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Podcast

OpenAI's Identity Crisis, Datacenter Wars, Market Up on Iran News, Mamdani's First Tax, Swalwell Out

All-In with Chamath, Jason, Sacks & Friedberg

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  • NYC Pied A Terre Tax Could Hollow Out Demand
    • The hosts argue New York’s proposed pied-à-terre tax targets the most mobile buyers, so demand for luxury second homes could vanish first.
    • David Sacks says compounding a roughly 3.9% annual tax can make a $10 million unit feel like a $20 million purchase after a decade. Transcript: David Sacks Or something? Jason Calacanis Yeah. He decided there’s no rich people left in New York, so he’s looking for other cities to tax. Chamath Palihapitiya Is it 3.9% a year? Is it per year? David Sacks I don’t know if the percentage has been released yet, but the speculation I’ve seen is 3.9%. But I don’t think that’s final. But yeah, it’s a Piazza tax. So if you have a second home. Yeah, every year. Jason Calacanis Wow. And by the way, it’s for any home over 5 million. There’s no homes under 5 million in Manhattan. This is not a rich person tax. This is within 15 miles of midtown Manhattan, you’re paying an extra tax. David Sacks But J. Cal, only if it’s a Piana Terrace. So what it means is that the most- Second homes. Well, yeah, but the most elastic part of the market is what they’re targeting for this tax. So in other words, people who don’t live in New York, who just have it as a second or third home, who could buy that property anywhere, are now being taxed the most. So what do you think that’s going to do? It’s going to have a massive impact on demand for second homes in New York, which will crash the whole market. Yes. Chamath Palihapitiya Congratulations, mom dummy. But in a weird way, that’ll be good for housing affordability in New York. David Sacks Well, that’s sort of the claim, but I don’t think it’ll be good for it because there’ll be no incentive to build more. Jason Calacanis Yeah. All units matter. Every time you add units, people upgrade. And it’s not like these are going to be low-income housing, like Penthouse on 57th Street or in Gramercy. That’s not low-income housing. You’d have to break it into seven units. Makes no sense. But by the way, I don’t know if you guys saw the video, not to get too serious. But he’s doxing a certain billionaire who owns a certain place. And he’s literally pointing at his home. Chamath Palihapitiya No, I said that to you, Jason, he’s not doxing because everybody’s known for years that Ken Griffin bought that place. Everybody knows that address. Everybody knows that unit. We all knew it. It was marketed widely. I don’t think that’s really doxing. He doesn’t live there and everybody knew he owned it. It would be very different if it was a place where somebody was keeping their primary residence and you didn’t know and they stood in front of the house. That I would agree with you. I think this one is a little bit more tenuous. Jason Calacanis Okay, fair enough. But what I will tell you is it’s a dog whistle. Crazy and this thing’s been seen by 30, 40, 50 million people now. It’s a dog whistle to say, that’s the next UnitedHealthcare CEO. And in the week that a fire, a Molotov cocktail and a bullet gets shot into Sam Altman’s house, it’s deadly serious. And if you reverse it, I always reverse it. If a republican sat outside of bernie sanders second or third home and said we should this is his piano terror this is his summer home we should add you know taxes to it and i’m sure you can Look up bernie sanders home pretty easily so just before you point at people’s homes and say this is the villain be careful folks because then if something does happen to that person Like you know what happened to sam waltman this week you can feel however you want about him but nobody deserves to have their house fire bombed or shot at period full stop i just think David Sacks That it’s gonna kill the demand for you know maybe people already have a home in new york like ken griffin they probably are just gonna suck it up and pay the tax and keep whatever they have. But if you were a person who was thinking about buying a Piatta in New York, there’s no way you would do it now. Because you don’t know what the tax rate’s going to be, and it’s going to keep going up. Chamath Palihapitiya After a decade with interest and inflation, you’ve effectively almost doubled the price of your unit. (Time 0:00:35)
  • Austin Shows Supply Can Beat Housing Inflation
    • Jason Calacanis says Austin shows housing gets cheaper when cities allow enough building to match migration and demand.
    • The group cites roughly three straight years of falling rents in Austin while population kept rising. Transcript: Jason Calacanis Is an issue is the land banking it’s like your bitcoin is hollowing out a neighborhood and there is something there but you know what the whole uh housing thing is complete cap and utter Bullshit because if you move to a place like austin where you are in nevada or florida you see what happens when you allow people to build units in austin three years in a row rents and housing Prices have gone down while net migration has gone up but that’s been good right right? For Austin, you guys would say? And that’s incredible. David Sacks Yeah, amazing. Austin has like roughly doubled as a city over the past decade. And yet the rent for, you know, whatever, a one or two bedroom apartment’s gone down. That’s incredible. So in other words, if you let people build to satisfy the demand, you won’t have this problem. Jason Calacanis And then who’s stopping the building? It’s Democratic cities. It’s NIMBY people. And then in a Republican town, they’re actually building units for an affordability. So you have one group saying they care about affordability, and they’re doing nothing about it, and they’re stopping it. And in another place, they’re like, we’re just going to let you build because it’s your right to build because it’s your land. That’s the approach in Texas. It’s your land. You have the right to develop it. Go. Chamath Palihapitiya By the way, the high end of the market in London has basically turned over and collapsed sacks to your point. They introduced the stamp tax, which I think is equivalent to this tax that the New York City mayor is proposing. And if you look at London as a guide, the real estate market just bid it at the high end. (Time 0:05:55)
  • OpenAI Needs Separate Consumer And Enterprise Tracks
    • Chamath Palihapitiya thinks OpenAI can justify both consumer and enterprise pushes, but only if it runs them as separate businesses.
    • He says Codex beats Claude on tricky long-horizon coding while OpenAI’s consumer team should stay focused on ChatGPT scale. Transcript: Jason Calacanis All right, let’s go to topic number one. Open AI is apparently suffering from a bit of an identity crisis on Sunday. Open AI’s chief revenue officer, Denise Dresser, sent a four-page memo to employees. Obviously, it leaked immediately, probably the point of it. And she called out in profit. She said their $30 billion run rate is cap, inflated by $8 billion due to a revenue share and some accounting with AI model providers. Chamath, you pointed that out in the last couple of weeks. Also, she said Anthropic’s story is built on, quote, fear restriction and the idea that a small group of elites should control AI. Obviously, she’s a fan of the pod. She also laid out OpenAI’s pivoting, and she said they are going hard after business customers, and they want to win the agent platform layer. If you remember, they hired the architect of the open source project, OpenClaw. They didn’t acquire OpenClaw. So Peter Steinberger is working at OpenAI. Cynical people said, hey, maybe they want his set of innovations to go inside of OpenAI’s products as opposed to the open source one. I kind of agree with that directionally. There’s obviously Perplexity Computer is doing really well. They quadrupled their revenue. And I was over at XAI earlier this week with Elon. I can tell you he’s got some very cool stuff coming. And this new model, Spud, is coming from OpenAI. Here’s your polymarket, 75% chance Spud is released next week. Additionally, and we’ll go to the panel in just a second, on Tuesday, two days after this memo came out, obviously people write these memos to go directly to the press, so they’re obviously Trying to undercut Anthropics valuation. And they feel that’s a threat. That’s my take. The FT cited anonymous open AI investors who are frustrated with the company’s lack of focus. Here’s the anonymous quote, quote, you have chat GPT, a 1 billion user business growing 50 to 100% a year. What are you doing talking about enterprise and code? It’s a deeply unfocused company. And we talked about this chat GPT is market shares going down as the number of users is going up because Gemini and Claude gaining significantly and Meta just last week released their First proprietary model. And Apple doesn’t have a product in market yet, but they do have a lot of users. So here’s your Gen AI website traffic. Let’s start Chamath with you, your thoughts on OpenAI. Should they be pivoting straight into business developers and getting focused on that? Chamath Palihapitiya Or should they stay focused on the consumer where they are the verb? As it relates to complex, long horizon coding tasks, what I can tell you from my team at 8090 is codex is better generally than anthropic. And so what happens is from the more day to day work, I think it’s more reliable to use the Claude ensemble of models. But when you’re dealing with something that’s very tricky and very complicated and a little bit more long horizon, Codex is really functional and really good. So I think if you’re looking at it through the lens of OpenAI, what they’re probably saying is, hey, hold on a second. If we allocate our resources and just double down and crush consumer, that’s probably three or four trillion of enterprise value. And then if we slowly refocus the company with the rest of the resources and double down on Codex and do something meaningful in enterprise, we can probably capture two or three trillion There. And now all of a sudden, you can paint a picture for a seven, eight, $9 trillion market cap in the fullness of time, not tomorrow, obviously. But Codex is really good. And there’s a business to be had in both. You have to separate the two businesses. You can’t have a lot of overlap because there’s too much context switching. You got to let the consumer team run. And then you got to isolate the enterprise team and let them do what they think is right. (Time 0:11:23)
  • Anthropic’s Faster Growth Could Become Uncatchable
    • Travis Kalanick says the frontier AI race now hinges less on size than on who compounds growth, usage, and compute fastest.
    • He compares it to Uber’s scale flywheel, where customer volume generated more cash to reinvest and widened network effects. Transcript: Jason Calacanis Travis, there’s a big debate going on amongst the investors. The FTPs also questioned the $850 billion valuation of OpenAI. Secondary markets have now priced Anthropic higher than OpenAI for the first time. This is the flippening that people predicted. One investor said OpenAI would need to IPO at a valuation of $1.2 trillion for the last round to make any sense. But there’s no buyers currently at the $850 billion valuation that OpenAI just closed, according to Bloomberg. Travis, how do you handicap this race between these two meeting frontier models? Travis Kalanick Growth is king right now in this world, in this segment. Growth is the whole damn thing. And if Anthropic is growing faster than OpenAI by a significant clip, the investors right now are going to play it forward. And you start to get network effects around compute, network effects around the number of tokens you’re pushing out for various customers, enterprise or consumer. And ultimately, it’s not great today, but how that plays into reinforcement learning and the things getting smarter over time. There’s so much upside to volume and scale that if they are growing faster at the same size, even if OpenAI is still growing, but if they are half the growth rate, a third the growth rate, A fifth the growth rate, I’d be worried. Jason Calacanis And you saw this at Uber specifically when you accelerated away from the competitors like Lyft and DoorDash, yeah? Travis Kalanick Yeah, you had to. Network effects was the whole thing at the end of the day. And network effects was based on scale. So yes, I’m sort of like coming from my very specific experience. But if you believe there’s network effects with the scale of data that you have and the scale of customers and the revenue, that’s this cash that’s coming in that you redeploy into compute. And so say there’s network effects of large compute. I’d be very worried if I’m open AI and seeing somebody growing faster at the same size. Jason Calacanis So Freeberg, when you look at this race between these two giants, maybe your thoughts on the flywheel as it relates, as Travis is pointing out, to advantages in compute, reinforcement Learning, and then also the ability to fundraise. One of the great things that Travis and the team did was as they were pulling away, they just sucked all the oxygen out of the room by using capital as a weapon. So your thoughts, Dave, on this high-stakes game? Because there’s also a point at which, and I’ll i’ll just end on this there’s a point at which you could run off the cliff you raise so much money and you deploy it so fast and the revenue Doesn’t catch up to it and then you go public and the markets don’t believe the story so your thoughts freeberg i don’t know the financials of the two companies well enough obviously David Friedberg Sam has no problem raising money the guy didn’t he just close like 150 billion dollar round or something 20 122 billion 122 billion largest round ever raised in any market i think private Or public yeah probably yeah i mean that’s crazy that doesn’t seem to be an issue what i’ve noticed is just the the pace of uh innovation at anthropic is from my experience unprecedented I mean their release cadence is extraordinary. They’ve basically supplanted OpenClaw already with this release they did a few days ago. And then today, the new Opus model got dropped. So there’s something about the momentum, not in necessarily just in user growth, but in how they’re operating this business that just seems to be head and shoulders above everyone Else in the cadence of upgrades. If I look back six months ago, I think we were pretty heavy on Cursor and Gemini. And now I think we’re probably 90% anthropic in just the last six months at my organization. There’s something very powerful about the flywheel they have going on. (Time 0:15:23)
  • Enterprise Coding Revenue Scales Better Than Consumer AI
    • David Sacks argues Anthropic’s enterprise coding focus explains why its revenue is scaling far faster than OpenAI’s consumer-heavy model.
    • He contrasts metered enterprise code spend with consumers wanting a $20 monthly subscription, then warns physical compute limits can still cap growth. Transcript: David Sacks Look, this other part of the criticism of open AI that they shouldn’t do enterprise is totally misguided. One of the reasons why they should have been more focused is to do more enterprise and get enterprise more correct. Now, why do I say that? To Travis’s point about growth rates, it’s true that OpenAI and Anthropic, as of the beginning of Q2, so let’s say two weeks ago, they were both around $30 billion of revenue. And that memo from that OpenAI employee was right, that if you compare them on an apples-to basis, that Anthropic is about 20% less because they are including revenue made by their channel Partners. But that doesn’t matter. What matters is the growth rate, again, to Travis’s point. And let me just put some numbers around this. The OpenAI growth rate has been around 3 to 4x a year. The anthropic growth rate has been around 10x a year. So they went from, let’s call it 1 to 10 billion of ARR last year. And by the end of Q1 this year, they were already at 30 billion of, again, that’s called their revenue. They’re on their way, you know, like Brad Gerstner was saying on our podcast, I think in the last couple of weeks, they’re going to end this year at 80 to a hundred billion, at least on the Current trajectory. And so you can plot their revenue on a logarithmic graph. I mean, again, no one’s ever seen anything like before where every unit on the Y-axis is another X, but it’s 10 X and it’s a straight line. Now’s crazy right so if it’s taking anthropic let’s say one year to 10x and it’s taking open ai two years to achieve a 10x then it’s obvious which one’s gonna win now what is the reason for This is because anthropic was very focused on enterprise specifically coding and what you’re seeing is that businesses are willing to pay for coding, code tokens on a metered basis. Let’s call it like electricity. The more they use, the more they’re willing to pay and their usage just continues to scale and scale. Consumer is completely different. I mean, consumer is a thing that OpenAI prioritized. Consumers have a lower willingness to pay. Maybe only 3% or 4% of them are willing to convert to premium in the first place. And what they want is a $20 a month, all-you subscription. So the revenue simply doesn’t scale the same way that enterprise does. And so if you want to tap into the scalable revenue source in the market right now, you have to go after enterprise. So again, where I would agree with the criticism of open AI is maybe they should have been more focused, but they need to be more focused specifically to pursue coding and enterprise. And if they don’t catch up soon to Travis’s point, then you could see Anthropic taking a lead here that let’s say over the next one or two years could be insurmountable. Just by the way, let me just say, say one thing, even though Anthropics revenue has followed this graph, this exponential graph very predictably, it can’t do that forever, right? Like, let’s say it does get to $100 billion this year, can it really get to a trillion dollars in revenue the year after that? Seems hard to believe, right? And the reason is because as you hit new levels of scale, you encounter new problems. I mean, you’re simply going to run out of compute or electricity, data centers, infrastructure. There are physical limits or there’s limits in the physical world that you’re going to hit. And there’s already some evidence that Anthropic is hitting some of those limits. Users were complaining, for example, that Claude was thinking less. Did you guys see this? That a typical Claude prompt, they seem to have cut down on the thinking time by about two thirds. Now, I saw someone tweeting today that they just released Opus 4.7, replacing Opus 4.6, and the thinking is back. But maybe they’re charging more for that, hard to say. But they’re going to hit some sort of physical limits. And I do wonder if over the next year, Anthropic will reconsider whether its support for all this like Doomer or NIMBYism was the right call, because it kind of made sense for them from A business standpoint when their competitors were building data centers and they were just getting compute from the hyperscalers. But now that they’re, I think, going to have to move into the game of building their own data centers, they might regret salting the earth for data centers all over the country. And I wonder if that’ll be the natural limit of their growth is they’ll be wasted on their own petard of Doomer Nimbism. (Time 0:22:14)
  • Frontier Labs Now Need Their Own Compute
    • Chamath Palihapitiya says frontier labs are reaching the point where renting hyperscaler compute becomes strategically dangerous.
    • Once Amazon, Google, or Microsoft control capacity, they can throttle rivals while enterprises start rejecting massive token bills for mediocre agent output. Transcript: Chamath Palihapitiya The first is just to build on Sax’s point. All of these frontier labs have a very serious issue, which is both OpenAI and Anthropic are growing so fast that they’re at a point now where they need their own infrastructure. It’s kind of like when you first start building any kind of company, you’re just much easier renting capacity from the hyperscalers. Travis Kalanick And it’s a dependency. Yeah. Chamath Palihapitiya But then it becomes a dependency. Exactly. And now when you’re so big, it’s actually strategically a huge mistake to not have your own compute supply. Why? Because if you look at who’s leading, the frontier labs are leading. And Saks, to your point, you mentioned this on X, you’re like, there was all this doomerism, but maybe it was tied to compute capacity, because when Bedrock opened up more capacity for Anthropic, all the doomerism went away. You’re left wondering, like, is it really tied to just the fact that they were just trying to throttle usage? So if you’re a frontier lab, you don’t want to have to go through Amazon and GCP and Azure and Tin Cup for access and capacity. What you’d much rather have is go straight to your customer. On the other side, if you’re Gemini or Microsoft or Meta, and you have all this compute, because I saw a stat this week, the hyperscalers control 60% of all the compute. So the game theory there is if you kneecap the frontier labs, it’ll give you some chance to catch up. And it gives you time to catch up because no matter what the demand is on the upside. You remember you guys remember like in social networking when Friendster was the cat’s meow? Yeah, that’s me out. Remember what the biggest problem that friendster was friendster was slow as a dog yes yes and what happened then myspace came in and took all the share then we came in facebook and we Took all their share so there is a way where you can handicap and kneecap these companies by throttling compute access to them so a they are forced to now go and get in the game which is weird Because look, OpenAI has tried to displace some of the Stargate spend. I don’t see any path except they’re going to have to do it themselves and Anthropic will have to do it themselves. But then separately, the other problem is when you change the subscription model in enterprise and you say, hey, we’re not going to subsidize any more tokens, what’s going to happen Is all these token budgets are going to go crazy. And what Freebrook said is going to happen where he’s like, hey, guys, why are you spending all this money? What are you making? And you inspect the code and you’re like, what is this slop? And you’re not going to add 30, 40, 50% OPEX to produce nothing. So I think that that’s an open question. And that question will become more amplified over the next year as they push the cost off of them. So as Travis said, no more subsidy from the capital, you have to grow into it, but you’re not going to support negative gross margins. So you’re going to pass through the token costs. (Time 0:27:31)
  • Data Center Scarcity Is Becoming The Real Bottleneck
    • Chamath Palihapitiya says bizarre deals around shells, land, and power reflect one reality: AI demand is now severely compute constrained.
    • He cites towns reversing approvals, Maine banning builds, and rising public hostility that could trigger a Friendster-style capacity failure. Transcript: Chamath Palihapitiya I think the thing that the capital markets are getting right is that we are massively compute constrained, massively. And those are two problems. One is the power. So if you look at companies like Bloom Energy, it has gone absolutely straight up vertical nuclear. And the reason is because Bloom has a solution that allows you to use nat gas, that allows you to do something on site, and critically allows you to get your clean air permits very quickly Because it has very, very little emissions. And it’s been proven as such. And so instead of waiting for years to get on the grid, if you wanted to build a data center, you can now use their services. The other part that’s going absolutely nuclear is the actual land and the shell, because it’s turning out, it’s impossible to get these approvals. Now, why is that? And I sent Nick an image. The reason is because underneath at the core of it all is there’s a tide that is shifting on AI. The American population is incrementally getting more and more negative on the whole subject matter writ large. And it’s not clear exactly why they’re doing that. Maybe it’s the doomerism, which we talked about last week. Maybe it’s the fear of the job laws that Jason has been talking about. Maybe it’s just this idea of yet another wave of innovation that’s only going to benefit a few in an extreme way, minting trillionaires all over the place while everybody else stands Still. I don’t exactly know what’s causing it, but the sentiment is shifting. And as the sentiment shifts, the most scaled action that they can take, they’re taking, which is then they are going and voting down data centers. Here’s an example, which was insane. A town approves a $6 billion data center build, and then half the board gets ousted, just voted out overnight so that they could put in new people to undo the decision. So if you look at this all around the country, the answer is not, oh, we’re only going to build in Texas. That doesn’t work. There’s not enough power. There’s not enough grid capacity. There’s not enough Nat gas that allows that to happen. Maine just passed a bill that bans all data center buildings. So I think the reason why all birds went crazy is a very, very small canary in a very important coal mine, which is we are absolutely compute constrained. I think if you play this out, the real problem again goes back to Anthropic and OpenAI. If I were them, it is a five alarm fire for them. They more than anybody else needs to get their hands on compute. They need to have LAN PowerShell. But otherwise, that revenue could either slow down or hit a wall. And it will not be because of product quality and adoption. It will entirely be because of the Friendster effect. You just couldn’t keep the site up. And I think that that would be a huge, huge problem (Time 0:39:54)
  • Anti Data Center Politics Ride Local Fear Better
    • David Sacks says data-center opposition blends ratepayer fears with organized doomer activism that found a more effective anti-AI message.
    • He claims groups shifted from warning about Terminator scenarios to local complaints like water and grid usage to block projects. Transcript: David Sacks Well, I think Jamath is right that the data centers become very unpopular. Probably in 30 states, they’re just going to ban them outright. And then it’s very hard to get projects approved. Look, I think there’s a few reasons for this. One is that there are a lot of, let’s call them real estate developers who are kind of wildcatters who are out there trying to get entitlements. And they did bring a lot of projects up for local permits where they didn’t have a power solution. And there’s no question that local communities do not want the data centers drawing off the grid, thereby increasing residential prices, if that data center is not bringing its own Power generation. And the administration agrees with this. This is why the president did the ratepayer protection pledge, where we got all the major users of the data centers, all the hyperscalers to agree that they would not build new data centers Without bringing their own power. So again, it was designed to be power neutral to the grid, or in fact, it would increase the amount of energy available to the grid because these data centers would give back when they’re Not at peak usage. So that’s sort of like category number one is there’s this fear of electrical rates going up, but there’s a couple other categories, I think, of groups. So the second one was Future of Life and a lot of these like Doomer groups saw that data centers were a way to stop AI progress. And there are interviews with some of these Doomer folks who say things like we have to meet people where they are, meaning that they’ve been unable to convince people that AI is going To lead to the Terminator, but they can convince them that AI data centers are going to use up their water, for example, which isn’t true. And so a lot of the nimbyism has been kind of astroturfed by a lot of the Doomer groups, which have a lot of money, thanks to contributions from a few tech billionaires like we’ve talked About in the past. So that’s category number two. Category number three, ironically, again, is Anthropic itself. It has allied itself politically with a lot of the Doomer groups, a lot of the NIMBY groups. It didn’t seem to matter in the first couple of years because Anthropic had made the strategic decision not to build its own data centers. So they probably thought that they were just throwing sand in the gears of OpenAI or XAI, their competitors, and they would just rely on hyperscalers to get their compute. And I think that that strategy has now backfired in the sense that they apparently have reached the limits of the compute that’s available to them by buying it from a third party and they Need to build their own data centers. It’s going to be very interesting to see how they adapt to that and how the message around data centers changes over the next year, as let’s call it the effective altruists decide that All of a sudden, data centers or certain kinds of data centers might be a good thing, because they serve their mission. So I think that’s gonna be a very interesting thing to watch. (Time 0:42:54)
  • Data Centers Became A Populist Symbol Of AI
    • David Friedberg argues data centers have become a physical symbol of elite wealth, making them an easy target for populist anger.
    • He says most consumers still do not feel direct AI benefits, so the buildings look like monuments to rich people getting richer. Transcript: David Friedberg Tell you the one thing I think you’re missing, which is that most people in America really are starting to really hate rich people. And there’s no physical space that better represents the wealth in America, the wealth creation that’s happened that a lot of people feel left behind from than the data center. What other physical space is there to go to? It is the temple of the wealthy. It is the mechanism, the tool, the machinery of the wealthy. It is the way that the rich, elite, tech, kind of political, connected billionaires that we’re obviously all attached to are taking from the poor, getting themselves ahead, shooting Themselves to space, leaving everyone else behind. And the data center, I think, is the representation of their progress. And it is a representation of the progress that others don’t feel. So that’s why I think it is physically like the manifestation that people want to attack and destroy. There’s very little rationale about, oh, let’s stop AI robots from killing us. I think people just don’t see the value in AI. The average person doesn’t see the value in AI today yet. Like we just talked about, so much of the value of AI is showing up in the enterprise and in the rebuilding of enterprises. But for a consumer’s life to actually be altered in a meaningfully positive way, most people don’t feel that yet. The best thing they see is some medical advice they’re getting on chat GPT or something. And that’s kind of the end of it for them. So I think there’s a lot of this populism that’s swollen, and that’s taken over not just the US, but probably a good chunk of the West and the data center is the target. Jason Calacanis It is the pied de terre of this space in a way this is their attack vector. David Friedberg To David’s point, they’ll probably ban data centers in 30 states. Data centers can output and input at the speed of light, so they can be anywhere. I mean, you know, the reason you put data centers in different states is cheap power, low latency. So maybe you get a couple of milliseconds of latency. So the data centers can go anywhere. So as soon as all the states start banning the data centers, the data centers will just go to space, to Iceland, to Texas, to wherever. And then everyone will be forced to move on, Travis. They’ll basically find the next target for populism, which will be something else. The peer-to the data center, what’s next? This is part of what’s going on right now, where we’ve got this kind of level of debt. I always bring it back to this because I do think this is the root cause of populism is the fact that the government promised so much is so inefficient. And as a result, it’s destroyed the value of the dollar, not given anyone anything that they thought they were getting. (Time 0:45:44)
  • Swalwell Allegations Seemed Widely Known Before Release
    • David Friedberg says the startling part of the Swalwell story was not the allegations alone but how widely they were known months earlier.
    • He says multiple people told him in December and January about the same claims, yet they surfaced only in a coordinated burst later. Transcript: Jason Calacanis Listen, there’s been a lot of shenanigans going down in D.C., the most boring city in the world, where apparently everybody’s getting a little frisky after hours. TMZ launched a news bureau. Eric Slawwell is out of the governor’s race. There’s a lot of dark stuff that’s been released. He is innocent until proven guilty, but it’s not looking good. He also resigned from Congress, J. Cal. And he resigned from Congress as well. And Friedberg, our investigative journalist, now working as a stringer for TMZ. Friedberg, what have you learned? What’s in Friedberg’s DMs? I haven’t learned anything. Okay, you have an analysis then, maybe. David Friedberg My anecdote on this is back in December, when it was first rumored that Swalwell was going to run for governor, I started making some calls to various folks to be like, hey, you know, what Do we think of this guy? Is he going to be a good candidate? You know, obviously, I and a lot of other people before they evacuate the state care a lot about the future of California. So I started checking around, I spoke to several people who independently told me that there’s knowledge about this guy sending, you know, pics to employees, and that this guy has a Bunch of stuff that’s going to come out about him. So I heard all of this, not from one person, but from several different sources. This was back in December, going into January. And I largely kind of dismissed it because I was like, if this is true, this would have all come out already. I’m like, there’s no way this is true. If it was true, like people would have talked about it, they would have made a thing about it. If multiple people are telling me about this, then I’ve got to assume that it’s a rumor that’s being used to block him from running for governor versus it being a real thing, because multiple People had this knowledge and this information. So this was December, January, where I had these conversations. And at that point, nothing had come out. So I was like, okay, it doesn’t seem like this is real. And then everything that I had been told started to come out in the last week. So the striking aspect of all of this for me was how much knowledge there was about these various incidents with the guy, how so many people had this knowledge, and how no one had actually Brought the knowledge to bear, which begs the question, why did they not do what was right by the victims? Or why did the victims sit on the sidelines waiting for the right moment to all come out together? Because this was broad knowledge within a community of people, and they made the choice not to bring it forward with that knowledge. And that’s what was so striking to me about this whole thing. I had honestly dismissed the whole thing as just being rumor mongering to try and besmirch the guy. And it turned out that these were all being held back purposefully and deliberately for a very particular moment in time when they were all brought forward to be used. Jason Calacanis And let me just be clear. These are all allegations. Nothing’s been proven in court. He doesn’t get his day in court. We just want to make sure there’s a bunch of allegements here. Yeah. David Friedberg And all that I’m saying is that people had told me about these supposed claims five months ago, four months ago, multiple people and had chosen not to bring it forward and that the victims Had not come forward publicly with these claims. And then there was this coordinated effort to bring everything forward at the same moment. And that’s what was so striking to me is just how coordinated all of this. (Time 0:59:22)
  • Sacks Sees A Democratic Machine Behind Candidate Exits
    • David Sacks frames California Democratic politics as a machine that narrows the field only when insiders decide a candidate has become a liability.
    • He links Swalwell’s exit to the same pressure politics he says forced Joe Biden out after the debate. Transcript: David Sacks I don’t know if that’s true. Well, not just her. David Friedberg I’ll tell you my sense of it. My sense of it is that there are certain insiders, and he’s not an insider. And those insiders are like the Katie Porters of the world. Katie Porter, I think, is who the Democratic establishment wants to be governor. She’s an insider to National Democrats. An insider to California Democrats. And I think that she’s the preferred candidate. Tom Steyer, she’s a spousal abuser. David Sacks I don’t know that Katie Porter is like this ultimate insider, but I think there are, look, there are clearly insiders. The Democratic Party is a machine that exists to siphon off as much money as possible from the public till to the interests that support the party. And it’s their gravy train. And they’re not going to let anyone stop that gravy. Dems, Sachs. David Friedberg I don’t know if it’s just the Dems. David Sacks Hold on a second. They’re not going to let that gravy train stop for one second. Now, the Democratic Party had a huge problem in this California governor’s race, which is that the Democratic field was very fragmented. And so the two Republican candidates actually were polling the highest. And so just so the viewers have context, California has this weird jungle primary system where the top two go to a runoff. They don’t have a Democrat lane and a Republican lane. They just take the top two jungle primary and then they go to the runoff. Even today, still, Hilton and was it Bianca or whatever, they are polling at both around like 14 or 15%. If the election were held today, you’d have two Republicans in the runoff. So the Democrats needed to winnow the field down and have fewer candidates. In addition to that, they must have been concerned that all this oppo on Swallow will come out once it was him versus, say, Steve Hilton. And they didn’t want it to come out later when they could lose the election. So the powers that be made the decision to lance the boil. Probably there was a conversation with him to tell him to get out of the race. He didn’t listen. And by the way, remember, this feels a lot like what happened with Joe Biden when he had to drop out of the presidential race. It does sound surprisingly like that. The whole Democratic establishment and all the mainstream media were saying that Biden was sharp as a tack. And then he had that disaster debate performance with Trump and it became clear. Hot swap! Yeah. And you could just see the text messages were flying during the debate between the Democratic Party insiders. And by the time that debate was over, they had congealed on a new position, which is that Biden had to step aside. And then Nancy Pelosi was reported as having gone to the president and said, we can do things the hard way or the easy way. Imagine that, like telling the president of the United States, we can do things the hard way or the easy way. And then Biden disappeared for a week and magically he stepped aside by tweet. Remember that? He published a statement that appeared to be done by an auto pen. People were speculating whether he was even behind this or the staff pushed him to do it. The whole thing was extremely weird, but he was clearly muscled out of it. Just a few days before, he had said, I’m not leaving the race no matter what. I mean, it was like straight out of that Wolf of Wall Street meme. They’re not getting me out of here. And then a few days later, he’s resigning by tweet. And again, Nancy Pelosi appears to be the figure at the center of both these things. She was- Hold on. Hold on. Hold on. Hold on a second. Pelosi is reported as having been Swalwell’s mentor. I guess she found him roughly 20 years ago to run for Congress in the first place. When the Republicans wanted to kick Swalwell off of the intelligence committee, the House Intelligence Committee, for allegedly being involved with that Chinese spy Feng Feng. It was Pelosi who protected him. So she’s sort of been a central figure in his career. I’m not saying she approved of anything he did, but there’s no way that that button gets pushed without going to Pelosi for the sign-off, right? I mean, she’s like the boss of this operation. And I think that the same thing happened to Swallow that happened to Biden, is they went to him and said, we can do things the hard way, the easy way. He was too dumb to listen, and they did things the hard way. (Time 1:03:07)
  • The Market Is Flashing Bullish And Dangerous At Once
    • Chamath Palihapitiya says today’s market sends conflicting signals, with valuation gauges near extremes while breadth and momentum still point higher.
    • His takeaway is to stay more risk-off because almost any investor can cherry-pick data to justify a preexisting view. Transcript: Jason Calacanis FD, and that’s just the truth. What’s he going to do with that cash position, Jamal? Speaking of Buffett, they have, what, 300 billion sitting there? The market is in a very complicated moment right now. Chamath Palihapitiya If you look at historical indicators of value, so if you look at chiller as an indication of value, it’s peaking. If you look at the Buffett index, it’s peaking. So there are things that when you look at it, look like all time highs. And the problem with that is you would say, oh, man, but there’s this weird dispersion happening in the market. Dispersion means literally a few companies are hitting all-time highs. I think it’s like eight or nine, and everybody else is not. So it’s a really complicated moment. It’s hard to understand what’s going on, but he’s got a lot of cash. If he’s sticking to his knitting, he’s looking at the chiller index, and he’s looking at his own indicator, which, which shows all time highs and he’s waiting for a correction. Travis Kalanick He’s not really in charge anymore. Like Berkshire Hathaway is not Warren Buffett anymore, even though he’s a big owner. He’s not really doing it. Jason Calacanis But I mean, the fact that they’re sitting on that massive pile of cash says something that they’re not putting it to work in the market says they don’t see an opportunity yet. Sacks, Travis, I’m curious your takes. Either one of you can go in whichever order you want on how is the market crushing it while we’re in week seven of a war and we put a hundred billion dollars or something into this military Activity in Iran and the market is pricing it in, shrugging it off, and we’re hitting all-time high sacks. I don’t know if you feel comfortable. Max you first. Yeah. David Sacks I mean, look, I think it’s pretty straightforward, which is that in the wake of the meeting in Islamabad, that the market is feeling confident and pricing in that the war is going to get Resolved. The president also recently said that it’s very close to being wrapped up. The military objectives are close to being achieved, and he’s made it sound like it’s going to be resolved. Yes, a deal was not signed in Islamabad. I always thought that was an unrealistic expectation that these two countries, which are at war with each other, and in fact have had hostile relations for almost 50 years are going To resolve all their differences in 24 hours. It’s not realistic, but the impression that the market I think has and clearly is trading on this is that that war is going to be what Donald Trump said, which is an excursion and something That is on its way to being resolved that they’ve made progress. And Jake, how you’re right whole week has just been incredibly strong. I think by Tuesday, the market had recovered all of its losses since the start of the war. I think it made a new high yesterday on Wednesday, and it’s making new highs, fresh highs today on Thursday. So you just have to say that at the present time, the market thinks, and I would consider the stock market to be the ultimate prediction market, that this war is on its way to being resolved. Just to qualify, I’m not speaking as a member of the administration. Of course not. I’m not saying that I know something. I don’t know anything. I’m just interpreting what the market is. Jason Calacanis No clipping. David Sacks I’m not representing anyone, and I don’t know anything different than what any of you know i’m just saying that i think this is what the market is clearly pricing in and i’m paying attention Jason Calacanis To what the statements are of the president and vice president and this travis you and i were talking the other day while you were yeah slaughtering me and back and we won our eight point Match you’re almost caught up about the taco trade not trump always chickens out you have a theory about trump always cares about optics unpack it for us travis yeah so while i was beating Travis Kalanick You backgammon i sort of had it you know there’s like the, cause Jake asked me and the inside is, is like, and I think this maybe is just the more simple view of things, which is Trump’s weather Vein is a stock market. Like we see vol is up. We see the VIX is really high, but you know what? The SMP is trading in this band. That’s actually fairly tight given the crazy shit that’s going down. And everybody’s nervous, but actually he moves in the policy space. He does not let the S&P go down too low. People also get the sort of the panicking thing now, which is like he gets people nervous. He makes moves. And then he comes back to sort of reality and gets things done as practical and probably the better parts of what he might be, you know, what he does well. And people are pricing that in. So there’s all the things Sacks is saying about the nuances and the details, but the sort of super high level, like I’m in low earth orbit view is like the stock market is Trump’s weather Vein. And he’s like, we’ll go to the place that makes the stock market come up. And if he’s go and if it’s up and it’s too high, he almost feels like it’s too easy. So he makes it hard on himself again. And then he brings it back up and the traders are getting used to it, I think. Jason Calacanis Yeah, it’s like playing with Alan Keating. It’s just like, how is this guy solvent? He’s literally playing every hand of poker. He’s losing tons of money. And then all of a sudden, by the end of the night, he gets two big pots and he’s got the nuts both times and he pulls out of the stall. What’s your take on the market today, Chamath? Chamath Palihapitiya Yeah, I mean, I’ll just do it again. But I think the Schiller PE, Nick, I sent it to you, shows near all time highs. Then the second is the Buffett index, which is the sum of all US equities divided by GDP is also at all time highs. So this would generally mean that you need to be increasingly a little bit more risk off. But then the opposite side of that, and I sent you a third one, and this is why it’s so confounding, is you have signals showing everything, which typically doesn’t happen. And this is this dispersion point where when you see this performance and it’s up 5% in the first half of April, typically the market is up almost 32% on average for the rest of the year. And we were already up, as Zach said, 7.5% already. Travis Kalanick I’m trying to read this graph. This is crazy. I don’t even know what’s going on here. Chamath Palihapitiya This is just the dispersion. But the idea of all of this is I think we’re in a moment where you can find a piece of data to underwrite your bias. And I think that’s where there’s a lot of danger. I don’t know, for me personally, I’m generally more risk-off right now. And more importantly, I’m waiting for these IPOs so that I can, to be very honest with you, delever and get some chips off the table. I think that it is crucial that this SpaceX IPO get done ASAP. And then I think it’s even more crucial that one of Anthropic and OpenAI front run the other (Time 1:10:31)
  • AI Productivity Is Real But Enterprise Proof Is Uneven
    • The group agrees AI is boosting software teams, but they split on whether that has yet translated into large, durable profit pools for incumbents.
    • Travis Kalanick says real founder-led companies are shipping faster, while big enterprises still get stuck on messy change management. Transcript: Jason Calacanis Microsoft Office may have made you 30% more efficient. The internet may have made you 50% more efficient, but none of these things made you 10 times. And you had a really interesting point that you slipped in earlier, Chamath, which was nobody knows how to harness these things yet, right? And it’s producing slop. The truth is 10% of people do know how to harness it, 20% maybe. And I watch this in my own organizations and I watch it in 600 portfolio companies. The ones that do deploy it correctly, they are running the table on the ones that are not. So the efficiency boom that we’re going to see at these companies, whether it’s Meta or Uber or Airbnb or whoever executes it properly is going to be phenomenal. The earnings will be insane. Chamath Palihapitiya Maybe I’m an idiot, but it has not translated into a tsunami of more revenue and more profit for me yet. Maybe I’m the only one, and maybe it’s everybody else but me, but I haven’t seen it. I see it in a lot of companies. Jason Calacanis I think in private companies, we have two companies, just two examples, Micro One, which is doing data, dark pools of data for these language models. And they have built technology that allows them to build data and allows them to collect data to help the large language models companies grow. And they are on a tear by using this to identify and find great people who can then contribute to these corpuses. And then we have one tax GPT that is making the accountants, I think they have six or 7% of all accountants using their platform now. They’re just ripping the productivity of accountants. Chamath Palihapitiya I hope you can agree with me with the following statement. Small companies nibbling at the edges is not where these guys will build a multi-trillion dollar market cap. Jason Calacanis I think we’re both in alignment. Big companies, dumb companies, slow to implement the technology, startups. No, they are dumb when it comes to implementing new technology. Chamath Palihapitiya They’re always the laggards when it comes to implementing new technology. And what I’m saying is, if you can’t prove that this works in the big time, prime time, big league use cases, it’s a toy. Jason Calacanis All right, Sachs, where do you stand? Are you in the JCal position? The startups are showing the way they’re being massively efficient. They’re growing revenues like we’ve never seen in the startup community before with less people. Or are you in the Chamath camp? Hey, big companies are not having a drop to the bottom line and they’re smart or both things are true. Where do you stand, Sachs? Be the adjudicator of this case. David Sacks I mean, honestly, I’m probably closer to you, J. Cal. I hate to say that. And listen, because look, I think people are still figuring out how to drive business value out of AI and change management is hard. And the bigger the company, the harder it is. So what’s happening right now is there are a lot of transformation projects at large enterprises that are failing. There’s like a big McKinsey study on that. But if you look at activity from the bottom up, I think it’s very interesting. It’s becoming more interesting. And over the last several months, obviously, with coding reaching a new level, we’re starting to see very interesting things happening there. And obviously, the revenue that’s now being generated from these coding models is, you know, again, it’s exponential, like we’ve never seen before. So the ROI is finally there at the model layer. Meaning, before, you know, people were saying that it’s a bubble, because you had all this massive capex at the data center level and there was no ROI coming at the model layer. Now we have the ROI at the model layer. And I guess we’re sort of questioning whether the ROI will be there at the application level. But in any event, I think things are progressing. I mean, look, I fundamentally am bullish on this whole thing. Chamath Palihapitiya Okay. No, no, no. Sorry, let me be clear. Hold on, hold on. Okay, go ahead, Shema. Obviously, I’m bullish. I’m in this space. I’m doing it. You’re in the arena. We have seen in every single wave, in the mobile wave, we needed consumers to show up at scale. So we needed consumer experiences. And it was very obvious that there were these consumer businesses that were going to be, if not already, incredibly, incredibly profitable. Google and Facebook were profitable within the first few years. They never look back. And all I’m trying to point out to you guys is there is not one great example yet. If we believe enterprise is where all the money is, and if we believe that’s what’s going to underpin these trillion dollar valuations, just please somebody show me a couple of good Examples of scaled profits. Jason Calacanis Okay, fair enough. David Sacks Travis, final word here on- But by the way, can I say one other thing? I think Chamath has a good point about being risked off right now, because if you just look at valuation metrics, they do seem to be quite high. And I’ve seen other versions of those metrics as well. So look, it’s very, very hard to time the market. I don’t try. But I think you could make an argument just based purely on valuation levels, not events, that you want to adopt a more conservative posture right now. Jason Calacanis Travis, is are these valuations so high right now on the standards that the efficiency that AI could bring to these companies is not real enough to continue the growth from here? It’s not a catalytic enough technology. Chamath Palihapitiya And, you know, when you look at Snap… No, it’s the opposite. All these traditional companies have horrible valuations they’ve been crushed so my point is if ai is real the upside is also real all i’m saying is the details guys matter it’s very Hard to take a very complicated business and all of a sudden quote-unquote transform it it’s not as easy as it sounds that word is easy say. Jason Calacanis For sure. Travis, go ahead. Final word. Final word from Travis, please. Travis Kalanick A couple things. First is when it comes to big companies, I think the big thing about, let’s call it the autonomous enterprise, is change management, is the big boy. And change management actually is about all the people that already work there, the middle managers, the technocrats, the bureaucrats, the whatever, the crats. The crats. And getting the change management going, the change management going there is, it’s a human thing. And it’s very tricky with very complex processes, many of which are not even documented. And in theory, it’s just all going to happen real fast, but in practice, like that’s hard. So that that’s part one, part two, what I’m seeing with true tech companies, real companies, public, I would say public, like hardcore public companies. I mean, like, you know, founder led, you know, folks that are really cranking public companies and tech companies that are sort of up and comers. I talked to CEOs across the board and they’re like, they are fired up about the development, the sort of the productivity and deployment schedule and like the new features they were Able to roll out much, much, much faster because they’ve pivoted their culture sort of very pro (Time 1:18:04)