All-In with Chamath, Jason, Sacks & Friedberg - E6: Big Tech antitrust aftermath, potential effects of an M&A clampdown on Silicon Valley & more

Episode Date: August 1, 2020

Follow the crew: https://twitter.com/chamath https://linktr.ee/calacanis https://twitter.com/DavidSacks https://twitter.com/friedberg Follow the pod: https://twitter.com/theallinpod https://bio.fm/theallinpod Jason's recent Big Tech antitrust hearings breakdown: https://www.youtube.com/watch?v=VWeMnJ0-a_U

All right, everybody, welcome back. It's another episode of all in podcasts. The podcast that is racing up the charts, despite the fact that we recorded every three or four weeks. There's no marketing. There's no ads in this podcast. It's just four friends who play poker together, who've decided to talk about the most important issues in the world. Welcome back to the podcast, David Friedberg, the queen of Kenwa, himself, obviously climate.com, Itza, and an undisclosed beverage startup that I'm not supposed to talk about. It's sorry about that. I know a lot of people were tweeting about this beverage startup.

You're still not ready to talk about the beverage startup. Thank you, Jake Cal. Yeah. Welcome back to the show. I always appreciate your promotions. But when will the beverage start? By the way, do you guys want to talk about Jason's home address? Because I have that I think. Please. No. I want to ask, is that a picture in the background?

I love space, by the way, as you know, but is that a picture of Uranus or what is that picture? I think it's Saturn. It's Saturn. It's not Saturn. It's not Saturn. It's not a great answer. It's not. Freeberg obviously taking the first virgin galactic flight, Chimath Polyhapatia, of course, with us here, the Prince of Spacks calling in from an undisclosed location that is not burning down like the United States.

How you doing on your VK? Doing really well. Thanks. I'm giving you the three-button salute as I told you. Yeah, thank God the microphone is perfectly positioned. is not burning down like the United States, how you doing on your VK? Doing really well, thanks. I got giving you the three-button salute as I told you. Yeah, thank God the microphone is perfectly positioned, so we do not have to look at your chest here. All six of your chest hairs. Oh my God.

It's like a thousand dollar suit that's missing all of its buttons or shirt rather. I mean, they couldn't afford to put buttons all the way up on your like probably $2,000 shirt. I already met it. Get back to the United States. As Jason said, my happy dash will meet me. I'm playing side.

So the three buttons. When he leaves for Europe, they remove the three buttons. He comes back to happy dash and puts them back on each shirt. He does that for the entire wardrobe. And of course, chiming in is rainman himself. David Sacks, professional blogger, and the fund manager of Kraft Ventures, of course, before that working at PayPal with Peter Tio Elon Musk, and a bunch of other famous people, two of which have gone on to have demonstrably

more success than Sacks, but Sacks having, of course, more than success to much more success than SACS, but SACS having of course more than success to more success than the other 72 rocket science tests from PayPal. In between he did a little company called Yammer, which Microsoft bought for a billion dollars. Speaking of big companies in Big Tech, we had a Big Tech hearing this week and Jeff Bezos, Sundar, and Zuck himself, as well as Tim Cook, two founders and two hired guns, people who were hired for their positions, defending themselves. From what I thought was some pretty good questioning. My expectations were very low that anybody on that panel would know what they were talking about. For me, I thought Jeff Bezos did the best job.

He had a great opening statement and he was the most candid. I think least likely to get broken up. Going around the horn here, Chimath, who did the best job in the hearings? I don't know if you saw all of them or just clips, but who do you think shined? I only saw it to be honest with you, your, which I thought was frankly really really good when we should probably link to that in the show notes of people can listen to it. I saw a couple of answers. The thing that jumped off the page to me was I read a little bit of Bezos' statement. I thought it was pretty fire. I thought he did the best job, kind of positioning himself. But the reality is, you know, it's kind of what I said

a few days earlier on CNBC, but I just not going in. This whole thing was set up to be kind of performative theater. And it basically was that, you know, just like the level of questions are just so poor, the level of understanding is so bad. And then, you know, people just use it as a way to grandstand. And everybody did. So, you know, I wasn't completely blown away by any of it to be quite honest. What do you think, Friedberg, who had the best showing in those hearings?

I think Zuck was the most kind of eloquent in the on point responses. He was super, super well prepped for this thing. I think Bezos and others were obviously, they had great kind of prepped work done for their statement, but in terms of like warding off the attacks, I think Zuck did a great job. It was weird, it didn't feel like Tim Cook should have been there. It was like kind of a random thing that he was there because everyone had an axe to grind. And the axe that everyone had to grind was a little bit different.

It wasn't like this was a true objective discussion about antitrust. And so the axe that people had to grind were kind of pointed at Google and Facebook and Amazon in different ways. Tim Cook was kind of, you know, hey, yeah, this is cool. You guys, go ahead and give your responses. I'm going to go back to work. And do you think that's because Apple does not have a monopoly position on a numbers basis in any one era. No. And or end or because their products are so loved and universally used. Well, I think it's actually a function of what these companies do.

So if you look at the Jim Jordan rant, I don't know if you guys watched this, but Jim Jordan did this big rant at the beginning. He opened it. And he went on and on. And the first thing he said, he's like, big tech is out to get conservatives. And then he went on and gave all these examples

about how Twitter has been pulling down Donald Trump's tweets and flagging them and Facebook's been, you know, canceling certain people on the platform. And his whole act to grind was really about censorship on social media platforms, which has fucking nothing to do with antitrust and has nothing to do with applesauce business. And so, yeah, I guess my point is like,

and then other people have do with Apple's business. And so, yeah, I guess my point is like, and then other people have issues with Google's dominance and ads and Amazon's impact on local business. And so there wasn't much of an axe to grind, frankly, with Apple at the end of the day, as I said, I just don't think that it was a function of, you know, a true kind of objective antitrust approach. And it was just more about like,

hey, we've all got different things we want to address. And we finally got these guys here. Let's beat them up. You know, sacks, what do you think? You with Freedberg that it was performance art or do you think that or performative rather? Do you or do you think that there are actually substantive issues that came up during the hearings that we should discuss here? Well, you know, it was both, you know, certainly there was a tremendous amount of grandstanding and political theater and the politicians on both sides wanted to take shots at the companies for various reasons. I mean, I think they have a slightly different hierarchy of hate. I think the left sort of hates

Facebook the most because they blame it for Trump's election, which I think is kind of a ridiculous scapegoating, which we should talk more about. And then I think the right is most suspicious towards Google. But I think there are legitimate issues here as that were brought up. And I think the congressional hearing did score some hit points. And your previous pod to a good job showing some of those. These hearings were teed up, apparently, over the past year by a series of subpoenas of records that the committee, this is the House subcommittee on antitrust had teed up. And so there were some moments where I thought that, you know, the representative scored some hits on Facebook and Google. What do you think the big,

who took the biggest hit in all of this? Who do you think has the most, putting aside all this performance, obviously, and the politicization of everything in our country? And Jim Jordan, who, to me, is like the, he's like the dad at the baseball game who like the little league league game who runs on the court and pushes the empire and gets banned for the season. Like he just yells over everybody for no reason.

But what is the actual, what was the punch that landed that is the most valid as we go around the horn one more time here. Now, we've got our initial thoughts about it. What punch landed the squareest in one of these companies' faces? Well, let me set the sub. I think there were three big areas of concern where just about all the companies with maybe the exception of Amazon took hits, although even, you know, bezos took hits. I think one is with respect to anti-competitive actions that these platforms are taking particularly with respect to the applications or small businesses that operate and are dependent on those platforms. I think all of the companies were interrogated about that. You know, bezos took a hit when he had

to admit that we're conceived that the company may not have always followed its policy with respect to using its third party sellers' data to figure out how to compete with them. Google was interrogated about snippets. There was news today actually just out of Australia that the government's gonna order Google to pay small businesses for the use of its content for snippets, which, you know, so the regulations

are kind of heating up on this. But the sort of the first area was sort of anti-competitive. And I think Facebook took some hits with respect to the Instagram acquisition, which, you know, Congressman Nadler really went after him. And then I think, Jaya Powell as well. That's a tremendously threatening issue for Facebook because if it is forced to divest Instagram, it would just be crippling for the company. Let's go to the desk.

Let's go to the desk. Jason, just set the table. Two other issues that I think came up, I'll just very briefly. Number two is sort of co-ing up to China. I think Google is the one that's most vulnerable here. And then the third issue is sort of this issue of censorship and bias with respect to content and politics. Which has nothing to do with anti-trust, the censorship issue. So let's table that one. I think you're hitting the nail on that. This was not about anti-trust going in. I think people were kind of confused, even even Jim Jordan just I don't think he has any clue what he's talking about

He doesn't know the difference between regulation and antitrust He doesn't know the difference between the Sherman Act and like you know section 230 I think they're all kind of making it up as they go along So in many ways I think personally that the companies that were the most at risk going in were the same companies at risk coming out. And so, you know, if you had to stack rank the risk, I think Facebook is number one at the top of the list. Then I think it's Google, then I think it's Apple, and then I think far, far, far down is Amazon. In many ways, Amazon is the most inoculated simply because the end market that they operate in is so massive.

And the market that Facebook operates in is so new yet so constrained with very few competitors. So in many ways, I think that's how the risk cuts. I really think that the antitrust legislative framework that exists today isn't enough to touch any of these guys. Instead, I think what really happens is more regulatory. And if you really think about what these guys are very concerned about, it's more that Facebook largely and then Google to a smaller degree, essentially can be kingmakers with respect

to popular opinion and sentiment. And I think that they wanna have regulations and I think that there's a good historical precedent for a bunch of industries that have had to come under regulation when they effectively get to 100% distribution. You know, whether it's meat or airplanes or radio or television, you know, agriculture writ large, automobiles and transportation, whenever a market basically serves 100% of the total of the dressable universe, government step in, and they don't necessarily legislate and trust bust, they fundamentally regulate in tax.

And I think in many ways that's just as bad and frankly in some ways it's worse, because if you do that to a tech company, you're basically crippling the one thing that they're supposed to be very good at, which is to innovate. And that's the only thing that they can use to basically keep their stock price high, which is then the only thing that they can use to get people to continue to work for them.

So that's the sort of circular loop that breaks if you regulate them. And I think that the risk coming in was the same as coming up. So let's take them one at a time. Facebook, I thought, had the worst performance because it was pretty clear that Nadler was setting them up not only to not be able to buy a company in the future, but in that clip, he was sort of teaming them up that maybe the Instagram acquisition should be unwound and they should be forced to spin that off because they were saying over and over and over again that Zuckerberg put in emails with his management team that they were going to buy these companies or kill them or copy their feature sets

and even though that may not be explicitly illegal, the fact that they've hit as a chama up is talking about such incredible market share with billions of users and because of the track record of Zuckerberg, which may not be at all related to this, but it sets the table. No, but James Jason and fairness to mark that decision wasn't made when Facebook had market dominance. That decision was made when Facebook was still fundamentally at risk and there was a large period of time where a lot of other people had they been left to their own devices or properly

capitalized, could have actually become a relatively important competitor to Facebook. Instagram could have been at that point, but then Snapchat was the opposite. Snapchat they were at scale and then they were going to buy it and threaten them either you sell to us or we're going to copy the features. and then they were gonna buy it and threaten them, either you sell to us or we're gonna copy the features. I think what a more logical and defensible reaction. Like I just think it's not defensible to say, oh, you know what, Facebook, I didn't like the acquisition

you did 10 years ago, basically because it worked. And so I'm gonna punish you 10 years later. That's crazy. That's stupid. Yeah, in the review mirror, no good. A more reasonable place to be is to say, okay, this thing, meaning communications writ large, has become a critical piece of societal infrastructure. And we are trying to figure out now what the rule should be. And rules shouldn't be brittle.

Rules should be evolutionary. They should map, you know, to the moral decisions and ideas and frameworks of the time. And so, you know, we have to figure out, for example, number one, interoperability. So how can you message across all these multiple networks? Another simple example. We legislated the ability for emergency services to be able to send a message on your mobile phone line

and your landline. You should probably be able to have a backdoor into all the messaging networks simply for that reason. So the point is that, you know, there are all kinds of things you can do today to make this infrastructure layer of society operate in a more predictable way on behalf of what was your best you have you thought about a regulation and then let's stick to Facebook and then we'll go to Amazon. Tremont have you thought about a regulation that would make sense to Facebook, whether

it's divesting an asset or maybe a certain percentage of usage or allowing Facebook messenger to work with I messenger to work with Twitter DMs? I'll answer it in a different way. So look, I mean, for 20 years, I've run these kind of businesses, like from Winamp to Aim and ICQ to then at Facebook. And so I remember at Aim and ICQ, we did all this hand-ringing and all these meetings between us and Microsoft and Yahoo to make our messaging networks interoperate. And eventually, we were basically just cut off

at the knees because other people just moved around us and Eventually it all just morphed anyways away from these sort of brittle messaging networks my my kind of view is that I know I think what's best for Facebook is a status quo And so, you know if if they can basically and by the way, I think the strategy is, and Mark wrote this in his manifesto, but a couple of years ago, you know, this is sort of what led to Chris Cox resigning, if I'm playing, you know, sort of like conspiracy theorist, if you read Zuck's manifesto, what he was basically saying

is, listen, we're gonna take all these product, and we're gonna take all that code, and we're gonna mesh them all together in such a complicated, convoluted mess that if and when somebody ever tells us to rip it apart, it'll take another five or 10 years to do it. And that's effectively the technical read on that manifesto. It's just like you're going to make it technically impossible to unthread these things as independent. And your thesis is that's a strategy against an antitrust breakup.

I find that. No, I just think it's a strategy against an antitrust breakup. I find that. I know, I just think it's a really smart strategy. I mean, he wrote it and he published it online. So it's not like he's hiding anything. He made it. I mean, it's the beautiful part about it. He made it completely in the clear.

Now, so that's the strategy is to basically make it one monolithic code base. So that if and when, I think, I'm not sure if this is the intention, but frankly, if and when somebody knocked on the door and said, hey, you need to strip apart what's that been messenger and Instagram, you can say, well, look, it's one monolithic codebase of 50 million lines of code. It'll take me 10 years, but sure, I'll figure it out somehow. So I think what's good for Facebook is a status code. Now that's different from what's good for politicians and then what's different for consumers. I think what's good for Facebook as a status code. Now that's different from what's good for politicians and then what's different for consumers. I think what's good for consumers is fundamental interoperability. Now this

is then what touches Android and Apple as well. The idea today that you cannot have a group text message that can only include iPhones. One of your on the off chance, one of your friends is an Android phone, you're basically fucked, it's kind of, which happens every six months on our group that freeberg, what do you think in terms of Facebook and any potential action that could be taken or any possible solution to them having such a dominant position, because they are the only one of the four

that has a dominant position. they are the only one of the four that has a dominant position. I would think about the, you know, how these businesses are kind of built, right? They're in all these businesses, there's an infrastructure layer. The infrastructure layer in the case of Google and Facebook is is is reasonably similar. It's a bunch of data centers and hardware and software infrastructure to run all of their services on top. Then on top, there are consumer products and then there are advertising products. The customer base for the consumer product is obviously users and the customer base for

the advertising products is these advertisers that pay to access these consumers and give them ads and get clicks from them and sell them stuff. And so if you think about what do you pull out, it sounds like on the Google side, there's, there's, there's concern both on the advertising and on the consumer products that are being offered and the scale and the leverage that Google has and how they make those products kind of kind of market. and the scale and the leverage that Google has and how they make those products kind of kind of market. And with Facebook, it's really about this absolute kind of monopoly on social products and services, whereas Google's got this great monopoly on search products for consumers.

So you could kind of take a layman's view and say, hey, rip out what's happened, rip out Instagram, and then Facebook is good. But the problem is in that infrastructure layer, and say, hey, rip out what's up and rip out Instagram. And then Facebook is good, but the problem is in that infrastructure layer, they've created the social graph and this connection between all the people that you know, and they've got all the stuff sitting on the same servers

and Jamal points out all the same code base, and there's a lot of commonality there. So the reality of ripping something out from there is a lot more nuanced and a lot more challenging than just saying, hey, you gotta get rid of rid of WhatsApp or you've got to get rid of Instagram. And it's more likely some Chinese wall situation where you end up with a negotiated exit, continued ownership and control. But almost like what happened with the banks in the 80s, you got to separate one side of

the business from the other. That could be one way that this goes because it's really hard to break apart, given the way that these businesses are built. What do you think about a solution, David, in which they can see it. Hey, we're not going to buy any more of these competing social networks, which I think would be kind of hard for them to buy one right now. I think that's done. You can even see that's Google Fitbit. Fitbit is what is it?

A $1.2 or $3 billion acquisition. It's going to take almost two years to close. And Google's already making concessions, antitrust concessions to the EU. For, you know, this is a $1 trillion company trying to buy a $1 billion company. So I think large acquisition and M&A buy the big four, it's impossible.

Is that good for society, your mother, bad for society? Is it good for our business of investing in services or bad for us investing in startups? Well, I think it's good in one very important way, which is that it forces the capital markets to support these companies. And what I mean by that is,

I've told you guys a couple times, but in the year 2000, there was 8,000 public companies. And what I mean by that is, you know, I told you guys a couple times, but in the year 2000, there was 8,000 public companies. In the year 2020, July 2020, as we said, there are August 2020. There's about 4,000. So we've seen a shrinking of 50% of the number of public companies. So the idea that there isn't an M&A on-ramp anymore means that more capital and the capital markets will become more fluid and we will support emerging growth companies in the public markets is my suspicion.

If only there was, yeah, if only there was an easy way for these companies to get public, go ahead, David, respond. Well, I mean, I think that, I think you're raising the right issue, which is the chilling effect on M&A that these hearings are going to have, even if Facebook has never broken up or that deal is sort of retroactively challenged. The big four tech companies have to be looking at these hearings and now they're going to

be second-guessing every acquisition they want to make and it's going to have a chilling effect. I think that's a disaster for Silicon Valley because we know that most of the startups don't work and there's really only, most of them go out of business and there's only two good exits. One is an IPO, the other is M&A. And if you take the M&A exit off the table because it's no longer sort of feasible from a regulatory standpoint.

Not all those companies are going to IPO. Yeah, but David, what you're saying doesn't make a logical sense because if those companies are shit anyway, they should be going out of business and who cares about an aquahire or some mini modest hire that gets you two times your money. There's a lot of acquisitions where the acquirer is picking them up because they provide an important component or technology or product, but that that start-up would not have been a great standalone public company. Would Yammer be worth more today and would you be worth more money?

Would your investors be worth more money if Yammer had spacked? Yes or no, David. Absolutely. Okay, so David, your argument makes no sense. I think you're playing to lose. It's not that it doesn't make sense. David does bring up something that's important in the following way, which is there's a lot of companies, Jason, that get to a certain amount of scale.

And they basically start running out of oxygen, whether it's because they've overbuilt or they've overhired or they've overspent or whatever. Or there's a natural audience for the product. EMAB, but I think a lot of it is just sort of more overbuilding and just kind of distracted capital allocation. But then, you need somebody to come in. And this is the problem with Silicon Valley, and I think what David speaks to is the following. If Big Tech M&A is off the table, the single biggest thing

that'll change is valuations by late stage private, by late stage privates. Because if you know that you can't get a 2x mark to market from the last post, guess what will happen to your post money? It'll go way down, right? Because that was always the understood assumption. You know, all these guys, these late stage money can come in and say, well, sure, I'll put, you know, two and a half billion dollar posts, a three billion dollar posts, because in their mind, what they've been taught is that immediately sets the mark to get acquired as 2X. And in many ways, Facebook started it because Facebook came to buy Instagram literally weeks after that growth stage round at 500 million. That's why they paid a billion one.

They doubled the valuation. But wouldn't it hold on on, I was saying, wouldn't it be healthier though for the entire ecosystem? If we weren't building those late-stage companies to be flipped to a major company, maybe merging them with medium-sized companies are slightly stronger and then taking them public to your point, Shamaaf. The point is, if you don't have a fucked up cap table, you can do all of those things. It's the fucked up cap table. So this solves that.

Who needs this late stage capital coming in and doing these Fakaka crazy rounds? Why not take the company's public earlier? Well, because look, you don't always know what's going to happen. I mean, this is the reason why Instagram sold is the reason Yammer sold is you don't know exactly what's going to happen. You don't know what the outcome is going to be and a lot of those cases that you're saying would become IPOs if they weren't acquired well a lot of them just you know aren't going to work it's it's crazy to be taking those exits off the table when both the startup

and you know the acquire or the big tech company you know want, want to do the transaction. And one of the reasons why I think these, you know, there are a lot of these M&A type outcomes is because big companies have realized they're not very good at R&D, at sort of good, at sort of new product development. And so what they've done is they've outsourced a lot of their R&D budgets to M&A. And so they let the startups run the experiments, you know, in any category, in any new area, you end up having a dozen of these startups get funded. We make fun of it because there are all, you know, there's so many competitors in every little space. But those startups are the laboratory where all these experiments are taking place. And then, you know, the big

company comes in at the end and sees which experiment did well. What do you think? Freeber, where do you think? I mean, I think the advantage of being a platform business is you can plug something in and immediately gain a lot of scale from it. So, I mean, Instagram and YouTube are perfect examples. They were, you know, reasonably fast growing, had millions of users. But once they were plugged into the engine of the bigger platform, they were worth a hundred times as much over a few years because of all the usage and the infrastructure and

the distribution, etc. that was provided. But it looked insane at the time to pay a billion dollars and a billion six for those two businesses. Each of them are easily worth worth 100 billion plus today, probably some multiple of that. And so I think it's, SACS point is right, is like I'd rather, as a, look, I worked in M&A at Google for a couple of years early in my career, I left Google in 2006, and a lot of the infrastructure that makes Google's revenue engine was acquired.

We bought a company called Applied Semantics for $100 million or something million dollars at the time, which ultimately became ad sense. Applied semantics could scan a webpage and basically determine what keywords that webpage represented and then match ads from ad words onto that webpage. That acquisition was $100 million. I mean, I don't track any more, how much, but tens of billions of dollars of revenue are generated by that ad-sense system today. You're bringing up something really important, which is at the time Google was not a trillion-dollar

company. So the point is that Google had access to enough capital market scale where nobody's going to get in the way of a $5, $10, $20 billion company trying to buy a $100 million business like that. I just don't think you're going to see any regulatory body take that seriously. Wait, so did we just paint the perfect picture? Maybe a trickle down. Wait, it's not the perfect picture. Sure, no, in fact, I think what it means is the $20 billion company now probabilistically can actually win. So, for example, look at this Intuit Credit Karma transaction, right?

The question is, you know, could a smaller company have bought Credit Karma? Probably, but not at the price that, you know, Intuit is willing to pay. Now if Intuit gets big enough where there is a chilling effect and regulators say, okay, you know, you're above a magic threshold and, magic threshold and no bueno on the M&A anymore. Now, Credit Karma has two choices, which is maybe they sell for $4 billion to a very different company, right? Or maybe they sell, actually, let's take a different example. PayPal. PayPal is now a top 20 business in America, right? By market cap. So if PayPal isn't allowed, for example, to buy a bunch of sort of payment rail, payment companies.

Maybe what happens is a medium to your business is allowed to buy them. And now all of a sudden, those future businesses can compete with PayPal. That's what I think. That actually seems like the best solution that we've kind of stumbled on here. Can Slack then become or Dropbox or Uber or any Airbnb? Now they can become the acqu You can't slack, then become, or drop box, or Uber, or any Airbnb. Now, they can become the acquires of these companies, and then they can compete. So why don't we just say,

hey, if you're over a trillion dollars, or if you're over 500 billion, you can buy one percent of your market cap. I'm just throwing a number out here. Let me jump in on this. That's not what Nadler was arguing for. You know, it's not like Nadler was saying that if you're a big fork tech company,

you can't do these deals, but everyone else can. The standard that Nadler and the precedent that he was essentially setting in that hearing is, you know, 2020 hindsight bias. You know, if a company acquires... You know, putting Nadler, so I agree with you on that, but putting that aside, if we were gonna come up with a rule,

because we know the rules as they currently exist are inadequate to do any type of regulation for these companies, because none of them have 95% market share. So if, in fact, we need a new solution, how about this for a solution? I'm just putting it out here. You can acquire something that is under 5% of your market cap.

So if your market cap over the last year is a billion, you can buy something 50 billion or less. If you're under 250 billion, you can buy whatever the hell you want. But, Jake, let me ask this question. The points we made earlier about YouTube and Instagram, they were successful because of the scale of the user base of the platforms that acquired them and the work that had already been done and so they could play in.

They would have both been totally successful with that. They would have been successful, but would they have been worth $300 billion? Maybe more, maybe more. But Instagram was 13 people, YouTube was a couple dozen people. It doesn't matter. The story is a small group were brought in with an interesting platform that was kind of working at the time and then they became these $3 billion platform. So that's one scenario. And a lot of money could be used in Google and Facebook used a lot of money to be the best acquirer and to be able to acquire those

businesses. And that's the argument for this, hey, they're at such a scale right now. No one else can compete because only they can pay this fee as Jamal points out into it in Credit Karma, only into it can buy Credit Karma at that price. Now, the alternative way to think about this is what if there is vertical expansion? So instead of leveraging their existing platform and their existing dominance, what if Google, in this case,

is trying to get into the cloud business, right? And they're competing viciously with Amazon and Microsoft and others in this enterprise cloud business marketplace that is continuously evolving, changing every year. There's a different kind of lead and a different company that's suddenly growing faster than the others. And Google spent $2.6 billion to buy Looker. Buying Looker for $2.6 billion does not advantage Google's advertisers. It does not, I mean, to some degree, it might. It does not advantage Google's users, and it is not about platform dominance in their traditional

ad business, it's about vertical expansion into a new market. Okay, so here's how I'll rewrite the law, David. If you have over 70% market share in your vertical, you cannot make additional acquisitions in that vertical. If you have... They're buying into a new vertical, right? That's my point. That's right.

So then the caveat is, if you're buying into a new vertical, you don't have to get that cap. We already have that. I mean, that's basically the way the rules work today is that you look at market share. I mean, Coke cannot buy Pepsi. Facebook cannot buy Twitter today. But what we're talking about is at a much earlier stage, are you going to interfere with the M&A, or are are you gonna retroactively go back

and unwind these transactions? How do you do that? How do you do that? Yeah. I think the point is, this is all water under the bridge, and but the incremental M&A for these big guys is very unlikely.

Now, David does bring up a good point unless it's in basically a, you know, do nothing, not at that important, you know, in the positioning category relative to the core business. And so this is why, you know, it's, again, go back to like, why it did looker, clothes faster than Fitbit. It's half the price. Looker is twice the price, right? Fitbit is half the price. Yeah, you mark market completely. Yeah. Yeah. And so, so there is a fear that there is going to be a compounding advantage that

regulators have a responsibility to stop. So I think it goes back to, once you get to a certain level of scale, the thing that we're missing with online businesses is this kind of like, you know, there's like a, there's like a great original sin here that we're missing with online businesses, is this kind of like, you know, there's like a great original sin here that we're not admitting, which is that the internet is now a pervasive and critical part of human infrastructure. As such, there needs to be people that regulate and manage the internet,

the same way the FAA manages and regulates planes and wind turbines. Like, think about the FAA manages and regulates planes and winter binds. Think about the FAA. Let's just take aviation. It is impossible for you to go and just go into your garage, build some random thing to carry people from point A to point B in the absence of some certification. Take agriculture.

It is impossible for you to basically go and like build up a farm and build up, you know, livestock or whatever and all of a sudden just supply it into fucking sobies and safeway without any sort of like checks and balances. Similarly, and the reason is because it's simple human infrastructure that everybody relies on and I just think that we have to admit that now the internet costs. Also also those are life and death This can be too. I mean like is it the guy that read the post about like the petafiles and the pizza joint came up with an a K47? Yeah, I mean it's quite an edge case compared to flying on a plane This stuff is life and death at some level, but even more than life and death

It's the anointing of power that then determines life and death. And that's, I think, the key is that it's power. Yeah. Timoth, do you think that there should be an internet regulatory body that decides how businesses operate and how content is censored and managed on the internet? Is that what you're kind of suggesting? Yeah. So let me be very specific. So I think that there are very specific kinds of businesses and business models that should

be overseeing. Specifically, I think the first and most important thing is a body that oversees the collection of user data and how it drives targeting and identification. So privacy concerns around that. That's a no-brainer. That's the first one. And then I think the second one is something that essentially tears the fig leaf

off of internet companies and says, you know what, you are the equivalent of a publisher and a platform, some weird hybrid that we didn't think could exist when we wrote these rules. And so we're now going to adapt these rules. Because if you think about it, nobody is happy with the internet publishers today. could exist when we wrote these rules. And so we're now going to adapt these rules. Because, you know, if you think about it, nobody is happy with the internet publishers today. You

know, the, the left things that it skews right, the right things it skews left, everybody's confused. Nobody gets what they want. And so I think somebody has to step in and kind of so well. Well, I think this is a good segue to Sax's point. And then I guess we have, we have, we have a four here now in the discussion. Do we want to go and talk about censorship and that specific issue across Facebook or do we want to get into Amazon for a second? Which way do we want to go, sex? Go to censorship.

Well, I mean, let's talk censorship. Let's jump the fence here. Should there be to Chimaltz Point, sex, a regulatory body that decides what people can and cannot say on social networks, yes or no? No, I mean, let's think about that. What we're saying is we need the politicians to set up a regulatory body to control how the people talk about the politicians.

I mean, that seems like a recipe for disaster. What about specific lies and intentionality to frame debates incorrectly? That's not what I'm saying. I'm saying like, you go to a movie and there's a little blurb here that says who can go to the movie and who can not. You buy an album and it tells you whether there's explicit lyrics or not.

Like, before you turn on the TV, there's like some rating agency that tells you whether your kids should be watching it with you. My point is, what is the equivalent version? We all need to think about what it is, but to say that there should be nothing, I think, is crazy. Sax? Well, I think, I mean, those ratings are mostly about standards related to kids.

The big internet companies already have a lot of child safety features. I don't know that you need to create laws around that. I don't think that's what we're talking about anyway. I mean, I think the big debate about Facebook or Twitter is whether they're engaging in censorship or bias, right? And that goes way beyond this topic of child safety. So, okay, let's unpack. I don't think that they're censoring. All I'm saying is I think you need to label,

and you need to more clearly designate what this content is so that people can choose. Like for example, on Twitter, I follow a bunch of people on the right, I follow a bunch of people on the left, I follow one or two QAnon accounts, only because I just wanna see it all. And then I wanna judge,

and I feel like if I can see everything, I can sort of like lay it all on a table and figure out where the rough center is and kind of move to that, you know? So you feel you're intelligent and mature enough to do that, Shamaath, but the rest of the world isn't? No, not really, but I try to do it because I think it's important for me. Would you rather the platforms or some regulators come up with what you could see on those platforms, Shamaath?

Again, not what I can see, but there has to be a simple way, for example, you could have something, and again, all this does is it breaks business models, which then it breaks monetization and it breaks the market cap of these companies. But for example, let's just say you had a new kind of job, which was, you know, all these, you had, you hired 500,000 people. And these were a combination of lawyers, journalists, you know, academics, all kinds of random people, artists, everybody. Okay. Normal folks, blue collar folks, and you paid them full time to basically read stuff and

kind of like, you know, you know, wisdom of the crowd style, tell us where this sat in a spectrum. Okay, this is on the left, this is on the right, this is kind of centered, this seems laughable, this seems unbelievable, this seems relative to crowdable. And I think that you would get, you know, very quickly, and I don't think the latency would be that high, but probably minutes, where, you know,

40 or 50,000 signals would tell you whether something is where something is in the spectrum of how to understand it. And then that system will get paid, get played though, it'll get gained, right? Like someone will figure out a way to turn all of Chimads, tweet labels into super evil tweets and now everyone will meet you because you're super evil. Yeah, I think we just defined George Orwell's 1984. Or cancel culture, right? If you're being 500,000 or a million people, if Facebook and Google and these guys come together

in Twitter and they pay a body of people to do this work, and so you don't know who posts it, you just see the content, you read it, you label it, it's a classifier. So, Chimalt, what do you think you would get classified as? And then what if you disagreed with what you were classified as? So, the David's like, what I'm saying is you wouldn't know it's me. Like if I wrote an article on Medium, right? And I wanted to publish it in Twitter, that article first hits a queue, 50,000 people read it,

they human classify it, and then it gets published. And now what if you don't like the way it's classified and you don't want those tags attached to it and you want a place to publish freely without classification, without tagging? Then there will be a company that supports that too and you'll see how much people care about that. Yeah, I mean, I think the free market can handle

what you're saying, Shemaaf, because I think David's concerns would be the same as mine, which is who's doing this classification, what kind of transparency is there? And we already have the wisdom of the crowds, which is things that are outrageous automatically get pushed up on Twitter, which allows anonymous. And then Facebook seems to be all the top trends seem to be on the right. Let's swing over to SAC. SACs, what do you think of the 1984 proposal from a Jamaat for 500,000 sensors telling you what to think of a post before you read it?

Yeah, I mean, it's the question, but it's a little bit like Twitter fact checking the politicians they don't like. The digital polypural. It's a it's a it's a form of like soft censorship. And I actually think that Zuckerberg gets attacked the most, but I think his position on speech actually makes the most sense. I mean, it seems like what he said is, we want to be a neutral free speech platform.

And whereas I think Twitter and Snapchat for that matter, much more likely to engage in either, you know, censorship or fact checking. Which is paradoxical, because Twitter's initial position, David, was it was the free speech platform. I totally agree with you. I think Zuck's position is the most defensible, but it also is the most untenable because it's the most, it also is the most untenable because it's the least technological and socially palatable, but it is the most defensible

and philosophically, in my opinion, the only position you can have. But it's not gonna be what wins. Right. Well, it's, the reason why Zuckerberg has hated it is because if you're gonna defend the principle free speech, you always end up defending speech that society hates, like the ACLU in Stokey. And so Zuckerberg, I think, has done the best job sticking to his guns.

I mean, the reason why Twitter is sort of loved on the left is precisely because they gave in to the mob and they've started taking down accounts that the mob doesn't like or fact checking them. Whereas I think Zuckerberg's refusal to do that, and by the way, I don't think he's been perfect in this regard, but he's been much better about standing up for the principle of free speech. That's what's made him, you know, anathema to the left. I think that and the fact that Facebook still gets blamed for free. I have two specific follow-ups to what David just said for you, which is one, how much of this has to do with anonymity being allowed on Twitter versus not being allowed on Facebook?

And second, how much of it has to do with the fact that we have algorithms that trend topics, if we didn't have those algorithms trending them, perhaps this wouldn't be an issue because if you wrote something that was inflammatory, it wouldn't, and false, let's say, in that situation, both characteristics, it wouldn't go to the top of the list, which is what everybody's kind of upset about is that something that's false goes to the top of your feed, comment on those two issues. Well, I think your second point's an important one, which is like social media helps to enhance the stimulation of the amygdala in the human brain.

You see something that makes you angry or something that makes you elated, you are more likely to engage with it. If you see something that is kind of a rational discussion about something that doesn't incite emotion in you, you're less likely to engage in it. And so whatever the engagement model is, it ends up creating a lot more virality and chatter and it kind of gets brought to the surface. And there's a lot that's been written and said about this that I don't think we're kind of uniquely in a position to say anything more on.

And that's obviously what a lot of people are kind of concerned about is the inflammatory and polarizing nature of the content that is getting highlighted on these platforms and is getting greater distribution on these platforms. Then I think to your prior point, I'm not sure it's about anonymity as much as it is about any form of censorship that ultimately can be viewed as biased. Jim Jordan's points were actually, as much as the guy Rance and goes on, and sounds like a guy running on the soccer field

and punched the coach. It's really interesting to hear the point of view that as a conservative, I believe that a lot of what Donald Trump is saying or what some conservative voices are saying is reasonable and that voice should be heard. And to hear over and over about Twitter pulling these things down and then seeing a whole bunch of stuff like anarchists taking over Seattle and taking over Portland, and they don't get their stuff taken down, then claiming that they can hold down the streets

of Portland and Seattle because that's the way that it should be, doesn't incite any sort of censorship, but Donald Trump saying he's going to end it inside censorship. And so I think it's not as much about anonymity as much as it is about having censorship tied to a voice and censorship tied to a labeled or tagged point of view or labeled or tagged individual or voice on the platform. So, without anonymity, I think the problem goes away for Twitter.

I think Twitter is working on a project, and I've been saying this for a decade, that they should let everybody pay $50 a year, $5 a month, or $30 a year, $10 a month, whatever it is, to go through a verification process to make sure it's their name on the account, which, by the way, next door is doing at scale. Not only do they know it's you, they know it's you're the person who lives at that address because you got a postcard there. I think, and in Korea, South Korea, you're required to put your social security number in to open a social account.

That would solve the entire problem. That may seem, and then it would drive other users who want anonymity to anonymous platforms. And that's where Twitter, it's trying to have its cake and eating it too, and they're falling on their face. They have one level, which is troll accounts that you can do whatever the hell they want, playing on the same playing field with people who can. And this is just

a disaster for them. Jim Jordan may be an idiot and just a loudmouth. But I think I agree with you. If the situation was reversed, then we were talking about Obama being censored for some reason and the right and right wing people or left wing people being silenced or deprecated on the platform, you know, soft band, people will be up in arms, but that was a different form. He should be doing that in a censorship, and they should have a censorship committee talking about that. What do you think, Jamoth, about these two issues?

Anonymity on these platforms, and the velocity in which things that outrage people, because you yourself, Jamoth, went from, hold up, but I wanted to cue the stuff for you, Jam Chimoff, went from, hold on, but I wanted to cue this off for you, Chimoff. You yourself went from being a perennial guest on a lot of these programs. And then now, since you've been a little bit more vocal

about how you feel about social issues, when you said break everything up, who cares on CNBC? And then when you said who cares, let them fail, they don't get their summer hampers house, you gained 150,000 followers. And now you've learned that if you're more, I don't want to say the word outrageous, but if you're more vocal about social issues, you're going to gain a lot of attention. Do you think you should have been labeled as somebody who is hysterical by your 500,000

people or being outrageous. Both and all platforms are littered with fake accounts. The interesting factoid from yesterday was, I think, Facebook says they take down 6.3 billion fake accounts or something. Some crazy, crazy, crazy numbers. So they are playing Wackemoll. Twitter just basically says, we don't have the team in the infrastructure. so just let the six-pilky and the cows beat. That's the only difference

between Facebook and Twitter. It's an, it's an, it's an acknowledgement of the problem and transparency on the reporting. So, you know, look, my, my point of view on this is that I think that irrespective of what I believe about free speech, I think it's becoming harder and harder for me, just as a layman reading to figure out what's true and not true. I think that the line is getting very gray and I think that sources that used to have complete integrity that were just beyond reproach in terms of their integrity. It's not clear anymore because the business model of the internet is driven towards clicks. So I think what's actually happening is that we are dismantling information and news and journalism. The first place where I think that goes

is places like Substack, which is going to rebuild it bottoms up, where people will vote with their subscription dollars, what to believe and what not to believe. And then on top of that, people will overlay aggregation tools so that you can actually have multi-subscriptions and create sort of like next generation

magazines and content subscriptions or whatever. I think that's where the that's where the world is going in terms of information and content Jason my honest belief is that I don't think I've ever said anything that particularly crazy I just think that I'm reasonably intelligent and I'm precise in what I say and it cuts through a lot of the bullshit because most people have nothing to say so and it cuts through a lot of the bullshit because most people have nothing to say. So when I make a fucking investment, I write a one-pager and I post it and I'm willing to be held accountable. When I don't understand about climate change, I just post about it even though I want to invest $2 billion of my own money in it. And so I think being authentic and just being straightforward is sort of like what is valuable at some level on the internet.

I think that governments are going to regulate these companies. Let's just be clear. Yeah. And you, whatever I think about censorship, it just doesn't matter what I think, because governments are of a belief that these platforms craft and shape public opinion and sentiment which drive the aggregation and coalescing of power, which fundamentally disrupts the business model of the politician. Let's go swing over to SACs here.

Any comments on that censorship issue or the once very respected sources of news may be being less respected now i think the new york times came to mind when uh... chimath was sort of outlining that phenomenon and then will move on to amazon yeah i mean i i think there are things that these platforms can do to elevate the uh... you know that the discourse you know that the quality of the information

people are getting I think that Eliminating the body counts. I think it's a huge problem on Twitter that that you know that they're out there They're not really doing much about it. I think that's something they could improve and fix You know requiring people to to be who they purport to be you know, I think and this is tied to the body issue of you know not allowing these sort of sock puppet accounts. So the thing about those steps that they could take is their speech neutral, right? The rules would apply to everybody, you know, to Freeberg's point.

And so I think they should look at doing more of those things, but, you know, what I'm concerned about is that, you know, so much of the debate, so much of the pressure that's being brought on Facebook is to actually moderate and control the type of speech that occurs on its platform. I think the reason why Zuckerberg is attacked more than, say, Jack Dorsey, is because he's been more resistant to doing that. I think it's actually because you have a bunch of what seems like real names. But again, I think that there's a fake account issue on Facebook that's just as bad as Twitter.

It's just the differences, the fake accounts on Facebook have proper first and last names. Whereas Twitter, you have all kinds of Alphanumeric garbage as an account name. So here's a different proposal. Why, you know, maybe what maybe what we need is the decision that we allow complete unfettered free speech. And there's a layer of both Facebook and Twitter and YouTube where that's completely allowed. But the precursor to have that access is you need to put in your social security number or something that's uniquely identifiable by your government. So that if you say something and there's a law against you saying something, already

a pre-established law, there's a recourse. Where can you go and be anonymous, Timoth? Because, you know, on a web page, you can create any web page you want. No, but nobody's going to say that I think what it creates is a decision by a user to coalesce on completely different platforms if what you want is complete anonymity for a very different reason. And I think that that's very reasonable to my point is the solution to this, David, is diversity.

Not to have one thing and two companies try to create some Swiss Army knife, Frankenstein product that solves this. It's just not possible. And I think we're both saying the same thing, which is like, you have completely different behaviors, trying to go through the same channel, it's not possible. I actually, I like the idea of these platforms doing more to eliminate bought accounts and anonymity,

because those are neutral rules of the game, and they do improve the quality of the debate that occurs on those platforms. I think those would be good things. I think it's just hard to do. I think that those companies may even want to do that. It seems like Facebook certainly does. It's just a hard thing to execute. It's actually not that hard. I mean, if you just said, hey, listen, this account, in order to have a verified account, you have to have a phone number and email. So that's two steps that a spammer trying to create a lot of accounts would not be able to do

because you'd have to get burn a phone number after burn a phone number, which is a cost. It's possible, but it's a cost. And if you wanna be verified, we need your phone number and we need your email address and we need you to put in your credit card and get charged a dollar on your credit card. Just that we're not over.

Over and overnight, Reddit would become the new Twitter. Over night Reddit would be cut night. Reddit would become the new Twitter overnight. Reddit would be cut for chance would become a new Facebook. I mean overnight like I'm not saying to have an account freeberg, but to have the blue check mark. So you would still be able to and then over time people could say, I don't want to see replies unless they've been verified. And it could be just a toggle you pick. By the way, Facebook, Google and Twitter already have this mechanism

because that's what they do to graduate advertisers up the spending curve. You can start as an anonymous advertiser just spending onesy-to-z dollars just off of a webpage, basically, just you go through and you do self-survads. The more you spend or the more targeting capability you want, you graduate, you self-identify, you give more information, you get more capability back, you get more trust in the system. So it does exist for the customers of these big tech companies. And this is the other big thing. What it shows you is that it's actually

solved the problem for the customers, it just doesn't solve it for the feudalist feedstock, which are the users. Because they won't pay. And so if you said, hey, listen, there's an odds amount of customers. They could be those. Twitter's coming out with a paid version. So they're obviously on the halfway there. They're going to come up with a paid version of Twitter. Jack set

it on his quarterly earnings. I'm going to sell my Twitter stock. Well, I mean, it's not one of the other freeberg, though. You don't have to pick one or the other. You could still be anonymous, but you have the opportunity. Because right now, they're not accepting new verified users. And unless you're a monkey to monkey, you don't have to pick one or the other. You can still be anonymous, but you have the opportunity, because right now they're not accepting new verified users, and unless you're a mucky-d mucky, you don't get to even go down that route. So shouldn't everybody have the ability to... I would like, I mean, I personally would like Twitter more

if it verified identity. I mean, I don't think there should be a speech tax. I don't know why they have to charge a dollar, but taking a dollar means we have your credit card. It's just another hurdle. That's why I put it down. Yeah, yeah, yeah, you can do it like a one dollar off without actually charging anyone's card. Yes, you could do that. For example, like if you if you actually force people to verify by putting in their social security number, like there's a couple of guys I follow. I'll just

name them. Scott Adams who wrote the Dilbert comments. Yeah, there's a guy I'm like so bitch who I'm really not sure I understand his politics by follow him because I because you know He goes all kinds of robberous or grab a lot of it is you know It's it's not just people on the left But I think it would be people on the left people in the center people on the right who would basically pay the quote-unquote Tax because they're already real people. And they would just, they would then have more guarantees and assurances that Twitter won't be arbitrary. And I think that makes Twitter better. And if it may be, it makes it smaller, right? And then maybe you're right, free bird, like 4chan or 8chan or Reddit become good for a different

kind of behavior. By the way, I mean, like that's what we do today. We don't eat the same fucking thing every goddamn day. We don't wear the same pants every day. I agree with where he's going with that. I mean, the defining feature of Reddit is that it is basically anonymous. People have usernames, but you never know who it is. Yeah. Yeah. Soodanims, and it creates a certain kind of conversation, and that's fine. Twitter is supposed to be real people. I mean, it's people. I mean, Facebook even more so, but when I think about the accounts that I follow on Twitter, you know, it's all of them are real people. Occasionally, you'll get a Z-Nomus. DC Braggs?

Yeah, you'll get a Start-up L Jackson or something like that, and I think that's okay. Yeah, but you would choose to then follow them. a startup L Jackson or something like that. I think that's okay. You would choose to then follow them. The difference with a startup L Jackson is they're not a fake account. They're just using a pseudonym. And you know that when you follow them. And over time they've proven to be to provide some value that makes people follow them. And so you could be anonymous.

If you get a certain number of followers, I guess you rise above the noise. Here's another solution. You could be anonymous, if you get a certain number of followers, I guess you rise above the noise. Here's another solution. There are no nuance about truth or how much you believe this is true as a voting mechanism. If you were verified on Twitter, and there was a scale that says, how truthful do you believe this is? You could slide it and pick from one to five. You could actually have another

signal there. What do you think about some sort of a signal to Tramot's point about community value saying, I buy this, I don't. 97% of people wouldn't use it and the 3% that do would completely buy us the results. Okay, Tramot, what do you think would happen? I agree with Freiburg. I don't think that's a really good idea. My, my, my only comment was just offering the other thing by the way, I know it sounds crazy, it's just

offering it as like the, you know, the way that this negotiated solution will end up. And it's kind of sort of what these internet companies are being forced to do, which are these weird, you know, pseudo action bodies that like review things and like, you know, so it's all just a slippery slope to that outcome But by the way you were speaking about Sardopol Jackson, you know, there was another guy super Mugato And you know, he turned out to be this you know really good young up and coming investor Dan McMurtry And he was sued you know He used to sue them for a long time build up a huge audience and then flipped himself and basically came out and said here My name is Dan McMurtry and I run a fund and you know, he used a pseudonym for a long time, build up a huge audience, and then flipped himself and basically came out and said,

here, my name is Dan McBurtry and I run a fund and, you know, it was wonderful. Yeah, I think it's a very good marketing strategy. It's a growth strategy now. Be started about Jack. Come on, when are you gonna be having a venture partner? When are you gonna announce that you're the guy behind BC Brex? Like, I'm not ready to do that.

I'm not ready either. I'm not, people thought it was me, I was like, I'm not ready to do that. I'm not ready to do that. I'm not. People thought it was me. I was like, I'm getting tortured. Wait for you here that I'm the guy behind zero hedge. That'll really make you. Well zero hedge is instructive. Didn't he get banned or the she get banned for posting about stuff in coronavirus?

That eventually turned out to be acceptable and true. Now imagine if he had verified his account, he had a social security number, he had all that stuff in there, just verified that's it, just information that says zero head is real. It's a real person. And the rule is when you're at that level of verified, you can publish whatever you want. So you can say false statements as a real person. So Donald Trump is a real person. He's a verified account and he's saying things that Twitter is then determining our false or inflammatory.

I'd rather, you know, them not try to do it. And I'd rather have pundits that you can believe in. So the other problem is like, look, when you have public figures, you have punditry around public figures, but the problem isn't what that person says. It's you can't believe the pun to treat because half of them are fake. So at some point you have to break this cycle and somebody has to be real. Well, and this is the problem with the Trump issue in a pandemic is two edge cases put together. And now we're figuring out what the actual cost of it is. Trump said masks are bullshit. You don't need to wear a mask, blah, blah, blah. I choose not to wear a mask. I'm not gonna give people a satisfaction

seeing me in a mask. Turns out masks are correct. We should have put that, or should we have put in front of Trump's non-mast comments, hey, this is against what the guidelines are. Or the fact is the who said, the world health Organization said, you shouldn't wear masks.

Then it turns out, now we have a bunch of conservatives dying who didn't wear masks. No, I don't think you should have put anything there. And let all the conservatives who believe him die. So it's not about letting conservatives die. I think that's a crazy way of positioning it. He's allowed to have his opinion. And really, if anything, I think social media has shown that the way that we use to venerate, veneration is sort of like, it's been disrupted by social media. The idea that you venerate

somebody because they want an election in a moment is so crazy because they are basically like you and in many cases maybe dumber than you. With respect, we all these ideas surrounding the idea that we need to regulate these platforms, I think we should just remember that the way stuff gets into your feed is that you make the decision to follow it. These feeds are self-curated. There is this issue about, well, you know, the algorithm does sort of emphasize or sort of increase the volume. And, you know, we want to make sure those algorithms, you

know, are done in a neutral way. They're not, they're not biased somehow. But, you know, the, the content that appears in people's feed is content they've, they've chosen to see. With the exception of trending topics on both platforms. Well, like I said, though, as long as those algorithms are unbiased and work in a speech neutral way, I think they're fine. But the reason why Facebook has been boycotted is that they refuse to censor some of Donald Trump's tweets. But you don't see those, you don't see those

posts, rather, unless you've chosen to follow them. I think it's crazy that they want to ban him. Problem is it's a chain of, it's a chain of fake accounts and real accounts, right? Let's be honest, it's just a combination of both that exists on both Facebook and Twitter to amplify content in ways that none of us really understand. And I would be very skeptical that anybody there really understands every single piece of content, how and why it gets weighted the way it does. And I bet you that there's probably a way to tell whether an account is fake. I mean, obviously they have system integrity tools to figure this out.

There's no way you could have eliminated six billion accounts if that wasn't true. But then you choose not to suppress the waiting of those or maybe you do suppress the waiting of them entirely. It's just an alter. You're talking about, but in terms of implication, okay, so maybe you can game the trending topics that way. But you can't get in my feed unless

either I choose to follow you or you pay to run an ad, which my eyes are just trained to skip over. So I think if you're an ASEA average person, do you believe that you are sort of influenced by deceptive content on Twitter and Facebook or sort of unduly influenced, they would say no. You know, none of us believe that we are. But then if you ask, but if you said, do you interact in groups and forums with a bunch of people that you don't know, the answer would be 100% yes. But what I'm saying is that the average person doesn't believe that they're

unduly influenced, but but if you ask them, or do you think other people are, they would say, yes, of course, like it's like, you know, when you're having a fucking slurpee, it's like, you know, do you think that this is unduly gonna hurt you? No. It's 1200 calories of liquid sugar. All right, I think we beat this horse to death. There's no solution just on the edges, but let's, let's go to Amazon because I thought that this was a particularly interesting one. Amazon, I thought came out the best of everybody and is the least likely to be broken up. I think some of you agree with that. What were your impressions on Amazon's performance and Amazon in terms of being broken up? Let's start with you, Friedberg, and then we'll go back to

Shema. I think the intention of antitrust law is obviously to protect consumers and protect markets and protect market pricing from being manipulated by monopolists, monopolies. And so, the point that was made about Walmart years ago is the same point that's being made about Amazon today, which is that they're crushing small local businesses. And as a result, there is a lot of damage being done and they are quote unquote too powerful.

But the reality is that the pricing effect of what they're doing is what needs to ultimately be scrutinized and I think is what will ultimately drive whether or not these guys have either some massive penalty or get forced to break up. And so you ask yourself the question, look, if I'm going to buy, call it a mattress or let's use something like a pillow, is a cheaper for me to buy that pillow as a consumer through Amazon or from the local store. Now what if the local store is put out of business because of Amazon? And now Amazon is the only place I can get a pillow.

Is the pillow now going to be more expensive or less expensive than it would have been otherwise? And I think that is the lens by which we need to kind of assess and the regulators will ultimately assess whether or not Amazon is causing harm in the marketplace because of its position and its power. Freebrough. Look, I have several businesses that sell on Amazon and it is fucking expensive.

One of my companies I'm on the board of, we've been the number one food product on Amazon multiple times and we kind of slide up and down the top 10. Can you say what that is? Yeah, soylink. Soylink. And so we sell a lot of soylink on Amazon. Yeah. And it is expensive, man. I mean, the fulfillment, the shipping, the advertising fees, they force you to pay, I will tell you that as a business owner or board member of a business that sells, and I have several others that sell on Amazon too, it is a grind and it is cheaper for us to sell directly through Shopify. Why don't you just raise the price on Amazon?

So to some extent, so Amazon, this is actually part of the problem. So Amazon forces certain best pricing negotiations if you're a large seller on Amazon. You have to make sure, in order for them to promote you and make you kind of a sponsored item and show you at the top of the list, you have to give them the best deal, sort of like what Walmart does, right?

You can't have a cheaper price anywhere else. And so that was something that did not come up. They forced you to have the best price there, even if you charge more on your website. In these negotiated deals, yeah. And so you have to make sure that you're providing, and I'm not sure what the deal is specifically with Soilit. So I don't want to kind of speak incorrectly here. No, I've heard the same thing from other folks. That is kind of part of what happens. And so I will tell you, like, it is harder for, it is cheaper for me to sell soil.

I think it's cheaper for some of these products to be so I can tell you my other company, which we sell quinoa, it's cheaper for us to sell through retail stores than it is to sell on Amazon. We actually give up more margin selling on Amazon. Why would you do it? Because of the volume. Because they've aggregated all the pieces. So you've made the decision as an entrepreneur

to sell your quinoa in all places, even though you lose some margin, you make it back in aggregate. Well, this goes to the market problem. That's like capital isn't a problem. Well, this goes to the market problem because now I have less choice as a business owner because the only place I can find consumers is in this online marketplace called Amazon.

I can no longer go sell at 50 local grocery stores because people don't go to the freaking local grocery stores anymore. And that's obviously a little bit of an extreme statement, but let's say I'm a pillow guy. I can't go sell up 50 pillow stores because they've all been shut down because all the consumers go to Amazon. But could you also sell that target in Walmart and those other competitors who seem to be doing just pretty well, actually. They're doing well.

Yeah. And a lot of people have said that they're the exceptions, but there's a thousand versions of Sears and other stores that haven't done as well. Walmart and Target just happen to be extremely well-run businessers, but there's nothing fundamental about those businessers. What if Amazon kicked you off the platform

and said we're not going to allow third party sellers? Would you be happier? Or would you be sadder? It would be sadder. Got it. Chimath, what are your thoughts? Amazon specific. I think David said it really well up front, which is that it's kind of a when and not

an ifs. So it's Amazon today. I don't think is at risk just because it's in market is so big, but I think within five or ten years, it definitely will be looked at through the same lens as Facebook and Google, and actually they're just those two. Look, and I think David said it also really well, like the Andy Trust Law that you would get

to be successful if applied to Facebook and Google has nothing to do with users and content, and it has everything to do with the pricing of the ads to their customers. And if anybody actually were smart enough to figure out whether there was some way in which their auctions were working, that was effectively pricing inventory in a market quote unquote or an assistant manipulated way, that's probably the best hook to nab one of these folks in any trust law. But other than that, it's going to be regulation.

In terms of Amazon, I think they're going to get a way on skate. What's incredible, by the way, is two days later, they're like, hey, by the way, we just got an FCC license. We're going to launch a $10 billion satellite constellation. And if you look at their RFP to the FCC, the number of people that basically complained and cried, it was incredible. By the way, I think this is a huge important point that we haven't made, which is the benefit

of scale for large innovative companies. There is no way any company would have out of the blue been able to afford a $10 billion distributed satellite program without having customers and all this other stuff lined up. Amazon can afford to take that risk just like Alphabet has taken the risk with self-driving cars and did so before anyone else for many years. Which is a net benefit for society, correct? Which is a net benefit for society. So by having scale, by having incredible profits, and then by reinvesting it in R&D, creating jobs, innovating, it's the only way this kind of stuff is gonna get done. You're not gonna get it done by breaking up these companies and having a hundred companies that only have ten million dollars a profit each,

and then each of them, you know, no one at all can afford to do these grand important projects that move markets forward. Ultimately for Humanity, Freiburg, you see these trillion dollar plus companies as because they can make those big swings, a net benefit for humanity. As a technologist and as a kind of person that hopes for the future, I hope that these sorts of companies can continue to persist and that they're led by people that want to take innovative risk with R&D dollars.

And by the way, if they don't, they're gonna fucking fail eventually, right? It's these guys that are leading these companies and putting these crazy bets on crazy new ideas that are allowing these businesses to remain competitive. And if they didn't, and you know, some big company manager were to come in and start running these things and distributing cash and dividends back to shareholders, these wouldn't be happening. And, you know, capitalism would take care of itself. And then the next big innovative risk taker

that can generate a profit and reinvest that profit in a smart way would end up winning in the marketplace. So, SAC, you are a big investor in SpaceX at craft ventures, I understand. And when you see Bezos copy every single thing Elon does from launching the rockets to then putting up the satellites. Do you think he's just a copycat?

Well, I think he's the scariest monopolist out of the whole bunch. If you look at Amazon versus say Google or Facebook or Apple, those other companies are sort of sticking to their original footprint. Whereas Amazon keeps expanding into new areas. That whole mantra he has about your profit is my opportunity. And so, yeah, with each advancement they make, as they get to a new level of skill, they then turn around and seek to take over the areas that their vendors or business partners are operating. So it started with First Aid and retail books, and then they expanded to other areas of

retail, and then they take over infrastructure. Now there's talk about them getting into freight or trucking. They keep expanding into these new areas, and it's really a statement about our politics. I agree with Jamal that Bezos went pretty much on Skath, and I think it has a lot to do with. You know, he did win the internet with that opening statement that he gave. It was really sort of great, you know, rags to riches, only in America type story. And so I think I agree with Jamal, he's going to get away pretty on Skath, but I do think

that they are the scariest monopolist of the bunch. Well, comment specifically on him copying everyone of Elon Musk's ideas. Well, copying is it is sort of a part of the game. It is part of the game, and I've heard you attack a Zuckerberg for doing the same thing. And you know, look, I get it. You know, we prize innovation and we love innovators. But as soon as you say that you can't, that other companies can't copy those innovations,

you do stifle progress. Yeah, but I look at it as more, how consistently do you do that as your playbook? When you look at Amazon basics? This is the point I wanted to make when I made my earlier podcast, which was, the Amazon basics and the third party seller system is the thing that they keyed in on these hearings. They did not key in on the issue of that freeberg brought up, which was, what is the margin they're taking

from those third-party sellers, which I think would have been a much more deft approach to questioning them. But when it comes to third-party sellers, the fact is they're allowing people to compete with them on their own platform, which drives prices so low. And when they make a better USB-C cable,

that doesn't take a genius to make a better cable. So do you think Amazon basics should be allowed and is great for humanity, or do you think that that using of the data, because they have the sales data on it, is in some way abhorrent and a problem, given the way antitrust laws are currently framed for sacks.

Well, okay. So I think this is an area where the area you're talking about is the way that these platforms treat the applications or small businesses that operate on their platforms. And I do think this is a good area for Congress to keep scrutinizing. There's a saying in chess that the threat is greater than the execution. So sort of a chess strategy principle. I think that's true here where we, I think the execution would be a disaster. If we actually impose a lot of these rules, if we broke up these companies, if we stopped Amazon from innovating, I think that would be

a disaster for those companies and for the economy. Because I do think they do a lot of good things. But in a weird way, I think we have to keep threatening to do those things in order to get these companies not to do anti-competitive things. I mean, we heard Bezos say that he couldn't guarantee that they weren't using their seller's data to inappropriate ways, basically to break Amazon's own policy. And so I think you do have to apply this kind of scrutiny to these companies because I don't think we want to be retroactively, you know, remediating a situation. I don't think we

want to be breaking them up or doing something like situation. I don't think we want to be breaking them up or doing something like that, but I do think we want them second-guessing these anti-competitive decisions before they actually happen. Because otherwise, you know, they- So some scrutiny, some rules, but we certainly don't want to ankle them versus their competitors in China as we wrap up here,

because we're getting way past our hour, we're now at 80 minutes and we said in Max and 90 here was what we all agreed on. I want to talk about the election. We are now at the 100-day mark. We all thought Biden was a shoe in. Now I have my own thesis. I want to float it and see what you guys think. You had Trump start wearing a mask last week, telling everybody they should wear masks. Now there's universal discussion of wearing masks. We've got a little bit of vaccine hope

and then we'll get to Friedberg's position on is that vaccine false cold or is it actual reality? But we know that masks are gonna take three, four weeks if they're implemented properly for us to see the caseload go down, which then the caseload starts going down in three or four weeks after that, the debts would start going down. We may have even seen a little plateau in the number of cases. Cases is ramping up. We hit a record 850 or 900,000 just yesterday at the time of taping. I think on the 29th of July.

Now, my thesis is, Trump goes all in on masks. The vaccine starts to show promise right as the debates start. He gets in there with Biden. We see case loads go down. We see debts plummet. We get down under 250 debts per day in America by September 15th the market rips and on September we have the first presidential debate Biden dunks on a senile or maybe not crisp Biden Trump sells in and we were just talking two months ago Anything could happen, but Trump was definitely not going to be there. Let's go around the horn freedberg vaccine false gold, or really promising,

and what happens in the election. I think that it's tons of promise with vaccine news in the next two months, three months. I guess the point is, you're going to hear more upside than you're going to hear downside news on vaccines, for sure, whether or not we have a vaccine and by when and yada yada.

A percentage chance we have a vaccine. We're going to have a vaccine. I think it's a function of how many doses at what pointed time. And you know, there is this 30,000 trial happening with Moderna right now. There's a Russian vaccine that just got approved yesterday in Russia that they're saying is ready to go and they're starting to distribute it.

So there are vaccines, right? This is a known known. So that news will only continue to improve and build and there'll only be more and more indications of success with vaccines between now and November. How that affects markets, I think, I'm not sure that drives markets as much as some of the other stuff that's going on in

markets with the Fed and with policy and with stimulus packages. I think those are frankly important drivers right now. And how much the markets ultimately affect the election, I don't know. So yeah, it's all still pretty uncertain. Who's going to win that? I think it's pretty uncertain. Who's gonna win? I think it's pretty uncertain. I'd possibly win right now. Okay, you have to put your entire net worth

on one person go. Yeah, I still think Trump is, I kind of have been vacillating on this. I think Trump is probably only gonna improve from here on out. So your entire net worth is on the line in three, two, place your bet. I'd go Trump.

Wow. Well, it's still, it's still to me. I mean, Trump has gotta be the huge underdog here. I mean, right now it looks like Biden's gonna win. I mean, his basement strategy could backfire in the sense that if, you know, fundamental conditions improve with respect to win. I mean, his basement strategy could backfire in the sense that if you know, fundamental conditions improve with respect to COVID or the economy, the fact that he hasn't said anything, done anything, gone anywhere, you know, it could turn out

to be a mistake, but right now, it looks like it's working. And you know, Trump seems to be completely knocked off his game. You know, just earlier in the week, he floated this troppo in about the lane, the election that was completely shot down by Republicans. And it seems like he's like, what did you think as a Republican? When you saw him tweet that, what did you think? What was your emotional visceral reaction as our token? You know, I'm not, I don't necessarily identify with, with partisan politics.

So I have to state that. But, but, you know, it's an American to him saying delay the election. Yeah, of course, everybody, everybody, you know, your reaction, everybody shot it down for good. Not everybody, your reaction. Of course, of course, we're not going to delay the election. We've, you know, um, you know, we, we, we, we haven't delayed the, we haven't delayed the election to fight more or more or two. He's so scared to be pinned as a Republican.

It's not gonna fuck with your deal flow, Sacks. You can be a Republican. Okay, your entire net worth, we have to wrap, your entire net worth, Sacks. You could write out three, two, net worth. Yeah, right now, let's say Bion's gonna win that Trump's been knocked off his game. And me to say, like, I think the problem that Trump has right now, let's say Bion's gonna win that Trump's been knocked off this game and me to say like I think the problem that Trump has right now is he's a salesman without a sales pitch

You know you go back to the state of the Union pre-COVID he had it all worked out He was gonna run on the greatest economy ever keep America great that issue's been taken away from him And it seems like he's still trying to regain his footing He's trying to figure out what to run on. And the fact that he can't do these rallies, which were really, the fact that he was able to go in 2016 to these swing states, he would be flying around on his plane and he did three rallies a day in these swing states with tens of thousands of people.

He wanted it, he wanted to win. It was that, and it gave him a way to go over the heads of the media and speak directly to the people and then those people talked to other people There's a lot of word of mouth And so he hit the inability for him to hold those rallies. I think it's just been Devastating for the type of campaigning that he likes to do and so in a weird way We have less than a hundred days to the election But it feels like the campaign hasn't really started yet because Trump can't do rallies and Biden hasn't left his basement.

Okay. Tramoth, entire net worth on the line, all SPACs, SPAC B, SPAC C, SPAC D, whatever you got spacked up, all your SPACs on the line, everything, the Warriors position. Three, two, two, but we don't need to guess, but I'll tell you why. You know, we had a 33% drop in GDP. We have double digit unemployment. And I think Trump's real path to winning the White House, which we talked about before, was getting an enormous stimulus bill passed and he didn't force the Republican Senate to the table to make sure that these unemployment benefits didn't roll off. Now, there's a very practical problem with these unemployment benefits, which is that it

is not administered at the federal level. It's administered by literally 50 state agencies that run relatively decrepit software. Now just so you guys know, why did we pick $600? It was an estimated numerical average because what the Republicans really wanted to do was just top it up. You know, whatever you used to get to get to 100 and it was technically not feasible to implement

across 50 different. Right, so somebody emboys the Idaho is different than somebody in New York So they were like ah 600 bucks. So my point is it's gonna take four to eight weeks to Reimplement unemployment insurance once we decide what we're going to do So that basically if you started today puts you somewhere between September 1 and October 1 and it today puts you somewhere between September 1 and October 1. And you have been 30 days to basically catch a positive tailwind or 60 days, so call it midpoint 45 days.

You have now federal eviction laws that are rolling off, so I think that it's setting itself up for a very difficult path. He just stopped spending, I believe, in Michigan, Trump did, which is, you know, not a good sign. He actually has overspent in Georgia. So if you look at the facts on the ground, your entire net worth goes on. No, Biden, it's a language campaign. As of today, David is right, he's a salesman without a pitch. And unfortunately, the path isn't clear. The path should have been paid with money.

It's such a no-brainer. Here, let me give you one last poll. He insisted on all that money too, and why would you stop printing the money? If you gave everybody $1,200 and six weeks of unemployment, why not just do it for another six weeks and give everybody another 1,200? I don't understand why that's such a difficult decision for Trump. Freeburg go. Let me give you a scary poll that just came out by UGov. It says 55% of supporters

of Donald Trump say that they will not accept the election victory of Joe Biden if mail-in votes are allowed. Wow. So, the framing of this is actually a little bit more serious than just who's going to win. There is a further polarization, constitutional crisis question, rioting, whatever disregard for the election entirely, kind of moment coming up here, because Trump and others have kind of framed this as such a non-election election because it's all fake and it's all fake news and this is all part of the conspiracy. So there is something scary brewing, I think. And that's what I'm kind of most interested in tracking is really, where does this all

go? percentage chance that we get to a constitutional crisis in Trump says I'm not leaving the White House on a percentage basis freeberg. I don't think he'll say I'm not leaving the White House. I think he's going to be fucking happy to go back to wherever he's going to go. Yeah, but I think there's going to be other ramifications that are worth us figuring out and thinking about because that's the scary stuff that's coming next. Okay, 25% chance of a constitutional crisis.

I think if the elections close, we could easily have like a Gore V Bush type situation. It could be very damaging for the Republic. I do not think there will be a hanging chat issue in this election. This is going to be one way or the other incredibly decisive on an electoral college. Okay, final. I do not set up for it to be that that close. Well, I don't think the election right now is not trying to be close at all. It's trying to be a blowout and so I think we'll avoid the the crisis because it's not close and it looks like Biden's gonna run away with it

but if it does get super close You know, I could imagine there being a crisis based on people not accepting that if the margin of error is within The margin of these male and ballots and you have you know at 30 40 percent of the they're not going to accept it. I'm not saying we'll have like a legal crisis, but I think you could have a legitimacy crisis. It could be very bad for the Republic. Not as bad as Trump's presence, clearly. So final question, final, final question. If Trump believes he's not going to win, and he's essentially giving up right now, which it feels like he's kind of giving up. What would you think who would win if Trump says, Nikki Haley and Pence can run?

I've done such an amazing job. I've been the best president in the history of the union, but I want to get back to my life. And I think Pence, Nikki Haley, should go for it. What happens and who wins? Sacks. Too late for that?

So late for that. You can't put pens in Nikki Haley on the ballot. Why not? Of course you can if he says I'm feeling under it. If he bows out, the Republicans would have to pick a successor. It's not a new third party. The Republicans would be allowed to pick a successor. If he said I'm not doing it for health reasons,

whatever the reason he comes up with. Who wins, Nikki Hally? No, too silly. I think he might drop out. I think I'm putting it out there. I think it's a 5% chance. He doesn't want to be demolished. And he says, you know what, I'll take the deal.

You agreed to not prosecute me getting out of here. I'll take it and... I changed my bet to Joe Biden. I've changed my bet. After this, after you risk your I changed my bed to Joe Biden. I've changed my bed After this after you're holding that where I think you're going to Joe Biden Well, he's clearly the favor right now and the question is whether there's still time for there to be a change I mean honestly, I think we should stop bending on what the outcome is. I think it's stupid I think what we should really be worried about is It's time to turn what what are we doing like letting tens of millions of Americans roll off of unemployment insurance

with zero, like the Republican Senate went on vacation. It's ridiculous. I mean, they should all be fired. It's the craziest thing. We have the biggest crisis in our lifetime. If you roll up the last three crises, 9-11, dot-com bust and the great recession, those three pal in comparison to the magnitude of this one and these motherfuckers are going on vacation, I agree with you, it's outrageous.

I don't think partisan politics are that interesting, but I think they will eventually pass a bill. I think the issue on the unemployment is not that the republicans don't support an extension of unemployment but the the magnitude of the unemployment now um exceeds what workers would get if they went back to work and so i think they're concerned about creating a disincentive for for workers going back to work so why does good difference why not make it three hundred dollars honestly it is such fake fucking news like it's like it has been shown that people then end up spending that money like i don't know if you guys saw, but there are industries that are posting, it's not just Facebook, Amazon, and Google, posting meat and beets like you wouldn't believe in boating,

in housing, people are spending this money. It drives GDP. So whether you put 600 or 200 or 1200 into people's pockets, they have a proclivity to spend it they should have gotten something done trot trump as well as all the republicans are up for re-election i think we just cave on this issue and and i i i think it will get done the the republicans are opposing it are the ones who are not for re-election and are concerned about debt you know that's the that's the uh... that's the concern that all the people have.

What is debt matter if we go into a depression, David? Why not? Well, the incremental six weeks of unemployment, put it at $300, but get something done, David. Why are you not getting something done, David? Why is your team fucking this up, David? Yeah, I don't, I don't wear Jersey. I'm not on a team.

But I think they will get something done. I mean, I don't I don't wear Jersey. I'm not on a team. But I think they will get something done. I'm not not defending them. When they're back for vacation, do you think they should have gone on vacation? They're got their own vacation, David. They can't. They got to come back to work. These guys went duck hunting instead of taking care of the 15-month.

Your team went duck hunting in Washington, DC. Obviously, there's a lot of there's enough Republicans who want to get something done. I mean, why not blame the Democrats for being too entranced yet? Sorry, what I'm saying is it's not Republican. I'm saying the entire we're breaking your chops. Sex. The entire group should not have gone on vacation. The entire half half of the Congress is gone. They're not to be found. Where are they? What are they doing? That's more important.

Maybe they're hanging out in their basement like Biden. I love you guys. All right, everybody stay safe on behalf of the dictator himself, Bestie C, the SPAC Meister himself, stay safe, Chimath on behalf of the queen of Kenwa, the freed burger himself. Stay safe, David, free burger in whichever one of your three houses you're in right now. And add to rain, man. He's definitely burnt that don't burn baby. He's definitely a great driver in the driveway. Yeah, yeah, definitely. Yeah. Yeah. He's definitely investing. I know what's a whopner. Whopner and of course, you have fish sticks and of course he's still investing from craft. Certainly craft

fun. Still investing. We'll see you all next time on the six most popular podcast out of the gate. We'll see. Maybe if you tell your friends about this podcast, we'll go to number one on the technology list. I love you boys. Stay safe. Can't wait to play poker. Bye. Great job, everybody.