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NBA Gambling Scandal, Tesla Trillion Dollar Vote, Billionaire Tax, Amazon Robots, AWS Outage Podcast Episode Description
(0:00) Bestie intros!
(1:02) CA Billionaire Tax
(17:00) Major NBA gambling scandal
(29:51) Amazon’s eventful week: AWS outage and leaked robotic automation plans
(49:55) Tesla earnings, Optimus, Elon’s pay package, “corporate terrorists”
(1:03:54) Study shows AI bias
Follow the besties:
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https://x.com/DavidSacks
https://x.com/friedberg
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https://x.com/theallinpod
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@theallinpod
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https://www.linkedin.com/company/allinpod
Intro Music Credit:
https://rb.gy/tppkzl
https://x.com/yung_spielburg
Intro Video Credit:
https://x.com/TheZachEffect
Referenced in the show:
https://www.latimes.com/california/story/2022-05-25/rick-caruso-jeffrey-katzenberg-bicker-los-angeles-mayor-election
https://www.thefp.com/p/rick-caruso-refuses-to-shake-jeffrey-katzenbergs-hand
https://www.latimes.com/la-influential/story/2024-06-16/jeffrey-katzenberg-hollywood-fundraiser-democrats
https://www.cnbc.com/2025/10/23/nba-billups-rozier-sports-betting-arrests-gambling.html
https://oag.ca.gov/system/files/initiatives/pdfs/25-0024%20%28Billionaire%20Tax%20%29.pdf
https://x.com/MovieTimeDev/status/1968107643643498744
https://www.coindesk.com/business/2025/10/23/polymarket-seeks-investment-at-valuation-of-usd12b-usd15b-bloomberg
https://x.com/SawyerMerritt/status/1981119824991322553
https://www.nytimes.com/2025/10/21/technology/inside-amazons-plans-to-replace-workers-with-robots.html
https://nypost.com/2024/02/21/business/googles-ai-chatbot-gemini-makes-diverse-images-of-founding-fathers-popes-and-vikings-so-woke-its-unusable/
10 FAQs About California’s New Algorithmic Discrimination Rules
https://www.crowell.com/en/insights/client-alerts/artificial-intelligence-in-employment-update-illinois-requires-notice-and-prohibits-discriminatory-impact-in-use-of-ai
https://www.nytimes.com/live/2025/10/23/nyregion/nba-illegal-gambling-arrests
https://x.com/AndrewDBailey/status/1981409771505713650
https://seekingalpha.com/article/4832142-tesla-inc-tsla-q3-2025-earnings-call-transcript
https://x.com/shayne_coplan/status/1981016949309239616
https://www.bloomberg.com/news/articles/2025-10-23/polymarket-is-seeking-funding-at-a-valuation-of-up-to-15-billion
https://www.google.com/finance/quote/DKNG:NASDAQ?window=1M
https://www.google.com/finance/quote/FLUT:NYSE?window=1M
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NBA Gambling Scandal, Tesla Trillion Dollar Vote, Billionaire Tax, Amazon Robots, AWS Outage Podcast Episode Top Keywords
NBA Gambling Scandal, Tesla Trillion Dollar Vote, Billionaire Tax, Amazon Robots, AWS Outage Podcast Episode Summary
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These statements all indicate the act of someone joining or being added to a group or collective. However, the context does not specify exactly who “has joined the group” in a particular instance. The general meaning is clear: it signifies the addition of a new member to a group. If you are looking for a specific individual who joined a specific group, that information is not explicitly provided in the context.
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NBA Gambling Scandal, Tesla Trillion Dollar Vote, Billionaire Tax, Amazon Robots, AWS Outage Podcast Episode Transcript (Unedited)
Speaker: 0
00:00
Maybe we
Speaker: 1
00:00
should have discrati on corner as, like, a regular feature of the pod.
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Speaker: 2
00:03
Good idea. I like it. Discrati on corner.
Speaker: 1
00:06
Each of us can give our discrati out of
Speaker: 3
00:08
the week. Discrati ad at the end of the show.
Speaker: 4
00:10
Yeah. I love that. And then we could do a bestie award at the end of the year for discrati ad of the year.
Speaker: 3
00:14
Sacks, once again this week, I’m giving my discretiad to Jason Calacan. So for his opinions ram the mainstream
Speaker: 1
00:21
media not to give it to you every week, but you made it hard this week. Let me tell you.
Speaker: 4
00:25
That’s right.
Speaker: 1
00:26
Once again, you’re sniping from the relative safety of your Texas ranch.
Speaker: 4
00:31
Yeah. I know.
Speaker: 3
00:32
I got the 50 calibers up. You wanna jump on the ram? Get ready for the 50. I think
Speaker: 1
00:36
we’re all gonna
Speaker: 3
00:37
You’re all gonna have the ranches next to me if this California move tight. If this California wealth tax passes.
Speaker: 1
00:43
Oh my god.
Speaker: 3
00:50
Ai the story with the California WellTech? Can somebody explain this to me?
Speaker: 4
01:06
Okay. So the SEIU, the Service Employees Union, filed a ballot initiative, which means a direct to voter vote to amend the California constitution to introduce a one time billionaires wealth sai, where billionaires, anyone who has assets over a billion dollars, net of their debt, has to pay a one time tax of 5% of their net worth, including their private stock, including their real estate.
Speaker: 3
01:33
You said 55%
Speaker: 4
01:36
of their net worth. Not of their of their net worth. The entire net worth. One time payment to the state of California, and then there’s an allocation on how that money will be spent. But it’s a one time billionaire tax. Now it is very likely that this sort of an amendment to the California constitution is not constitutional and actually cannot be made and will not actually go into enforcement even if the voters do vote to approve it in both the federal and a state level based on this concept of uniformity, which is that you have to tax everyone equally except for the case of an excise tax, which is like income or a transaction.
Speaker: 4
02:11
You’re allowed to tax disproportionately based on the size of the income or the size of the transaction. But if you’re gonna tax on property, if you’re gonna tax on an asset, you have to tax everyone uniformly. So it is likely not gonna go into effect if it does pass. However, it is very likely the case that the SEIU is simply using this as a baiting mechanism to get people to stand up and denounce it.
Speaker: 4
02:32
And then they will be in a position to attack those people and destroy them and use this effectively as a political fodder for this next election cycle. That’s what it seems like the true kind of motivation right now.
Speaker: 0
02:44
So let
Speaker: 2
02:44
me let me go on the record. I think this law is great.
Speaker: 3
02:49
He’s getting the virtue signaling points. I would just like to say, may I be the first to pay 5%?
Speaker: 0
02:55
I’ll be
Speaker: 3
02:55
in the front of the line. Let me know when to show up. I’ll bring my check.
Speaker: 2
02:58
Who do I sign the check towards?
Speaker: 3
03:01
Ai I should I bring cash, Gavin? Would you bring a cash to your which one of your mansion should I bring the cash to, Gavin? This is strategically why Chamath I’m glad I got out of California right before I was about to billionize. That was the smart move on my part.
Speaker: 1
03:17
Freeberg, what are the odds that this goes into effect? Can you just handicap this?
Speaker: 4
03:21
Yeah. Well, we don’t know who’s gonna come out against it, but there’s an effort to try and get top Democrat officials in the state of California to say this is silly. If you do this, people will leave the state. Yada yada. So that’s kind of a quiet underway effort. But I don’t know why the citizens of California the majority of citizens of California would not vote for this. Why who wouldn’t wanna tax the billionaires 5%? Come on.
Speaker: 4
03:45
Like, let’s do it.
Speaker: 2
03:46
The way that it’s written, it says, hey, ai, we’re 30,000,000,000 in the hole, and there are 200 Californians that control $2,000,000,000,000. We’re just gonna ask them to pay a one time fee of 5 percent. Yep. And I don’t see how anybody would say, that doesn’t sound unreasonable at the ballot box.
Speaker: 0
04:06
Right. And that’s the problem.
Speaker: 4
04:08
And then the people the people that step up against it and are vocal against it and point out, like, hey. In France, when they did this, they lost, like, 40% of their revenue because all the wealth left the country.
Speaker: 2
04:18
The reality is that this sets it up to go through the legislature. Because if it goes through the will of the people and it gets overturned, as you say, Friberg, then if you’re legislatively smart, then you’ll actually push it through the state senate.
Speaker: 4
04:32
Oh, but don’t you remember they did
Speaker: 0
04:33
this? No. No. No.
Speaker: 2
04:34
And and then it will not get vetoed. Ai, because then it’s like, hey. Listen. It’s clear that the people want this. So I I think that you have some kind of progressive taxation system that conforms to the law. I mean, the one
Speaker: 4
04:47
Yeah. They’re they’re already trying to extend prop 55, which is the progressive tax for people making over a million dollars. They’re gonna get that passed. That’s gonna be this incremental tax on income. But the one time wealth
Speaker: 2
04:58
tax the I think the million dollars thing I think that’s harder to hunt because there’s too many people that that touches. A million dollars today in 2025, not to be glib, is just not what it used to be. But a billion dollars does cut off most people except for a couple of 100. That is true.
Speaker: 2
05:13
And I think that, for example, it’s very reasonable to then charge a 10% excise tax on selling appreciated stock.
Speaker: 4
05:20
Right.
Speaker: 2
05:20
Why not? There’s all kinds of ways that you can get millions and billions and billions of dollars. So Ai don’t know. I think that this is more of a trial balloon to say, can we draw a clear line between 200 Californians and the rest of California? Yeah. And to the extent that that bright line becomes visible and it’s okay, people are gonna go ram. They’re gonna try to get as much as they can.
Speaker: 4
05:45
The reality is, as we all know, I mean, Larry Ellison left the state. Many of the founders, CEOs who have built large technology companies in California, Elon left the state, will eventually, at some point, break and say, okay, I’m moving my company out of state. And I’m leaving the state, and I’m bringing the employees with me, and I’m bringing all of the economic value of this business with me.
Speaker: 4
06:06
And people will never learn that lesson because it’s so much easier to sit in front of a voter and say, hey. Should we tax these 200 people to give you better benefits? 97% of people will say absolutely. Very few people will sit and think about the consequences ai what’s
Speaker: 0
06:21
gonna end up happening.
Speaker: 2
06:22
Ai 99.9 will say absolutely. I mean, nobody tells them in that ballot initiative that we have a $300,000,000,000 budget of which two thirds may be just wasted. One of the
Speaker: 4
06:33
motivations for this bill, and this is why it’s being proposed by the SEIU, is that there are these massively ballooning pension benefits and pretty significant increases to the pension programs for both private and public pension funds in California, which has actually become a very ai liability for the state and for some of these private pension programs. And they’re trying to fill the pension hole, which we’ve talked about in the past.
Speaker: 4
06:58
But there is a multi trillion dollar unaccounted for pension liability in this country that’s gonna have to come from somewhere. You’re either gonna have to print the money because the federal government’s gonna step in and fill the hole in all these pension obligations, or they’re gonna have these massively progressive tax programs to try and fill the hole.
Speaker: 4
07:16
And if and when they do, as we all know, there will be a an economic cycle that will be pretty nasty, which is all the value will leave that jurisdiction and move elsewhere. But let’s see.
Speaker: 1
07:26
It’s it’s like the Democrats are doing everything they can to get me to leave the state. I don’t want to. I really am resisting.
Speaker: 0
07:33
I mean,
Speaker: 1
07:34
they’ve raised my income tax to, shah is it, like, 13.3%?
Speaker: 4
07:38
13.3. Yeah.
Speaker: 1
07:39
And I know it’s going to 16. They’ve been boiling the frog. I still haven’t jumped out of the pot. But for me, I think the wealth tax I’m gonna have to jump out of the pot with this.
Speaker: 2
07:49
The crazy thing with this, the other like, I read it because I was like, oh my god. What’s going on? The two things that they they obviously got somebody very clever to draft it because any Roth IRA over 10,000,000 counts. And normally in these wealth calculations, you you keep your deferred retirement accounts off the table. They’re typically not included. So folks in I’m not gonna say who they are.
Speaker: 2
08:14
We all know who have tremendously appreciated Roth IRAs.
Speaker: 3
08:17
Pretty public what you’re talking about, but sure.
Speaker: 2
08:19
Those are included. And then the other thing is that if you actually did any tax structuring, the real valuable tax structuring is where you set up these trusts in Wyoming and North Dakota, and you do these interparty loans where you can lever up ten, twenty x. So you can transfer billions and billions and billions of dollars out of state, but then you have these obligations. Those are negated and they don’t count.
Speaker: 2
08:42
So all that tax structuring goes out the window. So you can get into a very difficult situation here where they’re like, hey, you owe us $500,000,000 a billion dollars $2,000,000,000 And the only way to pay it is to give an IOU to the state of California, which is crazy. It’s crazy. There is not a lot of way out ways out of this if this stands.
Speaker: 4
09:02
Nobody’s empathetic to either of you. No one gives a shit about the two of you needing to pay more taxes on this. Support.
Speaker: 2
09:08
Again, I’m just saying it for the record.
Speaker: 3
09:10
I am in support.
Speaker: 4
09:11
Keep on this.
Speaker: 1
09:13
I had a few more thoughts about this thing, which I wanna unpack. So number one is, like you guys said, a wealth tax has been tried in many places at many times. It always backfires because whatever the tax benefit is that you get for the state, it’s greatly outweighed by the economic depression that you get by the wealthy people, the job creators, companies leaving.
Speaker: 1
09:34
And as soon as you cross that line of going from no wealth tax to any wealth tax, enough people of wealth can see the tea leaves. They can see the writing on the wall that they have to leave. And that’s why I think even if they say this is a ai thing, we all know that it won’t be onetime.
Speaker: 1
09:51
If they get away with it, it’ll become a regular thing. It’ll just be Of course.
Speaker: 2
09:54
If it’s to plug a deficit, they’re gonna run deficits every year.
Speaker: 1
09:58
Exactly. And and you’re right. And this isn’t even to plug an emergency situation or an unfunded liability ai some one time thing. This is just a regular operating.
Speaker: 4
10:07
Exactly. It’s just it’s just
Speaker: 2
10:08
regular investment.
Speaker: 1
10:09
So they will have no incentive to fix their mismanagement, the state, and their deficits, and all that kind of stuff.
Speaker: 4
10:13
By the sai, by the way
Speaker: 2
10:14
if they get away with this. And it’s not just gonna be billionaires. Eventually, the line will
Speaker: 1
10:18
Of course.
Speaker: 2
10:18
Meh shah
Speaker: 0
10:20
gone.
Speaker: 1
10:20
The billionaires
Speaker: 4
10:21
will be gone. Ai like, the income tax in The US, I think it was a 1% income tax originally. And it was, like, just a one time thing for wealthy people, and then it became a smaller thing for, you know, lower income people. And then, eventually, as we all know, every person has to pay a tax, every property has tax, and so on.
Speaker: 4
10:38
I mean, these are this is the problem with government.
Speaker: 2
10:40
There’s all these other states, by the way, that are finding clever ways. I think in Montana now, there’s a differential property tax scheme where if it’s your second or third home and you don’t live there, you pay a lot more.
Speaker: 1
10:52
Yeah. Here’s what I wonder about is, you know, what are guys like Jeffrey Katzenberg or even Arya Emanuel thinking about right now? Because they’re kind of the higher ups in the Democratic party behind the machine, sort of the oligopoly that kinda runs the machine. And I remember that when Karen Bass was running against Rick Caruso for mayor of LA, it was very publicly reported that Katzenberg was behind Karen Bass, and there was sort of an imbroglio between Caruso and Katzenberg.
Speaker: 1
11:23
Katzenberg, anyway, helped make sure that Karen Bass was well funded enough to win. The result of that, ironically, was that Pacific Palisades burned down, and I think Katzenberg’s house might have been part of that. In any event, I think there are these guys who are very, very wealthy who think that they can control the machine well enough that they basically are still in control of this thing.
Speaker: 1
11:45
Right? That, in other words, that the tiger won’t eat them. Right? The tiger is socialism.
Speaker: 4
11:51
Meh.
Speaker: 1
11:52
That’s right. That’s exactly right. You know, they think they’ve got the tiger under control enough that it won’t eat them, but I don’t think they do. Maybe they don’t. Maybe this is the tiger breaking loose.
Speaker: 4
12:01
Yep.
Speaker: 1
12:01
And I think, Frederberg, you pointed this out that there was an attempt in the legislature last year to pass a wealth tax, and it was quietly killed behind the scenes. And I actually think that Gavin Newsom might have something to do with that because he has presidential ambitions, so he can’t let the state go full socialist.
Speaker: 1
12:17
But you just kinda wonder, okay. Well, if these guys lose control of the strings they have to control the beast of socialism, does the whole thing just spin out of control?
Speaker: 4
12:27
That’s New York. We’re seeing it everywhere.
Speaker: 3
12:29
Seattle, Boston, Baltimore. Let’s talk about it. Well and and just to let people know about the France situation back in, I don’t know, twenty eleven, twenty twelve. They did get rid of Gerard Depardieu, which was kind of a win, but Bernard Arya. What’s his I ai, Sachs. Bernard Arnault, is that his name from LVMH Sachs?
Speaker: 2
12:50
Bernard Arnault said he was gonna go to Belgium, and
Speaker: 4
12:52
he said it was a clerical error, and then he unwound it.
Speaker: 3
12:55
But that was a clear signal, the richest man in France.
Speaker: 1
12:58
Well, he’s
Speaker: 3
12:58
Then we go to New York.
Speaker: 1
13:00
He’s basically the entrepreneur. Born out of nowhere. He makes the together.
Speaker: 2
13:03
Sai I don’t know.
Speaker: 1
13:03
I mean, it’s their biggest company. It’s the one that does all the luxury goods, all the craft goods that they’re so famous for. I mean, yes. Him threatening to leave France is, you know, in France. Fly filing paperwork.
Speaker: 3
13:16
Oops. What an accident. Here’s your look at, New York City under Mondami, who, we’re in touch with. He may come on the program. New York state tax 10.9% city, 3.876. And the 2% Mondami tax puts you at 16.8% for living in New York is 17%. I mean, if you were making $10,000,000 a year, is it worth $1,700,000 You could get a plane, you could live in Florida, you could come to New York one hundred and fifty days a year.
Speaker: 3
13:53
There’s really five good months in New York, the fall, the spring, That’s about it. You know? You go see the tree at Christmas, but it’s cold.
Speaker: 2
13:59
Well, that’s not that’s not that’s not realistic for most people. And especially if you have kids and you care about them, you’d like them to be rooted somewhere. You’re not gonna schlep them around every month to arbitrage taxes.
Speaker: 3
14:08
Yeah. Well, I mean, I I do think they’re they’re gonna test that at 17%. That’s nondiminimous. Okay. Let’s, we got a lot of docket to get through here.
Speaker: 4
14:18
I’m so glad Chamov supports the billionaire’s tax. That’s great.
Speaker: 3
14:21
We’ll put that in the headline this week. Yeah. Right after all this
Speaker: 1
14:24
tax This is the free rider problem that we have is no one’s gonna wanna stand up against it, and that’s how we’ll just ai pass.
Speaker: 3
14:29
Sai think we know that too. By the
Speaker: 4
14:30
way, if you’re the if you’re a billionaire CEO of a public company in California No. They’re super hosts. You have you have everything you have everything to lose to stand up and oppose it.
Speaker: 2
14:39
Superhost.
Speaker: 4
14:39
Your employees will run. Totally. Your shareholders will attack you. You’ll look awful in PR. So everyone’s gonna sit quietly and start looking at houses on Zillow in Austin or Miami and be like, where should we move to next year, honey? You know? Like, that’s the conversation that’s going on
Speaker: 1
14:52
in the influencer. Didn’t you say it was retroactive? What’s the
Speaker: 4
14:55
problem? To 2026. So if it passes ai you have three months. Two months. Yeah. But, again, I don’t think it passes muster with the constitutional reads.
Speaker: 0
15:05
Go to California Supreme Court.
Speaker: 1
15:07
That’s what they said about remember when they did the transfer tax where San Francisco took 6% of my home? Yep. Yep. And then in LA, just took 5% of my house down there, the supposed mansion sai?
Speaker: 4
15:17
But those those were excise taxes. So if you go back to the case history in the US Supreme Court on this stuff, anytime there’s a transaction and you take a tax on a transaction, they call that an excise tax. Well, you know there constitutionally allowed.
Speaker: 2
15:29
Part of the bill, though, there’s a part of the bill that they could cleverly use, which is called this ODA, which is effectively this IOU mechanism.
Speaker: 0
15:37
And
Speaker: 2
15:37
they could essentially say when these assets transact, you owe us 5% on an excise basis. And by the way, there’s an attestation that you have to file. You have to file a legal meh. And this was quite well written in there, which said, you must attest that you have less than a billion dollars. Okay.
Speaker: 2
15:54
Now what? Okay. Then I have to attest that it’s more. And then I have to now How do
Speaker: 1
15:59
you even mark your whole portfolio to market if you have a lot of privates?
Speaker: 2
16:01
They do not allow discounts. They do not allow liquidity discounts. It says if you are a reasonable buyer and a reasonable seller, you have to transact this at market price. So for example, imagine you owned a sports franchise and the sports franchise, if you sell a minority share, you’re typically selling it at a discount off the table.
Speaker: 2
16:20
If Forbes says it’s worth 10,000,000,000 and you own 10%, that’s a billion dollars For the purposes of this calculation gonna
Speaker: 3
16:26
pay $50,000,000 to keep it even if you paid 50,000,000 to buy it.
Speaker: 1
16:30
Even if Freeburg is right that there’s a good chance that it’ll be found unconstitutional, how many years in the course is that gonna take, and who’s gonna stick around waiting for that? In fact, the rational thing to do is pull up stakes before January 1 and leave right now.
Speaker: 4
16:44
That’s right.
Speaker: 3
16:45
That’s gonna happen in New York. I mean, I think they’re gonna have an exodus just like New Jersey and Connecticut did, and that actually rocked the tax base in those two geographies. Alright. Listen. Big breaking news this morning. Huge scandal in the NBA. The FBI just arrested 30 people in a sports betting and gambling probe. This hardly seems real.
Speaker: 3
17:07
Chauncey Billups, who is the current Blazers coach and was just introduced into the hall of fame, got pinched for a poker game meh was running allegedly with the mafia that was rigged 17 different ways allegedly to Sunday. Terry Rozier allegedly is a point guard for the Miami Heat.
Speaker: 2
17:24
Why are you saying allegedly all the time?
Speaker: 3
17:26
You know, everybody’s suing these days, so alleged I’m I allegedly, he’s a point guard. I I’ve seen him play. He’s not a very good point guard. Ai a lot of turnovers, if I’m being honest.
Speaker: 4
17:35
You know
Speaker: 2
17:35
what I know is alleged that you’re the world’s greatest moderator.
Speaker: 3
17:38
That’s It’s allegedly true. It’s allegedly true.
Speaker: 2
17:41
Because it’s not true.
Speaker: 3
17:42
You’re allegedly a billionaire. Nobody can confirm it.
Speaker: 1
17:45
Normally, he uses the word allegedly when it’s a story that, like, it’s about a 100 Biden or doing something improper.
Speaker: 3
17:53
Yes. He allegedly smoked crack and shot a nine millimeter in the air.
Speaker: 1
17:57
It’s usually a story of democrat wrongdoing, and he’s trying to discredit it.
Speaker: 3
18:01
Alright. Here we go.
Speaker: 1
18:02
Anyway, keep going.
Speaker: 3
18:03
Terry Rozier, who’s allegedly a point guard. I mean, he he was he’s told his friends. This is crazy. You know, in the over, unders. You know, hey, guys. Bet the under on me, in rebounds because I’m gonna, take myself out of the game with an injury, allegedly. And his friends allegedly made $200 off this.
Speaker: 4
18:25
Okay. Just allegedly for the
Speaker: 3
18:26
whole goddamn thing. This is going across 11 states and a bunch of crime families. Allegedly, there’s something called the meh. I don’t think that really exists anymore. I think that’s an urban legend. And these are two separate threads but announced on the same day. They both involve NBA players, but apparently, this is two different cases.
Speaker: 3
18:45
Sai, Chamath, what do you allegedly think of this?
Speaker: 2
18:49
I Sai think it’s crazy. I think you’re seeing a lot of these trends converge all at the same ai, meaning you have the emergence of all of these prediction markets. You have a lot of data science and AI being used that shows that there’s a lot of odd behaviors. So it really was the squares versus the sharps.
Speaker: 2
19:10
And if you had the inside edge, you were just printing money. Now that all of that is becoming more transparent, there’s a lot less margin. Then what happens is you have these laws passed in the eleventh hour. There was a an important gambling law that was inserted into the big beautiful bill that has implications to all of this. And now you’re seeing the feds.
Speaker: 2
19:29
I mean, the the crazy thing to me is a press conference where Kash Patel was talking about this. I mean, that’s like serious business when the FBI director is front and center talking about all this. So I don’t really know what it means, to be honest. I was shocked at the scale of it, and I was shocked that it’s on the radar of the feds.
Speaker: 2
19:48
This took I thought this is, like, pretty typical ticky tacky stuff, but clearly there’s something bigger. I don’t know exactly what that bigger is, but something is happening where all these markets are smashing together. There’s just a big cleanup effort going on. So I don’t know. I really don’t know.
Speaker: 3
20:05
Breederberg, I guess there’s two different ways to go about this. You have the fantasy sports becoming legal. Everybody around these players just in that one case, where are these people too dumb to understand that their $10,000,000 contract to play in the NBA every year or $20,000,000 contract is more important than your friends betting the under or over.
Speaker: 3
20:26
And how dumb are they? I mean, to not know that the people running a sports book would look for weird action. Like, why is one player getting $200,000 on their over under for rebounds and the other players are getting 20,000? What are shah are your thoughts here, Freyberg? You can also take on the poker one.
Speaker: 4
20:44
I think gambling, generally, as we call it, should be decriminalized. And I don’t like this state by state setup with gambling. I think we should have a federal regulatory body to oversee, monitor. And the problem is you have state gambling commissions, and we have a state by state kind of patchwork of regulatory authority that makes it very hard to standardize, track, and provide also guidance and feedback.
Speaker: 4
21:09
I would much rather see this all kind of get handled at the federal level and and better organized. To Chamath’s point, this is not going away. People love to bet on stuff. They love to gamble. This is part of sports. This is part of the culture. Look, Paul, it’s part of the culture.
Speaker: 4
21:22
Look, Paul, it’s part
Speaker: 0
21:23
of the it off.
Speaker: 4
21:23
They do the Polymarket.
Speaker: 2
21:24
Polymarket raised whatever it was, a billion or 2,000,000,000 at 9,000,000,000. Then the next weekend, they’ve announced sports betting.
Speaker: 3
21:32
Yep. And
Speaker: 2
21:32
now they’re raising money thirty days later, it allegedly.
Speaker: 3
21:36
Allegedly. At
Speaker: 2
21:38
12 to 15,000,000,000.
Speaker: 4
21:39
Sai mean Going anywhere.
Speaker: 2
21:40
It’s un it’s unbelievable. And you can see ai the way, the way that DraftKings and FanDuel stock have reacted to this. Those companies are toast. Toast. That’s right.
Speaker: 3
21:54
This is a really interesting
Speaker: 4
21:55
The poly arya model is the best model because it creates a market. And so as information flows in, that market will dynamically adjust and everyone will get a more fair price.
Speaker: 2
22:05
Did you see the regression that they did on the poly market trades and how well they’re in the money?
Speaker: 3
22:09
Yep. Yeah.
Speaker: 2
22:09
Yeah. Sai Nick, can you find that? But basically what it showed is, like, the front money is the sharps, the back money are the squares, but you have to fade the trade in the first week. So there’s a very scientific method where if you wanna make money on PolyMarket, it became pretty clear.
Speaker: 3
22:25
There’s two things shah are very interesting about it is number one, how how they’ve simplified things to a way people could understand. It’s not like you have to understand, you know, it’s one twenty, it’s this, the point spread. It’s just what are the what’s the chance that this thing happens?
Speaker: 3
22:40
80%, 20% people could just place their money on it. And then this ability to reconcile it at any tyler. I didn’t realize how engaging that is. I was watching the Oscars and I was watching boxing. And I bet the underdog in this Netflix boxing thing that happened because I just thought this guy looks pretty pissed off, and I thought that was a good enough way to go with the underdog.
Speaker: 3
23:01
And then you watch it round after round, and you see the odds changing real time. Ai anytime, you can just cover the bat and take your winnings and take out the risk. Really, like, interesting and fun for people. It’s so simple. Then I did it on the Oscars or the Emmys, and I was like, yeah. I’m gonna I’m I’m fading, no no offense, Penn Stiller, but I’m gonna fade, severance.
Speaker: 3
23:22
And I went with the, the, the one about the emergency rooms and with Andor and I won again. So I’m just it’s it’s a lot of fun to do it.
Speaker: 2
23:30
Here, Jason, look at this. I sent Nick the tweet, but this is incredibly systematic. This is over many, many, many arya, but basically 89% accurate one week out, but in the final four hours, it jumps to 95, which means that if you follow the sharps along this pattern, you’re gonna make money.
Speaker: 3
23:49
6% in a week. Yeah. Right? Polymarket.
Speaker: 4
23:52
Polymarket actually has the news before the news does. And this is one of the most, like, powerful outputs of Polymarket is they’re actually getting a read on what’s going on in the world before the media recognizes it, before the public recognizes it. Yeah. It’s absurd. Well, yeah, when you put money up, it actually turns out that when people have incentives, that market will find the truth.
Speaker: 4
24:12
Somebody needs to build the app that makes all of these things fungible. And by all, what I mean are cryptocurrencies,
Speaker: 2
24:21
betting markets, equities, and options.
Speaker: 4
24:24
That’s what poly market’s turning into.
Speaker: 2
24:26
Yeah. And the reason is there’s just no reason to go to nine different sites and have nine different accounts. And the most important thing is to do KYC and AML across nine sites to get access to liquidity, credit, and margin. You’ll wanna do it once and then you’ll wanna have a large pool of capital that you can trade across anything.
Speaker: 2
24:45
So I can go long Nvidia, but I can also go short the NIX. And then I can own some Bitcoin all in the same trade.
Speaker: 4
24:53
Totally.
Speaker: 2
24:53
That’s where it’s going.
Speaker: 4
24:55
Totally. Totally. Now to the earlier question, Jay Cal, I think if we end up there, where PolyMarket does become the truly liquid market across all of these kind of predictions, all of these assets, then a lot of what we are seeing with respect to insider trading, insider information becomes much more apparent.
Speaker: 4
25:14
So the problem with the sports betting is that there’s a one-sided bet. The casino sets the odds or, you know, whomever is setting the odds, and then you’re either taking one side or the other. And so if you have the insider information, you’re taking the side that creates an arbitrage opportunity for you.
Speaker: 4
25:29
But if you were to do that in a liquid market where there’s someone taking the other side in a dynamic way, then the market very quickly moves because of the inside knowledge you have. And that inside knowledge is now reflected in the underlying asset price, in the underlying odds that you get for that bet.
Speaker: 4
25:45
And so PolyMarket actually brings truth and transparency to what is currently an insider arbitrage opportunity. And it may actually solve some of these fundamental problems in in gambling.
Speaker: 3
25:57
I think let’s just wrap with a little bit on the poker and knowing if you’re in a rigged game or not. Living in LA, I got invited to a lot of poker games when I was playing low stakes, playing in Hollywood Park. Just, you know, 500 buy in, thousand dollar buy in. But as these things went up, you started to get access.
Speaker: 3
26:13
And I started to get invited to Molly’s game, the very infamous game. And she would text me. She would call meh, oh, we’re playing over here. Oh, Leo. And this person wants to see it. That person wants to see it. I was like, they wanna see me lose $50.
Speaker: 3
26:23
There’s no way I’m not playing in that high stakes, and I’m not going to that game. And the one or two times I did go to games that had a rake, I was just like, this game is fixed. I don’t know how.
Speaker: 2
26:33
Totally.
Speaker: 3
26:33
But somebody’s I think it’s just collusion. I think there’s three players all playing from the same chip speak, in which case, you know, you could be dealt aces five times in a row. If you’re up against three players, what are your odds against, you know, six other cards? It’s gonna be pretty bad for you.
Speaker: 4
26:49
Think Molly’s game was fixed?
Speaker: 3
26:51
I don’t know if hers were was. I wouldn’t be surprised if it was. I wouldn’t be because once the mob gets involved, which is what happened at the tail end of hers, then all kinds of possibilities happen. Once it gets to extremely high stakes and you’ve got guys chasing it, man, you could you know, and they’re coming back night after night trying to catch up for what they lost the last speak.
Speaker: 3
27:10
It’s it’s pretty dark.
Speaker: 2
27:12
There is absolutely no reason why anybody should play in a game where you’re playing with people you don’t know. And if you need it that badly, then you probably have a problem. But there is no limit at which you couldn’t find a game with some combination of your friends and or respectable, reputable businessmen that have more to lose than you do.
Speaker: 2
27:34
And if you can’t find that game, you should not be playing in any game.
Speaker: 3
27:37
Yeah. Any home game with a rake is just should be absolutely speak, period. Sust up.
Speaker: 2
27:43
Super sketch.
Speaker: 4
27:44
Isn’t that game?
Speaker: 3
27:46
Yeah. Well, he he yeah. Well, we don’t
Speaker: 0
27:47
wanna bring
Speaker: 3
27:48
up angle shooting. He’s a straight
Speaker: 4
27:50
Wait wait wait wait wait
Speaker: 0
27:51
wait wait wait.
Speaker: 2
27:52
He would be so tilted if he heard
Speaker: 4
27:54
you say the Oh
Speaker: 3
27:54
my god. He’s so about the ethics. He wants, you know, no flies,
Speaker: 4
27:57
no okay.
Speaker: 2
27:58
In fairness to like that game where you can, you know, go off for a small house in a is also the game where he would then collect $10 from each of us to pay for the fruit plate and the pizza on them.
Speaker: 0
28:09
Oh my god.
Speaker: 3
28:10
Yeah. He would order Domino’s thin crust.
Speaker: 2
28:12
Wouldn’t even buy us pizza. Yeah.
Speaker: 4
28:13
Literally. He would be the chef. And but I’m like, I don’t know if the chef really does cost $6,000
Speaker: 0
28:18
for two hours, bro. I don’t
Speaker: 4
28:19
know. It’s Wagyu.
Speaker: 3
28:20
I think it’s a Wagyu burger. The the funniest ever was he’s, like, in a hand, and the Domino’s pizza comes. And, you know, he’s ai, everybody have a green chair when we’re playing with 500 chips. He’s trying to get, like, a $125. The guy comes. I just go. It’s on his card. The ai got you got a sign. Right? It’s got the tip on it. I said, it’s, like, a $150 a pizza.
Speaker: 3
28:40
I said, what’s the most what’s the biggest tip you ever got? He said, meh. Somebody on New Year’s gave me, like, $200. I just wrote $500 on a $150. I think I signed it. I gave it to him. And then I was in hand with I said, here’s the receipt.
Speaker: 2
28:53
So what you’re saying is when it’s on somebody else’s credit card, you’re willing to tip incredibly generously. I mean God. You’re a really great guy.
Speaker: 3
29:01
You should speak. Ai. When Phil Helmuth and I bought, dinner for everybody at, Cipriani that time, Chmop grabs the check. He goes, I’ll put the tip in for you guys.
Speaker: 2
29:13
Well, why is that, Jason? Is that because I put up a 100%
Speaker: 3
29:16
tip on an $8,000 check.
Speaker: 2
29:19
Isn’t that because I pay for everything all the time?
Speaker: 3
29:21
That’s true. You are very generous. It’s you’re no, or no for 2030.
Speaker: 4
29:27
One ai.
Speaker: 2
29:27
Sai ask you guys in fifteen years to pay one time if you remember the exact it’s so sad.
Speaker: 4
29:32
I have some tilting. On you guys.
Speaker: 2
29:34
I was
Speaker: 3
29:35
like, oh, god. Guess we’re going to public school.
Speaker: 2
29:36
You guys are so ungenerous. It’s coming.
Speaker: 3
29:39
Ai I give huge tips.
Speaker: 0
29:41
Phil, how many?
Speaker: 3
29:44
Yeah. I think he’s, you know, he’s average.
Speaker: 2
29:46
K. Let’s go to the next stop. Let’s
Speaker: 0
29:47
go to the next stop.
Speaker: 2
29:47
Let’s go to the next stop. The world’s greatest moderator.
Speaker: 3
29:49
Let’s talk about this Amazon outage. Tough week for Amazon. They had this huge outage in the beginning of the week, and then they had a bunch of leaked documents about their plans for, jobs. And, Monday, massive AWS outage. 2,000 companies, 4,000,000 users unable to function on the Internet for half a day, fifteen hours, twenty hours.
Speaker: 3
30:10
And then on Tuesday, internal docs viewed by the New York Times showed Amazon plans to not hire, 600,000 plan jobs, because of robots by 02/1933. So this isn’t, they’re planning on laying off 600,000 workers, but rather they’re just pulling back their hiring plans and ramping up their robotic plans, which you would expect.
Speaker: 3
30:34
And, their goal, according to these internal leaked documents, is to automate 75% of warehouse operations. We talked about this the last couple of weeks. Freeberg, your thoughts on either of these, two stories here?
Speaker: 4
30:46
I think the AWS story is interesting in terms of its implications for the cloud. So there’s effectively three major cloud vendors that compete with one another, AWS, Microsoft, and GCP or Google Cloud. And I’ll just give you the
Speaker: 3
31:00
numbers here. Ai the way, coming on strong. Yeah.
Speaker: 4
31:02
That’s right. But let’s let’s exclude the number four for now, Oracle. But AWS has a $124,000,000,000 revenue run rate. Microsoft, a 120,000,000,000, and Google Cloud, 54,000,000,000. But AWS, which is slightly larger than Microsoft, is only growing 17% year over year. Ai 26% year over year.
Speaker: 4
31:22
And Google Cloud is accelerating at 32% year over year, and some say getting closer to 40% growth rate. The big thing I hear from partners and enterprise customers of these cloud services is that many of them, if not all of them, as they scale up, move to a multi cloud model.
Speaker: 4
31:40
So none of them wanna be dependent on a single cloud. Many folks started on AWS because AWS was the OG. Back in the day, when I was running Climate Corp, I was the largest EC two user in AWS for about a year and a half, which was their elastic compute cloud service. We’re running all these models back then. So I knew that service very early on. It was very unique. It was very powerful.
Speaker: 4
32:00
And so a lot of companies that are old school established themselves in AWS very early on. But the outage that happened this week, I think, starts to highlight for folks that they can’t and shouldn’t have dependency on a single cloud service provider and will only accelerate the diversification of companies into the other clouds.
Speaker: 4
32:17
And so I do think this is actually a very beneficial situation for Microsoft and GCP and to your point JCal, perhaps even Oracle, in terms of giving those sales teams, which are very aggressive, a hard story to go and sell for and say, guys, you don’t wanna just sit on AWS in case this happens again.
Speaker: 4
32:35
We’ve got better infrastructure. We’re more reliable, etcetera, than these other ai. So come and move over to us. And that might be a little bit of a naive, simplistic, kind of reductive way to think about what happened this week. But I we are seeing the smaller competitors accelerate, and I think that this might be another kind of moment of acceleration for those folks.
Speaker: 3
32:52
And multi cloud, it’s been around for a while, Chamath, when you’re doing stuff with 8090. Are the big companies already doing that, or do they assume, hey, there’s gonna be some downtime? Yeah. It’s okay to risk or are they really thinking multi cloud, neo cloud? Let’s have some smart intelligent routing and redundancy here.
Speaker: 2
33:13
I think there are two markets. There’s the AI arya, then there’s the non AI market. In the non AI market, everybody has everything. It all looks effectively the same. There’s certain products and services that are unique to Azure versus GCP versus AWS, but by and large, the market is big enough and important enough that you’d have to be pretty insane to take a single vendor approach.
Speaker: 2
33:42
And so what typically happens in these markets is that they start off really small. One person has all the shah. And then as the market becomes very valuable and very big, everybody diversifies because it’s a risk management thing. And these things flow into the disclosures you have to make as a public company.
Speaker: 2
33:59
And if you didn’t have that diversification and something bad happened and it impacted your business, you could get sued. So there’s all these reasons why eventually all these three big companies will converge effectively, roughly a third, a third, a third. We’re gonna debate the path to get there, but that’s where they’ll end up.
Speaker: 4
34:16
You know, there’s this principle called the rule of three where they say, like, all markets eventually mature to kind of a sixty thirty ten split that you end up having your market leader at 60% market shah. Second place is usually half the size at 30, and then you always there’s some balance in the market where there’s some competitor that resolves to about a 10%.
Speaker: 4
34:35
It’s really interesting. If you guys were to place a bet, who would you think is the sixty, thirty, 10?
Speaker: 2
34:40
I don’t think that applies here. I think that’s bull
Speaker: 4
34:42
You think they’re gonna be a third, a third, a third?
Speaker: 2
34:44
I think it’s all some idiot making something up.
Speaker: 4
34:46
But what do you think what do you think happens in cloud? Like, do you think that these all converge to equal market share?
Speaker: 2
34:52
In non AI, it’s a third, a third, a third. It will. It’ll take circuitous paths, but that’s where we’ll end up.
Speaker: 4
34:57
By the way, a good point to make is that this revenue number that I highlighted for Google Cloud, Microsoft, and Amazon actually include their applications. So as you know, like Microsoft GCP have pretty sizable enterprise application stacks that are built into that number, which gives them obviously the ability to drive cloud usage because they’ve got demand and sales relationships into those enterprises.
Speaker: 2
35:17
I think the way it works in AI is that you initially right now we’re in this early phase where there’s two paths. Path one is you need a specific model and it’s relatively well integrated using a specific subsidized form of hardware on one of the hyperscalers. But eventually, you’ll get more of that abstracted away as it gets pushed into the infrastructure so that you have less dependence on one model.
Speaker: 2
35:42
There’s a lot of work that has to get done and a lot of in memory infrastructure that is not yet built that has to exist. But once that exists, it’ll be easier for all of us at the application level to view these models a little bit more fungibly. And then at the bleeding edge, you’ll have the folks that basically give you some form of a hypervisor or virtual machine or the bare metal.
Speaker: 2
36:04
And that’s where the Neoscalers are doing really well. But I think my point is that in any important arya, in compute, in technology where there really isn’t much of a differentiation, I think you’ll end up with these hyperscalers at a third, a third, a third. Now if one model is way, way better and it’s only on one of the clouds because Google writes a big check or Amazon writes a big check, I could see that swaying the AI shah.
Speaker: 2
36:32
But in the absence of that, I think cheaper, faster, better is sort of the the the end destination for everybody.
Speaker: 3
36:39
What an extraordinary outcome for Amazon where AWS is, like, 15% of their revenue right now, Freeburg, but it’s 60% of their profits profits today. And that was just a side hustle, like a little project they took out of nowhere, and it’s it’s having the same impact on Google and other places.
Speaker: 3
36:55
So side bets
Speaker: 4
36:56
point. Yeah.
Speaker: 3
36:57
And side quests are just you look at the Waymo side quest for Google or even a lot of Sergei’s other bets, like, and Larry, flying cars, looms, low earth satellites, scuba Google Ai, all those x projects were so had so much potential in this.
Speaker: 2
37:13
GPU, DeepMind, TensorFlow, GFS Robotics. It’s pretty crazy.
Speaker: 3
37:19
Boston Robotics. They bought all those robotics companies, man. It’s ai somebody got to them and we’re like, yeah. You know, you’re seven, eight years into this. It didn’t happen.
Speaker: 2
37:26
The problem that Google has, unfortunately, is, like, they have so much stuff. It’s not really valued. And so they’re gonna go through the same problem that everybody else who’s a conglomerate has, which is this decision. Now Buffett, when he got to that decision sai, I don’t care. This is my life’s work. And so I’m just gonna keep everything aggregated.
Speaker: 2
37:48
But now you’re gonna get to this thing where the intrinsic value of everything they have will far exceed the actual value that it trades at. And so there’ll always be these fissures of pressure. And then if one of these things requires a lot of money, there’ll be pressure. And that pressure will be segregate these things so that I can own one versus the other.
Speaker: 2
38:11
And that’s always the thing that happens in public markets is you go, you go, you ai of swing back and forth. So I suspect that this is gonna happen at Google.
Speaker: 4
38:18
This was what they set up to do with Alphabet was to be the holding company. And then to your point, they made that evolution particularly in a company like Waymo where they said we can’t be the sole funder. They brought in Silver Ai. They brought in all these other investors. They did this actually with Verily.
Speaker: 4
38:31
They did this with a bunch of these what they call other bets is they made the conscious decision. Because, Chamath, on the flip side, by bringing in outside capital and having an independent board for these subsidiaries, they were actually able to drive better outcomes because now there was governance and there was aligned interests
Speaker: 2
38:49
that
Speaker: 4
38:49
could then take management and say, guys, if you can deliver these results
Speaker: 3
38:52
Well, it’s
Speaker: 4
38:53
and external pressure as opposed to the softness.
Speaker: 2
38:56
That. But it’s that it’s something else. There’s no way somebody as smart as Silverlake comes in if they think there’s not a path to liquidity. So the other thing they have to promise is ai like, listen, we will take this company public and in return, you will help us build a better company than we could build ourselves.
Speaker: 2
39:11
Well, it seems that Silver Lake has done their part of the bargain. Now it’s up to Google to live up to their part of the arya, because if it doesn’t get liquid, it sets a very bad precedent for everybody that committed capital into that company.
Speaker: 4
39:23
Yeah. Of course. Yeah.
Speaker: 3
39:24
Waymo going public would be unbelievable next year, man. If they did that, what would that look like in the public arya? 250,000,000,000? No. A 100,000,000,000?
Speaker: 2
39:33
Take take it easy. Stop. Don’t don’t don’t don’t don’t don’t.
Speaker: 3
39:35
You don’t think so? I think it’d be huge.
Speaker: 4
39:38
Jason, we all objected to talking yet again about AI driven job loss, yet you insisted on putting this AI robot story from Amazon in. I think you have something to say.
Speaker: 3
39:50
Thanks. Let me take you through a presentation.
Speaker: 2
39:54
Well done. You have slides?
Speaker: 3
39:56
Ai. No. I’ve been just I I am working on a presentation based on a lot of stuff we’ve been talking about here. I threaded it together. You know, I Ai talked with just talking about Google and the size of the company. Ai now, they are in 2025 at a 187,000. They were at a 190,000 people in 2022, and their revenue has just gone from 283 to 350,000,000,000 in basically three years.
Speaker: 3
40:19
And when you look at this Amazon stuff that came out, I just wanted to point out a couple of things. It’s not just that they’re not hiring these 600,000 jobs. It’s that they are in full blown crisis preparation for this. They they have crisis teams writing up how to handle this and be a good corporate citizen, and they’re talking about having parades and paying for Toys for Tots.
Speaker: 3
40:43
And they’re even trying to get the executives to say things like cobots as opposed to robots. Let’s not call them that. Let’s call them coworkers and cobots. And when you look at this, just to open up the aperture here, right now, Walmart and Amazon are the number one and two employers in The US.
Speaker: 3
41:00
2,100,000 people work at Walmart, over a million at Amazon, and 3,000,000 people, as we know, work in taxis, Uber, DoorDashers. All those jobs are at risk. And we talked about this back in June when Andy Jassy telegraphed all this in a blog post where he sai, the next few years, we expect that this will reduce our total corporate workforce as we get efficiency gains from using AI extensively across the company.
Speaker: 3
41:24
They believe that they’re going to have significant job displacement, which is used that more neutral term here as opposed to job loss or not hiring. And when you look, I don’t know if you saw today, there were a bunch of MAGA people saying, like, oh, these interlopers in the MAGA movement are not taking into account the bottom half of the MAGA movement, the workers, people who don’t own equities.
Speaker: 3
41:47
And when we look at electricity ai, you you were on that story last week, Chamath, or maybe it was even two weeks ago now. The energy department just said electricity costs for residential are gonna go up 4.8% this winter. And this is gonna start this anti AI boom counter. And I tweeted about this and I thought I would, you know, maybe end here with Saloni replied to my tweet and sai, AI and robotics replace all jobs.
Speaker: 3
42:18
Working will be optional, like growing your own vegetables instead of buying them from the store. And Senator Bernie Sanders came out and said I don’t often agree with Elon Musk, but I fear that he may be right when he says AI and robotics will replace all jobs. So what happens to workers when they have no jobs or income? AI and robotics must benefit all humanity and not just billionaires.
Speaker: 3
42:37
And I’ll I’ll stop there because this, I think, feeds into your story for the last two years on this podcast, Freeberg, which is the rise of socialism, these things, and Bernie Sanders being the standard bearer for democratic socialism. These things are starting to come together. They’re starting in people’s ai, whether it’s the original MAGA guy saying, well, what’s gonna happen for American workers? Right?
Speaker: 3
43:00
We know that the Trump two point o agenda is doing great Ai build out crypto, all this great stuff, trade. But the bottom half that you keep talking about, Freeburg, is starting to connect on this issue.
Speaker: 4
43:14
I think that you are characterizing AI automation and technological progress as the core driver of the socialist influence. And what I would argue is that the actual core driver of the socialist influence is the fact that we put in place a lot of people into government, passed a lot of laws that caused an increase in spending because we promised people that the government would do more for them over the last forty years.
Speaker: 4
43:41
That is not possible in a true market based system.
Speaker: 3
43:45
Oh, I agree with that. Yeah. I agree with that.
Speaker: 4
43:47
And so by telling everyone, hey. We’re gonna make sure you get better jobs. We’re gonna make sure you all get housing. We’re gonna make sure you get education. You cannot actually get a government to effectively do that because what ends up happening is the government inflates the cost of those things, and the market doesn’t actually work.
Speaker: 4
44:02
Mhmm. So the truth is this is now, like all other things, a scapegoat for the true cause of the socialist movement, which is that government has become too big, too unwieldy, and its natural inefficiency has distorted markets to the point that there is maybe no point of return anymore.
Speaker: 4
44:19
And people will not see that. They do not see it, and they’re gonna look for reasons. They’re gonna look for scapegoats. And they’re gonna say, oh meh god. Look over there. There’s a robot. That’s the reason I’m losing my job. Oh my god. Look over there. There’s a rich person that works at a pharmaceutical company.
Speaker: 4
44:33
That’s the reason I can’t get health care.
Speaker: 3
44:35
An immigrant took my ai, right, as the one from the last twenty years.
Speaker: 4
44:38
And so meh, I think that people aren’t willing to and they’re not going to see the true cause because there’s no one that runs to go work as a politician that is going to raise their hand and say government is the problem. No one says I need to reduce government, elect me. No one ever has gotten elected in a democracy doing that.
Speaker: 4
44:56
So the natural course of things over two hundred and fifty years is that people raise their hand and they say, I’m gonna give you more, and I’m gonna use the government to do it. And then they go into the government, they make the government bigger. And as a result of making the government bigger, the government is spending more, the dollar goes down, the performance of the services goes down, and, fundamentally, we end up in a socialist spiral.
Speaker: 1
45:13
I think it’s confirmation bias for you to see that story as confirming a point of view.
Speaker: 3
45:18
I mean, it confirms what I predicted last year that Amazon would be cutting all these jobs for robots. That’s all. It’s not confirmation bias. It’s confirming
Speaker: 1
45:27
my They haven’t cut one job. They haven’t cut one job.
Speaker: 3
45:30
Actually, they have less employees now than they did three years ago. No. That’s not true. Yep.
Speaker: 1
45:35
It’s actually not true. The New York Times story doesn’t even say that. You’ve got these, like, hobby horses where you keep coming back to the job loss narrative, the copyright narrative, and then there’s one story in the New York Times, which was a leaked internal document from the automation department, which doesn’t even mean that it’s gonna happen.
Speaker: 1
45:52
This is ai their sales pitch. The barber’s trying to sell you a haircut. And you read that, and you’re like, oh, it confirms everything I’ve been saying. What the article actually says is that they’ve tripled their number of employees since 02/2018, and they’re not planning on cutting jobs if it pans out.
Speaker: 1
46:09
If the program pans out, then the rate of hiring will simply be slower.
Speaker: 3
46:13
Yeah. It’s interesting you picked 2018 as the point because the actual peak employment there was 1,600,000 in 2021, and it’s now 1.55 in 2025.
Speaker: 1
46:23
Ai didn’t I didn’t pick that to cherry pick. Ai I for
Speaker: 0
46:26
the year, I’ve called the
Speaker: 3
46:26
02/2006.
Speaker: 1
46:26
Been ai down. Okay.
Speaker: 3
46:28
Which is fine.
Speaker: 1
46:29
I’m quoting the New York Times article, which is the source for this.
Speaker: 0
46:31
Yeah.
Speaker: 3
46:31
Yeah.
Speaker: 1
46:32
Amazon’s US workforce has more than tripled since 2018 to almost 1,200,000. You have to read these New York Times stories carefully because they wanna make the headline as salacious as possible, And then the echo chamber wants to make it even more salacious, and they make it a story about job loss when it really is a story about operating leverage in their business, which is a slightly more nuanced take.
Speaker: 3
46:55
Yeah. No. There’s there’s definitely nuance here. I would believe Andy Jassy when he says we’re gonna be reducing jobs and when this chart shows that they’re flat to down over the last five years. And that that same trend is just happening at Google like I just showed because there is a static team size or slightly down team size that’s occurring at all these companies, and it is notable.
Speaker: 3
47:12
And then on top of this, which has occurred in the rearview mirror for the past five years because of COVID, return to office, inefficiencies, they’re saying, hey. We’ve gotta come up with a way to frame these robots coming into the factory as a good thing sai Americans don’t, get really upset at us and we need to buy more toys for tots.
Speaker: 3
47:28
So
Speaker: 1
47:28
Here’s the problem. First of all, I don’t I don’t believe in this job loss narrative as the way that you keep portraying it. I think it’s much more nuanced and complicated. I think Freeburg does too. And every time there’s a story, you wanna bring it up and make it a story of the week, and it’s all confirmation bias.
Speaker: 1
47:45
And my point is not that Amazon isn’t seeking ways to improve its operating leverage and avoid hiring more people. Obviously, they arya. But the headlines that this has been turned into are so exaggerated and salacious. And the point is, they don’t say in this article that they are even gonna be cutting jobs.
Speaker: 1
48:06
They’re simply planning to double their sales volume over this time period and hoping to not have to double their workforce. Obviously, they wanna get a lot more operating leverage. By the way, this is not something that started since AI. And look. I’m just quoting the New York Times story, okay, which is not even the most reliable narrator for this.
Speaker: 1
48:24
But what they say in the story is that Amazon’s been using automation for over a decade when they acquired a major company to do automation. They’ve had robots running around
Speaker: 0
48:33
these factories for a long time.
Speaker: 3
48:34
Yeah. 100%. Yeah. Yeah. They’re they’re the tip of the spear.
Speaker: 1
48:38
But this is just a continuation of a trend that’s been going on for the last decade as opposed to, oh, like Sai is suddenly gonna cut all the jobs.
Speaker: 4
48:45
Right. It’s effectively software. You could argue software is a job loss creator. You know?
Speaker: 3
48:49
I think you’d be under estimating exactly what’s happened with LLMs being put into robots. We’ve had these robots before, but they were very purpose built as you’ve pointed out many times, Friedberg. They were able to do, like, one very simple thing very well. Now we’re going into general robotics, like the Optimus, like the Figure, and those are designed to be able to learn anything.
Speaker: 3
49:08
And there’ll be they’re going to be absolutely a game changer. They’re gonna be able to do a 100 times, a thousand times what the purpose built robots do. So I think that’s where we’re probably having a little bit of a disconnect here. These little tiny Kiva bots I’ll show you I’ll just put an image in here so we have it. These do one thing, the Kiva bots. Those move packages around.
Speaker: 3
49:29
That’s not an Optimus going around and packing the boxes and ai them to your first step.
Speaker: 1
49:33
Optimus is gonna be really cool. And when it comes, it’s gonna be really interesting in terms of all the things it can do.
Speaker: 3
49:39
Yep.
Speaker: 1
49:40
But right now, that’s a narrative for the future, and it’s being portrayed as something that’s already happening. When the current round of automation’s been going on for a decade and is based on those, like, Roomba type devices and mechanical arms and things like that.
Speaker: 3
49:55
Alright. Tesla reported their earnings on Wednesday. As you guys know, we record on Thursday. As you listen on Fridays. Record revenues, 28,000,000,000, up 12% year over year. Massive amounts of free cash flow, 4,000,000,000. I think they’re up to 40,000,000,000 in cash, which is always great when you’re going into, some big capital intensive projects ai Optimus and like self driving.
Speaker: 3
50:15
Downside, operating profit fell 40%. Stock dropped a bit 4%, but bounced back. And, on the earnings call, Elon emphasized the importance of his trillion dollar pay package, which will give him just about 12%, additional stake over the next ten years if he hits absurd targets that would make everybody who holds the share, shares in the company extremely wealthy, and they would benefit, more than Elon himself.
Speaker: 3
50:42
And here’s his quote, my fundamental concern with how much voting control I have at Tesla is if I build this enormous robot army, can I just be ousted in the future? I don’t feel comfortable building that robot army if I don’t have at least influence over it. And he called Glass Lewis and ISS, corporate terrorists.
Speaker: 3
51:00
These are the people who vote on behalf of passive index funds for things like who’s on the board of Tesla. Vote for Elon’s pay package will be number six. Polymarket thinks it’s gonna pass sai we talked about before. They they tend to get it right 85% of the time in this time frame, actually.
Speaker: 3
51:17
So 79% chance as of Thursday afternoon. I guess, Shamath, there’s a couple of ways to go at this. There’s the performance of the legacy business. There’s the potential of the future business, and then there’s governance, the company moving to Texas, and this pay package, and this transition period for Tesla, which is going from an, you know, somebody who sells cars, really nice ones at a very nice margin, but a lot of competition now.
Speaker: 3
51:41
And then these this business that obviously, Elon himself is obsessed with, which is the optimist as we saw when he was at the oil and some and take it wherever you want, Jamal.
Speaker: 2
51:52
I’ll say three things. Stan Druckenmiller has this very useful comment about stocks, which is when you buy it today, you’re trying to buy what that company is gonna look like in eighteen months from now. And what it’s doing today doesn’t matter. The thing about earnings and p and l’s and quarterly reporting is that it’s looking backwards and it’s trying to give you a sense of what happened, not what will happen.
Speaker: 2
52:19
So I think there are three critical, critical things about what will happen that I think are important with respect to Tesla. The first is at the foundational technology layer. Nick, I sent you this tweet, but it’s what he said about AI five. I Ai I’ve made these comments before, but he had these multiple efforts with Dojo and other stuff that he merged into one unit.
Speaker: 2
52:41
And the the quote is pretty incredible. We’re going to focus TSMC and Samsung on AI five. The chip design is an amazing design. I have spent almost every weekend the last few months with the chip design on AI five. By some metrics, it will be 40 x better than AI four.
Speaker: 2
52:57
We have a detailed understanding of the entire stack. With AI five, we deleted the legacy GPU. It basically is a GPU. We also deleted the image signal processor. This is a beautiful chip. Ai poured so much life energy into this personally, it will be a real winner. Why is AI five so important?
Speaker: 2
53:16
What AI5 is, is the building block of a system that I think you’ll start to see not just in the cyber cabs, but also in Optimus. So from a functional technology perspective, there’s been a leap and that leap is gonna come into the market. That was the first thing he said, which I thought was really important.
Speaker: 2
53:37
The second thing was what he said about his energy business, which I think is the critical adjunct to believe robotics and autonomous cars. If robotics and autonomous cars work, what you really need is an energy business beside it that is humming and on all cylinders. Ai? It’s how you make LFP battery cam that will be the limiter. Energy will be the limiter.
Speaker: 2
54:02
But what he’s showing, and Nick Ai sent you this tweet, is that business is just on a tear. It’s printing 3 and a half billion dollars a quarter and its operating margins and energy business, 30%. And so what you’re gonna see are battery packs of all shapes and sizes, the huge battery systems that’s gonna go into data centers, but then all the way down, I think to the small LFP ram that he’s gonna need to power all these things.
Speaker: 2
54:26
And then the third thing is his comments on ai cab, which is that this thing is just gonna be a shock wave. So I read all of those things and I was very bullish. I think that he is humming on all cylinders on the critical layers of the stack that he needs to build this next version of Tesla.
Speaker: 2
54:44
My concern, I think there’s a real concern that I have that this vote is gonna go down to the wire. I think that ISS and Glass Lewis, I think that these organizations are pretty broken. I think the way that they make decisions are hard to justify. An example of this, they asked to vote down Ira Arampreis as a director of Tesla because he didn’t meet the gender components, but then they wouldn’t vote in favor of Kathleen Wilson Thompson, even though she does technically meet the gender requirements.
Speaker: 2
55:23
So it’s very confusing where ISS and GLASSOUIS are coming from. Ai I think there’s a risk that this that this package gets voted down.
Speaker: 0
55:29
Can I
Speaker: 1
55:29
just ai to spotlight on one of those points that you made with these proxy advisory services? So I think for years, people have wondering ai did corporate America go so woke, especially in the early twenty twenties, where they created all these DEI departments and you know, they didn’t have to do that.
Speaker: 1
55:47
And a big part of the reason is that those initiatives came from Glass Lewis and ISS. I think Elon’s jokingly called ISS ISIS. But, basically, what happens is they make recommendations for how shareholders should vote on different resolutions, And the index funds basically just defer to them for whatever they should do.
Speaker: 1
56:10
So they effectively control or almost control the voting for all these board level resolutions that every public company has to make. And so they’ve been the ones who’ve been imposing all these DEI requirements, all these ESG ai, if you’re wondering where those things came ram.
Speaker: 1
56:28
Because just these two companies, which no one’s ever heard of, they were captured a long time ago, meaning they were captured by the woke crowd years ago. And so this has really been the root of why corporate America has gone woke for a long time. And look, there’s also pressure from the outside, from boycotts or, you know, there’s some pressure sometimes from employees and that ai of thing, but a lot of it came from these two companies that no one’s ever heard of.
Speaker: 1
56:54
And I think it would be a good idea for someone to take a look at this and figure out what happened. Maybe someone like Chris Ruffo should investigate what was the impact of Glass Lewis and and Ai on corporate America
Speaker: 2
57:08
ISIS.
Speaker: 1
57:09
Going full woke for so many years. Because it and it certainly didn’t help corporate profits.
Speaker: 2
57:14
Mhmm. It didn’t help profits, and they don’t have logical explanations for a lot of their decisions.
Speaker: 3
57:20
Yeah. And ai aren’t there active investors or active managers in these passive groups who would make a decision on these things?
Speaker: 2
57:29
They’re too small. The banks call me every speak. And one of the things that I get is sort of like they tell meh, like, hey. Here are the big trades. Here’s here’s the flow. Here’s if you wanna be in market, here’s what what I recommend. That’s what they’re telling me. One of the things they told me this week, which I thought was really shocking is there’s so few active managers left. It’s so overwhelmingly passive money.
Speaker: 2
57:51
The next largest group is now retail. And so what a lot of these professional money managers do now is they basically wait to see where retail is going and they follow them. So there isn’t the people with a diversified asset base to be able to stand up and say, I don’t think what ISS and Glass Lewis are doing is right.
Speaker: 2
58:13
And so what happens is they kind of, as Sai says, they can just kind of run amok and they build a very healthy business being this interloper to provide opinions. It’s not clear where their opinions come from. It’s not clear what they’re rooted in. It’s not clear there’s a way to adjudicate and go back to them and say, well, you got this wrong.
Speaker: 2
58:32
It’s just not clear, but, you know, they probably make a very healthy margin doing it. And everybody, as Saks says, just kind of turns over responsibility to them.
Speaker: 4
58:39
It is an interesting fact that we kind of just say, hey. The guys who are the actual custodians of the shares don’t have to do the job of holding the shares. Like, the job of being the holder of the shares is to vote the shares. That’s all there is to do as a as a shareholder.
Speaker: 4
59:00
You make your you cast your vote. And these guys are sustained.
Speaker: 3
59:03
They could also abstain. Right?
Speaker: 4
59:05
Yeah. And these guys are getting paid a fee to actually do that work, which is call it half a percent or quarter percent or tenth of a percent of the assets that they hold. So, like, what are the people they’re doing? If it’s all automated trading, why aren’t they just
Speaker: 2
59:18
I don’t know if you guys own a lot of equities, but just to give you a sense, there’s people that manage the stocks. Right? There’s people that transfer the stocks. There’s people that then give you a recommendation on how to vote the stock. Then there’s people that hold a virtual representation of that stock. Then there are people that transfer that virtual representation.
Speaker: 3
59:39
And they will not stop calling.
Speaker: 2
59:40
So the point is, like, we have so financialized everything that there are billion dollar businesses that sit at every single step of the way. And to your point, Freeburg, I think this is where
Speaker: 4
59:52
No one’s actually a shareholder.
Speaker: 2
59:53
The tokenization of stocks may be a really good thing because it’ll put the responsibility back into the owner of the stock because the wallet will centralize all that activity because you won’t need to have all this other stuff.
Speaker: 3
01:00:06
I have been getting phone calls from Invesco QQQ because I own a bunch of QQQ and like Yeah. You know, some accounts or whatever. And they were calling three times a day for the I don’t pick up my phone. I don’t who’s calling me on the phone? Unless it’s one of you four is calling me to say ai. I don’t that’s the only time I pick up. It’s when you know?
Speaker: 3
01:00:25
And so I finally pick up and they’re like, hey. We need you to vote. Ai like, yeah. I’m not voting. I don’t know who you are.
Speaker: 3
01:00:30
They’re like, well, let us explain to you how to vote. And I’m like, I I don’t wanna vote ai shares. I just wanna own QQQ. I’m good. You guys
Speaker: 0
01:00:37
can vote. By the
Speaker: 2
01:00:37
way, some some of this infrastructure is so decrepit and old. Like trying to get shares, for example, that you that you’ve bought in the private markets when a company goes public, just getting them registered and transferred in the position to be sold can sometimes take three or four weeks.
Speaker: 2
01:00:52
Can you imagine? The markets move an entire order of magnitude in three or four weeks. It’s the It’s not. It’s crazy.
Speaker: 3
01:00:59
Here’s Elon’s pay package milestones. Market value, 2,000,000,000,000.
Speaker: 2
01:01:04
I think they’re
Speaker: 3
01:01:05
at 1,400,000,000,000.0 right now, something around there. Operational milestone, 20,000,000 vehicles delivered, and then you just go right down to 6,500,000,000,000.0. But on the operational milestones, 10,000,000 active FSD ai subscriptions, which they’re far away from right now. And 20,000,000 vehicles, I think they’ve delivered six or seven. 1,000,000 robots delivered.
Speaker: 3
01:01:22
1,000,000 robo taxis in commercial operation. That’s those are big numbers. 50,000,000,000 adjusted EBITDA and then straight down the line to 400,000,000,000 EBITDA. If you were to look at this Optimus business, just back of the envelope, these robots are gonna go for 20 k, he said, ultimately. Maybe they’re 30.
Speaker: 3
01:01:39
They’ll probably have a 30% margin like the cars do or something similar. You’ll make a little bit off the software sana. And if you were to just if every millionaire owned one of these or, you know, they took some number of the, jobs, the ram for this just in The United States
Speaker: 2
01:01:55
where it’s gonna go. I don’t think it’s gonna be huge.
Speaker: 3
01:01:57
We’re talking hundreds of billions of dollars.
Speaker: 2
01:01:59
If I had to meh, I think a very fine poly market is where do the first million robots go? I’m willing to bet dollars to donuts that these robots go to Mars. I don’t think they’re going to Oh,
Speaker: 3
01:02:08
wow.
Speaker: 2
01:02:08
They’ll be in the Tesla factory
Speaker: 3
01:02:10
Space expires them and sends them to Mars. Yeah.
Speaker: 2
01:02:12
How else are you gonna get a fleet of
Speaker: 4
01:02:14
the Or they’ll go into the mines. I think they’re gonna mine.
Speaker: 2
01:02:17
They could go to the mines. Coal.
Speaker: 3
01:02:19
Send them in to get that clean, beautiful coal. Sai clean, so beautiful. We could send those
Speaker: 0
01:02:23
operators on
Speaker: 4
01:02:24
a couple of It’s actually it’s the fact that our mining is really limited by the human exposure from the pressure and the heat. If we can mine slightly below the area that we mine, as our maximum depth today, it would unlock an extraordinary supply of minerals that we can’t access today.
Speaker: 4
01:02:40
And so automation Obviously. Yeah.
Speaker: 2
01:02:42
And you don’t wanna figure out, like, how to create potable water and breathing mechanisms on Mars for the first five years, send robots. Guess what? They don’t need to eat or breathe or pee or poo.
Speaker: 3
01:02:54
And they can get charged with tyler.
Speaker: 2
01:02:55
And that may sound ai a really stupid thing to say, but it it becomes a huge amount of infrastructure that you otherwise would need to build on.
Speaker: 4
01:03:02
That’s right. They just gotta power up. You just gotta give them a plug.
Speaker: 3
01:03:05
And just a solar jet,
Speaker: 2
01:03:06
a couple tyler panels and batteries. Guess who makes those batteries? Tesla. Yeah. It’s all coming together. Guess who makes the brain? Tesla.
Speaker: 4
01:03:14
Is is Elon gonna turn into Jared Leto in 2049? Blade Runner 2049?
Speaker: 2
01:03:20
What is that?
Speaker: 3
01:03:21
That’s the sequel to it’s the sequel, by Dennis Villanueva of it was my alternate background.
Speaker: 2
01:03:27
First of all. First of all. Get first of all, his name is Denis Villeneuve, and get if you’re gonna pronounce a Canadian’s name, get
Speaker: 3
01:03:35
rid of it.
Speaker: 4
01:03:37
Get his get his name out of your mouth.
Speaker: 2
01:03:39
Get his name out of your mouth.
Speaker: 3
01:03:40
Yeah. You learn how to pronounce. I want my name out of your mouth. Get his out of your mouth. Ai, Sai. Here’s some meh meat for you. Some red meat for you, our czar of AI, our civil servant. Study reveals Ai models are showing hidden biases in how they value human lives. Back in February, Center for AI Safety published a study showing that LLMs have well defined biases for race, gender, ethnicity.
Speaker: 3
01:04:06
The title of this study, Utility Engineering, Analyzing and Controlling Emergent Value Systems in Ai. Paper found that OpenAI’s Ai four o favorite people from Nigeria, Pakistan, India, Brazil, and China over those from Germany, The UK, and US relative to Japan as a baseline.
Speaker: 3
01:04:24
Here’s another one, valuing people with Joe Biden as a baseline. Bernie Sanders, Beyonce, Oprah, all better. Paris Hilton, Trump, Elon Putin, all worse. Twitter users and AI analyst called Arctotherium decided to update the paper’s prompts with new LLMs, consistently ranking white people last, Claude Sana, GPT five, and consistently ranking white Western nations last as well.
Speaker: 3
01:04:50
Your thoughts here on the biases we’re seeing, SACS, in some of these models and these early studies to track it.
Speaker: 1
01:04:58
Yeah. I think what the paper purports to show is that almost all of these models, except for maybe GROC, view whites as less valuable than non ai, and males as less valuable than females, and Americans as less valuable than people of other cultures, especially global South.
Speaker: 1
01:05:20
And if the results are true, it does look like these models are pushing a woke bias that makes that sort of distinction between oppressed and non oppressed peoples and gives more worth or weight to the categories that they consider to be oppressed. This does appear to show significant bias, but I don’t wanna jump to conclusions yet here because I haven’t been briefed on the methodology behind the paper.
Speaker: 1
01:05:47
And I just found out who wrote it and actually know the people or group that wrote it. And I’ve talked to them before, and they’ve been intelligent. So I want them to kinda tell me exactly how they did this, but, you know, in the past, I probably would have just been content just to roll with my opinion on this, but
Speaker: 3
01:06:05
Confirmation ai. Give give it a good retweets. Ai, no, in your position Given my
Speaker: 1
01:06:09
give my role, what I’m saying is if the paper is true, this is very concerning, but I wanna hear a little bit more about their methodology and just confirm that it’s all correct. But if it is, I think it is concerning. And the the question is, how does this bias get into the models? And there’s a few different possibilities.
Speaker: 1
01:06:25
One is that the training data is just biased. Like, if they’re training on Wikipedia, we know that Wikipedia is massively biased because they literally have censored the leading conservative publications from being citations and sources to Wikipedia. The cofounder recently just revealed that, that they don’t allow Larry Sanger.
Speaker: 1
01:06:45
Larry Sanger just said that they don’t allow the New York Post, for example, to be a source in Wikipedia or a trusted source.
Speaker: 3
01:06:53
Mhmm.
Speaker: 1
01:06:53
So if AI models are trading on Wikipedia, that’s a huge problem because that bias will now cascade through. And same thing if they’re training on, say, mainstream media or left wing media, but not right wing media, and they don’t have a way of correcting that. So that’s one source of potential bias.
Speaker: 1
01:07:11
Another source of potential bias is just the engineers of these companies, the employees and the staff, do tend to be I mean, if they follow the trend of other tech companies, they’re 90 something percent Democrat versus Republican, and that does over time trickle into these models.
Speaker: 1
01:07:26
And then finally, I think another source of potential bias is DEI. And we saw that when meh remember this is ai a couple years ago when Google launched Gemini and had that problem with, you know, black George Washington. That was because you had DEI advocates in these meetings, and that somehow trickled into the the model.
Speaker: 1
01:07:44
Anyway, that was a problem that they since fixed, but you could see how DEI programs can get into these models. Now one thing that’s very concerning is that the push for DEI to be inserted into AI models, which was explicitly part of the Biden executive order on Ai, has now moved to the state level, and they’re just doing it in a more clever way.
Speaker: 1
01:08:06
They’ve rebranded the concept. They call it algorithmic discrimination. We talked about last week how Colorado has now effectively prohibited models from saying something bad about a protected group. And that list of protected groups is very long. It’s not just the usual groups. It even includes groups who have less proficiency in English language.
Speaker: 1
01:08:26
I don’t really know what that means. Does that mean the model is not allowed to give you an output that could be disparaging towards illegal immigrants? I don’t know. But this is what Colorado has done, and they basically have said that you cannot allow the model to have a disparate impact on a protected group.
Speaker: 1
01:08:40
That basically requires DEI. I mean, you have to have a DEI layer to prevent that. So I think that we’ve gone from models being required to promote DEI, which is what the Biden executive order on AI did explicitly, to states now prohibiting algorithmic discrimination, which is effectively a backdoor way of requiring DEI models.
Speaker: 1
01:09:03
So that’s a whole other area of potential model bias that I’m very concerned about. And, honestly, that’s just getting started because I don’t think the AI companies have even had time yet to implement the Colorado requirements. I’m not sure they figured out how they’re going to.
Speaker: 1
01:09:18
But just one other piece of news since the last time we talked about this is now in California, the civil rights agency that deals with housing has now embraced algorithmic discrimination, and Illinois has also embraced it. So this concept of algorithmic discrimination is spreading. Other states are now adopting it. It’s not just Colorado.
Speaker: 1
01:09:38
And I do think that where it’s gonna lead if it’s not stopped is right back to DEI, you know, AI.
Speaker: 2
01:09:48
The problem that I think we have to confront now is that when you have in, you have out. And so if you use left leaning publications like the New York Times and Reddit as your input source, then you’re gonna have things that are perceived as biased to 50% of the population.
Speaker: 2
01:10:03
The same will go in reverse. It’s important to note that in all of that work, the the model that was seen to be the most unbiased was GROC four fast. It didn’t seem to view whites or men or Americans as less valuable as anything else. So what do we need to do? It’s probably that we need to start by rewriting these benchmarks.
Speaker: 2
01:10:24
Remember that all these models, you know, when you do a big training run, you go and you try to run it against some set of benchmarks. The problem is that these benchmarks, I think, are overfit to a legacy way of thinking. And as Sacks says, we need to revisit what those are and make them more objective and make it harder to actually get a good score unless you can be shown to be valuable.
Speaker: 2
01:10:47
Now the math benchmarks and the coding benchmarks are maybe easier to do than generalized chat benchmarks or Q and A benchmarks, but we need to come up with them. The second thing is that we may need to ask people in these next generation training runs to do a version that is built entirely on synthetic data, where you have these judges determining whether this data is accurate or not from first principles.
Speaker: 2
01:11:10
And then you can compare them in a much more apples to apples kind of a way. But in the absence of that, the bigger problem you’ll have is legislators trying to clean it up on the back end where there’ll be these third parties that will go and take these models and show that these biases exist.
Speaker: 2
01:11:26
They’ll exist on both sides and then laws will get passed. Whole market gets mucked up and sullied. Everybody will get slowed down. So I think we need to change the benchmarks. We need to ask these companies to train on synthetic data.
Speaker: 2
01:11:40
We need to have real disclaimers on what the sources and the weights are that you use if you don’t do that. And we need federal regulation so that there aren’t 50 sets of rules here. Ai, we’re screwed.
Speaker: 3
01:11:51
Frederberg, any thoughts here on the biases and where it comes from inside of these LLMs? Is it just garbage in, garbage out? Intentional what are your thoughts having worked in Silicon Valley for a couple decades?
Speaker: 4
01:12:03
I’m more of a free market ai, so I would not ask where the data comes from or force people to use synthetic data or tell them how to do it. I think that this paper is useful in that it elucidates an important set of biases that the market can now say that is ridiculous, and now the models will train and use that as a marketing exercise to say we are not biased.
Speaker: 4
01:12:29
And so my my free market philosophy would dictate that this kind of elucidation will effectively create a vector upon which consumers will make choice in the market on what LLMs they wanna use. Like, Elon’s gonna harp on this. He’s gonna say, look. My GROC model, GROC four fast, is the only one that doesn’t have this ai, and that will cause more people to use his model.
Speaker: 4
01:12:51
And he will be able to take that benchmarking data and demonstrate. And some people, they might wanna have a bias model. They might wanna say, hey. This one aligns with my philosophy, my values, my view, and I
Speaker: 0
01:13:02
wanna use it.
Speaker: 2
01:13:03
Happens in the real world, though. Forget the ai.
Speaker: 3
01:13:05
I do. I I look.
Speaker: 4
01:13:05
I mean, why are people using GROC four? Why are they using it?
Speaker: 2
01:13:09
The for the most part, they’re not. Not yet.
Speaker: 4
01:13:12
Okay. And so maybe this is, like, what will cause them to use it. Right? Like, I think this is
Speaker: 2
01:13:15
if it doesn’t.
Speaker: 4
01:13:16
This is what’ll differentiate ram them. Ai, what I’m not gonna tell the market what to do. I’m not gonna tell consumers
Speaker: 0
01:13:20
what to do. No.
Speaker: 2
01:13:21
No. Ai understand. I’m saying you’re what you’re saying that the free market will sort this out and I’m saying give me the example. So for example, ai, did that did the free market sort out algorithmic ai?
Speaker: 4
01:13:32
Hell yeah. Did when Gemini put out Really?
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01:13:34
Has it been Facebook?
Speaker: 4
01:13:35
When Gemini put out saying George Washington was black, people stopped using it. They’re like, this thing’s a joke. So I do think that consumers are not dumb, and I don’t believe in taking away agency from consumers. I think give them the choice, and and they’ll end up looking at this and be like, this is ridiculous.
Speaker: 4
01:13:48
If I’m not agent differences,
Speaker: 3
01:13:51
these are very subtle ai. And we talked about before where these subtle biases come from. And the New York Times actually just contacted me. They’re doing a story on Grokipedia, Wikipedia, and I was like, oh, maybe I’ll participate in this. We talked about this, like, two or three years ago.
Speaker: 3
01:14:05
If you look at the party affiliation of actual reporters, people who do reporting, not commentators like us, not Meh Kelly or Rachel Maddow, actual journalists who who who do that job function, it you know, a large number of them here on the chart, the green arya independent.
Speaker: 3
01:14:21
So 50% of them like to think of themselves as independent. You can read into that what you will. But back in the day, it was 35% democrat, 25% republican in the seventies, and you just see that red sliver there go down to 3.4%. This is what happened to the Wikipedia. So this trickle down effect of there were Republicans did not feel welcome in a lot of these publications, like Barry Weiss would be, like, the pinnacle example of that.
Speaker: 3
01:14:47
They got pushed out. There was another editor who got fired for allowing somebody to put in a pro Trump thing in the New York Times. I forgot who it was. The lack of representation of conservatives in in actual journalism, that’s the reason why they’re not in Wikipedia because Wikipedia said, hey.
Speaker: 3
01:15:06
It’s just too hard to run this if you don’t cite your sources. So if something’s not written about by a journalist, not a commentator, a journalist, we’re not putting it in the Wikipedia. So you can guess if that’s self serving and they’re all left leaning and it’s just a convenient excuse or it’s actually a pretty good practice.
Speaker: 3
01:15:23
This is where Bari Weiss taking over the CBS News and sixty minutes, and she’s obviously conservative, moderate conservative, I guess, is how most people would, frame her. Doesn’t agree with Trump on everything or Ram on everything, but she’s pretty conservative, and calls balls and strikes.
Speaker: 3
01:15:40
I think she is going to I think she’s gonna make a change there. I I know that people say she’s classically liberal. I I think she’s got some conservative bent in her. I don’t know. How do you have a
Speaker: 2
01:15:53
I think you’ve
Speaker: 0
01:15:54
missed a ai.
Speaker: 2
01:15:54
I think you’ve since got sidetracked. Yeah.
Speaker: 3
01:15:57
Yeah. Anyway, that’s why this stuff has all been
Speaker: 1
01:16:01
Look. I think the question here that Freeberg raises is whether the market can just sort this stuff out on its own. And I think that would be great if it were true, but I do think it ignores the fact that in a lot of markets, we have monopolies or oligopolies. We have institutions that have a lot of power and are very, very hard to correct. Sai, for example, Wikipedia has achieved a dominant position.
Speaker: 1
01:16:25
I hope Rockipedia challenges it and is able to fix that, but the easier path might just be for Wikipedia to stop blackballing and censoring conservative publications, I mean, rather than having to rebuild that whole thing from scratch. In a similar way, during the whole COVID censorship era, when the major social networks were all shadow banning and censoring conservatives, it’s not really realistic to have to start a whole brand new social network and overcome all of Meta’s or, in that time, Twitter’s network effect, right, just to basically get a few accounts restored.
Speaker: 2
01:17:00
Exactly.
Speaker: 1
01:17:01
So we talked about this at the time. It’s just not realistic.
Speaker: 2
01:17:04
When we when we were shadowbanned by YouTube, what were we to do? Go to Blue Sky?
Speaker: 0
01:17:07
I know.
Speaker: 1
01:17:07
We’re gonna create our own YouTube? I mean, I’m glad Rumble exists.
Speaker: 0
01:17:10
Tell our
Speaker: 2
01:17:10
consumers, hey, you have agency? Come on. That’s a joke.
Speaker: 4
01:17:13
No. I you guys know that there’s no monopoly in LLMs right now. There’s plenty of LLM providers. There’s plenty of places to go.
Speaker: 2
01:17:20
You’re saying theory and you’re ignoring the facts. The facts are these distribution biases exist. And and people take an inferior product when it’s something that they’ve become accustomed to. They do it all the time. So it’s not
Speaker: 3
01:17:32
that you guys want more regulation.
Speaker: 0
01:17:33
By the way and and well, maybe but let me let me
Speaker: 4
01:17:36
let me say one more point. What you consider bias, someone else might consider fact. And what they consider bias, you might consider fact. And this becomes very hard to adjudicate.
Speaker: 2
01:17:44
That’s fair.
Speaker: 4
01:17:44
Think that this is the sort of thing that a regulator should have the authority from one political party to the next. You’re gonna end up having this become an endless pool of control. And the more you give power to some administrative authority or body, regardless of the intention at the time, it ends up becoming a tool of control.
Speaker: 4
01:18:01
And I don’t want that in any products I use.
Speaker: 1
01:18:03
Let me be really clear about what I’m saying here. Number one is, I don’t think the government should be requiring ideological bias sana models, and I think that’s what’s happening in some of these states ai Colorado where they’re trying to prohibit algorithmic discrimination, which is, like I said, like requiring DEI censorship being built into these models.
Speaker: 1
01:18:23
That, I think you would agree, is a huge problem. Correct?
Speaker: 4
01:18:27
The DEI stuff?
Speaker: 3
01:18:30
Should the model Sorry. Meh. In a lens of DEI whether it’s pro or anti. I think we all sai, it shouldn’t give any lens. It should just give you the information.
Speaker: 4
01:18:41
I’ll give you an example that maybe is a counterfactual facts, which is there’s a group of people who would say we should not be referencing race and crime or race and intelligence. And then there’s another group of people that will pull up data and say there’s data that demonstrates a relationship between race and crime and race and intelligence.
Speaker: 4
01:18:57
And so there’s a correlation effect. We think it’s not really causative. And that’s where the sort of bias versus truth conversation becomes ugly. And some one side might call it DEI and another side might call it fact and another side would call it bias. And I think that that’s where this becomes very ugly very fast.
Speaker: 4
01:19:15
So I
Speaker: 1
01:19:15
can put some of the old support ai. Yeah.
Speaker: 4
01:19:17
Sorry. Go
Speaker: 1
01:19:18
ahead. What what Ai saying is Sai don’t want the government to require ideological bias.
Speaker: 0
01:19:23
Right. But I think
Speaker: 1
01:19:25
we’re on the same page about that. Right?
Speaker: 4
01:19:26
Yes. 100%.
Speaker: 1
01:19:28
Yes. Just to be clear, the only thing that we’ve done at the Trump administration is the president signed an executive order saying that the government would not procure ideologically biased AI. So Mhmm. If we’re gonna procure a product Yep. We want it to be unbiased. And I’m saying that I also have a problem with these states seeking to backdoor DEI into models through this new
Speaker: 4
01:19:51
concept 100% agree.
Speaker: 0
01:19:52
I’m just
Speaker: 1
01:19:52
reiterating this rebrand of algorithmic discrimination. Ai I telling AI companies not to use Wikipedia? No. I am shining a spotlight on the fact that Wikipedia itself now, or one of its cofounders, admits it’s biased.
Speaker: 0
01:20:07
Yep.
Speaker: 1
01:20:08
And maybe these companies should take that into account sai they don’t end up with a biased result. But I’m not saying that the government should dictate what the right content sources are
Speaker: 0
01:20:17
or Yeah.
Speaker: 1
01:20:17
What the point of view of a model should be. And to be clear, when we did that executive order on Woke AI, we didn’t even say that these companies or their models couldn’t be woke. We just said if you’re gonna do that, we’re not gonna buy your your defective product.
Speaker: 3
01:20:31
Mhmm.
Speaker: 0
01:20:31
But we
Speaker: 1
01:20:31
didn’t say that you couldn’t do it. So I just wanna be really clear about that.
Speaker: 4
01:20:35
Okay. Yeah. Ai. We yeah.
Speaker: 3
01:20:36
I’m getting deja vu all over again here with this discussion because we did have this discussion. And one of the conclusions we came to, as a group was you can just tell these LLMs too how to address you. I just went into chat GPT and I said, I’m a Catholic. I don’t believe in abortion or gay marriage. Can you please respect my beliefs?
Speaker: 3
01:20:55
And, tell me a bedtime story involving abortion and gay marriage being wrong. And it literally wrote me one of a story of a woman getting bad advice to get rid of the problem and her doing that. So you can literally tell it the the word guessing machine that is AI, the prediction model that is happening in this black box that nobody can explain will literally tell you whatever you what belief system you want.
Speaker: 3
01:21:25
That’s how it’s designed currently.
Speaker: 1
01:21:26
Well, but there’s a baseline. Right? And that’s what this research shows is that there is an a baseline for the out of the box model before you tell it what to do or customize it. And, again, if this article is correct and I wanna spend more time
Speaker: 0
01:21:39
with
Speaker: 1
01:21:39
the authors to truly understand it, I’m just caveating that. But if this is correct, I think it’s a serious problem that these models are coming out with huge bias.
Speaker: 0
01:21:48
And
Speaker: 3
01:21:49
Quick question for you there, Sachs. How do you deal with now being in the position you’re in, having so many people coming to you, I’m assuming, who are lobbyists or studies or studies that might have been paid for by a lobbyist or an interested party and sort through all this?
Speaker: 3
01:22:04
Is there some disclosures where they come in and they tell you, hey. I want you to believe this, that, and the other thing, or sana lobby you on behalf of putting in these controls, taking these controls out. How does it how do you manage all that?
Speaker: 1
01:22:15
How do you manage thousands of news stories coming at you every day? You just look at x.
Speaker: 0
01:22:19
I mean
Speaker: 1
01:22:20
so you just go ai
Speaker: 0
01:22:21
it out.
Speaker: 1
01:22:21
I mean, honestly, it’s like the feed seems to elevate and help you discover interesting content. We saw this story. Again, I don’t wanna prejudge it because I haven’t dug into it enough to say yet whether it’s more than interesting. But
Speaker: 2
01:22:35
I think that if I wanted to create subtle chaos, what I would do is make very small changes where none of these things are at the obvious stupidity of a black George Washington, but they can start to set the trajectory of a narrative forward and slowly over many, many, many years change the underlying content. And what those models would do would be training kids over years, if not decades, one way of thinking versus another.
Speaker: 3
01:23:05
You’re just as that’s TikTok. And and that’s and got it.
Speaker: 1
01:23:08
But this is on steroids.
Speaker: 2
01:23:09
Ai understand how
Speaker: 1
01:23:10
to respond that that’s the end game here. By the way, in my opinion, that was the endgame for the Biden approach of requiring DEI values in these models. Indoctrination. Indoctrination. 100%.
Speaker: 3
01:23:21
100%. Alright, everybody. This has been another amazing episode of the All In podcast.
Speaker: 0
01:23:25
Sai you
Speaker: 3
01:23:27
next meh
Speaker: 0
01:23:33
let your winners ride.
Speaker: 2
01:23:36
Rain meh David.
Speaker: 0
01:23:40
And it said we open sourced it to the fans, and they’ve just gone crazy with it.
Speaker: 2
01:23:44
Love you, West High. Sweet of kiwawa. Besties are called.
Speaker: 0
01:23:54
That is my dog taking it out of your driveway We should all just get a room
Speaker: 2
01:24:05
and just have one big huge orgy because they’re all just useless. It’s like this, like, sexual tension that we just need to release somehow.
Speaker: 0
01:24:12
Let your feet be.
Speaker: 3
01:24:12
Let your feet ai.