, okay, you know what, the real estate industry can now issue secondary stock sales, raise equity and equitize themselves. So they're going to find a soft landing for the equity part of the real estate industry in China. And now they're reopening. So I don't know, I mean, like, I'm not sure what we're supposed to comment. What I will stand by is what I said, which is I don't think we have a very clear view about what's going on, what the substance of these protests are and what people actually want. If you're only consuming US media. And so if you find a way to get a diet from a bunch of different sources all around the world, you may get a better sense. I had an accidental window into that by being in a completely different part of the world this past week. But I think there's no way we can get a better sense of what's going on there. And so what's going on there? I think one of the things we often miss is that China, the CCP does have their hand on the throttle. Like they throttle up and down. We always think that it's a linear line and that it's super dogmatic and fixed, but it's in the release of the lockdowns in Guangzhou and Beijing this week seems to have been a pretty good indication that when things do get, when the tides do change, leadership there seems to respond not always, but enough to kind of keep things going. So should they reopen? I think it's 60% of the population or so is vaccinated with obviously vaccines that maybe aren't as don't have the same efficacy as the ones here in the United States. Do you think they should open up? Just let it rip or do you think they should still try to maintain the zero COVID policy? Because that is the debate right now. What's the objective? What's the objective? Because obviously from the objective of economic growth, they need to open up and they need to keep their economy working and they need to keep their labor force engaged or else they're going to continue the suffer. So if economic growth is the objective, they need to open up. If the long term health cost of the nation, balance against that is the calculus that they're kind of weighing. There's probably some more nuance to that. And certainly my understanding is there may be a precedent setting, which is, hey, we've said that it's a zero COVID policy. Therefore, we have to hold strict to it, hold to the line. Else it looks like we're weak. And so there's also this maintaining the authority of the CCP objective. So there's a lot of maybe competing objectives right now. Certainly don't have a sense of how they're weighing them all. But I think that once all those videos came out this week, you guys saw them, but people were screaming. There was an apartment on fire with the doors locked with steel beams on the base of the building. At least that's what the video said. I don't know how much truth there is to that, but that's what we said. And clearly people are extremely distraught and unhappy with the conditions of the lockdown. At some point enough people with enough loud voices, something's going to change. Let's just remember the bargain that struck in that country, and with all countries, is that the citizens in need to some extent are willing to tolerate their government so long as their conditions continue to improve. And there's a bargain. That's some bargain that struck. And as soon as that bargain starts to go south for the citizenry, then that governing entity is at risk. And I think that that's what we sort of started to see this week was the conditions are getting far, far worse and far less livable for so many people in that country that the government had to shift. You think Chimoff, this COVID strategy in them will move on, was basically Xi Jinping wanting to get to that Congress, his coronation. And now that that's over, maybe he can change gears. And then like I said, my belief is that I have a very poor access to enough data to have a to steal man. What is actually going on there? But one explanation could actually be that in the absence of enough hospital infrastructure and ventilators and a bunch of these other things, they had to take a pretty severe approach to this disease. I don't know what they know or didn't know. Maybe they understood the virulence of it, maybe that they have slightly different aging characteristics of their population. Maybe they genetically responded to the SARS-CoV-2 virus. I don't know any of these things enough to tell you, Jason. Yeah. But the reality is what Friberg says is right, which is that you cannot grow an economy if people are inside locked in their apartments. And it looks like they have decided that that's coming to an end and they're going to deconstruct all of these things. So the Chinese growth engine is coming back. And I think that that's going to be an important factor economically that we're going to have to figure out because it's going to have a huge implication to American growth and American inflation. If in fact, if the lab league theory is correct, trying to have some insights into this disease that maybe the West didn't, maybe that plays into their policy a bit. Well, I'm just surprised to hear that you have a problem with their lockdown policy over there because aren't they just implementing Democratic Party orthodoxy? I mean, isn't this the policy that Tony Fauci and Barbara Ferrer that all the health experts I was not in favor of lock downs. What are you talking about? You're the one who had or your mask and had ventilators day one. Isn't this the lock down policy? Why am I getting those because you're the first priority? I'm just asking a question as the moderator. Isn't this basically why am I getting a straight? Isn't this what got to flinchy? I'll answer the question. Yes. I mean, I think February down. I was in favor of people wanted to stay home, stay home and then if people wanted to take the risk, take the risk, I was always in professionalism. This what Gretchen Whitmer and Michigan and Gavin Newsom in California subscribed to the idea that the way to fight COVID was through lock downs. Now, yes, Newsom had 10 pages of exceptions for his political donors. Absolutely. And he didn't use the police to lock people in apartment buildings. He may have wanted to, but they didn't actually do that. But can you really tell me that this lock down policy has been disavowed by people like Falky or by the health authorities, like the Barbara Ferrer's of this world. They still subscribed to this view. Do they? Is anybody doing lock down? Show me. Well, they're not able to do it because no one agrees anymore. But tell me, tell me where any body, tell me where any of the health experts who said that lock downs were the correct response have repented and disavowed that view. Yeah, I don't know. I haven't been, I haven't been tracking their meocopus. And you yourself were in favor of lock downs for a period of time. I don't know. No, absolutely. I'll pull the tape for the next episode. No, I was in favor of a mass mandate. No, it's not true. I was in favor of a mass mandate. And I said the mass mandate was the alternative to lock downs. Okay. I was saying that by May of 2020. All right. Listen, let's move on to the next thing. I don't represent, I'm an independent. I don't represent a Democratic party. I don't represent Falky. No, you represent mainstream media. I do not represent mainstream media. You just said I was an old school journalist who's mortified with where it is today. I'm giving you a hard time. I thought you're. I thought your explanation was fabulous. Oh, thank you. Thank you. Obviously, Jake, I'm giving you a hard time too. I know that you were not a big lock down proponent, but you understand the point I was making. I do understand your point. There were a lot of proponents in the US. Let's stop making me the Democratic spokesperson. I know. I'm feeling a lot better after my beer. Let's talk about. Come on. Come on. All right. So listen, let's talk about open AI. All right. Open AI is a company that builds. Social intelligence software and platforms. They have one platform called GPT. It is on its third version. As part of GPT3, they created chat GPT, which is a chat interface where you can ask questions to AI. The results are nothing short of stunning when they hit. Some of them are a little bit mixed, but Freeberg has spent the last 48 hours drinking white russians with Oatley milk and playing with chat GPT, including his question to the chat GPT, which was right a script of Chimau, Sachs and J-Cal talking about the future of AI in the style of a Quentin Tarantino movie. And I have to say, it was pretty great. The result. Go ahead, Freeberg. Tell us what you described. I think you guys should read this real quick. We can cut it out if it's stupid, but I want to actually read the script. I don't really know how to read the script. I think it was like in Tarantino part, right? I think it was impressive, but there's no F-bombs. There's no Tarantino S dialect. By the way, they excluded it from AI. They took out all cursing and violence from opening AI. That explains it. Because if this is a Tarantino script, there would be some choice language in here. But it's interesting. It's like the PG Tarantino script. It's okay. You're cursing no violence, no sex. You do the narrators. You do the narrators. Yeah, you do the narrators. Go ahead. The scene opens on Chimabh Palaihapatiya. David Sachs and Jason Calakana sitting at a dimly lit table in a smoky bar. A bottle of whiskey sits in the center of the table, half empty. Chimabh leaning forward, his eyes intense. So what do you guys think about this chat GPT thing? David Sachs takes a sip of his drink. It's impressive, no doubt about it. A large language model trained by open AI that can generate human-like texts in a variety of styles and formats as a game changer. Jason nods. Definitely. It's one of the most advanced AI systems we've seen today. It's going to have a huge impact on the way we use and interact with AI. Chimabh Frowns. That's what I'm worried about. With a technology like this, the possibilities are endless, but so are the potential dangers. Sex, Leans back in his chair. Oh, come on, Chimabh. You're not still stuck on that whole AI is going to kill us all thing, are you? Chimabh leans forward again, his voice low and serious. Look, I'm not saying. The chat GPT is going to turn into SkyNet overnight. But we need to be careful about the way we develop and deploy AI. We need to make sure that we're using it for good and not just for our own game. Jake Helnodz. I agree. We need to make sure that we're responsible in a way we use AI and that includes making sure it's accessible and affordable to everyone, not just to select few. To Moth with a dirty smirk. And let's not forget about the importance of regulation. We need to make sure that we have the right laws in place. Oh, this is difficult. This is useful. Oh, the director's calling cut. Cut, that's it. Scene. I mean, we're not going to finish it. I got that far off. I mean, it's 60% of the way there. I actually, there, there's no better one. I'm not buying it for sacks. If you blame buy it, and it would have been perfect. Let me tell you guys something stunning about this platform. So this is GPT 3.5, which is an interim model to the what people are saying is the long awaited GPT 4.0 model, which I think they announced in 2020 and has been a development for some time. So the model, this GPT 3.5 model was trained in three steps. They do a great job explaining it on the OpenAI blog site where they collect some data. And then there's a supervised model, meaning that there are humans that are involved in tagging. And then the model learns from that system. Then you ask the model questions, you get output. And then humans rank the output. And so the model learns through that ranking system. And then there's this third optimization thing. And then it's fine to you. So the model itself has several steps of human involvement and it sources its own data and builds it. You know what's incredible about this model? The total size of the software package that runs the model is about 100 gigabytes. Isn't that amazing? You could fit this model on probably what 20% of the storage space on your iPhone. And you could run this thing and you could probably just talk to it for the rest of your life. And it's really kind of an incredible milestone, but I think what was so stunning to me about this. I know you guys are probably expecting something to be said like this, but you could see so many human knowledge worker roles and functions being replaced by this extraordinary interface. So kids can do homework. That's easy. Software engineers can get their code optimized and can get their code written for them. Those great examples of how software code has been written by this interface. You could see real estate insurance salespeople being replaced by some sort of software like in face like this. Copy writers make me a hundred versions of a commercial or an ad. Customers support completely replaced. If you guys remember there were these automated customer support companies that started two decades ago. That was a great flurry. All BPO businesses were all about lower cost human labor. Now the cost of human labor goes to zero. My prediction, which is so everyone's got the obvious prediction, which is there's going to be a hundred thousand startups that are going to emerge. I mean, this is kind of like this moment where the internet came along and everyone's like this changes everything. I do think everyone thinks and feels that. So the obvious next step is a bubble will form. So I just got technical question though, free bird. And then I'm sure that probably thinking the same thing. I'm just finished my market prediction. I do the, but I think because everyone's so hyped about this and we all know this. It'll be over. FI. You see attention. All the investor attention is shifting to this capability. And how do you apply this sort of capability across all of these different industries and all these different applications. And as a result, my guess is the next hype cycle, the next bubble cycle in Silicon Valley. Yes. Absolutely be this generative AI business. Okay. But this is a little technical. But how would it know the difference between like why you are and you are when it is processing natural language if you were to do like your anus or your anus. How would that free bird? How would it know the difference between your anus and you are space anus? It'll learn that. You know, it's chocolate. It was a joke about your end. It was a joke about your end. It was a demo. I think I was trying to be AI. Yeah. I probably would have made a better joke than that. It would have made a better job. For sure. So, somebody did it in your group chat and said, can I introduce like J. Cal and they were terrible. So, I'll be asking you to offer another one. I'll be asking you to see AI to pretend you're the all-in pod besties telling Uranus jokes. That would be pretty cool. Sorry. Let me just say one more thing about this open AI thing. I do think that the biggest and most interesting thing to think about is how this will disrupt the search box. The way search works at Google and the internet search is there are these servers, these web crawlers that go out and gather data, some of structured data feeds and some of them are just crawlers. And then that data is indexed or in the structured way it's made available for serving directly on the search page. And so much of that is indexing. So I search for a bunch of keywords as keywords and perhaps some natural language contacts are matched to a result page and I click on that and it's linked out. Years ago, Google started a product called the OneBox where they could take structured data like what is the weather in San Francisco today and that top of the search result page just presented that data because it knows with high certainty the question you're asking and it knows with high certainty the answer it can give you. Yeah, Clifte. If somebody's website, right? So, if that starts to become everything, then that OneBox interface and it's not just Google's ability to access all this data and index it and serve it and store it, there could be a lot of competitors to the OneBox and a lot of competitors ultimately to search. And ultimately, Google's core product, their search engine, could be radically disrupted by an alternative system or set of systems that have more of a natural language chat interface. Literally, which is literally why Google bought DeepMind and there were a collection of human-powered search engines, Mahalo included, Chacha, who are trying to do the human-based version of this. It's just a scale. We don't want to get ahead of ourselves because one of the things we don't know is how much it's going on in DeepMind. They're not very open like OpenAI is. They talk about some of the advanced frontier stuff like Alpha Fold and so on and they've been public about that. But a lot of that is really to generate interest and hype and what's next. But my understanding is DeepMind has been applied to everything from ads, ad optimization, but also the ranking on YouTube videos to get people more engagement on YouTube, etc. So there's all these ways that DeepMind has been applied within Google services that we don't say. And certainly within search. But the question is, is there an entirely new interface for search that risks Google's core search business? And I think that there certainly will be a lot of money thrown at this. And if anyone has any interesting ideas, send me an email. Sax and then Shamath. Yeah, I think that's a really interesting point. I saw a thread on this where somebody was asking GPT, you know, a bunch of questions, like they were generally like coding questions and they were actually comparing the result in Google versus GPT. And Google would just give you a reference to like a link to some page, whereas GPT III would actually construct the answer, like a multi-paragraph answer that was far more detailed and in a way user-friendly. Yeah. Whereas like the Google page would kick you over to a reference where it was like this one, two, three sort of maybe someone had created a checklist, but it just wasn't that detailed. It really is pretty interesting. I thought Andreessen tweeted a really interesting example as well where he asked GPT to create a scene from a play starring a New York Times journalist in a Silicon Valley tech entrepreneur. They were arguing about free speech and each passing it asserts the view associated with his profession and social circle. We don't need to read the whole thing, but I thought this was like spot on where I was actually like both sides are making their best arguments and it's like to each other in a conversation that seems intelligible, like they're making their points at the right time in the conversation. It's like they're playing off each other. In other words, it actually reads like a conversation. I actually thought this one was more impressive than the one with the best impersonation because I actually thought that the one about all in didn't really capture our personalities per say, but this one actually does a pretty good job capturing the arguments in this debate. Jamath? Pretty impressive. Any thoughts here? Yeah, lots. I mean, I've been spending a lot of time learning about this area six years ago, a team that I partnered with who was at Google that built TPU. We've been building silicon for this space. We've been kind of going from the ground up for the last six years. Couple of things that I'll say. The first is that I think we're going to replace SAS with what I call MAS, which is models as a service. A lot of what software will be particular in the enterprise will get replaced with a single use model that allows you to solve a function. These chat examples are one and you can name a bunch of SAS companies that were purveyors of SAS that will get replaced by essentially GPT-3 or some other language model. Then there'll be a whole bunch of other things like that. If it's an expense management company, they'll have a model that will allow them to actually do expense management or blah, blah, blah forecasting better. I think SAS will get replaced over time with these models incrementally. That's phase one. But the problem with all of these models, in my opinion, is that they're still largely brittle. They are good at one thing. They are a single mode way of interfacing with data. The next big leap, and I think it will come from one of the big tech companies or from OpenAI, is, and we talked about this. I talked about this a few episodes ago, a multimodal model, which then allows you to actually bring together and join video voice data in a unique way to answer real substantive problems. If I had to steal man the opposite side reaction, so I think there's a lot of people gushing over the novelty of GPT-3. If I had to, or chat GPT, if I had to steal man the opposite, what I would say is it's going to get somewhere between 95 to 99 percent of all of these very simple questions right because they're cute and simple. There's no consequence of saying right of play because there is no wrong answer. You either kind of it tickles your fancy or it doesn't, it kind of entertains you or it doesn't. When this stuff becomes very valuable, is that when you really need a precise answer, and you can guarantee that to be overwhelmingly right, that's the last one to two percent that is exceptionally hard. I don't think that we're at a place yet where these models can do that. When we get there, all of these models as a service will be very much commoditized. I think the real value is finding non-obvious sources of data that feed it. It's all about training. You can break down machine learning and AI into two simple things. There's training, which is what you do asynchronously, and then there's inference, which is what you're doing in real time. When you're typing something into chat API or a chat GPT, that's an inference that's running and then you're generating an output. The real key is where do you find proprietary sources of data that you can learn on top of? That's the real arms race. One example would be, let's say you build a model to detect tumors. There's a lot of people doing that. The company that will win may be the company that actually then vertically integrates, buys a hospital system and get access to patient data that is completely proprietary to them and covers the most number of women of all age groups and ethnic categories. Those are the kinds of moves in business that we will see in the next five to 10 years that I find much more exciting and trying to figure out how to play in that space. I do think that chat GPT is a wonderful example to point us in that direction. I'm more of that case, which is it's a cute toy, but we haven't yet cracked the 1 to 2% of youth cases that makes it super useful. I think the first step will be the transformation of SaaS to Mass. From there, we can try to figure this out. It reminds me of in a way when you give that description of, hey, this is really interesting, but it's not complete. Remember when GPS came out and people were doing turn-by-turn navigation, they drive off the road because they were trusting it too much. Over 20 years of GPS, we're kind of like, yeah, it's pretty bulletproof, but keep your eyes on the road. Same thing that's happening. These changes tend to be slow. These last 100 or 200 basis points literally takes decades. The last 15% of self-driving is the decade long slot. That may take a century. 15% may take a century. But the last 2% will take a few days. It's like the change happens very slowly and then all at once for people who don't know what a TPU is. That's a tense or processing unit. This is Google's application-specific circuits, right? And custom silicon that they invented for a tensor flow at the time. So if you want to try it. Although now the modality of AI, we've changed that as well. So now we're totally in the world of transformers. So we're not even using, you know, you're not letting the tensors flow the way they used to. All right, there's been a slowdown in SAS. SAS, what is happening in the software as a service world? There was a good update by Jam and Ball, who works for all Timner, our friend, Brad Gerson, who does these really great updates on what's happening in the SAS world. The big thing this week is that Salesforce had its quarter and I would consider Salesforce to be the bell weather for the whole SAS category. I think they're the largest pure SAS company. They were the first multi-tenant SAS like company at scale. And what they've shown is a huge slowdown. Basically, their net new ARR that they just added in the previous quarter dropped two thirds compared to the previous quarter. But because their sales and marketing spend was the same as the previous quarter, it exploded their CAC payback, which means the amount of time it takes to pay back your customer acquisition costs for a given customer. So you see there are 155 months. It would take now to pay back the customer acquisition costs. That's over 10 years. That doesn't work. I mean, I think before this quarter, it was more like two and a half years. That's something that you can afford. A company can't, if you're spending 10 years of gross profit on a customer to acquire them, the business doesn't make sense. So now I'm not saying any of this to pick on Salesforce. It's an exceptionally run company. One of the absolute best Mark Banny off fantastic CEO founder, great human being. But I think the point here is that what you're seeing is the whole SAS industry is really slowing down here. In the first half of the year, you saw SAS valuations correct. Now we're actually seeing SAS top line correct. And there's an interesting question here. If your CAC payback goes from two and a half years to 10 years, you have to bring your CAC down. How do you do that? You can either reduce marketing or you can reduce sales. So in other words, you can reduce sales. You can cut the sales team. You can either cut people and head count from your own team or you can cut spending you do on advertising or events or money that you spend on other companies. Either way, there's going to be a big contraction in jobs basically around this industry. And I think that what that could do is cause a vicious cycle where we start seeing, I wouldn't say despiral. I think this vicious cycle for the next year or so where seat contraction becomes the norm instead of seat expansion. So if you go back over the last 10 years, a major tailwind at the backs of SAS startups has been that every year you start with 120%, 130%, 150% of last year's revenue just from your existing customers. Why? Because they were hiring more and more people and they needed to buy more and more seats. But now head count growth is frozen. And in fact, companies are doing major layoffs. So the baseline for next year could be seat contraction. So instead of starting with 120% of last year's revenue, you might start with 80% or 90% because there's going to be so much churn. So I think that SAS companies need to take this into account. This idea that growth is on autopilot, that could start to go in reverse. I don't think permanently, but I think for the next year or so, this is why I tweeted 2X is the new 3X. If you can grow 2X year over year in this entire business, that is as good as or better than growing 3X last year. Oh, clearly it's better. Like a lot of companies that weren't that great could grow 3X last year because it was so times were so frothy. Everyone was buying everything. But now it is going to be really hard to even double year over year. Companies need to take that into account into their financial planning. You need to restrain your burn because a lot of the revenue that you predict is going to be there may not be there. All right. Thanks so much to the Secretary of SAS. I think you got a board meeting. I did. I got to run. In terms of use cases, as somebody used the chat GPT to describe rooms, then they took the descriptions of those rooms and then they put them into like Dolly or stable diffusion one of those and it created the visual. I'm curious if you think the self-driving APIs and machine learning that's going on, then you got images, then you got chat. Maybe you have proteins going on with the alpha-fold stuff. And these things start talking to each other, is that going to be the emergent behavior that we see of general AI and that's how we'll interpret it in our world is these hundred different vertical AI's hitting some level of reasonableness to Chimaltz point on data sets. And then all of a sudden the self-driving AI is talking to the one that's looking at cancer and tumor diagnosis in the chat and the image ones and maybe stable diffusion, the protein AI and the one that's looking at cancer cells start talking to each other. Yeah, I'm not sure that's as likely as the, there's a lot of solutions that will emerge within verticals and I think you can distinguish them. So I kind of gave this example a few months ago. If you remember Kai's Power Tools was a plugin for Adobe Photoshop came out in 1993, I believe. Of course. So, the tools completely transformed the potential of Adobe Photoshop because Photoshop had all the basic brushing and editing capabilities within it. Kai's Power Tools was statistical models that basically took the matrix of the pixels and created some evolution of them into some visual output like a blur. And so you could blur motion blur or something and you could change the parameters and now your photo looked like it was going through a motion blur. The Photoshop bot and implemented those tools, but those were similar. There were statistical models that made some representation of the input which was the image and then created an output which was an adjusted image. I would argue that that is very similar although the models behind it are very different in terms of the contextual application of statistical models in software. And you could see stuff like for example a chat bot that replaces, help me figure out whether my credit card charges are correct or not. Instead of having a customer service agent, an offshore customer service agent helping you resolve that or help me return my item or there are very specific kind of verticalized applications that can plug in that ultimately replace what was manual and human driven before because humans used to manually make the motion blur in Photoshop and then it was automated with these software packages. And I think you can kind of think about it in that same way that these are known knowns, they don't require necessarily a human physical labor or some human responsiveness that if 95% of the work can be handled, it will get handled by some verticalized solution. So I think the physical labor versus the non-physical labor is one way to think about the distinction. Meaning is there some change in the physical world. Driving is absolutely a change in the physical world. You have to move physically through space. So that one is a very distinct class, all the stuff that's like communication, imagery, static imagery, audio and then visual video, there's some stacking that happens there. And some of those will be kind of siloed and then some of them will merge and you'll have these kind of unique kind of combo models. And so look as they start to work together, I think we'll see them completely rewrite some of these verticals like movie production or music production, right or advertising or we're seeing it now with video and creative arts with some of the visual stuff on the AI. And to be honest, a lot of journalism, a lot of creative arts have become the wisdom of the crowds over the last two decades where artists were looking at the collective works of the internet interpreting it and then coming up with content, which is kind of what these AI's are doing and then who legally owns the collective content is going to be a big question. So they're going to do someymmetry of that sort of PHP is her energy and in terms of The exact opposite. Yeah, it's the exact opposite. They say that this is actually your work. And I think that that's the right legal framework. But the answer to your other question is, this is why I think the hunt for proprietary data actually becomes the hunt that matters. All of this other stuff, I think, is a lot less important because I think you have to assume that all of these models will eventually just get commoditized. So there'll be a, you know, like you see like Jasper AI and you see a bunch of these generative AI companies, it's really interesting. But the problem is when you sit it on top of the same substrate, you'll have a convergence. Right? Everybody's chat model will eventually look and sound and feel like the same thing. Unless you're giving it a few special ingredients that other people are not. And so it's the hunt for those ingredients that will make this next generation of models really valuable. So to give it an example, you would have Wikipedia, which is creative comments anybody can use. So as a data set, not everybody can use that's owned by a company. So for would have advantage. Take an extreme example. If Kora didn't allow themselves to be crawled, right? Okay. Which they, yeah. But then they developed their own language model, which used the best of the internet. So call it, you know, GPT and Kora, maybe they are slightly better in certain domains and others. But the other extreme example is the one that I used in healthcare, which is, you know, if you have access to patient data that you will not license to anybody else, you know, it stands to reason that that model actually then has much better chances of highly effective clinical outcomes versus any other model. Apple watch comes to mind, right? Apple has all that watch data. They could pair that with epics. It's another very good example. That's it. What could they do together? And this is going to be like, this is the new oil is going to be data. And by the way, like to talk about Apple for a second, the smart thing is they've gotten so methodically they've never touted the AI. You know, they introduce one or two distinguishing features every year, right? So like the ECG, which was introduced many, many years ago, has only gotten slightly more usable like five or six years later. But in the meantime, there's, you know, tens of millions of watches collecting this kind of data. At the point, it's, it's using these devices as Trojan horses to collect training data. That is the oil. Uber and Tesla have all this data of the data being collected by, you know, the, well, the so far, or the cameras in the cars. The other difference though is that you have to be in a realm where you don't need regulators to go the last mile. So the problem with ADAS, I think, or level five autonomy is that eventually you get to a point where even if the model becomes quote unquote perfect, you still need regulatory approval. And what I'm saying is I think you have to focus on areas of the economy that are not subject to that or where the regulatory pathways already define. So for example, if you use that healthcare example, let's say that you had the largest corpus of breast cancer image data and you could actually build an AI that was a much better classifier for tumors versus other things. The FDA actually has a pathway to get that approved very quickly. The problem with, you know, level five autonomy is that there is no clear pathway. It's not again, we go back to almost a crypto example. We don't really know who will govern that decision and we don't know how that will be governed. So I think the thing that investors have to do and entrepreneurs, entrepreneurs have to pick their end market very carefully. And investors have to realize that this dynamic exists as well. If you're going to do this right, imagine the Robinhood trading. You know, trader, data set, watching people sell and shares and then predicting markets with it with AI. I mean, it could be crazy. You have that or payment for order flow that's used by Citadel and the other big, but not AI. Right. So maybe they are losing an error on their side. They are. I can tell you as somebody who sells, we sell a lot of machine learning hardware into this market. The biggest buyers are the US government and these ultra high frequency trading organizations. Here are some of the very final votes here. How could this affect astronomy? How could this affect our search of the galaxies going out past Pluto, Saturn, breaching Uranus? Any of those things? How could it impact? I'm trying to get a Uranus joke to lead. Help me out there, Tramon. You got to. I think you need to have more space related. Yeah, workshop this one with me. Or got biome related. You know, got biome. Yeah. So how would this affect super gut use the promo code twist? You have to trick Friedberg into thinking we're asking a serious question. Get him down the science path. And then rug pull him. Now that's the right use of rug pull. Exactly. Okay, let's do it. Here we go. Let's workshop. So tell us, you know, when you're doing like super gut use promo code twist to get 25 percent off. When you're doing super gut, you're analyzing people's guts. How would you then have machine learning in this, you know, API, this chat API and GPT 3? How could that help with processing all of that, especially when it passes through Uranus? Friedberg. You okay with that, Friedberg? You were hung over. I'm hung over, but I also had like a 7a and board meeting. So I'm also just a little beat up. Will you grumpy on the board meeting? Did you get a little contactor? No, it's fine. It's fine. You can keep the rage and the rage. I think I had my caffeine fuel and then I kind of cranked down afterwards. All right, everybody. We will see you next time for the Secretary of SAS, the dictator and the Sultan of hungover. We will see you next time. Bye-bye. Love you guys. Bye-bye. We give it an suck so we are so happy to give it a try. It's so before you go. This is our culture. Oh man, my hamlet's have to be at your room, meet me at the place. We should all just get a room and just have one big hug or two because they're all just like this sexual tension that we just need to release that out. What, you're the B, what, you're the B, B, what? We need to get merch. I'm going on, lilin' I'm going on, lilin'