All-In with Chamath, Jason, Sacks & Friedberg - Mag 7 sell-off, Wiz rejects Google, UBI, Kamala in, China's nuclear buildout, Sacks responds to PG

Episode Date: July 26, 2024

(0:00) Bestie intros: Nostracanis appears! (3:50) Wiz turns down Google's $23B offer, intends to IPO (13:30) CrowdStrike's rough week (17:51) Market update: Mag 7 sell-off? (22:47) Sam Altman's UBI study was a mixed bag (42:02) Succession IRL: Rupert Murdoch's children are in a legal battle over the future of his media empire (48:35) Biden out, Kamala in: Hot swap complete, speed-run primary subverted (1:03:08) Antisemitism rising, Josh Shapiro as a VP candidate (1:08:37) Sacks responds to smear campaign (1:26:46) Science Corner: China's nuclear buildout Follow the besties: https://twitter.com/chamath https://twitter.com/Jason https://twitter.com/DavidSacks https://twitter.com/friedberg Follow on X: https://twitter.com/theallinpod Follow on Instagram: https://www.instagram.com/theallinpod Follow on TikTok: https://www.tiktok.com/@theallinpod Follow on LinkedIn: https://www.linkedin.com/company/allinpod 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.cnbc.com/2024/07/23/google-wiz-deal-dead.html https://cloudedjudgement.substack.com/p/clouded-judgement-71924-big-tech https://www.cnbc.com/2024/07/12/snowflake-shares-slip-after-att-says-hackers-accessed-data.html https://arstechnica.com/information-technology/2024/07/crowdstrike-blames-testing-bugs-for-security-update-that-took-down-8-5m-windows-pcs https://www.crowdstrike.com/blog/falcon-update-for-windows-hosts-technical-details https://www.cnn.com/2024/07/23/business/delta-flight-cancellations/index.html https://www.google.com/finance/quote/CRWD:NASDAQ https://www.google.com/finance/quote/SPY:NYSEARCA https://www.google.com/finance/quote/TSLA:NASDAQ https://www.cnbc.com/2024/07/23/alphabet-set-to-report-q2-earnings-results-after-the-bell.html https://www.google.com/finance/quote/VIX:INDEXCBOE https://public.websites.umich.edu/~mille/ORUS_Health.pdf https://www.nytimes.com/2024/07/24/business/media/rupert-murdoch-succession-fox.html https://apnews.com/article/fox-news-dominion-lawsuit-trial-trump-2020-0ac71f75acfacc52ea80b3e747fb0afe https://www.nytimes.com/interactive/2024/07/22/us/politics/kamala-harris-democrats-endorsement-list.html https://www.predictit.org/markets/detail/7057/Who-will-win-the-2024-Democratic-presidential-nomination https://thehill.com/homenews/campaign/4790684-kamala-harris-polls-donald-trump-wisconsin https://www.nytimes.com/2024/07/05/us/politics/biden-interview-stephanopoulos-abc.html https://www.politico.com/news/2024/07/03/biden-no-ones-pushing-me-out-00166497 https://www.axios.com/2024/07/23/inside-harris-sprint-democratic-nomination https://www.politico.com/news/2024/07/21/why-biden-dropped-out-00170106 https://apnews.com/article/biden-election-trump-democrats-329071c25dfaaae583b5f06184586267 https://x.com/JoeBiden/status/1815080881981190320 https://x.com/paulg/status/1816334112086712830 https://x.com/paulg/status/1771640321446683060 https://www.sec.gov/files/litigation/admin/2017/33-10429.pdf https://x.com/mwseibel/status/1816542692727488784

Oh, no. Gosh, I'm having some technical difficulties. Free bird. There's something happening. Oh, you got a bit. Oh, breaking in. What's happening? Oh, no, my camera is not working. But I sense something is happening, guys. It's like a transformation. I'm going through. You're not going to believe it. Yes, it is I know Shrek on it. I'm here. I'm here. I'm here, Nostra Canis has arrived. I have predicted the hot swap sacks. Can I get my flowers now, Premier Sacks? You need to bring- Yeah, I give you, I absolutely give you credit for that. You also predicted a speed run primary, which is the opposite of what happened. Okay, well- So one out of two is not bad though.

Nostra Canis did not account for the Democratic Party being run by the deep state. I'm having a vision. Producer Nick, there's a vision for you coming in to view. Yes, your uncle has been bought out of the All In podcast that's going full MAGA. And he got the $ million dollar buyout deal and he gave you 20 percent we're leaving we're going to start a new podcast and Jared Kushner is the new moderator here oh no wait it's JD Val- no it's Alex Jones starting next week Alex Jones the new host oh wait Oh wait, I'm going away. Look at that, Kadi says, be it.

I'm going away. I'm going away. We'll let your winners ride. Rain Man, David Satterson. I'm going away. And as said, we open source it to the fans, and they've just gone crazy with it. Love you guys. Queen of Kin Wands.

I'm going away. All right, let's get started here. We've got a full docket. We've got civil wars. Everything is going down in all inland. It is episode 189. You're not done with us yet, folks. The world's number one podcast is still

publishing. The world is still spinning. Hey, did you announce that you've moved to Texas? I did. I did. I did a little tweet. We moved to Austin a little earlier this year. We have a horse ranch. And we've always wanted to move to Austin. We looked during the pandemic, thanks for asking, Chamath. And we wanted to have a ranch and horses and live a more homesteading lifestyle. And obviously, a lot of our friends are in Austin. So I'll still be spending a lot of time

in the valley in New York, like I always do in Miami. But the home base and the girls are going to school and in Austin. How was it going so far? It's super hot, no, isn't it? Summers are hot. But most people decamp. So we'll decamp for Tahoe or Park City or something during the summer months and the winter months to go skiing and get a little lake time or whatever. And yeah, we're really, really excited. We found an incredible horse farm and we're gonna raise animals and horses

and just enjoy these last years with the girls. While, you know, some big announcements coming in terms of my accelerator and my investing in startups in Austin. So I'll save those announcements for maybe the fourth quarter. Some big announcements will happen. And yeah, I'm just super excited about this. I'm going to miss the weekly poker game, but I will be back on the regular and we'll just do a double second play Friday, Saturdays. You got to get this for two days in a row. We'll just do a full Friday session.

Everybody take my Fridays. I'm sad to see you go. The one thing I'm sad about is like missing the Thursday game, but I'll be back regular. Don't forget Science Corner today. We got a great Science Corner lined up. Absolutely, absolutely.

Sax is looking forward to it. Sax has been texting me all week about it. He's like, I can't wait for Science Corner. I'm thrilled. He was shaking nervously. He's like, I can't wait for science corner. Thrilled he was shaking nervously. He's ready. Sax does not look amused. All right, let's get started. Wiz has declined Google's $23 billion offer and it intends to IPO. Some big news there. Last week, we talked about Google offering

to acquire this cloud security startup for 23 billion CNBC report. Wiz declined Google's offer. Wow, that's big time because whiz was valued at 12 billion in its most recent funding round. They've got about 500 million in ARR. So this $23 billion is a massive, massive 50 times current revenue 23 or so times. forward looking revenue, they think they'll hit a million a billion in ARR. This is a company that was founded in 2020. And just so if you don't know what they do, they help people secure their data in clouds like AWS, Azure, Google Cloud, all that good stuff. But high growth SaaS businesses are trading at a 10x forward revenue multiple,

there's the chart. This is obviously an absurd premium. And two potential reasons that I can think of and I'm curious your positions gentlemen, of why they would do this. I guess Chamath, there's two reasons one, they think they can grow this company at a high percentage, maybe fill in that premium Google was willing to pay. Or maybe they're scared that they can't get this deal through. You know, regulators, what's your take here? And then we'll go talk about the wider cloud, and Google Cloud and AWS in a moment. But what's your initial take here of why they would do this?

I actually wonder whether this deal would have had more probability of happening had the whole AT&T snowflake leak not happened. Because I think that when you have moments like this, there's a non-trivial possibility that it supercharges sales even more. I think the reality is that if you're a hyperscaler, so if you're Amazon or Google or Microsoft, your business is pretty fragile and brittle if the services you provide or the services that third parties like Snowflake provide through you are not reliable. And so I've never heard of a business that has generated so much ARR so quickly. I mean, from zero to half a billion dollars in four or five years.

I mean, how do you even build the product surface area quick enough to capture that much revenue? I think it just goes to show you how bad security is in the cloud and how needed it is. So it doesn't surprise me that Google wouldn't buy something like this. I think Amazon and Microsoft would probably want something like it as well. I suspect that if you had to guess why they said no, is because they thought that they could grow revenue much faster because of recent events, as well as their own just natural momentum.

And I think that if this thing had not happened, I wonder whether they wouldn't have just sold. All right, Sax, I want to get your take on this after showing you a couple of charts here. Google's cloud revenue growth has been absolutely stunning. Here is a chart. They're going to hit, gosh, in the first half they did almost 20 billion. So they're on a run rate of $40 billion this year. Last year they did 33. Back in 2017, he only did four. And if you compare this to Amazon's AWS, again, these are cloud services. People can buy, compute in the cloud. AWS, if you look at those first seven years, the crack all in research team put these side by side. Google is tracking almost identical in revenue to

AWS is interestingly meta and Apple do not have a competitor here. You said on this podcast chamoff I think last year, that would be a pretty bold move by Apple to have a cloud computing platform since they have all the app developers. Sax, what do you think of this just tremendous run by Google Cloud, also known as GCP in the industry? Well, all the cloud service providers are doing extremely well. I mean, cloud is still the future of software and the cloud service providers are still growing really strongly.

On Wiz, I think the most likely explanation is that they just want to keep building this as a standalone company. I think they're probably also worried that they can't get the deal through. The multiples that we have right now are not that insane. I mean, I think the long-term median software multiple is around a seven. So you see here the mid-growth median 7.7. We're about tracking at the historical pre-COVID mean. And we had that really frothy, bubbly period in 2020 and 2021 and that's

clearly over. Now, in terms of how our friends at Altimeter break this down, I think that high growth means a 30% or greater growth rate. And then I think the mid-tier is more like, what is it, like 10 or 15% to 30%. And then the low growth is like, you know, like under 10. Yeah. So my point is if WIZ is growing at- 100%.

100%. I mean, I don't know if it's still growing at 100%, but I mean, I guess they're projecting- Even 50%, yeah, would be. Yeah, they're projecting a billion in ARR next year up from, what is it, roughly 500. Like, that offer may not be that crazy. Again, you know, you're getting 10 times at a 30% average growth rate. So, you know, let's say they get to a billion in ARR next year, and then they're forecasting, you know, whatever it is the year after, you know, the

23 may be reasonable. So I can see why these guys would just want to go for it if they think they're building a big standalone company. Freberg, let's talk a little, since you were a Googler at some point, this GCP product, maybe you could tell us a little bit about, and I know you know some of the people running it, how meaningful this is becoming to Google or how much of a priority it is YouTube, obviously, Android priorities there at the company, they have like the next year down, Nest, Waymo, you know, some of those other projects, but but how important is GCP right now to Google?

Well, GCP in the last quarter did 10.3 billion in revenue, which is up from 8 billion in revenue the year before the same So, you know, if you kind of think about what cloud margin should be over time and kind of call it 20 to 30% margin, this cloud business could be generating $20 to $30 billion a year free cash flow. Now, in the last year, the last quarter, the last quarter, the last quarter, the last quarter, the last quarter, the last quarter, the last quarter, the last quarter, the last quarter, the last quarter, the last quarter, the last quarter, the last quarter, the last quarter, the last quarter, kind of call it 20 to 30% margin, this cloud business could be generating 20 to 30 billion

dollars a year of free cash flow. Now, in the last year, if you kind of look at, or even if you look at the last quarter annualized, Google is generating currently about 60 billion dollars a year in free cash flow as an overall organization, Alphabet is. And they have over $100 billion in cash. So, what can I do to accelerate this cloud outcome, given the risks, the challenges, the slowdown with respect to the core consumer business? Cloud and AI-based tools really is where it's at. And so Google's asking this important strategic question, I would imagine, what can we do to accelerate outcomes in the cloud? And what can we do that is gonna be big enough to matter? And what can we do that is gonna pass antitrust muster?

So we can actually get it through antitrust authorities. So cloud security kind of comes top of mind. It's a fast growing segment as evidenced by the results with with WIS. And it's an opportunity for Google to cross-sell and to secure more enterprise customers and theoretically cross-sell more enterprise revenue by getting folks on a platform that Google could now offer.

I would imagine that what Sachs is saying is probably right. I have absolutely no sense of what these individuals and board members at Wiz are thinking. But I think what Sachs is saying is right. This is an incredibly fast growing business. Peter Thiel made the comment once, which I think is totally right. Either the buyer pays way too much, or the seller sells way too early. When you have a fast growing business like this, it's really an important question to kind of acknowledge that if whiz continues to grow at this rate, it's conceivable they could be in the range of a Palo Alto Network's $100 billion market cap in a couple of years, you know, given this momentum and

if you progress it forward. So if I was them, I would ask that question, could we reach 100 billion if we feel reasonably confident? This may be a risk worth taking. And what's the downside, right? The downside is they go public next year anyway, and maybe they're only valued at 15 billion or 20 billion. And so I think you could see them perhaps looking at some public M&A in the same space. And so I think that's a good way to look at it. And I think that's a good way to look at it. And I think that's a good way to look at it. And I think that's a good way to look at it.

And I think that's a good way to look at it. And I think that's a good way to look at it. And I think that's a good way to look at it. And I think that's a good way to look at it. And I think that's a good way to look at it. And I think that's a good way to look at it. And I think that's a good way to look at it. And I think that's a good going to look for other sizable transactions that will pass antitrust muster. And so I think you could see them perhaps looking at some public M&A in the same space.

And I wouldn't be surprised to see them start to get active in that sense. YouTube and GCP are the two money printing machines inside the organization that have actually paid off. Android's paid off in terms of dumping more search from the default search buttons or boxes. But I guess the, to steal man, the other side, if you're on the board and you want your cash, you know, you get a hundred percent of it, you take no risk. And what if Google decides they're going to make this product free and bundle it as we saw Microsoft do in a number of cases,

and they just Microsoft teams this or internet explorer it. I guess that would be the risk is if Google feels some vendetta here and puts this product out for free. As you alluded to Chamath, it was a big week for cybersecurity crowd strike. Had a really rough week last week when they knocked out eight and a half million Windows machines. Just to briefly explain what happened here. Obviously, Wiz is cybersecurity, so is CrowdStrike. CrowdStrike, instead of working on data sets in the cloud, they work on securing your laptop, your desktop, your servers, all that kind of stuff for threats. And they did an update.

And when they did their update, a sensor configuration update, as they called it, to Windows machines, they basically bricked them. And this wasn't a cyber attack. They were a cybersecurity machines. They basically brick them. And this wasn't a cyber attack. They're a cybersecurity company. They weren't attacked. They updated it and it crashed all these machines. And these machines all needed to have a hard reset by IT. It wasn't something that could just be field swapped. Apparently people had to go back to their offices. In some cases, Delta was hit hardest. They canceled over 6,000 flights. And there's a Department of Transportation

investigation going on now. Shares are down 25% since Friday. So that represents $24 billion in market cap. CrowdStrike CEO has been clowned for his apology and explanation. And the good news though, is they sent everybody an Uber Eats gift card. So I'm super happy about that.

Shamad Sachs, looking at this in dovetailing with the last story. This is going to be an ongoing story and one of the big trends in our industry. Yeah. Major outages like this. I think the reality is that that code is still really brittle and there's gaping holes everywhere. that code is still really brittle and there's gaping holes everywhere. And I suspect that the reason why foreign adversaries

don't hack us is because we could hack them back. And so I think it's almost like a mutually assured destruction is the only reason why these things stay up every day. So at some point we're gonna write better code. Maybe these AI agents will do it and there won't be like memory leaks and all this other random stuff. But in the meantime, I think you just have to assume that everybody

will get access to all of your information and that eventually everything is hacked and everything is leaked. Yeah, and act accordingly. And act accordingly. Yeah. Assume every, the worst conversation you ever had on social media or on DMs is going to come out. All right. I think we've kind of finished this one.

Anybody have any thoughts on this CrowdStrike thing? Seems like it's over now. I don't have a lot to say about them except actually this is that that company has some murky connections to the deep state. Oh, really? Yeah. Well, apparently they're- CrowdStrike.

Yeah. Their fingerprints were all over, you know, Hillary's bleach server. Then there's been other reports, which I don't know exactly what to make of. I can say this that in the wake of this, Elon announced that he was removing CrowdStrike from any of his company's servers. Similarly, I had my IT department check and make sure that we didn't have it running anywhere and we don't. I'm just going to be frank.

I don't trust this company. All right, there you have it. Deep state tinfoil hat. Deep state. Deep state acquisition. I forgot you believe what you want. I don't. There's a first time hearing about it. I don't have my tinfoil hat here. I guess. If you want to.

They have it folks. And Sax is as puts his endorsement behind Palantir. Definitely not Deep State Palantir. Look, there's no question that Palantir sells into the Deep State. But I don't know that that makes it Deep State. Well, they're on your team as opposed to the other team. No, hold on. I'm not on any team in respect. I don't understand what you're saying there. I'm just goofing. I have shares in the company. I think it's a good investment.

Okay. There you have it. All right. Let's go to the stock market. He just had his first basis. I got to get a two-poil hat for a bit here. One thing I want to say, none of us are at any risk of running Palantir on our servers. Absolutely. CrowdStrike is running in the background of many, many companies who may not even be fully aware of it. And they were certainly surprised when all those airlines computers went down. So my only point is maybe you should make sure about whether you're running their products or not, and then make a conscious decision whether you think that's a good idea. That's all. That's all.

Just a little tip from the more you know from David. Jake, move on. I'm trying. I'm trying. The stock market just had its worst day since 2020 on Wednesday. Clearly this is because of the January 6th insurrection, the NASDAQ, which is the most tech, I'm joking, the NASDAQ, which is the most tech heavy fell 3.6% S&P down 2.3%. A bunch of the magnificent seven companies were in the red, but you got to put this in context NASDAQ and S&P still up around 15% for the first half of the year. Record setting

territory. Obviously that holds up or increases. There's a lot of theories about this, that people are rotating under the max seven tech stocks, which were a place that maybe got a little overheated with the AI bubble. Here's the top gainers that are not in the max seven. As you can see, financials, energy materials over the last six months, S and P financials up 11 S and P energy nine SP materials, 9% as well broader index up 11. As we said, Tesla dropped 12% after missing on earnings, but they had a massive run up earlier this year. Google dropped 5%. I guess YouTube was

what most people pointed to their revenue came in lower than expected. So maybe some softness in the advertising market, which would then correlate with consumers, Nvidia down 7%, Meta down 6%. Chamath, any thoughts here on what we're saying? You talked a lot about the consumer weakening on an episode about six weeks ago, I believe. So is this just the manifestation of that prediction you made? you made? Not this specific thing. I think that when you see a broad base set of revenue misses, that that will kind of mean that the consumer is really under pressure. I think I still think that that's more in the fall. But we're headed in that direction. I think what happened here is that the market is just priced to perfection. And all of a sudden, we had all kinds of volatility. You had the former president almost assassinated, you have the current sitting president resign, you have a somewhat convoluted process to pick who replaced him that at a minimum was opaque.

And all of these things create doubt and anxiety in the people that own financial assets. And so if you saw the volatility index, the VIX, that has spiked. And so whenever you see that stuff happen, people go risk off, right? And when you go risk off, what do you sell? You sell the things that are deepest in the money where you think that they probably don't have

that much more room to run. And that was the MAG-7. And so what you actually saw was a huge rotation out of those companies into everything but those seven names. And I think that that's a pretty reasonable thing to do. So I think we're in the part of the cycle where people are getting a little bit more sober and risk managing. We're also in the middle of the summer where a lot more vacation is taken, which how it manifests is that people tend to be, frankly, more risk off and be more liquid because a lot of people are in and out of the office.

And I think the real setup is for what happens in September. Maybe there's a cut, which will help. Maybe there isn't, which won't help. And then the whole consumer cycle, the consumer credit cycle. That doesn't look good, to be honest. And so I think the fall is going to be complicated. Yeah, absolutely. What an eventful week on a political front. We'll get towards that in a moment. But Freiburg, your thoughts here, is it just people trimming their perfect positions and maybe a dispersion going out, people wanting to own some other assets that maybe have been

undervalued in this market cycle. No, I think it's definitely this mini AI bubble deflating a bit. And transactions are, let me get out of some of these high multiple tech stocks that are expected to grow rapidly, gets of AI, and shift more into stable market recovery, interest rates are going to get cut, type trades that will benefit there. So I think it's just a rebalancing. And as a result of the high concentration of the MAG7 and the S&P, and in the Qs, the indices look like they're coming down. But yeah, there's obviously a lot of complexity in what's going on in the economy right now.

But I do think that that's been a big trade for PMs for portfolio managers over the last couple of weeks. Makes sense. Yes, Sacks, if you owned a bunch of Nvidia and it ran up Meta, Google, Apple, other companies that ran way up, you might want to trim your position here and deploy capital and balance things out. Yeah. Sure.

I just don't want to overreact or over read into one day in the market. I mean, today's up yesterday was down. It's these are blips in the grand scheme of things. Even a two to 3% move is not that unusual. Yeah. Especially given the context, but definitely something worth keeping an eye on is what the earnings reports will say for Q3 and Q4. And those will come out towards the end of the year. Okay, some interesting news. Sam Altman did a UBI experiment a couple of years ago. He put 14 of the $60 million into this experiment that was done by a firm called Open Research.

That's a nonprofit group that was founded in 2015 out of an accelerator called Y Combinator. First, I'm hearing of that one. Well, here's the experiment they did. This took place between November of 2020, October of 2023, 3000 low income adults in Texas and Illinois, making just under $30,000 a year on average, were selected 1000 participants received $1,000 a month for three years. So on top of the $30,000, they got $12,000 a year tax free. So that's nearly a 50% pay increase for doing no more work.

2,000 control participants received $50 per month over the same period. And the research collected and studied a bunch of data. They did blood draws to do a health impact, they had a custom app that tracked time usage, work, play, etc. And they checked everybody's credit reports and bank balances. So broadly speaking, the research found almost no lasting impact on everything they tested from overall health to work to

education. And here are the quotes directly from the paper and I'll get the gentleman's take on this UBI, super fascinating obviously. The cash transfer resulted in large but short-lived improvements in stress and food security. We find no effect of the transfer across several measures of physical health. We also find that the transfer did not improve mental health

after the first year. And by year two, we can, again, reject very small improvements. Final quote, we also find precise null effects on self-reported access to health care, physical activity, and sleep. I find this so fascinating and reinforces a bunch of intuition that I think we would probably all have. Have you guys seen these studies where when somebody has an amputation or they get paralyzed, they study their free levels of happiness, their interim level of happiness and then they just kind of mean revert to their natural state of happiness independent of what physical calamity they may have gone through. And I, when you were

talking about it, J. Cal, I was reacting in the same way, which is in the absence of, I think, purpose and community, I think children in many cases, it just doesn't meaningfully shift any of these curves that really matter. I think your happiness levels mean revert, I think your health levels mean revert. So your happiness levels mean revert, I think your health levels mean revert. So it's great to kind of confirm, at least my intuition, which is that UBI is a wonderful idea that I think doesn't really understand how humans are both

motivated and wired. Freeberg, your thoughts? Yeah, so I definitely agree. I think I've talked about this. We talked a little bit about it with Jonathan height. There's some great studies that have shown in the past that the change in income is a better predictor of happiness than absolute income. Eventually, everything normalizes. So I think UBI makes no sense for three reasons. The first is

this normalization of spending level. So once you've kind of had this increase, you have a moment of happiness. And then you actually start spending differently or spending more. And effectively, every human has one innate trait, desire. And desire is what drives humanity, it's what drives progress, it's what pushes us forward, because no matter what our absolute condition, it's our relative condition that matters relative to others, or relative

to ourselves in the past, or prospectively in the future. And so we always want to improve our condition. So a UBI based system basically gives a flat income. So the only way for it to really work is if you increase the income automatically by say 10% a year. So in a UBI world, no amount of money will actually make someone satisfied or meet their minimum thresholds because those minimum thresholds will simply shift. And the second issue is just the net economic effect. If we gave 350 million Americans a

thousand bucks a month, that's $350 billion a month. That's $4 trillion a year. Our prospective budget for next year is $7.3 trillion at the federal level. So you know, that's already more than 50% of the total projected federal budget next year. Finding the mechanism for funding this at scale is not what this study actually looked at. Because if you look at it, the net effect would be inflationary. And that's the third major reason is that ultimately, this would have an inflationary effect. Anytime we've stimulated the economy with outside money, with government-driven money, we see many bubbles emerge and we see an inflationary effect. So look at COVID. There were all these little bubbles that popped up in

the financial markets. We had NFTs, we had crypto, we had all these sort of new places that money found its way to. And then we had an aggregate inflationary effect. Food prices are still up 30, 40% since COVID. And so NetNet, I think that the study provides an interesting insight into the micro effects, the psychological effects, the social effects. But the macro effects are what is so simply arithmetically obvious, which is inflation and an inability to actually fund this at scale. And fundamentally, people want to work. So they'll take that money, and then they'll go find ways to work and generate more money. And you have this inflationary effect. So I think that net UBI does not

make sense. Sachs participants were 5% more likely to start a business by the third year. Maybe that was the most encouraging part of this. People work slightly less 2% decrease in labor participation, but that seems negligible. People in their 20s had a 2% increase in enrolling in post-secondary education. Again, very tiny impact. There were major benefits to stress and mental health in year one, but by year two, as we talked about it, reverted to the baseline. How do you think about UBI in a world where, let's say, I don't know, we lost a large amount of jobs in a short period of time because of AI?

So in that hypothetical situation, and we hit 20 or 25% unemployment from the historic low we're at now, how might you think about UBI? Well, that's positing a future that I don't think is going to happen. At least not anytime soon. That's why I tried to, yeah, that's whyiting a future that I don't think is going to happen. At least in our times, too. That's why I'm trying to give you a hypothetical. Yeah, no, I don't really buy that. And so I think this whole idea of UBI is premature and very expensive.

And it doesn't work. I mean, I think what we saw from the study, just to echo what Friedberg said, is that cash transfers don't work. We saw this in the Great Society. Just handing people money doesn't solve poverty. It actually traps people in conditions of dependence. We also saw during COVID that all those STEMI checks, it might have had a macro effect in the economy of kind of boosting the economy during what could have been a COVID depression. However, at an individual level,

what did we see? We saw people quitting or quite quitting their jobs. They spent more on leisure, alcohol, and meme stocks. In other words, it wasn't tremendously productive. So I think that what we've seen in the past is just handing people money doesn't create the types of outcomes that people want. And, you know- Is all this virtue signaling, signaling sex is it virtue signaling kinda kinda I'm kind of I mean yeah I think it's I think it's a combination of virtue signaling combined with let's assume that you want to become the first AI trillionaire and people are concerned about job loss you're gonna virtue

signal the direction of well this is let's just give everyone money. And a lot of people in power will love that because it creates a lot of dependence. So it serves the interests of tech moguls and people in the government, but I don't think it serves society. And I think one of the most interesting data points in the study, please confirm if I get this right, but what it said is that the people who got the thousand a month UBI saw their incomes rise to $45,000 on average, while the control group who only got $50 a month increased their average income to 50,000, actually just died at 51,000. So

the people who didn't get the larger stimmie actually genuinely better themselves over the course of the study, while the ones who got the $12,000 a year stayed in place. And that's kind of what you'd expect, right? Which is if you just hand people money without having to work, it doesn't motivate them to work harder. It actually motivates them to do less. Yes. And let's say that you're in a point in your career where you need to learn, you need to get mentorship, you need to advance yourself.

By giving people UBI, you could be kicking out those bottom rungs of the ladder where the work isn't necessarily that fun, but you're picking up very important skills that are going to help you rise up in the ladder. Yeah. Being a cashier, like sending your kids to be a cashier at a restaurant or a bus boy or a waiter, that teaches them a work ethic. I was a dishwasher. I did hard work as a child. I was a bartender. I mean, look, these are all jobs that have dignity. I mean, I think work has dignity and you need people to start somewhere. And if you just give them the STEMI or the UBI,

it demotivates them from starting their careers. And you trap people at this lower level. So I just don't think you're doing anyone any favors by doing this. And I just want to say, you know, my production company is in full swing and we are actually working on a remake of Cheers with David Sacks. Yeah, as the bartender, as the lead character. It's a really great show. Looking at the back of the envelope, Matthew, I had the crack research team take a look at this welfare $1.1 trillion budget in 2023, eight different federal agencies, Medicare, I'm sorry, Medicaid was in there as well. Unemployment, $33 billion paid across 1.8 million participants last year. Food stamp safety, 113 billion. We put all those numbers

together and we've got about a hundred million people participating in these programs in some way for $1.2 trillion per year. This is all back of the envelope. It's imperfect, but that turns out to be about 12K each, which is exactly what the study did. So not perfect math. But that's totally reasonable. I grew up on welfare. And we needed it to make ends meet. And we would have completely fallen through the cracks without it. And so I'm glad that I was able to be raised in a country that has welfare. I guess my question to you, Chamath is, do you think all

these agencies put together, you know, with all this administration and all this complexity, would it be better if we take something from this UBI and maybe consolidating down? No. No. No. Okay. No, because I think like you need to be motivated, as Zach said.

And so even though we got support from, I grew up in Canada, so the Canadian government, there was still an expectation where certain things were not covered and you still had to work and so you had to find motivation to pick yourself up and go out and get a job. And it just so happened that in our situation, even welfare and what my mom made as a housekeeper, and then as a nurse to say it wasn't enough and my dad didn't have a job. So I went and I started working at Burger King. And to Sax's point, it's pretty eye opening when you're 14 years old, and you know, you're working the night shift and people come in after going to the bars, they're drunk, they're puking all over the place. Sometimes you see people that go to your own high school. And it's a little bit embarrassing because you're working while they're going out.

But at the end of the day, it was very motivating. And I think Sax is right, if you take that away from people, I think that you end up with a worse society. I don't think that you have a motivated group of people that want to go and better themselves. I think they just become really lazy. I think it's well stated. And I think the pressure cooker that immigrants are under or you know, people who have tough situations like it can create the diamonds. And man, I do think a

lot of the folks here on this podcast went through that pressure cooker and does create a chip on your shoulder. And when people criticize these entry level jobs, and they're, oh, they're not sustainable. Well, there, we do have a safety net in both countries, Canada and the US. I think the problem is not the entry level job. I think it's the expectation of people. And Friedberg just mentioned this, but what you have is that there is this desire doom loop that we've fallen ourselves into, where what social media does is amplify, in many cases, a fake perception of what your neighbor has that you don't have. And so you're in this constant desire doom loop. So if you go to a job, and you're expected to work for four years, I'm just going to make up a number before you get

promoted. And the perception is that your neighbor is getting promoted after eight months, you're going to be mad, and you're going to be angry angry and you're going to feel like life isn't working out for you. And we have to figure out a way of resetting that back to normal so that you know that that is a lie that is being told to get clicks and likes. And the real truth is, you're going to have to just put your nose down and grind at something to get what you want. And life is not perfect. And it's complicated and it's messy. And we need to do a better job of that. Let me ask you a question, Freberg. If you were going to do a 2.0 of this study, I was thinking about it. Where do you go from here? I just had this idea, well, what if you put half of the money into a perfect portfolio, wealth front, one of those services, and allow people to take out maybe 5% of it every year, some sustainable amounts. So they see, you know, and get some education around that, or maybe put the money into a business formation fund,

people can apply to get grants to, you know, maybe form a business and you kind of reframe how this UBI is distributed with milestones and maybe some education baked into it. That was my thought on where to go next with it. Do you have any thoughts of where you would do a 2.0 test of this or would you just... Well, that's not UBI, right? And what you're describing, I think exists and there are incentives and programs and opportunities out there. People can sign up with Roth IRAs. They can

contribute some percentage of their paycheck to a 401k if they have a job that has a 401k set up for them. There's a lot of systems and mechanisms out there and you get tax breaks for doing that. So there's mechanisms and incentives out there to do that sort of thing. The concept with UBI is can you pay people a flat amount of money so that they don't have to work and then they end up being able to explore and do other things with their life as the robots and AI does

everything for them. And I've just always been of the belief that I don't think that there's this natural border that we hit beyond which humans don't work. I think that AI based tools and automation tools are the same as they've always been. When we developed a tractor, people didn't stop farming. They could get much more leverage using the tractor and farm more and new jobs and new industries emerge. And I expect that the same thing will happen with this next evolution of technology and human progress.

Humans will find ways to create new things, to push themselves forward, to drive things forward. And for the natural market-based incentives that fundamentally are rooted in this internal system of desire, we will create new opportunities that we're not really thinking about. So I don't believe in this idea of UBI and some utopian world where everyone's happy not working and letting machines do everything for them. I think that the fundamental sense of a human is to find purpose and to realize that purpose to drive

themselves forward and progress themselves. And I think that that's always gonna be the case. The closest thing to leisure and leisurely pursuits that we have today in modern society is the Nepo baby. And if you look at the, no, but if you look at the Nepo baby, they're the most miserable group of people I've ever met. They're so unhappy with themselves. And so, and part of it is

because they've only ever lived a life of shout out to Alex Soros. No, I'm not name checking anyone. I'm just saying, when I when I when I observe it, I think that you can see it right in front of you, which is that there's just so much inherent unhappiness. Because you're not motivated to do anything. And then that's amplified typically by guilty parents, because they've been working so hard. And I so I don't think you need to run a second study, a different version of an idea that friend

of the pod Brad Gerstner is working on, which I think deserves a shout out is this idea of giving every kid when they're born a retirement account. And I think that that's an interesting idea, where you give them some amount of money, and it just matures inside of an index fund that gets unlocked for you when that kid is 65 or 70 years old. That's great, because it helps you have a soft landing in retirement. I think that that's very humane and a right thing to do. But it doesn't rob you of that motivation to work in your 20s, 30s, 40s, and 50s.

And that's a much better idea than UBI. And I think, by the way, it's really important to state that UBI can be more of a trap than a benefit. It takes away the opportunity for individuals to progress. Because you no longer have a system that says you progress, you get richly rewarded. It ultimately drives to an outcome where you spend all the money and distribute it equally. So everyone ends up having some sort of stasis. And I don't think that that's really human nature. I do think that systems and government programs

that support people's ability to succeed, to work hard, to work smart, to progress while providing these necessary safety nets is a better solution. There's no right or wrong way. It's just it's a very complicated system that's needed. I don't think that there's like this UBI concept is fairly naive. And I think that you'll see a play out at both a micro and a macro scale as being I think net net negative. So yeah, you know, just wrapping up here so we can get on to the

rest of the very juicy docket we have today, it does seem demotivating to just have money dropping your head. That's why I like my experiment, I was referring to Freiburg, just forcing people not like having these programs that you have to go find out about and have the social capital and fabric around you that you know about small business loans, etc. But hey, these three things are happening to you right now. This money has been put into your account automatically and you can decide

what to do with it and just raising the education level and empowering people is a much better idea. I feel like whatever the education system is schools or whatever, like actually teaching the vocational skills or the skills of how to succeed in the workplace. Like here's how you go get a job. Here's how you build a business. How you start something. Those are the sorts of skills that how to succeed in the workplace. Like, here's how you go get a job, here's how you build a business, here's how you start something. Those are the sorts of skills that are not taught

in the educational system that I think are generally lacking. And then people kind of learn a bunch of history or some algebra or whatever they learn in school and they pop out the other end and it's like, okay, go figure out how to survive, go figure out how to get a job, go figure out how to build a business. To just build on your idea,

we need more healthcare workers. If you paid somebody a thousand dollars a month and you paid for their school for one year to become a nurse, doctor, nurse practitioner, whatever, that would actually have a dramatic impact and solve a problem for our society while not giving a handout. I think we all agree on this one. Let's keep moving through this amazingly juicy docket. All right. There is a battle right now for Wimper Murdoch's media empire. The Times reported on a behind the scenes fight for control of Fox News, Wall Street Journal, New York Post, and just tons of TV networks in Australia, the UK. I think we all know the Newscorp holding set a bit like the TV show Secession, News Corp holding set a bit like the TV show Secession, which makes sense because they based it on the Murdoch family. It turns out this article in the Times is based on a sealed

court document that was obtained by them. Murdoch, to remind you, is 93 years old now and his trust would have given control to his four eldest children. However, he changed the trust to ensure that Lachlan Murdoch, who is more conservative, would take over these assets as opposed to James Elizabeth and Prudence, who are more moderate than Lachlan. And they are engaged in a massive court case now that's going to start in September. The trust is revocable, but it contains a provision allowing for changes so long as they're made, quote, in good faith, and with the purpose of benefiting all members. So Rupert argued that the change is in the

best interest of James Elizabeth and Prudence, as it keeps them formally separate from Fox News without having to worry about its political point of view. Fox News obviously has massive They did the largest settlement ever in a defamation case with Dominion. It's $787 million. You remember Tucker Hannity, Laura Ingraham, all of them privately trashed the people who lied about the Dominion case on Fox News. They did the largest settlement ever in a defamation case with Dominion. They paid $787 million. in million dollars. You remember Tucker Hannity, Laura Ingram, all of them privately trashed the people who lied about the Dominion case on Fox News, and that all got shown in text

messages and it was a disaster for them. Sax, any thoughts on this and how this collection of assets and the GOP have, you know, collaborated over the years? I wouldn't necessarily call it collaboration. I call it a market position. I mean, Fox News has carved out a powerful and profitable market niche by being the one cable news network that appeals to conservatives. And now if, you know, let's say the more liberal members of the family like James take over and change the content

and the programming to serve their own political views, they're gonna lose viewership, they're gonna lose their audience. It would be a foolish idea just from a business standpoint. So I think that Lachlan is the right choice. I've met Lachlan before, by the way. Nice guy. Look, I think a pretty mainstream conservative type of guy,

he's clearly the right guy in the family to run this. And the siblings, I think, could really screw it up. And I'm talking about not just from a content standpoint, I'm talking about from a revenue and profit standpoint, if they take it in a different direction. I would already say that Fox News has a, has a market position problem, which is that Ruber is very much a neocon and neoconservatism is on the way out in the Republican Party in favor of a more populist conservatism that

you see with Trump or now his running mate, JD Vance. Rupert and Fox waged a really strong campaign to keep JD Vance off the ticket, obviously lost that battle. Rupert fired Tucker by far their highest rated and most profitable host ever. And it was over, again, this populism versus neoconservatism direction. So I think that Fox already has a problem where they are becoming misaligned with their audience. And regardless of what you think of the politics, that's as bad for business. It'll be really interesting to see if Loughlin will realign things in a more populist direction,

but definitely going in a liberal direction that like James or the other siblings would wanna go in, that would be a disaster. Freeberg, Chamath, any thoughts on this media empire and secession planning? Chamath, any thoughts on this media empire and secession planning? Man, I think probate and wills and trusts are of the devil's making.

Nothing good comes out of these things. And I don't know, I just think some of these assets should just be left to shareholders. Just sell them. Or just sell them and take the money, give it to the kids. Yeah, hopefully you raise good kids, they can all go and pursue their own path. Because again, I think the point is like, the path and the journey is the fun. And these kinds

of battles are really brutal. And I'll tell you, to me, the thing that I'm, I'm sad when I hear this whole thing is like you have four siblings that I'm guessing grew up together. Yeah. And now, are they ever going to talk to each other again? Or is it like three versus one or two versus two? Or and I just think that that's ugly over what power and money? I would have just if I was the father, I would have sold the asset given the money to the kids or to charity or whatever. And hopefully, they would have found happiness in a different way. But that is what they did with the Disney deal. They took the cash and they distributed it to the kids. So they each got a

pretty big windfall. And then I think the concept was this remaining asset would be managed over the long term. Maybe I'm speaking out of school a bit, but I thought that's what happened there. They did sell you, the studio and yeah, and the library, yeah, and the library. And that brings X-Men, Fantastic Four, Wolverine back together with the Avengers, which is most important. 20th century Fox. Clearly they didn't. No, it's all coming back together now. They just got to get Sony to give up. I mean, we want to talk about interesting IP. Marvel just sold these characters to the highest bidder in perpetuity. Such a crazy

weird deal. But it's like, it's like me saying, you know, I, uh, I've collected some really nice belts. And so I'm just going to have like a death match between my five kids to see who gets the best belt. I just, I mean, and it's not it's not even about money, actually, because they have enough. It's clearly about power. No, and it's about being picked. Imagine if your father loves the picture sibling, and not you. Why would you? Why would you do that? Yeah, like is there is the asset so important? As I said, there's these are self managing because business people will make

rational business decisions. So put it in the hands of a rational business person, keep the family intact. Because if you lose the family, what do you have? That's what I don't get. That's what I don't understand. Shout out to Tom Wamskin. We might as well just go to our next topic. Joe Biden has been hot-swapped as Nusha Anas predicted.

The speedrun primary, maybe that's been subverted. As we all know, Joe Biden formally exited the- What's your version? Maybe it has been subverted. Maybe possibly could have been subverted, inadvertently knocked over, forgotten. It could be an oversight. Anything's possible. Joe Biden formally exited the presidential race on Sunday after donors and party leadership politely asked

him to enjoy his retirement. No, they shivd him. By most insider accounts, Biden was not happy about the decision and felt betrayed. Nonetheless, public has backed his VP Kamala Harris, who appears to have already wrapped up the nomination. survey conducted by AP on Monday suggested that Harris already had the endorsement of enough delegates to secure the nomination in the first round of convention voting. So this won't be official until the DNC that starts August 19 in Chinatown. So far, no one has stepped forward as a rival for Harris. And in fact, many of her would be competitors have already endorsed her. That includes Shapiro, Pennsylvania's governor, Newsom, California's governor, Pritzker, Illinois'

governor, and Whitmer, Michigan's governor. All of those, I guess, potential VP candidates. She is now the 90% favorite to get the Democratic nomination. I'll stop there and ask our panelists what they think of this turn of events. Shamath, do you want to start us off? I mean, I don't think the process was super open and transparent and Democratic, but I don't think they had much of a choice. And I think we've talked about that because too much of the money would have had to essentially been returned. and I think we've talked about that because too much of the money would have had to essentially been returned. And I don't think you can fight a federal election in 2024 with one hand

tied behind your back. So she was the de facto nominee when the rumor started. And now I think the whole point is to figure out where does she stand? I think the thing that she will have to overcome is that these last three years, three and a half years, she's been relatively under the radar, Am I some might say, and I think that now there's this like this whole controversy. I don't know if you guys have seen this where like, she was named the borders are but then she was not the

borders are and I think there's a there's a mainstream media is it's sort of fighting with itself from six months ago about the whole thing. But the point is that we don't know what she believes and we don't yet have a sense of her agenda really, you know, and I think that over these next two months, it'll be up to her to really create a very clear case of what she believes in. And then it'll be really interesting to see who she picks as her VP candidate. And then people, I think, will be in a position to judge. And I think that that's what, you know, what if I've been kind of like reading the tea leaves from the folks that I've talked to is sort of what they say, which is TBD, and we need to figure out where she's at.

TBD, and we need to figure out where she's at. Freeburg, your thoughts on this unbelievable 10 days in the history of our country where president was nearly murdered by an assassin. And Joe Biden resigns, and a 39 year old political neophyte venture capitalist is picked as VP. I mean, this is consequential. What are your thoughts on this? 10 days? Well, that's a lot of stuff. I think we talked about that last week, but the Kamala Harris de facto nomination that took place over 48 hours, I think was a little bit shocking to a lot of people I've spoken with that there

wasn't a bit more of a process to identify a nominee besides Kamala that effectively the party lined up. Now, what I think is, is relevant here is that for the first time, it's exposing people to the way the electoral process actually works in the United States, that it's not a direct democracy, where every individual in this country votes for their federally elected people. Remember, the United States was set up as a federated republic, that there

was meant to be these states, the states were in a federation. And then the states would elect electors that would go and figure out who should be the president, who should run the federal office. And the states would elect their representatives, their Congress people, to go represent them in the federal government. And so I think a lot of people,

whether it's just without thinking about it, or based on precedent, assume I get a vote in who gets to be president. What you get to have is a vote and who gets to be the delegate to represent your state in picking the president. And so this process where delegates very quickly fell behind Kamala Harris, because of the significant coalescing of power and influence within the parties, the two major parties in the United States has, I think, exposed a lot of

people to the lack of a democratic process for federal executive role. parties, the two major parties in the United States has, I think, exposed a lot of people to the lack of a democratic process for federal executive role in this country. And I think that's a little bit shocking to people, but it is the way that the nation was set up. And the same thing with the popular vote versus electoral college, right? People keep getting confused by that. That's right. And in this very unusual condition, where a candidate who's earned all of these delegates drops out of the race, it's shocking and surprising to people that they don't get to go and make a vote again, individually. And I think it feels unfair. And I think that a lot of people are feeling that way.

I do, however, think that pretty quickly, there's a lot of people who are anyone but Trump that are going to rally behind her. And she seems to be pulling well in the polls that have come out in the last couple of days here. So, all right, let me hand it off to, uh, Saks then you had a situation where Trump was the runaway favorite and this unbelievable unity at the RNC. Mark Kelly looking like the possibility, which would obviously give them a lot of support in Arizona and with moderates and law and order folks. So sacks were looking at essentially a dead heat. Some polls have them tied some polls Reuters, and with moderates and law and order folks. So, sacks we're looking at essentially a dead heat. Some polls have them tied. Some polls Reuters, Ipsos has Harris with a 2% lead,

CNN has Trump with a 3% lead. What's your take on, forget about how we got here. You know, how does this affect the race itself? This is a dead heat now. What are your thoughts on the race going forward? Who's the VP pick that you're most worried about going up against the Republicans? Well, look, this clearly reshuffles the race

to some degree. I don't think it's a dead heat. The polling shows that Trump is still ahead in most of the swing states. But look, Harris has more upside than Biden does because she can actually campaign. I mean, Biden clearly was a surefire loser. And that was exposed in the presidential debate.

And that's why there was a total panic in the Democrat Party after that debate. They're like, we got to get someone new. And they drove him out. I do want to just say a word about that process. You know, throughout that process, remember, it started with Biden doing that Stephanopoulos interview. He said that even God Almighty won't get me out of this race. Then he said, nobody's pushing me out. I'm not going anywhere. I'm campaigning next week. He expressed that what was happening in the party was a revolt against him. And then boom,

all of a sudden he's out. And you know, all we really know from the public reporting is that Nancy Pelosi said, you know, Joe, we can do this the easy way or the hard way. And he was out again, less than 24 hours after he said, I'm in, and I'm campaigning next week. And even his surrogates on the Sunday morning shows were saying that he's definitely in the race. The White House staff didn't know his campaign staff didn't know. It kind of came out of the blue. It's a very strange process. And it happened via him just posting a photograph of a letter that was on personal stationary, not even like an official White House memorandum. And we didn't get an update. We didn't hear directly from the president

about one of the most consequential decisions of his life and of his presidency until Wednesday. Well, he did have COVID. So that, you know, for an 80 year old is pretty hard. Yeah. Fair enough. That was the story. But still, I mean, for us to be left in the dark wondering what was really going on for three days, it was very strange. It certainly was not what you would call a democratic process. There was no speed run primary as you want to Jason. There was no open convention. What happened is the delegates fell in line instantly, as I predict it, because I said that they would not be able to handle the chaos, that they wanted to basically fall in line immediately and end the chaos. And they fell in line behind Kamala Harris,

who has never gotten even one primary vote. Who worries you most as a VP candidate? Give us that, because we understand that. I'll be honest with you. I think that's the scariest. The scariest, the one I would pick, is Josh Shapiro. He's the governor of Pennsylvania, rising star. Look, if he can deliver Pennsylvania for the Democrats, that's powerful, because one way for Harris

to eke out a victory is if Shapiro can get her Pennsylvania and then if she sort of tax back to appealing to the Arab and Muslim vote in Michigan, to eke out Michigan and then ekes out Wisconsin with this one point. In other words, if she can hold on to the blue wall and then she loses the swing states that Trump is very much ahead in, like Arizona, Nevada, Georgia, North Carolina, she can still win this election by 270 electoral votes to 268. It'd be the closest margin in presidential history. So that's the scenario, and it's probably her best path to victory is to win by one electoral vote. That's the scenario I'd be most worried about as a Republican. Now the other candidate you

hear a lot about is Mark Kelly, the son of Arizona, who on paper looks fantastic. He's an astronaut. His his wife that was a victim of a gunshot. Moderate, right? Super moderate. I personally don't think he is that moderate, but I think he presents as one and he's he's made noises. He comes across as tough and comes across as, as someone who's wanted to be tougher on the border, which is a huge weakness for Harris. Yeah. If he can deliver Arizona, then he becomes a strong contender, but I'm not sure that he can. So if it were me, I'd probably go with Shapiro. I mean, I hope they're not listening to me. I hope they go with Kelly.

So, Chamatha, obviously even in this heated thing, the good news is that both sides are going to accept the election results. We have that fairness and that honorability in both parties where we'll accept even a close election. There'll be no drama after it. But what's your thought on will accept even a close election, there'll be no drama after it. But what's your thought on the strongest ticket? Do you think Shapiro? Do you think Kelly? CNN said, Hey, and this went viral. Do we think a Jewish vice president, the country's ready for it? They got kind of dragged for that. What do you, what do you think is the right VP pick here, Chema? What do you think the right VP pick here is? And which one is the scariest to a Trump JD Vance ticket, which is a very strong ticket in

and of itself. So if you look at Trump's VP pick, it's about aligning a philosophy. Donald Trump created the MAGA movement, this populist conservative right-wing movement. And I think JD Vance has an opportunity now to carry that torch post Donald Trump. And that is an ideology that spans states. I think this idea that you pick somebody because they can deliver a state is pretty misguided. I just don't think that that in reality is what happens. So I think that Kamala has to decide what she stands for, and figure out whether she

needs somebody on her flank that represents a slightly different set of ideas that will then maximize her appeal, or she wants to double down. And then she has to pick somebody that sort of like aligns with her philosophically. And again, I would just say that it's not super clear yet what she thinks. I think that Joe Biden was more of a traditional centrist that had to appeal to the progressive left in order to get his work done. So that kind of makes sense, you can understand it, you don't have to agree with it. But it's it's pretty obvious. I don't

know what she where she's at politically. So I think that that's the first thing she needs to explain herself. Is she a centrist? Is she more of a moderate Democrat? Is she more of a progressive Democrat? And then we can then understand who the best person to align her with should be. But if I was if I if I was in the Democratic kind of like Star Chamber, yeah, I would kind of try to figure that out first because I think the Donald Trump pick makes a lot of sense because it basically moves the Republican Party in a very firm direction that die is cast for the

Republicans for many years to come now. Okay, free bird your thoughts who is the VP candidate? What do you think of this race and give us a prediction? You know, you're famous for your incredible insights and predictions in politics, give us your prediction. Who should you pick? Who will she pick? I think there's a lot of talk about Roy Cooper in North in politics, give us your prediction of river. Who should you pick? Who will she pick? I think there's a lot of talk about Roy Cooper in North Carolina.

Saxon mentioned Cooper, but sounds like could be in the running and could be a leading contender for the slot. I think the Harris Trump poll is not out or there's a recent one that shows Harris. Yeah. 44, 48 from in the lead in North Carolina. So there's a some, some room there. If you can get the governor in that spot, that's a lot of electoral votes.

In terms of who I think should be, I'm not sure. But I do think that might be a top contender from folks I've talked to. Any thoughts on Shapiro and CNN's positioning that the country's not ready for a Jewish vice president? So, you know, I was shocked recently to hear about a board, a pretty, you know, important board, because it represents a large organization. And there was a an individual on the board who was supposed to be elected chairman, a pretty important board, because it represents a large organization and there was an individual on the board who was supposed to be elected chairman. They went in for the vote.

And in that board meeting, this individual who happens to be Jewish, there was a conversation that ensued about, you can't be the chairman at this time, because having a Jewish chair would be really difficult in this current climate. And I was shocked to hear this. It was not expected by folks going

into the meeting. Things were supposed to be quite different in the vote. And ultimately the decision was made that a Jewish person should not be the chair of the board at this time. J Cal to your question, I think that behind closed doors these are the sorts of conversations that are going on. That there's a perception given the conflict, that there is a risk

of having Jewish leadership being put into powerful positions right now, Jewish leaders being put into powerful positions. Wow. That is shocking. That's insane. It's just, this is this is what is going what? This is just, yeah, it's shocking and deranged. And the anti semitism right now on social media and what we're seeing online is just absolutely heartbreaking and infuriating in equal parts.

Sax, anything you want to add to this as we wrap up our? What the? Well, I mean, just talk about Shapiro, Sax. Is the country ready for this? You saw the CNN clip and sort of- Sorry, can I just ask a question? I'm sorry. Go ahead. What is it's song? What does it accomplish?

Less heat coming into that board. Less protests. Less protests. The protesters now have, I guess, what I would read into this, correct me if I'm wrong, here, Freeberg, is the protesters have now won in that they've intimidated people to an extent that they don't want to go near Jewish leadership. Am I interpreting correctly? A possibility here? Sorry, say that again, the protesters and what? So these protests, the Gaza conflict have reached a point where people do not want to

have Jewish leadership because it would be polarizing and create more protests. That's right. That's that. And that's the conversation that I hear going on behind closed doors or I'm hearing about. And so, you know, it's almost like a cancel culture against Jews because of the risk of a Jewish person being in a leadership position that could drive. Yeah. Which is exactly what CNN was bringing up with the VP choice of Shapiro. And that's right.

I think it's totally crazy. However, I definitely have seen people online. I mean, articles online like saying like, is this an issue with putting Shapiro on the ticket? Now, I can't believe this is a problem for the voters of the country. However, I think if you're one of the Democratic masterminds, and you're trying to engineer enough electoral votes for Harris to win, like I said, you're trying to win that blue wall, you're trying to get not just Pennsylvania, but Michigan. And the problem that Biden had and now Harris has in Michigan is that the large Arab and Muslim population of Michigan is really against the administration's support of Israel. Now this is why Harris just snubbed Netanyahu when he came to Washington. So they are immediately trying to reposition that issue.

And remember, the margin of error in Michigan is like 2%. So if they can win back that vote by seeming to be more progressive on the whole Israel-Gaza war, then there's a big electoral advantage for them. So I have to wonder if this is where this talk about, you know, is it an issue for Shapiro to be Jewish on the ticket or whatever. Again, it's nuts to me that we could be even having that conversation in this country, but it's possible that that is what's going on.

It's like, can you win Pennsylvania, but not lose Michigan? Well, the inevitable outcome of identity politics by giving everyone a definition on their race or their gender or their background or their religion is that you ultimately end up picking winners and losers. And you don't just get to pick winners. When you make selections or prioritize things based on identity like this, you also de facto

pick losers. And that's where this unfortunate snowball. When John F. Kennedy ran for president, it was a big issue that he was Catholic. I mean, you guys don't remember this, but- I do, yeah. Irish- In 1960, right?

It was a major thing in our family. There was a major point of pride that we had an Irish Catholic in the White House, yeah. Yeah, and specifically what people asked is, would he be loyal to the United States or be loyal to the Vatican and the Pope? Who was his ultimate authority? And he made it really clear, look, I'm gonna do what be loyal to the United States or be loyal to the Vatican and the Pope, you know, who was his ultimate authority? And he made it really clear, look, I'm going to do what's right for the United States. And he neutralized that issue. I think that what matters about Shapiro or any VP is

their views and their accomplishments, their policies, and whether he's Jewish or not really is secondary. Even if, even if your principal concern is Gaza, there are still plenty of Jews who have a wide spectrum of views on that issue. So it is nuts to me that this conversation is seriously happening. Right. There has been a kerfuffle, a Donnybrook online between Paul Graham and our bestie, David Sachs here, here Paul Graham threatening you Sachs on X, do you really want the full story of what you did to Parker being told publicly?

Because it's the worst case of an investor maltreating a founder that I've ever heard. And I've heard practically all of them, this Paul Graham, the founder of Y Combinator. I was talking recently to another investor about whether you are the most evil person in Silicon Valley, Frank G. or David Sachs. He thought about it for a few seconds and agreed, and he couldn't think of anyone worse. The second tweet about you being the most evil person, David Sachs, in Silicon Valley has been

deleted. Well, that's nice to know. Your response. It's nice to know. Yes. That's nice to know. There was also another unhinged tirade that he had against me a few months ago. Okay. Where he was commenting in the Ukraine debate and was responding to a Ukrainian partisan who this guy is like a propagandist for Ukraine. It was embedded in the Azov battalion. People may know what that is. In any event, Paul went out of his way. The thing is, I've never met Paul Graham. I don't know him. I've never done business with him. So it's just weird to me that he has this animus and this vitriol towards me. It's hard to know exactly what this is based on. I think that part of

it is that he thinks he knows what happened at Zenefits, even though he wasn't involved at all. And he's just listening to one guy who's been nursing this vendetta for many years. And then other people are speculating that there could be other things involved. I don't quite know. Do you want to set the record straight on Zenefits and just say what happened? What is it that you guys want to know? Parker apparently has done several public interviews where he kind of made claims.

I think, I don't know if I've listened to him. I've just read the summaries, but Jake, you probably know that. He just says you ran a coup on him. Obviously for folks who don't know, there was an SEC investigation and Parker was ousted from Zenefits as the founder CEO. He's very bitter about that, did a revenge startup, Rippling, which is doing quite well from what I understand. And he blamed Sachs for all of this, even though he was sanctioned for doing essentially assurance fraud by helping people

lie on a test for their insurance certifications. And he got sanctioned by the SEC for it. And as you pointed out, Zach, he was the only person who was sanctioned for that. So he broke some rules and he got pretty serious penalty, yeah? Do I have that basically correct brushstrokes? That whole experience was like,

was easily the worst year of my entire professional career, having to deal with that mess that he created. And look, anybody can now say anything almost 10 years later in a podcast, but the situation there was thoroughly investigated by regulators who had subpoena powers, who did extensive discovery. They looked at everyone's emails throughout the whole company. They also interviewed something like a dozen people

under oath and took witness testimony from them. And then they sanctioned him, they fined him, and they published an account of what happened. I personally think it's a huge waste of time to be rehashing events that are almost a decade old, but I guess I'm being forced to by this smear campaign that he and Paul Graham have engineered against me. If you wanna know what happened,

just read what the SEC said, read what the other regulators said. There was only one person who was named as being aware of the misconduct. And there was only one person who was fined and held accountable by regulators. In fact, he was fined more than the company. Now, if he just said, yeah, look, I learned from that mistake

and I made some mistakes, moved on, and apparently he does have a successful company. So I don't really understand why he's so bitter. He seems to have like a, you know, he's like disturbed about it. Then it would be fine. I mean, there'd be no reason to be talking about this, but the guy refuses to admit that he did anything wrong. And instead he's created this elaborate story that his departure from

Xenefits wasn't related to massive compliance issues. And that somehow it was related to him missing a sales target or being the victim of a coup. That's not what happened. This was a regulatory crisis that unfolded over many months and kept getting worse and worse. And we kept discovering new compliance violations. And this created a 50-state insurance investigation

that could have shut the company down. And he controlled the board. He didn't have to leave if he didn't want to. He ultimately perceived that it was in his interest to leave and let us clean it up. And then he went on to go do this other startup, which I think he was planning to do all along. So his plan worked out for him, which is he left a big mess for us to clean up. And it's very successful now with the new company. So right, right. So I remember, I will just say, I remember how hard you worked at that after you were

in the CEO seat, and then you were promoted to CEO. And I was really impressed watching it and seeing what you did, because you chose to step up and take care of this company at a time where you expressed to all of us privately how hard it was and what a challenge this company had found itself in. And you had investors that were friends of yours that were involved in the company that were on the board. And I think you did what felt like at the time and from my experience interacting with you during this time, the right thing, which was to step up and address this rather than just throw your hands in the air and say, this guy screwed things up, or this company screwed up and walk away from it. You had personally put money in, your friends had put money in, and you worked hard to try

and help the business recover after this miserable period of time. And it was really impressive to watch you do that work. So I just want to highlight my kind of experience watching you and knowing you during that time. It was miserable and obviously pretty thankless. And I did it for no compensation. I did it because, like you said, I had a lot of friends who invested in the company. I just thought it was the right thing to do this cleanup. The lawyer said it would take two years. We managed to get it done in one year. We got a clean bill of health from regulators. We had to remediate all the compliance failures.

When I then handed the torch to the new CEO, we had $200 million in the bank and $60 million of ARR with a clean bill of health. So, you know, but I didn't know I'd have this like crazy founder like lobbing bombs at me the whole time. And frankly, if I had known he was gonna do this, I would have just said, Listen, man, you clean up your mess. And he would have continued playing games and stonewalling the regulators and it would have been a much worse situation for sure. Chumafi, want anything here here before we wrap up on this? Because I have two points to make,

but I'll let you go first. Look, I think that part of what happens in Silicon Valley is that there is these cliques. And there's definitely a YC clique. And they protect their own in absolute terms. And so I think there's a level of morality that everybody else has to live by that's not necessarily the rules that apply if you're a YC CEO. Now that was accepted in

Silicon Valley because in the early days, they were, frankly, one of a very, very small handful of games in town with respect to high quality deal flow when you started to do series A, B and C. And as a result of that, I think venture capitalists essentially look the other way because the returns were so good. The companies that were coming out of the incubator were so good. But as with all things, when you're successful and you try to scale, returns decay. And this is not a slight on whyC's returns, but it's what happens to everybody. So if you look at Blackstone's returns, they were incredible when they started,

then they're okay today. When you look at Sequoia's returns, they were incredible when they started, they're okay today. YC's returns were incredible when they started, they're okay today. And this is nothing against any of these folks. It's that in the business of building an organization and scaling, that's what happens. And when that happens, and a lot more competition emerges on the scene, the old tactics that you used to use to run a protection racket, if you will, just doesn't work anymore. And I think part of what's spilling out in public here is that that kind of immature form of bullying and intimidation is just kind of dumb because it's, it just doesn't hang together anymore.

So I don't know, I thought the whole melee, if you will, ruckus, Jason, fracas, fracas, Donnie brock, bro, all a clash. Yeah. Was more about a guy that was engaged in this trying to do what he perceived to be the right thing for a YC founder in his community, but probably just he just needs to get back to work and do something productive and probably this wouldn't happen the next time. I'll just make two points here. Y Combinator has always, like much of our industry, they're not unique in this, been in favor of rule benders, breakers, and naughty is actually something in their interview process that they optimize for.

Sam Altman has talked about this very publicly. I had a YC alum who was trying to get funding for me, hack my voicemail and change my outgoing voicemail. And that was like a big brouhaha on hacker news, et cetera. And, you know, we kind of celebrate a little bit of bending and breaking of rules. And what everybody needs to understand is sometimes if you bend or break a rule, like insurance certification, like Parker did here, you know here, that can be fatal for a company, which it was and it can be really, really dangerous. And so then you superimpose on top of this, to your point, Chema, Y Combinator, very big, powerful organization.

Some folks say a mafia and they described it as a bully stack. You know, Y Combinator does circle the wagons. They do bully people. And they do put out a presentation that we are the only people in Silicon Valley who are founder friendly, you know, even though they're getting 7% for 125K, like we do in our accelerator, Techstar does, while also saying everybody else is the enemy, everybody else is taking advantage of founders. The truth is, we're all working really hard. Every founder, you know, is going to hack their way to success. Sometimes you take it too far. Like Parker did here, he learned a lot of

lessons, like some people say Uber did like some people say Airbnb did, there's always been rule breaking and bending in the entrepreneurial class. And then you superimpose on it. Paul Graham's feelings, you know, in the Middle East, sacks your strong feelings about Ukraine and politics. And now the footprint of Silicon Valley is just so powerful, so influential on the global stage when it comes to politics, it just reaches a level of toxicity here that it doesn't need to. We're all on the same team. Let's all build great companies. Let's put this ugliness behind us and get back to work. That's my final statement. Nersh Forkhanis has spoken. Patrick Shepard I like that statement. And if we were just talking about somebody who had learned

their lesson, this wouldn't even be an issue. This is like events that happened a decade ago, such a waste of our time and energy even be talking about. The problem is that you have people, really we're talking about Parker and Paul Graham, who are trying to smear somebody as a way to... You. ...exhaust. Yeah. Maybe. They're trying to damage your business. Let's be honest. They're trying to get founders to not work with you. For sure they're doing that. And that's bulls**t, by the way. Look, Parker has this very complicated story. And the whole purpose of it is to exonerate

himself to basically say that he didn't engage in any wrongdoing, and somehow he was set up. Okay, it's ridiculous. I mean, I don't have that kind of power over the SEC. The SEC, they sent us a list of people they wanted to talk to. I was not on the list. And I was like, well, wait, don't they want to talk to me? I'm the new CEO of the company.

And the lawyer said, no, your discovery was clean as a whistle. They don't have any questions for you. They only want to talk to people who, you know, they saw in the discovery there was an issue. So the regulators prosecuted, they basically conducted this investigation. I had no impact over that.

It was a very serious issue. This was not made up. So I just think it kind of defies belief to now say that this, you know, all the regulatory compliance issues which played out over months were not an existential issue for the company, it certainly was. But look, we have better things to talk about. Do you see Ali Reznik's tweet? This is pretty dark. Ali Reznik tweeting here, Paul Graham reached out to the key SV firms, Silicon Valley firms, to attempt to get Jewish VCs fired post October 7th. No idea if that's true or not. But there has been this Paul Graham is

anti-Semitic, you know, sort of meme going around. I don't think he's anti-Semitic, but this is a pretty bold charge here. And I don't know if it's true or not. Well, I can speak to some of it. Okay, go ahead. Yeah. I've talked to a few people who are involved in this. Look, I think what happened is that in the wake of October 7th, there was obviously a very heated debate online. PG is on one side of that. He got into it as supporters of Israel on the other side. They accused him of saying anti-Semitic things. He took offense to that and basically went over their heads to their

bosses of a couple of different VC firms, at least two that I know of, where he basically went to the heads of these firms to express his displeasure, I guess, with these exchanges. And I think the feeling on the part of the junior VCs, because the people he was going over the heads of were not senior partners or whatever. These were lower-level to mid-level VCs at firms. You can understand how they would receive that. The head of YC is going over...

Yeah, Paul Graham is a giant in the industry. He's basically going to the heads of their firm to seek a correction in their behavior, even though this wasn't like a workplace activity. And so they certainly felt intimidated and silenced by that. Or in the worst case that he was trying to get them fired. In his case, I guess he's trying to say, hey, this isn't cool to call me an anti-semite on Twitter publicly.

And the truth may be somewhere in between. I mean, the great irony of this, of course, is he's concerned about his reputation being damaged. And I know YC took it very seriously, the claims that they're anti-Semitic and Paul Graham's anti-Semitic. They took that very seriously, as they should. But here he is out there trying to damage your reputation. So it's a little bit of hypocrisy here, I think,

if he's outwardly trying to destroy your reputation with founders and then he's concerned about his reputation. Well, clearly there's a double standard here because PG doesn't like being called names on Twitter. Yeah. He doesn't like his use being labeled and he's willing to take those debates offline, go over the heads, not talk to the people who said those things, but then go to their bosses,

the heads of their firm. Yeah. Maybe not threaten them, maybe not say, I don't think he said fire this person or whatever, but like you said, there's always an implication of retaliation because people understand the way that YC operates. And certainly those junior level VCs experienced it as a form of intimidation. I mean, this is the classic cancellation playbook, right? And this is what people will do to the left or the right, or they'll do it to advertisers. They'll try to get advertisers to cancel.

It feels similar to that cancel culture, even if that's not how PG intended it. Well, it's also, it's like rather hypocritical when he's super sensitive about this type of thing. But then he's instigating this pylon when on this whole Xenefits thing, he's basically single source from a disgruntled founder who has this vendetta,

who's been nursing this thing for years. He's never talked to me. Like I said, he's never even met me, but he's willing to call me the most evil person in all of Silicon Valley. And then again, instigate this pylon with like all these other people from YC. Yeah. I mean, how dare him call you the most evil person. That's my job here on the podcast. Yeah, exactly. And then I saw like other people from YC, like Michael Siebel, who I think is actually a really cool guy. He's awesome. Yeah Yeah, and there are any founders and then he's tweeting that like I somehow I put up my founders who were there were a lot

Of founders who basically spoke up and actually said including many founders who came out of YC So, you know actually David's been a great VC to us and he's saying oh Saks must have put them up to it No, I never asked anybody to do that and a good reason why is I don't want to trouble my founders. Or drag them into this. Drag them into it. So I'm not going to make them do that. So I had nothing to do with that. But frankly, you know, old saying that every accusation

is a confession. Maybe the reason why people at YC think that I might have done that is because that's kind of their playbook is they create these online mobs. But like what gives him the right to do that? I can tell you. Go for it. He doesn't have enough to do. He's sitting around. He's got a lot of money.

I mean, he's been very successful. And as far as I can tell, he's just getting into dustups on Twitter. And then like like there's a lot of amazing people. We all know them that are so good when they're under pressure, focused and grinding. And then when you take a little bit of the pressure off, they just go crazy. And they don't have enough to do. And it's amplified by money. And it's amplified their own perceptions of themselves. So I don't know, maybe maybe you

should just go back to work. So everybody back to work. When these things get heated, here's an interesting idea for everybody, go get a cup of coffee with the person you disagree with, sit down like we do here at the all in podcast, and have a vibrant debate. It makes life richer. It makes you smarter. It gives you more perspective. And so PG, sacks, anybody else involved, you just all sit down and have a cup of coffee, try to hash this out. Okay. Good coffee in San

Francisco. That's my rx. Freeberg, I've been talking to Sachs privately. He has been complaining to me for weeks that we've had too much politics on the program and not enough science corner. So I acquiesced to Sachs's appeals to me and all of his supporters to get a science corner in today. Let's talk about nuclear power. Everybody has got nuclear power on their mind. Obviously China is doing a really good job of executing on it. And there's some new science here. So fill us in.

Sax looks so engaged. Let's go. Well, Sax might like it because it's a bit of an economic story and a bit of a China competitive story, which I think is the main point here. The story is rooted in a paper that was published out of China on their new high temperature gas cooled pebble bed reactor, which is a new type of nuclear reactor technology that shows that this thing cannot melt down, which is an

amazing new technology, but I want to just take a step back and talk about general electricity production in the US versus China and where it's headed. So today, the US has roughly one terawatt of total electricity production capacity. China today has about three terawatts of total electricity production capacity. And about two to 3% of that is nuclear today for China. So by 2050, the US is projected to build out an additional terawatt to getting us to two terawatts of capacity. So we're going to double our total electricity output by 2050. China, meanwhile, has a plan stated to increase electricity production to 8.7

terawatts. So basically tripling between now and 2050. 88% of their power by 2050 will be renewables. And by 2060, they've stated this goal that they want about 18% of their overall power to come from nuclear reactors. They currently have 26 nuclear reactors in the construction phase. They've got planning going on around building 300 of these.

And they've already got stated plans around 500 gigawatts of capacity. just to give you a sense of that 500 gigawatts, which is what China's got plans for is half of the total US electricity production today. That's in their nuclear build out today, just to give you a sense of the relative cost of electricity. China is about seven to nine cents a kilowatt hour. The US is 17 to 25 cents a kilowatt hour. And China is about seven to nine cents a kilowatt hour. The US is 17 to 25 cents a kilowatt hour. And China is projected to drop their price

to less than six cents due to the expansion of renewables and nuclear power in the country. So the US cost is about triple what it is in China to build out new electricity capacity. That's a really important point. So currently, we have about a third of what China has. China is going to triple. We're going to double by 2050. Their cost is already lower than ours, and it's going to get lower. And their cost to build out new electricity is a fraction of what it is in the US. So this is a massive difference. The International Energy Agency estimates that the

electricity from nuclear power costs $ bucks per megawatt hour in China compared to 105 in the US and 140 in the EU. And recent data has US costs looking like they might be anywhere from five to up to 10 times what it costs to build out in China. So this is a real important long-term competitive point. China has more electricity production, it's cheaper to make electricity production, it's cheaper to make electricity and it's cheaper to build new capacity, and they're building at an accelerated rate. This really highlights the industrial challenge the United States is going to have in the decades ahead. We talk a lot about wanting to onshore manufacturing in the US,

build out new manufacturing technologies, but ultimately all of these industries, particularly AI, are going to be driven by the cost of power. So Nick, if you pull up this chart, so what's going on in nuclear? Well, there's effectively considered to be four generations of nuclear reactors. The first generation was all the early prototypes. And I've got an image up here to show this comes from the Department of Energy. The second generation, which was the first kind of commercial power reactor started to get built out in the 1960s, 70s, 80s. And then these Gen 3 reactors were these lighter weight reactors that were kind of more advanced. Gen 4 is the next generation of nuclear power reactors. And their next generation because they're meant to be much

more safe, where they cannot theoretically have a meltdown. You can't have a nuclear meltdown like you had with Fukushima or with Three Mile Island. And to be clear, Fukushima was generation two. Those are the boiling water reactors. Yeah. Yeah. And so these old reactors have this risk where you pump water in to cool down the reactor and to drive the turbine. And if the water pumping system fails and you can't get the rods out of the reactor, then the reactor keeps reacting. The uranium keeps having this kind of chain reaction,

gets hotter and hotter and eventually gets so hot, it melts all the walls and all the surrounding materials of the reactor and all of the nuclear rods start to evaporate and all this nuclear material is released into the environment. That's the risk of a meltdown ultimately. This is not a nuclear bomb, just to be clear. This is just about really high temperatures melting the facility

and then radioactive material escapes the facility. The Gen 4 reactors are designed where that isn't possible. And so one of the first, if you go to this next slide, you'll see just kind of an image here. This is the new reactor called the Pebblebed Reactor. China started this facility. I don't want to butcher the name, but I think I will. It's at the Shiidaoan site in Shandong province.

It's a 210 megawatt electricity production reactor. They started construction in 2012. They finished and started doing operational tests in December of 22. They ran all the safety tests in the summer of 23, where they turned off the cooling, and basically simulated that the system failed to see if it would melt down. And that's the results that they just published, which was the test they ran last summer. And even when they turned everything off,

the system did not fail, it did not have a meltdown. It maintained its ability to control its temperature and not have a meltdown. And the way it works, as you can see here, is that these little pebbles, they're kind of like billiard ball sized pebbles have uranium in their core. These pebbles kind of drop into this center reactor chamber. And when the uranium is close to other uranium, a chain reaction starts to generate heat, that heat is actually in this reactor concept captured by a helium gas that's circulated inside around the reactor. That hot helium gas heats up water, turns a turbine, generates electricity. And then these billiard balls fall out the bottom. So what they did is they simulated that the system stopped circling, that the power went out and measured what happened ultimately.

It was able to recover. It didn't melt down. And this is quite different, Nick, if you show an old model of an old nuclear rod system. So, here's nuclear rods. They're made of uranium. They go inside these chambers that have other uranium. And when they touch each other or get close to each other, they heat up. And you have water that has to be pumped continuously to keep it cool, to maintain a low temperature.

What happened in Fukushima and other facilities where we've had meltdowns is that the water stopped pumping, everything kind of evaporated away, and the rods didn't get pulled. If the rods can't get pulled out and the water can't keep pumping, you have a meltdown. When things get so hot, it melts everything around it and collapses. So this Chinese site just demonstrated this pebble bed reactor, which is a Gen 4 reactor. And it has extraordinary safety profile. There's basically no condition where the system would have a meltdown. So these Gen 4 reactors are smaller, they're more modular, they're much, much safer, they're more efficient, they have much less waste. You still have to store those used billiards somewhere, so

you still have to kind of take them and put them somewhere and keep them underground for 10,000 years. But compared with previous reactors, you know, this plant is designed to be much more efficient, much safer, and they completed the safety test, they published the results on the safety test. And I think it really shows the performance is there. And this was always meant to be future technology, these Gen 4 reactors. China opened up commercial operations of this reactor in December of 2023. So it's running, producing power, it's on the grid. And, you know, this design, funny enough, was first proposed in the 1940s. And it took us nearly 100 years to get it to market. proposed in the 1940s. And it took us nearly 100 years to get it to market, which makes me also point out why I'm so optimistic 100 years from now on fusion technology, which seemed crazy today. And this this sort of technology seemed crazy at the time, but you know, 80 years later,

we've gotten there. So, you know, this was an exciting outcome. But I really do want to highlight the competitiveness with China, lower cost to produce, lower cost to run, much safer. And they're expanding like crazy. And the downstream is they can power more H100s. The US, this is why, and this is why I asked Donald Trump when he came on the show, and I wanna make my passionate plea. This is why investing in

and deregulating nuclear reactor technology in the United States to enable a competitive playing field with the United States and China in the decades ahead is so critical, because if we don't, China will beat the United States to enable a competitive playing field with the United States and China in the decades ahead is so critical. Because if we don't, China will beat the United States industrially, and we will eventually find ourselves in a greater point of conflict with respect to this rising power that

is going to be driven by low cost, highly abundant power. And the United States does not have that. Power equals AI. You don't think that distributed energy can basically deliver effectively energy at a marginal cost of zero? Yeah, so the solar build-out, Chamath, is in the US forecast where we could get, in an optimistic scenario, a doubling of power output

from one terawatt to two. That's in the system today in the forecast. But how do we get to nine? That's where China is going to be at by 2050. And we have to have this ability to more rapidly kind of accelerate, you know, high power output systems like nuclear, because while solar is great, it's a low power output, you need, you know, much more volume. So this is a highly concentrated system. And the cost per megawatt hour, you know, can be significantly competitive if you use these small modular reactors and accelerate.

What about carbon? What about carbon based solutions as a fallback? Difficult to scale. I mean, we're not going to open up 500 more coal power plants in the next couple of years. What about oil and that gas? Yeah. So today, Nat gas is 44% of, of us power production capacity and we are going to build out and we are building out new Nat gas is 44% of US power production capacity, and we are going to build out and we are building out new Nat gas facilities, but that's in the forecast. So all of our forecasts today for the US are mostly Nat gas going out and a lot of solar and wind going out to 2050 to double our capacity. And it's already a stretch for us to be able to double our capacity.

So the only solution is to rewrite the regulation. We have to get nuclear going in the United States. And these systems are safe. They are scalable. And if the United States embraced this, and we took a public policy perspective that this is about competitiveness with China, it's about national security, I'm

hopeful that whoever comes in to lead the executive branch in this next administration will be really thoughtful and make this a top priority. So that's my plea and my reason for going through this today. Yeah. I agree with you. Yeah. This has been another amazing episode of the All In Podcast for-

What have we learned, Jason? It's important to have a job. Otherwise, everything just goes to pot. Yeah, do not retire. Keep your mind sharp. And a shout out to our friend Phil Helmiuth doing really great at the World Series of poker. Happy birthday, Xander. Happy birthday to our guy Xander, yada yada and for the

chairman dictator, the Sultan of Science and your Rain Man architect. Yeah, David Sachs. I am the world's most moderate moderator. We'll see you all next time. Bye bye. I'm going all in What, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, what, just useless. It's like this sexual tension, but they just need to release them out. What about B? What about B? What about B? We need to get merch.