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I had this thing with my oldest son where I don't know if it's all kids, but he's 13. He doesn't know how to answer the phone. Not to save his life. Oh, he picks up the phone. Hello. And so I said, listen from now on, when you call me, I expect a certain way that you pick up the phone. And that's going to be practiced for you, how you interact with anybody else. And vice versa, as well, if I call you, you have to pick up the phone. And if you don't, I'm hanging up right away. So yesterday, he calls me and I'm like, Chimalt speaking. You know, it's like, hello, Chimalt speaking. Done. Hi, he calls back. Hello, Chimalt speaking. Done. We did this three more fucking times. And then finally I said, when will you get it through your head? Can you please just answer like if I say hello to Chimalt speaking, hey, dad, it's your son or hey, dad, it's. And it's unbelievable. And he's like, well, none of my friends pick up the phone like this. And I'm like, oh my god, like don't they think they need to have verbal communication skills? It's unbelievable. And then when I call him, he picked up the phone. What? Not even hello. Huh? What is that? It's like a grunt. Minimal efforts, like the minimum number of syllables. It's embarrassing. Are you kids like this? Or is it just my kid? Actually, I don't think I've heard him pick up the phone. I need to test that. Oh, what? J.K.L. was on Twitter, calling me out for not denouncing the Chinese balloon is strong enough language. Although I don't think he understood the language I was using. Did you understand what the word errant means? What did you think it meant? You know, I do understand the word errant. It's generally mean shring off course. Yeah, traveling in search of adventure, at least according to Mary and Webster. So I just thought maybe you're being a little... But I know you're a dove. But it was a little dove. I think they were just off course. I think you think they were off course or they were doing it deliberately. You buy that it was off course? Genuflect. Go, genuflect. J.K.L. Go, go, go. So I knew J.K.L would have to join in this nationwide panic over the balloon. I have no panic over it. It doesn't mean that it's a word errant means. That a monoletic camera does to it. J.K.L. I got some really bad news for you. There were these things called spy satellites. No, we know what that is. And they can see everything. I don't know. It's obvious people they've been sending these balloons over here for a while. I just thought you were framing as it was errant as in like... What do you know? Do you think it was... I'm sincerely asking. Do you think it was errant? What is it? What is it? It's such a hair brain scheme to send a balloon flying over American territory that the Occam's razor explanation here is that they somehow lost control over it. And these things are not steerable. So like my guess is that it probably wasn't deliberate just because of how stupid a plan it would be and how like obvious it would be. But it could be. I don't really know. What I do know is that the whole nation got in a lather and a tizzy and sort of hyperventilating about this balloon. And it just shows how reflexively hawkish the media is. You know, it's like, hey, can we just wrap up this war in Ukraine before we start another war with an even more formidable... I think that's fair. The balloon got more in tension than us blowing up Nord Stream. Exactly. Hold on. We're pretty jump into it. No, what I would say about that is the media insight is the valid one. I was just responding to the errant and I was curious if you actually thought it was an accident. I don't think it's an accident. I don't think there are accidents. Well, I think it clearly was off course and problematic. So, you know, I don't know about the intentionality of it. I think it very well could have been intentional, but I tend to think because it's such a stupid hair brain scheme, like I almost given the benefit of the doubt, not because they're not capable of spying. I'm sure they're spying on us. Obviously, they're spying on us just like we're spying on them. That's what we both do. But it seems like such a stupid way because you're going to get caught. It's a made for TV moment. You have to understand the nature of live television and why the media overreacted to it. It's ongoing. So, because it's not final, it's like a live event occurring, like when kids are trapped in a mine. Kids are the best stories for CNN because you can keep updating people and people keep turning the TV on to check on the status. So this one was just made for CNN because obviously we're going to shoot the thing down and obviously you can interpret into it if it's an accident or not and it just gives them something to talk about on a slow news week. But it is interesting. I think your point that is interesting is the Nord Stream story correct or not. Why is that not being covered? It's not being covered because it's not an ongoing story. So that just shows you. I don't think that's right. I think it's not being covered because the mainstream media already took a side on this. So, even more so. Yeah. Well, it's not just cynical. So when Nord Stream got blown up, the administration came racing out with the line that the Russians did it. This was self-sabotage. And by the way, the media repeated this endlessly. This was the media line. And it never really made sense to anyone who's paying attention because first of all, this was an economically vital asset to Russia. Second, it was their main source of leverage over Europe. Was there control over the gas supply? So the idea that they would shoot themselves in the foot that way, just to somehow what, show how crazy they are. It never really made sense to anyone who's paying attention. And the fact that the administration and the media so quickly raced to that conclusion suggested that it was maybe a cover story because if we had nothing to do with it, you would just be more neutral and say, yeah, we don't know what happened. But they had to like promote this line that will the Russians did it, which just never made any sense. And now, Sy Hersh has come out with this story. So it laying out in great detail how we did it. It's not just saying we did it. It's laying out who did it and how and the steps and all that kind of stuff. And just to you guys understand who this guy is, he's this legendary Pulitzer Prize winning journalist. He's like 86 years old or something like that now. But he broke during Vietnam. He broke the story of the Meal Eye massacre, which the military denied until he proved it. He broke the story during the Iraq War of the Abu Ghraib prison abuses, which again, the military denied until it was undeniable. His Pulitzer winning is all you really need to know. He's a Pulitzer winning journalist, basically another covert military action. And look, we don't know for sure whether it's true or not, but it looks, it looks pretty bad. Do you think that Europe knew? Do you think that the Europeans were told that the Americans were going to go and blow the thing up? If that's true, by the way, the administration has said clearly this is a false story. It's just a reflection. I think the specific code was this is pure fiction. The Ukraine would be the most likely person to do this. You've got to look for means, motive and opportunity. They don't have the opportunity to go down the story. I don't think the Ukrainians have the capability to do an undersea mission like that. Interesting. The Norwegians do. And the story maintained that we did it with them. The British do. Story didn't say whether they were involved or not. So no, my guess is that if this was a covert US activity, it was kept to a very small group, which is why it'll be hard to prove more definitively than this. The other side of the argument is this is such a provocation and the administration saying is fiction. So what is your response to that, Saks? Would the US do something so provocative or would they have somebody else do it? And would Norway do something so provocative? It seems like an extremely offensive technique as opposed to just backing the Ukraine to defend itself against Russia's invasion. First of all, before the invasion, Biden at a press conference said that if the Russians invade, Nord Stream would be no more. And they asked him, well, how can you make sure of that? That's a deal between Germany and Russia. We're not involved. They said we have ways. We have ways. Just trust it'll happen. Separately, Victoria Nulund is our deputy security state. It said something very similar about how we would stop Nord Stream if the Russians invaded. And then after Nord Stream got blown up, Lincoln at a press conference said that this was a wonderful opportunity. I was extolling all the benefits of this. And then Victoria Nulund at a congressional hearing said that I'm sure we're all very glad that it's a hunk of metal at the bottom to see again extolling all the benefits. And we've discussed the benefits on this program. If now we've shifted the European dependence on Russian gas to a dependence on American gas. So the fact of the matter is the administration kind of telegraphed what they were going to do. They had the capability to do it and they had the motive to do it. So it's certainly a plausible story. You're right that we can't know for sure. It's a single source story. You don't believe the administration's story depends on the credibility of Sy Hersh. But as it stands right now, whose story do I think makes more sense? Probably Sy Hersh's. You believe Sy Hersh or the spokesperson of the CIA who wrote, the claim is completely an early false. Just to be clear. Same people denied Abu Ghraib, they denied me live. You believe that. They denied everything. They denied that NATO expansion or anything to do with breaking out of this war. Yeah, I mean, this is one of these situations where we can't possibly know. Yeah, you make a good point, Jake Al, which is this if true. Look, I'm not saying I don't know if it's you're leaning towards believing it. I lean towards thinking it's more plausible than not. Okay. It's also like who else could have done it and who, again, who had the motive means an opportunity. But you make a great point, which is if we did it, it's an incredibly provocative act. It's basically perpetrating an act of war against a country that has thousands of nuclear weapons, Biden promises at the beginning of this war that he would keep us out of being directly involved. So this would directly contradict what he said at the beginning of this war. So I think it's a very scary situation here. Yeah, no, if you've been, if you didn't do it, if the US didn't do it, like why don't we find the real killer? I have the theory. Here's my theory. The CIA knew how to do it. Biden wants to do it. The Republicans want to do it. Obviously the people who are the most pro-stopping Nord Stream have been the Republicans. They've led this charge even more than the Democrats. So it's a bipartisan issue, stop Nord Stream, bipartisan issue hands down. I think the CIA probably knew how to do it. And just like we equipped the Ukraine to do it, we might have facilitated the Ukraine and a collaborator, UK, Norway, some freelancers. You know, we have those freelance former Navy SEALs that operate. Perhaps the CIA just said to the Ukraine, here's a, you know, block ops group. If you wanted to engage them, you could feel free to do so, which would then split the difference between what SIA is saying, what the CIA is saying, which is typically where the truth lies is probably between what this investigative journalist of note has said and what the CIA is denying. The CIA probably has plausible deniability. That's my point. Well, if you could find a source for that story, Jake, how that lays out in the same level of detail that Herschens laid out in terms of the meetings that occurred, what was approved when, how they did it, you know, when they did it, the explosives they used, the divers they used, it goes into a fair amount of detail. Incredible detail. Yeah. I mean, you're laying out a story. So down to what explosives, right? But you're trying to put what you just said, which is basically you inventing a story on the same level as Herschens' story. I understand, but he actually has a lot of detail in his story. He had umpteen sources. There was a lot of people that were willing to tell this story. No, no, I don't think that's actually the case. I don't think it has umpteen sources. And there's no on the record. There's one main source. There was one main source. Yeah. But who provided a ton of detail. I don't know exactly how much he was able to directly corroborate with other sources. I don't know of that. The other thing I wonder, Sachs, is he with this one source story, he has a collaboration with the New Yorker and anybody would, if this was a really well-sourced and you could back it up kind of story, they would love to have the ratings for this story. There's a blockbuster story. Or as happens a long time, which we learned was it through the Valerie Planeter, which is that these major news publications will some Tom Simms had a back channel back to the National Security apparatus when they have something like this. And the message was, you can't hit print on this. Yeah. Which case? It goes in just self-publishes himself, which wasn't really even an option a few years ago. No. Yeah. So, I mean, this is the raw shock test of raw shock test. You have the media. You got the CIA. It's a fodder for a great movie. When I go back to Jay Callitz, I think you can lay out some theories about, let's say, you know, the polls did it or maybe Ukrainians with the British or something. Yes, you could lay out those theories, but the media wasn't willing to entertain any of those theories when this news broke. What do they do? They don't have the Russians. And that story made no sense, but they set it so definitively. I'm looking for the source on that. I'm looking for, Nick, if you could pull up the source of the administration blaming the Russians, I just want to make sure we're accurate. Go buy and did it at a press conference. Yeah, I just want to make sure that you have the sabotage by the Russians. Now, they didn't push it that hard. What was interesting is the Biden administration set up, but they didn't keep coming back to it. But the media really ran with it. And when people on both the left and the right, like people like Jeffrey Sachs on the left and Tucker Carlson on the right, basically started a question whether the US could have done it. They were accused of being conspiracy theorists and Putin's stewedges and all the rest of it. And now all of a sudden, here comes Seymour Hirsch with a pretty detailed story lending credence to that point of view. Yeah. It just may indicate we don't know everything that's going on with this war. And I think the longer this goes on, the more dangerous it is. Freeberg, you have any thoughts on geopolitical issues and who might have blown up Nord Stream? Now, what are your sources saying, freeberg? What are your sources and sides quite are saying? Speculation is best left to the future. I don't know about the whole speculating on what could have been done in the past by someone. Those are conspiracy theories. They're not actually conspiracy theories. You were saying your stream was blown up. You understand that, right? Like there's no doubt that it's blown up. It's Jake Aless theory. Oh, yeah. Jake Aless theory. It's just a story. I think you've got to bring data to the table to the pure speculations. You've got to bring data to the table to make it a by the way, speaking of which, Radik Sikorsky, who is a Polish diplomat, I think he was like their foreign minister, when Nord Stream blew up, he tweeted a photo of it saying, thank you, USA. Oh, which was one of the reasons why people thought that, okay, like, yeah, of course the US did it, you know, who has the capability to do it, who has the motive to do it, who said they were going to do it, and who benefits? You crazy. We bow no. Who benefits? Who was conducting NATO exercises in that region? Right. Three months right. Right. Exactly. And Jeffrey Sachs pointed that out on, I think it was a CNBC interview before they basically stopped him because he's not allowed to talk about this on network TV apparently, but he basically pointed out they were like, US radar signatures in the area. President Joe Biden declared that this is from Bloomberg that a massive leak from the Nord Stream gas pipeline system in the Baltic Sea was an intentional act and that the Russian statements about the incident shouldn't be trusted. It was a deliberate act of sabotage. And now the Russians are pumping out disaffirmation lies by 12 reporters throughout the White House. So he didn't exactly say the Russians did it. He just said it's an act of the media. The media did the Russian. What's that? The media did. You could do one of these montages where it was like Russian sabotage. In fact, go to Matt. But he just did it. Biden didn't say it was sabotage. He said it was an act of sabotage. If you actually look at what Biden said, everything he said is absolutely true if the US also did it. Correct. Yeah. Every single sentence that we single send interesting to Biden said is 100% true whether we did it or whether Russia did it. It was a deliberate act of sabotage in part of his bias. Think about it. If we did it, we know they didn't do it. And then we have to be careful about suggesting they did it. What do they Germans think? Because this is the Germans pipeline. So if we blew it up, that's also an explain to me your thinking on the chess board of our relationship with Germany. If we blew it up, would they not also see that as a hostile act? This is why I asked if Europe knew because I think you have to tell Germany that it's going to happen. And I think the quid pro quo with Germany is some amount of guaranteed supply that the US directs into Europe so that they know that their long term LNG supply is intact so that they become ambivalent. Right. There's a point of indifference where the Germans say, okay, we don't know when this thing is going to get turned back on and we don't know what the implications of it are. Here's what our demands are, meaning our energy supply, our energy needs are. And so as long as the United States can say, look, worst case, we have stuff in the, you know, SPR that we can give you, there's probably a point of indifference where the Germans say, okay, we're just going to turn around and not say anything. And I'm curious did the Germans say anything when this happened? No, not that I love. I'm looking for the, I was literally just type to Nick. What was the Germans position on this because that's interesting too. That's a tell. Well, yeah, if you're breaking this down like a poker hand who we're trying to figure out, if you construct this hand, right, pre-flop, it's like, you know where both of these folks are, right? Okay. There was a really interesting video that a guy named Matt or Falea who puts together these really funny videos, he puts together these montages of media reactions to things. And what he shows is that, you know, you can have like 20 different media outlets and they all use the exact same words. And when he clips it together, you can see that the reading from somebody's talking points and it's not really clear who. And basically if you look at his video here on Who Blow Up Nord Stream Pipeline, you see that there was like a party line from the mainstream media on this stuff. Nord Stream 2, we will bring it into it. What, how will you, how will you do that? I promise you we'll be able to do it. So we're all up for Nord Stream Pipeline. I mean, we have to conclude with that. It was a Saturday line. It was said as most likely Russian sabotage on its own infrastructure. I think it's Putin's way of sending a message. What Putin is saying to us by blowing up his pipeline is, look, I can blow up a pipeline. No one knows that Putin did this himself. Who are these talking kids? Smoking gun. Without the direct proof. Yeah, I think logic and common sense will tell you that without the evidence, Russia was played high in the incident. You can say it for sure. Who sabotaged the Nord Stream 2 pipeline? The Russian. Right. This nonsense. Come on, that's a terrible. You know, it's these talking heads who have no firsthand experience in them. That's fantastic. More than willing to comment on this stuff. It's a terrible, it's a terrible, it's a terrible, it's a terrible, it's a terrible question. All his videos are like that where, like he has one on the hundred buying laptop as well, where again, he's got like 20 different talking heads and media outlets all portraying it in exactly the same language. And it makes me realize that this is a narrative around things. So the Sunday morning shows you hear the same narrative from each side. How does that actually get coordinated? Each side builds those bullet points, emails there. What do they call them, surrogates? The email, all the surrogates and say, just keep saying these things over and over again to codify. Yeah, so what's up? It's what's happening when they're just like, say this over and over again. How does it work, Zach? I think it's partly talking points memos that go out to chat groups. I think it's also just people looking on Twitter. And then there's like certain key nodes that they follow. And they know, okay, this is the party line because such and such key person is saying it. And they take their cues. Is that mnemonic, mnemonic effect that you guys always talk about? People with mnemonic, mnemonic, yeah, the mnemonic. Yeah, the thing to understand is that all of the prestige outlets repeat the same party line and have the same perspective. Yeah. You got to do your own search for information. This is the beauty of sub-stack actually. This is why sub-stack is so important is it actually gives you a lot of terms. It's disruptive. Yeah, it's disruptive. It's disruptive because like you've got 10 different mainstream media networks or newspapers and magazines, but they all have exactly the same talking points except maybe Fox News is kind of the one exception. Although even Fox on the whole Nord Stream thing, you saw that Fox seemed pretty militaristic and they had the same generals basically blaming the Russians for this on Fox. Yeah. Germany's position is just, hey, everybody, this is sabotage. So that's it. But not who did this sabotage. I think you asked a really good question there about the German interests in this. Right now, the German economic interest and the German foreign policy interests are not aligned. What's clearly best for the German economy is to have cheap natural gas powering its industries even if it comes from Russian pipelines. And they no longer have that anymore. In fact, they may never have that again. So they're going to pay a very high price economically, maybe forever. And remember, there are whole economies based on industry. They're very industrial power. So if this war drags on for a long time, I think Schultz might be in some political trouble precisely because he's gone along with the Americans on this. And there is a growing political opposition to this war inside of Germany. War fatigue is a real thing. And this thing's got to wrap up at some point. Any final thoughts, Freiburg? I know you didn't get to involved in that conversation. But what is any game theory from you? No. Okay. There you have it, folks. Sultan of Science checking in. What's the problem? Is the establishment? What do you mean, Seth? It's a hard person to talk. It's like, you predicted. Why don't you have my position on this? No, I'm just trying to understand. I don't know. I'm not a pro-establishment. I think you know that. I'm just analytical around the fact that I think there's a strong orientation towards conflict. And I think there's still is. I don't think that there's much of an incentive or a motivation to back down because this conflict creates a significant amount of debt owed back to the US. It creates a potential future asset stream. Creates a realignment of power. Everyone's looking externally as internal economic conflict and wealth disparity issues arise. And economic growth is challenged. And inflation is soaring. It's a great place to address one's energy. So I think all of this stuff is detailed analytical shenanigans around who's saying what or who's doing what? I think the underlying thesis and the underlying river that's flowing is one that's like looking for external conflict. I think the same is true with the US and China. And I think that's a military industrial complex. It's going to benefit massive limits. The longer this drags out, the more the conflict in Taiwan heats up, the more we're going to invest in our military. We often talk about these things as if they're like top down like master plan driven. And as we all know, like they're more Ouija board driven. It's a bunch of guys. They got their hand on the Ouija board. And they're all just had a little too much caffeine. You know, and in this case, I think it's just more about like everyone's a little anxious in the anxieties leading to a desire for more conflict. We're not happy at home. If you're happy at home, you're not looking externally for conflict. That's true in nearly every developed nation on earth today. That's it. I don't know. Pretty similar. I like your position. I think there are a lot of interests who benefit from war. And I think the foreign policy establishment is funded by those interests. And that's kind of wired for war. At least in terms of the reflex, right? Even something as relatively harmless as a balloon. That becomes like a cashew spell. It's like people are ready to go to war against China over that. I saw a couple of military leaders give a talk a few months ago. It's in a private thing. So it wasn't on public record with the establishment? No, yeah, I was at the establishment gathering. With the establishment. Oh, this is the Elurmanani. Did you genuflect twice going in? Because that's the definition. You do one genuflect on each knee. Then they give you the bag of capital. With the Elurmanani like down the side for your mental health. Yeah. What was striking to me in this particular thing where these guys were being interviewed on stage. I'd like to dinner thing. And they were so oriented around their next steps in escalation. And I think it speaks to the point, Zach. Like, none of them were thinking about like where are we out today? How do we de-escalate? What is this going to get? There was no conversation at all from anyone about resolution or de-escalation. With every single one of them, it was all about like my orientation for getting bigger, going deeper, going harder, going stronger, making this thing bigger. And I think that was really scary to me because I didn't hear anyone having a conversation around like, how do we should we even consider whether we should get bigger? Everyone was thinking, assumptively, it was going to get bigger. I like the Ouija board. You have to follow the financial incentives. When the last time we looked at this, right, Leon Panetta and all these other guys who were screaming for war, they were getting paid by the military and industrial complex. I remember when Lloyd Austin was nominated as defense secretary. He had some conflict issues because he was just on the board of Northrop Grumman or one of these big military industrial companies. And so, of course, these generals have to push for war because as long as they're gurting for war, they're guaranteed to have for them a very lucrative job once they leave the military. The Ouija board, though, sacks on and I'll throw it to you. Maybe you can keep this metaphor going. The media's got their hands on it. They want ratings. You have the energy industrial complex in this German conflict who seeks to benefit massively if people invest in renewables or you find other oil off Norway. Norway's oil is one of the largest reserves that's untapped. You have this Ouija board, media, energy and the military industrial complex all moving it at once. Maybe you can speak to that analogy. Everyone wants to move it to the side of the Ouija board that says escalate. There are very few people that have the energy to move it to the other side that says the escalate. It's not a probable day. Escalation means less energy, more or less investment. So yeah, we're going to go escalate. You know who warned us about the military industrial complex? Yes. Dwighty Eisenhower, Supreme of the Republic of America, in WWII, wins the war. Patriot war hero, top general, becomes president, Republican president and is departing address warns us that yes, we need a defense industry, but they become a vested interest in favor of foreign interventions of war. In the 1960s, on the other side of it. Where's the interest on the other side of it? I can tell you this, the American people don't want to be in a war with Russia. I don't even think most American people want to send 100 billion over there. They want to send 100 billion to their cities to fix crime and all the other problems. Yeah, homelessness, everything. If you've never seen that farewell address from 1961, it is well worth watching. You can find it on YouTube, just search for military industrial complex Eisenhower and this is a person who was part of the military industrial complex saying watch out for this. It was a very, very, very, very, very, very, very, very important. Yes. He was in the machine. He helped build the machine. Welcome to the all-in podcast with us again, David the Dev Sachs, Chimoth Pali Haapatia and the Sultan of Science, who is on his podcast. Oh my God. So many podcasts you're doing. The Sultan of Sciences in hot demand. What are all these podcasts you're doing, Freeberg? All these science podcasts pulling you in? I did a podcast with Brian Keating last week who was really kind enough to reach out to us. He's had some awesome guests. He's a cosmologist at UCSD, professor down there. And we were supposed to record that day and then we canceled, I think, last minute, right? Yeah, yeah. I was only supposed to be on with him for an hour and I'm like, oh, well, my next thing just got freed up. So ended up doing like three hours. I was so, I was like exhausted that day. So I look really hungover on the video and probably part for the course. It's a little a lot. Yeah. But no, Lex Friedman for you. So Chimoth and I have been Friedman. Lex Friedman, but you have not. He's invited you yet. Lex has Lex invited you. No, no, he's not. Where's my invitation? Where's my invitation? I know what's going on here. Collect all four of us. What are you doing? All right. No, no Davos and no Lex Friedman. Wait, what's going on? You remember? Anti-establishment. What's going on? No, I'm too anti-establishment sucks. That's, you know, the stress has arisen. Nobody's inviting this quartet to anything. Prophels, we're not doing all in live from Davos. It's not happening bugs. Sorry. They don't have that heat. I agree. I'm with Dr. Marks. I don't want to be part of any club that would have been a member. Absolutely. And they also don't want you there anyway. So it works out for everybody. It does fill me with like a rage where I actually might agree to doing the all in summit again. Oh, by the way, proposal coming your way this weekend. If you want to really, really, really fund your nose at the establishment. Yes. Let's do it. That's the exact same dates and times as an establishment conference. Oh, the all to Davos. And then invite all the best guests so that they are, they come towers. Just a suggestion for this. Did you choose all Ted? Ted Davos have a lot of it. I guess if they're new establishment conference, you could call it the anti-establishment. Oh, that's going to be a tagline. Let's come up with a tagline that just tweaks everybody. And then we'll go. Oh, she created a list. We should create the anti-list. You know, they have their like establishment list. We should have the anti-list. That's a good point. I like the anti-establishment. Start with them. I have a great vanity fair establishment thing story. Oh, go ahead. I snuck on that list. They put me on that list a decade ago. Let me find a link. Go on. And the most incredible thing about it is that when you go to the event, which is kind of a cool event, we all had photos taken by Annie Leibovitz. Oh. And I have a montage of some of the people that took photos that day. That's pretty cool. Annie, Erin Levy, Priscilla Chan, Bezos, bunch of people. But I look like a toy. I was about to say, just before you had, this way you had the dad bod and no fashion sense. Yeah, it was like, yeah. Oh, look, here it is. I just think. Basically, I had no stylist. It was like a year or two post Facebook. It was not a good look for me. Yeah, but that's not that. That's not the picture. Is that Tom Ford? That was your Tom Ford face. He's doing the jeans blazer thing, which is like a really tired look for a surprise. For free skinny jeans, though. It's like a little free skinny jeans. That was in 2011. Not bad. That's not so bad. Just don't pull up the chamauth pictures when he's wearing like, oh my god, he's on his macy shirt. If you do the Google search, you put the images before 2011. You will find chamauth photos. Do the Facebook for Greta, I wear the same thing every day for four years, five years as brutal. Oh, oh my god. What is that's awesome? That's awesome. We got to break this down. Yeah. See, this is when the sweater game was not tight. This is like sweater 1.0 game. And I didn't know what I was doing back then. Just stop. Put these pictures off, please. Look, oh, he's also got the watch subtly peeking out. This is back when he was like, oh, I got a Rolex. Ooh, that's a petite. But anyways, yeah, okay. Oh, what is that? This is when the watches were only five days. That is zero. I don't know if that watch got to six or two. Or two, but yeah, same story, same, same, same, same, same, same, same, same, same. All right, well, listen, all right, so I got an Apple watch and I'm going to up. Oh, geez. That's a dad vibe. There's a dad vibe. Yeah, yeah, yeah. He's going to spare the dad vibes. Wow. That must have been from, yeah, 13, 14 years ago. Wow. God, you had no style. I really didn't. I mean, don't pull up pictures of me. I was fat. Yeah, yeah, yeah. Pictures of me eating egg sandwiches all over the internet. Oh, yeah. Chubby Jake, how? Oh, man, look at that face. There he is. That's plus 20 pounds. Let's keep this going. Search worse. Microsoft versus Google. Okay, it's been a rough couple of days for Google. We've all seen a Google and Microsoft. We're so off. Both did live demos of their new Genervai, yadda, yadda, yadda. You guys all know about ChatGPT. But now Bing is integrating it into their search engine, getting there before Google. In Microsoft, CEO Satya Nadella, he is going ham. He looks great. He's fit. He's wearing a tight t-shirt and he is saying he's going to make Google dance. Dance, Google dance. He is getting up in their business and listen, he is in a distant second place. So it makes sense. On the other hand, Google's AI demo was, frankly, a bit of a disaster. Poorly received. Stock they dropped 12% since his event. And their presentation did not include the chatbot Bard because in search because it wasn't working. It seems like there was an error in it when they said, what new discoveries from the James Web Space Telescope can I tell my nine-year-old and Bard answered that it took the first pictures of a planet outside our solar system, which is false. Which of course we all know about ChatGPT. It's only right half the time. It's a little woke on the margins. So anyway, there was a screenshot circulating today, which is probably false, but it says the following. Me and a bunch of coworkers were just laid off from Google for AI demo going wrong. It was a team of 168 people who repaired the slides for the demo. All of us are out of jobs. I can't imagine that's real. But if it was, that would be a hardcore moment for Google to fire a bunch of people for screwing it up. Listen, you worked in the belly of the beast for your bird. What are your thoughts on being poking the tiger and telling Google, dance? Sundar, dance. What's interesting is Google's had an incredible AI competency, particularly since they bought DeepMind. It's been predominantly oriented towards internal problems. They demonstrated last year that their AI improved data center energy efficiency by 40%. They've used it for ad optimization, ad copy optimization. The YouTube follow video algorithm. So what video is suggested to you is your next video to watch, which massively increased YouTube hours watched per user, which massively increased YouTube revenue. What's the right time and place to insert videos and YouTube or insert ads and YouTube videos? So auto fill in Gmail and Doc. So so much of this competency has been oriented specifically to avoid this primary disruption in search. Obviously, now things have come to a bit of a point because this alternative for search has been revealed in chat GPT. You guys can kind of think about search. We've used this term in the past. Larry and Sergey, the textbook that they read, one of the original textbooks that's used in internet search engine technology is called information retrieval. Information retrieval. So information retrieval is this idea that you know, how do you pull data from a static data set and it involves scanning that data set or crawling it and then creating an index against it and then a ranking model for how do you pull stuff out of the index to present the results from the data that's available based on what it is you're querying for. And doing that all in a tenth of a second. So you know, if you think about the information retrieval problem, you type in the data or some rough estimation of the data you want to pull up and then a list is presented to you. And over time, Google realized, hey, we could show that data in smarter, quicker ways. Like if we can identify that you're looking for a very specific answer, we can reveal that answer in the one box, which is the thing that sits above the search results. Like if you said, what time is it? You know, when does this movie show at this theater? So they can pull out the structure data and give you a very specific answer rather than a list from the database. And then over time, there were other kind of modalities for displaying data that it turns out or even better than the list, like maps or shopping where you can kind of see a matrix of results or YouTube where you can see a longer form version of content. And so these different kind of information retrieval media were presented to you and it really kind of changed the game and created much better user satisfaction in terms of getting what they were looking for. The challenge with this new modality is it's not really fully encompassing. So if you can kind of think about the human computer interaction problem, you want to see flight times and airlines and the price of flights in a matrix. You don't necessarily want a text stream written to you to give you the answer that you're looking for or you want to see a visual display of shopping results or you do want to see a bunch of different people's commentary because you're looking for different points of view on a topic rather than just get an answer. But there are certainly a bunch of answer solutions for which chat DPT type, you know, natural language responsiveness becomes a fantastic and better mode to present answers to you than the matrix or the list or the ranking and so on. Now the one thing that I think is worth noting, I did a back of the envelope analysis on the cost of doing this compared to chat GPT. So Google makes about three bucks per click. You can back into what the revenue per search is a bunch of different ways. One way is three bucks per click, about a three percent click through eight on ads. Some people estimate this is about right about five cents to ten cents revenue per search done on Google or anywhere from one cent to ten cents. Even if they don't click the ads because one out of a hundred people click an ad and that's where the money comes from. So let's just call it five cents, right? And you can assume a roughly 50 percent margin on that search, which means a 50 percent cogs or cost of goods or cost to run that search and present those ads. So you know, right now Google search costs them about, you know, call it two and a half cents per search to present the results. A recent estimate on running the GPT three model for chat GPT is that each result takes about 30 cents of compute. So it's about an order of magnitude higher cost to run that search result than it is to do it through a traditional search query today, which makes today, today, that's right. And so, so that's the point, like it has to come down by about an order of magnitude. Now this is a, this then becomes a very deep technical discussion that I'm certainly not the expert, but there are a lot of great experts that there's great blogs and sub stacks on this on what's it going to take to get there to get a 10X reduction in cost on running these models. And there's a lot related to kind of optimization on how you run them on a compute platform, the type of compute hardware that's being used all the way down to the chips that are being used. So there's still quite a lot of work to go before this becomes truly economically competitive with Google. And that really matters because if you get it to the scale of Google, you're talking about spending eight to $20 billion a quarter just to run search results and display them. And so for chat GPT type solutions on Bing or elsewhere to scale and to use that as the modality, you're talking about something that today would cost $80 billion a quarter to run from a compute perspective. If you were to do this across all search queries. So it's certainly going to be a total game changer for a subset of search queries, but to make it economically work for, for these businesses, whether it's Bing or Google or others, there's a lot of work still to be done. The great part about this, Chamath is that Bing gave 10 billion to our friends Sam and chat GPT to invest in Azure, which now has the infrastructure and will providing the chat GPT infrastructure to startups or corporations, big companies and small alike. So that $10 billion should do enough to grind it down between software optimization, data optimization, chip optimization and cloud optimization, yes, you would think so or no. The ability to run this at scale is going to happen because we're getting better and better at creating silicon that specializes in doing things in a massively paralyzed way. And the cost of energy at the same time is getting cheaper and cheaper along with it. When you multiply these two things together, the effect of it is that you'll be able to run these models the same output today will cost 1 1 10 as long as you ride the energy and compute curve for the next few years. So that's just going to naturally happen. I have two interesting takeaways and one is maybe a little bit of a sidebar. So the sidebar is if you guys were sitting on top of something that you thought was as foundational as Google search back in 1999, would you have sold 49% of it for $10 billion? Or no, I think the answer is no. I think the answer is no. Not in an environment where you have unlimited ability to race capital. This is something that we've said before, which is that chat GPT is an incredibly important innovation, but it's an element of a platform who will get quickly commoditized because everybody will compete over time. And so I think what Microsoft is doing is the natural thing for somebody on the outside looking in at an entity that has 93% share of a very valuable category, which is how can I scorch the earth? And so Microsoft effectively for $10 billion, but almost 50% of a tool. And now we'll make that tool as pervasive as possible so that consumer expectations are such that Google is forced to decay the quality of their business model in order to compete. So that as Friedberg said, you have to invest in all kinds of compute resources that today are still somewhat expensive. And that will flow into the PNL and what you will see is that the business quality degrades. And this is why when Google did the demo of Bard, the first thing that happened was a stock went off 500 basis points. They lopped off $100 billion of the market cap. Most seen reaction to, oh my God, this is not good for the long term business. So the real question is not good for the long term business on a mechanical basis. When you get an answer, you don't have to click the links. No. Look at Google's business, they have the best business model ever invented on earth ever for a profit company. It just reigns money. This is a business that this year will do almost $100 billion of free cash flow. It's a business that has to find ways and we kind of joke, but they have to find ways to spend money. Otherwise, they'd be showing probably 50 or 60% EBITDA margins and people would wonder, hey, wait a minute. You can't let something like this go unattended. So they try to do a lot more things to make that core treasure look not as incredible as it is. They have 120 billion of cash. This is a business that's just an absolute juggernaut and they have 10 times as many employees as they need to run the core business. I don't know what that is, but my point is that it's an incredible business. So that business will get worse if Microsoft takes a few hundred basis points of share, if meta takes a few hundred basis points of share, if 10 cent does, if a few startups do, or by the way, launch something called PO, which I was experimenting and playing around with last weekend. If you added all up, what Sautya said is true, which is even if all we do collectively as an industry is take 500 or 600 basis points of share away from Google, it doesn't create that much incremental cost for us, but it does create enormous headwinds and pressure for Google with respect to how they are valued and how they will have to get revalued. And that's what happened. So the last thing I'll say is the question that I've been thinking about is what is Sundar Duke, right? So what's the countermeasure? Yes, this is what I was going to get to. I think the countermeasure here, if I was him, is to go to the board and say, guys, we're going to double tack. Right? So tack is the traffic acquisition cost that Google pays their publishers. It is effectively their way of guaranteeing an exclusivity on search traffic. So for example, if you guys have an iPhone, it's Google search. That's the default search in the iPhone. Google pays Apple. This year, this renegotiations for that deal could mean that Apple gets paid $25 billion for giving away that right to Google. So if these Google does all these kinds of deals, last year they spent, I think $45 billion or so. So about 21% when you think about that, Shamaaf. So basically paid Apple, which was working on search technology. They were working on a search solution. They had paid them to stand their business. And they're paying everybody. So I think the question for Google is the following. If you think you're going to lose share and let's say you go to 75% share, would you rather go there and actually still maintain your core stranglehold on search? Or do you actually want 75% share where now all of these other competitors have been seated? Well, you can decay business model quality and still remain exclusive if you just double the tap. And what you do is you put all these other guys on their heels because as we talked about, if you're paying publishers two times more than what anybody else is paying them, you'll be able to get published to say, hey, you know what? Don't let those AI agents crawl your website because I'm paying you all this money. Remember that, right? So do not crawl in robots.txt equivalent for these AI agents. And I think that that'll put Microsoft and all these other folks on their heels. And then as you have to figure out all this derivative work stuff, all these lawsuits, Google will look pristine because they can say, I'm paying these guys double because I acknowledge that this is a core part of the service. So that's the game theory I think that has to get figured out. I was in doubt. I double attack. I think I love the second part because hold on, let me get sex about that. I love the second part, Tremoth, because in this clip, I'm about to show Neelay Patel from the verge did an awesome interview with Satya. And he basically would not answer this question, at least to my satisfaction, which is, hey, what do the publishers get out of this? You've ingested our information. How do we get paid? Watch this clip. It's very telling. And the answer, or even in the chat session. But if I ask the new bang, what are the 10 best gaming TVs? And it just makes me a list. Why should I the user then click on the link to the verge, which has another list? To the time bus gaming TVs? Well, I mean, that's a great question. But even there, you will sort of say, hey, where did these things come from? And would you want to go dig in? Like that, even search today has that. Like we have answers. They may not be as high quality answers. They just are getting better. So I don't think of this as a complete departure from what is expected of a search engine today, which is supposed to really respond to your query. While giving them the links that they can then click on, like ads, and such works that way. And there's a terrible answer. He needs to address how they get paid. He punted the answer and just said, hey, listen, search works this way. Sacks will the rights to the data will will Google just say to Korra, hey, we'll give you a billion dollars a year for this data set. If you don't get a dandy, but he else, they should maybe sacks the strategist. Let me hear your strategy here. You're now CEO of Google. What do you do? I think there's maybe even a bigger problem before that, which is I think the whole monetization model might change. So the reason why Google monetizes so well is perceived as having the best search. And then it gives you a list of links and a bunch of those links are paid and then people click on them. Now I think when you search in AI, you're looking for a very different kind of answer. You're not looking for a list of 10 or 20 links. You're just looking for the answer. And so where is the opportunity to advertise against that? I mean, maybe you can charge, like an affiliate commission, if the answer contains a link in it or something like that. But then you have to ask the question, well, does that distort like best answer? Am I really getting the best answer? Or am I getting the answer that someone's willing to pay for? This is your key insight. The fact is if Google gives you an answer, you don't click on ads. Google has had a very finely tuned balance between, hey, these first two or three paid ads, these might, the paid links might actually give you a better answer than the content below them. In case of the chat GPT sells you, hey, this is the top three televisions. These are the top three hotels. These are the top three ways to write a better essay. You don't need to click. You have to have a given answer. And the model is gone. The paid link is still a subset in that case. So at Google, we used to have a key metric was the bounce back rate. So when a user clicks on a result on the search results page, we could see whether or not they came back and searched again. And so that tells you the quality of the result that they were given. Because if they don't come back, it means they ended up getting what they were looking for. And so ads that performed better than organic search results, which means someone created the ad paid for it and the user clicked on it and didn't come back and came back with less frequency than if they clicked on an organic result, that meant that the ad quality was higher than organic quality. And so the ad got promoted to kind of sit at the top and it became a really kind of important part of the equation for Google's business model, which is how do we source, how do we monetize more search results where we can get advertisers to pay for a better result than what organic search might otherwise kind of show. And so it's actually better for the user in this case than say just getting an answer. For example, I'm looking for a PlayStation 5. I don't want to just be told, hey, go to Best Buy and Buy PlayStation 5. I want to be taken to the checkout page to buy a PlayStation 5. And I am more likely to be happy if I click on a result and it immediately takes me to the checkout page. And Best Buy is really happy to pay for you to get there because they don't want you looking around the internet looking for other places. And we can't convolut all search queries. Not all search queries are, hey, you know, what's the best dog to get to not be on the floor or whatever kind of arbitrary question you might have that you're doing research on. Many search queries are commerce intention related. I want to buy a flight to go somewhere. I want to book a hotel to go somewhere. I want to buy a video game system, et cetera. That series of queries may have a very different kind of modality in terms of what's the right interface versus the chat GPT interface where yeah, there's a lot of kind of organic results that people shift on the internet for today. And the question earlier can be resolved by Google doing a simple analytical exercise, which is, you know, what's it going to cost us and what's going to give the user the best result? That's ultimately what will kind of resolve to the better business model. It's really measurable. I think on Jamof point, you know, today Google pays Apple $15 billion a year to be the default search engine on iPhones on the Safari browser. That's only about a quarter of Google's overall tack. The majority of Google's traffic acquisition cost is actually not being paid for search. Good chunk of that is being paid to publish shares to do ad sense display ads on their sites and Google's rev share back to them for putting ads on their sites. So you know, the tack number, I think maybe you kind of want to move the needle, but the majority of Google searches don't come through the default search engine that they pay might be on it. It might it might move the needle a bit, but I don't think it really changes the the equation for them. My comment is more tack has to become a weapon on the forward foot number one. So if you're going to spend 21% of your revenue on tack, you should be willing to spend 30 to 40% to maintain the 93% market share. I don't think what you want to see is your profit dollars decay because you lose share. It's rather better for you to spend the money and decay your business bottle than have someone decayed for you in general. At this point, Apple is really the only tack line item. I understand. I'm not talking about today. I'm saying take that idea. You have an entire sales team whose job it is right now to sell ad sense, right? You have an entire group of people who know how to account for tack and how to think about it as a cost. But if you're basically willing to say out of the hundred billion dollars or free cash low, I'm willing to go to 80 or 70 billion of free cash flow combined with the hundred billion of short and long-term investments I have. And I'm going to use it as a weapon. And I'm going to go and make sure that all of these publishers have a new kind of agreement that they signed up for, which is I'll do my best to help you monetize. You do your best by being exclusive to our AI agents, right? So you deprive other models of your content on your pages because that will get litigated. And there is no way, just like again, if you say do not crawl, you're not allowed to crawl if you're Google or Microsoft or search it. So this is going to happen for these agents. It's unrealistic to expect that it won't. So my point is Google should do this and define how it's done before it's defined for them. So I think that people are in this nascent phase where everybody thinks everybody's going to be open and get along. And I just think that that's unrealistic. It's a really important kind of philosophical question. First off, like Google today, just so people know on AdSense is typically paying out 70 cents on every dollar to the publisher. There's, you know, it's a pretty, you know, generous. And it's the way they've kind of kept the competitive mode, you know, wide and kept folks out of beating them on third party ad network. Bit. Because they bid on everything and they always win because they always share the most revenue back. So they own that market with respect to acquiring content. You know, the internet is open. It's an open protocol. Anyone can go to any website by typing in the IP address and viewing the content that a publisher chooses to make available on that server to display to the internet. And there's a fair use policy. That's not true. And there's, you can type in any IP address. I think 15 or 20 or 30% of the pages on the internet right now are apps that are closed. Facebook's closed. Oh, yeah. I'm talking about the open internet, right? So like the content on the open internet. You're saying the open internet matters less and less? Yeah. I don't know. I mean, look, you're right. Maybe there's the enhancement of the models. But my point being that if the internet is open and you and I spent a billion lifetimes reading the whole internet and getting smart and then we were the chatbot and someone came and asked us a question and we could kind of answer their question because we've now read the whole internet. Do I owe licensing royalty revenues to the knowledge that I gained and then the synthesis that I did, which ultimately meant excluding some things, including some things, combining certain things. And the problem with these LLM, these large language models, is that you end up with 100 million, a billion plus parameters that are in these models that are really impossible to deconvalute. You don't know. We don't really understand deeply how the neural network is the model is defined and run based on the data that it is constantly kind of aggregating and learning from. And so to go in and say, hey, it learned a little more from this website and a little less from that one site. I'm not saying that. It's a practical impossibility. I'm saying when you look at Transformer Architecture today, every LLM that you write on the same corpus of underlying data for training will get to the same answer. So my point is today, if you're a company, the most important thing that you can do, especially you have a $1 trillion plus market cap that could get competed away, is to figure out how to defend it. And so all I'm saying is from the perspective of a shareholder of Google and also from the perspective of AvA, the board of director or senior executive or the CEO, this should be the number one thing that I'm thinking about. And my framing of how to answer that question is build a competitive mode around two things. One is at the end, which is how much money and what kind of relationship do I have with my customers, including the publishers, and can I give them more so that number two is I can affect who they decide to contribute their content to. So you're right. Let's assume that there are five of these infinite libraries in the world. You mean non-public content? How important. And also public. How important is it if Kora says, you know what guys, I've done a deal where my billions of paid views and all of that really rich content, Kora's incredible content, Google's paying me two billion a year and so I've decided to only let Google's AI agents crawl in. And so maybe when there are questions that Kora is already doing an phenomenal job of answering, I think it does make a difference that Google now has access to Kora's content and others don't. Right. For hot minute, they did have access to the Twitter fire hose and that was the premise was we could get this corpus of data that we can have in a very limited restricted way. They paid Twitter a lot of money. I don't think that those deals exist anymore Twitter. I mean, you guys might know better than I do, but I don't think they exist anymore. Here's where it's your mouth. I think you're right. And maybe David, I think you're being too forgiven. These models know where they got the data. And they can easily cite the sources and they can easily pay for it. And if you want to see an example of this. Go ahead. You're absolutely right. The video in the Wall Street Journal where Satya was interviewed showed a demo. And you're exactly right. They actually showed Jason in the search results. Yes. The five or six. But it made no sense because it's like how do you know that those are the five most cited places that resulted in this? Well, PageRang technology or the authority of the website or the author. But let's pause for a second here. There is a company called Niva.com. I'm not an investor. None of us are. It's a former Googler. They have 78 employees, I think, according to LinkedIn. I just typed in one of the best flat panel TVs. Here's the result. And as you see, sentence by sentence, as it rewrites another person's content, it links with a citation just like the Wikipedia does. And when you scroll to the bottom of it, it tells you, hey, this is from Rolling Stone. This is from Best Buy. This is from ratings. And if that answer is good for you and you trust those sources, those people should get a commission. Every time there's a thousand searches and you come up, you should get a dollar every time your data was used. And if not, these sites should sue the daylights out of Google. If we're going to say they can't do it, is hog watch the YouTube. It's not fair use because in fair use, you have the ability to create derivative works on future platforms. And you are taking this person, the original content owner's ability to exploit that and you are co-opting it. And you're doing it at scale. And that is against fair use. You're not allowed to interfere with my ability to make future products, David. You know this is an attorney. The problem with that IP lawyer, sorry. All right. Well, I play one on TV and the spot is the problem with that idea just from a product perspective for a second is that if you limit how they can tokenize to just being all entire sentences, the product will not be that good. Like the whole idea of these LLMs is that you're running, you know, so many iterations to literally figure out what is the next most best word that comes after this other word. And if you are all of a sudden stuck with blocks of sentences as inputs that can't be violated because of copyright, the product will not be as good. I don't just think it'll be as useful. Correct. These are also not deterministic models and they're not deterministic outputs, meaning that it's not a discrete and specific answer that's going to be repeated every time the model is run. These are statistical models. So they infer what the right answer could or should be based on a corpus of data and a synthesis of that data to generate a response to a query. That reference is going to be assigned some probability score. And so the model will resolve to something that it thinks is high probability, but it could also kind of say there's a chance that this is the better answer, this is the better answer, and so on. And so when you have like you have in the internet competing data, competing points of view, competing opinions, the model is synthesizing all these different opinions and doing what Google search engine historically has done well, which is trying to rank them and figure out which ones are better than others. And that's a very dynamic process. And so if as part of that ingest process, one is using some openly readable data set that doesn't necessarily mean that that data set is improving the quality of the output or is necessarily the answer from the output. Correct. Let me just give everybody a quick four factor education on fair use. And here it is from Google's actual website because they deal with this all the time. And when you look at it, the nature and purpose and character of the work, including whether such use is not profit or educational purposes. So that first test of fair use is, hey, if you're using it educationally and you want to make a video that is criticism of Star Wars prequels or how to shoot a shot like this quentin Tarantino, if it's educational, it's fine. And of course, typically focus, I'm reading here from Google on whether the use is transformative. That is whether it adds new expression or meaning to the original or whether it merely copies the original. It's very obvious that this is not transformative. They're just rewriting it. The nature of the copyright. This is a transformative to me. I don't think so. I'm not about. They're coming out with entirely new content. They're just rewriting it. They're not actually adding anything to it. It would be fine. If a human does it, it's not. If you just rewriting something, it's pretty cool. Listen, Jake, I think you guys are trying to put it on. I think the rights issue is just like the cost issue, which is a problem today, maybe, but it's going to get sorted out. But here, let me finish. New technology waves that are this powerful. Don't get stymied by either chip costs or legal rights issues. They do by legal rights. You're underpinsed. You're underpinsed. YouTube got stopped dead in their tracks. And the only way YouTube and Naps are got stopped in the tracks. I predict this is going to get stopped dead in its tracks with YouTube level near death experience. That's your policy. This is different. And Google was enabled to piracy. And then they had to build tools to fight against. It's deeply disagree with Jake Hill. It's deeply disagree with you guys. I think I do. I think the thing that costs can stand the way. Let me read you number four. Let's get a stand the way the AI AI. No, it's going to stay standing in the way. The AI is going to happen. The AI is going to happen. The AI is going to happen. Two, two, and big cars are already happening. AI happening. Like this. Move to the conversation board. Actually, I want to take my AI experience. I would like to make my point. We don't need your amateur lawyer opinions. I am going to give my point. I don't give a shit if you want it or not. The effect of the cost. You're going to build 500 bucks an hour for a potato bee alloying on TV. He's going to be an hour on TV. He's going to be an hour on TV. He's going to be an hour on TV. He's going to be an hour on TV. He's going to be an hour on TV. Let's look at this. I've heard this one a few before from you. Here it is. Okay. Take it easy, Mr. Subbeder called Jake Hill. You're going to have time. You've done this. The effect. Listen to this. The effect of the use on the potential market for or value of the corporate work. You should have that harm the copyright. Listen to this. Very important. When the AI takes over the world like SkyNet, Jake Hill is going to be like, I thought we'd stop this with rights. Listen to this. AI is not going to be stopped, but companies using AI to steal content will be effective use. Use is that harm the original copyright owner's ability to profit from his or her original work by serving as a replacement for that one. It's likely to be fair. You should assist AI. This is the one. Okay, great. You may have your point and you may be right. Sorry, we need to get to Marjorie Taylor Greene for you to have a good show. Let's cue up Marjorie Taylor Greene. Hold on. Hold on. I have another aspect of the AI thing I want to talk about. Besides this like, intermoval rights issue that you're going on. Better call Jake on the go. So I had to ensure AI experience this week. And I think we're all going to start having these stories. Or you can use the AI to make a script of how to talk to your kids every week. There'll be some new like use case that you see that you're kind of blown away by. But the use case I saw this past week in a product demo was they were showing me like an Excel spreadsheet, like a very complicated Excel spreadsheet modeling and financial asset. And they had a plug in to a chat GPT type AI. And so they just asked it. They typed in what does this spreadsheet do? And it spit out like a one paragraph explanation of what the spreadsheet did. And it was really good. I mean, because me just eyeballing the spreadsheet, I cannot have figured out like instantly what that thing did. It would have taken me like a while to figure it out. It told me here are the key inputs, here are the key outputs. So that was number one. Then they did something I think even more interesting, which is they said, give me the formula that tells me when the yield is above 2% and this and that and that. And the chat GPT spat out a formula that was like perfect Excel logic. That was something that you know you or I could never figure out, right? You need like a super pro user of Excel to basically know how to do this stuff. So it's spitted out and like boom, it worked instantly. They copied and pasted the spreadsheet and this you could basically like the spreadsheet was much more advanced now. So what it got me thinking about is that we're going to have these little assistants everywhere. You combine that power with say speech to text, right? Because we couldn't just talk to it. The speech to text would transcribe the instruction, spit it back out. And you're going to have these like little personal digital assistants in applications. I think you know it's pretty obvious to see how AI could replace call centers with having the front line call center operator be instead of being a human. It could be like an AI, but this is actually even before that like you could actually I think in every single application that we use. There's going to be an AI interface and like it is probably going to be voice based where you can just say to it, hey, I'm trying to accomplish this. Like how do I do it? Can you just make it happen? Totally. And it's going to be really powerful. I have an idea. I was hanging out with Andre Carpethi and I gave him this following challenge. So there I was. I said, if you had to build stripe. I said, how many engineers do you think it would take you and how long will it take you to build a competitor? I was just just a thought exercise. You know, it would take hundreds of millions of dollars and years. Now imagine you could you were feeling threatened by stripe. Imagine you're a large company. Fees a master card just as an example. You can now actually get one or two really smart people like him to lead an effort where you would say here's a couple hundred million dollars to compete with stripe. But here the boundary conditions number one is you can only hire five or ten engineers. And so what you would do is you would actually use tools like this to write the code for you. And the ability to write code is going to be the first thing that these guys that these things do incredibly well with absolute precision. You can already do unit testing incredibly well, but it's going to go from unit testing to basically end to end testing. And you'll be able to build a version of stripe extremely quickly and in a very lean way. So then the question is, what would you do with the two or three hundred million you raised? And my thought is you use it again as tack. You go to customers. You go to customers and you're like, well, listen, if rain tree is going to charge you one basis point over these a master card. Or sorry, a hundred basis points and stripe of 50, you know what? I'll charge ten margin destruction, margin destruction. And this is going to make everything so interesting. You can take any business that's a middleman business. I think this is the point. Any middleman business right now that doesn't have its own competitive mode can be competed against. Because now you can take all of those input costs that go into human capital. You can defer that, have a much smaller human capital pool and push all of that extra money into traffic acquisition and customization. This goes to the net and Silicon Valley of being more efficient. This is going to be to that efficiency. The benefit of all of this is economic productivity because the end customer that's using that tool that you just mentioned, they now have a lower cost to run their business and their total net profits go up. And this is what happens with every technology cycle. It always yields greater economic productivity. That's why the economy grows and that's why I don't want to say that. That's why technology is so important to drive economic growth, not debt. We've historically used financial engineering to drive economic growth. And this is why we need immigration and innovation drive this. What about China? What are you talking about? What we're describing here is AI making it harder and harder to make humans productive. No, it's more productivity per human capital. Per human of labor. One human can do the coding that 20 humans would do before. Assuming they're skilled enough to use the AI. Go back to traditional capitalism. Go back to traditional capitalism for a second. The striped example is another good one. If you have this business model, how does the ecosystem get efficient? How do we create more opportunity to use freeberg's language? The only way that it really happens, how does Costco down? Is that certain entities become big enough that they can drive the prices down. An Uber, a door dash or whomever says, yes, I need payments capability. So, brain tree, give me your best bid, check out.com, give me your best bid, Adian, give me your best bid, striped, give me your best bid, you compete it down. Amazon comes in, Walmart comes in, they do it in physical CPG goods, they do it online. They do it for all kinds of technologies. But you've never had an internal form that can create hyper efficiency and basically create customer value like this thing can, because this thing can allow a billion examples. A billion, ten person companies to get created that can do the work of 10,000 people. Hold on, let me show you two things. These are two aha moments I had this week. This first one is called Galileo AI. It was just a tweet. You describe the design of an app. That's all that's just a great. Here they say an onboarding screen of a dog walking app. Incredible. And you type that in and it gives you a welcome screen. That's like a seven out of 10 that it says, oh, away for people to change their name, phone number, password. You know that classic screen on any app I need to change my thing. Boom, it gives you that. Well then at the same time that people are making text to UX user interface. Beautiful here. This stuff will get dumped into Figma. But then there's a GitHub co-pilot, which if you haven't seen, we all know it here. This is allowing you GitHub and GitHub co-pilot. GitHub is bought by Microsoft. Another one of Satya and the Dell is incredible acquisitions. This guy's like the new Zuckerberg. I mean, what an incredible person to come after a bomber who is just so effective at what he's doing. As you're writing your code, it fills in your code. It knows what you're writing just like in an email. And it's a smaller subset of information than email. Email, you could write anything. You could be talking to a lover or a business person, whatever. Here, when you're doing programming, it's a much finer data set. These two things are going to come together where you're going to be able to build your MVP for your startup by typing in text and then publish it. You're not going to need a developer for your startup. That is transformative in the world. Let me ask you guys a question. Do you think that this leverage, and I argue this is all about leverage. It's one person can generate x units of output more. Do you guys think that this commoditizes and puts at risk sacks in particular like all of enterprise sacks? Because it becomes such a commodity to basically build a business that does something now. Or does it create much higher returns for investors because you invest so much less capital to get to a point of productivity with that business or revenue of that business than was needed before. I'm not sure. I tend to think that if it gets easier than everything becomes more competitive. So I don't know. So value gets competed away. I would slightly disagree with the characterization. Does this scare you as an investor? I don't know. For example, in that demo we just saw, what does the AI do? It exports the new design assets to Figma format because that's the standard. So if you can create a SaaS product that becomes a standard, everyone's still going to want to use it. And there's really good reasons for that. So I don't know. I don't think business software is going away. I also don't think that you're not going to need to hire engineers because Copa is going to do it for you. I think what Copa will do is make your typical engineer more productive. Yes. That's in graphs around how Copa will reduce coding time by 50%. So I think you'll be able to get a lot more out of your developers. I think that's sort of the key is a lot of the drudgery work gets taken care of. The answer freeberg to your question is I think more startups, more niche startups, will make better products and then you'll just have many more folks like making SaaS. Are those venture could they don't get big enough? They don't get big enough. In that case, it's entry price matters. It'll be poorer returns. Well, entry price matters too. If you're investing at five million like I do in companies when they're just on napkins and you know back of envelope, there's plenty of room. If you have a $200 million exit, that's a 40x. But there could be a lot of new categories too. Like a lot of new categories. There could be a lot of traditional industries. There's a lot of traditional industries that get disrupted. Like we're thinking about software displacing software. It could be software displacing industries that aren't even soft. Video games. There are video game industries going to get completely rewritten with AI because you're not going to have a publisher anymore that makes one game that everyone consumes. You're going to have tools that everyone creates and consumes their own game. You guys want to watch this cool clip? It's 58 seconds long. Good. This is a music clip day here on all in. But I thought it was really cool. Is this AI turning you into Eminem? This is what the world's waiting for. I hope it's you doing an Eminem show. I'm naturally Eminem like, but this is a. Only in your anger. This is the future rave sound. I'm getting lost and I'm underground. This is the future rave sound. I'm getting lost and I'm underground. Is that Eminem? It's David Guetta. At David Guetta playing Eminem, a track with Eminem's voice, right? And the practice became hugely viral. Something that I made as a joke and it worked so good I could not believe it. I discovered those websites that are about AI. Basically, you can write lyrics in the style of any artist you like. So I typed right a verse in the style of Eminem about future rave. And I went to another AI website that can recreate the voice. I put the text in that and I played the record and people went nuts. It's nuts. It's nuts and the crowd went wild. It's awesome. So here it is folks, whoever makes the best Friedberg Eminem hybrid rap with David Sacks as the height man is getting a free VIP ticket to all in summer 2023. I think we need an original. I think we need an original performance at all in summer 2023. One thousand percent. You and I are so insignificant this day's free. There are going to be a lot of interesting mashups that get created. Like, for example, you'd be able to create a movie where let's see. You want to make a Western. And you want John Wayne to start it. I mean, obviously got the rights from the. But let's say you want to make it. Wayne to stay, but no actor ever goes away. You can. There's going to be a database of all of them. But if you want to make it, it's going to be better. You're going to be writing the script. As you write the script, the AI is going to be showing you that scene in real time. And you don't have to publish it. Right? Like that's the point. Rainy day. It'll just change in real time. I think I'm going to do for Star Wars. Just like Instagram and TikTok basically democratize like everyone's ability to create and publish content. This takes it to a whole nother level where the monopoly that big production houses have because they have the big budget. So they can afford to make a big movie. If that cost of making a $10 million movie goes to $10,000 or $1,000 of compute time, anyone sitting in their studio in a basement can start to make a movie. And it really changes the landscape for all media, not just movies, music, video games. And ultimately the consumers themselves can create stuff for their own enjoyment. And the best of those products win. But having free individual experience. I'm going to be sure you've just become a lot more like the music industry. I mean, remember anyone can really create a song now. And people do go viral on TikTok. And they upload it on Dishro kit. And it's on Spotify. And you guys saw this article in the New York Times that was kind of throwing some shade at the CEO Goldman Sachs David Solomon. Yes. I just see the headline. You look great in the picture, but I didn't read it because I figured it's hate. They were talking about his side gig as being a DJ, but specifically they called out a potential conflict of interest. And it's related to this because what I guess he had gotten a license to a Whitney Houston song. And he remixed it and released it on Spotify. And her biopic is about to come out. And they thought that there could be this perceived conflict because Goldman works on behalf of the publishing company. And my thought was along the lines of what you guys said, like, why is this a story? Meaning David Solomon should be able to go to any website, license the song, make it, and then submit it back to them for them to approve. Because the quote in here that that matters is the company that licensed it said, we are in the business of making sure this body of music stays relevant. So obviously you want Whitney Houston songs, Michael Jackson songs, you want John Wayne. You want these people to live on in culture because it's part of our culture. Look at this sub head. David Solomon brushes off DJing. The better way to maximize it would be like this. Go and use it, create a derivative work. Let us see it if we like it. So like, Guetta should be able to just give that back to Eminem. If Eminem's cool with it, he should be able to ship it and just be done. What a non-story like the New York Times. It's just so anti-billionaire. So David Solomon brushes off DJing as a minor hobby that has little to do with his work at the bank. But his activities may pose potential conflicts of interest. It's like, what are they writing about? Is there not something more important than this? Do we think that David Solomon or any CEO of any major bank on Wall Street would put their job at risk running one of the 20 or 30 most important institutions in the financial architecture of the world to license a Whitney Houston song that they can play at Coachella? I mean, does that come from? Pass the smell test. No. Just for the record, iconoclastic David Solomon, you're going to be doing the opening night DJ set for all in Summit 2023. The grip, the grip is on. Let's get a piece of book. If the New York Times hates him, you got anybody the New York Times hates on. You got a slot. You got a slot. That'll be our lens. Your Dave Shippell. Dave Shippell for sure. 1000%. I mean, he looks good. It looks like he's living his best life. So, fine. It's just like a friend. They're just like a friend of them that a corporate CEO could. Well, that anybody's happy. I think it's kind of cool. DJ is. Yeah. Fuck you. I've always wanted to be a DJ. Oh, DJ. I spent the one and two. You could be a DJ one night. We all in 20, 20, 20 after party and we'll use AI to help you out. The idea that I should have been learning how to DJ. I was playing the violin. I'm so. You should get up there. I'm going to be a DJ. I'm going to be a DJ. I'm going to be a DJ. I'm going to be a DJ. I'm going to be a DJ. I'm going to be a DJ. I'm so. You should get up there and urquil your violin under a DJ. That would be nice. I'm going to be a violin for 10 years. We can play a duet together. I played a duet for 14 years. I played in an orchestra. I played in an orchestra. Oh my God. I never knew this. Never again. This is all kind of revelations happening here. By the way, here was my most. Pull up that first chat GPT. I gave you. This was an aha moment. Me and Saks were doing our weekly mastermind group. Saks and I get together. We kind of like co-mentor each other. Here was a little bit less away during our mastermind group. This was a chat GPT. I did this one because I was trying to figure this out. How do I make my spouse and kids feel heard? And a chat GPT game is a great way. Give them your full attention. Number two, empathize. Number three, validate their feelings. There you have it, Saks. Just put that into your server too. Let me use this as an example. What public? So that's obviously the aggregation and synthesis of lots of different self-help websites. How do you describe attribution of that answer to a particular content publisher? Honestly, serious question. Fair use, derivative work. I think in this case, this is a big, compassionate, you get this understanding. There's no monetization opportunity there. There's no monetization. Yeah, you say that because you hate content provides. But here, I tell you, this is compassionate, publishing. I think the GPT, the chat GPT, the GPT, get the hundreds on this one, J.K. Because this is, no, they know who they got it from. They know what they got it from. It's a synthesis of lots of websites. It's a very smart synthesis. You can be aware of the software. It's not pulling a result from someone's website. It's like red hundreds of websites. And it's like average them. Bulldog, you could lay for the average. That's complete bullshit. They could say, as we ingest this stuff, tag it and when we pull it. That is how it's being done. And then you could publish it. When you publish it, you say, hey, where are we? You're saying, you're doing something. Is that what you're saying? No, I'm saying it's not bullshit. That is what you said is exactly how it's being done. Right. And J.K., let's say that the AI is using a hundred different websites and synthesizing a hundred websites. What's the incentive for the marginal 100th website to say, well, op me out unless you pay me? Totally. Right. So that's a shame. No, that's a shame. Open AI will just be like, okay, fine. We'll just work with the other 99. And this is why content providers, this is my best piece of advice. You asked the question, I'll give you the answer. Content providers as a group need to get together and fight for their rights. You understand? You know. New York Times, Medicare, Fight for the right to party. No, fight for the right to get paid and to survive. You know, you want to be challenging me to say, as a group, either give us these terms or don't index us. You're trying to unite us. You are not a solid content creator. Absolutely. You don't unite all of them. They should be a united front like the music industry. Why do you think the music industry gets paid by Peloton? Everybody else. Because it was a five of them yet together. And they five of them. Yes. And you could organize but there's millions and millions of publishers. I think the point here is that technology is fundamentally deflationary. Here's the next great example where the minute you make something incredible cost go down but also frankly revenue and profit dollars go down in the aggregate. doesn't mean that one company can't husband a lot of it and do incredibly well like Google has done, but it's just going to fundamentally put pressure on all these business models. I think it's important for Google to take a good freeber. Google should go and they should cannibalize their own business before it is cannibalized for them. Freeber, final word. Here's another way to think about it. I think that if this goes as we all predict and everyone saying it's going to go, it is more likely than not that many of these, quote, content publishers that aren't adding very much marginal value are going to go away. That you could see the number of content sites offering self-help advice and how to do this and how to do that. 95% of them go away because all of that work gets aggregated and synthesized and presented in a really simple, easy user interface that makes them completely oblivious. And I'm not discrediting the value that many content publishers provide, but the requisite at that point to be valued as a, quote, novel content producer is going to go way up. Like the offset to that though, is it so much easier to create content because of the AI? Totally true. We have this company copy AI where even before this Chatchee PT stuff, you would just go there and say, I want to write a blog about X, Y and Z. You just give it a title and it spits out a post and then they'll actually give you 10 different blog posts and then you just select the one that is the direction you want to go and you keep doing human selection on it. By the way, but how do you have new intelligence get put back into the system? You have a corporate blog so you publish it your corporate blog. My point is if there is now some new information in the world, who is going to add that to the corpus if everybody is just stealing content and rewriting it? It is. Humans have always had anxiety to create. Most people create for free. There's a head of the long tail that actually gets compensated. The rest of the long tail is traditionally gotten nothing and they do it because they want to create it. And now the creation, the creation that explodes is so easy. Beethoven listened to Heiden and then Beethoven wrote novel symphonies and his symphonies were incredible and he built on the experience of listening to Heiden. The same is true of how content is going to evolve and it's going to evolve in a faster way because of AI. And this content is not just being retrieved and reproduced. It's being synthesized and aggregated and represented in a novel way. By the way, I want to answer that. I want to answer that, please. But ChatGPT takes a Yelp review and a Condaness traveler review and they represent it based on the best content that's out there that they've already ranked because they have that algorithm with PageRank or Bing's ranking engine. And then they republish it and then that jeopardizes those businesses that is profoundly unfair and not what we want for society. And they are interfering with their ability to leverage their own content is profoundly unfair and those magazines and news by prediction need to. What's up? It's possible. YouTube is a great example. YouTube was going to get shut down Sequoia and the YouTube founder sold it to Google because they were so scared of the Viacom lawsuit and how well it was working against them. They thought this business will never fly if we don't have a big partner like Google to support the lawsuit. They won the lawsuit or they settled it because they were able to do content ID and allow content creators. The only reason YouTube exists is hold on. Maybe finish is because they let content creators watermark and find their stolen content and then claim it. And when they claim the stolen content, they were able to monetize it. That's what's going to happen. There will be a settlement where they are going to be able to claim their content. I will bet any amount against your your your your your your premonition here. J. Cal this is like a bad proposal. Propose a bet. You've seen these ayes that generate images right? Like stable fusion and like all your whatever you literally just tell it I want this image in this style and boom it's done and it would take an artist weeks to produce that and you can do it in five seconds and you can tell the AI give me 20 of those and then you just keep iterating and in five minutes you've got something mind blowing. So the fact that it's so much easier to create content you can do the same thing with the written word the people who need to be compensated J. Cal if they don't go what they want they may just go away but there'll be 10 times or a hundred times more people here's how you are thank you for bringing up this example so that I can prove how wrong you are. Getty images is suing stable diffusion at the moment. Here is what the dipshit's at stable diffusion did. They trained their AI on getty images with the water marks on them and they've been busted and they are dead to rights now and they're going to pay a hundred million dollars or more to getty images for stealing their content and allowing it to be republished in a commercial setting. It's not too good to me. Over time it's going to get result. Stable diffusion copied the getty image water. I think stable diffusion is bigger problem is they can't do noses and ears and eyelids. That looks like a bigger problem. Anyway, shout out to stable diffusion for stealing getty image content. So, just. By the way, motes are influenced by hide and up eight ovens are. No, but a really interesting topic about AI that we don't have time to get to this week but I think we should put it on the docket for next week which is should AI is be trained to lie. Super important. Because that's happening right now. And we're having to or have opinions. The last thing I'll say on this from my perspective maybe we can jump on after this is this the best thing that could happen for all of the monopolists in technology because Microsoft taking five or six hundred basis points of share is the best way to ensure that the FTC has zero credibility and going after course or anybody else in tech. Those all of those things I think are DOA. So in some ways actually Google leaking five or six percent of the market share is a really good thing because the FTC is rendered toothless in making it. It's going to understand that. That's just a good point. I mean, it's kind of a good news bad news scenario with this whole thing. The good news is that the Google monopolist finally been cracked. The bad news is that it's Microsoft and even bigger monopoly. That's the one that's done it. But it just shows like how vulnerable all these big tech companies are. TBD. TBD. And they may all end up competing with each other. It's great. It's great. It's great. It's everyone. Everyone's got a tactical nuclear weapon now and we don't know where it's going to get pointed and who's going to set it off and where and like the weaponry has completely changed. Yeah. The weaponry total change. I don't know if you guys are here is the verb. Here we go. The cold pilot. Here's the other lawsuit open source. Right. Nick are you feeding him this nonsense? No. I've been tracking this. You people haven't. You guys need to watch what's happening right now. Co-pilot, GitHub, chat GPT and Microsoft are being sued by developers because co-pilot was built off of stolen content. These lawsuits are just beginning and. So the market's going to result in licensing. This will be a transitory effect and it won't change the dynamics of where this is going over the long term. It changed the dynamics of YouTube in the long term. So let's keep going. I don't know. They're doing pretty good. We have a portfolio company called Source Graphics is building and. Why don't you just put your logo page up if you're going to go through the whole portfolio? No, they're building something similar. But it's it's opt-in. You just opt-in to the, you know, you just get all your customers to opt-in to it. Okay. Which you want to just get people to play. Let's move on. Let's move on. What do you want to move on? You want to do the crackdown? Your exact sex point about AIF. State of the Union will be a great chat. Let's talk about it next week though. Yeah, I think there's more time. State of the Union, I don't know about you guys, but I found it one of the more profoundly disappointing saddening states of the Union. I've ever seen. I unpacked it. I unpacked it. I think it was, you know, we often kind of focus on the one-year cycle of what the state of the Union says. But I think what's more important is how much the data that's coming through in the state of the Union supports the more scary long term cycle. I've talked about this a lot on how scared I am about kind of where we're headed with respect to the US's ability to fund its financial obligations. And the scary moment at the state of the Union besides Biden's inability to kind of articulate much very well, which was honestly a really discouraging site to see, was, you know, when he talked about where, you know, the Republicans are trying to cut social security and Medicare. The US Treasury put out a projection, which I tweeted last week, originally shared on Twitter by Lynn Alden. This is the US Treasury's forecast of debt held by the United States over time. And the assumptions in this forecast are we've got a certain amount of debt today and we're running social security and Medicare forward without cuts. And so what happens as we make these social security Medicare payments and we accrue and pay interest on the debt that we hold today and we don't change the tax rates in this country. And this is what happens. So it's a runaway kind of debt scenario in the US by definition has to default at some point because you cannot tax every dollar of the economy at 100% at some point. And so, you know, there are two ways this can go. The first way is you have to cut back on these major kind of, you know, expense commitments that naturally balloon over time and that is social security and Medicare. And the other one is that you just tax a lot more and when you tax a lot more, economic growth gets affected and it makes it really hard to eventually pay off that debt and the debt continues to spiral. So I think what we saw was number one, the announcement by Biden, hey, Republicans are the ones who want to cut social security Medicare and they all screamed and they said no way, no way. We'll never do that. And so, I think the poll has been underused afterwards and said it's total BS and Biden would say that, which I think supports what the polls have shown, which is on both sides of the aisle. People do not want to see social security and Medicare cut in any way right now. That means you can't and you guys saw what happened in France where they pushed back the retirement age by two years and there was effectively riots across the country. I don't know if you guys saw this a few weeks ago. We didn't talk about it, but it was pretty brutal, pretty ugly. And so this is a real cost that's coming bear. It's coming bear in the United States, not just with the publicly funded social security and Medicare programs, but also with a lot of the private tensions that are going to need to get bailed out with the same federal money because they're not going to let those things go bankrupt. And that's another trillion plus of liabilities. So that cost is going to balloon. And the only solution at that point is to introduce massive tax hikes. And so they proposed this billionaire tax, this tax on unrecognized capital gains. It is literally if you keep social security Medicare where they are and you don't pay down the debt and you don't grow the economy fast enough, you have to introduce significant tax hikes across corporate and the individual taxpayer base. And so you know, it really, again, if you zoom out, it really indicates this steepening curve that the US has to climb its way out of. And as you tax more, there's less to invest in the economic growth. The government is a far worse investor in economic growth than the free market. And that means that we can't grow our way out and grow GDP enough to ultimately cover our debt obligations. And this is what Dalio's book that I mentioned in 2021 was so kind of importantly sharing. This is a multi hundred year cycle. And the last couple decades get really nasty. And this chart, which is a forecast from the actual US treasury, highlights the problem. And the comments made it the Congress is in front of the Congress this week by the President of the United States indicates how serious of a problem this is going to be because no one wants to cut these major cost obligations that we have coming to you. And so what are you talking about? Sex aren't you and the Republicans? You want to cut Medicare and get rid of it? Is that what Biden said? You guys want to get rid of it? No, no, no, no, no, no. What was that kerfuffle about with your, who's the person on your squad who was yelling and screaming out at the President of the United States? No, that doesn't matter. That was to sort of, but who was screaming at them? Let me tell you what happened to the union is that Biden was basically trying to take a page out of Bill Clinton's playbook. When Bill Clinton lost the midterms in 94, he basically trained late to the center and he did two things. He started going for kind of small ball. He started playing small ball politics. It was like school uniforms and things like that that were relatively unobjectionable and that regular middle class people could get behind. And then he basically posed as the defender of entitlement programs. Back then he in 96 he ran against Dole by portraying Dole. He went all the way back to Dole's vote against Medicare. This is what the Biden team is team up for the reelect in 24 is they're talking about things like curbing ticket master fees and fixing right turn red lights. I mean, seriously, like total small ball. Okay. They're going to try and pretend like he wasn't the most radical tax and spend progressive over the last two years that we've really ever had in American history. They're going to try and make everyone forget that and just talk about the small objectable stuff. And then he's also going to, again, pose as the stalwart defender of entitlement programs. They're very popular. And partly they're doing this. They're ready, I think, getting ready for DeSantis on this because if you read some of the political analysis on this and Josh Barrow had a good column and Andrew Sullivan had a good column talking about this that way back when DeSantis was in Congress and he was like a back venture, he voted for some Republican budgets, a Paul Ryan budget that had some of this entitlement reform in it. So they're going to try and portray him as against Tom reform. Now I don't think it's going to work because all you have to say is like, listen, that was a long time ago. I wasn't voting for cutting entitlements. I just voted for my party's budget. That's irrelevant. I can tell you I will not cut entitlements. So any smart Republican is going to take entitlement reform off the table because it is a total third rail and they will lose. And I think Trump had the right instincts on this. And I'm sure that any major Republican will have the right instincts on this. And you can see it. You see the way they're throwing Rick Scott into the bus. Rick Scott had this proposal about having entitlements go from being sort of permanently entitled to being something that gets voted on every year. And the rest of the Republican caucus is like, hell no, we're not touching that. And they can't run away fast enough from Rick Scott. So freeberg is right. There is no appetite for entitlement reform and I would tell any Republican, if you want to do entitlement reform, it's got to be bipartisan. You got any thoughts on the state? You got to do you got to do what Ronald Reagan did, which is join hands with Tip O'Neal and Moynihan and you jump off the cliff together. You do not stick your neck out on this. Traumaugh and I thoughts on the state of the union writ large. No. Marjorie Taylor Greene yelling liar at the president. No. Okay. That's the most boring state. Well, you know, I mean, like both sides engage in a lot of like weirdness. I mean, Biden was like bellowing at various points in his speech. It was quite bizarre. And you're right. There were some Republicans, the audience who were bringing like Jack Asis and it's unfortunate because I think. Included, utterly disciplined. I think if the Republicans had just calmed down, I think Biden's sort of weird mannerisms where he was like practically yelling. It was like Abe Simpson, you know, old man yelling at the cloud and yeah, they do a good job of like right at the moment of self-imulation. They let him off the hook. Yeah, really. It's really incredible. Republicans just they have no impulse control. Right when they could just be quiet, sit there calm quiet and let Biden do the damage to himself. They just cannot. I like McCarthy. I like McCarthy telling Marjorie Taylor Greene. Yeah, exactly. And they tell him that other liar guy to get the hell out of here. Listen, it's always been hard to control back ventures. That's the reality. That does not speak for the entire party. How do you guys feel about being taxed on your change in net worth from year to year? You mean a wealth tax? A wealth tax. Yeah. If it's for billionaires, totally cool. If it's for cent a millionaires or deccone millionaires, absolutely off the table. We want those people to grow their wealth and invest. The billionaires, yeah. Sure. Is that what you think is going free, Berk? Yeah. It's hard to execute on what he's supposed to do. I would love to see a website where you have a piece of yarn. You know those, the site where you have, and then you have like a little pin and you kind of push the pin out and the other one has to go in. You can't have it all. You can't have low taxes and have these entitlement programs and have this level of spending. It's impossible. You have to tax. That's the only way or you have to cut the entitlement programs or you have to cut the spending. Well, you're right about that, Frieberg. Let me tell you why the American people think it would be ridiculous to cut their entitlements. They've watched as Washington spent $8 trillion on forever wars in the Middle East. They just watched as Biden spent trillions enriching the pharma companies on a fugaisie that didn't work. They've just watched as hundreds of billions went to climate special interests of the Democratic Party. Did you just say the facts in the Fugaisie? We talked about that. They've watched as trillions of dollars have gone to the donor class and they are going to rise up and say the hell with you if you cut off our social security that we paid into for decades while enriching all these special interests. I don't advocate for any of these points. And the bell outs of corporations in the great financial crisis. You're right. I think it's just an analytical certainty that the government is going to have to pay out. You got to zoom out and stop thinking about the yearly cycle and the election cycle on this stuff and just look at where we're headed over a multi-decade cycle. Okay. And there's just no resolution to this problem. What happens if there is a way we're all oriented right now? If there is a wealth tax, let's just say on billionaire. Sorry, let me just say one thing. Sorry, Jacob. Let me just say what they do. They leave the country. No, well, that did happen in France, by the way. I think 40% of the people that were taxed left and then they came back. They would violate our constitution. That'll be litigated for sure. Just a record, yeah. If you can get the cost of energy in this country to drop by 50 to 75% and you can increase energy capacity by 10 to 20 fold, then you have a fighting chance because you can actually grow the economy out of the problem. And that's really where I am optimistic and excited about opportunities like fusion and you guys can make fun of me all you want. But if we can get to a point where we can increment energy capacity by an order of magnitude, there is economic growth that will arise from that from all these new industries and you these production systems. And that's how we can grow our way out of the debt entitlement tax problem where one of those three things has to give in the absence of that. So I'm the cheapest source of energy today. Fusion. It's three cents a kilowatt hour. Fusion you mean? No, it's fusion. It's the sun using solar panels. There it is. Yeah, the problem, Timon. Let me just say this one thing. The problem is can you scale energy capacity by 10X? Yes. And can you do it fast enough? And that's the real test. Yes. While creating jobs. Yes. That's the real techno economic question, right? Like I posted a link in my reading list today. This week you guys can go look at it. The most prolific distribution of fusion technology is China actually deploying solar on every single rooftop in China. United States could do it too and you will 10X the power available. Well, yeah. I mean, they are and you say zero. So you're guessing they're having a half a year. It's just sometimes we want to create intellectual complexity. I love these different forms of fusion. I just think it's a 50 year charge to get it because even if I'm not betting on it, I'm just saying it's there is a one agreeing with you. I'm just building on your point to say it's actually happening. Fusion is what is actually creating abundant zero cost energy today. Yeah. Look, if we can increase energy capacity in this country by 10X energy production capacity by 10X and we can do it in the next 20 to 30 years, you can do it in 10 by putting so many every rooftop. If we can, we have a path out of the entitlement tax debt problem. Otherwise one of those three things is going to give and it's going to be ugly. The thing that we are lacking right now is not actually the generation capability, which is incredibly cheap, but it's really scalable storage. And once we figure that out, which is actually the real technical bottleneck to abundance, zero cost energy, we'll have your boundary condition met and we'll have it well before different forms of fusion are commercializable. France had an exodus of an estimated 42,000 millionaires between 2012 and really before the world tax for 12 years. And then they were reversing. They were just losing the tax base so violently they had no choice. That's what's going to happen in California if they move forward with it. It's happening in California already with Apple. It's happening already and now there's stupidly telling people that this wealth tax is going to have a 10 year look forward. So everybody I know is at least talking about, hey, could this happen in the next 10 years because if it might happen five years now, we got to leave now because if I wait, they're going to chase you. They're going to chase me. Yeah, specifically you. They hate you. No, I mean, it's a problem. It is a serious problem. It is a serious problem. It's a freeberg's point. It's not just Ray Dalio, the great political satirist, P.J. Aror, who died last year. He wrote that American politics is defined by the formula X minus Y equals a big stink, where X is what people want from government and Y equals what they're willing to pay for government. And that difference is basically the big stink. And the job of politicians is to manage that stink and the problem is the politicians have not been doing a good job managing it and they increasingly do a worse job managing it. So yeah, at some point it's going to blow up. Yeah, you guys want to hear a crazy statistic? I was pulling the sand up though. You know what the budget per capita is of the city of San Francisco? So how much the city spends per year divided by the number of people that live in the city? Well, we know it's a couple of billion dollar budget. We know only a couple of hundred thousand billion dollar budget. Yeah. And there's 800,000 residents. And it's $18,000 per citizen per year. That's how much the city of San Francisco spends. A third of that money, by the way, 30% of it goes to or 25% goes to public health care. Now when you look at that $18,000 budget per capita, it is more than every single state of the union on a per capita basis, except Oregon and North Dakota, which have very weird budget. So San Francisco spends more than every other state per capita. It spends more in aggregate than 16 US states. And the federal budget per capita is $15,000. The federal government's budget per capita is $15,000. So San Francisco spends more than 15 states and spends more per capita than every other state except to and spends more than the federal government per capita. And I think that really highlights and you need to tax the base to do that. And now we are seeing San Francisco is the largest population of Exodus and population of Exodus of any city and business Exodus of any city in the United States. That is your predictor. That is your predictor of where this goes. Right. In Miami, Florida, my contrast has no state income tax. They just rely on property tax and sales tax, which California has as well. There is a income tax and cap gains tax of zero in Florida. And they seem to make it work. 880,000 people was the peak in San Francisco 2018, 2019, 2020. And then in 2021, 815. So 10% of the show is going to be further in 2020. Yes, some people think it's down to 650 now. I think it is because it's not. Hard to track. Well, you have a lot of people who owned homes there and maybe owned second homes because that's facet. It was a well-heeled group of individuals living there. And a lot of them just still have their places, but they've left. And then they're in the process of selling their places. The point is increasing the tax rate is a great short-term solution. But over the long term, if that budget, her citizen, isn't brought in line, there is no way to tax the base enough without causing the tax base to leave. Forget about what anyone's personal opinions are. That's just the economic reality of what happened in France. It's what's happening in San Francisco. There's a lot of great predictors in history of where this has happened. And so something has to get. Or you have to have a miracle, like an energy miracle, but we'll all keep investing for that. All right, everybody. This has been an amazing, amazing episode of the All in Podcast 115 episodes for the dictator, Sultan of science. And for the pacifist, David the dove, sacks. I am the world's greatest moderator, Jake out and we'll see you next time. Bye-bye. I love you besties. We'll let your winners ride. We open-source it to the fans and they've just gone crazy with her. I'm going to the US. I'm going to the US. I'm going to the US. What? What? What? What? What? What? What? What? What? What? What? What? What? What? What? What? What? What? What? What? Sara S豪? What? Sara S豪? Sara S豪? Sara S豪? Who are you? Sara S豪. Sara S豪? Sara S豪? Sara S豪? Sara S豪?