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Podcast

Iran War, Oil Shock, Off Ramps, AI's Revenue Explosion and PR Nightmare

All-In with Chamath, Jason, Sacks & Friedberg

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  • Short Sharp Conflict Narrows Economic Damage
    • Oil price spikes from the Iran conflict raise PCE inflation and shave GDP growth, with Goldman Sachs moving PCE forecast from 2.1% to 2.9% and GDP down ~30 bps for the year.
    • Markets reflexively price in shorter conflicts; Brad Gerstner and Chamath argue Trump doctrine favors swift, limited objectives which likely compress duration and economic pain. Transcript: Jason Calacanis All right, let’s talk about the war in Iran. Obviously, there are much more important issues than financial ones, life, death, the freedom of the people of Iran. But we’re uniquely qualified, I think, to talk about the economic fallout, second order effects, first order effects. And there has been massive volatility over the last five trading days. Just talking about Brent crude oil, and we’ll key the discussion off of that type of oil. It spiked $84 on Friday. That was day seven of the war, 119 on Monday, day 10. Dropped back down to 84, jumped back up to 100 after three commercial ships were hit in the strait on Wednesday. Those ships, by the way, were not oil tankers. They were carrying cargo. They were flagged as Thai, Japanese, and Marshall Islands. Brent crewed currently at 99 when we’re taping this. It’ll be at something different by the time you listen to the pod, I’m sure. But it’s quite a spike. And here’s a second chart. This shows you the spikes over time. I was old enough to remember the oil shock of 1978. We had to get in line at the gas station based on your license plate number. And you had to wait an hour or two to get gas. Gulf War, obviously, it hit $100 in $26. 2008, we hit kind of a peak moment, $216 in today’s dollars. That was the peak oil discussion. Demand from China went off the charts. When Russia invaded Ukraine, we hit 115, which would be 133 in today’s dollars. So this is not new, but it is significant and breaking news today. Iran’s new supreme leader, Moshtaba, he’s keeping the strait closed as a tool to pressure the enemy wall street journal on thursday quoted a senior fellow at the middle east institute Saying that reopening the strait will require ground troops polymarket 27 chance that u.s forces enter iran by the end of march and 57% by the end of the year. So the sharps over at Polymarket believe we will have boots on the ground. Let me stop there. Brad, your thoughts on what happens when oil hits this kind of number and we have this uncertainty of, hey, this could last, you know, two more weeks or it could last six months. It could last a year. Nobody seems to know. And how it resolves, we just had a really interesting talk with Graham Allison, how it resolves is also a major unknown. Your thoughts? Brad Gerstner So first is, obviously, there are huge direct costs as oil prices go up. Oil is a component of a lot of consumer and enterprise products. And it also hurts consumer confidence, enterprise confidence. Goldman Sachs is out today with some analysis where they updated kind of the economic knock-on effects, right? So they raised their PCE inflation forecast from 2.1 to 2.9, right, for the year. So that’s a huge jump, right, in terms of their expected, you know, PCE inflation. PCE, which excludes oil, okay, is they forecasted up from 2.2 to 2.4. So they’re saying even if you excluded the direct price of oil, the knock-on effects is going to cause a little more inflation. They lowered their GDP forecast by 30 basis points for the year. And they also expect higher unemployment as a result of this for the year. All of that is weighing on the sentiment in the market. (Time 0:03:49)
  • China Is The Real Pressure Point
    • China is the strategic amplifier: sustained Strait closures hurt China and Asia far more than the U.S., creating leverage for a summit-level grand bargain between Trump and Xi.
    • Chamath predicts Xi will negotiate to protect China’s oil imports ahead of their meeting. Transcript: Chamath Palihapitiya Much as people want to talk about iran iran iran i think as i explained last week i think this is about China, China, China. And you have to remember, at the end of this month, he has a pivotal three days with Xi Jinping in China. This is going to be an absolutely historic convening of the two superpowers that run the world. One, which is us, we are the established, and one, which is China, who wants to be reascended. And I would bet dollars to donuts that there is going to be an enormous incentive for Xi to negotiate a grand bargain in those three days and do something historic for himself. And I think that the president will use that if he thinks that it creates leverage. Jason Calacanis I think it’s a great insight. How does the Strait of Hormuz open? If this war is dragging on and Israel, which seems to be the driving force in this, if Israel keeps it up with Iran, how do we ever get the Strait open again? Brad Gerstner I think the off-ramp is that the United States declares victory, does what SAC says, and says, listen, we degraded and we destroyed. That’s what we came here to do. We did not come here for some experiment in democracy. We wish the best to the Iranian people to do the things they need to do. And if Iran does not back down, if after that declaration, Iran continues to destroy cargo containers moving through the narrow straits, I think you’re going to see Iran’s neighbors And Israel and others get very involved as it pertains to Iran because it’s in their interest. Listen, the United States produces 20 million barrels of oil a day and we consume 20 million barrels a day. This is a modest problem for the United States. This is a massive problem for China. This is a massive problem for Asia. This is a massive problem for all of our friends in the Gulf who are trying to dodge Iranian missiles right now. So there are a lot of people in the world who will take up arms to deal with the Iranians if the United States isn’t there because we can take care of ourselves. Jason Calacanis Your position, Brad, just to confirm it, is we are going to leave the war in the next 30 days. And then if the straits are not open, then China, India, and all the Gulf countries that are impacted by it, they will protect it. They will fight Iran. Brad Gerstner I think they’ll put a lot of pressure on Iran not to continue firing missiles at their ships. Right. At the end of the day, this is not just an American problem. Right. And let’s be clear. We’re always involved in this part of the world. The only question is, are we going to have an active armada that’s engaged in active military activities against Iran? And what I’m suggesting again, and listen, any time you try to clean up a mess like this, there is risk. This is not a risk-free, you know, initiative by the United States, nor was Venezuela. But let me steel man the alternative. Doing nothing and allowing Iran to procure, you know, the ingredients for a nuclear missile when they are set on the destruction of the United States and U.S. Interests, doing nothing in Venezuela while the Monroe Doctrine is totally wrecked and we let our adversaries take up positions in South America, those also have risks, right? Those carry a lot of risks. And so we’re weighing these two risks. Again, for me, I don’t like the fact that we’re engaged in military activities here. But I will tell you, I am very much on the side that if we’re going to go protect American national security interests, you go in, you do the degrading of their capability, and you get out. And I think, you know, that’s what I hear out of the president. Chamath Palihapitiya Chamath, you want to follow up? All roads lead to China. I think that you’re going to see Xi offer up a grand bargain. And I think it’s up to the president to decide whether he wants to take it and see what he wants to add to it to get something done. But I just don’t see them meeting and coming out with nothing. I think I see them going in and coming out with something that’s historic. And I think that all of this, Venezuela and Iran together, is all about China. Brad Gerstner Let me just say one thing as to that, Chamath, I think, because I think the point is absolutely spot on, right? Probably the single greatest takeaway for us from an investment perspective at the start of this war was that the Chinese, right, didn’t take up arms on behalf of Iran, aren’t defending Iran, and they didn’t cancel the summit with the president, the very fact because they need him they need the oil 20 percent of their entire domestic consumption is oil from Venezuela Chamath Palihapitiya And Iran 20 percent but it’s not 20 percent because it’s literally a hundred percent of anything that’s feedstock anything that transport, cars, buses, planes. They are in an enormous world of hurt. Now, they have a strategic petroleum reserve as well, and it’s quite robust, but it’s not robust enough to sustain five or six months of this. It’s not that robust. So at the end of the day, who is going to be hurting the most? It is China. And so if you play this game theory out, the reason he kept it is because now he needs to summit even more. Could you imagine if the president canceled? That would be a disaster for the Chinese. So the fact that it’s still on the books, if I was Xi, I’d be like, how do I negotiate and help find the off ramp? How do I end up fixing this faster? (Time 0:19:18)
  • AI Revenue Hit A Nuclear Moment
    • Frontier AI revenue surged to unprecedented scale: Anthropic hit a $14B run rate and OpenAI $20B, driven by enterprise agent/token usage moving beyond IT budgets into labor budgets.
    • Brad calls Jan–Feb a “splitting of the atom” moment with months like Anthropic’s $6B illustrating token-as-utility dynamics. Transcript: Jason Calacanis Revenue at these two companies growing, gosh, like unprecedented levels. Here are the reports, and I believe you’re investors in both these companies, Brad. Anthropic hit a $14 billion run rate last month, February. That means they have grown revenue from $1 billion to $14 billion in 14 months. They have 12x year over year. They’re valued at a meager $380 billion last month. This feels like a bargain given the growth. OpenAI ended 2025 at $20 billion annualized run rate. And they’ve grown revenue from $2 billion to $20 billion in 24 months. They’re valued at $840 billion last month. And man, it looks like Sam Altman has Dario in the review mirror. He could get lapped any moment. Lots of debate. Where did you find this? What the hell is this? That one? I made that. Brad Gerstner This is Dario closing in. Jason Calacanis What is that, a velociraptor? What is it? A T-Rex? It’s the famous scene from Jurassic Park. Oh, my God. But, I mean, I don’t think anybody expected Dario to be coming around the bend this fast, but he’s right behind, apparently, and they’re winning, obviously, the business-to side of The business. The J-curve on these companies is insane. $250, $500 billion, who knows what gets invested before these companies reach profitability, Brad, but you’re invested in these two companies. Yeah. Unless you sold when Sam Watman told you he would buy his shares back on the famous BG2 episode. Brad Gerstner I don’t think you sold it. Jason Calacanis I bought a lot more since then, Jason i bought a lot more fantastic that’s important information for us to have quick question for you number one what’s a better buy here yeah uh anthropic At 380 open ai at 840 uh and then i think people want to know if these companies are going to go public what you if you think they should go public what is the chance of that happening take Those questions however you like. Brad Gerstner Well, I mean, listen, love your children equally. They’re both incredible companies. Anthropic unquestionably has a lot of financial momentum, you know, and open AI is seeing a lot of momentum themselves, right? But the single most important question this year, right, was would AI revenue show up? And just 60 days ago, 90 days ago, there was tremendous skepticism. No way all of these infrastructure investments were going to pay off. There’s no incremental revenue coming out of AI, including many of our friends. But in February, we had, in January and February, we really had kind of a nuclear moment, right? The splitting of the atom moment. I mean, we had a $6 billion month out of Anthropic in February, right? Widely reported, okay? Let that set in for a second, right? $6 billion in a month. It was only a 28-day month, okay? That’s more revenue than the annual revenue of Databricks and Snowflake that are two of the greatest software companies of all time after 12 years, right? They could do in the first four or five months of this year, the total revenue of SpaceX this year. Jason Calacanis What is driving that? Just explain to the audience, what’s driving it? Is it token use? Is it Claude subscriptions? We crossed a threshold with Opus 4.6, right? Brad Gerstner And we saw it again with ChatGPT 5.4, where the models and the agents on top of them, whether it’s CloudCode, Codex, ChatGPT, they’re no longer competing with IT budgets. They’re now augmenting labor. They’re competing with labor budgets. You could not possibly have a $6 billion a month. It is impossible to do that by displacing IT budgets. Millions of other companies across America say, oh my God, let’s spin up these agents and have them do things for us. And we’re willing to pay for it because the product of that effort is worth the money to us. And the revenue and the usage momentum, I will tell you, in the month of March continues, and it only accelerates from here. As Kevin Weil has said, the models and the agents are the dumbest today they will ever be. Right. We’re in the early innings of compute and algorithmic capability. And so, you know, like that to me is the observation of this moment. (Time 0:27:13)
  • Take Frontier Labs Public To Fund Compute
    • Public frontier labs should go public to access cheap capital and broaden retail ownership; Brad argues IPOs solve compute financing constraints and democratize stakes for programs like kid accounts.
    • Jensen and others expect both Anthropic and OpenAI to IPO this year to fund large compute builds. Transcript: Brad Gerstner I’ve said, yes, they should go public for several reasons. There’s tons of institutional demand. They need cheap access to money to continue to build out the compute they need to support. There is more compute constraint in these businesses this very day than they’ve had any time in the last three years. So they need access to the capital. And then finally, I think you have to have the retail investor in the game. These are two of the most important companies in the history of capitalism, in the history of America. It’s destabilizing not to have them public. Jensen said last week that he expected the $40 billion he recently invested in these two companies would be his last money in because they were both going to go public. He said they would both go public this year. I think that they’re preparing and heading down that path. (Time 0:31:17)
  • Most Enterprise AI Spend Is Still Experimental
    • Much current AI enterprise spend is experimental, not yet integrated into mission-critical regulated workflows, so revenue may overstate production durability.
    • Chamath and others note absence of proven, high-margin AI replacement in healthcare/finance where mistakes carry legal risk. Transcript: Jason Calacanis Shamop, you had some insight into the quality, durability of this revenue. Chamath Palihapitiya There’s not a single good example that we can find of sustained positive margin expansion and impact of AI inside of a true corporate enterprise that is not right now a small test. There’s not. Brad Gerstner So where does 6 billion come from? Chamath Palihapitiya Because everybody has to show up to their board and have an AI checkbox. And everybody is thousands and thousands of companies. And when you have tens of thousands of companies as customers paying $200 plus a month, it’s not that hard to show up with that kind of revenue. The real question is the following. If you take, you use the Databricks and Snowflake example. If you look at the companies that use that software, those companies generate enormous revenues and enormous margins, and these products are in critical production workflows that Underlie those revenues and profits. That is just not true with AI today. We have all kinds of claims, but we are still experimenting. Why are we experimenting? Because we know it’s important, but we don’t yet really know what to do. You can’t just slot this in to a critical workflow in healthcare and all of a sudden show up where if you make a misdiagnosis or if you make a mischaracterization of a procedure, you can Get fined and go to jail. The companies that are in healthcare don’t do that. If you’re in financial services, and you make a mistake about somebody’s portfolio, or you make a misallocation and you point to a model, you will get sued and you will be in trouble. None of these things have transitioned from it’s interesting, it’s experimental, it’s the core critical operational workflow. That’s interesting. There will be a transition in revenue quality when that happens. A great example of this is Amazon. Why does Amazon issue an edict that says you cannot use this stuff inside of AWS unless a human now reviews and approves it? Because what happened? They had three or four SEV1 faults from a bunch of code that was written by agents that brought down AWS. Now, look, I’ve told you, I love AWS for one reason, because it’s hyper-reliable. I hate AWS for the same reason that hyper-reliability comes at enormous cost. I pay it, but I pay it to never have a SEV1. The reason they have 12 nines of accuracy is because it’s humans and deterministic code that never fails. It doesn’t mean that two companies can’t get to 20, 30, 40 billion of revenue. What it means is we have to be honest. This is an industry that’s early. We are all figuring it out. There’s a lot of test budgets that are going at it. It will slowly and methodically emerge into production, but (Time 0:32:12)
  • Code Generation Is The Scalable Enterprise Entry Point
    • Coding assistance is the breakout enterprise use case; it scales because software engineering supply was chronically constrained, so metered AI code generation unlocks latent product throughput.
    • David Sacks argues agents plus cheaper code metering can expand product creation rapidly. Transcript: David Sacks Well, look, when you’re talking about enterprise revenue, what you’re really talking about is coding assistance. That’s been the breakout use case. It’s really the first big breakout use case on the enterprise side. The consumer side has been more of like, you know, research and writing that kind of stuff, the chat bots. But enterprise has all been about coding assistance. My sense is that the demand for code is very scalable. Software engineers has always been an area of the economy where companies have never been able to hire enough, even in Silicon Valley, which is the most attractive place for software Engineers to work. We’ve never been able to recruit and attract enough of them. The rate limiting factor on the progress of every startup I’ve ever invested is not having enough engineers to code up the product roadmap. And then you look at the rest of the economy, the fortune 500 and so forth and so on. They have hardly been able to recruit software engineers at all because they’ve all gone to Silicon Valley. So I think you’re dealing with a part of the economy where there’s always been a massive supply shortage. And I don’t know the natural limit on that is, but my sense is that there’s a tremendous latent demand for the ability to generate code in large quantities, create new products. As the cost of code goes down, as the coding assistants get better, you can code up new types of products. And then, of course, it’s going to lead to agents, which is another way of basically using the code that gets generated. So my sense is that this could be very scalable. I don’t know where it taps out exactly. Where I think Chamath is right is that I think there is a change management aspect to this in Fortune 500 companies, for example, and they haven’t really wrapped their heads around how Exactly they’re going to use this. There was a McKinsey study that showed that a lot of these pilot projects in Fortune 500 companies were experimental. A lot of them were proving not to be successful. So I do think as you go beyond coding into company transformation, things like that, it becomes a little bit more speculative. That’s not to say it won’t happen. I think it will happen. I’m actually, I’m bullish. But I do think that we’re still waiting to see what the breakout use cases beyond coding will be. Probably agents will be the next big one. But I think Brad’s right that that’s big enough to see this scale for a while. (Time 0:39:04)
  • Reduce J‑Curve With Better Silicon And Open Source
    • Shrink the AI J-curve by improving silicon, embracing open source, and optimizing infrastructure to shorten the multi-year payback of gigawatt-scale data centers.
    • Jason outlines ~$50B per gigawatt builds and five-year payback assumptions as the baseline to improve. Transcript: Jason Calacanis The place to look for this actually moving from experimental into production is not at big companies. Big companies are actively resisting this. Management in big companies will resist it because it means lowering headcount, and it means the person who implements it might actually implement themselves out of a job. So that is the natural resistance you’ll see in big companies. That’s not where to look for adoption of new tech. That’s not why it’s happening. That’s not why it’s being so dumb. And then you can counter it. Startups are the place to look at this, and that’s where I am on the ground. What I’m seeing there is that startups are using this in production for their legal work, for their marketing, for SDRs, for their accounting, reviewing legal documents. This is all work that they would normally hire consultants for, or make hires for and what i’m sitting on the ground is it’s production ready in startups who are using it in those categories Hr as well accounting marketing all of that all that blocking and tackling all those chores are being done currently with these llms and they’re doing it in production and they’re doing It at scale just a quick second point here. Here’s the J curve. And this is the question I think we’ll get to in our next segment. When does this become a profitable business? If, and you asked this, Sam, in that famous clip on the BG2 podcast, RIP BG2, here you go, the LLM industry J curve. I just asked Claude to make this for me. If you have 500 billion, I think you would agree it’s probably going to be around that number brad invested in all of this and then more a lot more okay so five billion is an underestimate Here and then when do we actually see these large language model companies hit profitability in a in a calendar year it took tesla uber amazon you know decade plus in each of those cases To win back their investment. Here’s the precise. This is a really good chart. Chamath Palihapitiya Here’s the precise math on this. So I am building a one gigawatt data center in Arizona. Okay. When I greenlit that project, I thought it was going to be a four or $5 billion investment. I was like, okay, whatever. Then it went to 10. Then it went to 15. Then it went to 20. And now it’s upwards of $50 billion for the powered shell, for all the land, all the permits, then for all the infrastructure, all the people, all of it. Okay. Sarah Fryer said, I think it was about a year ago, maybe less than a year ago, that for them, every gigawatt is about 10 billion of annual revenue. So if you think about that J curve, Jason, really the way to think about it is, look, energy equals intelligence. For every gigawatt that they’re trying to spend, they have a five-year payback is roughly what it means just to get to break even. And then years six, seven, and eight will be where the profit is. Now, how do you shrink the J-curve? You have better silicon. We’re going to see something from Jensen in a week or two that uses a bunch of the stuff that we partnered with him at Grok on. There’ll be other people, there’ll be open source. So all those things can shrink the depth and the surface area of that jQuery so that you can get out of it faster. But right now that that thing is roughly accurate, which is it’s about 50 billion per gigawatt. And it’s about a five to six year payback just to get into the money. (Time 0:42:56)
  • AI Doomer Messaging Helped Fundraising But Hurt Trust
    • Chamath Palihapitiya said AI companies used scary doomer messaging to raise capital, then changed their posture once real revenue and government contracts were at stake.
    • He contrasted Dario’s warnings, Alex Karp’s political framing, and Sam Altman’s utility pitch as evidence the industry still lacks a coherent public story. Transcript: Chamath Palihapitiya Please. I think the big thing that we’re debating is actually something we’ve seen in every other technology trend when it started to get some really meaningful traction. So in the first generation of the internet, when you started to see e-commerce and all these other business models, then in the second big wave of the internet around the move to mobile And the move to social, and then now we’re seeing this big wave around AI. And I think what happens is in step one, entrepreneurs are A-B testing what it takes to raise money. Okay, that’s step one. And I think what has happened is that at least some parts of the AI ecosystem have decided that this crazy, scary doomerism is the best way to raise money. Where every now and then, they come out and they say, all the jobs will be destroyed. Anthropic, you know, Dario says that. This thing is sentient. And investors are like, okay, here’s 10 billion, here’s 50 billion, here’s 100 billion. But then the second step happens, they get the money, they start to do the training, they start selling. And then the investors are like, hey, where’s the revenue? And so then they start selling everywhere. And then if you see in the Department of War example, all of a sudden you flip flop, you become sort of an unserious dilettante like partner to the American government, they’re like, We’re going to boot you out. That’s billions of revenue gone. And what happened? So same investors that gave billions of dollars are like, hey, hold on a second. That’s absolutely not allowed. You need to conform and get back on track. And so what does Dario do? He flip-flops. And he’s like, oh, I’m really sorry. I didn’t mean to. Let’s sort of make good. All of that, to me, is an industry that’s still in its very early phases and still figuring out what its place in society is. So what is the problem? The problem is the following two clips, and I’ll just have Nick play these, and I’d love your guys’ reaction. The one thing, though, that I think even now is underestimated by all actors in industry, and including in Silicon Valley, is how disruptive these technologies are. Jason Calacanis If you are going to disrupt the economic and therefore political power significantly of one party space, highly educated, often female voters who vote mostly Democrat and military And working class people who do not feel supported and you like that’s, you believe that that’s going to work out politically. You’re in an insane asylum. Like, you cannot have it. This technology disrupts humanities trained, largely democratic voters and makes their economic power less. And increases the power, economic power of vocationally trained, working class, often male voters. And so these disruptions are going to disrupt every aspect of our society. And to make this work, we have to come to an agreement of what it is we’re going to do with the technology, how are we going to explain to people who are likely going to have less good and less Interesting jobs from their perspective and how is it that we are going and by the way on the military thing these technologies are dangerous societally the only justification you Could possibly have would be that if we don’t do it our adversaries and uh will do it and we will be subject to their rule of law. So if you decouple this from the support of the military, you’re going to have an enormous problem explaining to the American people why is it that we’re absorbing the risk of disrupting The very fabric of our society, including the most powerful parts of our society, if it’s not because it’s about maintaining our ability to be American in the near term and long term. Chamath Palihapitiya Now watch Sam’s reaction. Brad Gerstner Fundamentally, our business and I think the business of every other model provider is going to look like selling tokens. Jason Calacanis But we see a future where intelligence is a utility like electricity or water, and people buy it from us on a meter and use it for whatever they want to use it for. Chamath Palihapitiya So if you take those three messaging veins on a spectrum, one is we have a sentient super god. We’re the only ones that can protect you from it. But, you know, your days are numbered. That’s Dario. Alex, which is, hey, hold on a second. You can’t have it both ways. You can’t both say it on the one hand and then try to run the fabric of society and flip it. You need to be much more circumspect. And then Sam’s, which is we want to sell tokens as a service. I think the point is that this industry right now, that revenue traction, if anything else, has distracted people from actually getting on the same page and being much more methodical And much more reliable and trustworthy in explaining all of this and managing the expansion of this. And so what I would say is all of this fundraising gobbledygook has actually created this breathlessness that is not useful and isn’t helping. And I would say there needs to be a lot more seriousness by these folks to actually run this business thoughtfully. You can’t be a dilettante, you can’t flip-flop, you can’t pressure test, A-B test this kind of messaging in public, but I understand why you’re doing it because the stakes are so high, You’re playing this enormous poker game. But I think we need to do a better job of explaining all this to people because right now, my end of this is look at this chart. This is now the result of those three messages. Here is where AI is. It is slightly above the Democratic Party and an autocratic state. That’s where AI is. ICE is more popular than AI. So it’s not very popular. So to me, this is really the crux of this, where we are not really being honest. It would be much better if we said soberly, there’s a lot of experimenting. This revenue is great, but we don’t really know what’s real. We’re going to try to figure it out. We’re going to work methodically. There’s a lot of regulated industries. We’re going to work within those. We’re not going to flop the law and the rules. Licensure will still mean something. That’s a way better, thoughtful, mature message. (Time 0:46:17)
  • AI Has A U.S. PR Crisis That Is Now Blocking Buildout
    • The group argued AI is unusually unpopular in the U.S. because CEOs, media incentives, and well-funded doomer networks amplify fear.
    • David Sacks said Future of Life-style groups fund journalism and anti-data-center narratives, while Chamath said cancellations already wiped out billions in projected AI revenue. Transcript: Jason Calacanis Brad, what do you think? And rant. Chamath Palihapitiya And rant. Great rant. Jason Calacanis Brad, does the industry have a PR problem? Obviously, these recent surveys, and especially comparing them to China, where people see AI as abundance and this incredible new technology they want to embrace here, people are Scared. People are scared they’re going to lose their job. People are scared about wealth disparity. The rich get richer, the poor get poorer. There’s a lot of fear here in the United States. What can our industry do to turn this around in terms of communication from the big companies? They don’t seem to be communicating in any coordinated fashion. And they obviously are scaring the out of the public. Brad Gerstner Yeah, no, listen, I think it’s a fair rant and a fair point. At the start of the industrial revolution, at the start, you know, in the late 1800s, we had similar social responses to innovations that were occurring. We, in fact, had some violent clashes. We had demonstrations in the street. We had the entire robber baron movement. You know, so class warfare and worse is, you know, has come with other, you know, kind of industrial changes of this magnitude. So it doesn’t surprise me that we have a lot of anxiety by people that they may lose their job. And I think there are people out there who are kind of forecasting into the future in ways that are scary to, you know, the average person who’s listening to this. And I don’t think that’s particularly helpful. So could we do a better job messaging? No doubt about it. But if I just rewind to kind of where we started, I actually think the industry is, you know, this is going to be a pivotal year for the industry to demonstrate, right, how this is really Beneficial for humanity. I think we’re going to be able to demonstrate that it’s very beneficial from a healthcare perspective, from a drug discovery perspective, from an education perspective, etc. But we need to have a coordinated effort because Chema’s right, it’s deeply unpopular in the country. I happen to be on the optimistic side of this. 70% of the jobs that exist in the United States today did not exist 40 years ago, right? We’ve gone through the digital disruption that put a lot of people out of work, but the abundance and the recreation of new jobs, right, expanded the pie for largely everyone. I think that will be the case here. If you listen to Dario, he says the concern is that the disruption occurs at a faster and bigger rate, and so that we can’t keep up with kind of that replacement. I think that’s another fine point. But if we just go back to where we started the conversation, which was, are these good investments, right? That’s not the conversation. Chamath Palihapitiya No, of course they’re good investments. Of course you’re going to make money. Brad Gerstner No, no, no, no, no, no. That’s not what it’s about. That’s not it. He asked the question. You made the argument. Jason asked the question right are these companies simply selling tokens at a loss right and we moved into this no no they’re they’re selling at a profit i’m buying them and losing money Chamath Palihapitiya Right in the 1849 gold rush yeah anthropic and open ai and all of these model makers are selling the pick and shovel in the gold rush i am buying it and I’m trying to pan for gold. But as with the Gold Rush, most of these companies will go out of business. And all I’m saying is, if we are really circumspect and honest, there is still way more to figure out than has been figured out. This is not a solved problem. And I think it would behoove everybody to just tell the truth about this. It would be way better to be honest. This is not figured out. Brad Gerstner I would say I think the data, the cards that are being turned on the table move me in the exact opposite direction. Jason Calacanis Okay, let me get Sachs involved and then I’ll give my take. Sachs, do you have any thoughts here? David Sacks Well, I have some thoughts on the question you asked about is the industry doing a good job with PR. I think the answer is clearly no. I think they are scaring the bejesus out of the public. And that’s why the popularity is right down there with, I don’t know, what was it, Iran? It’s pretty, I think we’re a little more popular than Iran. Chamath Palihapitiya But look, that’s- Well, Iran’s had 100 years to f*** it up. So we’ve only had two. David Sacks Or 47 anyway. Chamath Palihapitiya Yeah, Iran’s had 47 years to f*** it up. We’ve only had two. David Sacks But it is very much a U.S.-specific problem. If you look at data, sentiment data across countries, what you’ll see is that other countries are much more optimistic about AI than the U.S. I think Stanford did a study on AI optimism. They simply asked the question, do you think AI is going to be more beneficial than harmful? Something like 80% of people in China said yes. In the US, it was in the 30s and it might be even lower now. And it’s not just China and the US. You see across Asian countries, they tend to be pretty optimistic. And then the US and Western Europe tend to be pretty pessimistic about it. I think that’s less about the reality of AI and more about our media environment and who influences it. Obviously, you have the influence of Hollywood has created a lot of dystopian films about AI. You’ve got the fact that, like we talked about, these CEOs are doing a horrible job and they keep talking about putting everyone out of business. I mean, this has, I think, been not accidental. I would say some of these CEOs are speaking this way because they’re not very good at comms. I think others are actually doing it because they see a strategy there. They’re going for a regulatory capture agenda. Jason Calacanis Such a good point, Sachs. It’s delusions of grandeur, plus they’re positioning their companies. David Sacks It could be for financing reasons, like you’ve mentioned, Shemath, it’s like they want to tout the stuff for fundraising. But also, I think that some of it is to create a regulatory backlash that they can then control, you know, create a licensing scheme or permissioning scheme. And that’s a big part of it too. And then I think you just have the fact that in our media environment, the scare stories are the ones that get a lot more attention than the heartwarming stories. You know, if it bleeds, it leads type thing. So you can just see how unpopular it is for all of these reasons. Chamath Palihapitiya You know, New York is about to outlaw medical and legal advice from AI chatbots, which, by the way, that’s probably the most obviously valuable and highest ROI thing for a consumer. And it hurts poorest people the worst. David Sacks It hurts poorest people the worst. But do you understand, like, if you’re, say, a professional association that sees it as your job to protect your industry from disruption, you might actually want to spread FUD about AI in order to then seek those protections through your state legislature. Jason Calacanis Well, if you have companies that are fanning those flames and those companies are the ones in the industry, it’s making your job even easier. But just think about the poorest person. They can’t afford a lawyer and they want to do their own research. And they research the legal stuff in order to fight an evictioniction or there are poor people who don’t have a primary care doctor they’re not insured and they find a way to deal with You know some medical issue they’re having this is the greatest thing it’s the level it’s a it’s it levels the playing field for poor (Time 0:52:36)
  • Open Source Expands AI TAM More Than It Crushes Leaders
    • Brad Gerstner said open source is spreading fast, but frontier labs still win enough high-value planning work to post extraordinary revenue.
    • He said advanced companies increasingly use an ensemble strategy, reserving frontier models for planning and open models for execution. Transcript: Jason Calacanis Brad, before we move on, want to get your opinion on open source and how powerful it is and how powerful Apple Silicon is getting. I’m not sure how you factor this in at altimeter into your thinking. But this seems to me to be a massive headwind against the two big bets you have. All of these open source models, we started running them, picking up about 85% of tokens right now. And every startup I know is saying we are standing up our local models and we only use the top models, the paid ones, when we have jobs we can’t do. So I’m just curious your thoughts on that. And you can add to that, the auto research project from Karpathy that came out this weekend, for people who don’t know, we now have a group of tinkerers who are setting up their open clause And now setting up a large line of models and now trying to train them with this auto research tool. This seems like a parallel track that could be material. I’m just curious if you’re monitoring it at all. Brad Gerstner I mean, first, I would say that I am very enthusiastic for open source. Okay. We see it in widespread use everywhere. But here’s the interesting thing. For the advanced companies, they’re doing some planning with the frontier labs, and then they’re kind of doing the execution, if you will, with the open source models. So they’re running an ensemble of model strategy. But here’s what I think is more impressive. We have incredible open source models nearly on the frontier. And notwithstanding that, we’re seeing companies like Anthropic at five or $6 billion of revenue in a single month, which is extraordinary. We’ve never seen anything like it in technology. And that’s in the face, Jason, of all this open source usage. So what does it tell me? It tells me that the TAM is dramatically bigger than any of us think that it is. And that, you know, when we look back on this period, you know, that will be the big takeaway. It’s a takeaway with Uber, the takeaway with Google, the takeaway with Amazon. The TAM was way bigger. We’ve crossed an important threshold. Open source will be a part of it, but clearly the Frontier Labs can do well, even in the face of it. (Time 1:04:58)
  • Howard Schultz Left Seattle As Washington Passed A New Tax
    • Howard Schultz moved from Seattle to Surfside, Miami the same day Washington passed its new millionaire tax.
    • The panel framed it as another high-profile example of wealthy residents exiting high-tax states, alongside Jeff Bezos leaving Washington earlier. Transcript: Jason Calacanis The millionaire tax has hit Washington State. Howard Schultz, CEO, longtime CEO of Starbucks, has bailed and he’s gone to Miami. Chamath Palihapitiya Surfside. He’s in Surfside. He bought a condo in Surfside. David Sacks He pulled a J-Cal? Chamath Palihapitiya He pulled a J-Cal. Jason Calacanis I think you mean a Saxe-Poo? David Sacks Yeah, but I was never a Starbucks liberal before I left the state of California. Jason Calacanis Listen, I don’t know how many times I have to make this correction. I am a moderate. I literally voted four elections in a row for Republicans. People have asked me for the receipts, Pataki, Giuliani, and Bloomberg. I literally, for almost a decade, voted exclusively Republican. Washington’s millionaire tax passed this week. Here’s what the tax is. People making more than $1 million a year will pay an extra 9.9% in tax starting in 2029. The Budget Center estimates the tax will impact 30,000 households, bringing another four billy for the state’s general fund. The funds are supposed to go towards public schools, higher education, and healthcare. In a huge coincidence, on the same day the new tax was passed, Howard Schultz, the billionaire Starbucks founder… That’s a huge goals did you say yeah just just unrelated stories an unrelated story yeah unrelated he will be leaving seattle after a 44 year run because he found out about these incredible Chamath Palihapitiya Cuban there was an opportunity there was an opportunity to buy a 44 million dollar condo in surfside he couldn’t pass it up it just happened to be on the same day that they passed the millionaire Tax. Jason Calacanis He had the Cuban sandwich at Le Sanguiche, and he fell in love. Schultz has been getting crushed after saying when he ran for president that he would be willing to pay more taxes. Bezos obviously left back in November of 2023. (Time 1:07:51)
  • Wealth Taxes Can Shrink The Base Before They Raise Revenue
    • Chamath Palihapitiya and David Sacks argued state-level wealth taxes fail because wealthy taxpayers can move while spending problems remain.
    • Chamath cited Hoover modeling a negative expected value for California’s billionaire tax, while Sacks warned a federal version is becoming Democratic table stakes. Transcript: Jason Calacanis So I guess, Chamath, what is the endgame here? Because for these local politicians, they must have learned the lesson people of means can move they have the ability to buy new homes put their old homes on the market they’re very mobile And they could even leave the united states and go to singapore or dubai or other locations in the world why are they still enacting these and will they continue to still enact these until We get to 60, 70% tax rates and we just lose all of the creators and this becomes anorandian? Chamath Palihapitiya I think that state politicians on the West Coast are very ineffective and not very smart. Nick, there’s a tweet that was published, I think maybe it was an infographic that showed net migration rates of every single state for 2025. Washington is a few months behind California in trying to enact these stupid taxes. And the reason they’re stupid is these kinds of things don’t work at the state level. And we know what it’s already done in California because the Hoover Institution just published something this morning. And it’s a complete indictment of what the billionaire tax was trying to do. And by the way, this billionaire tax is only polling right now 25% of the votes it needs. So maybe it’ll find a way to get on the ballot. And then even then, it’ll have an uphill climb to get voted in. But look at the destruction that it has done in California by just announcing it. The Hoover Institution basically ran this Monte Carlo simulation. They ran 100,000 runs. And in 71% of those runs, it comes out with a negative NPV. And if you expected value it out, it’s about a $25 billion hole. They also found that they overcounted the number of billionaires in California. So that number was wrong. They undercounted the amount of revenue that they pay. So that was wrong. And they overcounted the estimate of how much money that they would make. So that was wrong. So they’re not good at math. They’re not good at math. So when you add it all up, they thought they were going to make 100. They’re actually going to make 40. The people that left pay, you know, three to $5 billion a year of taxes. It’s going to create a $25 billion hole. You’re going to have the middle class that’s now going to have to foot this because this is net revenue that’s not going to come into the budget. That’s about $2,500 per middle class household. There’s about $10 million in California. So that’s what’s happened just by making the threat. Washington had a 23-hour debate and passed the law. So I suspect when you look back on this in 18 or 24 months, it’ll be as bad or worse than California. These things don’t make sense. The reason they don’t make sense is that you are putting good money after bad. We all know that money that goes to the state governments are wasted. We just don’t know how much. And so when you keep asking more, eventually the smart people say, enough’s enough, I’m out of here. Jason Calacanis We might find out how much. I think Bari Weiss is on the case. I don’t know if you saw her do her CBS report this week. She’s going hard for fraud. And until you get fraud out of the system, I don’t think you have the moral high ground to raise taxes. I think that should be the message that all Americans send to politicians. That should be your campaign promise when you run. Okay. Hi, I’m Jason Calaghanis, and I will get rid of fraud and lower your taxes. David Sacks Look, you may have seen an even more severe tax was proposed at the federal level where Bernie Sanders and I think Ro Khanna came out with their version of a national wealth tax where it Wasn’t just 5% once like in California, it was 5% per year. So in other words, in roughly 20 years, the federal government is going to take all of your money. I mean, look, this is socialism. This is another way to get to the same end point, which is the government owns everything. They seize. Jason Calacanis Well, I mean, the seizure part of it, I think, is the nuanced point we have to get across, which is if you earned it and paid your taxes already, and then the state can just decide, you know What? We didn’t take enough 10 years ago. We need to go seize that. Hey, when you sold Yammer, we didn’t take enough. We need to take it now. Chamath Palihapitiya Raise your hand if you believe the things you own are better off being owned by Bernie Sanders and Ro Khanna. Raise your hand if that’s what you believe. I mean, you’d have to be an idiot to believe that. Brad Gerstner Ro gotta go. I’ll tell you, the last time we saw these proposals of asset seizures was during the Gilded Age, you know, 1870 to 1920. You know, then it was Carnegie and Rockefeller. You know, what’s interesting, I went back and looked at it. There were actually like it was actual warfare. We had hundreds of people killed in clashes, you know, during the Great Railroad Strike, the Pullman strike, etc. And it was all over this. And so I think shame on the politicians that are fanning the flames of class warfare. We all need to bring the temperature down. There are fair debates on whether states have enough resources to fulfill their obligations to the citizens. There are fair debates about fraud all has to be taken on. But I think it’s interesting in the state of California, right? I think the teachers union is against the billionaires tax because they know it’s going to lead to less dollars for education for the state of California. Matt Mahan, who’s running for governor, is against the tax. The current sitting governor, Democrat, against the tax, right? All need to step up and explain not just that they’re against the tax, but you’re either on the side of business and entrepreneurs and creativity and moving the state forward and growing The economy, or you’re against it. And that’s what’s at stake here. And fortunately, the outcome of the battle during the Gilded Age was that America didn’t abandon entrepreneurialism. We didn’t abandon capitalism like Europe did. And now we leaned into it. Now we played it out. One point on that. David Sacks So you mentioned that some of the unions in California are opposed to this asset seizure tax. That’s only because they weren’t cut in on it. Right. So there’s already rumors that the California Teachers Association is working on their own version of a billionaire asset seizure for not this selection cycle, but for the next one. And next time they’re going to have their ducks in a row and they’re going to have all the pigs at the trough and all the unions going to get together because the SEIU, UHW, they did this On their own. So again, they didn’t allow all the other groups to wet their beak. So I think that unfortunately, I think that’s gonna be corrected. If this one doesn’t pass, they’ll correct it for 28. And it’s more likely to pass because they’re all going to do it. And the other thing is that I think that by 28, this national wealth tax will just be a standard part of the Democratic platform. It’s gonna be table stakes. Yeah, it’s table stakes. I think that, you know, the Bernie Sanders Ro Khanna position will be the position of the Democratic Party. And you even see Gavin Newsom creating wiggle (Time 1:09:51)
  • Entrepreneurship Beats Socialism By Solving Basic Costs
    • Jason Calacanis argued the antidote to socialism is letting entrepreneurs lower costs in housing, healthcare, and education.
    • He said AI plus deregulation could widen access to care and learning, while housing supply needs the same rule-breaking push that revived nuclear. Transcript: Jason Calacanis Is a way out here from the socialist movement. It’s very simple. If you think from first principles, what does an American want? What does an American family want? What do mothers and fathers in this country want? They want to educate their kids. They want to be able to own a nice home. They want to have decent healthcare. They want to have healthy food. It’s a very small subset of issues. And AI is uniquely positioned to solve a lot of these problems. And entrepreneurs can come in and take these highly regulated industries, if we’re allowed to participate in them. Education, we have to break this accreditation, you know, cartel. And then housing, we have to break these regulations like the great state of Texas, Nevada, and Florida have. And then, you know, when it comes to healthcare, this is where AI could have a tremendous impact and entrepreneurs can have a tremendous impact in lowering the cost of healthcare and Letting people solve for that with their own, you know, healthcare-led, you know, self-led healthcare. These are the problems. If you solve for these problems, people’s homes, people’s health, people’s education of their kids, we’re going to solve these problems and we don’t need to go to socialism and seize People’s assets. That’s what entrepreneurs should be doing. That’s what entrepreneurs should be working on. And that’s where the government can help. That’s where Trump’s uniquely qualified. He is the regulatory breaker. He got nuclear back on the agenda. No other president had gotten nuclear back on the agenda for America. He can get housing back on the agenda. We have to break those things and not start foreign wars, my earlier point, and start creating houses for Americans. (Time 1:17:23)