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AI Doom vs Boom, EA Cult Returns, BBB Upside, US Steel and Golden Votes

All-In with Chamath, Jason, Sacks & Friedberg

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  • AI Doomerism Sensationalism
    • AI doomerism is often sensationalized with exaggerated claims for headlines.
    • Genuine concerns exist but are sometimes co-opted for political or financial agendas. Transcript: Jason Calacanis Docket, but there’s kind of a very unique thing going on in the world, David. Everybody knows about AI, doomerism, basically people who are concerned, rightfully so, that AI could have some significant impacts on the world. Dario Amodei said he could see employment spike to 10 to 20% in the next couple of years, the 4% now, as we’ve always talked about here. He told Axios that AI companies and government needs to stop sugarcoating what’s coming. He expects a mass elimination of jobs across tech, finance, legal, and consulting. Okay, that’s a debate we’ve had here. And entry-level workers will be hit the hardest. He wants lawmakers to take action and more CEOs to speak out. Polymarket thinks regulatory capture via this AI safety bill is very unlikely. The U.S. Enacts AI safety bill in 2025 currently stands at a 13% chance. But, Sack, you wanted to discuss this because it seems like there is more at work than just a couple of technologists with, I think we’d all agree, there are legitimate concerns about Job destruction or job and employment displacement that could occur with AI. We all agree on that. We’re seeing robo taxis start to hit the streets. And I don’t think anybody believes that being a cab driver is going to exist as a job 10 years from now. So there seems to be something here about AI doomerism, but it’s being taken to a different level by a group of people, maybe with a different agenda. Yeah. David Sacks Well, first of all, let’s just acknowledge that there are concerns and risks associated with AI. It is a profound and transformative technology. And there are legitimate concerns about where am I lead? I mean, the future is unknown and that can be kind of scary. Now, that being said, I think that when somebody makes a pronouncement that says something like 50% of white collar jobs are going to be lost within two years, that’s a level of specificity That I think is just unknowable and is more associated with an attempt to grab headlines. And to be frank, if you go back and look at Anthropik’s announcement or Dario’s announcement, there is a pattern of trying to grab headlines by making the most sensationalist version Of what could be a legitimate concern. If you go back three years ago, they created this concern that AI models could be used to create bioweapons. And they showed what was supposedly a sample, I think, of claw generating an output that could be used by a bioterrorist or something like that. And on the basis of that, it actually got a lot of play. And in the UK, Rishi Sunak got very interested in this cause. And that led to the first AI safety summit at Bletchley Park. So that sort of concern really drove some of the initial AI safety concerns. But it turns out that that particular output was discredited. It wasn’t true. I’m not saying that AI couldn’t be used or misused to maybe create a bioweapon one day, but it was not an imminent threat in the way that it was portrayed. There have been other examples of this. Obviously, people are concerned about, could the AI develop into a superintelligence that grows beyond our control? Could it lead to widespread job loss? I mean, these are legitimate things to worry about. But I think these concerns are being hyped up to a level that there’s simply no evidence for. And the question is why? And I think that there is an agenda here that people should be concerned about. Jason Calacanis So let’s start with maybe Freiburg, things that we all agree on here. There are millions of people who drive trucks and Ubers and Lyfts and DoorDashes. You (Time 0:01:27)
  • AI Boosts Productivity and Jobs
    • AI dramatically increases productivity, raising ROI on capital deployed.
    • More investment and jobs will follow, offsetting displacement fears. Transcript: David Friedberg Cars, et cetera, trucks. Yeah, Dave? I think that might be the wrong way to look at it. Or I wouldn’t look at it that way. And maybe I’ll just frame it a different way. Please. If I’m deploying capital, let’s say I’m a CEO of a company. And I can now have software that’s written by AI. Does that mean that I’m going to fire 80% of my software engineers? Basically, it means one software engineer can output, call it 20, 50 times as much software as they previously could by using that software generation tool. So the return on the invested capital, the money I’m spending to pay the salary of that software engineer is now much, much higher. I’m getting much more out of that person because of the unlocking of the productivity because of the AI tool that I previously could. So when you have a higher ROI on deployed capital, do you deploy more capital or less capital? Suddenly, you have this opportunity to make 20 times on your money versus two times on your money. If you have a chance to make 20 times on your money, you’re going to deploy a lot more capital. And this is the story of technology going back to the first invention of the first technology of the caveman. When we have this ability to create leverage, humans have a tendency to do more and invest more, not less. And I think that’s what’s about to happen. I think we see this across the spectrum. People assumed, oh my gosh, software can now be written with one person. You can create a whole startup. You don’t need to have venture capital anymore. In fact, what I think we’re going to see is much more venture capital flowing into new tech startups, much more capital being deployed because the return on the invested capital is so So so much higher because of AI. So generally speaking, I think that the premise that AI destroys jobs is wrong, because it doesn’t take into account the significantly higher return on invested capital, which means More capital is going to be deployed, which means actually, far more jobs are going to be created, far more work is going to get done. (Time 0:05:20)
  • EA and AI Regulation Network
    • Effective Altruism (EA) underpins many funded AI safety organizations.
    • There is a tight network linking EA, Biden staffers, and AI regulation ambitions. Transcript: Jason Calacanis And flooding the zone, perhaps. So if you were to look at this article here, Nick, I think you have the AI existential risk industrial complex graphic there. It seems like a group of people, according to this article, have backed to the tune of 1.6 billion, a large number of organizations to scare the bejesus out of everybody and make YouTube Videos, TikToks, and they’ve made a map of it. David Sacks There’s some key takeaways here from that article where it says here that it’s an inflated ecosystem. There’s a great deal of redundancy, same names, acronyms, logos with only minor changes, same extreme talking points, same group of people just with different titles, same funding Source. There’s a funding source called Open Philanthropy, which was funded by Dustin Moskovitz, who is one of the Facebook billionaires. Chamath, you worked with him, wasn’t he like Zuck’s roommate at Harvard or something? He was one of the first engineers, made a lot of money. He’s an EA, and he funded this group called Open Philanthropy, which then has become the feeder for essentially all of these other organizations, which are almost different fronts To basically the same underlying EA ideology. And what’s interesting is that the guy who set this up for Dustin, Holden Karnofsky, who is a major effective altruist and was doling out all the money, he’s married to Dario’s sister. And she’s, I guess, associated with EA, and she was one of the co-founders of Anthropic. So these are not coincidences. I mean, the reality is there’s a very specific ideological (Time 0:11:24)
  • Risks of AI Regulation
    • Government-imposed AI regulation risks hindering US innovation versus China.
    • Greater dystopian risk may come from government control rather than AI itself. Transcript: Jason Calacanis We’re going to have so many of these general intelligences. Isn’t it odd that they only believe that when they’re raising money? Well, that’s what I’m sort of getting at. I think they believe it all the time, but maybe the press releases are time for the fundraisers. David Sacks But yet they’re building a really great product, right? Yeah, look, I mean… It is a great product. Claude kicks us. I’m more interested in the political dimension of this. I’m not bashing a specific product or company. But look, I think that there is some non-zero risk of AI growing into a superintelligence that’s beyond our control. They have a name for that. They call it X-Risk or existential risk. I think it’s very hard to put a percentage on that. I’m willing to acknowledge that is a risk. I think about that all the time, and I do think we should be concerned about it. But there’s two problems, I think, with this approach. Number one is X-risk is not the only kind of risk. I would say that China winning the AI race is a huge risk. I don’t really want to see a CCP AI running the world. And if you hobble our own innovation, our own AI efforts in the name of stomping out every possibility of X-risk, then you probably end up losing the AI race to China because they’re not Going to abide by those same regulations. So again, you can’t optimize for solving only one risk while ignoring all the others. And I would say the risk of China winning the AI race is, you know, it might be like 30%, whereas I think X risk is probably a much lower percentage. So there are other risks to worry about. And I do think that they are single-mindedly focused on scaring people with some of these headlines around, first it was the bioweapons, then it was the superintelligence. Now it’s the job loss. And I think it’s a tried and true tactic of people who want to give more power to the government to scare the population, right? Because if you can scare the population and make them fearful, then they will cry out for the government to solve the problem. And that’s what I see here is that you’ve got this elaborate network of front organizations, which are all motivated by this EA ideology. They’re funded by a hardcore leftist. And by the way, I became aware of Dustin’s politics because of the Chase of Boudin recall. I found out that he was a big funder of Chase of Boudin. Remember this? Dustin Mossmiss and Carrie Tuna, his wife. Also, Reed Hastings just joined the board of Anthropic. Remember when he, back in 2016, tried to drive Peter Thiel off of the board of Facebook for supporting Trump. So, you know, these are like committed leftists. They’re Trump haters. But the point is that these are people who fundamentally believe in empowering government to the maximum extent. More government and empowering government to the maximum extent. Now, my problem with that is I actually think that probably the single greatest dystopian risk associated with AI is the risk that government uses it to control all of us. To me, you end up in some sort of Orwellian future where AI is controlled by the government. And out of all the risks we’ve talked about, that’s the only one for which I’ve seen tangible evidence. So in other words, if you go back to last year when we had the whole woke AI, there was plenty of evidence that the people who were creating these products were infusing their left-wing Or woke values into the product to the point where it was lying to all of us and it was rewriting history. (Time 0:16:19)
  • AI Fear as Power Strategy
    • AI doomerism serves economic and ideological interests to secure market dominance.
    • It leverages fear to push government power and regulatory capture. Transcript: David Sacks And there was plenty of evidence for that. You look at the policies, you look at the models. This was not a theoretical concern. This was real. And I think the only reason why we’ve moved off of that trajectory is because of Trump’s election, but we could very easily be moved back onto that trajectory. Jason Calacanis If you were to look at all three opinions here and put them together, they could all be true at the same time. You’ve got a number of people, some might call useful idiots, some might call just people with God complexes who believe they know how the world should operate. Effective altruism kind of falls into that. Oh, we can make a formula, that’s their kind of idea, where we can tell you where to put your money, rich people, in order to create the most good and, you know, where are these enlightened Individuals with the best view of the world? They might be, who knows, maybe they’re the smartest kids in the room, but they’re kind of delusional. (Time 0:20:18)
  • AI’s Economic Transformation
    • AI will create new jobs and reduce costs, similar to past technological revolutions.
    • Increased capital deployment and economic growth will balance job displacement fears. Transcript: Jason Calacanis Hey, we got people out of fields, you know, in the agricultural revolution, we put them into factories, industrial revolution, then we went to this information revolution. So your position is we will have a similar transition, and it’ll be okay. But do you not believe that the speed, because we’ve talked about this privately and publicly on the pod, that this speed, the velocity at which these changes are occurring, you would Agree are faster than the industrial revolution, much faster than the information revolution. So let’s one more time talk about job displacement. And I think the real concern here for a group of people who are buying into this ideology is specifically unions, job displacement. This is something the EU cares about. This is something the Biden administration cares about. If truck drivers lose their jobs, just like we went to bat previously for coal miners, and there were only 75,000 or 150,000 in the country at the time, but it became the national dialogue. Oh my God, the coal miners. How fast is this going to happen? One more time on drivers specifically. Okay, coders, you think there’ll be more code to write, but driving, there’s not going to be more driving to be done. So is this time different in terms of the velocity of the change and the job displacement in your mind, Friedberg? The velocity is greater, but the benefit will be faster. David Friedberg So the benefit of the Industrial Revolution, which ultimately drove lower price products and broader availability of products through manufacturing, was one of the key outputs Of that revolution, meaning that we created a consumer market that largely didn’t exist prior. Remember, prior to the Industrial Revolution, if you wanted to buy a table or some clothes, they were handmade, they were kind of artisanal. Suddenly, the Industrial Revolution unlocked the ability to mass produce things in factories. And that dropped the cost and the availability and the abundance of things that everyone wanted to have access to, but they otherwise wouldn’t have been able to afford. So suddenly everyone could go and buy blankets and clothes and canned food and all of these incredible things that started to come out of this industrial revolution that happened at The time. And I think that folks are underestimating and under realizing the benefits at this stage of what’s going to come out of the AI revolution and how it’s ultimately going to benefit people’s Availability of products, cost of goods, access to things. So the counterbalancing force, J. Cal is deflationary, which is, let’s assume that the cost of everything comes down by half. That’s a huge relief on people’s need to work 60 hours a week. Suddenly, you only need to work 30 hours a week, and you can have the same lifestyle or perhaps even a better lifestyle than you have today. So the counter argument to your point, and I’ll talk about the pace of change and specific jobs in a moment. But the counter argument to your point is that there’s going to be this cost reduction and abundance that doesn’t exist today. Give an example. Let’s give like some examples that we could see. Automation and food prep. So we’re seeing a lot of restaurants install robotic systems to make food. And people are like, oh, job loss, job loss. But let me just give you the counterside. The counterside is that the cost of your food drops in half. So suddenly, you know, all the labor costs it’s built into making the stuff you want to pick up, everyone’s freaking out right now about inflation. Oh my God, it’s $8 for a cup of coffee. It’s $8 for a latte. This is crazy, crazy, crazy. What if that dropped down to two bucks? You’re going to be like, man, this is pretty awesome. With good service and good experience and don’t make it all dystopian. But suddenly there’s going to be this like incredible reduction or deflationary effect in the cost of food. And we’re already starting to see automation play its way in the food system to bring inflation down. And that’s going to be very powerful for people. Jason Calacanis Shout out to Eats at Cloud Kitchens and Cafe X. We all took swings at the bat at that exact concept is that it could be done better, cheaper, faster. David Friedberg One of the amazing things of these vision action models that are now being employed is you can rapidly learn using vision systems and then deploy automation systems in those sorts of Environments where you have a lot of kind of repetitive tasks that the system can be trained and installed in a matter of weeks. And historically, that would have been a whole startup that would have taken years to figure out how to get all these things together and custom program it custom coded. So the flip side is like when Uber hit, those people were not drivers. Think about the jobs that all those people had prior to Uber coming to market. And then the reason they drove for Uber is they could make more money driving for Uber or now driving flexibility or DoorDash and the flexibility. So their lifestyle got better. They had all of this more control in their life. Their incomes went up. And so there’s a series of things that you are correct, won’t make sense in the future from a kind of standard of work perspective, but the right way to think about it is opportunity gets Created. New jobs emerge, new industry, new income, costs go down. And so I keep harping on this, that it’s really hard today to be very prescriptive to Sachs’s point about what exactly is around the corner. But it is an almost certainty that what is around the corner is more capital will be deployed. (Time 0:25:33)
  • Job Loss vs GDP Growth
    • Dramatic job losses would require unprecedented GDP growth fueled by AI.
    • Massive unemployment claims need to be balanced with expected economic expansion. Transcript: David Sacks Got it. Well said, Friedberg. Well said. I think I’ve heard Satya turn this question around about job loss saying, well, do you believe that GDP is going to grow by 10% a year? Because what are we talking about here? In order to have the kind of disruption that you’re talking about, where, I don’t know, 10% to 20% of knowledge workers end up losing their jobs, AI is going to have to be such a profound Force that it’s going to have to create GDP growth like we’ve never seen before. (Time 0:30:53)
  • New Grads Replaced by AI
    • New grads were historically used as “autocomplete” for entry-level work.
    • AI tools now replace much of that grunt work, reducing new grad hiring. Transcript: Chamath Palihapitiya And to your point, the models are good enough that it effectively allows a person to rise in their career without the need of new grad grist for the mill, so to speak. So I think the reason why companies aren’t hiring nearly as many new grads is that the folks that are already in a company can do more work with these tools. And I think that that’s a very good thing. So you’re generally going to see OPEX as a percentage of revenue shrink naturally, and you’re going to generally see revenue per employee go up naturally. But it’s going to create a tough job market for new grads in the established organizations. And so what should new grads do? They should probably steep themselves in the tools and go to younger companies or start a company. I think that’s the only solution for them. David Sacks Bingo. The most important thing for whether there are jobs available for new grads or not is whether the economy is booming. So obviously in the wake of a financial crisis, the jobs dry up because everyone’s cost cutting and those jobs are the first ones to get cut. But if the economy is booming, then there’s going to be a lot more job creation. And so, again, if AI is this driver and enabler of tremendous productivity, that’s going to be good for economic growth. And I think that that will lead to more company formation, more company expansion at the same time that you’re getting more productivity. Now, to give an example, one of the things I see a lot discussed online about these coding assistants is that they make junior programmers much better. Because if you’re already like a 10X programmer, very experienced, you already knew how to do everything. And you could argue that the people who benefit the most are the entry-level coders who are willing to now embrace the new technology, and it makes them much more productive. So in other words, it’s a huge leveler and it takes an entry level coder and makes them 5x or 10x better. So look, this is an argument I see online. The point is just, I don’t think we know how this cuts yet. I agree. And I just think there’s like this, this dumerism is premature and it’s not a coincidence that it’s being funded and motivated by this hardcore ideological element. Chamath Palihapitiya I’ll tell you my hiring experience. We have about 30 people at 80, 90. And the way that I found it to work the best is you have senior people act as mentors and then you have an overwhelming corpus of young, very talented people who are AI native. And if you don’t find that mix, what you have instead are L7s from Google and Amazon and Meta who come to you with extremely high salary demands and stock demands, and they just don’t thrive. And part of why they don’t thrive is that they push back on the tools and how you use them. They push back on all these things that the tools help you get to faster. This is why I think it’s so important for young folks to just jump in with two feet and be AI native from the jump because you’re much more hireable, frankly, to the emergent company. And the bigger companies, you’ll have a lot of these folks that see the writing on the wall, may not want to adapt as fast as otherwise. Another way, for example, that you can measure this is if you look inside your company on the productivity lift of some of these coding assistants for people as a distribution of age, What you’ll see is the younger people leverage it way more and have way more productivity than older folks. And I’m not saying that as an ageist comment. I’m saying that it’s an actual reflection of how people are reacting to these tools. What you’re describing is a paradigm shift. It is a big leap. It’s like when I went to college, when I took computer science, it was object oriented programming. It was like C++. It was compiled languages. It was gnarly. It was nasty work. And then you had these high-level abstracted languages. And I used to remember at Facebook, I would just get so annoyed because I was like, why is everybody using PHP and Python? This is like not even real. But I was one of these old light lights who didn’t understand that I just had to take the leap. And what it did was it grew the top of the funnel of the number of developers by 10x. And as a result, what you had were all of these advancements for the internet. (Time 0:36:13)
  • Be AI Native to Thrive
    • Young professionals should embrace AI tools fully to stay competitive.
    • Older, established workers resistant to AI risk falling behind. Transcript: Chamath Palihapitiya I’ll tell you my hiring experience. We have about 30 people at 80, 90. And the way that I found it to work the best is you have senior people act as mentors and then you have an overwhelming corpus of young, very talented people who are AI native. And if you don’t find that mix, what you have instead are L7s from Google and Amazon and Meta who come to you with extremely high salary demands and stock demands, and they just don’t thrive. And part of why they don’t thrive is that they push back on the tools and how you use them. They push back on all these things that the tools help you get to faster. This is why I think it’s so important for young folks to just jump in with two feet and be AI native from the jump because you’re much more hireable, frankly, to the emergent company. And the bigger companies, you’ll have a lot of these folks that see the writing on the wall, may not want to adapt as fast as otherwise. Another way, for example, that you can measure this is if you look inside your company on the productivity lift of some of these coding assistants for people as a distribution of age, What you’ll see is the younger people leverage it way more and have way more productivity than older folks. And I’m not saying that as an ageist comment. I’m saying that it’s an actual reflection of how people are reacting to these tools. What you’re describing is a paradigm shift. It is a big leap. It’s like when I went to college, when I took computer science, it was object oriented programming. It was like C++. It was compiled languages. It was gnarly. It was nasty work. And then you had these high-level abstracted languages. And I used to remember at Facebook, I would just get so annoyed because I was like, why is everybody using PHP and Python? This is like not even real. But I was one of these old light lights who didn’t understand that I just had to take the leap. And what it did was it grew the top of the funnel of the number of developers by 10x. And as a result, what you had were all of these advancements for the internet. And I think what’s happening right now is akin to the same thing, where you’re going to grow the number of developers upstream by 10x. But in order to embrace that, you just have to jump in with two feet. And if you’re very rigid in how you think the job should be done technically, I think you’re just going to get left behind. (Time 0:38:30)
  • The US-China AI Race Reality
    • AI competition between the US and China is an intense ongoing race.
    • The balance of power in AI will shape global economic and military dominance. Transcript: David Friedberg Is a great topic. I want to make one last point, which I think, and Sax, you may not appreciate this, so we can have a healthy argument about this. I think in the same way that all of these jobs are going to get lost to AI fearmongering, there’s a similar narrative that I think is a false narrative around there’s a race in AI that’s Underway between nation states. And the reason I think it’s false is if I asked you guys the question, who won the industrial revolution? The industrial revolution benefited everyone around the world, there are factories, and there’s a continuous effort and continuous improvement in manufacturing processes worldwide. That is a continuation of that revolution. Similar if I asked who won the internet race. There are businesses built out of the US, businesses built out of China, businesses built out of India and Europe that have all created value for shareholders, created value for consumers, Changed the world, etc. And I think the same is going to happen in AI. I don’t think that there’s a finish line in AI. I think AI is a new paradigm of work, a new paradigm of productivity, a new paradigm of business, of the economy, of livelihoods, of pretty much everything. Every interaction humans have with ourselves and the world around us will have in its substrate AI. And as a result, I think it’s going to be this continuous process of improvement. So I’m not sure, look, there are different models, and you can look at the performance metrics of models, but you can get yourself spun up into a tizzy over which model is ahead of the others, Which one’s going to quote, get to the finish line first. But I think at the end of the day, the abundance and the economic prosperity that will arise from the continuous performance improvements that come out of AI and AI development will Benefit all nation states and actually could lead to a little bit more of a less resource constrained world where we’re all fighting over limited resources and there’s nation state Definitions around who has access to what and perhaps more abundance, which means more peace and less of this kind of resource driven world. Jason Calacanis Your thought on the Kumbaya theory exposed by (Time 0:44:31)
  • Clarifying BBB Spending Misconceptions
    • Big Beautiful Bill (BBB) has misconceptions about spending and doge cuts.
    • Doge cuts relate to discretionary spending, which reconciliation bills can’t address. Transcript: Jason Calacanis It’s permeating everywhere. The two conversations at every stop I’ve made here is the big, beautiful bill and the balance sheet of the United States, as well as tariffs. So we need to maybe revisit our discussion last week. Chamath, you had in Freiburg, did an impromptu call with Ron Johnson over the weekend, which then spurred him going on 20 other podcasts to talk about this stephen miller from the administration Has been tweeting some corrections or his perceived corrections about the bill and sax i think you’ve also started tweeting this where do we want to start maybe well i think there are David Sacks Just a couple of facts that should be cleaned up because okay so facts from the administration, their view of our discussion. Well, even though I was defending the bill last week, on the whole, I wasn’t saying it was perfect. I was just saying it was better than the status quo. Jason Calacanis Yeah, you were clear about that. David Sacks Yeah, but even I, in doing that, was conceding some points that I think were just factually wrong. And the big one was that I said I was disappointed that the doge cuts weren’t included in the big, beautiful bill. What Stephen Miller has pointed out is that reconciliation bills can only deal with what’s called mandatory spending. They can’t deal with what’s called discretionary spending. And since the doge cuts apply to discretionary spending, they just can’t be dealt with in a reconciliation bill. They have to be dealt with separately. There can be a separate rescission bill that comes up, but it can’t be dealt with in this bill. And just to be very clear, look, if the doge cuts don’t happen through rescission, I’m going to be very disappointed in that. I really want the doge cuts to happen. But it’s just a fact that the doge cuts cannot happen in the big, beautiful bill. It’s not that kind of bill. And I think it’s therefore wrong to blame Big Beautiful Bill for not containing doge cuts when the Senate rules don’t allow that. It all goes back to the Byrd rules. There are only specific things that can be dealt with through reconciliation, which is this 50-vote threshold. And it has to be, quote-unquote mandatory spending. Discretionary cuts are dealt with in annual appropriations bills that require 60 votes. Now look, this is kind of a crazy system. I don’t know exactly how it evolved. I guess Robert Byrd is the one who came out with all this stuff and maybe they need to change the system. But it’s just wrong to blame the big beautiful bill for not containing the doge cuts. That’s just a fact. So the other thing is that the BBB does actually cut spending. It’s just not scored that way because when the bill removes the sunset provision from the 2017 tax cuts, the CBO ends up scoring that as effectively a spending increase. Rates are simply continuing at their current level. In other words, at this year’s level. So if you used the current year as your baseline, okay, and then compared it to spending next year, it would score as a cut in spending. So it’s just not, it’s not correct to say the still increases spending. It does actually result in a mandatory spending cut, but it’s not getting credit for that because we’re continuing the tax rates at the current year’s rates. Jason Calacanis Do you believe, Sachs, that this administration, which you are part of, in four years will have spent, will have balanced the budget? Will it have reduced the deficit or will the deficit continue to grow at $2 trillion a year? What is your belief? David Sacks Because there’s a lot of strategies going on here. Yeah. My belief is that President Trump came into office inheriting a terrible fiscal situation. Jason Calacanis I mean, basically- That he created and that Biden created. I don’t think he created it. They both put $8 trillion on the debt. That’s just a fact. It’s a big difference. David Sacks It’s a big difference to add to the deficit when you’re in the emergency phase of COVID. Okay, fine. Give him a mulligan for that. Sure. Emergency spending. It was never supposed to be permanent. And then somehow Biden made it permanent. And he wanted a lot more. Remember Build Back Better? He wanted a lot more. So it’s tough when you come into office with a, what is $2 trillion annual deficit. So to my original question. Now look, hold on. Would I like to see the deficit eliminated in one year? Yeah, absolutely. But there’s just not the votes for that. Well, I asked you for four years. There’s a one vote margin here in the House, and the Democrats aren’t cooperating in any way. So I think that the administration is getting the most done that it can. This is a mandatory spending cut. And I think the doge cuts will be dealt with hopefully through rescission in a subsequent bill. Jason Calacanis I’m asking you about four years from now, will we be sitting here in four years? Will Trump have cut spending by the end of this term in another three and a half years? Will we be looking at a balanced budget potentially? Is that the goal of the administration? Or will we be at 42, 44, $45 trillion at the end of Trump’s second term, David? David Sacks Listen, if you want that level of specificity, you’re going to have to get Scott Besson on, okay? This is just not my area. (Time 0:53:03)
  • CBO Scoring and Energy Concerns
    • CBO’s scoring of the budget bill is brittle and opaque.
    • Energy supply concerns are critical to sustaining GDP growth and the bill’s success. Transcript: Chamath Palihapitiya Later? I think Stephen’s critique of how the media summarized the reaction to the bill is accurate. And I think it’s probably useful to double click into one thing that Sachs didn’t mention, but that Stephen did. A lot of this pivots around the CBO, which is the Congressional Budget Office, and how they look at these bills. And there’s a lot of issues with how they do it. In one specific case, which Sachs just mentioned, and Stephen talked about is that they have these arcane rules about the way that they score things. And what they were assuming is that the tax rates would flip back to what they were before the first Trump tax cuts, which obviously would be higher than where they are today. What that would mean in their financial model is we were going to get all that money. Now, to maintain the tax cuts where we are, they now then would look at that and say, oh, hold on, that’s a loss of revenue. Why are all of these things important? I downloaded the CBO model, went through it, and what I would say is, at best, it’s Spartan, which means that I don’t think a financial analyst or somebody that controls a lot of money Will actually put a lot of stock in their model. I think what you’ll have happen is people will build their own versions, bottoms up. Jason Calacanis Do you trust it, the CBO’s version of this, or do you largely trust it? Chamath Palihapitiya I don’t think the CBO really knows what’s going on, to be totally honest with you. Okay. I think that there are parts of what they do, they’re also opaque on. Nick, I sent you a tweet from Goldman Sachs. So here’s what Goldman put out. Now, the point is, when you build a model, what you’re trying to do is net out all of these bars, okay? You’re trying to add the positive bars and the negative bars, and you figure out what is the total number at the end of it. Now, in order to do that, when you see the bars on the far right, that’s a 2034 dollar. That’s very different than a 2025 dollar. The CBO doesn’t disclose how they deal with that. They don’t disclose the discount rate. So you can question what that is. The CBO makes these assumptions that, as Stephen pointed out, are very brittle with respect to the tax plan. That’s not factored in here. So those are the issues with the way the CBO scores it. So you have to do it yourself. Now, Peter Navarro published an article, which I think is probably the most pivotal article about this whole topic. David Friedberg Peter Navarro of tariff fame. Jason Calacanis Yeah. Chamath Palihapitiya Here, I think he nails it right in the bullseye, which is the bond market needs to make a decision on one very critical assumption when they build their own model. Okay. So let’s ignore the CBOs kind of brittle math and the Excel that they post on their website. People are going to do their own because they’re talking about managing their own money. But Navarro basically points to the critical thing, which is, listen, those CBO assumptions also include a fatal error, which is they assume these very low levels of GDP. What you’re probably going to see in Q2 is a really hot GDP print. If I’m a betting man, which I am, I think the GDP print is going to come in above three, not quite four, but above three. And so what Peter is saying here is, hey, guys, you’re estimating 1.7% GDP. Why don’t you assume 2.2? Or why don’t you assume 2.7? Or any number? Or really what he’s saying is, why don’t you build a sensitivity so that you can see the implications of that? And I think that that is a very important point. Okay, so where do I net out a week later, Jason? It’s pretty much summarized in the tweet that I posted earlier today. So over the last week, as people have digested it, I think that there are small actors in this play and big actors. The biggest actor is obviously President Trump, but the second biggest actor is the long end of the bond market. These are the central bankers, the long bond holders, and these macro hedge funds. Why? Because they will ultimately determine the United States’ cost of capital. How expensive will it be to finance our deficits? Irrespective of whatever the number is, it could be a dollar or it could be a trillion dollars. That doesn’t matter right now. The point is what is going to be our cost of capital. And what’s happened over the last little while is that they’ve steepened the curve and they’ve made it more expensive for us to borrow money. That’s just the fact. So how do we get in front of this? I think the most important thing, if you think about what Peter Navarro said is, this plan and the bill can work if we get the GDP right. Okay? So how do you get the GDP right? And this is where I have one very narrow set of things that I think we need to improve. And the specific thing that I’ll go back to is today, America is at a supply-demand trade-off on the energy side. What does that mean? We literally consume every single bit of energy that we make. We don’t have slack in the system. We are growing our energy demands on average about 3% a year. So I think the most critical thing we need to do is to make sure the energy markets stay robust, meaning there’s a lot of investment that people are making. On Tuesday, I announced a deal that I did building a one gigawatt data center in Arizona. This is a lot of money. This is little old me. But there are lots of people ripping in huge, huge, huge checks, hundreds of billions of dollars. I think the sole focus has to be to make sure that the energy policy of America is robust, and it keeps all the electrons online. If there’s any contraction, I think it’ll hit the GDP number, because we won’t have the energy we need. And that’s where things start to get a little funky. So I think where I am is, I think President Trump should get what he wants. I think the bill can work, narrowly address the energy provisions, and I think we live to fight another day. (Time 0:58:58)
  • National Champions via Government Role
    • Strategic industries need government-supported national champions with golden votes.
    • Steel, AI, batteries, and rare earths are vital sectors for national security. Transcript: Jason Calacanis All the GDP. All right, Nippon Steel and the US steel merger got cleared by President Trump. This was something that was being blocked by Biden, obviously, for national security reasons. Nippon is going to acquire a year’s steel for $14.9 billion. Biden blocked that, as we had discussed. On Friday, Trump cleared the deal to go through, calling it a partnership that will create 70,000 jobs in the US. And on Sunday, Trump called the deal an investment, saying it’s a partial ownership, but it will be controlled by the USA. Chamath, there seems to be a reframing of this deal and that the United States is going to benefit from it, but it’s not a sale. Let’s set some context. Chamath Palihapitiya The United States is always on the wrong side of these deals. Okay, we’ve been on the wrong side for 20 years, meaning we show up when an asset is stranded or completely run into the ground. For example, we did the auto bailouts at the end of the great financial crisis. If it’s not a company and there’s toxic assets, we up something called TARP. What do we get? Not much in return. In this, it’s the opposite. I think that this strategy has worked for many other countries really well. If you look at Brazil, companies like Embraer and Vale, which are really big Brazilian national champions, have a partnership, a pretty tight coupling with the Brazilian government. The Brazilians have a golden vote. If you look inside of the UK, there’s a bunch of aerospace and defense companies, including Rolls-Royce, that have a very tight coupling with the UK government. They have a golden vote. If you look in China, companies like ByteDance and CATL have a very tight coupling with the Chinese government and the Chinese government has a golden vote. And so what are all of those deals? Those deals are about companies that are thriving and on the forward foot. And so I think this is a really important example of things that we need to copy. I’ve said this before, but one part of China that I think we need to pay very close attention to is Hu Jintao in 2003 laid out a plan and he said, we are going to create 10 national champions In China in all the critical industries that are going to matter for the next 50 years, including things like batteries and rare earths and AI. And they did it. But for those companies, it allowed them to thrive and crush it. And I think that we need to do that and compete with those folks on an equal playing field. Jason Calacanis So- In all industries or in very specific strategic ones? Because that would seem like corrupting capitalism and free markets would be the steel man. Chamath Palihapitiya Yeah. There’s 10 industries that matter. And you can- Give of them. Steel is one. Okay. I think the precursors for pharmaceuticals are absolutely critical. Got it. I think AI is absolutely critical. I think the upstream lithography and EV deposition and chip making capability, absolutely critical. I think batteries are absolutely critical. And I think rare earths and the specialty chemical supply chain, absolutely critical. If you have those five, you are in control of your own destiny in the sense that you can keep your citizens healthy, and you can make all the stuff for the future. So I think if the president is creating a more expansive idea beyond US deal with this idea of US support, maybe there’ll be preferred capital in the future to US deal. But if he creates a category by category thing across five or six of these critical areas of the future, I think it’s super smart and we should do more of it. Jason Calacanis What do you think? Interventionism, putting your thumb on the scale, golden votes, a good idea for America in very narrow verticals or let the free market decide? (Time 1:17:10)
  • Prefer Trade Incentives Over Intervention
    • Avoid direct government market intervention to prevent inefficiency and corruption.
    • Use trade incentives to promote onshore manufacturing instead of picking winners. Transcript: David Friedberg Don’t like the government markets keep the government out of the markets it creates a slippery slope. First of all, I think markets don’t operate well. If government’s involved, it gets inefficient. And that hurts consumers. It hurts productivity. It hurts the economy. Second, I think it’s a slippery slope. You do one thing now. David Sacks Non-intervention results in all the steel production moving offshore, if it results in all the rare earth processing and the rare earth magnet casting industries moving offshore, In fact, not just moving offshore, but moving to an adversarial nation such that they can just switch off our supply chain for pretty much every electric motor. Is that an outcome of the quote-unquote free market that we should accept? David Friedberg Well, then I think that’s where the government can play a role in trade deals to manage that effect. So you can create incentives that’ll drive onshore manufacturing by increasing the tariff or restricting trade with foreign countries so that there isn’t a cheaper alternative, Which is obviously one of the plays that this Trump administration is trying to do. I’d rather have that mechanism than the government making actual market-based decisions and business decisions. You know how inefficient government runs. You know how difficult it is to assume that that bureaucracy is actually ever going to act and pick any best interest or any good interest at all. They’re just going to get all up. So I’d rather keep the government entirely out of the market, create a trade incentive where the trade incentive basically will drive private markets, private capital to build that Industry onshore here, because there isn’t one and there’s demand for it, because you’ve restricted access to the foreign market that I think would be the best general solution. And then I think it’s a slippery slope, because then you could always rationalize something being strategic, something being security interests in the United States. So then every industry suddenly gets government intervention and government involvement. And then the third thing is, I don’t want the government making money that the Congress then says, hey, we’ve got more money, we got more revenue, let’s spend more money, because then They’ll create a bunch of waste and nonsense that’ll arise from having increased revenue. One side, and I will say, one thing where I do think we do a poor job is we don’t do a good job to answer your question, J. Cal, of investing the retirement funds that we’ve mandated through Social Security. We should be taking the four and a half trillion dollars that our Social Security beneficiaries have had deducted from their paychecks over many, many years. And those Social Security future retirees or current retirees are getting completely ripped off because their money is being loaned to the federal government. It’s not being invested. It’s been loaned to the government to spend money and run a deficit and ultimately inflate away the value of the dollar. We should have been investing those dollars in some of these strategic assets. So if ever there were to be shares or investment that the government does, it should be done through strategic investing through the Social Security or Retirement Program. Similar, by the way, to what’s done in Australia, where these supers have created an extraordinary surplus of capital. Same in Norway, same in the Middle East countries. Incredible sovereign wealth funds that benefit the retirees and the population at large. (Time 1:23:20)
  • Strategic Investing for Social Security
    • Invest Social Security funds strategically to benefit retirees.
    • Shift from loans to government towards equities and sovereign wealth strategies. Transcript: David Friedberg We should be taking the four and a half trillion dollars that our Social Security beneficiaries have had deducted from their paychecks over many, many years. And those Social Security future retirees or current retirees are getting completely ripped off because their money is being loaned to the federal government. It’s not being invested. It’s been loaned to the government to spend money and run a deficit and ultimately inflate away the value of the dollar. We should have been investing those dollars in some of these strategic assets. So if ever there were to be shares or investment that the government does, it should be done through strategic investing through the Social Security or Retirement Program. Similar, by the way, to what’s done in Australia, where these supers have created an extraordinary surplus of capital. Same in Norway, same in the Middle East countries. Incredible sovereign wealth funds that benefit the retirees and the population at large. That’s where the dollars should be invested from. I do think the fundamental focus priority right now should be reforming Social Security while we still have the chance. We have until 2032, when Social Security will be functionally bankrupt, and everyone’s going to get overtaxed and kids are going to end up having to pay through inflation for the benefits Chamath Palihapitiya Of the retirees of the last generation. Feeberg’s right, we’re on a seven year shot clock to when Social Security is not funded. David Friedberg And by the way, this opportunity to fix mandatory spending, it was an opportunity to introduce some structural reform in Social Security. Another reason why I think that there’s a degree of disgraziate in this bill, particularly with how Congress had acted, and not addressing what is becoming a critical issue because Everyone wants to get re-elected in the next 12 months, 18 months, they’ve got elections coming up. So everyone’s scrambling to not mess with that because you can’t touch it. It’s like, you know what, guys, this is bankrupt in seven years. It’s going to cost us five, 10 times as much when we have to deal with it when everyone runs out of money. Deal with it now. Fix the problem. And by the way, we should flip all that money, four and a half trillion dollars, into an investment account for the retirees where they can own equities, and can make investments in the Markets and they can participate in the upside of American industry and the GDP growth that’s coming. (Time 1:25:31)