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Podcast

Trump vs Powell, Solving the Debt Crisis, the $10T AGI Prize, GENIUS Act Becomes Law

All-In with Chamath, Jason, Sacks & Friedberg

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  • Tariffs’ Limited Impact on AI
    • Tariffs impact the economy but are less relevant for AI development and data centers in the U.S.
    • Market sensitivity to tariffs may dampen volatility, with China being a primary focus. Transcript: David Friedberg Yeah. Gavin, let me ask you a question. How do you price tariffs today? So where do you think this ends up? Obviously, there’s a lot of back and forth and, you know, everyone’s trying to make a read on what the end game is. What’s your market take as you’re making investments right now and where we end up on the tariff front? Gavin Baker It is a good question. It’s it’s open. We’re going to see what happens with sectoral tariffs. I think it’s hard. You’re doing the winning AI summit. It’s going to be hard to win an AI if we put tariffs on semiconductors. But for a lot of what I do for now, tariffs are not super relevant, but for the market, for the economy, they are relevant. But for AI, they’re maybe a little less relevant because I think everyone is maybe a little more sophisticated about the downsides of tariffs for constructing data centers here in The United States. Jason Calacanis And ultimately, don’t we look at the tariff situation and say, despite the shock and awe of the opening salvo, it’s quite a boring position now. It just seems to be reciprocity and reasonable reciprocity at that. Yeah, that’s how we would sort of categorize the endgame here? Gavin Baker I would say for everyone but China. You know, it is, and you know, we’ve clearly reached some sort of deal with China, you know, rare earths for H20s and MI308Xs. But it’s interesting. And one of the trade deals that has been finalized is Vietnam. And there’s a special carve out for goods that were trans-shipped from China through Vietnam. So they are clearly focused on China more than almost any other country, rightly or wrongly. But yeah, and I do think there is, you know, there was maybe three months where Trump said he did not care about the stock market, but now he’s back to quoting the market at all-time highs. He clearly cares and is clearly very sensitive to market feedback. So I think that that will be a dampening mechanism on tariff volatility. But they passed the bill and he immediately went back to tariffs. (Time 0:01:50)
  • Fiscal Challenge Beyond Fed Chair
    • Rising long-term U.S. treasury rates pose a significant fiscal challenge beyond Fed chair changes.
    • The market demands higher rates reflecting concerns about deficit spending and borrowing costs. Transcript: David Friedberg Jerome Powell necessarily solves the US fiscal challenge, which is rising interest rates on the long end of the treasury curve. So if you look at the 30-year treasury yield over time, and Nick, maybe you could pull this up while I’m talking, but as of today, we’re at exactly 5% on the 30-year. And you can see that this 5% yield, which is what the market is demanding the United States government pay in order to be loaned the money to make the bill payments that the U.S. Government has to make every year, is the highest it’s been. The borrowing cost is the highest it’s been since going all the way back to 2007 as of today. And I think this is the real story for the United States. We have $36 trillion of debt. The average interest rate we’re paying on that debt today is 3.3%. That’s the average of all the treasuries that the federal government has issued, the Treasury Department has issued to borrow the money that it is using and has used to pay all its bills. And if you look at the 5% number, that’s a 1.7% hike. At 3.3%, which is the current average rate we’re paying across $36 trillion, we have a run rate interest expense. So just the money we’re paying each year on the interest of the outstanding debt is $1.2 trillion a year. And if this spikes up to 5% from 3.3, we’re talking about nearly $2 trillion a year in interest expense. And that number is only going to get bigger as we borrow more money each year and the loan balance goes up, the outstanding debt goes up, because we are still running a deficit. The government is spending more than it’s making every year. So the crisis that America faces is a more profound fiscal crisis where the rates that we’re having to pay are a function of what the market is telling us. The market does not want to loan the United States money over a 30-year period for less than 5% as of today. Curve, making overnight loans cheaper, which is what the Fed can do, will stimulate the economy and make more money flow easily, because now you’ll be able to borrow money overnight To do stuff like build a building, and then sell the building next week or next month, or take out a car loan and pay it down and use your car to go drive for Uber and grow the economy and other Things. So the theory is that if we can, you know, drive rates down on the short end of the curve, we’ll grow the economy such that we’ll be able to make those payments on the long end of the curve. But there comes a point where, again, you’re only going to be able to move the market so much until the more important fiscal situations are going to be addressed, which is spending, Taxation, and some of the other key policy issues. So I think what the market is saying is it’s not as much about Jerome Powell and frankly, getting rid of a prudent individual may be more challenging than it is beneficial when the real Challenges facing the United States need to be more heartily addressed. (Time 0:09:00)
  • Deficit Matters with Higher Rates
    • Historically, the U.S. deficit didn’t matter when rates fell consistently.
    • Now, higher rates make deficit spending costly, potentially making interest the largest government expenditure soon. Transcript: Gavin Baker So that is just empirical proof that what David is saying, I think is right. And second. The deficit has been a feature of American politics dating back to Ross Perot’s. You know, 1992 presidential run, his independent third party run. His independent third party run. Here we go. But yes, but the deficit never really mattered because interest rates kept going down such that even as our debt grew, interest expense has kind of a percentage of the government’s Budget stayed relatively low. Now that rates have gone up and don’t seem like they’re going down anytime soon, the deficit does matter and it really matters. And you can kind of run a couple of scenarios, but pick your metric. If the deficit kind of continues at current levels and we were to refinance the debt at the prices that, you know, David was talking about, you know, it’s only a few years before spending On interest is significantly larger than spending on Medicare and Medicaid or Social Security or the military. So pick something you care about. But our current course in speed, it’s in the not too distant future where interest expense is the biggest line item for the government. And that is not healthy. And that’s why the deficit finally matters. It’s just that rates are higher. But the great thing is, is there is a virtuous cycle here. As you close the deficit, rates should theoretically come down. And then those both feed on each other to kind of help the problem. And it is possible, there’s no silver bullet here, but some combination of slowing government spending, extra revenue, and tariffs are effectively, we’ve never had a consumption Tax here in America, which I think is a good thing because consumption taxes are very regressive. But the reality is like, even when Obama controlled the house, the Senate, and was the most popular democratic president of our lifetime, I don’t think federal government tax receipts Has a percentage of GDP got above 18-19%. So that’s kind of the ceiling for income taxes alone. And tariffs are really just a consumption tax that kind of incents domestic manufacturing. I mean, there’s all sorts of reasons they’re bad ideas. You know, David Ricardo, the theory of comparative advantage, 100% correct. Free trade is a good thing. But introducing some sort of a consumption tax, growing the economy a little bit faster through deregulation, and slowing government spending, I think there is a way out of this for America. (Time 0:12:08)
  • Grok 4’s Big AI Leap
    • Grok 4 AI model significantly outperforms leading competitors on challenging benchmarks.
    • This represents the biggest leap in AI capabilities in some time, indicating rapid model progress. Transcript: Jason Calacanis Into either a transcendent intelligence that we haven’t seen before, that we as humans can’t comprehend, it goes beyond human intelligence, or this is the smartest human on the planet And where we are right now in this journey. Because I think these terms are all getting muddled together. And I think we have an interesting conversation here if we parse them. Gavin Baker I think artificial general intelligence, I would define it as an AI that can take economically useful actions in a variety of domains be better than the average human in most domains, All domains. But that’s very different than superintelligence. Being able to draft a contract, that’s not superintelligence, but it is useful. Being able to do a medical diagnosis is not superintelligence, but it is useful. Being able to book my travel, so on and so forth. Superintelligence means exactly what you said, that it is smarter than any human, but it has access to all of human knowledge. I think one of the most interesting questions is what will the economic returns to superintelligence be? They’re definitely unknowable because we have never seen super intelligence before. If as humans, we have kind of pushed the limits of physics, biology, chemistry, the laws of the universe, then maybe the economic returns to super intelligence won’t be that high. But if super intelligence is curing cancer and inventing warp drives, then the returns are going to be really, really high, and it’s fundamentally unknowable. Yeah. Jason Calacanis Okay. So we’re at general intelligence. Hey, your lawyer, your tax or accountant is going to go much faster. They’ll have a co-pilot. This is all going to be great for a business. Every business gets 10% more efficient a month. (Time 0:21:58)
  • Distinguishing AGI vs ASI
    • Artificial General Intelligence (AGI) can perform useful economic tasks across domains better than humans.
    • Artificial Superintelligence (ASI) surpasses humans and could unlock unprecedented innovations and longevity. Transcript: Gavin Baker Think artificial general intelligence, I would define it as an AI that can take economically useful actions in a variety of domains be better than the average human in most domains, All domains. But that’s very different than superintelligence. Being able to draft a contract, that’s not superintelligence, but it is useful. Being able to do a medical diagnosis is not superintelligence, but it is useful. Being able to book my travel, so on and so forth. Superintelligence means exactly what you said, that it is smarter than any human, but it has access to all of human knowledge. I think one of the most interesting questions is what will the economic returns to superintelligence be? They’re definitely unknowable because we have never seen super intelligence before. If as humans, we have kind of pushed the limits of physics, biology, chemistry, the laws of the universe, then maybe the economic returns to super intelligence won’t be that high. But if super intelligence is curing cancer and inventing warp drives, then the returns are going to be really, really high, and it’s fundamentally unknowable. Yeah. (Time 0:22:18)
  • The $10T AI Efficiency Prize
    • The $10 trillion AI market prize is driven by broad efficiency gains, not just AGI.
    • Cost efficiency in AI compute is crucial, as producing more output tokens at lower cost creates major advantage. Transcript: Jason Calacanis Yeah, in your mind, it’s not just the general intelligence. That be the silver medal people are going for the gold here not general intelligence super intelligence breakthroughs that we can’t imagine am i would you say that’s a fair way to uh David Friedberg Sum up the massive interest in investing in these projects yeah i mean i think there’s something where everyone has identified this asymptotic return moment, where if you get to that Moment, you’re limitless in terms of the upside. Is there one winner? I don’t know. I don’t think so. Kind of reframe this as being some binary condition that I think we’re talking about it as being quote general intelligence, super intelligence as being on a spectrum of leverage towards Complexity, complexity, meaning like I can do a simple task, like instead of writing a letter and putting it in an envelope and having some guy carry it to my mom, you know, and she gets The next day, I can digitally get her that message instantly over email. That creates an incredible amount of leverage and solves a lot of the complexity of getting her that communication from me. So if I as a human said, I would like to harness fusion power, similar to what the sun uses to make energy, and I want to do that on Earth. Today, we’re in, call it year 40 or 50, of a research cycle of humans trying to solve that particularly complex problem. It’s a scientific problem, it’s a discovery problem, it’s an engineering problem. And this idea of superintelligence is that it could give us immense leverage in solving that complex problem that we otherwise may be challenged to solve over decades or hundreds of Years, or think about one day solving a problem that would take humans thousands of years to solve. I don’t think that humans are limited in our ability to solve problems. I think we’re limited in terms of time. And what intelligence, what digital intelligence gives us is leverage on time, so that we can now tackle ever more complex tasks that as you think about these tasks, the amount of time Isn’t just an incremental one year or two years, but it becomes 100 years or maybe 1000 years. So this relates to I think, projects around physics around chemistry, transportation, around biology, where we’re probably fundamentally scratching the surface today, and where The superintelligence is an enormous leverage creator for us. And so I don’t view it as some like species or race that independently persists in its own intentions, but it is a tool that provides leverage in a way that is orders of magnitude greater Than the leverage we got from yesteryear’s digital tools and probably today’s AI tools and probably tomorrow’s general intelligence tools is kind of how I would think about it. And, you know, maybe it’s because one model does so much stuff better than any human, you can call it super intelligence. But I think functionally, leverage into complexity is where this becomes super compelling for humans. And it’s why I think we can and should be highly optimistic about living very long lives and traveling anywhere we want and having abundance in food and having abundance in resources And having abundance in recouping our time to do the things we want to do instead of the things that we have to do today, because we don’t have access to this incredible leverage. So that’s where I get kind of, I love it. I think it’s a great way to look at it. Jason Calacanis But I want to go back to the silver medal here in this sort of competition, gold being super intelligence, we start solving fusion and really big problems on deep research cycles and The velocity of that goes up. But just going back to the silver, everybody in the economy becomes, I don’t know, single digit, it’s more efficient every month and some amount every year. I’ve been trying to back of the envelope what I think the value is for a human being in the West, in the modern world, and what they should spend on AI per month. I’ve come up with a number of about 75, 150 bucks, somewhere in that range, is a no brainer to spend on your AI per month as an individual working in the world. If that’s the premise, right? I think there’s a billion people in the developed world who could spend, let’s call it 100 a month, 1200 a year. It doesn’t take a genius to figure out this is a trillion dollars in revenue. Based on market cap, that’s probably $10 trillion in market cap. And then we just have to back into the spending of what it costs to build this, you’re doing these kind of calculations, I’m sure, at a treaties, yeah? And where this general back of the envelope that I’ve come up with in my mind for a mental model that there’s a $10 trillion prize, a trillion dollars in revenue, just in the silver medal, Does that jive with the spending we’re seeing today? I think people are putting in $10 billion worth of equipment a year across five different companies, right? Gavin Baker Well, I think they’re putting in quite a bit more than $10 billion per year. Each. David Friedberg No, no. Google alone is doing $70 billion this year. Each is putting $70 billion. Jason Calacanis Is that $70 billion they’re putting in this year going to be repeated for the next five years? So it’ll be $350 billion? Gavin Baker TBD Well, yeah, TBD, the future is always uncertain. But if there are economic returns to that, they will keep doing it for sure. Something interesting is AI is, as we’ve discussed in previous all-ins, extremely compute intensive. And it’s just at no point in my career as a tech investor, except the very beginning, which was kind of the end of the PC wars, which Dell won by being a low cost producer, going direct, cutting Out the working capital, the components and a PC depreciate. So if you have to go through a store where it sits on the shelves, you’re at a big disadvantage from either a, call it a cost or a quality perspective. But at no point in the 25 years I’ve been a tech investor is being the low cost producer mattered. Being the low cost producer is really going to matter in AI. Because at some level, the amount of tokens you produce is intelligence, because of test time compute, you know, post training reinforcement learning. And so if you can produce those tokens at a lower cost, you’ll have a big advantage. You know, if for that 75 billion or 30 billion or 50 billion that you’re spending per year in CapEx, you can produce more tokens. That is a profound advantage. I don’t like your calculations, like just has a back of the envelope, you know, kind of scratch. (Time 0:25:23)
  • GENIUS Act Modernizes Payments
    • The GENIUS Act updates financial payment rails, using blockchain to secure U.S. dollar dominance.
    • Bipartisan support for crypto regulation aims to integrate digital assets with traditional finance. Transcript: Jason Calacanis David Sachs calling in live. I see the pale yellow paint in an ancient building. You must be in some sort of wing of the great White House. Is that correct, David? David Sacks I am. Well, I’m actually not in the White House per se. I guess I’m on the White House grounds. We’re in the Eisenhower Executive Office building. That’s where my office… Yes. Jason Calacanis I can tell from that holding… Freeberg and Schott have been here. Yeah. No, they said great things. And I checked my calendar. I’ll send you some photos. It’s great. Well, no, but the calendar is wide open between now and the all in summit all in.com/yada, yada, yada. So the windows there sacks the windows wide open. And I’ll see you in the cafeteria, I guess. David Friedberg Play your cards right on stage next week, you might get invited after the summit we’re doing. Yeah, absolutely. DC.C. Jason Calacanis Next Wednesday, which has been publicly announced, so it’s going to be exciting. David, you brought a friend today. Maybe introduce your friend and tell us what you got done. What have you gotten done in the last week for the American people? They want to know. Because you weren’t here last week doing the pod, so you must have gotten something done for the American people. Let’s hear it. David Sacks Well, first of all, this is the czar behind the czar, Bo Hines. He’s the executive director of the president’s working group on digital assets. So that’s the working group that I chair, but he actually does all the work. He’s the executive director and he’s here every day. And he’s been working on crypto pretty much nonstop since we started the administration. And he’s kind of the unsung hero within our operation here on these two bills that just passed the House, which are historic and quite momentous. Jason Calacanis So, Bo, welcome to the program. And maybe you could tell us a little bit about these bills and what they do for the American people. Bo Hines Yeah, well, first of all, David, you’re too kind. We’ve had a blast working together. I mean, we connected back in transition, I think, in late November, and we started mapping out a plan for this. And to see it come to fruition this week is really like, it’s unbelievable. The fact that we had the bipartisan votes we did today in the House is remarkable. It’s unprecedented. And it shows you that, you know, leaders on both sides of the aisle understand that our country has to be at the forefront of this technological development. But let’s start with genius, because I think genius is really the foundation for everything else we can build upon in this space. A lot of industry cares about market structure, as do we, and we want to see it done on the president’s desk as well. But genius is unique because it really updates the payment rails inside of our current financial system. I mean, the payment rails have been archaic. And I’ve likened to the fact of the ways in which we’ve communicated have changed quite dramatically over the course of the last several decades. The ways in which we move money really haven’t. And we have the technology there in blockchain technology. So what we’re doing here is we’re fixing the plumbing of our financial system. We’re securing US dollar dominance for decades to come. If you want to access our capital markets, you’re going to have to use a dollar back stable. You’re also providing a pathway for tokenization of public securities in 24-7 markets and the things that people have dreamed about for quite some time. This is a revolutionary piece of legislation. And the fact that it had this much bipartisan support is incredible. It’s a testament to President Trump’s leadership. It’s a testament to our fantastic AI and cryptozar, David’s leadership. I mean, he’s truly been the guiding star behind the ideology and what we’re pushing here. And, you know, he has a phenomenal team as well. I mean, I’d be remiss not to thank Tracy, who’s David’s chief of staff. I mean, in the midst of all of the chaos to get this done, and like there were so many steps to this, you had to beat the banking lobby to get it past the Senate. Then it moved over to the House in which we had to basically fight some members that really misinterpreted or misunderstood what this bill actually did. And the president stepped up, David stepped up in the enormous way. It wouldn’t have happened without either of them. And so now we have this bill heading to his desk tomorrow. And to pivot to market structure really briefly, this provides the rules of the road for the exchanges, the brokers, everyone in this space. They desperately need it so that we can break down the wall between traditional financial institutions and these digital asset players. I think that’s well underway. Obviously, getting a vote as strong as they did in the House is indicative of what can happen in the Senate. If we deliver on these two pieces of legislation, I mean, that’s about 90% of what needs to be done for crypto to make the US crypto a capital of the world. (Time 0:38:42)
  • Trump’s Role in Crypto Legislation
    • President Trump’s direct involvement was pivotal in passing historic bipartisan crypto legislation.
    • Overcoming opposition required negotiation and addressing real concerns effectively. Transcript: David Sacks Done. Just to clarify one thing when you say finish line. So like Bo was saying, there’s two bills. There’s the Genius Act, which is the stable coin legislation. And then there’s a Clarity Act, which is market structures, basically all the other tokens besides stable coins. Where we are is that both passed the House today, but Genius has already passed the Senate. So it is going to the president’s desk tomorrow. And it will become law. We’re doing a bill signing with the president. By the time this pot is released, it will probably be law. I think we will have the signing. Clarity started in the House. And so it has passed the House. And now it’s going to the Senate. And they still have to do their hearings and markup on it. And we expect that will happen over the next couple of months. In fact, the chairman of the Senate Bank Committee, Tim Scott, has said that he wants to finish with the market structure legislation by the end of September. So if all goes well, then we could be looking at a second bill signing in, say, October. And like Beau said, that would be pretty much the crypto industry’s wishlist for having a clear legal framework in the United States for both stable coins and other crypto tokens. So it’s really pretty amazing. I mean, when I started this job, I’ll just tell you, one of my friends in Silicon Valley said that, you know, you may be able to get some AI things done, but you’ll never get anything done On crypto. And the reason is because the entrenched interests are too powerful, and they’ll stop it. The banking lobby will stop it, or Elizabeth Warren will stop it, or just all the status quo players who could get disrupted by blockchain-based technology will somehow find a way to Stop it. And that didn’t happen. We’ve actually now moved forward. Genius is about to become law. And I think Clarity is looking like it’s going to have the votes in the Senate as well become law. So it’s really pretty amazing how much progress we’ve made in just six months. And like Bo said, this really comes down to President Trump’s leadership. He made the promises during the campaign to prioritize crypto, to make the United States the crypto capital of the planet. And it was his negotiating skills and deal making that made this all happen. I mean, this past week has been a little bit of a roller coaster. There were reports over the last couple of days that the whole thing was falling apart and wouldn’t happen. There was a moment, I think this has been publicly reported, but I’ll give you some color on it, is there were 12 members of the House whose votes were necessary to advance the bill to this Vote today. (Time 0:43:27)
  • Energy Powers AI Infrastructure
    • AI infrastructure growth involves diverse industries expanding energy production in places like Pennsylvania.
    • Energy expansion, including natural gas and nuclear, is critical to powering AI data centers. Transcript: David Sacks Was an energy and innovation summit that was organized by the Pennsylvania Senator Dave McCormick and his wife, Dina Powell McCormick. And they did an amazing job bringing together all of these different companies and interests that have a stake in energy in Pennsylvania and the development of AI. And Pennsylvania is, I think, it’s the number two energy producing state in the US. It has tremendous amounts of natural gas. They feel like they can expand that. I think there’s been a lot of fracking in the past there. For example, they even have nuclear Westinghouses there. And it makes sense to have the data centers near the power source, right? And so we know that these big AI data centers can be powered by either natural gas or nuclear. And so Pennsylvania just makes a lot of sense as a place to build this AI infrastructure. So this was a summit to announce new investment in Pennsylvania, something like $90 billion. President Trump was there to keynote the summit and talk about these investments. It’s his policies towards energy that he started describing long ago. I mean, remember, he made the campaign promise of drill, baby drill. He’s been talking about the need for energy expansion in America for many years. And I think he was very farsighted in seeing that energy is the basis for everything. It’s the basis for AI. It’s the basis for all other kinds of growth. So by promoting energy dominance, we also get AI dominance. And we’ve talked on the show before about how we’re going to need that energy to power the electricity of all these two AI data centers. So this summit brought together all these different groups. And the thing I thought was really interesting, the thing I learned from it was just how diverse the business interests are that are going to participate in this whole AI boom. It wasn’t just big tech. Yes, Ruth Porat from Google was there. It’s also small tech. There was hardware companies, there were robotics companies, but there were also these energy companies. There was nuclear, there was gas. The trade associations were there. It’s construction, it’s electricians, it’s carpenters. And so there’s a huge diverse array of different parts of the economy that are going to experience growth from this AI boom that’s taking place. It’s not just a Silicon Valley thing. (Time 0:53:00)
  • Nvidia Chips Restriction Reversal Helps
    • Lifting Nvidia H20 export restrictions to China aids America by providing tech advantage over Huawei.
    • It prevents China from developing domestic alternatives that could challenge U.S. AI hardware leadership. Transcript: Gavin Baker And I am, you know, it seems like the export, they’re going to get the licenses. And that is 100% the right decision for America. And I do give you credit for championing that. I’m happy to talk about why I think it’s great. Jason Calacanis But we just, you know, can you frame it for a second for the audience, Gavin? What we’re talking about here, NVIDIA obviously was banned from selling their latest and greatest to China and even the last generation, the H20s. And obviously that creates an opening for Huawei and other players to create competitive products as opposed to using the standards built here in America. Gavin Baker Yeah. Well, I think, I mean, I think you said it well, but first of all, it’s not the latest and greatest. The H20 is not the latest and greatest. I don’t think we’re going to let the latest. It’s not even the last gen. David Sacks It’s a deprecated version of the last generation. Right. Yeah. Remnants. It’s a less powerful version of the hopper chip. And now they’re onto Blackwell. So it’s anyway, Gavin can explain. Gavin Baker Yeah, it is. It’s many, many years behind. But while it’s many years behind the kind of state of the art here in America, it is, I think, kind of devilishly clever, because it’s called two years ahead of kind of the chips from Huawei. And so it kind of gives America an advantage while preventing China from developing kind of a domestic and video alternative. And the real threat is because China, they do have more electricity. They can do things that we cannot do here in America. You know, the Blackwell racks are exquisitely designed to be as power efficient as possible. If you don’t care about power, you can make very different kind of design decisions. Huawei has something called the Cloud Matrix 384, which uses fiber optics instead of copper to link the chips together. And while it’s not nearly as power efficient as the Blackwell NVL-72, they have all the power they need. And so I think it’s a smart decision for America to sell this chip that gives America an advantage in AI and keeps China from developing kind of their own domestic alternatives, which Could eventually kind of challenge, you know, NVIDIA, AMD, you know, other kind of American AI accelerator champions globally. We don’t want that to happen. So I thought it was a mistake when they banned the chips. And I’m really happy and think it’s really good for America if that is being reversed. And kudos to you, David. Gavin, you said it so well, I don’t think I have anything to add. (Time 1:00:03)
  • Stablecoins Extend Dollar Dominance
    • Dollar-backed stablecoins will extend USD dominance globally by offering trusted currency in unstable regions.
    • This could lead to widespread dollarization of economies through accessible digital wallets. Transcript: David Sacks Think what’s going to happen with these dollar-based stablecoins is they’ll start being used all over the world. Let’s say that you’re in a country, maybe it’s a developing world country, where the fiat currency is not trusted. And now all of a sudden you can transact in dollars using a wallet on a phone, you know, and the merchant also has a wallet on a phone, and now you can just transact in dollars, you could see A large portion of these economies dollarizing from the bottom up. Because again, once you have your choice of fiat currencies through stablecoin, why wouldn’t you just use the best one? And that’s what I think is really interesting. So I do think it extends the dollar’s dominance internationally into the online realm. (Time 1:02:53)
  • Bipartisan Crypto Law Success
    • Passing GENIUS Act required broad bipartisan support, overcoming partisan opposition through education and negotiation.
    • The law marks a major step for U.S. crypto leadership, securing financial innovation and dollar status. Transcript: David Sacks Bill, you did a phenomenal job. I got to observe this whole process. And you really played the critical role. You were a very skillful legislator crafting delicate compromises. You were kind of the glue that held the whole thing together. Congratulations on getting this done. Is this your first bill that you’ve gotten done as a senator? Sen. Bill Hagerty It is. I’ve served in the Senate for over four years, but we were in the minority for the past four years. So this is the first opportunity since the Senate was taken by the Republicans to actually drive legislation through. And the fact that we had the House of Representatives, the Senate and the White House made this possible. It was just a threshold concern. We worked so hard, as you know, to retake the Senate in 2024, to retake the White House in 2024 and hold on to the House of Representatives. It worked. And that’s the only thing that’s enabled us to deliver this type of meaningful legislation. And I say this too, it’s been a great team that has done this. I may be the author of the legislation, but the leadership that you’ve brought to bear from the White House coming in and donating your time from the private sector, working as a volunteer Here, but making certain that the leadership and the vision is present here at the executive branch, you’ve been absolutely great. And that vision, I think, is carried forward into the Senate, the House. More and more people are understanding this and catching on. And I think what we’ve done today is launched the catalyst for what’s going to make America the crypto capital of the world. David Sacks Yeah, it’s been really amazing and interesting for me to watch this whole process. They say that you shouldn’t watch legislation or sausages being made. But you know, earlier in the week, the media was reporting that this bill was dead because there were a dozen holdouts. And President Trump made calls late into the night. He gathered people into the Oval Office. He cajoled, he twisted arms, and he also persuaded. Sen. Bill Hagerty And he got us over the finish line. It was pretty incredible. Well, I think the founding fathers made it actually quite difficult to legislate for a reason. But it is difficult. It’s taken months upon months to get to this point. And the legislation, the Genius Act has been killed a couple of times in the media. Elizabeth Warren declared victory early on that she killed the bill. That didn’t happen. She didn’t have the juice to do it. David Sacks But there have been many, many attempts. That’s a big deal because until now, the crypto community has been living under Elizabeth Warren’s reign of terror. That’s exactly right. I mean, she basically was calling the shots during the Biden administration on crypto. And I was there when the Genius Act passed the Senate. I was up in the bleachers or whatever, and she was not happy. Sen. Bill Hagerty I mean, there were photos of her, and she did not like losing. There’s a fundamental reason for this, David, because Elizabeth and her crowd want to see a central bank digital currency. What they want is control of our transactions. They want the ability. They’re the ones that wanted to get to a $600 threshold for your Venmo transactions reporting everything. They want the ability to do choke point 3.0. And if you think about it, they had visibility in our transactions, the ability to centralize and control them. They could control our lives. It may be okay for the Chinese Communist Party, but that’s not going to work here in America. And this legislation put the final nail in the coffin to that. It’s really amazing that you got it through. And to get this passed, the Senate, you had to have 60 votes, right? David Sacks Because reconciliation, you only need 50 plus one. But for a regular order, I guess, to get past the potential for a filibuster, you need 60. That’s exactly right. So what demands did that put on you in terms of getting Democrat votes? Because the Republicans have, what, 53? Yes. So we didn’t have all the Republicans. We lost two Republicans. Sen. Bill Hagerty But what enabled me to get the other nine Democrats to come on board was really an education process. Because at its core, this shouldn’t be a partisan issue. This is about taking America’s payment system in the 21st century. This is about making our nation more competitive. This is about expanding demand for the U.S. Treasury securities that we issue. This is about the dominance of the U.S. Dollar. It’s hard not to like it. But I think there’s a partisan bent here in Washington that’s so strong that their objective is just to keep Republicans or Donald Trump or David Sachs from getting a win here. And through education and through listening, and frankly, I don’t think it’s my legislative skills. I think it’s the business skills that I brought to the legislative branch. I think it’s through the business skills and the ability to negotiate that we’ve actually gotten to this point today. And so tell us about that. So before this, you were a businessman, then you became ambassador to Japan. David Sacks You met President Trump. You told him you want to run for Senator. He told the story up at the speech. He said that you had learned Japanese in like six months as ambassador to Japan. It was a little longer than that. Okay. Sen. Bill Hagerty There’s a piece of the story missing because I started my career at a place called the Boston Consulting Group. And they sent me to Tokyo for three years back in the late 80s, early 90s. That’s when I learned the language. And to go back as U.S. Ambassador to Japan under President Trump in 2017, the honor of a lifetime. I can tell you representing the greatest nation in the world, any place in the world is an honor. But particularly in a region like that, that has so many strategic initiatives that are underway right now. You think about this, Japan has more US military stationed there than any place else in the world. Japan is one of the toughest environments in the world. When you think about the neighborhood that they’re in, North Korea, Russia, China, right at your doorstep. The time that I spent as ambassador really helped me dig in deeply in terms of the national security issues that our nation confronts and those that our allies confront. At the same time, we did two trade deals with Japan. Nobody thought it could be done. And we were able to navigate that with Jameson Greer working right beside Bob Blinheiser. I loved working with those guys. And we got two great trade deals done. Jameson is back now as the U.S. Trade representative. And I’m very optimistic that we’re going to see more trade flourish. President Trump knows how to do this. I’ve been with him in the trade negotiations. He knows exactly how to navigate this, and I’m looking forward to great results from our trade negotiations as well. Excellent. David Sacks And so we’re only six months into this administration. It feels like so much has happened. So much has been done. I mean, we just had one beautiful bill. Now we have this legislation. What’s next in your view? What do you think is going to happen next? Sen. Bill Hagerty What’s happening right now in the United States Senate, we just put through a rescissions package for a little bit over $9 billion. That’s a small amount. It’s a large amount of money, of course, but it’s a small amount relative to the entire budget. And the Democrats have had, they’ve just gone apoplectic over this. Any effort to cut back on spending, somehow they’ve got to be against that. They’re only for spending and we’re trying to bring physical sanity back to America. So the focus is going to be to continue to find opportunities to basically legislate what has been found at DOGE. The other activities well beyond DOGE, every department head, every agency is looking for ways to streamline … (Time 1:06:21)