All-In with Chamath, Jason, Sacks & Friedberg - E42: China's tech crackdown, CRISPR breakthrough, practical climate change solutions & more

Starting point is 00:00:00 Pick up your phone, dipshit. Hello? Sacks. Yeah, I'll be ready in like two minutes, okay? I'm sorry. Let's go. Splash some water on your face, take a couple of, whatever you need, some,

Starting point is 00:00:14 **** and, let's go. We're waiting. I'll be there in two minutes, okay? Okay, hurry up. Is your chance to get max airtime? Yeah, we're on your report, that's the report. You listen, freebergs out, that means you're gonna're gonna get by default 33.3% of airtime. It's gonna be your biggest week ever Hey everybody, hey everybody, welcome to another episode of the All in Podcast with us today, the dictator himself, Jamal Pahapati and the rain man, David Sacks.

Starting point is 00:01:00 I'm Jake Hal and the queen of Kinwa quit the show. Where's the point? He quit the show, I think. I think he quit. So we're looking for a science person. If you know anybody, email science guy at theallinpodcast.com. If you want to apply for the science position here. No, he couldn't make it.

Starting point is 00:01:19 He was a... He's moving. He's moving. He's moving. I guess we can say that without invading his privacy, but he's not going to be able to do a show anyway because there's so much going on. And I think we should start with this. Do we want to start with the COVID stuff again for the third episode in a row? Or do I start with China and then back into COVID?

Starting point is 00:01:39 Oh, fuck COVID. I know we should just do COVID quickly because I think, you know, as much as the audience complained about it, we got a lot of comments saying, why are you talking about COVID so much? We were ahead of the curve. I'm predicting this whole new Delta wave. You know, we told people it was coming. I think it was a useful service.

Starting point is 00:01:56 So people might not want to hear it, but it was, I think, I would say we're probably two weeks ahead of the natural- It was very impressive. I think that we've gotten a couple things to actually write a couple weeks ahead of other people think that we've gotten a couple things actually right the a couple weeks ahead of other people. Yeah, so yeah I mean it was pretty obvious that this was going to race through the places that had low vaccination and

Starting point is 00:02:16 having the breakthrough cases is I Don't think anybody anticipated that and And the thing we didn't. Yeah. Over the last week on Twitter, I'm seeing this big debate on whether a vaccinated people can spread the Delta variant. And I'm like, guys, didn't you see the show two weeks ago? We covered this. I got it.

Starting point is 00:02:36 I was vaccinated. I got it from someone who was vaccinated. This is no, you know? Yeah. Delta variant has slipped the vaccine. It still prevents the most serious cases, generally speaking. We need to see it as a spec-work protection rather than completely binary, but yeah, absolutely, you can get it and pass it on if you're vaccinated. Like, we know that, and we told the audience

Starting point is 00:02:56 that through weeks ago. The other thing we predicted was that this is going to be incredibly disruptive, and it's going to create another debate of potential lockdowns and mask mandates. And most of all, we discussed, and we had a pretty vibrant debate between all of us about under what circumstances, does your decision to not get vaccinated, impact everybody else, vis-a-vis the petri dish of the next variant that's coming. Hopefully, that'll be less deadly, less contagious, which tends to be how these things go.

Starting point is 00:03:32 But we also predicted some people are just going to start requiring vaccines, vaccine cards, and we mentioned what's happening in France, and I don't know what examples you've seen this week. I thought last week when you made vaccine passports the main issue, I thought, well, let's put it this way, I think that was actually turned out to be great moderation because what has been the big issue all over the world since the last episode, vaccine passports. You saw it with Nufftali Bennett in Israel.

Starting point is 00:03:59 They are not taking any of this vaccine as a Gen C. There's 9 million people in that country, 8 million are vaccinated. They're telling the last million, you gotta go get vaccinated. He has laid down the law saying enough is enough of a billion people have gotten vaccinated. It works. And for the last million of you who haven't gotten vaccinated,

Starting point is 00:04:16 if you want to attend any function with more than 100 people, if you want to go to synagogue, if you want to go to a sports game, if you want to go to the mall, you have to go to synagogue, if you want to go to a sports game, if you want to go to the mall, you have to be vaccinated or you're gonna get tested that day at your own expense. Everywhere you go, it's gonna be it. So they're gonna make it a real pain in the ass until you get vaccinated. You then separately had Roger Gidell, basically doing the same thing in the NFL, saying to players, you, well, first of all,

Starting point is 00:04:44 all the coaches have to get vaccinated. There was an anti-vax coach who got fired. And then they don't have as much power with the players because the players have a union. But Gidele said to them, listen, if you don't get vaccinated, you're going to get tested every day that you go to work. And if the team, if there's an outbreak on the team and you guys miss a game, you're going to lose all of your salary. We're not going to put up with, apparently, there's an outbreak on the team and you guys miss a game, you're going to lose all of your salary. We're not going to put up with, apparently, there's a game last year during COVID,

Starting point is 00:05:11 where I think it was a Raven's Steelers game. Half of one of those two, I think it was the Ravens. Half of the first string was out with COVID, or they were in isolation protocol because they're around players. Obviously, if you're in a locker room, one player gets to everyone's gonna be exposed, right? So it turned out to be like one of the worst games that the NFL put on last year and get all say,

Starting point is 00:05:34 we're not gonna put out product like that anymore. If you are the reason why the team misses a game, guess what, you and all of your teammates are gonna lose your salary. And so this is only 17 games in an NFL season. You're talking about real, real money. So you had Gidele doing that, and now you have Facebook and Google basically coming out saying, in order to go back to the office, you have to be vaccinated.

Starting point is 00:05:56 Now, it's a little bit of the soft, it's sort of more of the, the Iron Fist beneath the Velvet Club because they are offering testing. So if you don't get vaccinated, you can get a test every time you go to the office. But unlike Israel, which is making you pay for it, you know, Facebook and Google are so rich, they're going to pay for it. So basically what you're seeing here is that government is not in the US. It's not required. By and by and demand date, federal workers, otherwise you have to get tested weekly.

Starting point is 00:06:24 This is beyond now debatable. I think the funny thing is the Republicans, I think some are along the way, realized, oh my God, we're going to lose the midterm elections. They have found a way to find a single modality and behavior, to steal defeat from the jaws of victory. I think that the Republicans are probably trending to basically win back the house. And now I don't think that's the case. And you have a bunch of these red state governors who are literally flipping their shit right now, trying to figure out how to get their folks vaccinated. Many of these people may not even be able to vote come midterms because they're either going to be dead or still sick. I mean, it's, it's, uh, we've learned a lot. Um, and at this point, you're

Starting point is 00:07:10 being left with folks there, again, there are people who do it for religious reasons. I get it. There are people that, you know, are going to sort of like live off the grid and live by themselves. I get them to, but the folks that want to be attacks on the system or use public resources, I don't understand. And they're basically going to get singled out and discriminated against. And the carrot and the stick method here, I think, is going to work because we saw a bunch of people sign up to get vaccinated in France. Once they said, you can't go to a cafe or a bar.

Starting point is 00:07:39 And I think that a lot of the people who are not vaccinated are probably enjoying going out and having a life, Danny Meyer, the restaurant tour in New York from Union Square, FA and Grammar Street Tavern, one of the most famous restaurant tours of all time. Announce on CNBC this morning, that he'll be requiring vaccines for all staff and customers.

Starting point is 00:07:58 What do we think of that? Restaurant saying you've got to show a backscar like it. I like it. I love it. Listen to me, if I'm going to go in and I'm going to spend $2,000 or $3,000 on wine and then a couple thousand bucks on a tip, I don't want some asshole who's going to get me sick there. It's bad enough that I still

Starting point is 00:08:14 may get sick. And by the way, Danny Reiner's restaurants are not like, you know, fucking, you know, red robin. These are extremely high places. Yeah's a much easier for us The idea that you can get a communicable respiratory disease and spend $5,000 is yeah untenable untenable non-starter Sacks, I mean listen you you you Is there interesting last episode? I felt like you were Really trying to balance your belief in freedom and people being able

Starting point is 00:08:47 to make decisions to themselves with the reality that we can't be close forever. How is the last week changed your thinking and what do you think of the Danny Meyer? I like what Danny Meyer did in this sense. He wants to create a certain experience for his clientele. And he knows that his clientele are more likely to go, dine in his restaurants, if there's a vaccine policy in his restaurants. He's not saying the policy for the whole country, he's setting it for his establishment. He has every right to be able to do that and he believes that will help his bottom line

Starting point is 00:09:20 and he's probably right about that. Similarly, Roger Gidele, same thing. I mean, he took a tough line because he knows that if he wants the NFL to put out a great product every week, they can't be canceling games because of COVID outbreaks. You know, they can't have the first string players out with COVID. So he made a smart business decision. I think people should have the freedom and the right to do that. Now, I still have, let's call it a reservation, about government requiring it.

Starting point is 00:09:48 Not because I don't see the benefit. I definitely see the health benefit, but just because I don't like giving government the power to stick a needle in your arm. If you're a government employee, I do think the government has added power. We talked about this last week. They can make it a job requirement. And what's interesting in California, California said, if you're a state employee, you got to get vaccinated. But the one group they singled out were the teachers. Because Gavin Newsom has no guts to stand up to the teachers union whatsoever.

Starting point is 00:10:21 And I find it so ironic that early in the pandemic, we had this big debate about whether the teachers would go back to school in the fall and the teachers union said we won't go back unless we're first in line for the vaccine. Well guess what they got that. Now they're saying they're not going to go back if you make us get back. I mean you can't win with these things. Yeah, they're moving the goals post. I mean people want post. They want to work from home, it's kind of ridiculous. There's one group that needs to do it most.

Starting point is 00:10:47 And they should be the one, it's kind of like the army and teachers and healthcare workers. They should be given a mandate. If you want this job, you must be vaccinated. You cannot be in the army in the military and not be vaccinated because we need you in close quarters on a helicopter to go wacko some have been lot and we can't have a COVID outbreak in the Navy seals when we got to go. I'm okay with that. I think every employer has the right to require if they believe it's going to impact

Starting point is 00:11:14 job performance. Now, I want to go back to the point that your math made about midterm elections. I, because I, there's a part I agree with and a part I disagree with. So the part I agree with is that the Republicans were cruising to, you know, a midterm shalacking. And now the whole vaccine hesitancy issue, I think there was a prospect of that causing damage to the Republicans, not because most Republicans are a vaccine hesitant, but rather because Republican politicians were not out front enough on getting vaccines. But look, there's a different screen reality and perception.

Starting point is 00:11:50 Here's the reality. Every single Republican governor, every single one has been vaccinated and has supported the vaccine. Mitch McConnell is vaccine sports vaccine. Kevin McCarthy put out a statement. You even have the House minority whip's, Scalice, get vaccinated on live TV. Why had he not been vaccinated? Because you already had COVID

Starting point is 00:12:09 and he didn't have sleep. You need it, but he got the vaccine anyway to basically double down. You had Sarah Ockery Sanders come out and say that she was getting the Trump, she called it the Trump vaccine. Yes, please, if the, put the Trump logo on it. Right, I mean, she understands, right?

Starting point is 00:12:24 Like this is probably, you know, Operation Light Speed or Warp Speed or whatever, was probably the biggest- Operation, Operation Fuck Up the Midterms, that's what the Republican should call this. Yeah, well, so, so look, I mean, the Republican politicians in the main support vaccines, the problem is that they were being a little bit too

Starting point is 00:12:42 quiet about it, and as a result of that, you have the French people, the Marjorie-chiller greens and so forth. They were occupying too much air space around this issue. And frankly, you know- Right now, I think the Democrats are going to keep those. I wouldn't necessarily go that far, but because I think that- I think the Republican problem was not that their vaccine has to, but rather that they were just being a little too quiet

Starting point is 00:13:07 about it. But now I think that's changed. I mean, there is not a single major Republican politician who isn't strongly in favor of vaccine. If the Republicans can get their actual act together and actually get these, you know, Jason does joke about it, but I do think he's bright in a certain way, basically like this, this group of Republicans, largely, who refuse to get vaccinated,

Starting point is 00:13:30 then they may be able to pull something out, but I think that it's going to have to require a little bit of backtracking and showing up, as you said, by the mainstream Republican political groups, and they just have not done a good job. There's a really simple offer for them. New information, new strain, new approach. Listen, we didn't anticipate Delta would happen. This is 10 times more. Yeah, there are people to say face basically. They can say face, they got a perfect offer.

Starting point is 00:13:54 Listen, there's new information here. This thing is... Even the CDC hasn't officially changed their policy yet. I mean, it's coming, right? We know it's coming. They've always been behind the curve. We predicted the policy change on the show anywhere from two weeks to two months before they actually do it

Starting point is 00:14:09 uh... but look on the vaccine i don't discern a difference in position on the vaccine itself between republican governors and democratic governors they both are advocating it they're both allowing private organizations to require it but but none of them, to my knowledge, have either had the guts or the temerity however you want to see it to actually require it. Oh, I love that word, temerity. Oh, not really used enough.

Starting point is 00:14:35 Not used enough. And just putting a cap on this before we move on to what's going on in China, we talked about implementing this and how do you implement it. Well, we don't need to have a national registry. People have vaccine cards. You bring your vaccine cards You show it and then of course people go to well what happens if you Create a fact can anybody create a fake vaccine card? Yes, of course you can but the FBI has put out A statement now because a lot of paulza the music festival has put out a statement now because of Lala Polusa, the music festival, they are saying do not buy a fake vaccine card because if you want to have no mask at Lala Polusa, you have

Starting point is 00:15:11 to show your vaccine card and they said the FBI is tweeting about this. It's illegal, it endages yourself and those around you and it's a federal crime that can lead to hefty fines or prison time. Oh my God. Yeah. So show us your papers. Just get the vaccine and just get the vaccine folks on the air. We're dealing with this. Oh, I went to buy. Quickly becoming a Darwin Award.

Starting point is 00:15:35 This is quickly moving into Darwin Award territory. We are. I talked to my doctor and I was like, I want to get the Moderna or J&J, which one should I get? And they're like, you got the Pfizer ready. I'm like, yeah, I wanna take a second. I don't think that's gonna make a difference. I was like, I think it's totally gonna make a difference.

Starting point is 00:15:48 This is like when we got off the pod last week. And they're like, yeah, I was like, well, just give me the third shot of Pfizer then. And they're like, well, that's not necessary either. I'm like, I don't care if it's not necessary. I want it. Give me the third shot of Pfizer. And then I open up drug report yesterday.

Starting point is 00:16:01 And it's like third shot of vaccine of Pfizer in Israel or whatever. They're just gonna start giving people a third shot. Yeah, I just want to get ahead of the curve. It's coming, you're exactly right. But by the way, there's one other piece of news that came out that I think is very positive on COVID, which is the availability of these oral antivirals, the pills, that you can take when you get an early case of it.

Starting point is 00:16:21 Right. So it's like what they have for tamiflu with the flu. Like no one should ever die of the flu because tamiflu is like completely effective at stopping it provided you take tamiflu early in the case. So I think that with the reduced effectiveness of vaccine, what we're going to have to do is supplement the vaccines and the boosters with home testing and then these oral antiviral so that you take a test, you discover you got COVID and you immediately get prescribed, you know, one of these, these

Starting point is 00:16:50 pills and the pharma companies are coming out. There's like three different pharma companies coming out with these oral antivirals. And if freeberg were here, he could tell us all about it. Freeberg, explain the science behind this. You know what? The science can go fuck itself. Hey, Danny Meyer, chill a great bottle of white burgundy because I'm coming, baby.

Starting point is 00:17:07 I'm coming, I'm coming. I'm sorry. Let's go, baby, Vax, and ready to go. Oh my lord. All right, the China situation has been perplexing to me. You know, my position was always be careful working in China or investing in China. We're investing in Chinese companies

Starting point is 00:17:24 because they could change the rules at any time and change the rules they have in the past year. We talked about obviously ant financial and Jack Ma going MIA, bite dance a CEO and founder stepping down as CEO amid Chinese regulations and all this scrutiny. And then we have D.D. last week being pulled from the App Store in an unprecedented penalty where you're not allowed to download D.D. and the existing users can use it. And then on top of that, all the educational companies this week were told that they cannot operate as for-profit companies. And these companies have gone public and Hong Kong and in the West.

Starting point is 00:18:10 And this has caused such an acute effect. Softbank is clearing a bunch of its uber position to cover their losses in D.D. And then there is the story of Larry Chan, who is a Chinese education entrepreneur. He was worth 15 billion in January. Now he's lost 99% of his net worth. According to Bloomberg, he founded Gowtu Tejido or Tejido, which is a Chinese online tutoring firm as we know education is huge in China.

Starting point is 00:18:40 That company, Gowtu, peaked at $142 a share in January and has fallen to $3 a share. Big sorted story there. Tencent lost $100 billion in market cap in three days early this week as China cracked down on what they called the monopoly and music rights. So while we debate what happens with the monopolies here in the United States, China just literally told them, and here's the quote from the BBC article, the company and its affiliated businesses have been told that they can no longer engage in exclusive deals

Starting point is 00:19:10 over music rights and must resolve any existing agreements within 30 days. I mean, this would be like Biden just saying, the app store is now open, you have to let other apps or it's an Apple or just coming down and saying to Amazon, you can't sell Amazon basics anymore in 30 days, no more Amazon basics at the site, what do we? What do you think the end game is here? Is this a, because China seems like they are very deliberate

Starting point is 00:19:34 and they plan in centuries, what is happening here? There's the short term and the long term. I think what's happening in the short term is that the same thing that we are talking about in the United States that sacks is very eloquently basically, I think led most everybody in just really framing for a lot of people is this idea that we have privatized free speech and we have put the distribution of information into the hands of three or four founder CEO oligarchs. That's also true in China.

Starting point is 00:20:07 And when you look under the hood of the major internet companies, there's four or five guys that are in charge. And so I think that in the United States, politicians feel increasingly uneasy with those folks having power because it's applied indiscriminately. Trump gets banned, Trump may not get banned, this person gets distribution, this article is considered misinformation, that article is considered disinformation, this article is suppressed. It's a dangerous place to be. And in China, they were just like enoughs enough. So I think the short term as it relates to the internet companies was basically a realization that we are not going to allow any more devolution of power

Starting point is 00:20:45 from the Chinese Communist Party to and into the hands of these Internet entrepreneurs. So that was sort of like the... So it was a move out of fear. They're scared. They're going to lose their power, but... They're not scared. I think they're just smart and they were like, we're not going to allow this to happen. So they don't have to deal with Section 230 or any law like that.

Starting point is 00:21:03 I think it was just a realization that we want them to understand who was boss. Right. And so there was a wave of resignations. There was now all of this market cap up evil. And this is now what we get to sort of like the appetizer. And I think in the appetizer, what they're basically saying is we will control how money is made and who makes money. And I think that that sets up the really difficult thing that I think happens, which is about the long term. So in this thing, what's happening right now is China very firmly telling everybody, we

Starting point is 00:21:38 are firmly in control. There is no private market and there is no capital market without our approval. And that's a really big statement. And in fact, it was such a big statement that I think the Chinese security authorities then have like a conference call in Goldman Sachs, JP Morgan, all these folks were invited. And the vice chairman basically is quote with something to the effect of, we promise that any more changes will at least let you know. Not A, there's nothing to see here,

Starting point is 00:22:08 or there's nothing more to come. It's just more that as we decide new rules, we'll make sure that we give you guys enough warning. So it's very much firmly saying, we know exactly how money is made. We will decide who makes money in what way, and we're going to make sure that, you know, all of this wealth creation

Starting point is 00:22:26 happens under terms that we define. And I think that's the setup for the long term. The long term in China is complicated. It is an enormous demographic time bomb. We've talked about this before. By the end of 2100, China's population will shrink from 1.1, 1.2 billion people down to about 700 million people. So. So they had very progressive, quote unquote, under their framework, laws of one child policy to basically make it economically viable in the 60s and 70s. There was such a number of people, those people were able to get great jobs in the, you know, 80s and 90s and 2000s. And now they've realized, oh, wow, we made a huge miscalculation because now there is

Starting point is 00:23:08 just not enough people. And so China is going to shrink. And I think that honesty, I think Xi Jinping probably thinks the simplest way to solve this is to basically nationalize a lot of the economy over time. And so if I was a betting man, which I am general, but I'm not in China because I just don't understand the market, it's super complicated. Well, because you know, it's a stupid am general, but I'm not in China, because I just don't understand the market. It's super complicated. Well, because you know, it's a stupid place to bet.

Starting point is 00:23:28 I'm not gonna say that. I just think that I don't know the market. Well, I mean, that they changed the rules of the game. Well, hold on, let me just finish what I was saying. I think that what we're starting to see is the beginning of nationalizations. And I think it's gonna start in technology, universe, because those are the critical assets that the Chinese need to own for the future. So that's in my opinion what's happening. I think it's really important what's going on there. And yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah China win if this would seem not having a vibrant entrepreneurial, you know, socialist,

Starting point is 00:24:13 communist hybrid? Is this the end of that experiment? And now it's just going to go all national and then doesn't that make it easier for the West to win if China is just going to say we're going to operate everything? And they don't have a competition of ideas? If they go that far, I think it's really interesting actually to compare what's happening in China with what's happening on the US, because on the surface, both countries are having this debate about whether big tech needs to be rained in, broken up, controlled. We're having that debate in the US and obviously they're having some version of it in China, but it's a little bit like the civil rights debate, right?

Starting point is 00:24:49 Where we have our civil rights issue in the US, and they have Shenzhen, they have the U.S. It's like a whole order of magnitude different in terms of the way they react. And I think there's, I would say there's three main differences here between the Chinese approach and the US approach. Number one, data privacy. We have a concept of separation between private companies and the data they control and the data that the US government can get its hands on. And the US government typically has to get a warrant and go through a corpus scene to get that data. What China is doing, they've not passed a law, basically saying, all these companies,

Starting point is 00:25:29 your data belongs to us. If we want it, we get it. They're taking operational control over the data and you know they're going to use it. That's a big difference. Number two, I think that China seems to be really worried about these big tech companies, not just in terms of whether they might engage in anti-competitive practices or consumer harm, sort of those conventional antitrust concepts in the United States, but they're concerned about these big tech moguls becoming power centers in China.

Starting point is 00:26:00 And you saw this with Jack Maul, right? I mean, clearly the CCP had a problem with the way that Jack Maul had become a figure that people rallied around him. They looked to him. They cared about what he had to say. And all of a sudden, yes, the ant IPO was put on hold, but it was more than that, right?

Starting point is 00:26:16 This was not just like what the SEC would have done. All of a sudden, Jack Maul disappears. He goes into some sort of house arrest. He comes out three months later, looking kind of emaciated. They are putting the fear of God in these big tech moguls in a way that we would never do in the US. I mean, look, I don't want Tim Cook to engage in anti-competitive practices, but I don't want anything bad happening to Tim Cook.

Starting point is 00:26:38 I don't think the guy should be under house arrest. If he wants to donate his money to political causes and speak out as a private citizen, he has every right to do that, and I'll defend his right to do that no matter how much I want Apple to be reined in. They don't have that, again, that separate concept in China. And I think the last thing that's going on here that's different is you saw China put the kabash on. There were 34 IPOs of major Chinese tech companies that were scheduled to IPO in US markets. And they have sort of shut that pipeline down.

Starting point is 00:27:10 And what it appears to be, they appear to be saying is that, we've talked about reshoring strategic industries back to the US like pharmaceutical manufacturing. They seem to be saying we are gonna reshore the IPO business. We do not want you big Chinese tech companies, IPO-ing on American markets, on American exchanges. We are bringing that business back to China. That is why I think you're seeing giant ripple effects now because, to a small point,

Starting point is 00:27:40 about decoupling, we now, it looks like, are going to be decoupling our financial markets. And you know, that's why you're seeing, you know, gigantic hits to the valuations. That's a, would you agree with me that the decoupling of these financial markets might be in the best interest of humanity and ultimately the decoupling of these two economies. If we don't see at eye about human rights and how to trade people, maybe it's good that we have a little more distance between the two markets. I mean, it's hard to know if engagement is the better process, but it doesn't seem like the Chinese Communist Party wants to have anything to do with democracy, anything to do with free markets.

Starting point is 00:28:18 They want to control all the markets. Yeah, I mean, you could see, but in a way, the product that the US was exporting to China was our financial markets. Yeah, I mean, you could see, but in a way, the product that the US was exporting to China was our financial markets. And I think a good way, right? So I think the bad version of this is when China is able to buy up ownership in critical strategic centers in the US, and that affects people's speech rights over here. But this is not China buying up ownership in the US. This was China acting as a consumer of US financial markets. And I think it's different, right? When we're selling products over there, that helps correct our trade balance, right? This is why I don't have a problem with Elon selling cars over in China,

Starting point is 00:29:00 as he's helping our trade balance, okay? But so. But they're kind of canceling that. They're kind of saying, we're going to re-sure this industry, we want to have a domestic stock market. This is creating a mono-economy. It's going to blur the lines between public and private ownership. It's going to basically make it one huge pot from which the Chinese government can take and put it back into as a deem's fit for the broader success of China as a whole. Right? So if you're a CEO and they don't like you, you're going to resign, right? If you're a company and they're worried about your propensity to be a little too frisky on your own.

Starting point is 00:29:46 They'll reign you in. They'll either use cybersecurity law or something else. But the point is that I think that we shouldn't take this as free market regulators having their way. This isn't lean econ implementing some laws. This is a top-down decision to nationalize large parts of the economy starting with technology. And I know that for some people that may seem unfathomable, but if I'm a betting man which I am, that's what I would bet on.

Starting point is 00:30:16 That this is the beginning of an attempt to pull these companies in. I mean, what David said is true. The Chinese government owns the data of Chinese companies. So at the end of the day, the Chinese government also owns the users and it also owns the revenues. It just hasn't told you yet. Yeah, in a way, it's like the Chinese government,

Starting point is 00:30:37 in our government is trying to officiate the game fairly and create a really competitive, vibrant game. And I think with the Chinese government just said it as the game's over, like there is no game. Yeah. No, there's a game, it just has, it just has been won. What is the game? Because it has a new procedure.

Starting point is 00:30:53 It has a new procedure. It made a bunch of CEOs, general managers and a large corporation that report through a reporting chain to one person, G. Jean-Pierre. But there's no more game in terms of building companies and investing in China. How is the West ever going to trust? How is Goldman Sachs or Sequoia launching a venture firm there or retail investors or hedge fund investors?

Starting point is 00:31:15 How are they ever going to want to participate in that market? Because this will look, for example, when you invest in China, or if you set up a fund, there are two pools of capital. There's the local, or maybe denominated investment vehicles, and then there's a US dollar denominated investment vehicles. And they do that to segregate where the capital comes from. So it's not too difficult for the Chinese government to basically say, you know what, I'm going to actually make a constraint on dollar inflows so that, you know, the Remimbi denominated investment funds that are from Chinese investors

Starting point is 00:31:46 into Chinese companies needs to be above a certain percentage. Call it two thirds or call it 80%. They can make all these decisions because these are all just rules that are completely under the control. So, I think that people who don't think this is going to happen are probably not looking at the setup. The setup seems to be directing itself towards that outcome. And by the way, it makes sense for what Xi Jinping wants to do.

Starting point is 00:32:08 No, that's not my question. My question is, why would Masayoshi-san or another entity ever invest in China again? Because you look through the risks and you got completely enamored by the population and the tam. But what I'm saying now is, why would they do it again? No, they're not going to do it. No, but there saying now is why would they do it again? Or are they not going to do it? No, but there are boundary conditions that would say that even before this, you would have had to reconsider. The population is shrinking. There's a different demand side pull that's happening, right? Older people need different kinds of services than younger people. There's not enough younger

Starting point is 00:32:39 people. There's too many men. There's not enough women. So there's not enough couples. There's not all of these demographic issues ultimately will get reflected in the economic reality, which is that smart investors would put money in China differently over time anyways. But I think that this is a bigger thing, as David said, which is if that's coming to pass, you want to control the pipes because you want to control how that information is presented to people, your citizens, so that they don't get pissed off. And then you might as well just own the economy, own the business anyway. I see this as being amazing for American tech companies because I don't see who would ever want to be an entrepreneur,

Starting point is 00:33:14 who ever has a great idea and wants to pursue it in China. Why would you do it? No, I disagree with you. And the reason I disagree with you is that we don't have access to their markets anyway. What company has access to their market? The difference is young smart Chinese people for decades have been staying in China. And the reason I disagree with you is we don't have access to their markets anyway. What company has access to their market? The difference is young smart Chinese people for decades have been staying in China. In part because they could more relate culturally to Jack Ma, than they could to Jack Dorsey.

Starting point is 00:33:37 Okay, that just makes sense. Sure. And I understand that. And then the second is we, like the opposite of, like, sorry, like the opposite of some other Western countries that Canada closed our doors. Why would the next Jack Ma start a company if they saw Jack Ma disappear? That's my question. Because, you know what, if you're coming from China and you can only make a billion versus 45 billion, I think you still take the shot. Okay. I think, Jake, is right in the sense,

Starting point is 00:34:05 I don't think it's gonna be like a binary decision where all of a sudden everyone just stops doing business and chine up, but they're gonna be hedging their bets. I mean, if you were a Chinese billionaire looking at this landscape, your priority has got to be to get some wealth outside the country beyond the control of the CCP. You're gonna be buying Bitcoin,

Starting point is 00:34:21 you're gonna be trying to get your money overseas. You have got to be very nervous about what's happening. Buying homes in Palo Alto. Absolutely. I mean, look, I think what President Xi is doing is fundamentally redefining the bargain between Chinese entrepreneurs and the government. And here was the original bargain, right? The great Chinese leader, an economic reformer, Deng Xiaoping, basically set the bargain,

Starting point is 00:34:45 40 years ago, and basically the bargain was this. We're gonna open up the economy and let you, the entrepreneur, get rich. We're gonna keep all the political power. So as long as you don't mess with us politically, you can get as rich as you want. That was the original bargain. Now President Xi is saying there's a new bargain,

Starting point is 00:35:02 there's a new boss in town, and here is the deal. That economic interest in China will be subordinate to national interests, those national interests are defined by the CCP, and I run the CCP for a lot of money. Exactly. And that is what is happening. And that is a big change. They just got layered. There is a new CEO that they report to. This actually makes me very hopeful actually. I think this is going to be like a spiraling down

Starting point is 00:35:28 of their economy. I don't think it's going to smile up. I don't think so. I mean, who's going to invest in their economy? Everybody, guess what? Because if you want a shred of fucking lithium, if you want a battery, if you want nickel, if you want anything to happen, you need to work with China.

Starting point is 00:35:44 They are incredibly smart and thoughtful. if you want nickel, if you want anything to happen, you need to work with China. They are incredibly smart and thoughtful. They had been strategic while we've been running around, complaining, crying, talking about the kindergarten soccer game. They were doing the hard work. They were doing it for decades. And until we find solutions that can work around them, we need to work with them.

Starting point is 00:36:07 I think they just throttle innovation and they just shot themselves in both feet. I think they're gonna regret this decision. I would come out in the middle and say they've just attached a discount rate that now every investor has to consider political risk when they invest in China because the future is very uncertain.

Starting point is 00:36:24 The bargain is getting changed. and if you're an investor, you now have to take, you're taking some huge policy. I agree with David. I think that's a better way. I would refine what I'm saying by saying, it's a distribution of risk where it's closer to Russia now than it is to the United States. Yeah, and then I think there's literally an act

Starting point is 00:36:41 called the McGinsky Act. McGinsky Act, Muginsky Act? What is the act that Bill Broder's lawyer, Muginsky? Oh, yes. Oh, because basically in Russia, they were just killing people and taking their businesses. I mean, this feels like the equivalent in China to me. Not the name Muginsky.

Starting point is 00:37:00 The name Muginsky. Yeah, I think. I mean, literally that was Bill Broder's lawyer who was tortured to death. I just don't see anybody wanting to invest or any more. This does make the Bitcoin in hindsight. It does look like they shut down Bitcoin a couple of months before making these actions. Your point, David, they probably anticipated that people would start shipping their money out using Bitcoin and so they banned Bitcoin and

Starting point is 00:37:27 Now they're banning CEOs from having too much power. That was probably a sequential event. That would be very smart on their part, you know can't be very smart What does this do to like the Sequoia capital China the Masio Shisan investing heavily thereing, investing all the Chinese... All the Chinese feel very active in the United States investing in companies. All the Chinese LPs are fine. All the Chinese GPs are fine.

Starting point is 00:37:54 All the Chinese companies are fine. I think David's right, it's just a discount factor. I do think it affects global dollar flows. And I think it's hard for a Western capital pool to allocate money to China without doing a little bit more work and applying a higher discount rate. I have to believe that the conversations happening in these firms that have made gobs of money in China over the last couple of decades. It has to be, are we living on borrowed time?

Starting point is 00:38:23 How much more time do we have before China says that Chinese profits, Chinese return on investment are going to go to Chinese individuals and companies under our control? Because that's the direction that all seems to be headed. Yeah, and how quickly can I get out of these positions? I mean, how do you even get out of these positions? This other thing I don't understand, if they're going to reverse some IPOs, how does that mechanically happen? Are they going to just say?

Starting point is 00:38:48 Just say it's a buyout. It's a second transaction and they'll just do like a buyout. So if Masio-Shirson owns some amount of D.D. They say here's the price for share that we pay you. Here's your cash. Give us a share of the channel. That's incredible. A forced sale at whatever price they determine.

Starting point is 00:39:07 I know. I mean, like I think these things will operate more efficiently than that because you have a distributor shareholder base. So, you know, China can't force a shareholder of D.D. to sell the shares because it's listed in an American stock exchange. But if D.D. does go private the way that the news reports are saying, somebody is going to have to backstop that capital. I suspect it will be a Chinese organization.

Starting point is 00:39:28 So they will take D.D. private again and then buy out all of the shareholders who bought from around the world. If that does come to pass, I think that is an obvious signal that we're moving into a more nationalization of critical resources. And China has determined that internet resources are critical. And I think that that's right. If I was in their shoes, that's exactly what I would do as well. Does this mean that we should be kicking out Chinese companies from operating in the

Starting point is 00:39:58 US, I ticked off, etc. No, but I do think that ticked off needs to get carved out of bite dance and it needs to have a completely American cap table, but that shouldn't be a government edict. That should be something that the bite dance investors and board are scrambling to do right now because otherwise that equity value may go to zero. Bite dance should be a half a trillion dollar company. It probably is a couple hundred billion dollar company now, which means that it probably lost half of its market value.

Starting point is 00:40:26 It's crazy. Crazy. I think there's a few things for us to worry about there. I like the idea of out competing China by having freer and more open capital markets and allowing any one of the world to invest in our companies. I think the issues with TikTok are more around data. in our companies. I think the issues with TikTok are more around data. You know, we know now that any data that by dance has belongs to the Chinese government. This isn't just a TikTok issue. It's any company, any US company that's doing business in China. Look, it applies to Zoom, okay.

Starting point is 00:40:58 Look, Zoom, we're on Zoom right now. Zoom is not a Chinese company, but as a giant engineering team in China, what are the data implications for that? Yeah, they stopped routing their servers to remember they had some servers routing through China, but I do think they're gonna have to shut down and sell off whatever their assets are in China. That's gonna be untenable to have a communication platform.

Starting point is 00:41:20 It's kinda like Huawei, right? We don't allow Huawei to operate and we're gonna have to do that with software. Right, there's been a big crisper breakthrough. 65-year-old man named Patrick Dirty was suffering with a disease in which his protein was misshaped, mischaped, and building up in his body destroying important tissues,

Starting point is 00:41:40 such as nerves and hands and feet. He watched the same disease kill his dad, and here's the quote, had watched others get crippled and die, difficult deaths from this disease. And it's a terrible prognosis. He entered a trial utilizing CRISPR, the gene editing tool, and researchers reported the data indicating that the experiment treatment worked well.

Starting point is 00:42:01 The study, Dirty, volunteered for is the first in which doctors are simply infusing the gene editor directly into patients and letting you find its own way to the right gene in the right cells. In this case, the cells in the liver making the destructive protein, the advance is being held not just as not just for amyloidosis patients, but also as a proof of concept that CRISPR could be used to treat many other

Starting point is 00:42:25 much more common diseases. It's a new way of using the innovative technology to my thoughts. I think this is a really important breakthrough. And what it allows us to do now is see a world where, look, if you think about the two different paths of the following idea, you're going to make a solution to a problem. If the problem was an internet company, or you wanted to make a solution to a problem. If the problem was an internet company, or you wanted to make a product, what you would do is you would go to Amazon Web Services, you'd be able to consume a whole set of abstractions, and then you

Starting point is 00:42:55 would build a light amount of programming, which was essentially like the application logic of your app. Right? I think a lot of people listening understand that idea because that's what they do. Here, what we're getting to a place is now soon we're going to be able to view biological problems in the same way. So we're building all these small little buildings, I don't want to call them small, but building these very important building blocks that is very much akin to the building blocks we needed to put together the first set of computers to put together MS-DOS, all of that allowed us to create windows, windows allowed us to actually access the first set of computers, to put together MS-DOS, all of that allowed us to create windows,

Starting point is 00:43:25 windows allowed us to actually access the internet. And there was this in-serietim development of things that happened. And I think that we're on the verge of that. And that's what these kinds of breakthroughs really show us, which is that you can view. So for example, in a different company, they've created these mRNA gate arrays, logic gate arrays. So if you're a chip designer,

Starting point is 00:43:45 you would understand how to basically create electrical function in part using gate arrays. But if you reduce a biological function to the same idea, now that same person has a translational ability to solve a different problem that they didn't have before. So I think what we're saying is that we're seeing this platformization, this AWS ification of a biological tool chain with things like CRISPR and all of the other modalities

Starting point is 00:44:12 that need to stack on top of it so that the next person can view it as a programming problem. And I think that that's the really exciting path that accelerates a lot of this development. But this is an enormously important breakthrough because it validated a lot of what CRISPR was beyond a lot of theoretical innovation that up until now was basically what it was known for. And a lot of investment had gone into companies that were trying to do things, but this was the first really important one. The funny thing about Intelli is that it's been public for like seven, eight years, and it's just been toiling, toiling, toiling, toiling, toiling. And then, you know, the last little while obviously it's gone absolutely crazy because of this

Starting point is 00:44:50 breakthrough. Yeah. And related to, in related news, CRISPR creates its first genetically modified marsupials after years of using the gene editing technique. CRISPR to genetically modify everything from vegetables to lab, rodents, researchers have used it to edit one of the hardest target shots from our soup deals, the MIT technology reports. I guess it turns out they're very hard to edit

Starting point is 00:45:11 and we're now editing more soup deals and changing things like their hair color. So, brave new world. Freeberg was here, the freeberg ratio would be off the charts. All right, wrapping up, we have. Pretty incredible. Just one thing to add to that.

Starting point is 00:45:24 I mean, I think what it shows is that these COVID vaccines are just the first product, the first breakthrough product of this mRNA technology. There's going to be a lot more. And what I wonder about is, you know, this category of vaccine has some people. They're kind of like, you know, in the technology world, you have kind of a spectrum of early adopters, late adopters, luddites, you know people are actively engaged in technology. Yeah well I mean Luddites are even more... Luddites and then Luddites yeah. Yeah Luddites are even more violently opposed. I think the original Luddites, I think the original

Starting point is 00:45:57 Luddites were in England, they lost their jobs at some factory and so they broken to the factory with sledgehammers to destroy all the machines that replaced their jobs. So there's clearly a spectrum. And what I wonder about is that if you're on sort of the blood end of the spectrum with respect to biotechnology, I mean, are you going to have a materially worse life because you're not getting the benefits of all these vaccines and all these treatments? And I mean, COVID could just be the first example of this. Well, I mean, if you build on it, it's sort of like we're gonna create a two class society. One that is not only dealing with all the maladies

Starting point is 00:46:29 and cancers and living longer, but we haven't even started to think about well, taking somebody who's already in great health and what can you do for them. So, oh, you know what? You can be too anxious to talk or you could add 10 IQ points, you could run faster, you could have higher blood oxygen, whatever. I mean, we could genetically modify people

Starting point is 00:46:49 to stay under water for 10 minutes and be better processors of oxygen like other mammals are. You could have super humans. I mean, that's basically where this is going. And that unlocks a whole nother level of ethical and moral considerations, but you're right. There could be a group of people who are like, I don't want to touch any of this.

Starting point is 00:47:08 And they die at 60, 70, 80 years old. And then we got another class of people who embrace this and they have 20 more IQ points than they live to 120. No, I mean, it sounds funny, but and like science fiction, but that is in the realm of possibility in our lifetimes. There's a lot of great science fiction written about this whole sort of transhumanist idea. A book series I really like is Nexus by Remez Non,

Starting point is 00:47:32 who actually was a developer at Microsoft and you know, then became a writer and he writes with, I'd say, a high degree of sort of accuracy and specificity about these technologies and how they might evolve. It feels to be sure to check out that book. Jason, be honest, if you could actually increase anything in your body through this gene editing, what would it be?

Starting point is 00:47:54 Just throw anything out there with the first thing. Anything out there? Anything out there. What would it be? It would increase my muscle mass. 100 percent. Increase my muscle mass. But there was a percentage of fat would go down, not in reality, and absolute turns, but

Starting point is 00:48:07 just in percentages. So this CRISPR thing was a public company called Intelli-Atheraputics. But I want to throw a shout out to another startup that seemingly I think may have had a breakthrough this week called Four of Energy. And the reason why these guys are interesting is that they've built this incredibly massive long duration battery out of iron. Now why is that important? We have really simple ways of harvesting iron from the earth.

Starting point is 00:48:37 It is literally everywhere. Everywhere you look, iron exists. It's not so true for nickel, it's not true for cobalt, it's not true for manganese, it's not true for lithium, it's not true for all of these other specialty chemicals that we need in order to build batteries. But these guys have solved a very complicated technical challenge that will allow you to store energy cheaply, which has huge implications for electricity and grids. And so a big shout out to these guys at Form, because if it looks like what they said they did is true, it's a really important breakthrough

Starting point is 00:49:13 that'll have some important ramifications. It's amazing, by the way, to see progress. Now you wake up and you read these things, and you're just like, God, this is incredible that there are people working away on shit that really matters. It's almost as if there's like one group of people, we talked about cynicism in a previous episode recently. There's one group of people, whether you're in the founder circles or capital allocator

Starting point is 00:49:38 or a journalist covering this space who understands it. There's a technical, you know, explosion going on here, an innovation that is going to solve a lot of problems. I mean, I have another group of people who think that all these problems are intractable. I'm kind of looking at this, you know, what happened with COVID, and I was talking to my wife about global warming. And I was like, feels to me like we can solve global warming. Like, feels like it's very much in our control. And then there's another group of people who feel like it's over and don't have kids because the whole planet is going to go on fire.

Starting point is 00:50:11 We're, I mean, I think Elon tweeted this out. And I think we've talked about this now with respect to China. But, you know, we have an enormous problem in the world in general, which is that unless our birth rate is positive and accretive, it has huge implications to progress. If you just eliminate or you decrease the denominator of the global population, the odds that there's another Elon Musk or Jeff Bezos that are created are just lower. Net of anything else, a declining population rate, particularly in Western countries, has huge detrimental effects to the world.

Starting point is 00:50:48 And so all the folks that think that they're going to solve the ecology of the world by not having kids, it's a little misguided. The thing to do is to actually have a positive birth rate, find technological solutions to this problem, and allow what we've been able to do, which is a rising populace to basically be motivated to work and solve problems. And I think that we have to be very careful about that, because if people don't

Starting point is 00:51:09 get this right, they're going to take the wrong solution. It's not going to be a solution at all, and it's going to make the problems even worse. Could you imagine if the population of the earth shrank in half, what it would mean in terms of productivity, services, the healthcare requirements that are needed, the costs of providing those services, the healthcare requirements that are needed, the costs of providing those things, the economic viability of countries will go away, it would be a disaster. Yet there is a group of people who feel

Starting point is 00:51:32 and we should do exactly that. And not a small group of people, yeah. Well, they think that, I think the mistake isn't thinking that human consumption is the problem. It, in specific with respect to, to climate change or global warming. in thinking that human consumption is the problem. In specific with respect to climate change or global warming, no, you can't see it that way because look, humans in order to exist need to consume and we're gonna emit carbon as part of that process.

Starting point is 00:51:59 The important thing to focus on is energy production. Are you shifting to clean production? Not because you're never going to be able to shrink your consumption enough to basically eliminate carbon emissions. It has to be done on the production side. And one of the interesting things that's happening now, I think we should talk about is in Europe,

Starting point is 00:52:20 they're creating this new carbon trading plan. I think China is even trying to set up one of these markets. And so they're creating this new carbon trading plan. I think China is even trying to set up one of these markets. So they're creating these new marketplace to trade carbon permits. I think the most exciting part about this is that it gives an incentive for innovators to create new technologies that actually take carbon out of the atmosphere. They're called negative emissions technologies. Because what happens is if you have a technology to take carbon out of the atmosphere, you can now sell a permit on the exchange

Starting point is 00:52:54 that gives somebody else the right to admit that carbon. And now those technologies, those nets, the negative emission technologies, it's unclear whether they really exist yet, but no one's gonna create them if there's not a customer for them. And that's just really cool about these new tradable permit schemes

Starting point is 00:53:12 is they create a buyer for those nets. And I think that's ultimately how we're gonna solve this problem of climate change. We're not gonna do it through reducing human consumption. Like we're gonna have to go back to the Stone Age if you don't want to emit carbon. It's about moving to clean production of energy and creating negative emission technologies.

Starting point is 00:53:32 Yeah, let me just build on that for a second. There's a bunch of cap and trade systems. China basically has a carbon tax system in place. The big thing that none of these folks have gotten to yet, but I think if you look at the laws in Europe, they're going there is the idea of a carbon tariff. And I think these carbon taxes, if they actually exist properly, will look like a tariff. What does that mean? Let's just say you're Britain and you want to import a Volkswagen from Germany. If Britain has a carbon tariff, that says, you need to account for all of the emissions

Starting point is 00:54:08 that went into making this car, and I'm going to assess an import duty that basically maps to that. I think that that's where the world is going, and that's probably David to your point. It's going to be a really big value unlock because the amount of money that will get both made but also destroyed in that process will be incredible. And that's where we have a chance to really reimagine consumption in a different way. Like there are just so many categories. I saw this interesting that if you look at CPG companies, right?

Starting point is 00:54:39 Companies like Procter and Gamble, Clorox and you compare them to the places where they sell their goods like Walmart and Target. Every single major big box retailer has basically declared a net zero emission strategy in the next five to 10 years. Not a single company on the CPG side has actually any plans to do anything meaningful anywhere near 2030, 2045, 2050. And when you look under the hood, those companies like PNG and Clorox are enormous emitters, enormous. So even though you walk into a target in Amazon and you try to make yourself feel good thinking to yourself, I'm buying something that zero emissions, it's not true. It's basically that Amazon will bear the cost of getting to net zero, but the products that you actually consume are horrible for the environment. And the amount of, you know, false fuels that went into it,

Starting point is 00:55:29 and the amount of plastic that will then get put into the ocean, it's tremendous. And so moving slightly more aggressively beyond these cap and trade systems into something that looks more like a tariff, I think, could be really important for the world. And we're going to need to do it. There's, and there are multiple ways to do it. I don't know if you guys saw Elon back this the X-Price carbon sequestrian sequestrian project which is a hundred million dollar prize and you can do this in multiple ways. You can do it at the factory and there's the one trillion trees that I work. I don't know if you saw that where they're

Starting point is 00:56:02 trying to plant trillion trees because that's the original way to sequester this carbon. So there's the one trillion trees that are organized all that were the trying to plant a trillion trees because of the original way to uh sequester this carbon so that there's going to be like three or four different ways to do this and if there's an incentive to do it yeah that um is going to help for sure part of why there's such political disagreement over this is because you look at approaches like the green new deal i mean i think they understand the problem, but what they're proposing is always on the consumption side is basically politicians picking and choosing how people are going to consume carbon,

Starting point is 00:56:34 whether it's cracking down on private planes to factories. I mean, again, taking us back to the Stone Age, nobody wants to, no one's saying, I think wants to support that kind of totalitarian principle that the politicians get to tell us how to consume. But this is why I think these market-based solutions where you say, look, carbon emissions are obviously an externality. If you want to admit, you need to basically pay the correct price for carbon emissions.

Starting point is 00:57:06 And we use the money that you pay as some sort of, whether it's a tax or whether it's buying a permit, we use that money then offset into negative carbon emissions. It's a market-based system where the government controls the externality, but they don't dictate how people get to consume carbon. And I think that's the right balance. And we don't really have that type of balanced conversation in the US yet, because you've kind of got one side that says they want to save the planet, but they want to control everything. And then you got the other side saying, well, look, I want to save the economy because

Starting point is 00:57:40 your plan, the green you deal is going to destroy it. What we need is, is again, a market-based solution to this. And I guess the criticism of a market-based solution is you're basically giving people away to the most cynical interpretation would be, you can pay to pollute. You can just, you can pollute all you want and just pay a fine, essentially.

Starting point is 00:58:00 But that's not the right way to look at it. You're actually offsetting somebody else is capturing what you put out there and it depending on the rules of the road if you had to capture 50% more than you put in you could create a formula there, right? I mean there could be some formula that over time There's been a lot of fraud in this market like you know people sell these carbon credits from you know Certain forests and there's this joke, which is like, there's been a tree that's been sold like 80 billion times because it's like, you can't really verify.

Starting point is 00:58:31 You can only really estimate the amount of carbon sequestration that, for example, a tree actually does in the first place. And so there's been just a lot of unfortunately, fly-by-night, unreliable, non-trustworthy ways that this market has evolved. People have been waiting for decades for this carbon trading market to really step into high gear, which is why some folks think the more aggressive plan will just be introduced

Starting point is 00:58:54 tariffs and let the market to David to your point sort it out. Tom, what do you think the prospects are for these negative emission technology? I can't believe that a solution as low tech as planning trees is going to solve the problem. And algae. Yeah. Yeah. So the question is, what do you think the, assuming we create the market, the demand for

Starting point is 00:59:14 negative emission technologies, the permits to emit, what do you think the prospects are technologically that innovators are going to come up with these solutions? I do think that we are a couple of breakthroughs away from these things being non-issues. So I'll give you a couple of examples. If you look at, like, I'll just use batteries as an example because where I'm spending a lot of time. When you look back and like, you ask yourself, like, how did we decide to make the batteries the way we make them?

Starting point is 00:59:42 You know, was it some like, you know some broad survey of every single chemical composition and all these different structures? We realized that a composition of nickel and manganese and cobalt was the right thing to do. Lithium and iron and phosphate. It turned out that it was mostly a handful of people decided and we all just been iterating around the edges ever since. One of the solutions to a lot of these problems is to actually go back to first principles. The problem is that as these industries get built up and you know this, you have so much PPE, like so much equipment, so much investment in physical cap-ex that's happened. The idea of switching platforms is almost impossible because it's not economically viable.

Starting point is 01:00:26 So we are in this situation today where a bunch of solutions have been proposed, David, to solve that problem, right? The problem with carbon capture and other things and negative emission technologies is that they are extremely expensive, they're very inefficient, they require an enormous amount of energy themselves and it's not clear that they work. So what's happening? One is that there's been some pretty novel innovations in moving people past some of these basic problems by looking at the periodic table to try to find different ways of solving things like energy storage, which has huge implications to climate. But the second is that we are pushing the boundaries of physics in different ways as well, and that's where there's going to be the potential for an enormous breakthrough,

Starting point is 01:01:07 specifically around superconductors. So what is a superconductor? It's something that allows an enormous amount of energy to basically trans through it. Now, we have this issue, which is that you can actually create superconductors in highly controlled environments that are extremely, extremely cold, but they have incredible performance characteristics that would revolutionize power and energy transmission in storage.

Starting point is 01:01:32 People have been innovating in bringing that up to room temperature. In that breakthrough, which I think you will see in the next 20 to 30 years, it's just a complete sea change of how we think about this whole problem. So I think the short term we're innovating in the periodic table, in the long term, we're figuring out how to bend the laws of physics.

Starting point is 01:01:53 And I think that those are probably the two most practical solutions to a lot of these things that remove the constraints that we've created. And again, the constraints have been completely human-defined, which is the sad thing. They were not necessary from the start. We could have made very different decisions, had we known these problems were going to be as big as they were. You know, the way that we make plastic didn't have to be this way, right? The amount of petroleum that we use, it didn't have to be in this specific way, but this is where we are. And there are direct-air capture technologies, DAC, which is basically an energy issue. You can literally suck the carbon dioxide out of the air.

Starting point is 01:02:29 And again, another issue of material science, because the substrates that you used tend to be relatively inefficient and sort of really activate them. You're pumping a tremendous amount of energy through there. That's the issue, is can you give the energy? And I think when we talked about the small reactors, the small module or nuclear reactors, if energy is free, or it's solar based, you could kind of get a virtuous cycle going here. That's essentially what superconductors allows you to see

Starting point is 01:02:55 is a world where you basically have limitless free energy. It sounds like the thing that we all agree on is that this problem is ultimately gonna be solved by innovation. And this is the problem I have with so many of the political proposals is, you know, our ability to innovate is a function of the size and scope of our economy and the incentives and rewards for innovation and the freedom for entrepreneurs to do their thing. And if you crush that, you know, with government mandates, you won't get the innovation we

Starting point is 01:03:21 need to get out of this problem. We can easily innovate our way out of it, and it requires some individual to say, I want to dedicate my life to it, and then what is the motivation to do that? And who are the capital allocators who are going to give them the billion dollars to create this company? I spend a bunch of time. So I'm the capital allocator that'll give billions. In fact, I did a survey of the superconductor scale. I can't say an example. And here's what I found of the four folks that I

Starting point is 01:03:50 found who are all each individually doing things in superconductors that I think are incredible. They're all immigrants. Every single one, we're not born in the United States. board of the United States, you could, they are so fucking happy to be here. They feel so lucky, and they don't understand why everybody complains all the fucking time. Yeah, complaining is, there is a disease of constantly complaining about stuff, and if you count the number of times you complain every day and it's more than Two or three times a day You need to get your head examined. You're probably just talking yourself into anxiety problems Stop complaining start building. I mean problems are solvable. There is an immigrant in

Starting point is 01:04:37 In the United States right now that will figure out how to conduct electricity without resistance It will transform the world and we are so fucking lucky that that guy came here to this country and we have the chance to give the guy a billion dollars. One of my favorite movies is Wack the Dog with Chris and Rob and Rob and the other. And Dustin Hoffman plays this producer character. And every time there's a setback, he's like, oh, this is nothing. I know we made this movie and three out of the four lead actors died and we recast the movie. It's like, this is nothing. And, you know, and that's sort of his catchphrase is he's got this can do attitude. No

Starting point is 01:05:14 matter what setback happens. He just makes it and it's like, oh, this is nothing. We got it. And, you know, and that's kind of the attitude you need if you want to be an entrepreneur is there's going to be so many setbacks. You've got to be like, this is nothing. You forgot to weigh around it. Yeah. This one of the guys that are working on superconductors showed me his data for the last 10 years. And what's interesting, David, to your point is he had a four-year period where he took

Starting point is 01:05:35 a huge step back, where basically, like, you know, he had this superconductor. He's like, it works at, you know, I'm just going to use simple numbers here, but like, you know, I'm just going to use simple numbers here, but like, you know, minus 300 Celsius, he got it all the way up to minus, you know, a hundred and then it went back to minus 200. For four years, could you imagine the mental devastation? And I said, how did you deal with it? He goes, ah, you know, basically, he's like, ah, it's nothing. Yeah.

Starting point is 01:06:02 And thank God for that guy. It's interesting. I just listened to Quentin Tarantino's on a podcasting tour because he's got a new book. He wrote a novel out of the once upon a time in Hollywood characters. And I just started listening to it. It's fantastic.

Starting point is 01:06:16 Listen, unaudible. And Brian Coppelman, from the moment, interviewed Quentin, and I listened to it yesterday on my bike ride and he was just talking about how he just never gave up and he had written true romance and then he wrote what was the other one he wrote at that time, Natural Born Killers. Natural Killers, yeah. And he was just talking about how the first movie nobody would do, then he wrote the two screenplays and nobody would do and then he got to reservoir dogs and you know they tried to script together $800,000 and he kept asking like,

Starting point is 01:06:52 why didn't you quit? Why didn't you quit? He's like, well, you know, I just figured it out. Like I figured out I had a voice and then nobody would buy my scripts because I was trying to do something innovative and they were reading the scripts and they didn't understand what I was doing in terms of innovating on how a movie would be with how he does with Pulp Fiction, he changes the time and tells the story telling in a non-linear fashion. And he's like, nobody understood it. But every time I read it, I realized I had a voice,

Starting point is 01:07:16 it was my voice, it was getting better and better. And then people, I sold those movies and then he kept building them. And it was very inspiring to think about that take of like he just didn't give up. And he just looked at work and he found his own value in his own work, improving, even with the external.

Starting point is 01:07:39 It's a fantastic story. It's like one of those classic Hollywood or on-the-door stories. He's working at a video store for years. And, you know, he would start, he was making his own movie, and he would fill them on the weekends. And then, you know, he made a few hundred dollars every week, basically. And then he would rent the equipment on a Friday, because then they would only charge him for one day, because it was the weekend. So he could basically record the entire weekend. And so he'd go off and record. And, and then he'd have to go back to work. And he started making this movie, you know,

Starting point is 01:08:09 one weekend at a time for like two or three years. And then he finally put the, you didn't even have the money to get the film developed. So finally, after three years, he gets the film developed. And he's unfortunately, it sucked. It wasn't what he was expecting. But during that time, he wrote, Tourmans, which then got bought. He sold that screenplay. That gave him a little bit of money. Then he wrote Resort Dogs, and then he met Lawrence Bender. And Bender went out, read the script, and was like, holy shit, this is amazing. They raised the million or so bucks to make the movie, and then that kind of launched

Starting point is 01:08:39 everything. And yeah, it's one of these amazing rags to riches stories. They're kind of rare and they're more rare in Hollywood. They occur all the time in the tech industry. We see that all the time. That's such an interesting point. He said, they're like, you would never let you make that movie now in another conversation. I think I listened to three podcasts with him.

Starting point is 01:09:00 Joe Rogan, Brady Sinalis, and then Brian Coppamins, and all three of them are tremendous. But I think in the Brady Sinalis and the Joe Rogan, Brady Stinalis, and then Brian Coppamins, and all three of them are tremendous. But I think in the Brady Stinali, in the Joe Rogan one, he's like, oh, they would never let you make that movie. He was like, bullshit. You can just make it. I just made it. I did you not see the last two films and how politically incorrect they were. And, you know, I don't care what Bruce Lee's, you know, fans think of how I portray Bruce Lee. He was a, he was a bad actor. He was a terrible human being to these folks. And his basic thing was everybody keeps waiting to ask for permission.

Starting point is 01:09:30 And he's like, I'm just gonna make my movies and let the chips fall with them. I'm not gonna be censored. I'm not gonna censor myself. And I'll make my 10 movies and that's it. Game over. I'm gonna tell a very spiritual story. I wanna tell this co-crestory.

Starting point is 01:09:44 I get one last time on a tier of zero. Yeah, yeah a right to your story. I want to tell this poker story. I get one less on them. Terrentino, you tell your story. Terrentino's success with Resort Dogs. I think it came out in 1991. That really inspired me to want to make movies, because I saw that somebody could make a movie outside the system for so little money. That's why I made think for smoking.

Starting point is 01:10:01 We have another independent movie coming out next year about Salvador Dali, which finally got made after about 15 years. So yeah, I mean, he's inspired a lot of people. And he shows what can be done. This is a rags rich story that involves Jake out. So I get invited, I get invited to the Harvard Business School to give us a speech. First and last time I was invited, because I was disinvited

Starting point is 01:10:24 Jason after that, what happened? Well, the back two rows walked out in the first five minutes. Wow, it was incredible. It was incredible. I get invited to do this thing. Obviously it's in Boston.

Starting point is 01:10:36 It's in winter time, right, Jacob? It was winter and it was Boston. It's like not a great trip. So, so I was like, okay, Jacob, what are we gonna do to spice this trip up? And we invite Big Al. So, so I was like, okay, Jacob, what are we going to do to spice this trip up? And we invite Big Al. Oh, okay. And we get on the plane and Big Al says, oh, you want to play a little poker? I said, absolutely. And I turned to Jacob and I said, Jason, do you want to play? He's like, ah, I said, you know, you guys can play against each other. And I said, Jason,

Starting point is 01:11:02 why don't you deal? He's like, I'm not interested in dealing. And I said, Jake, I'll give you 10% of whatever I would. I was like, shuffle up. He deals the game for fucking six hours from LA. Chinese poker to Boston. I smash big L. I smash big L. Smash., smash them. And then we go into the thing. We have like a nice dinner, blah, blah, blah. We go out. We have the thing at Harvard where I said something like, you know, I think an MBA is basically worthless. It's not a good use of your time. I think you should be out building things. The back two rows walked out. They were completely offended. And I did this piece, it doesn't matter.

Starting point is 01:11:48 I kept back on the plane and we're flying back. And at some point I realized, I said, Jason, what's the tally? And Jason says, I'm up 40,000. And I said, excuse me, you're up for it. And it turned out that I was fucking smashing him. Smashing. It's smashing. Anyways, the long story short of it was that we circled

Starting point is 01:12:10 for a few times and then we finally landed and J-Cat won $55,000. But that's what I was thinking. So you could play circling so you could win more. I can't get it down. Here's what you're going to have. Through the pack of cards, add Jason and said, I never want to see you ever again.

Starting point is 01:12:24 I never want to have you fucking play poker. I went to the pilots and I told them, I'll give you five grand if you can make this flight last another hour. And they were like, can we got a circle? They got, we just got a circle. I was like, I got to get another hour in. He was $550,000 on the fucking stupid trip. He never even wanted to come.

Starting point is 01:12:43 He just came. He didn't want to go. He didn't want to go to the best Michelin star restaurant. In Boston. Oh my God. In Boston. It's so fucking stuffy by the way. And so stuffy.

Starting point is 01:12:53 And so stuffy. They take themselves so seriously. And they're trying to bring, you know, 18 courses to us. And, you know, big hours, big guys. It's called big hour for a reason. I mean, he's a linebacker. And they say to big, he's like,

Starting point is 01:13:08 I'll take the, I wanna stake. What do you got? He's like, oh, that's the stake included in the prefectures. You should do the tasting manual. It's like, oh, tasting buddy, fuck it, let's go. Yeah, I'll put more truffles on it. It's not truffle season, sorry.

Starting point is 01:13:17 He's like, okay, well, make it truffle season. Anyway, he start bringing the food. And he wants the steak. And they bring him. I get you know those funny season a movie where like they pulled it the tin and it's like Like a small piece of meat that's like Cheyenne Flind lost a piece of parsley and that's it the steak was the size of a pack of rigley's gum I am not kidding.

Starting point is 01:13:45 They took like a beautiful steak and they just made a little rectangle out of it. He takes his fork, he puts it on it, he holds it up to the moment, he goes, where's my steak? And he puts all the steak, he's my piece of sauce. He would die. She goes, sir, that was your steak.

Starting point is 01:14:01 He's like, I want a steak. He's so screaming. I want a steak. I want so screaming. I want a steak. I want a steak. The whole restaurant's terror. He's like, I ordered a steak. This is not a steak. If you ask him about the strip,

Starting point is 01:14:12 he's like, I lost so much money. Yeah. He's like, I didn't eat. It was cold and bopstick. It was cold. It was a worse trip ever. It was a horrible trip ever. And he is like, the woman's like,

Starting point is 01:14:22 well, how can we make you happy? He's like, bring me a steak. We're talking like, well, how can we make you happy? He's like, bring me a stake. We'll start. We gave you a stake. The stake. How many stakes are you going to afford now that Robin Hood just on public? Yeah. It's right now. It's my third biggest win, Ubercom, and then this one. And time in market, I think Robin had going out of 30 billion. there's a chance this could go 10, 20, 30 X from here. I think it could be a trillion dollar company someday. 22 million members, even through all the craziness that we talked about on this podcast.

Starting point is 01:14:56 You know, they're learning, they're fixing things, and 22 million people using the product and they're going to launch so many other products as part of it. And all these young people getting financially literate, I know it's a double-edged sword, but I kind of feel like this generation. No, balance, it's better. Balance is important. I mean, can you imagine if we were in our 20s trading derivatives and options and just trading stocks all day, I wanted to do that, but it was too hard.

Starting point is 01:15:21 You had to get a broker. It was $35 a trade when I started trading and you had to call Chaus Schwab and put it in water. If all the things, of all the things I could have done online in my 20s and 30s trading stocks didn't end up being high on the list, but you play a lot of cards. I mean, I mean, I play a lot of cards. Right, but that's what these kids are doing. Like for them, this is, you know, in the same zone, a lot of them is sports batting, wagering, playing poker for money.

Starting point is 01:15:48 They're learning. I don't know how you feel about it, David. I'm sorry, I'm just from strategy. Well, I mean, if you make a lot of mistakes early in your career when you're making $100 or bats or buying a tenth of a stock, you know, it's small stakes and you're going to learn a hell of a lot. So I think the edge of the part is you can only learn by doing, right, Zach? I mean, you can't learn in a thing.

Starting point is 01:16:08 Okay, listen, there's been an amazing episode of you with our freeberg. We miss you freeberg, come back next week. Let the conspiracy theories abound, but freeberg just was busy. You could make it and we all wanted to, we missed each other, so we wanted to see our besties. We love you freeberg.

Starting point is 01:16:23 We love you freeberg. We love you freeberg. I'm a, Freeberg. And we love you, Freeberg. We love you, Freeberg. I'm a freeberg. Baggatch, you're freeberg. I'll see you all next time in the All-In-Pakas. Bye-bye. What? What let your winners ride?

Starting point is 01:16:34 Bring man David Sack. What? I'm going on. And it said we open-source it to the fans, and they've just gone crazy with it. I love you, Sack. We know can walk. I'm going to the toilet. What?

Starting point is 01:16:47 What? What? What? What? What? Besties are gone. Go for it. That's my dog taking it away.

Starting point is 01:16:56 It's your driveway. Sit. Oh man. My hamlet has your room. Meet me at the police station. We should all just get a room and just have one big hug or two because they're all just It's like this like sexual tension that we just need to release that doubt What your, B, B

Starting point is 01:17:12 What your, B, B B, B, B We need to get merch these aren't that bad I'm going on, Lee I'm going on, Lee I'm doing all the same.

All-In with Chamath, Jason, Sacks & Friedberg - E42: China's tech crackdown, CRISPR breakthrough, practical climate change solutions & more

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