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New SEC Chair, Bitcoin, xAI Supercomputer, UnitedHealth CEO murder, with Gavin Baker & Joe Lonsdale Podcast Episode Description
(0:00) Bestie announcement!
(2:53) Gavin Baker and Joe Lonsdale join the show
(4:14) State of the Trump Bump: Debt focus, Deregulation, America’s lucky position
(20:08) Trump nominates Paul Atkins as SEC Chair, replacing Gary Gensler: What this means for crypto and other markets
(41:07) Thoughts on Michael Saylor’s Bitcoin play, state of defense tech, and the US/China AI competition
(49:25) xAI’s massive GPU cluster, expanding to 1M GPUs, how Grok 3 will test AI scaling laws, and what’s next
(1:08:28) UnitedHealth CEO murdered, reactions
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Referenced in the show:
https://truthsocial.com/@realDonaldTrump/posts/113603133222686186
https://www.nytimes.com/2024/12/04/business/trump-sec-paul-atkins.html
https://x.com/davidmarcus/status/1862654506774810641
https://www.bloomberg.com/news/articles/2024-12-05/convertible-bond-arbs-are-making-microstrategy-wall-street-s-hottest-trade
https://www.ft.com/content/9c0516cf-dd12-4665-aa22-712de854fe2f
https://www.nytimes.com/live/2024/12/04/nyregion/brian-thompson-uhc-ceo-shot
https://abcnews.go.com/US/man-shot-chest-midtown-manhattan-masked-gunman-large/story?id=116446382&cid=social_twitter_abcn
https://nypost.com/2024/12/06/media/taylor-lorenz-defends-unitedhealthcare-ceo-brian-thompson-jokes
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New SEC Chair, Bitcoin, xAI Supercomputer, UnitedHealth CEO murder, with Gavin Baker & Joe Lonsdale Podcast Episode Top Keywords
New SEC Chair, Bitcoin, xAI Supercomputer, UnitedHealth CEO murder, with Gavin Baker & Joe Lonsdale Podcast Episode Summary
In this episode of the All In podcast, hosted by Jason Calacanis, the absence of regular hosts Sacks and Chamath is noted, with guests Gavin Baker from Matrides and Joe Lonsdale from 8 VC stepping in. The episode delves into several key topics, primarily focusing on national debt and economic policies. David Freeburg is acknowledged for his early and persistent warnings about the national debt crisis, which has now gained significant political attention. The discussion highlights the importance of addressing fraud, waste, and abuse in government spending, with a consensus among Americans on the need for efficiency and lower taxes.
Joe Lonsdale, known for his conservative views, shares insights on market trends and economic strategies, emphasizing the need for thoughtful approaches to economic challenges. The conversation also touches on the role of AI in business, with positive mentions of AI tools in platforms like Notion and Zoom for enhancing productivity through summaries and bullet points.
A significant announcement is made regarding David Sachs, who has been appointed as the White House AI and crypto czar, explaining his absence from the episode. This appointment is seen as a major development in the intersection of technology and government policy.
The episode also references historical economic policies, including a 2007 SEC speech on accreditation rules for private investment funds, highlighting the ongoing relevance of economic risk and return considerations.
Overall, the episode underscores the importance of proactive economic policy-making and the role of technology in shaping future strategies, with a recurring theme of consensus-building around efficient and effective governance.
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New SEC Chair, Bitcoin, xAI Supercomputer, UnitedHealth CEO murder, with Gavin Baker & Joe Lonsdale Podcast Episode Transcript (Unedited)
Speaker: 0
00:00
Everybody. Hey, everybody. Before we drop this week’s amazing episode, just some quick information for you. Sacks and Chamath both had the week off. So we had 2 amazing friends of the pod on, Gavin Baker from Matrides and Joe Lonsdale from 8 VC. What a treat to have them on the program.
Speaker: 0
00:17
But there is some big news, Freeburg?
Speaker: 1
00:19
Yeah. Well, the news dropped after we recorded, so it’s not gonna be referenced. And the show might feel a little stale, but here we go. Our friend, David Sachs, is the White House AI and crypto czar of the United States of America. Congratulations to our boy. Amazing. Super thrilled.
Speaker: 1
00:37
That is a big reason why he wasn’t able to join us for the show. He was in the middle of getting this news ramped up. Yes. It came out. We had already recorded.
Speaker: 0
00:44
Yeah. Take that into account as we go into the show. Yes. And, according to Trump’s truth social post, Sachs will, quote, guide policy for the administration in artificial intelligence and cryptocurrency. He will also lead the presidential council of advisors for science and technology. How great is that, Freebird?
Speaker: 1
01:02
Wow. Science corner in the White House? Can’t wait. It’s gonna be fun. Be amazing. And Pretty awesome.
Speaker: 0
01:08
I have no announcements. The rumors about me becoming press secretary are obviously premature, but if asked to serve, I will serve my country. Okay. Let’s get to it. Don’t worry, besties. All in isn’t going anywhere. We’ll be here every week for you, except maybe Thanksgiving or a holiday now and again. Alright. Let’s start the show. Freeberg?
Speaker: 0
01:26
Great episode. Let’s go. Alright, everybody. Welcome to the All In podcast. I am your host, Jason Calacanis. How are you doing, Freeberg?
Speaker: 1
01:35
I’m hanging in there. I’m waiting for the tsunami to hit. It’s gonna we’re about 40 minutes away. I’m a little anxious right now.
Speaker: 0
01:42
More anxious than normal is what you’re saying. Like, on a scale of 1, 2, Friedberg, this is like as anxious as
Speaker: 1
01:49
you get with the tsunami? I don’t know what’s gonna happen. This current warning shows a 5 foot water rise or 5 meter. I can’t tell. God, I really hope we don’t publish this episode and there’s, like, a total disaster.
Speaker: 0
02:03
That would be making light of it.
Speaker: 1
02:04
Historic. Yeah.
Speaker: 2
02:05
This is gonna be
Speaker: 0
02:05
We’re not gonna make light of it. We get warnings once in a while. Just to give everybody a little perspective here, I’m at David Sachs’ house. I’ve taken over. As you can see, I got my Moncler hat on, Freeburg. I, I found Sachs’ robe. Did you this year? It was Saks’s robe, but I got a red Sharpie, and I just crossed it out, and I just put J. Cal on it.
Speaker: 0
02:25
And then I I went down, and I was talking to chef.
Speaker: 1
02:28
Does Saks know that you’re staying at his house?
Speaker: 0
02:30
He knows I’m staying here, but Does he, though? He doesn’t know that I found the actual caviar.
Speaker: 2
02:38
The Lego winner tried.
Speaker: 1
02:40
Rain man David Sacks.
Speaker: 2
02:45
And instead, we open
Speaker: 0
02:53
With us today, Chamath couldn’t make it this week. And Chamath
Speaker: 1
02:56
like surgery and now he looks like Gavin.
Speaker: 0
02:59
Okay. Yes. Yeah. And Sachs is taking a day off. He’s he’s he’s got the day off today. I think he’s just winning too much with us. 2 substitutes to, jump in here for the team. Cackling, you can hear, the cackling. Joe Lonsdan. There’s Joe Lonsdale. I’ll take my Moncler hat off here.
Speaker: 3
03:18
And Jayco.
Speaker: 1
03:19
I I am also Joe Lonsdale.
Speaker: 3
03:20
I’m I’m also winning too much, but I’m happy to be here at the last minute as a as a sub for David Jay Jayco.
Speaker: 0
03:25
Joe Lonsdale, for people who don’t know, is to the right of David Sacks. He is a venture capitalist, and he started a couple of companies. You might have heard of them, Palantir. And what are the other greatest hits? Adapar?
Speaker: 3
03:37
Adapar just crossed $7,000,000,000,000 reported on it this month. It’s a good real company too. Yeah. The Elgin dov sold this year. We we saw it started a bunch of
Speaker: 0
03:43
things. They’re good. Yeah. Joe, gets he said you’re a little bit lower profile than, all these accomplishments. It’s pretty incredible. Cofounded how many $1,000,000,000 companies have you cofounded now?
Speaker: 3
03:55
I don’t know. Maybe 6 or so.
Speaker: 0
03:57
6 or so. Also with us, Gavin Baker from Matreaties. He is a hedge fund manager. He does private. He does publics. One of the smartest guys I know. Great analyst. Welcome to the program, Gavin. Friend of the pod.
Speaker: 2
04:10
Thank you, J. Cal. Happy to be here. Great to see everybody.
Speaker: 0
04:13
Yeah. We are experiencing a huge Trump bump. The election is over. The cabinet is being assembled, and we’re seeing those, the Department of Government Efficiency, as well as maybe regulations being pulled down. And and we’ll we’ll get to our first topic about our new SCC chair.
Speaker: 0
04:33
But just generally speaking, Gavin, as a market participant for a living, what’s your take on what we’ve seen over the the last 3 weeks since the election results came in?
Speaker: 2
04:43
So if they execute on stated plans and there are some of the world’s greatest execution machines involved, You know, Elon generally does what he says he is going to do. Mhmm. Like, I this is going to be awesome for America, for markets, for the world. And the analogy I keep coming back to is Satya Nadella taking over as CEO of Microsoft.
Speaker: 2
05:12
Microsoft was a monopoly, incredibly advantaged, and it just been horribly mismanaged for years. All he had to do to start winning was stop doing really, really dumb things. And that’s an incredible place to be. You know, America, like, we’re the greatest country. You know, we’ve got, you know, oceans on two sides, peaceful neighbors, incredible natural resources, you know, completely, you know, can produce our our our own food and energy.
Speaker: 2
05:39
Like, in many ways, most privileged country on earth. But sometimes with great privilege comes great, like, stupidity, and California to me would be a leading example of that. Most in many ways, most privileged state in America, and has prided it away with bad policies. And I do think one thing that everyone of all political stripes agrees on is there are too many regulations that result in far too many administrators, far too much complexity, and an inability to build things in America.
Speaker: 2
06:11
So, you know, it was used very effectively and as it should have been against the Harris administration that they’d approved $42,000,000,000 for rural broadband, hadn’t built anything, had approved $40,000,000,000 for EV chargers, whatever it was, hadn’t done anything. And it’s not that they didn’t want to, you know, dig trenches and do broadband. They didn’t wanna make EV chargers. Their own regulations prevented them.
Speaker: 2
06:39
So I just think deregulation and simplifying regulations and and the tax code is going to lead to an immense amount of growth, which is something that all Americans should be happy about.
Speaker: 0
06:54
Joe, you wanna maybe give us your take? I know, obviously, you’re very vocal. You’re obviously a conservative, run a think tank, and have strong feelings on all this, but there is consensus, I think, amongst all Americans that we don’t like fraud, waste, abuse, and those items.
Speaker: 0
07:09
Those seem to be consensus building, efficiency, and paying long lower taxes. All of that seems like something almost all Americans most Americans can get behind. So I guess maybe a little bit of your take on what we’ve seen in the markets and the plan. And then, also, are you gonna be involved in this at all?
Speaker: 3
07:28
Well, listen, Jake. I I think I do agree. I think almost all reasonable Americans can see that our growth is ridiculously constrained. And I think Jeff Bezos was saying, yesterday, like, we need a growth oriented mindset if we’re gonna get out of our debt problems, our deficit problems.
Speaker: 3
07:42
So it’s nice to see everyone kinda coming on the team and saying, yeah. We need to fix these things. I think what people don’t understand is, like, just how broken the government bureaucracy and regulations are. Right? It’s not like they’re kinda sort of bad.
Speaker: 3
07:55
Like, it’s it’s almost like they’re companies that went bankrupt. Like, think of the worst company you know in Silicon Valley that went bankrupt, like, 30 years ago. And imagine if someone just, like, kept pumping money into that worst company you know over, like, 30 years to keep hiring people.
Speaker: 0
08:09
So, like, Yahoo or AOL, like, some legacy company
Speaker: 3
08:13
The idea was failing. You take the worst department there, and then, like, the worst department gets the most money. So it’s like it’s it’s it’s it’s like it’s it’s like more I guess you can use the word retarded now. It’s more retarded than anything you’ve seen in a long time.
Speaker: 3
08:25
And and and I I think one of the important things is America used to have these really hard tests for a 100 years. You know this? In 18/83, we said, you know what? We shouldn’t just hire our friends. If someone’s gonna run something in government, let’s have these tough tests, kinda like China China did for 1000 of years.
Speaker: 3
08:39
And and and for a 100 years, we had really hard tests. If you when we went to the moon, when we fought the World Wars, you know, we did the Manhattan Project, the people making those decisions in hiring people had to pass things that really only, like, 5 or 10% people could pass who took them.
Speaker: 3
08:53
And then in the late seventies, we said, not only are these tests racist, so we can’t test people anymore of of any background. We also can’t fire people anymore because we’re gonna give them tons of protections. So for and so the last 40 years, it just got dumber. And then 10 years ago, you started doing all the virtue signaling and and, you know, hiring based on your identity versus based on anything else.
Speaker: 3
09:11
So so it’s gotten even worse. And so now it’s so broken that, yes, we’re sliding tens of 1,000,000,000 of dollars on fire. And so there’s really 2 things here. 1, you gotta take a chainsaw as Elon Musk said. You gotta take a chainsaw and just, like, cut a ton of broken stuff.
Speaker: 3
09:23
But then day 2 is you gotta say, how do we make this not stupid in the future? And there’s things like, maybe you bring back tests. Maybe you bring accountability. Thing I the thing I’m most passionate about is, you
Speaker: 1
09:34
know, right now, there’s over
Speaker: 3
09:35
a 1000000 rules at the federal level. It’s stuff that everyone disagrees on. You can be the most left person trying to build, like, solar or wind or whatever, and you’re like, what? I have to do what study over how many years? This makes no sense. So so we gotta we gotta we gotta take these regulations and not only cut them, but we gotta make a data driven system that forces regulations to defend themselves.
Speaker: 3
09:52
In that way, instead of having a cancer that just grows forever out of control, you could actually have a process that, like, naturally trims things, naturally makes things fight for himself. And and that that way it doesn’t get as dumb ever again.
Speaker: 2
10:04
I would why not just make them automatically sunsetting after 5 years if they’re not renewed?
Speaker: 3
10:08
Exactly. But make the process to renew them difficult and data driven. Exactly. So basically, it’s the fight.
Speaker: 1
10:13
Yeah. Yeah. Exactly.
Speaker: 2
10:14
So if you fought for an allocation them Yeah. Will take so much time that it will slow it down.
Speaker: 0
10:19
I wonder where we got to the place, Friedberg. I will bring you in on this since really, I think it was maybe 2 or 3 years ago, you started to point out exactly the debt spiral we need to get in. I wanna give you your flowers here on the pod. Because from this pod and in your obsession, and your harping on and on about this national debt problem, you saw it early. You talked about it constantly.
Speaker: 0
10:43
You brought a lot of consensus on board. And now we’re seeing it as the issue of the transition is the debt. And we were sitting here for the past year or 2 saying, when are politicians gonna even pay attention to this? And now they are paying attention to it. So first, here’s your virtual flowers. 2nd, how are you feeling about the transition to date?
Speaker: 1
11:03
Well, I mean, I think there first of all, there’s like 3 layers of the problem which I’ve been trying to harp on for almost 4 years. Number 1 is the inefficiency and lack of accountability, which Joe and Gavin are obviously talking about. And that leads to excessive spending, and that leads to the debt problem.
Speaker: 1
11:18
And the debt problem creates this kind of arithmetic debt death spiral, which is, something you don’t wanna find yourself in. So that’s the inevitability that I’ve been kind of really worried about. And I think that, you know, look, there’s, the first derivative and second derivative can kinda get addressed.
Speaker: 1
11:33
And then, hopefully, you don’t get to the absolute point where you have this breaking breaking point. I I think right now everyone’s banking number 1 on, can we deregulate in a way that can unlock growth? And by unlocking growth, the right? The the the the kind of arithmetic argument is grow GDP because you’re not gonna be able to shrink debt super fast.
Speaker: 1
11:52
In order to grow GDP, there there needs to be some unleashing happening. And so if you can get GDP to grow 4, 5%, and you can minimize the excess spending, meaning you can minimize the deficit, the federal deficit, and therefore minimize the increment in in the debt level, the debt to GDP ratio becomes more manageable because ultimately, you can only tax so much of GDP.
Speaker: 1
12:14
So, yeah, I feel like this is important in both senses. 1 is just cut the inefficient wasteful spending, get rid of the regulations, and that’ll unleash the necessary growth. One of the proxies I look to, and I I think that this is gonna be kind of the critical motivating factor for the United States, whether it’s this administration or the next or on a content of continuous basis, there’s gonna be this kind of moment where we’re gonna look across the water at what China has.
Speaker: 1
12:42
And you can see what China’s getting, what China is making, what China is doing. I’ve talked about this a lot as well, and I do think this is the most critical metric that no one talks about as much as I think we should, which is the increment in electricity production capacity in China compared to the United States.
Speaker: 1
12:59
And so we are going from 1 terawatt to 2 terawatts. They’re going from, I think, 2 to 8 over the same time period. And they’re doing
Speaker: 0
13:07
it upfront. Important for the people who are listening, who think that you’re saying
Speaker: 1
13:10
it’s very different. I’ll let Joe I’ll let Joe answer that. No.
Speaker: 0
13:13
Go ahead. Just unpack it for the audience. I mean, I I obviously understand why this is important, but I want you
Speaker: 2
13:17
to The
Speaker: 3
13:17
number one thing I’d say is it’s usually correlated to the how well the working class is doing in your country to per capita GDP, to cost of goods. I mean, obviously, I care about it because we wanna scale AI for all the things we’re doing, and we wanna be able to do it effectively.
Speaker: 3
13:31
But if you just look over time, it’s really clear the relationship between how well is your average working middle class person doing and their and their quality of life, their cost of life, and the cost of electricity and cost of power. And it’s it’s crazy we’re not just, like, ramping up and cutting things and do this.
Speaker: 1
13:45
More electricity means more automation, means more AI, means more things are being done for the for every person that are being done in factories, are being done by machines, and that unlocks, a new kind of level of living. And that’s been kind of a continuous process for humans. There’s this guy that writes these books that Bill Gates always talks about, Vaclav, Smith Smir?
Speaker: 2
14:08
What’s his name? Milk. Milk. Vaclav Smir.
Speaker: 1
14:11
He’s got all these books on the history of the relationship between energy and kind of prosperity.
Speaker: 0
14:15
There’s definitely correlation there and there’s definitely causation there, Gavin. And I it there’s even, like, really simple ones. I don’t know if you’ve ever seen, Lee Kuan Yew from, you know, the founder of Singapore essentially talk about just how air conditioning changed the country’s fate.
Speaker: 2
14:33
It raises average IQ by 2 or 3 points. It really matters.
Speaker: 1
14:36
But look, I think
Speaker: 3
14:37
I think selfless for it.
Speaker: 1
14:39
At the end of the day, my my key point was we have to make sure that this administration and Joe can hear me on this, and I know he he he believes this. But, for me, it has to be such a priority that we, accelerate a nuclear, energy rollout in the United States because that’s what China’s doing.
Speaker: 1
14:55
They have dozens of Gen 4 reactors that are gonna get built out, each of which has a gigawatt of production capacity. And they’re doing it in a cost that we can’t compete with today. But, fundamentally, they can do it. In the US, we can’t even do it. And regulations, it goes back to Joe. Yeah.
Speaker: 1
15:11
And and so so the regular the regulatory structure prohibits our ability to actually expand energy capacity or electricity production capacity, which is a critical difference. And that ultimately leads to a situation where in 10 years, we’re gonna be looking across the water at, you know, a competitive country that has 3 x, 4 x, the electricity production capacity of our country.
Speaker: 1
15:33
And everything is cheaper. Everything is faster. It gives them superiority in a lot of functions that we can’t
Speaker: 3
15:39
This this is a completely natural security thing too because we need manufacturing here to be affordable and competitive in order for our national security. You know, David, when you when you texted me last minute to join this, I was actually in a meeting with our friend from Founders Fund who’s building nuclear fuel again for the first time in the US because that’s actually gone away too.
Speaker: 3
15:54
And so so that needs to be approved. But, you know, I I know Chris Wright. He’s a nominee for the new, the, you know, energy secretary of energy, and he, you know, he’s super pro liberty guy, but super pro cheap cheap energy guy and he’s pro nuclear. So I I think we have some really great people who care about this. We’re gonna be fighting hard for it.
Speaker: 1
16:08
Gavin, what’s your what’s your read on it?
Speaker: 0
16:10
Yeah. What’s your read on energy and the blockers?
Speaker: 1
16:12
Yeah.
Speaker: 2
16:13
I mean, more nuclear, more better. Like, I mean, I I agree with everything Joe said. And the only thing I would just add is it is the most environmentally friendly kind of energy source. It’s the most great. Even more like, I I think it is highly likely that in my lifetime, the world just runs on solar.
Speaker: 2
16:33
Like, if you just you know, we all know compound interest is the greatest force on earth. But if you just look at the rate at which photovoltaic cell efficiency is compounding, battery efficiency is compounding, and people make these balance of system arguments. But it it it will it will never be as cheap as nuclear, but it will likely approach coal.
Speaker: 2
16:54
And I think a lot of the world will run on solar, but that’s gonna take 50 years. Nuclear is arguably just as environmentally friendly done right and carefully, and it is here now. And so I just yeah. I mean, that’s
Speaker: 1
17:09
Yeah. I don’t
Speaker: 3
17:10
I don’t I don’t want I
Speaker: 1
17:10
don’t want
Speaker: 0
17:11
It is unbelievable to watch, not exactly Moore’s law, but this precipitous drop in the cost of just solar panels. Solar solar
Speaker: 3
17:21
is very solar is very impressive, but in some ways to me, it’s a little dystopian to think about all these forests just covered with the stuff.
Speaker: 1
17:26
And I
Speaker: 3
17:26
think it’s great. It’s rate limiting.
Speaker: 1
17:28
It’s rate limiting. You have you have to have many, many acres rolled out. And with nuclear, you can have a building that can, you know, power the equivalent of many acres.
Speaker: 2
17:38
So The answer is both. The answer is both. Yeah. But it is, like, Elon has tweeted many times about the tiny fraction of, you know, deserted, desert areas of America that need to be covered with panels. And then you put in batteries.
Speaker: 1
17:52
There’s still a space limiting like, let’s just fast forward a 100 years on planet Earth. And if you look at the past 100 years and the 100 years before that, like, energy demand, even on a on a per capita basis has this nonlinear kind of scaling problem. And that means that land consumption will scale nonlinearly.
Speaker: 1
18:11
Now we have it
Speaker: 3
18:12
If we’re gonna say a 100 years, though I mean, sorry to interrupt. If we’re gonna say a 100 years technology changes, it’s very clear you could probably do it from space if you really wanted to. I mean, this just sounds crazy, but you probably could have, like, tons of these in space. I mean, a 100 years is far.
Speaker: 1
18:24
I mean, we we have we have enough uranium in just the crust of the, you know, like, northern hemisphere to In other words power to power everything. We are
Speaker: 0
18:32
on the verge of unlimited energy for all time. Just to wrap this up and move us on.
Speaker: 2
18:37
If we
Speaker: 0
18:38
can get out of our
Speaker: 2
18:38
own way.
Speaker: 0
18:39
Get out of our own way with a bunch of mid widths who have put so much regulation in place and who are working from home for 4 hours a week. If we can just get them out of the way, then maybe we could approve some nuclear reactors and a little more solar battery.
Speaker: 1
18:53
Did you just call did you just call government workers midwits?
Speaker: 3
18:56
Is that what you just
Speaker: 0
18:57
told me? Just the ones who are blocking If you’re not blocking and you’re working 50 hours a week, God bless.
Speaker: 2
19:03
A lot
Speaker: 1
19:03
of people are working hard in the government.
Speaker: 0
19:04
I that’s exactly my point, but there’s some number of them who are just obviously do not see the forest through the trees.
Speaker: 2
19:10
By the way, on that point, Jake, how it is interesting, Texas is the number one solar producer in the country, and it’s not because everybody there is more environmentally conscious.
Speaker: 0
19:19
No. We’re not down in the
Speaker: 2
19:20
rural here. Cities. It’s just it’s easy to build stuff in Texas. You have to build solar power plants. Yeah. This
Speaker: 0
19:28
is I mean, for the libs in cities who are so prosolar and anti natural gas or whatever yeah. Look at Texas. They’re just built as much as you want. And where Joe and I live in Austin, home prices have gone down 2 years in a row. Rent has gone down 2 years in a row. They are building like lunatics because you don’t need to beg and and bribe people to build stuff.
Speaker: 0
19:52
Joe, maybe some thoughts on what we’ve seen in regulation, Austin,
Speaker: 3
19:56
and our tech council is not perfect. Austin, they call it the blueberry and the tomato soup. So there may be a tiny bit of baking going on. But despite that, you’re able to build there and everywhere else around it, you’re building like mad. So it works. There’s there’s there’s plenty of supply. I agree.
Speaker: 0
20:07
Speaking of regulation, Gary Gensler is out. Paul Atkins is in, and Bitcoin just cracked a 100. This is all obviously related. Atkins was previously SE commissioner under Bush 2 in the early 2000. In the nineties, he worked for both Bush 1 and Clinton at the SEC. According to the New York Times, Atkins is admired, among DC legal circles and regulators.
Speaker: 0
20:29
He’s pro crypto and he’s been helping draft some best practices for the crypto trading platforms. As you know, Gary Gensler’s approach to crypto was there’s a rule set. Follow the rule set. We’re not here to change the rules. We’re here to enforce them. Good luck.
Speaker: 0
20:47
And in some cases, I think maybe he was right with ICOs and a bunch of scams, but he also gave good actors no path to go forward. Anybody have strong feelings on this?
Speaker: 3
20:58
I love Paul Jay Kelly. I think he’s I think he’s gonna you’re a share guy. Yeah. I’ve met him several times at conferences and groups, and he’s really smart guy, cares about the rules, cares about helping innovators. And the thing that really pissed off you went off with Gary, I mean, I love you probably seen, like, I think I think, I I think both Coinbase with Brian and the Winklevoss twins have put something out.
Speaker: 3
21:17
They won’t even hire anyone who worked with Gary on any of this stuff they were doing. And the reason they’re that angry at them is they were purposely not defining the rules in certain cases and then going after people, after not having to find it in order to kinda, like, play a gotcha game.
Speaker: 3
21:30
It was very dishonorable. And Paul sees all that, and there’s no way he’s gonna allow that.
Speaker: 0
21:34
Gavin, any thoughts here on how this might change regulations in our business? Also the fund business. Joe is a venture capitalist, HBC. You’re in public markets and funds. I have I do precede. So, yeah, what do you think in terms of funds and regulations there and then crypto and and, you know, the SEC may be becoming innovative as opposed to punitive and, you know, what’s the word for Freiburg?
Speaker: 0
22:01
What’s the word I’m looking for here? Adversarial?
Speaker: 1
22:05
Well, they are a regulator.
Speaker: 0
22:06
They are a regulator, but they don’t also seem they seem to have gone beyond just regulating. They seem to have been The essence aggressively adversarial. Yeah.
Speaker: 1
22:14
I mean, they’re a regulatory enforcement agency. That’s their job. So I I don’t know, like, you know
Speaker: 0
22:19
I mean, but not giving a path or not even meeting with people. I think that was the thing that I felt was kinda weird.
Speaker: 1
22:25
Like, what was
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22:25
the name
Speaker: 0
22:25
of the you
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22:26
were a big donor to the left. They wouldn’t meet with you otherwise. That was part of
Speaker: 1
22:28
it too.
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22:29
That was sketchy. That was why SBF got tons of meetings, but Brian got none. Right? I mean, it’s nonsense. It’s like that.
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22:34
Go ahead. I I do think cryptocurrencies
Speaker: 1
22:36
Yeah. Go ahead.
Speaker: 2
22:37
At some level fundamentally reduce the power of nation states. And that is something that is oft professed by the true believers, but it is true. And so if you, are on the left and, you know, you are, a devout believer in the power of the state to do good things, I get why you would not like cryptocurrencies.
Speaker: 2
22:59
You know, at the same time, we’re very early in crypto. I do think I read with interest all of the posts that David Marcus and his peers at Libra made, made about what happened to them.
Speaker: 0
23:13
Libra was a Facebook project to embrace cryptocurrency at a very intrinsic level onto the sort of identity level of every one of their billions of users.
Speaker: 2
23:24
And I think you can argue it would have been really, really good for not just America, but the entire world. Yeah. You know, there are a lot of immigrants in American in America who send remissions back to their home countries at extremely high,
Speaker: 0
23:38
Predatory rates. Yes.
Speaker: 2
23:40
Yeah. Predatory rates. It would have made that free. And that would have been amazing for a lot of really hardworking, people all over the world. It would have you know, Visa and Mastercard, they do charge big fees. I mean, Visa and Mastercard do not charge big fees, but the, credit card complex in aggregate is a is a reasonably big fee.
Speaker: 2
24:00
I mean, everybody goes, oh, it’s just, you know, 2, 2 and a half percent to make it, you know, perfect and safe. I think Facebook had a sound argument that they could have done that cheaper. And that would have been an efficiency game for America. And it really did bum me out, you know, to read some of the letters that they sent.
Speaker: 2
24:18
The way they killed Libra, if anyone doesn’t know, maybe we could you could pull up David Marcus’s post. They just all these politicians sent letters to participants in financial markets saying we don’t know if they’re doing anything wrong, but we think they probably are. And we’re gonna look at this very closely, and we want to discourage you from participating.
Speaker: 1
24:40
Well, it it was it
Speaker: 3
24:41
was worse it was worse than that. It was like a mafia letter. It was like, if you are to support this and help with this, we are going to look into everything else you are doing, and we may then find some issues. It was it was like a mafia threat. We can’t stop you legally, but watch out. Like, it it was really sketchy.
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24:55
It was Sherrod Brown who who now is out of office, like, who led this to senator from Ohio, but it was it was really bad. It was really bad what they were doing.
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25:02
It was really bad. I found it upsetting as an American.
Speaker: 0
25:05
And it’s you you kinda hinted at this, Gavin. The fear of governments is that they will lose control of money supply and monetary policy. Maybe unpack that a bit, and then Freyberg will go to you on the same sort of, thread.
Speaker: 2
25:20
Yeah. I mean, look, it’s a it is a rational fear. I mean, controlling monetary supply, like, at some level, you know, the greatest, you know, powers we give the state are a monopoly on violence to keep us safe. And, you know, control over the money supply has, you know, a means of exchange, a unit of account.
Speaker: 2
25:39
And those are great powers, particularly if you’re America and you’re reserve currency. The only thing I would just say to balance this out, and I do think people are are very positive on Paul Atkins. I’ve never met him. But the reaction from people who know him like Joe and who I respect has been very positive.
Speaker: 2
25:58
It is important to remember, we have the best capital markets in the world. You know, the US equity and fixed income markets are the most trusted places on Earth, and we can always make them better. But just it is very you know, you you wanna be very vigilant about keeping them fair and keeping out things like in inside information, which makes people feel comfortable doing business here, you know, making, you know, having investors have confidence in a company’s financial statements.
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26:27
And those financial markets are one reason America is such a great country.
Speaker: 0
26:31
And Gavin, to put this in context, this was during a time period, this David Marcus Libra process, when they felt certain people in government, and I’m not saying I endorse this, but this is their position. Zuckerberg had too much power. Zuckerberg was censoring people. The right felt they were being censored. The left felt that Cambridge Analytica and people were using targeting.
Speaker: 0
26:56
Firstly, the general vibe and even JD Vance is kind of was in on this as well was too much power, specifically at Meta. Too much influence. Now they’ve got this many people, this penetration, and the algorithm, plus we’re gonna give them money. And they’re gonna have power over people’s wallet.
Speaker: 0
27:17
And then what does the government have? They can’t censor people. They can’t control the message, and they can’t control the purse strings. That that is the time period we’re talking about here.
Speaker: 1
27:26
Oh, no.
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27:26
No. I well, I understand 100% why they did it. Yeah. I just think as an American, at a minimum, the way that they did it Yeah. Was to, you know, use one of Joe’s phrases, dishonorable. You know, if you if you want to say that we’re gonna kill this, then just, like, let’s have a debate as a nation.
Speaker: 0
27:44
Absolutely. Don’t do it
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27:45
in the shadows. Yeah. Yes. Rule of law. Rule of law is also another reason America is a great country.
Speaker: 3
27:52
Yes.
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27:52
Freyberg, your thoughts on David Marcus’s comments and and this SEC pick and and just generally a more proud
Speaker: 1
28:01
I don’t know. I I
Speaker: 0
28:02
Less regulation kinda situation.
Speaker: 1
28:05
I think the SEC is, like, one of the most important agencies we have, and I think they’re one of the best federal agencies. So I’ve worked with them, and I’ve worked with many other agencies. And there’s all these issues with the SEC, but they play a very important job. And if you’ve worked in in foreign markets and you’ve dealt with foreign securities regulators, you’re gonna be like, thank god for the SEC. Like, can’t wait to go back.
Speaker: 1
28:29
This whole crypto thing, I there there’s there’s a distinction, I think, between Bitcoin and cryptocurrencies as speculative kind of assets, speculative trading.
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28:39
What do
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28:39
you see those differences as?
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28:41
Well, I I definitely concur with Gavin. I think Bitcoin fundamentally is meant to be, supposed to be, ultimately, will become a real threat to the US dollar. And it’s kind of ironic that Trump had this declaration this week
Speaker: 0
28:54
Yeah.
Speaker: 1
28:54
That he’s gonna put a 100% tariff on all these BRICS nations that try to participate in an alternative currency to the US dollar, the greatest currency on Earth. When he literally turns around and then says, we’re gonna support Bitcoin, it felt like the biggest irony of the week to me because I do think Bitcoin is the big threat to the US dollar.
Speaker: 1
29:12
And I do think that at some point, whether it’s this administration or the next, they’re gonna wake up to that fact. And maybe the the Bitcoin does you know, the network state concept does emerge, and that’s where we end up. But I do think we wanna have and are gonna have strong federal government in the United States for quite some time that’s gonna play an important role in everyone’s lives here.
Speaker: 1
29:31
And I don’t know if you can really just say let the dollar, you know, be supplanted by Bitcoin. Bitcoin seems to be a more of a safe haven asset than that seems to be the trade that it’s
Speaker: 0
29:40
store value.
Speaker: 1
29:40
It should be kind of store value and alternative. It’s just gonna take over gold. What do you think, Jim? Yeah.
Speaker: 0
29:45
You think, the state has reasonable concerns about crypto competing with it? And then maybe specifically, when you saw Trump talking about, hey. Congratulations on your Bitcoin. I did this for you on 100 k and taking credit for it at the state which he should take credit for it. He did it.
Speaker: 0
30:02
He did that last $48,000 per coin. And then you see him talking about the bricks, and then we have the US currency. So which is a bigger threat to American, exceptionalism and supremacy on planet Earth? Bitcoin or BRICS?
Speaker: 3
30:19
So one represents a move towards liberty and what one represents a move towards authoritarianism. If bricks were to become dominant, if China and Russia were able to control global currency together and and other players, that is terrible. It’s bad for the US for so many reasons. Bad for US consumer for so many reasons. He’s right to fight it.
Speaker: 3
30:35
At the same time, having, you you know, to channel, having this, like, pro liberty network state, like like, forces in that direction. Like, for example, I think rather than just, you know, Hong Kong and Singapore, Hong Kong has been lost. We should have, like, more Hong Kong and Singapore’s in the west to compete with the US.
Speaker: 3
30:49
That’d be good for all of us We’re on the pro freedom side of the US to make the US wealthier. We’re gonna show examples of of new experiments to create great wealth. And then that’s kind of the side of Bitcoin is you want more experiments and competition from the Liberty distributed side. You don’t want competition from the authoritarian side.
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31:04
So to me, it was very consistent.
Speaker: 2
31:05
Yeah. Well, I would just say Texas is the Singapore of America, you know, and it is putting pressure on the rest of America. And I don’t say that just because I grew up in Texas. It’s just a fact. I do think long term Bitcoin I do not think the bricks will ever be able to replace the dollar.
Speaker: 2
31:22
Just rule of law, even if it has occasionally been corrupted in America, is very, very powerful Yes. As opposed to rule by law. And but I do think Bitcoin will at some point be a serious threat to the US dollar. And that just is what it is, and we will see how different administrations react.
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31:45
Would would
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31:45
that is it check
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31:46
on is it check on the most aggressive mistakes. First of all, if the debt, it doesn’t get under control. If our deficit is ridiculous, Bitcoin is a wonderful check on that. You actually want healthy competition from something good because you wanna check the excesses and the craziness.
Speaker: 3
31:58
You want you you need someone coming from the outside to say, no. Don’t do that. Let’s just say at some point, an AOC like person gets in charge. It could happen in the next 20 years. You need some kind of check on the dollar, and it’s much better to come from the Liberty side than from the other side.
Speaker: 2
32:11
I agree with all that. I will just say on AOC, I thought it was very interesting. I think if you’re a Democrat, I think you’re probably largely heartened by the kind of intellectual leaders of that party, their reaction to losing. You know, it’s focused around, hey, we do need to deregulate. It is too hard to build.
Speaker: 2
32:28
Josh Shapiro has been tweeting every 3 days about how he’s making it easier, you know, to do business in Pennsylvania. It used to take 20 days to become get a hairdresser license. Now it takes an hour. All that is good. But I actually thought AOC, who is a very talented politician
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32:44
She’s an extraordinary communicator.
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32:45
Is an extraordinary communicator. Her reaction was, like, she posted this on Instagram, If you voted for Trump, I want to hear why. I wanna hear the things you listened to that convinced you. Like, I don’t say this out of anything other than genuine curiosity. Basically, clearly, I am missing something, and I, you know, I wanna listen. And I just thought that was a very interesting reaction.
Speaker: 0
33:09
That is the proper reaction. Yeah. Absolutely.
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33:11
Yeah.
Speaker: 0
33:12
I I wanna point out one thing I did. I was doing some research, before the show, and I found this SEC speech. And this is, really fascinating. And this is from 2007 from Paul. And he was kind of giving his state of the union here, and he’s talking about doing some self reflection.
Speaker: 0
33:30
And he’s talking about accreditation rules in 2007 before the great financial crisis. The concept of economic risk and return also affect a different proposal of the Commission, the SSA. Relating to private investment funds, specifically part of the Commission’s pros proposal would add an additional requirement for any natural accredited person to have at least 2,500,000 in investments before he or she could invest in private investment fund in a private investment fund like a hedge fund or private equity fund other than a venture capital fund.
Speaker: 0
34:01
The underlying premise for the commission’s proposal is that these types of investments are too risky for individuals other than the very rich. Therefore, we would have to presume that the non rich are either unsophisticated or lack access to sophistication, and it is simply not tolerable to have these types of people at risk of losing their money on a hedge fund.
Speaker: 0
34:19
Assuming that these premises are true, however, what evidence does the commission have to support the conclusion that private investment funds are the most risky? What makes a hedge fund or a private equity fund more risky than a venture capital fund? Great question. And how does the risk profile of a pooled investment compare with the risks of investing in securities of a single issuer for which this new 2,500,000 standard is?
Speaker: 0
34:40
This is where it gets super interesting. Many public comment letters express indignation at the commission’s proposal. One commentary wrote, stay out of my wallet. Stop trying to protect me from myself. Stop presuming to know more than I do about my own life, risk tolerance, and financial sophistication.
Speaker: 0
34:56
The commission’s parole may very well prevent the nonrich from losing their money in private investment funds, but it also certainly will prevent the non rich from participating in any upside profits and gains on these funds. Does this mean the rich get richer while the non rich should be content to just hold their place on the economic ladder? Yeah.
Speaker: 0
35:13
This to me, when I saw this, I was like, you know what? I am feeling absolutely fantastic about Trump. If he stops these wars or stops one out of 2 and keeps us out of, you know, participating even though we’re not on the ground with the other any nuance, and he removes regulations and we have people in power who understand that moving up the socioeconomic ladder is as important as protecting the downside risk, especially when we see wealth polarization, this is a great pick.
Speaker: 0
35:45
Now the other picks, there’s some whack pack picks in there. I’ll be totally honest. I don’t know what the strategy is, Joe. I’ll ask you that in a minute. But what do we think, Gavin, of this sort of approach here, which is really thinking thoughtfully about what is sophisticated and and what are we doing here?
Speaker: 0
36:02
What is the outcome we’re looking for?
Speaker: 2
36:05
Yeah. No. I think it’s great. And you could just I mean, the reality is a hedge fund that runs with a lot of leverage probably is more risky. I don’t know that it’s more risky than a single security. But, like, at the end of the day, since he wrote that letter, it was an incredible 15 year run for private equity.
Speaker: 2
36:23
And, you know, now all the big private equity firms are making a huge effort now, when probably the business is more mature and maybe the return opportunities aren’t what they were to appeal to Main Street America. Like, it would have been cool if, you know, Blackstone or KKR or whoever in ‘seven, ‘eight, ‘nine, 2010, you know, could have had their fund up on, like, the Fidelity marketplace for subscription.
Speaker: 2
36:50
That probably would have been good for America. So I think these comments
Speaker: 3
36:54
are well taken. Imagine if Elon could raise for SpaceX, like, you know, from regular Americans. I’m sure he would have loved to do that if it wasn’t crazy risky with the SEC. Right? So there’s all these people who are just they’re blocking us from letting the average be part of it. It does keep them from climbing the wealth ladder.
Speaker: 3
37:07
I think it’s crazy.
Speaker: 0
37:09
Yeah. Freyberg, any thoughts here? I mean, this has been my pet peeve for a long time is letting people do what they want with their money. If you don’t allow people to take risk with their money and move up from poor to middle class, from middle class to upper middle class, and and maybe eventually becoming affluent.
Speaker: 1
37:23
Jason, there’s a lot of places people can invest their money. They can buy public stocks. There’s $20,000,000,000,000 of public stocks they can buy. I don’t think that you’re prohibiting people from transitioning their wealth like bans by not being able to buy private stocks.
Speaker: 1
37:35
In fact, I think it’s more likely than not that people are gonna go market bull securities and private markets and rip poor people off even worse. And that’s why there are these regulatory kind of barriers. And I don’t think that it’s look. Everyone says, let’s make it everything free and everything libertarian seems like a good idea until someone gets punched in the face, gets ripped off, someone dies from a drug, you know, that’s not properly tested.
Speaker: 1
37:58
And then we’re all like, where are the regulators? Where are the agencies to protect the individuals? And I think that’s the role that these agencies are are kind of providing. And that’s the reason these rules are in place. I don’t think that this is, like, one of these things where, oh, liberty is being denied.
Speaker: 1
38:11
I think it’s, you know, there’s a there’s a care there’s a careful line to walk.
Speaker: 0
38:14
Yeah. I mean, when you I I
Speaker: 2
38:15
I I’m generally pretty centrist in most things, so I agree with what a lot of David said. And I do think if you were to allow ordinary Americans to buy private companies that are held to a lower standard of disclosure and reporting the public companies, like, somebody would have to change.
Speaker: 2
38:33
Like, you know, just, hey. If if a private company wants to like, public companies are, you know, are held to certain standards for reasons.
Speaker: 1
38:42
Numbers and have non GAAP financials and yeah.
Speaker: 2
38:45
Yeah. And there is a lot of fraud in Venture. There are unethical people. There are
Speaker: 1
38:52
And smart diligent people can’t even find it all. You know? That’s it’s like the smart, smart diligent people are still getting ripped off.
Speaker: 2
38:58
Yeah. I mean, look at FTX. I mean
Speaker: 0
39:01
I mean, FTX ripped off some very, very intelligent friends of ours.
Speaker: 2
39:05
Did did any diligence at FTX. Yeah. But Well, which
Speaker: 0
39:08
is an important part of this. But, I mean, if you had a sophistication I mean, there’s such an easy solution to this. You just do a sophistication test. People take a 5 hour course, and they answer 50 questions. The end, like a driver’s license.
Speaker: 2
39:19
Well, I do think it is a little that’s why I talked about private equity. These are extremely sophisticated institutions who are always investing alongside their clients. Yep. And they’re buying established businesses. They’re putting leverage on them. But, like, I think private equity is kind of a middle ground and a on a pooled basis.
Speaker: 2
39:38
I think you could argue. And, you know, maybe those funds would need to change their reporting and their disclosures to deal with kind of the average American. But, and and by that, I mean, strengthen it. But I think private equity his comments were well taken. That’s what I would say.
Speaker: 0
39:57
Joe, what are your thoughts?
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39:58
Yeah.
Speaker: 3
39:58
I mean, I think the elephant going
Speaker: 0
39:59
to the room born here.
Speaker: 3
40:00
The elephant in the room that’s really funny here is that you have the people on the left saying the only people with lots of money are smart enough to be allowed to do this, which I think is just a very funny position to take. I mean, it’s just like you’re yeah. You have to have a few $1,000,000 to be sophisticated enough to be allowed to do this.
Speaker: 3
40:14
Like, I like your idea, Jay Cal of Attest. Like like, there should be there should be some other way of accessing this if you really want to. I I agree I agree. Listen. I don’t wanna live in a world where we’re all constantly being spammed to the average person by, like, stupid financial stuff that’s just like we would be scammed all the time.
Speaker: 3
40:28
There probably should be some rules. Like, I agree. I I’m not, like, a total libertarian on this. I think it’d be really annoying. But, yeah, but just to totally block people from participating. To me, that sounds crazy.
Speaker: 2
40:38
Alright. Like, I mean, that’s finance college professor, you know, might, unless they had another job, might not, you know, be
Speaker: 1
40:47
able to use this to be
Speaker: 2
40:47
clear. $250,000.
Speaker: 0
40:50
Let’s talk about a 100 DM.
Speaker: 1
40:52
Let’s talk about a very important public market set of transactions. Gavin, I’d like your point of view on Michael Saylor’s convertible note issuances being used by Bitcoin. Oh, oh, oh,
Speaker: 0
41:03
oh, oh,
Speaker: 1
41:03
oh, oh,
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41:03
oh, oh,
Speaker: 1
41:03
oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh, oh,
Speaker: 0
41:04
oh, oh,
Speaker: 1
41:04
oh, oh, oh. Which this morning this morning, Bloomberg reported is the hottest trade in hedge funds right now. Nick, if you could pull up the article. And then, J. Cal, I know you’ve been an outspoken, opinion setter on Michael Saylor’s promotion of his securities actions. Would love your point of view, Gavin.
Speaker: 2
41:22
I would just say at some point, this does get too big for a while when it was smaller. You know, you could support the debt.
Speaker: 1
41:29
I’m sorry. Could you explain it? Can you explain it to everyone, Gavin?
Speaker: 2
41:31
Yeah. So what he is doing is issuing debt and buying Bitcoin with the premise that Bitcoin is always going to go up, and he, you know, has made eloquent arguments why why that is the case. No trees grow to the sky. And I think the interest expense on his convertible notes is 75,000,000 off the top of my head.
Speaker: 2
41:56
And by the way, I am I could care less about MicroStrategy. Like, I’m not close to it. I’m not involved. Yeah. I don’t know any hedge funds who own it.
Speaker: 0
42:05
No horse in the race.
Speaker: 2
42:07
Yeah. Yeah. I I think a lot of hedge funds are short micro strategy, but I have no horse in the race. But the but here’s the underlying business that, you know, pays the interest expense on the debt. Only does $400,000,000 a year in revenue, and it’s, you know, high gross margin revenue.
Speaker: 2
42:26
But I just unless debt investors have absolute confidence in Bitcoin as collateral, and I don’t think that’s where fixed income markets are yet, he it will get to a point where it is it is too big for the size of his company. And then, yeah, maybe he can over collateralize it and, you know, have $10 in Bitcoin for every dollar of debt.
Speaker: 2
42:54
But then like the the magic money creation machine that, you know, I see discussed on x breaks down because that’s, like, you know, that’s, that’s very, very different than what is being discussed today.
Speaker: 1
43:12
Joe, do you have a point of view? Because I Joe’s gotta run, by the way. So, Joe, do you wanna close us out with a point
Speaker: 3
43:16
of view? Defense people down here in LA.
Speaker: 1
43:18
Yeah.
Speaker: 3
43:18
Listen. Listen. I am very bullish Bitcoin. I love the all the energy of our society around it. I I agree with what you said, Dave, that there’s, like, there needs to be some barriers for the public taking crazy risks, and I think the risks around how he’s accessing this is actually very unusual and does scare me a bit.
Speaker: 3
43:34
And people need to do their research, so they shouldn’t just, like, throw money without studying it. It it does scare me a little bit how blithely people are throwing money at this without knowing the kind of leverage he’s taking. You know?
Speaker: 1
43:43
Yeah. Joe, anything else you wanna share that you’re up to that you’re excited about before you head out?
Speaker: 3
43:48
Well, you know, I this this weekend is the annual defense forum at the Reagan Library where I’m on the board. It’s the biggest biggest defensive end of the year. Everyone’s coming. And I I guess I guess I’m really excited that America has, like, woken up. And assuming we can bring back more advanced manufacturing here, I think there’s enough top companies now with Androl, with Ceramic.
Speaker: 3
44:06
We’re gonna be building thousands of these vessels for the Navy with AI. With EPRIS. We’re, like, turning things off, you know, 10 miles away, whatever, fairly far away with microwave radiation. There’s some really cool technology coming that actually is gonna make us be able to deter enemies. So I if you asked me 6, 7 years ago, I was panicked.
Speaker: 3
44:20
We were we’re gonna, like, get way behind China. I’m feeling really good about it now. I think and and I and I think I think, you know, just just the Pete Hegseth pick, you know, is actually someone I’m quite bullish on from everything I’m hearing. So I I think these are going in the right direction.
Speaker: 1
44:31
Is there a wholesale upgrade happening in defense in the United States? Are all systems and all strategies being rethought right now, using technology and innovation and kind of a performance based product mindset leading, kind of a reinvention of everything? Is that what’s gonna happen in
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44:50
the next 4 years? War warfare is fundamentally totally shifted. We’re seeing some of this in Ukraine. There’s all sorts of new ways you wanna swarm things on the land, swarm things in the water, swarm things in the air. How do they coordinate? How do they work together? How do you manufacture enough of these things?
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45:03
And and how do you use electronic warfare in new ways to, you know, to that’s basically created by this. And so that is just a whole new way of doing things, and we are going that direction. Too much of the money, David, like, 95% of the money is still going towards, like, frankly, like, wasteful legacy, like, mostly things we don’t need.
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45:18
Plus maintenance. Cost. Yeah. But enough
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45:22
is shifting, and there’s enough good people fighting. And as long as we keep just allowing open competition, allow it to say, okay. Which is better? And just let the best things win. As long as we keep doing that, I think it’s going the right way. I’m feeling very good about it.
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45:33
Is the Chinese position shift in their technology strategy and their system strategy gonna motivate a shift here, do you think? And they already have a shift underway?
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45:42
It it already have. I mean, it definitely already has.
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45:44
So we don’t we don’t need big aircraft carriers. We don’t need f 30 fives. We need drones. We need lasers.
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45:49
I think I think there’s a role
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45:50
I think there’s a role for carriers and forced projection. I don’t think we need, like, incrementally a ton more of them. I know I I’m not I’m not, like, this crazy radical where you get rid of all this, but, yeah, on the margin, I’d much rather have 10,000 more smart drones above and below the water than, like, an inter incremental carrier.
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46:05
Right? So there’s there’s on the margin, there’s all these things that are better uses of money, and I think we’re pushing that way.
Speaker: 1
46:10
And is there a huge tidal wave of venture money? I was at a dinner last night where there was this conversation about defense tech used to be off limits and a lot of LPAs say you can’t invest in defense companies. That’s now changed or is changing and everyone’s kind of coming up with their own defense tech strategy. Do you think I mean, you were obviously early in this, Gavin.
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46:27
I don’t know if you’re an investor in this space. But are you guys seeing a big shift? Yeah.
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46:31
I I obviously listen. There’s only been 9 unicorns, still at this point, and I started 3 of them and invested 3 of them the 1st round. So I’m obviously pretty involved in in in the space. And I think listen. It it helps me if there’s more money for my companies, which is really great.
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46:45
Right.
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46:45
I I think there’s probably the right answer for the US. It’s not gonna be, like, 1000 businesses or a 100 businesses. It’s gonna be it’s gonna be, like, 7 to 10 new primes. One of them is obviously Unruhle. I think one is probably Ceramic and Epirisk. We’ll see. But, like, there’s gonna be 7 to 10 new primes, and that’s what’s gonna be.
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46:59
So there’s gonna be a lot of zeros and a lot of bad investments, but, yes, these 7 to 10 new primes are gonna be huge. And if you can get access to them, you’re gonna do really well.
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47:06
Gavin, how do you look at that market? Do you agree?
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47:08
I I agree with everything, Joe said. The only thing I would just add on China, what we are doing by restricting their access to advanced, compute and advanced networking, if you have read or watched the 3 3 body problem, America is unfolding is so fond over China. Yeah. Yeah.
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47:28
That’s a great way to say it.
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47:29
I have been really impressed with, some of the Chinese models that have come out. And I think the risk to this strategy is necessity is the mother of invention. And despite this handicap, they’re managing to stay just behind the leading edge of America, which is amazing. But, you know, NVIDIA’s black oil chip comes out next year.
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47:49
You’re gonna have new chips from AMD, new ASICs from Broadcom. And I I think at that point, it it is not going to be possible for them to keep up anymore.
Speaker: 0
48:01
So that’s actually positive regulation and great, in your mind, foreign policy.
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48:11
It is very aggressive foreign policy. Yeah. Clearly. Yeah. You know, they could have lots of unforeseen consequences.
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48:18
Yeah. What do you think about the the rare earth trade restrictions coming to us, And is that gonna actually affect discipline?
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48:25
We have lots of rare earth here in America. Like, in Ameri we have everything in America. Like, we you know, and I think there’s a project underway to restart rare earth production. Yeah. If there ever ever to be a conflict
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48:37
It’s just the cost.
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48:37
Stuff would go away. Yeah.
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48:38
It’s it’s
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48:39
a it’s a cost, and it’s allowing us to do the refining here. So refining some of this stuff, like, we desperately need gallium gallium nitride for things that I’m doing, right, with with, like, shooting the microwave radiation. The problem is the refining is really messy. If you let it happen in the US, it will still be messy, but it’ll be cleaner.
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48:53
But but we’re not letting it happen. So there’s things like this.
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48:55
So we’re back to regulation, and, obviously, the cost here is different. Maybe different cost structure.
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49:00
Joe, you gotta go meet 20 senators. So thank you. Yeah.
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49:02
We appreciate it.
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49:03
Thank you, guys. I appreciate
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49:04
your time.
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49:04
Same to you. Good jobs.
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49:06
JKL, do you wanna do you wanna talk about AI with Gavin and Yeah. I think that would be, like, a
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49:11
a great next place to go would be to talk about the supercomputer being built by a friend of the pod, Elon. He’s now got the world’s largest supercomputer, and he’s gonna 10 x it according to reports.
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49:25
Yeah. And I would just say this is, I think, a very important moment for AI, you know, for this entire AI trade in public and private markets. You know, everybody, I’m sure, who watches your podcast is very aware of scaling loss. And we have not had a scaling loss for training, where if you 10x the amount of compute used to train a model, you significantly improve the intelligence and capability of that model.
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49:52
And often there are these, you know, kind of emergent properties that emerge alongside that that higher IQ. No one thought it was possible to make more than 25,000, maybe 30,000, n 32,000, pick a number, NVIDIA hoppers coherent. And what coherent means is in a training cluster, that each GPU, to kind of simplify it, knows what every other GPU is thinking.
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50:21
So every GPU in that 30,000 cluster knows what the other 29,999 are thinking. And you need a lot of networking to make that happen.
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50:31
Enabled by InfiniBand. Right?
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50:33
InfiniBand and I and I think even more importantly, NVLink. Although a lot of Ethernet is, you never bet against the Internet, never never bet against Ethernet. Like, if you read the LAMA 3.1 technical paper, you know, got a lot of people excited about SkinnyLink Ethernet. But, don’t
Speaker: 0
50:51
Just to slow down for the audience here, Gavin, maybe Sorry. Explain why transporting information between the GPUs is important. And we’re talking we get we’re in the weeds here a little bit. Everybody’s heard of Ethernet, but some of the other protocols, and ways of moving stuff around.
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51:06
Large amounts of data. That’s what these h two 100, h 200 do particularly well. They’ll move a couple of terabytes a second from 1 processor to the next processor.
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51:17
Yeah. So, you know, picture a server in the case of GPU. It looks like maybe 3 pizza boxes stacked on top of each other, and it has 8 GPUs together. And those 8 GPUs are connected today with something called NVLink. You broadly, you can think of the speed of communication. On chip is the fastest. Chip to memory, next fastest. You know, chip to chip within a server, next fastest.
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51:51
And so you take those units of servers, which are connected the GPUs are connected on the server with a technology called NVSwitch, and you stitch them together with either InfiniBand or Ethernet into a giant cluster. And each GPU has to be connected to every other GPU and know what they’re thinking. They need to be coherent. They need to kind of share memory.
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52:18
For the compute to work, the GPU just need to work together for AI. And no one thought it was possible to connect more than 30,000 of these with today’s technology. From public reports, Elon, as he so often does, focused deeply on this, thought about it from first principles, how long it should take the way it should be done, And he came up with a very, very different way of designing a data center, and he was able to make over 100,000 GPUs coherent.
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52:58
No one thought it was possible. If, I was I was a last minute ad for this, but I would have said there were all these articles that were being published in the summer saying that no one believed he was gonna be able to do it. It was hype. It was, you know, ridiculousness. And that was coming.
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53:20
The reason the reporters felt comfortable writing those silly stories is because engineers at Meta and Google and other firms were saying, we can’t do it. There’s no way he can do it. He did it, and I think the world really only believed it when, you know, Jensen did that podcast, I think, with, wasn’t it with Kirchner?
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53:42
He might have been with Kirchner.
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53:44
Yeah. He was with Kirchner and said, what what Elon did was superhuman. No one else could have done it. And I actually think you can argue that Elon doing that, in a lot of ways, kinda saved NVIDIA from a tough 6 month period when Blackwell was delayed because everyone who was waiting for Blackwell and thought it was impossible to make a 100,000 hoppers coherent rushed out and bought a lot of hoppers to try and do it themselves.
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54:08
Now we will see if someone else is able to do it. It was really, really hard. No one else thought it was possible. And as a result of that, GRUC 3 is in trading now on this giant colossus supercomputer, the biggest in the world, a 100,000 GPUs. In Memphis. In Memphis.
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54:30
Electrolux factory, and they’re they’re putting a lot of energy in there. A lot of natural gas, a lot of
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54:36
Yeah. A dingy Electrolux factory.
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54:39
Yeah.
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54:40
With a lot of mega packs around it, and the city of Memphis is all in on supporting this. Yeah. Which is obviously smart for them. But you have not had a real test of scaling laws for training arguably since GPT 4, and this will be the first test. And if scaling laws for training hold, GROC 3 should be a significant advance in the state of the art.
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55:01
That is an immensely you know, from, like, a Bayesian way to look at the world, that is, like, an immensely important data point. But it if that card doesn’t work, and I think it is gonna work. I think rock 3’s rock 3 is gonna be really good. I should note that I am by the way.
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55:22
Yeah.
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55:22
You’re you’re involved. My firm
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55:23
is an investor in FCI.
Speaker: 0
55:25
Got it. Yeah. They they’ve raised a tremendous amount of capital, a lot of it from the Middle East, and they’re supposedly gonna build Colossus to a 1000000 GPUs. Is this data goal 10 times bigger than it is currently? There’s been some debate back and forth, Freeberg, about, hey. Are we hitting a wall here?
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55:42
Maybe you could explain the wall, either of you, to the audience. Yeah.
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55:45
David. Well, I’ll I’ll
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55:46
let Gavin speak to the wall. I I mean, Gavin, I think one of the questions also is, you know, do we see an evolution if if the kind of increment in performance relative to the investment in net kind of training compute resources declines? Do we start to see a shift in, how the architecture of the systems are run?
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56:13
Meaning, like, do we start to build models of models and that starts to resolve a higher level architecture that unlocks new performative capabilities. So
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56:23
I I would just say we’re already building models of models. You know, almost every application startup I’m aware of is chaining models. You know, you start with the cheap model. You check the cheap models work with a more expensive model. You know, lots of very clever things are being done.
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56:36
You know, every every AI application company has what’s called a router so they can, you know, swap out the underlying model if another one is better for the task at hand. As far as what the wall is, there’s been a big debate that we were hitting a wall on these scaling laws, and that scaling laws were breaking down.
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56:57
And I just thought that was deeply silly because no one had built a cluster bigger than, you know, 32,000 h 100s, and nobody knew. It was, it was a ridiculous debate. Then there were, you know, really smart people on both sides, but there is there there’s no new data. GROC 3 is the first new data point to support whether or not scaling laws are breaking or holding because no one else thought you could make a 100,000 hoppers coherent.
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57:25
And I think based on public reports, they’re going to 200,000, hoppers. And then the next tick is a million. It was reported they’re gonna be first in line for Blackwell. But Crocs 3 is a big card and will resolve this question of whether or not we’re hitting a wall. The other question you raised, David, is very interesting.
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57:46
And by the way, we should note there is now a new axis of scaling. Some people call it test time compute. Some people call it inference scaling. And basically the way this works, you just think of these models as human. The more you speak to one of these models, the way you’d speak to your, like, 17 year old going off to take the SAT, the better it will do for you.
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58:04
As a human, you know, if I ask you, David, what’s 2+2? 4 flashes in your mind right away. If I ask you to, you know, unify a grand unified theory of physics that accounts for both quantum mechanics and relativistic physics, you will think for a lot longer. We have been Yeah. Yeah. Nobody knows. We have been giving these models the same amount of time to think no matter how complicated the question was.
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58:28
What we’ve now learned is if you let them think for longer about more complex questions, test and compute, you can dramatically improve their IQ. So we’re just at the beginning of this new scaling law. But I think the question you raised on ROI is very good, and I’m happy to
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58:46
address it.
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58:46
And there’s a context window
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58:49
Oh, yeah.
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58:49
Shift underway as well, which also creates a new kind of scaling access arguably in terms of the potential set of applications. So networks of models, think time, context window, there are multiple dimensions upon which these these tools ultimately kind of resolve to better performance.
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59:09
Oh, yeah. We have even if scaling laws for training break, we have another decade of innovation ahead of us.
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59:15
Exactly. And and and as my understanding from speaking to folks, I’m certainly not as deep and and well versed as you, but there’s there’s a lot of effort and research going on in reengineering various parts of the, the stack to reduce energy, to reduce every resource that effectively drives model performance, to basically reengineer architecture.
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59:35
It was all like, very brute force for a period of time, and it was, like, push, push, push. But now as we go back and we start to reengineer and architect things in perhaps a more designed way, we get better performance, and there’s a lot of work to do there still.
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59:46
Absolutely. This is
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59:48
one of the great things about capitalism and a functioning capital market is you’ve got people working just on the context window. For people who don’t know what that is is that’s the number of tokens. A token is essentially a word you can think of it, a a piece of information.
Speaker: 0
01:00:01
The number of tokens you can put into a conversation within a large language model. Some people have really large context windows, some people have smaller ones. But you can basically put an entire book in the context window and start asking questions against the model. And the speed of those is critically important as well because if you put the book in there and it takes you 10 minutes to get an answer, that’s not functional.
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01:00:22
Right?
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01:00:22
Gavin, are you an investor in OpenAI?
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01:00:25
Oh, absolutely not.
Speaker: 1
01:00:26
Yeah. Can you kinda theorize on what the build out that’s being done with Colossus does to the advantage that OpenAI has today? How long till we kinda catch up there with XAI? And, you know, how much is gonna be disrupted and how quickly here?
Speaker: 2
01:00:42
Well, if scaling laws hold, the best information I have is the largest cluster Microsoft has after panicking is still smaller than XAI’s cluster in Memphis. If you didn’t believe it was possible, you you weren’t even working on it. GROC 3 should take the lead if scaling laws hold in January or February.
Speaker: 2
01:01:09
I do think a lot of talent has left OpenAI. I thought it was a really shocking statement from Mira Muradi that she resigned during a fundraise. That’s the only way she can express disapproval of what is going on there and still probably get her money.
Speaker: 1
01:01:32
Right.
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01:01:33
So I think I think there’s there’s a lot of reasons if scaling on hold to be to to be optimistic about CROC 3. But I think, and and then by the way, on the power question, and and they are, you know, 2023 and 24, it was just a panic to get GPUs and get them plugged in. Now we’re, you know, trying to make them efficient and thoughtful, and to your point, rearchitecting them.
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01:01:59
And the h two hundreds now are 50% less power and either 50% more or twice as much compute depending on the task.
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01:02:07
They they have a little more compute and a lot more memory, which really matters. Yeah. So per kind of a unit of effective compute, they’re a lot more power efficient. They can just 3
Speaker: 0
01:02:17
times, you think? Or
Speaker: 2
01:02:18
No. The h two hundreds? Probably not probably not 2 x, but a good increment. And the h one hundred was a great chip. And then So 50%. Yeah. Yeah. Blackwell is just around the corner, and that’s an entirely new architecture with an entirely new set of networking technology.
Speaker: 0
01:02:33
Consumers, if we had to sort of speculate here, what would consumers how would consumers experiences change in using forward facing language models? And then maybe what are developers gonna see on the back end, you know, in terms of what they’re gonna be able to build? If if this pans out, you know, in the next You know, right now you have 2 years. Yeah.
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01:02:52
Right now you have, like, a friend in your pocket who has an IQ of a 115, a 110 maybe, but has all of the world’s knowledge accessible to it. And that’s what makes it amazing. I think this will be like you have a friend in your pocket, but and they sometimes make things up. Again, they’re very human.
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01:03:12
And a lot of humans, when they don’t know the answer, they’re just simple. Yeah. These AIs do it too. So you will have a friend in your pocket with an IQ of what maybe 130 that knows everything, has more up to date knowledge of the world, and is more grounded in factual accuracy.
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01:03:33
And it is interesting for any question involving real time information, mostly sports and finance. You know, I always you know, if there’s a stock down 25%, ask every AI why is the stock down 25 percent. Generally, Grok is the one that knows. Yep.
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01:03:48
Grok is
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01:03:49
the one that knows. Yep. Grok is the
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01:03:50
one that knows. Grok Grok because of the Twitter dataset
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01:03:55
Exactly.
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01:03:55
Knows what is happening at the moment
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01:03:58
In the world today.
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01:04:00
Alright. And then, you know, as we sort of wrap up here on the AI issue, what about the ROI here that David was mentioning?
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01:04:08
Yeah. So the I find these these debates also very funny. You know, there have been articles written about the multi $100,000,000,000 ROI questions. Those are very strange to me because Yeah. The biggest spenders on GPUs are public companies, and they report financial results every quarter.
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01:04:28
And you can calculate a metric called return on invested capital.
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01:04:32
Yes.
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01:04:33
And ROIC, ROI, has gone vertical since they ramped their CapEx on GPUs. It actually just started to level out in this latest quarter. So the ROI on AI has been very positive thus far. Just a fact. It’s a really good question. Will it continue, particularly if, you know, it’s gonna cost $100,000,000,000 to train a model in 2 or 3 years, which I think is a realistic estimate.
Speaker: 0
01:04:59
I guess the counter to that isn’t the counter to that that, maybe there’s a little bit of hype that, you know, maybe their people are trying to determine the ROI and and correlate it more precisely? And I guess that’s the challenge, you know, Meta doing AI across its entire enterprise, you might see and Google, you might see it directly making ads more effective as an example.
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01:05:23
I know
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01:05:23
what you’re saying. Yeah. Meta and Google have shown the best ROIs on AI.
Speaker: 0
01:05:26
Yeah. But then for other folks, like, you know, is it actually happening or is it a toy, I guess, is the criticism I hear. I’m not saying that’s my position, but that’s the criticism I hear is, like, are people actually getting money from the copilot or maybe this is just product market fit discovery process because the the AI laptops, AI intelligence on Apple, and let’s say some general LLMs people feel maybe aren’t worth the money or Copilot for Microsoft maybe not worth the money.
Speaker: 2
01:05:55
Yeah. I mean, I personally have not had good experiences with Copilot. But I would say that and I’m sure both of you have come across these. There are lots of companies that are just these thin wrappers over a foundation model, and they go from 0 to 40,000,000 instantaneously
Speaker: 0
01:06:16
Yeah.
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01:06:16
And they’re profitable. And for their customers, they’re replacing labor budgets. And I think I’m sure you guys are noticing this too, but startups today at a given size are employing fewer people than they would have 3 years ago. And just like you know, it’s funny. People are very scared.
Speaker: 0
01:06:33
I would say 50% less.
Speaker: 2
01:06:34
Yeah. And that’s the ROI on AI. And like in you know, I went to the first AWS reinvent conference, and no big companies were using cloud computing. It was all startups. Startups always adopt technologies first. So outside of the ROI on AI that you’re seeing in Google and Meta from, you know, using this across their businesses, you’re seeing real ROI on AI from startups the same way they saw real ROI from cloud computing before anyone else.
Speaker: 0
01:07:00
It’s crazy.
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01:07:01
But I don’t think these companies are in a classic prisoner’s dilemma. They all believe to varying degrees that whoever gets there first to artificial superintelligence is going to create tens or 100 of 1,000,000,000 of dollars of value. And I think they may be right. And I if they get there and they think that if they lose the race, their company is at mortal risk.
Speaker: 2
01:07:23
So as long as one person is spending, I think they will all spend even if the ROI decelerates. It is a classic prisoner’s dilemma.
Speaker: 0
01:07:32
Competition is amazing. It really is when you have a free market with competition. We’re sitting here 2 years ago, 3 years ago on this pod, Gavin, just lamenting like, oh my god. What could happen and China could just roll over us? They’ve got everything dialed in. We’re a disaster. And now here we are. China’s a disaster.
Speaker: 0
01:07:49
They’ve got all kinds of challenges and the free market is even with weapon systems, we’re seeing capitalism applied and competition applied there. Alright. I think we should just wrap up on this, Brian Thompson story. The CEO of UnitedHealthcare was shot and killed in outside a Manhattan hotel on Wednesday morning.
Speaker: 0
01:08:04
UnitedHealthcare is an insurance subsidiary of UnitedHealth Group, and, they employ over a 140,000 people. May provide coverage to 1,000,000. And this was I don’t know if you’ve seen them. Assuming you guys have seen the video on social media or go by on x. It there’s been a big debate. Was this like a really well trained killer?
Speaker: 0
01:08:26
Like an assassin? Like a hired gun? Was it something personal maybe and this person’s a hack and they’re not really good at doing a hit like this, and most people are sort of coming somewhere in between. ABC has reported, and this is where this thing has taken, like, a crazy turn, that the words deny, defend, and depose were discovered on the bullet casings at the scene.
Speaker: 0
01:08:49
And those are the terms. 2 of the 3 are in a book about how health insurers, reject many of the claims every year. They deny it. They defend it, and then they will depose people to harass them essentially. This is a crazy, crazy story, and it’s breaking here.
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01:09:09
I don’t know if anybody has any insights on it, but I thought I would bring it up here to just maybe intelligently speculate about what we’ve seen.
Speaker: 1
01:09:18
I mean, it seems like the most likely case is someone’s loved one died because they were denied coverage. And whether this person was hired or they’re a victim or related to a victim I don’t know if it matters. I I think there’s the observation I’ll make is a question, which is, should CEOs be personally responsible for corporate actions, generally speaking?
Speaker: 1
01:09:46
So there’s a difference between a CEO committing fraud or being negligent. But if you don’t get a good service or a good quality of service or the product you expect, even if it is something you depend on for health care, for example. Let’s say you take a drug and the drug causes a side effect that causes some permanent damage. Should the CEO be individually held accountable?
Speaker: 1
01:10:15
And if that were the case, would anyone wanna be a CEO of a company that sets out to provide services that are critical like this? It’s a very, like, I think, challenging question to think about because, certainly, you could feel like you wanna hold someone responsible because a loved one died, because that CEO’s job was to make more money for their shareholders and therefore deny claims, and therefore, the way that they run that business is wrong.
Speaker: 1
01:10:42
I think, ultimately, we’ve gotta kind of have this distinction between negligence, fraud, and acting on the corporate behalf. There’s a there’s a for a period of time, all of these, documentaries and this movement against the idea of the corporation, generally speaking. You guys remember this?
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01:11:02
It was, like, a decade ago or 15 days ago. Movement. So
Speaker: 1
01:11:07
Yeah. And it’s like this the corporation shields individuals, and the corporation creates a shield for individuals to do harm is kind of the argument that’s made. And so there’s a lot of people in this camp that think that these old CEOs of companies that let people down are evil, should be killed, should be put in jail, whatever the awful kind of contextualization of that is.
Speaker: 1
01:11:29
And I do think, like, it’s really important to think about, well, if no one were to be the CEO because they face that threat and those companies can’t make money as a business, then those services go away entirely. That’s kinda the end state of where this goes. There’s gonna be these difficult situations.
Speaker: 1
01:11:44
If a CEO does something negligent, fraudulent, wrong, there’s a court and there’s a system, and there should be kind of laws that protect people. I I I don’t know, man. I the whole thing is pretty depressing to think that a guy who’s the CEO, he’s you know, from from what I heard
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01:11:59
guy’s got a family. Yeah. I mean He’s got
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01:12:01
a family. He’s got a wife. You people that have known him said he was, like, a nice guy and a good guy, and he runs a tough business. You know, insurance is a very tough business.
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01:12:09
Well and to your point about this seems like it’s very personalized with the casings, if that is in fact true. Again, this is breaking news, so we’re speculating here, hopefully informed. This chart has been the one that’s been circulating on social media. Now this has now become, Gavin, like a Rorschach test about how you feel about corporate America health care, etcetera.
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01:12:29
But UnitedHealthcare, at least according to these charts that are speculating, deny claims at a rate, at a multiple, 2 or 3 x other people in the industry, and that they are the most hated. Not that any of this obviously results in somebody deserving to die. I mean, I can’t believe I’m even saying this, but Taylor Lorenz was went viral with a series of tweets, not tweets.
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01:12:59
I think she’s on whatever the blue thing is, sky blue. Blue sky. Where she wrote some quotes here. And people wonder why we want these executives dead. Lorenz wrote on Blue Sky and Microblogging social media site alongside an article about how Blue Sky, Blue Cross Blue Shield no longer cover anesthesia for the full length surgeries.
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01:13:22
That’s in according to the New York Post. Gavin, your thoughts on this insanity and tragedy? Yeah.
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01:13:29
Well, first of all, it’s a tragedy. It actually I’m in New York as we record this and then it happened one block from where I am. And I mean, it it is absolute it’s a human tragedy. Taylor Lorenz was not the only person on social media who reacted that way, which I thought was deeply troubling.
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01:13:50
There was a large group of people who are writing very morbid comments. There was a lot of anger Yeah. Around this issue that I was unaware of.
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01:13:59
I was completely unaware of it.
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01:14:01
Well, I
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01:14:02
think we all probably are very privileged to have great health care and able to pay our premium. So we’re not affected by this at this stage in our lives. I was very affected by this 30 years ago. Yeah.
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01:14:11
We’re we’re all very lucky on this podcast. Yeah. And, like, I can’t imagine how I would feel if, you know, someone I loved had been denied medical care and and died, and I felt like it was unnecessary, and, you know, due to, you know, some corporation trying to make more money.
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01:14:35
But I just I cannot believe I’m sure I’d be outraged, but you can’t believe I was deeply disturbed as a person by the number of people online celebrating this.
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01:14:50
It’s really crazy.
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01:14:52
Yeah. I thought it was it it was awful. And I guess the last thing I would just say about that chart is I think it is a little misleading. I think that is initial denial. Uh-huh. You know, maybe the you know, in other words, maybe the company that, you know, only denies 7%, that’s a final deny.
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01:15:10
You know, they Yeah. That’s a company that
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01:15:12
And who knows if the chart’s even correct? I bring it up only that it is the trending item and people are I find in these tragedies, they become like a bar shock test. Right?
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01:15:22
Like Yeah. UnitedHealthcare’s medical loss ratio is about 85%. So 85¢ percent
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01:15:29
of this. Yeah.
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01:15:29
So 85¢ of every dollar they collect in insurance premium they’re paying out in claims. If you guys wanna look at what the most egregious insurance industry in the world is, it’s title insurance, and I’ll give you the list of the rest. Travel insurance is pretty bad. They pay out, like, nothing in the title insurance.
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01:15:45
Business for a bit there.
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01:15:46
Yeah. So, like, I mean, you know, health insurance is the hardest one of the hardest, besides auto insurance businesses to be in. You’re paying out constantly, and, there is a very difficult kind of process of managing losses. Because the number of claims that comes in, it’s very easy to suddenly pay everything out, And then your premium goes up, and then people can’t afford the health insurance.
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01:16:06
So you’re striking this balance of making health insurance affordable against the cost of medical claims. So it’s a very kind of difficult business to be in. And and I I think it’s very complicated to walk people through the how they and their individual circumstances aren’t necessarily motivated by some corporate, you know, malfeasance.
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01:16:24
It’s just, the the way the the thing that has to operate, unfortunately. Let me just say, I I think that they’re much like we saw with Hamas and the the attacks in Israel a year ago, there were people celebrating that behavior, and we’ve seen that several times since. And and and people have become very vocal about their celebration of what they view to be, the death and harm done to those who view who they view to be oppressors in whatever context you wanna kind of fit this to and put that oppressor label on an individual.
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01:16:56
And that mindset seems to hold true through any social, financial, economic, political context. There is an oppressor group and there is an oppressed group. And if you’re in the oppressor group, you deserve harm. You deserve death. You deserve jail. And this is another manifestation of that mindset playing out.
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01:17:14
This is an individual with a family who ran a business, who worked very hard for many years and wasn’t trying to hurt people. And, for him to kind of be be have his life taken like this and for people to say that person is an oppressor, I think really speaks to how deeply, people’s minds have been contorted by this concept that there’s oppressors and oppressed.
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01:17:34
It’s almost like a mind virus.
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01:17:36
And I’m not gonna call it the woke mind virus, but, because I just think you immediately shut down and won’t hear that that because it sounds cliche. But there is this concept of, like, everyone is in one of 2 groups. You’re either being oppressed or you’re an oppressor. And if you’re an oppressor, there is no limit to what I should do or what should be done to you.
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01:17:51
I think it’s well said.
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01:17:52
And it’s a very oppressed. It’s a very stark it’s a very stark and sad kind of commentary on right for what’s going on right now.
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01:17:57
Sorry. If you’re oppressed, the correlate to that is if you are considered oppressed, you can do no wrong.
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01:18:02
You can do no wrong.
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01:18:03
Yeah. And that is and, obviously, there are people who are oppressed on this planet, but they can still do wrong. They should still be held to a moral standard.
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01:18:14
Yeah. There there and there is a moral standard, and there is a standard in murder, obviously, and assassination like this is not, acceptable, and it’s just tragic. I just feel so terrible for these these kids.
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01:18:25
Let’s end on a happy note. So we’ll see you on Saturday. Big party. Yeah.
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01:18:28
I’m
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01:18:29
excited. Hard turn here, but, looking forward to seeing everybody on Saturday for the all in holiday.
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01:18:34
Zoom is sponsoring the, all in holiday subscriber.
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01:18:37
So if you want to go to allin.com, you can go sign up there. Right, Friberg?
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01:18:41
Yeah. And then you can sign up for the Zoom. Gavin, we expect you to sign up. Yes.
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01:18:46
We have a Caviar budget we have to replenish over here at Saks.
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01:18:50
We do appreciate Zoom helping us out for the event. Zoom AI companion helped set up the, the live stream.
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01:18:56
So thanks to Zoom for doing that. It’s been awesome. Everywhere. I have to say, you know what? One of the great I I I have a couple of experience with AI that are really great. Notion has a phenomenal AI built into it and so does Zoom with the AI summaries. I love getting these AI summaries of calls.
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01:19:13
I ask people permission to turn it on, and we get a summary and the bullet points really well done.
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01:19:17
I went to I we did a hackathon in the office a couple of weeks ago, and we used have you guys actually built applications with Cursor? You guys have not? Not.
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01:19:25
Was it fun to build it out?
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01:19:27
Well, it was great because we had so many people that have never built software applications in the hackathon, and they built tools from scratch, deployed them in production, and are now using them. And I think it really showcases the, kind of the impressive impact that AI is having on workplace productivity. You don’t need to buy SaaS tools.
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01:19:47
You don’t need to have service providers do stuff for you. Individuals in the and it by the way, it’s only getting better. And you can It’s gonna be safe.
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01:19:53
I mean, the ability to just wake up in the morning and say, I want this app and have it built for you.
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01:19:58
It is. And and by the way, I’ll just say it’s it’s, like, 70, 80% there. You still have to debug. You still have to have someone come in and help kind of get things into production. So there’s still a little bit of work. Well, it’s
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01:20:06
just like real ages. Right?
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01:20:07
Going back going back to the going back to the architecture question. 2 months ago. And I and then go back to
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01:20:12
the architecture 60% there, not 70 to 80.
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01:20:14
And and you fast forward 12 months, and now you’ve got the architecture where the AI can run its own QA testing and debugging, and the AI can run its own kind of sales
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01:20:24
and marketing.
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01:20:24
And it’s got its own u its own UX of the application, and it can run everything. So you’re basically gonna say, I want this app to do this. It builds it. It tests it. It builds the UX. It tests the UX. It iterates the UX. It does everything streamlined for you.
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01:20:37
And then you show up a couple hours later and you’re using a new product that was built on the fly for you. It is and and we’re literally, like, climbing this ladder, Gavin, like, very quickly that it’s gonna totally change this. The the entire software industry is, like, getting rearchitectured.
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01:20:53
Guess Freeburg’s app at his company hackathon. You know what? What do
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01:20:56
you mean I made?
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01:20:57
I made a vegan version of Yelp. Totally profiles all the vegan restaurants. I actually
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01:21:03
I actually tried to make a CRM tool so that I wouldn’t have to, pay for CRM licenses.
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01:21:08
Hey. I tried 9 months ago to make a shout
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01:21:10
out Mark Benioff.
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01:21:11
Uh-oh. Sorry. Go ahead, Gavin.
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01:21:13
I tried 9 months ago to make a multiplayer, app for Skyrim, which I was very excited with. Skyrim’s a baby. But I do think I failed. Maybe I should just give it another go. But the,
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01:21:26
You learned. You didn’t fail.
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01:21:27
You I learned. I learned. I didn’t fail. I learned. Yeah. I have a growth mindset. But Yeah.
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01:21:30
We learned the we learned the limits. We we all tested the limits. Yes.
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01:21:33
We stress tested the app.
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01:21:35
But I think next year, the human language will be the dominant programming language.
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01:21:40
Totally. Totally.
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01:21:41
Awesome. It’s
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01:21:43
totally. Yeah. It’s it’s you really made a great insight earlier, Gavin, with, you know, startups is where you see these innovations happen. And I I always say internally, resource constraints really do drive innovation. And when you only have a nickel, you you gotta try to get a dollar out of it.
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01:22:05
And when you got a dollar and you got a lot of dollars, you’re like, yeah, it’s okay if I get a nickel out of a dollar. I got more dollars laying right over here. And Dylan always talked about this as well. Like, they they asked him, like, why did Blood on the Tracks? Like, why did you do that? It was incredible. Like, it’s this Rolling Stone interview was talking to Dylan about it.
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01:22:23
He said, this was like my favorite album and this is incredible, whatever. And like, what was she inspiration? Take me behind it. And he said, well, you know, I owed Columbia Records and album and they had given me an advance and they were gonna sue me and I had to give the money back.
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01:22:35
And I just gone through a divorce and I needed the money and I I couldn’t do it. So I wrote the album. I was desperate. Lee Cruises crushed that Dylan’s one of his best albums and pieces of art in his life was strictly a function of the pressure of
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01:22:52
Necessity is
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01:22:52
the mother of both There
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01:22:53
it is.
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01:22:54
Technical and creative invention.
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01:22:56
Yeah. Absolutely. Alright, everybody. 4
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01:22:58
Thanks, guys.
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01:22:59
Gavin Baker, Joel Lonsdale, David Friedberg, and we miss you, Saks, taking an a victory day. I’m just taking victory day today, and, Chamath, both out of the office today. I am the world’s greatest moderator, and we’ll see you next time on the All In Podcast. Bye bye. These
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01:23:18
are facts. Going.
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01:23:18
Bye bye.
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01:23:20
We’ll let your winners ride.
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01:23:23
Rain man David Sacks.
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01:23:28
And it said we open sources to the fans, and they’ve just gone crazy with it. Love you, sis. Queen of kin wah. Besties are gone. 30.
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01:23:43
That’s my dog thinking I’m missing your driveway
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01:23:45
your driveway sucks. Oh,
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01:23:49
man. You might have
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01:23:49
a cashier roommate to you, I would say. We should all just get a room and just have one big, huge door because they’re all just useless. It’s like this, like, sexual tension that we just need to release somehow.
Speaker: 1
01:23:59
Let your Beat your feet.
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01:24:01
Wet your feet. Wet your
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01:24:03
feet. Wet your feet. Where did you get mercy’s arm back? I’m
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01:24:06
doing all this.
