All-In with Chamath, Jason, Sacks & Friedberg - E99: Cheating scandals, Twitter updates, rapid AI advancements, Biden's pardon, Section 230 & more

Episode Date: October 7, 2022

0:00 Bestie intros! 1:34 Breaking down major cheating scandals: chess, poker, fishing 16:13 Twitter deal updates 30:05 AI making rapid advancements: Tesla AI Day, Meta's text-to-video tool, where this all leads 49:45 Biden pardons all prior federal offenses of marijuana possession 59:24 SCOTUS will hear cases regarding Section 230, common carrier, algorithmic recommendations Follow the besties: https://twitter.com/chamath https://linktr.ee/calacanis https://twitter.com/DavidSacks https://twitter.com/friedberg Follow the pod: https://twitter.com/theallinpod https://linktr.ee/allinpodcast Intro Music Credit: https://rb.gy/tppkzl https://twitter.com/yung_spielburg Intro Video Credit: https://twitter.com/TheZachEffect Referenced in the show: https://www.wsj.com/articles/chess-cheating-hans-niemann-report-magnus-carlsen-11664911524 https://twitter.com/Billyhottakes/status/1576246821139070976 https://www.bloomberg.com/news/articles/2022-10-04/musk-proposes-to-proceed-with-twitter-deal-at-54-20-a-share https://makeavideo.studio https://fred.stlouisfed.org/series/JTSJOL https://twitter.com/POTUS/status/1578097875480895489 https://www.vox.com/policy-and-politics/2018/12/22/18146338/marijuana-legalization-2018-win https://www.bloomberg.com/news/articles/2022-10-03/social-media-company-liability-draws-us-supreme-court-scrutiny

We're seven minutes in and we've produced absolutely nothing that will go in the show. Here comes sex, wake him up with us. What is commentary? When freeberg is criticizing you for being too negative, you're in a dark place, sex. I'm actually angry at sex for not publishing my AMA for the other night. It's coming. It's coming. It's coming. It's coming. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. It's not. like four hours. It was crazy. It was like the original days of clubhouse. Everyone I know that was trying to get in was texting saying they couldn't get in. So it definitely capped out right? I know. Well, we hit we hit some scalability. You may want to buy

an extra server, sacks. Cheap. Yeah. Why aren't you the same guy who's response were scaring PayPal? No, that was somebody else. That was eBay. They sold it before it's killed. No, that's not true. We had huge scale building challenges that pay pal too. It seems like a theme. Yeah, the theme is when you have an app that's breaking out, you hit scale building challenges. It's called a high class problem. 2000 people is not a high class problem. It's a trickle. It's 2022. 2000 people to spend the conversation is a child.

I haven't written code in 20 years. Here's what you do. When you get to a thousand people coming to the room, that's a lie. That's all right. Everybody else is impassive. You've never written code ever. Of course I have. Of course I do.

That's a lie. Come on, be honest. Oh yeah, it's actually been 25. The last time I wrote code was Lotus Notes. True. You're like your winner's ride. Rainman David's side. So there have been three cheating scandals across poker chess and even competitive fishing. I don't know if you guys saw the fishing one, but they found weights and fillets during

a fish way. And then everybody wants us to check in on the chest and the poker scandals. Chest.com just released their report that this grandmaster has been suspended. They have evidence he cheated, basically in a bunch of tournaments that were, in fact, for money he denied that he had done that. But he had previously cheated as a kid. They now have the statistical proof that he was playing essentially perfect chess.

And they've outlined this in like hundreds of pages in a report, Sacks you. What are your thoughts on this scandal in chess? Magnus Carlson finally came out and explained why he thought Hans Neiman was cheating. Basically, he got the strong perception during the game that Hans wasn't really putting in a lot of effort, that he wasn't under a lot of stress. And he's, it's his experience that when he's playing, you know, the top players, they're intensely

concentrating. And the Hans Neiman didn't seem to be exerting himself at all. So his, you know, hackles were raised and got suspicious, and then he has had this meteoric rise, the fastest rise in classical chest rating ever. And I guess he had gotten suspended from chest.com in the past for cheating. So on the basis, and maybe other things that Magnus isn't telling us, Magnus basically said that this guy is cheating. I think that maybe the interesting part of this is that there's been a lot of analysis now of Hans Neiman's games, and I just think

the methodology is kind of interesting. So what they do is they run all of his games through a computer, and they compare his moves to the best computer move, and they basically assign a percentage that matches the correlation, matches the computer move. And what they found is there were handful of games where it was literally 100%.

That's basically impossible without cheating. I mean, you look at the top players who through an entire career have never had a 100% game. You know, chess is so subtle that the computer can now see so many moves into the future that nailing the best move every single time

for 40, 50, 100 moves is just. And, and, and in chess, which a human really can't do that well is that there are positional sacrifices that you will make in short lines that pay off much, much later in the future, which is impossible for a human to calculate. And so, you know, and you saw this by the way when I think it was the, it was the Google AI, the Deep Mind AI that also played chess. So the idea that this guy could play absolutely perfectly according to those lines is only possible if you're cheating.

Right. So there were a handful of games at 100%, and then there were tournaments where his percentages were in the 70s, something plus. And so just to give you some basic comparison Bobby Fisher during his legendary 20 game winning street was at 72% so he only matched the computer for best move 72% of the time. Magnus Carlson playing at his best is 70% Gary Kasparov in his career was 69% and then the you know the super GM's category are typically in the 64 to 68% range. So I think it's really interesting actually how you can now quantify by comparing the human

move to the best computer move. And it's multiple computers trying the best. They actually have. It provides a way to assess who the greatest player ever is. I actually thought that it was Magnus, but now maybe there's a basis for believing it was Bobby Fisher because he was at 72 and Magnus was only at 70. However, look, the idea that Hans Neemon is in the 70s, 80s or 90s during tournaments would be, you know, just an off-the-charts level of play. And if he's not cheating, then we should expect over

the next couple of years that he should rapidly become the world's number one player over the board, you know, now that they have all this anti-cheating stuff, right? So it'll be interesting to see what happens in his career now that they've really cracked down on, you know, with anti-cheating technology. I have a general observation, which is these people are complete fucking losers. The people that cheat in any of these games don't understand this basic simple idea, which is that trying is a huge part of the human experience. The whole point is to be out there in the field to play trying. And it's basically taking the wins and the losses and getting better. That is the path. That's what's

fun. Yeah. Once you actually win, it's actually not that much fun because then you have this pressure of maintaining excellence. That's a lot less enjoyable than the path to getting there. And so the fact that these people don't understand that makes them slightly broken, in my opinion. And then the other thing is like, why is it that we have this strain of people now that are just so devoid of any personal responsibility that they'll just so brazenly take advantage of this stuff? It's really ridiculous to be. They don't, it's really sad. These people are pathetic. They're losing. It's really pathetic.

But it is really interesting how they caught him and running this against the computer. Here's a chart of his scores in these tournaments. Oh, well, here is this first chart is how quickly he advanced, which was off the charts. And then the second chart, that's really interesting is his chess.com strengths. So if you don't know chess.com, it has become like a juggernaut in the chess world, especially after that HBO series came out. A lot of people subscribed to it. I subscribed to it. I like to play chess there. And man, you look at the chess strength score there. He was just like perfect. And then the He's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he's, he the games where they were live streaming, but they've proven that wrong.

Sacks, how does he cheat in person then? Less the thing, no one really knows. And I don't wanna overly judge it until they have hard proof that he was cheating. I mean, look, here's the thing he was never caught in the act, it's just that the computer evidence, you know, seems pretty damning.

And I don't know how they prove. I don't know how they prove. I don't know how they prove that he was cheating over the board without actually catching him, doing it. I still don't think anyone really has a good theory in terms of how he was able to do that. Well, it's not just in the look, but the fishing thing, Jason, which was crazy,

I think Freeburt shared the video. This guy was in a fishing competition and they basically caught these fish and then they put these big weighted pellets inside the fish's body. They even put like a chicken breast and chicken fillets inside of the thing so that they would run more. Yeah, they put fish fillets. Then there's in poker now. In poker, everybody's afraid that there are ways in which you can read the RFID and some of the cards and some of these, you know, televised situations and front run what the playing situation is so that you know whether

you're winning or losing. And again, I just asked the question, like, is it, is this, are things that bad that this is what it gets to? Like, we all play poker. The idea that we would play again, somebody that would take that edge. It's really, it's really makes me really sad. So disappointing. Yeah, it's a terrible one observation might be that across all three, because I'm trying to find some common thread across these,

but it could be that there was a lot of cheating going on for a long time. And maybe the fact that we do have so much digital imagery that's live on these things now, and so much coverage and everyone's got a cell phone that suddenly are a perception of the cheating in competitive events is becoming more tuned. Whereas maybe there's been a lot of cheating for a long time and it's just kind of coming to light.

I mean, we didn't have a lot of live streaming in poker. Who knows? I mean, we could probably ask Phil this. We're kidding, but like for how many years? Oh, there was visions. Yeah. Well, there were tons of cheating in online poker. Yeah, and online poker. Remember, like people are using these like software programs that would track the hand history of your opponents.

Yeah, exactly. So it would help you assess whether the person might be bluffing in that particular situation. Like he has superhuman memory. So I don't know if you guys, I don't know if you guys watch Twitch, like video games, like Fortnite or whatever, but there are like players that have been accused

of using these screen overlay systems that basically more accurately show you and drive the mouse to where an individual is on the screen, so you can more accurately shoot them. And so there's software overlays that make you a better competitive video player. Can I tell you what the through line is? And then the stuff basically became like,

so now what's interesting is now there's eye tracking software that people are using on Twitch streams to see if the individual isn't actually spotting the target when they shoot or if the software is spotting the target. They're called AEM bots. They're AEM bots. Yeah, they're like reverse cheap the whole thing. And I think what's interesting is just that there's so much, you know, insight now, so much more video streams, so much more, I mean, think about all those guys at that. Well, and the tools. Yeah, and there's two cell phones and they all videoed this thing happening. Yeah, I think 10 years ago that wouldn't have been the case and there wouldn't have been

a big story about it. And so Shabbat said there was a theme you wanted to, there was a fact. I think the theme is pretty obvious, which is that there's been an absolute decay of personal responsibility. People don't feel like there's any Downside to cheating anymore and they're not willing to take it upon themselves to take a journey of wins and losses to get better at something They want the easy solution The easy solve the quick answer, you know That gets them to some sort of finish line that they have imagined for themselves will solve all their problems

The problem is it doesn't solve any problems and it just makes them a wholly corrupt individual. Yeah. Okay, so let's talk about this Hussler casino live cash game play. There's this woman, Robbie, who is a new player. Apparently, she's being staked in a very high stakes games playing as a guy Garrett who is a very, very known winning cash game player. And it was a very strange hand on the turn. All the money gets in. She says she has a bluff catcher. Then she claims that she had a thought she missed right her hand.

Now people are saying that the poker world seems to be 70, 30 that she cheated. But people keep vacillating back and forth. There was a lot of weird words, 30 that she cheated, but people keep vacillating back and forth. There was a lot of weird words, salad that she said that she had a bluff catcher, which would normally be an ace. Then she said she thought she had a pair of threes, and then she immediately said afterwards that he was giving her too much credit. They confronted her in the hallway. She gave the money back because she supposedly loves production.

So all of this stuff sounds very weird. One side says, okay, well, this is happening because she's a new player. The other side is saying somebody was signaling her that she was good and giving her just a binary, you're good. Because if you were going to cheat, cheating with Jack High in a situation where you just put all in for a $24 million pot seems very suspect. I don't know if you guys watch the hand breakdown. Where does everybody stand on a percentage basis,

I guess, if they think she was cheating or not, because this is not definitive, obviously. It's not like they cut it open and found the ball bearings. It's not so obvious in that situation, but I think the way that that line played made no sense. Did not make any sense. She was holding a Jack four, and I guess in her previous hand,

she had a Jack three and there was a three on the board. So if she missed her hand for it. The board was 10, 10, 9, 3. No, but you would have had to call the flop. So I'm thinking what? Yeah, no, I get it. The hand makes no sense, but I'm just trying to find a logical explanation.

And that Jack three explanation, somebody kind of fed that to her, and then she changed her story to that. So this changing of the story is the thing I was sort of keyed on, Friedberg is, why does she keep changing her story? Is it because she's embarrassed? Maybe she's had a couple of beverages or whatever. She's just a new player and she's embarrassed by her play

and can't explain it. She can't explain the hand history. All of the things you're saying are probable. I don't think that, yeah, I don't think there's any data for us to have a strongly held point of view on this. I'm just looking forward to us all playing live. DHCL poker live, October 21st, minus David Sacks, unfortunately.

Tomap, J. Cal, Gersner, Stanley Tang, Phil Helmue. So we're going to be playing on the same stream. We're going to be playing on the same stream, same table. I figured out how to hack into the video stream for the car. I just got my RFID sunglasses as well. I'm going to read all your shitty hands, J.K.L. I'm going to take your money.

And I'm going to find my kids and my kids. For my 40th birthday, sky organized poker in Tahoe. And we brought in the team from CBS. That was the present. And they taped it as if it was being broadcast with whole cards and commentators. And we edited it into a two-day show. It was an incredible birthday present. It's one of the greatest things that anybody's ever given me. I appreciate. There was one hour block where somebody at the table said, okay, guys, how about we do a cheating free for all?

Yes. Where you could look at each other's cards and you know, you could sort of help somebody else switch cards, whatever. In that one hour, our beautiful home game of friendship became Lord of the Flies. I have never seen so much hatred, angling, me behavior. Oh my God, it was incredible. All the humans are capable of. So I hope that we never we never we never see cheating in our game. Yeah. Well, we'll see how it goes on October 21st at HCL poker live. I'm excited, I can't wait. It should be a lot of fun. It should be a lot of fun. Oh, and we're not having any official 100 stuff,

but the fans, some of the fans who were at the All in Summit 2022 are doing their own 100 episode 100 meetups on October 15th, I think, all in meetups.io. So there are fan meetups happening in Zurich in a bunch of other places. I'm gonna FaceTime into some of them and just say hi to the fans. You know, it might be like 10 people in a bar somewhere.

I think the largest one is like Miami or San Francisco are gonna be like 50 people or something. We should all face time in. That actually would be kind of fun. I'm basically, I told them to send me an invite and I'll FaceTime in any time. This is next week, what is this? The 15th I think is it's occurring

October 15th. It's a Saturday the Saturday after the 100th episode people are doing these all-in meetups.io. Well, it's next. Earlier this week it was reported that Elon contacted Twitter's board and suggested that they move forward with closing the transaction at the original terms and the original purchase price of $54.20 a share. In the couple of days since then, and even as of right now with some news reports coming out here on Thursday morning, it appears that there are still some question marks around whether or not the deal is actually going to move forward at $54.20 a share, because Elon, as of right now, the report said, is still asking for a financing contingency in order to close, and there's a lot of back and forth on what the terms are.

Meanwhile, the court case in Delaware is continuing forward on whether or not Elon breached his terms of the original agreement to close and buy Twitter at $54.20. As we know, leading up to the signed deal, or a post-signing the deal, Elon put together a financing syndicate, a combination of debt investors as well as equity co-investors with him to do the purchase of Twitter at $54.20 a share. So the $40 some odd billion of capital that's needed was committed by a set of investors

that were gonna invest debt and equity. And there's a big question mark now on whether or not those investors want to or would still consummate the transaction of the Elon, given how the markets have turned, and given how debt markets are trading and equity markets are trading. So Chimab, I'd love to hear your point of view on what hurdles does Elon still have in front of him, does he still want to get this done, and is there still a financing syndicate that's standing behind him at the original purchase price to get it done? It's a great question.

Maybe the best way to start is Nick, do you want to queue up what I said in August 25th? The lawsuit really boils down to one very specific clause, which is the pinnacle question at hand, which is there is a specific performance question at hand, which is there is a specific performance clause that Elon signed up to. Right, which, you know, his lawyers could have struck out and either chose not to or, you know, couldn't get the deal done without. And that specific performance clause says that Twitter can force him to close at 5420 a share. And I think the issue at hand at the Delaware Business Court is going to be that because Twitter is going to point to all of these

you know, gotchas and disclaimers that they have around this bod issue as their cover story. And I think that really, you know, this kind of, again, builds more and more momentum in my mind that the most likely outcome here is a settlement where you have to pay the economic difference between where the stock is now and 5420, which is more than a billion dollars. Or you close at some number below $54.20 a share. And I think that that is, like, you know, if you had to be a betting person, that's probably and if you look at the way the stock is traded and if you also look at the way the options market trades, that's what people are assuming that there's a seven to ten billion dollar swing. And if you impute that into the stock price, you kind of get into the $51 a share, kind of an acquisition price. Again, I'm not saying that that is right or should be right.

That's just sort of what the market says. Yeah, so it turns out that, you know, sort of like that kind of guestamit turned out to be pretty accurate because the stock today is at $51 a share. So I think that the specific performance thing is exactly what this thing has always hinged on. And I think that there was a realization that there were very few outs around how that contractual term was written and agreed to. So there is an out in the contract. And that out says that I think it's by April. If the deal doesn't get done by April, then the banks can walk away from their commitment to fund the debt. And if the banks walk away, then Elon does have a financing contingency that allows him to walk away. So the actual set of events that have to happen is those two things specifically.

Get to April so the banks can pass and say, we've changed our mind, market conditions are different. And then Elon is able to say, oh, you know, the banks just walked away. Right now, the banks, if you look at all of the debt that they've committed to, while they committed at a point in time when the debt markets were much better than they are today. In the last six or seven months since they agreed to do this, the debt markets have been clobbered. And specifically, junk bonds and a bunch of junk bond debt, the yields that you have to pay.

So the price to get that kind of debt has skyrocketed. So roughly back to the envelope math would tell me that right now the banks are offside between one and two billion dollars because they're not going to be able to sell this debt to anybody else. So I think the banks obviously want to weigh out. The problem is their only way out is to run the shot clock off until April. So I think that's the dance that they're in right now.

Elon's trying to find a way to solve for the merger. I think Twitter is going to say we're not going to give you a financing contingency. You have to bring the banks in and close right now. And then we will not go to court. Otherwise we're going to court. And so I think it's a very delicate predicament that they're all in, but my estimate is that the equity is probably 20% offside. So it's not a huge thing. He can make that up because he can create equity value like nobody's business. The debt is way offside by

a couple billion dollars, which is hard to make back, but I think in the end, given enough time, they can probably make that back. The best off in all of this are the Twitter shareholders. They're getting an enormous premium to what that company is worth today in the open market. And so I think this deal is going to close, and it's probably going to close in the next few weeks. And had you bought Twitter when we were talking about it in August, you would have made 25% in six weeks. And, you know, if the deal closed at 54, you would have made, you know, a third of your

money in eight weeks, which is, you know, very hard to do in a market. If you're a GP at one of the funds like Andreessen or Sequoia, and you had made this commitment to Elon or even Larry Ellison a couple months ago, do you fight against closing at 5420? Do you stick with the deal and support him? I mean, what do you do given that the premium is so much higher than where the market would trade it at today? Some people are saying this stock should be at like 20 bucks a share or something. The average premium in an M&A transaction in the public market is about 30%. So, and I think the fair value of Twitter is around 32 to 35 bucks a share.

So, it's not like he is massively, massively overpaying. And so, I would just sort of keep that in the realm of the possible. So, like if you take $35 as the midpoint, fair value is really $45.50. So yeah, he paid 20% more than he should have, but he didn't pay 100% more. So it's not as if you can't make that equity back

as a private company, particularly because there's probably $10 of fact in the stock. If you think about just OBEX, in terms of all the buildings they have, maybe they don't need as many employees, maybe they revisit salaries. You know, one thing is when I looked at doing an activist play at Twitter, I think I mentioned this five or six years ago, one of the things that I found was at that time, Twitter was running their own data centers. The most obvious thing for me at that time was we're going

to move everything to AWS. Now, I don't know if that happened, but I'm sure that if it hasn't, just bidding that out to Azure GCP and AWS can raise, you know, three or four billion dollars because I'm sure those companies would want this kind of an app on their cloud. So there's all kinds of things that I think Elon can do as a private company to make back maybe the small bit that he overpaid. And then he can get to the core job of rebuilding this company to be usable, this product to be usable. This product to be usable because I look I'll just speak as a user right now.

It has been decaying at a very very rapid clip. And I think that his trepidation closing the merger. In part also even he hasn't said it has to do with the quality of the experience is just degraded it's not as fun to use as it was during the pandemic, or even before the pandemic. So something is happening inside that app that needs to get fixed. And if he does it, he'll make a ton of money. Sort of like what happened with Friendster and MySpace and any social networking app over time, the quality degrades. If it's not growing, it's shrinking. And it gets stuck. If it's not growing, and also if the product hygiene isn't enforced in code, and product

hygiene in this case are the spam, bots, the trolling, it can really take away from the experience. Yeah. I mean, interestingly, like, if you think back to the original, the starting day is the original days of Twitter, I don't know if you guys remember, you would send in an SMS to do your tweet and then it would post up and other people would get the SMS notification. And it would crash all the time and the apps were, the app was notoriously crashing. It was poorly architected at the beginning. And some people have argued that Twitter has had a cultural technical incompetence from the earliest days.

I think that's a little harsh. So I do think, look, Twitter was known for what's called a fail whale. You know, they used to have these fail whales constantly. And they did hire people that attempted to try to fix it. I remember the funniest part of when I went in there and said, hey, here's my plan and here's what I want to do,

is literally a day or two later, the head of engineering quit. A camera for who is named once, but he was just out the door. But it is a, I think it is a team that has tried its best that probably at the edges definitely made some technical miscalculations. Like I said, at that time, the idea that any app of that scale would use their own data centers made note, technical sense whatsoever.

It made the app laggy. It made it hard to use. It made it more prone to downtime to your point. But that being said, I would be shocked if they haven't made meaningful improvements because the stack of the internet has gotten so much better over the last seven years. And so to your point, David, if they didn't take advantage of all these new abstractions

and mechanisms to rebuild the app, or to rebuild search, or to rebuild, you know, how all these infrastructure elements of the app work, how would be really surprised because then what are they doing over there? Yeah. Well, look, I mean, to the point earlier, besides the product points, there was a really good tweet light. Yeah. Well, look, I mean, to the point earlier, besides the product points, there was a really good tweet light. That said, for what it's worth, I think Elon will show us just how lean the Silicon Valley advertising companies can be run.

At the very least, it'll be an interesting thought experiment for spectators. Because if he does go in and actually does significantly reduce op-ex and headcount and the company does turn profitable and he can grow it. Well, look, it'll really, by the way, it'll really be a beacon for the financial big companies. From a financial perspective, there is $10 a share in op-ex cuts that he should make right away just so that he is economically break even and he looks like every other M&A transaction. You know, you paid a 30% premium and you bought a company. There is a lot of margin of safety there if Elon does that. So to your point, there probably is, and there probably needs to be a meaningful rift at Twitter.

I'm not saying it's right. I'm not saying it's, you know, and I feel for the people that may go through it. But from a financial perspective, the math makes sense for him to do that because then he is a break even proposition on a go in M&A transaction. And I think that there's a lot of intelligent financial sense so that all the debt holders feel like he's doing the right thing and all the equity holders particularly see a chance for them to make a decent return here. All right, well let's move on. This is the great conversation between Chimoff, Polly Haapatia, and Dave Friedberg about the Twitter transaction. And now we're being rejoined by our besties who are...

Yeah, by other besties. How was your cappuccino, J.K. That was great. I have a nice cold brew here, a nice iced cold brew, and a nice drip coffee. I'm working both. I'd love to talk about topics that I'm not being subpoenaed or depositioned about. We will have a lot to say in the coming weeks. I'd love to talk about topics that my lawyers have advised me not to talk about.

That's brutal. How eerie was our prediction? 51 bucks a share. It is exactly where this talk is right now. Let's eerie. Yeah. All right. Lots of advances. No problem. Let's keep going. Yeah. Speaking of Elon, Tesla AI Day was last week. I actually went. It was great. This is a recruiting event where

what did you do after Phil Helmuth? And I went and I drove Phil Helmuth home the end. No, it's a great event. And it is essentially a giant recruiting event. Hundreds of AI. Sorry, but I'm sorry. I'm sorry, I'm sorry. Can we just talk about Phil Hamley's non-sequitur

in the group chat about Ken Griffin? I mean, oh yeah, he's just like, I made a joke about his net worth and he was gone. What is going on? We were talking about the most serious of topics and he just comes up with seven seconds to fill. It's what's going on. Seven seconds to fill. By the way's going on. Seven seconds to fill.

By the way, I was texting with Daniel McGronu. He did an incredible podcast. If you guys with Lex Friedman, if you haven't listened to it, the Daniel McGronu pod with Lex is incredible. But I was joking with Daniel that there's a section where he's talking about the greatest poker players of all time.

And if you look in the bar of YouTube, it shows where the most viewership was. And it was exactly the 30 seconds he talks about Helmuth. And I said to Daniel, this must have been Phil rewatching it over. I put it on a loop. It went to bed with it like it was ASMR to put him to bed. I'm just so glad I'm talking about him. Sorry, Jacob. Sorry, but it's all good.

So anyway, the event was super impressive. Elon only spoke when he showed the optimist, the new robot, he's building a general purpose robot that will work in the factories. It's very early days, but they showed two versions of it. And he said he thinks they could get it down to $20,000. It's gonna work in the factory. So it's actually got a purpose.

And obviously the factory's already have a ton of robots, but this is more of a robot that will benefit from the general or the computer vision and the AI, the narrow AI being pursued by the self-driving team. This is like two and a half hours of really intense presentations. The most interesting part for me was

they're building their own supercomputer and their chips and the Dojo supercomputer was really impressive at how much they can get through scenarios. So they're building every scenario of every self-driving. I actually have the full self-driving beta on my car. I've been using it. It's pretty impressive. I have to say, if you haven't used it yet, I feel like AI is moving at a pretty advanced clip the past year. If you haven't also seen meta-announced

a text to video generator. So this is even more impressive than Dolly. Dolly, you put in a couple of words, Friedberg, and you get a painting or whatever. Dolly put in a couple of words, Friedberg, and you get a painting or whatever. This is put in a couple of words and you get a short video. So they had one of a teddy bear or painting a teddy bear. So it looks like you're going to be able to essentially create a whole movie by just talking to a computer. Really impressive. Where do you think we are freeberg in terms of the compounding nature of these narrow AI efforts? Obviously, we saw poker, chess, go, Dolly, GPT-3, self-driving. It feels like this is all compounding at a faster rate. Or am I just imagining that? Yeah, look, I mean, it's interesting when people

saw the first computer-point chest, they said the same thing. I think any time that you see progress with a computer that starts to mimic the predictive capabilities of a human, it's impressive, but I will argue, and I'll say a few words on this. I think this is part of a 60-year cycle

that we've been going through. Fundamentally, what humans and human brains do is we can sense our external environment, then we generate knowledge from that sensing, and then our brains build a model that predicts an outcome. And then that predicted outcome is what drives our actions and our behavior. We observe the sunrise every morning, and we observe that it sets. And you see that enough times and you build a predictive model from that data that's been generated in your brain

that the sun has risen, it will therefore set. It has set, it will therefore rise. And I think that the computing approach is very similar. It's all about sensing or generating data and then creating a predictive model and then you can drive action. Initially, the first approach was just basic algorithms. These are deterministic models that are built.

It's a piece of code that says, here's an input, here's an output, and that model is really built by a human. A human designed that algorithmic model and said, this is what the predictive potential of this software is. Then there was this term called data science. So as data generation began to proliferate, meaning there were far more sensors in the world.

It was really cheap to create digital data from the physical world, really cheap to transmit it, really cheap to store it, really cheap to compute with it. Data science became the hot term in Silicon Valley for a while. These models were not just a basic algorithm written by a human, but it became an algorithm that was a similar deterministic model that had parameters. The parameters were ultimately resolved by the data that was being generated.

These models became much more complex and much more predictive, finer granularities, finer range. Then we used this term machine learning. And in the data science era, it was still like, hey, there's a model and you would solve it statically. You would get a bunch of data, you would statically solve for the parameters, and that would be your model and it would run.

Machine learning then allowed those parameters to become dynamic. So the model was static, but generally speaking, the parameters that drove the model became dynamic as more data came into the system and they were dynamically updated. And then this era of AI became and that's the new catch word. And what AI is realizing is that there's so much data that rather than just resolve the parameters of the model, you can actually resolve a model itself. The algorithm can be written by the data, the algorithm can be written by the software. And so with AI, example, so poker playing, an adaptive model. So people, so you're playing poker and the software begins to recognize behavior, and it builds a predictive model that says here's how you're playing. And then over time,

it actually changes not just the parameters of the model, but the model itself, the algorithm itself. And so AI, and then it eventually gets to a point where the algorithm is so much more complex that a human would have never written it. And suddenly the AI has built its own intelligence, its own ability to be predictive, in a way that a human algorithmic programmer would have never done. And this is all driven by statistics. So none of this is new science per se. There's new techniques that all on their underlying use statistics as their basis. And then there's these techniques that allow us to build these new systems of model development,

like neural nets and so on. And those statistics build those neural nets. They solve those parameters and so on. But fundamentally, there is a geometric increase in data. And a geometric decline in the cost to generate data from sensors because the cost of sensors is coming down with Moore's law, transmit that data because the cost of moving data has come down with broadband communications, the cost of storing data because the cost of DRAM and solid state hard drives has come

down with Moore's law. And now the ability to actually have enough data to do this AI driven, where people are calling AI, but it really is the same. It's part of a spectrum of things that have been going on for 60 years to actually drive predictions in the world, is really being realized in a bunch of areas that we would have historically been really challenged

and surprised to see. And so my argument is, at this point, data played a big role, yeah. Yeah, over the last decade, we've reached this tipping point in terms of data generation storage and computation that's allowed these statistical models to resolve dynamically. And as a result, they are far more predictive.

And as a result, we see far more human-like behavior in the predictive systems. Both those that are like a robot is the same as one that existed 20 years ago. But the way that it's run is using the software that is driven by this dynamic model. And that's a lot. A lot. A better answer.

Chema. Okay, I have two things to say, but the first one is a total non-sequitur. So use the term data scientist. Do you know where the term data scientist came from? Has classically used in Silicon Valley? It came from Facebook and it came from my team in a critical moment. If this was in 2007, I was trying to 2008, I was trying to build the growth team. This is the team that became very famous for getting two billion users and

you know, building a lot of these algorithmic insights. And I was trying to recruit a person from Google. And he was like a PhD in some crazy thing, like astrophysics or particle physics or something. And we gave him an offer as a data analyst because that's what I needed at the time. This is what I thought I needed, an analyst, an analyzed data.

And he said, absolutely not, I'm offended by the job title. And I remember talking to my HR, you know, business process partner and I asked her like, I don't understand, what is this, where is this coming from? And she said, he fashions himself a scientist. And I said, well, then call him a data scientist.

So we wrote in the offer for the first time, data scientist. And at the time, people internally were like, this is a dumb title. What does this mean? Anyways, we hired the guy he was a star and And that title just took off internally. It's funny because parallel we started climate corp in 2006 and the original the first guy I hired with a buddy of mine who was a 4.0 for in applied math from Cal and then everyone we hired on with him We called them the math team and they were all applied math and statistics, PhDs.

And we called them the math team, and it was really cool to be part of the math team. But then we switched the team name to data scientist, and then it obviously created this much more kind of impressive role, impressive title, central function to the organization that was more than just a math person or data analyst, as I think it may have been classically treated. Because they really were building the algorithms that drove the models that made the product work, right? Peter Till is a very funny observation, not funny, but, you know, observation, which is,

you should always be wary of any science that actually has science in the name, political science, social science. I guess maybe data scientists, you know, because the real scientists don't need to qualify themselves, physics, chemistry, biology. Anyways, that's so here's what I wanted to talk about with respect to AI. Two very important observations that I think is useful for people to know. The first one, Nick, if you throw it up here, is just a base lining of, you know,

when we have thought about intelligence and compute capability, we've always talked about Moore's Law. And Moore's Law essentially this idea that there is a fixed amount of time where the density of transistors inside of a chip would double, and roughly that period for many, many years was around two years. And it was largely led by Intel. And we used to equate this to intelligence, meaning the more density there was in a chip, the more things could be learned and understood. And we used to think about that as the progression of how computing intelligence would grow, and

eventually AI and artificial intelligence would get to mass market. Well, what we are now at is a place where many people have said Moore's Law has broken. Why? It's because we cannot cram any more transistors into a fixed amount of area. We are at the boundaries of physics. So people think, well, does that mean that our ability to compute will essentially come to an end and stop? And the answer is no.

And that's what's demonstrated on this next chart, just to make it simple. Which is that what you really see is that if you think about, you know, super computing power, so the ability to get to an answer, that has actually continued unabated. And if you look at this chart, the reason why this is possible is entirely because we've shifted from CPUs to these things called GPUs. So you may have heard companies like Nvidia, why is companies like Nvidia done so well? It's because they said they raised their hand and said we can take on the work. And by taking on the work away from a traditional CPU, you're able to do a lot of what Freeberg said is get into these very complicated models. So this is just an

observation that I think that we are continuing to compound knowledge and intelligence effectively at the same rate as Moore's Law. And we will continue to be able to do that because this makes it a problem of power and a problem of money. So as long as you can buy enough GPUs from Nvidia or build your own, and as long as you can get access to enough power to run those computers, there really isn't many problems you can't solve. And that's what's so fascinating and interesting.

And this is what companies like OpenAI are really proving. You know, when they raised the billion dollars, what they did was they attacked this problem because they realized that by shifting the problem to GPUs, it left all these amazing opportunities for them to uncover. And that's effectively what they have. The second thing that I'll say very quickly is that it's been really hard for us as a society to build intelligence in a multi-modal way like our brain works. So think about how our brain works.

Our brain works in a multi-modal way. We can process imagery. We can process words and sounds. We can process all of these different modes, text into one system and then into it some intelligence from it and make a decision. Right? So, you know, we could be watching this YouTube video. There's going to be transcription. There's video, voice, audio, everything all at once. And we are moving to a place very quickly where computers will have that same ability as well. Today, we go to very specific models and kind of bulk and eyes silos to solve different kinds of problems, but those are now quickly merging. Again,

because of what I just said about GPUs. So I think what's really important about AI for everybody to understand is the marginal cost that intelligence is going to go to zero. And this is where I'm just going to put out another prediction of my own. When that happens, it's going to go to zero. And this is where I'm just going to put out another prediction of my own. When that happens, it's going to be incredibly important for humans to differentiate themselves from computers. And I think the best way for humans to differentiate ourselves is to be more human. It's to be less compute intensive. It's to be more empathetic. It's to be more emotional, less emotional, because those differentiators are very difficult for brute force compute to solve. We care for the replicants on this call, getting a little nervous here. They're not processing that. That was an emotional statement. Do not want to process that one.

Well, to your point, during this AI day, they were showing in self-driving as you're talking about this Balkanization and trying to make decisions across many different decision trees. You know, they're looking at lane changes, they're looking at other cars and pedestrians, they're looking at road conditions like fog and rain, and then they're using all this big data to your point, Friedberg, to run tons of different simulations. So they're building like this big data to your point, Friedberg, to run tons of different simulations. So they're building like this virtual world on market street, and then they will throw people,

dogs, cars, people who have a weird behavior about that into the simulation. It's such a wonderful example. Imagine that system hears a horn. Yeah. Well, you hear a horn. So clearly there's some auditory expression of risk, right? There's something risky. And now you have to scan your visual field. You have to

probabilistically decide what it could be, what the evasive maneuver of anything should be. So that's a multimodal set of intelligence that today isn't really available. Yeah. But we have to get there if we're going to have real, full self driving. So that's a perfect example, Jason, a real world example of how hard the problem is, but it'll get solved because we can brute force it now with chips and with compute. I mean, that's going to be the very interesting thing with the robots as well as all of these decisions they're making, moving cars through roads all of a a sudden we're going to see that with VTOLs, vertical takeoff and landing, aircraft, and we're going to see it with this general robot.

And everybody wanted to ask Elon about general AI, the terminator kind of stuff. And his position is, I think if we solve enough of these problems, Friedberg, it'll be an emergent behavior or an emergent phenomenon, I guess would be a better word, based on each of these cities crumbling. Each of these tasks getting solved by groups of people. You have any thoughts as we wrap up here on the discussion about a general AI and the timeline for that, because obviously we're going to solve every vertical AI problem in short order. I spoke about this a little bit on the ask AMA on Colin on Tuesday night Once Sacks gets it out. You can listen to it

But I really have this strong belief that servers crash There's no way out This episode drops. Oh my god. Yeah, you guys can try to download the app but it might crash so just be careful So so here's here's my my Court the fall mystery burger that you were 10 times more popular than J. Cal, so unexpected levels of traffic. Well, you did have an account with 11,000 followers. I mean, it's like,

all right, J. Cal, we'll put you on that account next time. Yeah, please. I'm starting from zero. Yeah, that's fair, that's fair. Yeah, look, my court thesis is, I think humans transition from being, let's call it passive in this system on Earth to being laborers.

And then we transition from being laborers to being creators. And I think our next transition with AI is to transition from being creators to being narrators. And what I mean by that is as we started to do work on Earth and engineer the world around us, we did labor to do that. We literally plowed the fields, we walked distances, we built things,

and over time we built machines that automated a lot of that labor. You know, everything from a plow to a tractor, to a caterpillar equipment, to a microwave that cooks for us, labor became less, we became less dependent on our labor abilities. And then we got to switch our time and spend our time as creators as knowledge workers. And of that's majority of the developed world now, primarily spends their time as knowledge workers creating. And we create stuff on computers, we do stuff on computers, but we're not doing physical labor anymore.

As a lot of the knowledge work gets supplanted by AI, or as it's being termed now, but really gets supplanted by software, the role of the human, I think, transitions to being one of a narrator, where instead of having to create the blueprint for a house, you narrate the house you want and the software creates the blueprint for you. You dictate. And instead of creating the movie and not spending $100 million producing a movie, you dictate or you narrate the movie you want to see and you iterate with the computer and the computer renders the entire film for you because those films are shown digitally anyway.

So you can have a computer render it. Instead of creating a new piece of content, you narrate the content you want to experience. You create your own video game, you create your own movie experience. And I think that there's a whole evolution that happens. And if you look, Steve Pinkner's book Enlightenment now has a great set of statistics on this. But the amount of time that humans are spending on leisure activities per week has climbed extraordinarily over the past couple of decades. We spend more time enjoying ourselves and exploring our creative interests

than we ever did in the past in human history, because we were burdened by all the labor and all the creative and knowledge work we have to do. And now things are much more accessible to us, and I think that AI allows us to transition into an era that we never really thought possible or realized where the limits are really our imagination of what we can do with the world around us,

and the software resolves to the, realize where the limits are really our imagination of what we can do with the world around us. And the software resolves to the, and the automation resolves to make those things possible. And I'm speaking, a really exciting kind of vision for the future that I think AI enables. I start track had this, right? People didn't have to work and they could pursue things in the holodac or whatever that they felt was rewarding to them. But speaking of jobs, the job reports for August came in. We talked about this.

We were trimming 300,000 jobs a month. We were wondering if the other shoe would drop, or boy did it drop, over a million jobs burned off in August. So without getting into the macro talk, it does feel like what the Fed is doing and companies doing hiring freezes and cuts is finally, finally, having an impact. If we start losing a million as we predicted could happen here on the show, people might actually go back to work and lift and Uber are reporting that the driver shortages are

over. They no longer have to pay people's spifts and stuff like that to get people to come back to work. So at least here in America feels like returning a corner. Do we want to go? Yeah, let's talk about the marijuana breaking news. That Biden just did. Yeah. Yeah, as we're going to say, we got a couple of things we really want to get to here. Ukraine section 230 and then this breaking news. We'll pull it up here on the screen while we're recording the show.

President Biden says that I'm just going to quote here. First, I'm pardoning all prior federal offenses of simple marijuana possession. There are thousands of people who are previously convicted of simple possession who may be denied employment housing or educational opportunities. As a result, my pardon will remove this burden. That's big news. Second, I'm calling on governors to pardon in simple state marijuana possession offenses,

just as no one should be in a federal prison solely for possessing marijuana. No, we should be in a local jail or state prison for that reason. Either, finally, this is happening. Third, and this is an important one, we classify the marijuana at the same level as heroin and even more serious than fentanyl. It makes no sense. I'm asking Secretary Buru Bacara and the attorney general to initiate the process of reviewing how marijuana is scheduled under federal law. I'd also like to note that as federal and state regulators

change, we still need important limitations on trafficking, marketing, and underage shells of marijuana. Thoughts on this breaking news. Is this, giving the timing on this is kind of midterm related? Is this, I guess is this a politically popular decision to do? I think so. I mean, look, I support it.

So I've, I've, I finally did something I like. Great. I mean, I thought that we should decriminalize marijuana for a long time or specifically, you know, I agree with this idea of descheduling it. It does not make sense to treat marijuana the same as heroin as a Schedule I narcotic. This doesn't make any sense. It should be regulated separately and differently. Obviously, you want to keep it out of the hands of minors, but no one should be going to jail, I think, for a simple possession. So I do agree with this, and I think the thing they need to do, I don't see it mentioned here, is they should pass a federal law that would allow for the normalization of, let's

call it legal cannabis companies. So companies that are allowed to operate under state laws like in California should have access to the banking system should have access to payment rails because right now the reason why the legal cannabis industry isn't working at all in California is because they can't bank, they can't take payments. So it's this weird all cash business that makes no sense. So listen, if we're not going to criminalize it as a drug like heroin, if we're going to allow states to make it legal, then allow it to be a more normal business where the state contacts it and it can operate in a more above board way. So, but I think this is what

you're saying, the federal mandate. I think it could still be regulated on a state-by-state basis, but I think you need the feds to bless the idea that banks and payment companies can take on those clients, which states have already said are legally operating companies. Right now they can't, and it's a huge gap in the law. Maybe that's the one thing I would add to this, but I don't have any complaints about this right now based on what we know from this tweet storm. I would say this is by the way, it was about face. This was about face by Biden. Yeah.

Do you know what the polling data says? I mean, is there, I'm assuming there's big support in kind of the independence and the middle for this? It was 70% at one point. Yeah. Yeah. So look, this, to me, this is the kind of thing that Biden should be doing with the 50 50 Senate, finding these sorts of bipartisan compromises. Right. So look, to me, this is the kind of thing that Biden should be doing with the 50-50 Senate

finding these sorts of bipartisan compromises. So, yeah, look, this is good news for his own concern. Why hasn't this happened in the past? Like, what's been the political reason that other presidents Obama even didn't that have this sort of similar ideology? Like, why does anyone know why this hasn't been done in the past. There was rumors he was going to do in the second term. They just didn't have the political capital to do it.

Why? Why? I don't want to be a part of the position. Yeah, the pardon doesn't require political capital. I think it's probably the perception that this is soft on crime in some way or there wasn't enough broad base support as David said. I mean, I think the United States population has moved pretty meaningfully in the last 20 years towards the Charte. That's a shame off.

Look at the chart here. You know, if we were talking about 2000, it was only 31 percent. And then you look at 2018, it's up at 60 plus percent. So when people saw the states doing it and they saw absolutely no problem, you know, in every state. And I think what people will see next is that's a gallopul. That's a gallopul. Yeah. So it's increased dramatically MDMA, cellosybum, and some of these other plant-based medicines ayahuasca are next. And they're doing studies on them now.

I don't want to take away from how important this is for all the people from this will positively impact. I just want to talk about the schedule change from marijuana. As a parent, one of the things that I'm really, really concerned about is that through this process of legalization, getting access to marijuana has frankly become too easy, particularly for kids. At the same time, I saw a lot of really alarming evidence that the At the same time, I saw a lot of really alarming evidence that the intensity of these marijuana based products have gone, I think it's like five or six times more intense than they grew up. 50 or a hundred, much higher.

Right, so it's no longer this kind of like, you know, do no harm drug that it was 20 years ago. This could be actually David, the way that it's productized today as bad as some of these other narcotics. So in June of this year, the Biden administration basically made this press release that said the FDA is gonna come out with regulations that would cap the amount of nicotine in cigarettes.

And I think that was a really smart move because it basically set the stage to taper nicotine out of cigarettes which would essentially, you know, decapitate it as an addictive product. And I think by thinking about how it's dealt with. What I really hope the administration does is it empowers the FDA. If you're going to legalize it, you need to have expectations around what the intensity of these drugs are. Because if you're delivering drugs, OTC, and now any kid can go in at 18 years old and buy them, which means that 18-year-olds are going to buy them for 16-year-olds, 16-year-olds are going to get fake IDs to buy them for themselves. You need to do a better job so that parents, you're helping parents do our job. Here's what you need. So, shouldn't it be 21 like alcohol? If alcohol is 21 then...

Of course, yeah. Fine, but even alcohol, David, you know that there are, we know what the intensity of these are. There are labels and there's warnings and you know the difference between beer versus wine versus hard alcohol. But let me just give you some statistics here, Tramoff. If you think about the cannabis in the 90s and prior to that, there were a ton of studies on this in Colorado. The THC content was less than 2%. And then in 2017, we were talking about, you know, things going up to 17 to 28% for

specific strains. So they have been building strains like Girl Scout cookies, etc. that have just increased and increased. And then there are things like shards and obviously edibles, you can create whatever intensity you want. So you have this incredible variation. You could have an edible that's got one milligram of THC. You got one that has a hundred,

or you could have a pack of addibles. And you see this happen on the news all the time. Some kid gets their parents pack or somebody gives one. And the kids don't know. And this dabbing phenomenon combined with a dabbing is like the shards, like this really intense stuff combined with the adibles is really the issue and the labeling of them.

So you gotta be incredibly careful with this. It's not good for kids. It screws up their brains and so yeah, be very careful. I have a zero tolerance policy on this stuff. I don't care if it's illegal, illegal. Like I don't want my kids touching any of this stuff until, it's not for kids, obviously. But we also should not be putting

until they're 35 or 40 and even then I hope they never do it. But I need some help. And I'm not sure I'm the only parent that's asking, you can't have this stuff be available effectively sold like in a convenience store. No, no, that's not going to happen. Where there isn't even labeling, at least like cigarettes are labeled. It's very clear how bad this stuff is for you.

Would you guys have any feedback on the job report or anything? Going away when the AI wins. Well, that's why I brought it up. It's like, we're now going to see a potential situation where jobs go away and a lot of the stuff, like even developers, don't you think freeberg developers are going to start? Development tasks. No, I think it's going to be. Everyone assumes a static lump of work. I think what

happens, particularly in things like developer tools, is the developer can do so much more, and then we generate so much more output. And so the overall productivity goes up, not down. So it's pretty exciting. And remember, like we were talking on the AMA the other night, Adobe Photoshop was a tool for photographers so you didn't have to take the perfect photograph and then print it, you could use the software to improve the quality of your photograph. And I think that that's what we see happening

with all software in the creative process is it helps people do more than they realize they could do before. And that's pretty powerful. And it opens up all these new avenues of interest and things we're not even imagining today. All right, so Scotus is going to hear two cases for section 230. The family of Nohima Gonzalez, a 23-year-old American college student who was killed in an ISIS terrorist attack in Paris back in 2015.

You remember those horrible attacks? Just claiming that YouTube helped and aided an abetted ISIS. The family's argument as YouTube's algorithm was recommending videos that make it that makes it a publisher of content as you know it's section 230, comment carrier. If you make editorial decisions, if you promote certain content you lose your 230 protections in court papers filed in 2016 they said the company quote, no one will permit ISIS to post on YouTube hundreds of radicalizing videos inciting violence, which helped the group recruit, including some who are actually involved in the terrorist

attack. So they have, I made that connection. Well, let's be honest, we can put a pin in this thing because I think it would be shocking to me if this current scotus, all of a sudden, founded in the cockles of their heart to protect big tech. I mean, they've dismantled a lot of other stuff that I think is a lot more controversial than this. And so, you know, we've basically looked at gun laws, we've looked at affirmative action, we've looked at abortion rights. Sorry.

Well, I mean, I think, as we've said, I think we all know where that die is unfortunately going to get cast. So to me, it just seems like this could be an interesting case where it's actually 90 in favor for completely different sets of reasons. I mean, if you think of the liberal left part of the court, they have their own reasons for saying that there are 230 protections for big tech. And if you look at the far right, or the right-leaning parts members of this of SCOTUS, they have another set of different reasons.

So you think you're going to make a political decision, not illegal? No, but even in their politics, they actually end up in the same place. They both don't want the protections, but for different reasons. So there is a reasonable outcome here where, you know, Roberts is going to have a really interesting time trying to pick who writes the majority opinion. There was a related case in the Fifth Circuit in Texas where do you guys see this Fifth Circuit decision where Texas passed a law imposing common carrier restrictions on social media companies. The idea being that social media companies need to operate

like phone companies and they can't just arbitrarily deny you service or it's not you access to the platform. And the argument why previously that had been viewed actually is unconstitutional was this idea of compelled speech that you can't compel a corporation to support speech that they don't want to because I was a violation of their own first amendment rights. And what the first, the fifth circuit said is no, that doesn't make any sense.

Facebook or Twitter can still advocate for whatever speech they want as a corporation, but as a platform, they, if Texas requires them to not discriminate against people on the basis of viewpoint, then Texas has the right to impose that because that doesn't, their quote was, that does not chill speech if anything it chills censorship. So it doesn't work. What's the right legal decision here in your mind? Putting aside politics, if you can, for a moment, putting on your legal hat. What is the right thing for society? What is the right legal issue around section 230? Specifically in the YouTube case, and just generally

should we look at YouTube, should we look at a blogging platform like Medium or Blogger, Twitter, should we look at those as common carrier, and they're not responsible for what you publish on them. Obviously, they have to take stuff down if it breaks our terms of service, et cetera, or if it's illegal. I've made the case before that I do think that common carrier requirements should apply on some level of the stack to protect the rights of ordinary Americans to have their speech in the face of these giant monopolies, which could otherwise de-platform them for arbitrary reasons.

Just to explain this a little bit. Historically, there is always a debate between so-called positive rights and negative rights. So, where the United States start off as a country was with this idea of negative rights. That what a right meant is that you'd be protected from the government taking some action against you. And if you look at the bill of rights, the original rights, they're all about protecting the citizen against an intrusion on their liberty by a state or by the federal government.

In other words, Congress will make no law. It was always a restriction. So the right was negative. It wasn't sort of positively forced. And then with the progressive era, you started seeing more progressive rights. Like, for example, American citizenship have the right to health care. Right? That's not protecting you from the government. That's saying that the government can be used to give you a right that you didn't otherwise have. And so, that was sort of the big progressive revolution. My take on it is, I actually think that the problem we have in our society right now is

that free speech is only a negative right. It's not a positive right. I think it actually needs to be a positive right. I'm embracing a more progressive version of rights, but on behalf of sort of this original negative right. So, and the reason is, because the to town square got privatized, right? I mean, you used to be able to go anywhere in this country, there'd be a multiplicity of town squares. Anyone could pull out their soap box, draw a crowd, they could listen. That's not how speech occurs anymore. It's not on public land or public spaces. The way that speech, political speech especially occurs today is in

these giant social networks that have giant network effects and are basically monopolies. So if you don't protect the right to free speech in a positive way, it no longer exists. So you not only believe that YouTube should keep its section 230. You believe that YouTube shouldn't be able to de-platform as a private company. You know, Alex Jones has about one example. They should have their free speech rights, and we should lean on that side of forcing YouTube to put Alex Jones or Twitter to put Trump back on the platform. So that's your position.

I'm not saying that the Constitution requires YouTube to do anything. What I'm saying is that if a state like Texas or if the federal government wants to pass a law saying that YouTube, if you are say of a certain size, your associate network of a certain size, your monopoly, network effects, I wouldn't necessarily apply this to all the little guys. But for those big monopolies, we know who they are. If the federal government or a state wanted to say that they are required to be a common carrier and they cannot discriminate against certain viewpoints, I think the government

should be allowed to do that because it furthers a positive right. Historically, they've not been able to do that because of this idea, because this idea of compelled speech, meaning that it would infringe on YouTube speech rights. I don't think it would. I mean, Google and YouTube can advocate for whatever positions they want. They can produce whatever content they want. But the point that, and I think Section 230 kind of makes this point as well, is that they are platforms, they're distribution platforms, they're not publishers.

So if they want, so especially if they want section 230 protection, they should not be engaging a viewpoint discrimination. Okay, so now there is a rub here. Can I just say, can I just say, your explanation, David, your explanation that you just gave before was so excellent. Thank you. That, it allows me to understand it even more clearly. That was really so.

So, Trimoff, do you think the algorithm is an act of editorial lasations? Yes, yes, yes, yes. And so then, should YouTube, look, to the end of the day, let me, let me break down an algorithm for you. Okay, effectively, it is a mathematical equation of variables and weights. An editor 50 years ago was somebody who had that equation of variables and weights in his or her mind. Okay. And so all we did was we translated, again, this multimodal model that was in somebody's brain into a model that's mathematical, that sits in code.

You're talking about the front page and I think, and I think, and I think it's a fake leaf to say that because there is not an individual person who writes point two in front of this one variable and point eight in front of the other, that all of a sudden that this isn't editorial decision making is wrong. We need to understand the current moment in which we live, which is that these computers are thinking actively for us. They're providing this computationally intensive decision-making and reasoning. And I think it's pretty ridiculous to assume that that isn't true. That's why when you go to Google and you search for Michael Jordan,

we know what the right Michael Jordan is because it's reasoned. There is an algorithm that is doing that. It's making an editorial decision around what the right answer is. They have deemed it to be right. And that is just true. And so I think we need to acknowledge that because I think it allows us, at least to be in a position, to rewrite these laws through the lens of the 21st century. And we need to update our understanding for how the world works today.

And you know, Chimap, there's such an easy way to do this. If you're TikTok, if you're YouTube, if you want section 230, if you want to have common carrier and not be responsible for what's there, when a user signs up, it should give them the option. Would you like to turn on an algorithm? Here are a series of algorithms which you could turn on. You could bring your own algorithm, you could write your own algorithm

with a bunch of sliders, or here are ones that other users and services provide like an app store. So you, Chimoff, could pick one for your family, your kids, that would be, I want one that's leaning towards education and takes out conspiracy theories, takes out cannabis shoes, takes out this one.

It's a wonderful, what you're saying is so wonderful, because for example, this organization commonsense media, I love that website. Every time I put in a movie, I put commonsense media to decide if we should watch it. Or like, I use it a lot for apps because they're pretty good at just telling you which apps are reasonable and unreasonable.

But if commonsense media could raise a little bit more money and create an algorithm that would help filter stories and TikTok for my kids, I'd be more likely to give my kids TikTok when they turn 14. Right now, I know that they're gonna sneak it by going to YouTube and looking at YouTube shorts and all these other things

because I cannot control that algorithm. And it does worry me what kind of content that they're getting access to. And you could do this, by the way, Jamoth, on the operating system level or on the router level in your house. You could say, I want the common sense algorithm. I will pay $25 a month, $100 a year for it. Put it on your router.

And then any IP that goes through it would be programmed properly. I want less violence. I want less sex, you know, whatever. I think we are as a society sophisticated enough now to have these controls. And so I think we need them. And so I think we do need to have the right observation of the current state of play.

Friedberg, where do you sit on this? Do you think the algorithm should be I don't have to I don't know. I don't know. Are you out of 230? Yeah, I don't fully agree with sex on the monopolistic assumption. I think that there are impact. I think that there are other places to access content and I think that there is still a free market to compete. And it is possible to compete. I think that we saw this happen with TikTok. We saw it happen with TikTok. We saw it happen with Instagram. We saw it happen with YouTube competing against Google video

and Microsoft video prior to that. There has been a very significant battle for the attention of kind of being the next gen of media businesses. And we have seen Spotify compete and we're seeing Spotify continue to be challenged by emerging competitors. So I don't buy the assumption that these are built in monopolies and therefore it allows

some regulatory process to come in and say, hey, free speech needs to be actively enforced because they're monopolies. This isn't like when utilities laid power lines and sewer lines and trains across the country and they had a physical monopoly on being able to access and move goods and services. The internet is still, thank God, knock on wood open, and the ability for anyone to build a competing service is still possible. And there is a lot of money that would love to disrupt these businesses that is actively doing it. And I think every day, look at how big TikTok has gotten. It is bigger than YouTube almost, or we'll be soon.

And there is a competition that happens. And because of that competition, I think that the market will ultimately choose where they want to get their content from and how they want to consume it. And I don't think that the government should play a role. So, Act for a bottle to that, you buy that? Well, so not all these companies are monopolies

But I think they acted in a monopolistic way with respect to restricting free speech Which is they act as a cartel they all share like best practices with each other on how to restrict speech And we saw the the watershed here was there when Trump was thrown off first Twitter made the decision You know Jack I don't even know Jack it was Jack, but basically the company. Jack said it wasn't him, actually. He said it was the woman who was running it specifically. Yeah, Jack played as a person. She got a death test for that.

Yeah, Jack actually said it was a mistake, but any event, Twitter did it first, and then all the other companies followed suit. I mean, even like Pinterest and Octa and Snapchat, like officially, Facebook, YouTube, everybody. Yeah, but Trump was actually on Facebook. He wasn't on all these other companies. They still threw him off.

So they all copy each other. And Jack actually said that in his comments where he said it was a mistake. He said he didn't realize the way in which Twitter's action would actually cascade. He said that he thought originally that the action was okay because it was just Twitter deciding to take away Trump's right

to free speech, but he could still go to all these other companies and then all these other companies basically, you know, they're all subject to the same political forces. The leadership of these companies are all sort of, they all drink from the same monocultural found. They all have the same political biases. The polls show this. So the problem of Freeberg is, yeah, I agree, a bunch of these companies aren't quite monopolies, but they all act the same way. I hate to say it, but I agree with you. Exactly.

I'm a great collective effect of a speech cartel. So the question is, how do you protect the rights of Americans to free speech in the face of a speech cartel that wants to basically block them? Go ahead, Freeberg, respond. Here's my argument. My argument is that these are not public service providers,

they're private service providers, and the market is telling them what to do. The market is saying, and I think that the pressure, I think that the pressure that was felt by these folks was that so many consumers were pissed off that they were letting Trump rail on, or they were pissed off about Janskiks, or they were pissed off about whatever, whatever the current fat is, the trend is, they respond to the market and they say, you know what, this is cross the line. And this was the case on public television when nudity came out and they're like, okay, you know what, we need to take that off the TV.

We need to, because the market is telling us they're going to boycott us. And I think that there's a market pressure here that we're ignoring that is actually pretty relevant that as a private service provider,, they're going to lose half their audience because people are pissed about one or two pieces of content showing up, that they're acting in the best interests of their shareholders and in the best interests of their platform. They're not acting as a public service. Look, I love market forces as much as the next libertarian. But I just think fundamentally that's just not what's going on here. This has nothing to do with market forces, has everything to do with political forces.

That's what's driving this. Look, do you think the average consumer, the average user of PayPal, is demanding that they engage in all of these restrictive policies, throwing off all these accounts, who have the wrong viewpoints? No, that's nothing to do with this. It has to do with the vocal minority.

I think it's a small number of people who are political activists who work at these companies and create pressure from below. It's also the people from outside, the actress who create these boycott campaigns and pressure from outside. And then it's basically people on Capitol Hill who have the same ideology who basically create threats from above. These companies are under enormous pressure from above below and sideways.

And it's 100% political. Hold on, it's not about maximizing profits. I think it's about maximizing political outcomes. Yeah, I don't know if that is what the American people need to be protected from. Now, I will add one nuance to my theory though, which is, I'm not sure what level of the stack we should declare to be common carrier.

So in other words, you may be right actually that at the level of YouTube or Twitter or Facebook, maybe we shouldn't make them common carrier and I'll tell you why because just to take the other side of the argument for a second, which is, you know, if you don't, because those companies do have legitimate reasons to take down some content. I don't like the way they do it, but I do not wanna see bots on there, I do not wanna see fake accounts, and I actually don't wanna see truly hateful speech

or harassment. And the problem is, I do worry that if you subject them to common carrier, they won't actually be able to engage in, let's say, legitimate curation of their social networks. Yeah, right. However, so there is a real debate to be had there and it's going to be messy. But I think there's one level of the stack below that, which is at the level of pipes, like

an AWS, like a cloud flare, like a PayPal, like the ISPs, like the banks. They are not doing any content moderation or they have no legitimate reason to be doing content moderation. None of those companies should legitimate reason to be doing content moderation. None of those companies should be allowed to engage in viewpoint discrimination. We have a problem right now where American citizens are being denied access to payment rails. So wait, hold on.

And to the banking system. You're saying AWS shouldn't be able to deny service to the Clue-Clux clan or some hate speech room? I think that they should be under the same requirements of the phone company's under. Okay. So the question is like look I could frame the same question to you. Should you know such a horrible group should such a horrible group you'll get a phone account right? Yeah. No, no, no, they should get anything but they have that right. That has been litigated and that's been pretty much

protected by the Supreme Court. Even if it's a government conferred monopoly, the Supreme Court has said, okay, listen, like, it's not violating one's constitutional right. For example, if your water bill gets terminated without you getting due process, and the inverse is also true. So, for whether we like it or not, that that Jason, that issue has been litigated, I think, I think, I think for me, again, just like practically speaking for the functioning of civil society, I think it's very important for us to now introduce this idea of algorithmic

choice. And I don't think that that will happen in the absence of us rewriting section 230 in a more intelligent way. I don't know whether this specific case creates enough standing for us to do all of that. But I think it's an important thing that we have to revisit as a society because Jason what you described as having a breadth of algorithmic choices over time, where there are purveyors and sellers. Could you imagine that's not a job or a company that the four of us would ever have imagined could be possible five years ago, but maybe there should be an economy of algorithms and there are these really great algorithms that one would want to pay a subscription for because

one believes in the quality of what it gives you. We should have that choice and I think it's an important set of choices that will allow actually YouTube as an example to operate more safely as a platform. Because it can say, listen, I've created this set of abstractions. You can plug in all sorts of algorithms. There's a default algorithm that works, but then there's a marketplace of algorithms, just like there's a marketplace of ideas. I don't discriminate and let people choose. This is the key thing to this model. Like, if it was on a blockchain,

if all the videos, all the video content was uploaded to a public blockchain and then distributed on distributed computing system, then your ability to search and use that media would be a function of a service provider you're willing to pay for that provides the best service experience. And by the way, this is also why I think over time to kind of, sax and I are both arguing both sides a little bit, but I

think that what will happen, I don't think that the government should come in and regulate these guys and tell them that they can't take stuff down and whatnot. I really don't like the precedent it sets, period. I also think that it's a terrible idea for YouTube and Twitter to take stuff period. I also think that it's a terrible idea for YouTube and Twitter to take this stuff down. And I think that there's an incredibly difficult balance that they're gonna have to find because if they do this, as we're seeing right now,

the quality of the experience for a set of users declines and they will find somewhere else and a market will develop for something else to compete effectively against them. And so that's why I don't like the government intervening because I want to see a better product emerge when the big company makes some stupid mistake and does a bad job and then the market will find a better outcome. And it's messy in the middle.

And as soon as you do government intervention on these things and tell them what they can and can't take down, I really do think that over time you will limit the user experience to what is possible if you allow the free market. And this is where the industry needs to police itself. If you look at the movie industry with the MPAA and Indiana Jones and the temple of doom, they came out with the PG 13 rating specifically for things that were a little too edgy for PG. This is where our industry could get ahead of this. They could give algorithmic choice and algorithmic app store. And if you look at the original send,

it was these lifetime bands. Like Trump should not have been given a lifetime band. They should have given them one year band. They should have had a process and- What is it over-reached? We wouldn't be in this position where it is so vitriol. Jason, when you talk about- When you talk about like having an industry consortium like the MPAA,

what you're doing is formalizing the communication that's already taking place, it's already happening between these companies, and what is the result of that communication? They all standardize on overly restrictive policies because they all share the same political bias. No, but if they did it correctly, it's all in the execution sacks. It has to be executed properly like the Mewving Initiative. No, no. It doesn't matter.

You'll end up with the same problem as having the government intervene. If you have the government intervene or private body intervene, any sort of set standard intervention that prevents the market from competing, I disagree with you. I think you can create more competition if the government says, okay, folks, you can have the standard algorithm, but you need to make a simple, abstracted way for somebody else to write some other filtering mechanism and to basically so that users can pick those. Power users. I don't like it.

I don't like it. What the MPA did was, I don't understand why it didn't. Why isn't that more choice? Because that's a product. That's a product company. I don't want to be told how to make my product. Right? If I were not on YouTube.

You have an Algo. You're now saying that there is this distinction of the Algo from the UX, from the data, and my choice might be to create different content libraries. For example, YouTube has YouTube kids, and it's a different content library, and it's a different user interface, and it's a different algorithm, and you're trying to create an abstraction that may not necessarily be natural for the evolution of the product set of that company. I would much rather see them figure it out. That's not a good argument. Again, if you were not a monopoly, I would be more sympathetic. But because like somebody, somebody's feelings would get hurt.

A product manager's feelings would get hurt inside of Google. It's not the reason to not protect free speech. I think you're unnaturally disrupting the product evolution. And I have a plug. That's what happens when you're worth $2 trillion to get over it.

And when you impact a billion people on the planet, when you start having massive impact in society, you have to take some responsibility. And those companies are not taking responsibility. If you're not super, super, super successful, it's this is not gonna affect you. So you're not gonna worry about. You'll see apps off shore and you'll see TikTok

and other things compete because they'll have a better product experience. Because they don't like no one's gonna know. No one's gonna create a new Google because they're down ranking, one to 10 no no no i think they create a new google because they're downranking and i want to ten percent of the search results for free some accountability hold on an ideal world companies like google and so forth would not take sides in political debates to be politically neutral but

they're not you look at all the data around the political meetings that people running these companies and then you look at the actual actions of these companies and they have become fully political, and they've waited into all these political debates, with the result that the American people's rights to speech and to earn have been reduced. You have companies like PayPal,

which are just engaging in retaliation, basically financial retaliation, purely based on what political viewpoints they have. Why? It's not like PayPal needs to be in the business of content creation. Let's continue this conversation. We're not gonna solve it in it.

Call in AMA, as we've been doing a lot of work. If they can get some servers over there, I don't know, maybe see you got to raise some money sacks for this app and get some more servers. All right, listen, for the dictator who needs to hit the loo to do a number two, yes, I am the world's greatest moderator, Friedberg is the Sultan of science,

and David Sacks is the Prince of Peace. See you all next week on episode. Wait, wait, is this 98 or 99? No, it's 99, it's 99. Only one episode left. Wang Ratsky. Get it while less. Enjoy while less.

We're wrapping it up here All right, we'll see you all next time it. I'm the U.S. I'm the queen of kilowatt. I'm going on a leash. What? What? What are we on a leash? I'm going on a leash. Besties are gone. I'm going through.

That's my dog taking a wish. You're driving away. Six. We're going to dog. Oh, man. My ham is the actual meat. We should all just get a room and just have one big hug. George, you could do all this. It's like this sexual tension that we just need to release that out. I have a gesture when we meet me at the place We should all just get a room and just have one big hug or something

Cause it's like this sexual tension that we just need to release that house What you're the big, what you're the purest Big, what you're the purest We need to get mercy I'm going all in I'm going all in I'm going on with it!