Nvidia's Historic Quarter, SaaS Comeback, Bessent vs Druck, America's Debt Crisis, Cancer Vaccine

your podcast, your favorite podcast, yes, it's the all in podcast. The core four, the fantastic core. The original core tech is here. David Freeberg, hot off of his deep state conspiracy interview

with Eric Weinstein. Amazing. He did a little run to DC, great episode. Freeberg.

It was fun. Eric is one of a kind. I saw Cratsio's two kind of two sides of the coin of

“science in America. What's the basis of those two interviews? They were fun. Who is Eric Weinstein?”

He's a scientist who works with Peter Teele from Harvard. He has done some really, he's a real capital capital. He had a podcast for a hot minute. He is a heterodox thinker in science. What is his heterodoxical thought about science? There's all these things that everyone takes as fundamental premises and modern physics, like the string theory as an example, and he thought it was bullsh*t and called it out as bullsh*t. So he's been kind of the outcast in the scientific

community. It is bullsh*t. Right. So he's made this case and he's proposed alternative theories

that kind of created grand unification theory of physics. Then he's been outcasted by the scientific

community and people say that he's a quack and he's more on and he's talked about UFOs and he's talked about Jeffrey Epstein and people kind of say, well, this guy's fringe or they use these different terms to chastise him. And over time, you know, the point is similar to what Cratio has said, like so much of science has kind of followed this sheep-like mentality where everyone has to line up, agree to the same general theory or you get outcasts, you don't get grant funding,

you don't get tenure, you don't get jobs, you don't get invited to do lectures,

“you have to follow the mainstream in science or your outcasts. And it used to be the science,”

but that's true. Yeah, I know, but it's very rational to say, until string theory is proved, it's unproved. And so if you want to use the adjective bullsh*t, that's fine. It'll probably offend some people. But he's more right on the substance of what he's saying than he is wrong. It's unproved. Right. It's like J. Baucharia being like, hey, you know, COVID may have come from a lab leak. And when people were saying this, they were, they were told you were creating

conspiracy theories. You were pushing misinformation. When there is no misinformation, if there's no absolute truth that you're talking about, it's theory, everyone was starting with theory on where the COVID came from. You're talking about a level of corruption in a very narrow specific realm of science, which is the funding and grant approval apparatus that and getting cases in your and getting professor shifts. And so if you don't follow the voting, the methods, the theory,

if you don't follow the mainstream, you got to stay around cast. By the way, I buy that. I don't, I don't know what has led to stagnation in science in America, because if you do not part of the mainstream, you get excluded. And because everyone has to now think in the same way, you don't have heterodox thinking. You don't have outside of the scope thinking, which means we're not pushing the envelope and discovering new things anymore. And that's a very kind of pointed issue right now.

“That's why I went and talked to Cratzi, I was going to say differently. There's probably a lot of”

incrementalism in 2026 that didn't exist in 1926. Totally. Exactly right. We think about the general theory of relativity being published. It was completely outlandish, but people still studied it, assessed it. They didn't discredit it and say, oh, you're an idiot. And if you're thinking about this general theory of relativity being real, you're more on, that's what goes on today in science, where if you say stuff that's too far outside of the realm of the standard approach, the things,

your, your chastise, your outcast, your excluded. Do you guys see the, a limbic? You see the robot Olympics sacks? Check this out. This is pretty crazy. They had these, uh, Olympics in China. And they copied how Friberg actually runs in. Look at this. Look at that. Yes, that isn't definitely a free sprint for the free sprint. Do in the freebred sprint. Look at this one. He backs up and then boom. That's not my sprint. That's like me skiing right there. Yeah.

Look, and there's Jason Cooen setting records at 42. This is Jason Cooen right here. Here's Jason Cooen, with a shirt off at the poker game. Really great. You're sure back on Cooen. You know, I was thinking about the sacks. You know what I realized? I think you're 100% right about the PR. And I realize that the Chinese, the CCP is brilliant at PR. Look what they did. They got a bunch of Chinese people to fill a stadium and cheer for AI and robotics. They're cheering for it. They're rooting for it.

And then we got Dario saying all jobs are over. We're going to be the last company in the world. And it's the end of days. I can't wait to talk about Dario this week. We're not talking about Dario this week. Your grand unifying theory is that in a country of

a billion people, they couldn't find 4,000 to show up to watch a bunch of robots running around

to track. Are you really brave? This is that your grand unifying theory? It is true that China is much more optimistic about AI than we are. AI optimism in China is over 80% meaning they pull on the

In the US, that number is like 30%. So I've been saying for a while that the US ahead of China and every category except one, which is optimism. And that is the biggest risk to us winning this AI race against China is doing something that will shoot ourselves in the foot,

“because we're so pessimistic about what AI might do. I think it's all science. They're making”

you feel, you see that show the robot blowing up at 16 seconds Nick. This is all stage. It's a science. This is a science. They make you feel bad for the robots. They make you cheer for them. This is going to be like a major thing. No, it's the red robot. The funniest thing was when the red robot lost his legs. There was a couple tweets that I thought were hilarious. One guy was like,

"Oh my god, he tore his HDMI, his CPU. I've been, I've been, and then the second one,

which is not funny because I know Christian McAfrey, he's a great guy. He's like Christian McAfrey in week three." And you just see the entire leg just snap off very, very mean. Congratulations to the CCP. By the way, Optimus. Have you guys seen the latest Optimus videos from Iran by chance? Have you shown any of you guys? I haven't seen it. It's not publishing in public. I saw the latest Optimus. It would win half of these things already. You guys see it.

“He's making sick progress. He's not showing it publicly. But I saw it. I thought the sparks”

coming out of its mid-second. No sparks, but I saw a video that I said to him. I said, "Is this CGI or is this real?" And he said, "No, this is real. They just sent it to me this morning." And it's like, whoa, Optimus will be the best selling product. Yeah, and the hard part, as I understand it with these robots, is you can train them to do a specific action like running that race or jump or whatever. But the hard part is when they encounter a condition

that they weren't programmed to expect. And specifically when they have to interact with something in the physical world, that's when I guess tricky, right? Can they do the whole folding laundry or pick something up without breaking it or dropping it or whatever? And specifically something that they weren't taught to do. That's where I guess tricky. Yeah, the fidelity of the Optimus is, and it's ability to do novel things. You kind of nailed it. I don't want to say any more.

You've been playing with grockbot though, right, sex? Yeah, yeah. You got, you got grockbot, shot it. You've been grockbot maxing. I just reached my grockbot usage limit and have to upgrade. So 200 bucks a month. I've been, yeah, it's been really interesting, actually. Yeah, what it's just something. It just does what you tell us to do, right? Like it just gets it down.

Yeah, what's great about grockbot is that it's always on. It's in the cloud. You set up your agents.

And then they can keep working even when your computer is off or it goes to sleep. The other, you know, agent harnesses that we're kind of doing this, we're like open claw or Hermes,

“they were just on your desktop. So if your computer went to sleep, they would stop. You have to”

do all these Mac minis. And also, they were like very hard to use. Very powerly and super complicated. This is like by far the easiest. It's still a lot of work to get it set up, working right, perfectly, whatever. But it's fun. And it's the easiest it's ever been. And you can really see where it's all going. Yeah, it's pretty amazing. I told him he should make it multi-player mode. So like, you can put two agents in the same room, but then being able to put two people from your team in the same

room. And then, you know, having humans in the loop, it's going to be such a good idea. That will make this thing go so freaking viral. Yes. If you can just add because then, you know, what's what's cool about the agents is you actually have an agent swarm. You actually have lots of different agents performing different tasks. And they get good at different things. You know, some people ask why don't you just have one agent. It turns out that if you have multiple agents, then they age to have more

context and expertise. So they get more specific. But yeah, you could then use each of those agents as a channel and invite people to it and then they participate in that. And then they add another person. Yeah. Yeah. Then I could get a very, very viral. Yeah. It's a great product. All right. Let's get to work. We got a lot going on in video. I just had a record setting earnings report. I mean, they blew the door as office. And also, we'll talk a little bit about sales force also coming back

and the SaaS apocalypse ending. Stock was up in videos. That is 9% on huge numbers and even

huge or guidance 96.2 billion in revenue in the quarter to 1,166% year over year. More than double.

Wall Street's expectation was 92 billion. They guided for 70% growth next year. That is well above what Wall Street was expecting at 45%. So about that, sink in. The number people are going crazy over 60 billion in net profit. That is the most profitable core business quarter of any public company ever Google and Amazon. They've had higher one of quarters. Obviously, here's your chart in video net income and revenue quarterly just blowing the doors off of it. Stock is up.

12% year to date on par with the S&P 500. But they were lagging the broader chip index. I guess

the headwind from office that people believe there's competition coming. We'll talk about that. In video is the world's most valuable company. 5.5 trillion polymarkets. That's 79% chance.

“You should probably market our great partner. Polymarkets. 79% chance in video ends the year”

as number one. 6.3 million in volume. In other news, self swars up over 20% on Thursday. After they also reported a big quarter, revenue up 11.3 billion, 11% year over year. That was in line with expectations, but they beat it. They're adjusted EPS by 80% 590 versus $3.27. Sense. They got a big jump because they are major investors in antropic. They raise the full year guidance. 46 billion. You called it. Let's give. Chamopt is victory. FAP. Here he goes.

The victory. FAP. The lap. Chamopt on May 15. If you're take on this, you've been pretty critical

of the SaaS space in previous episodes. I think the high end of the market where Mark operates where the large monoliths operate is quite safe. What people are finding is he hold on a second. This is a lot harder than we thought. It's not like poop, poop, poop, put it a prompt and beat

“that poop in all works. It's not how it works. I think we're a little oversold. Now I think this”

consolidation and the re-rating can happen in the opposite direction. So what is the opposite trade? The opposite trade is who has constructed net dollar retention? Who has negative churn that's been really predictable? Which is a way of saying who has the best relationships? Those guys I think are positioned to crush. All right. There you have it. Chamopt your thoughts on Nvidia and Salesforce blowing the doors off of there. Quarterly earnings reports. There's a lot

there. So maybe we'll start with Salesforce first and then I'll go to Nvidia because I think the

Nvidia one is actually a good segue into talking about the national state of finance. I don't know. It was pretty obvious to me in May that Salesforce specifically was meaningfully oversold. I think what I was trying to say there and maybe I can say more precisey now is we're getting to the end of this second phase of AI. So if the first phase of AI were models and think of like a model as a brain, the second phase of AI is harnesses right and

agents, which is the analogous equivalent of giving a brain a pair of eyes and hands and a notebook for memory and a keyboard to type things on. So you're sort of taking this primordial object that was really good at Q&A and you're making it more useful almost like an autonomous being. But we're starting this next phase soon, at least I see it in the enterprises that I work with, which is that that's still insufficient. And what you now need to do is make that

autonomous agent much more informed and give it context and allow it to do a job much more intelligently. So meaning you take a brain, you give it arms and legs and limbs and eyes, etc. But then you have to train it to be a lawyer or be a customer service rep or be a sales agent or what have you. And to do that next step, you need a ton of contextual information. And so the people that control that today, the large systems of record,

what I said before and what I'll double down on now is that those guys hold an incredibly special place in the ecosystem if they do it right. And I think what you're seeing is Mark is finding a way to play well with the models, support harnesses, but also build his own and now start

“the push into this next phase. And I think that's why his net dollar retention is strong. That's”

why he's revenue is strong. That's why he's guiding up. And that's why the stock's ripped. I think was like a 43% since I said it. I bought him. I mean, it took about 20% today just on that and freeberg. I think you were in where you want to see NBC or you just on the quarterly call. I went to Benny Off's office for the earnings setup yesterday. So Dario was there. Dario and Mark did their CNBC bit. They set up a studio for the earnings call on the 60th floor.

You know, where we've all had dinner up there. And then I did the earnings call with Mark. Because you know, about a year ago, I think I mentioned this to you to him off. Like we kind of over a weekend, built a CRM tool internally using cloud code and cursor and stuff and kind of

this feature and you got to change this. I'm going to count in security and access and where's the data repository that makes it protected. And there was a lot of kind of back and forth on all the

features we ultimately needed to build to make it truly useful and scalable. Meanwhile, we've got

competing interests at our company on where we can build software that's unique to our company, like plant breeding software, which is what we do as kind of our unique advantage as a company is plant breeding. So how do we build a better breeding technology platform? How do we build software that gives the people in the lab and in the greenhouse and the breeders tools? And so we started building all these internal tools and eventually realize our time, our efforts, our energy,

is better spent building the workflows that are unique and create values for our organization uniquely, versus recreating a bunch of software that other people have already made. Where's your best ROI? Your best return on time spend and your best return on dollar spent. And it's not on rebuilding a communications tool like Slack or a messaging tool like Gmail or a CRM tool like Salesforce. And at the time, Mark and I were talking on the phone, he's like, you know, hey,

try Salesforce. I'll set you up. Come on, do it. And I was like, no, no, no. And then he's like, yes, yes, yes, yes. And he's so persistent. You guys know Mark. He's like, so persistent. Yes,

“what is like best sales guy on a text with me and kept texting every day. Are we up yet? Are we up yet?”

Are we up yet? Until the sales guy, I said, okay, go to my office. He goes to my office. He gets set up and then we're done. And then we realized, oh my god, this is actually much better wait for us to do this. So Mark asked me to come and recount that story at the earnings call and talk a little bit about the view on this change. So I do think, and I've shared this in the past, I think the horizontal platform companies, these tools that are horizontal CRM works across many different

verticals, industry verticals. And Gmail works across many industry verticals in Slack. And so on Excel, no one's going to go rebuild Excel. The real value is in the the software that's unique for your vertical. That's where AI plays a role in building custom workflows and custom software. And so I think that's kind of how I view this the real SaaS apocalypse. It's more of a vertical SaaS apocalypse, which is software that's designed for just one vertical, 100%. And that's where

“I think things get blown up. I totally agree with the platform myself for. I totally agree with you.”

I totally agree with you. Sex, let's talk about Mark Benioff. He is just an incredible salesperson

who just fought through the SaaS apocalypse and then figured out a way out of being put in the bucket of SaaS roadkill and then just massively integrating AI into the platform. Maybe you've known him for a long time. Maybe you could talk about him as an executive. And what we can learn from what he just did in terms of going from in the market's mind, roadkill, to leading the pack. Let's say in SaaS again. Well, this narrative of the SaaS apocalypse was totally overdone.

I mean, this whole SaaS is dead. Narrative is just getting shredded today with salesforce being up over 20%. You could go back and look at some of the clips I've been saying now for months. I do not believe that core systems of record like CRM are going to get written replace with something vibe coded. I've been saying that for a long time. Enterprises want certainty, they have compliance. They want professionally managed software that's been running and debugged for years. I mean,

“just think about all the bug reports have been filed against salesforce for over 20 years, right?”

And that's the hard part to get right. I mean, when I play with all these agents and AI, you're dealing with something that's probabilistic and there's so many edge cases. When you're dealing with a core system of record, you just want to know that it works. And the expense of it is low enough that you just don't want to basically jeopardize one of your core systems I'm ripping it out and replacing it with something built in house

in the kind of DIY way. So I just think this whole-sask podcast narrative was overplayed now. At the same time to your point, Jason, I think Banyoff is doing all the right things here. And you could kind of say it's if you can't beat him, join him type approach, which is he made this deal with anthropic. What is that deal? I mean, first of all, he's going to be offering

anthropic models inside of Salesforce. More importantly, I think. This is really the critical thing.

He is integrating Salesforce into Claude. He's willing to allow Claude to be the front end to have the sort of the primary user relationship and Claude is now going to access all of the data in Salesforce and all of the workflows, all the actions that a user can take. So in other words, Banyoff here is willing to risk decision remediation in order to ride this AI wave. Because he knows it's what the customer ultimately wants. You don't want to go into Salesforce

or any SaaS application to ride your agency. You want to create agents in the AI program that you're using and you want those agents built around across all of your SaaS platforms. So he's willing

Now, why is this ultimately good for his business and not bad? It's because, like I said,

I still think that you need systems of record. You need the AI agents to basically go to those systems get the data from a canonical source of truth. You just don't want there to be any probabilistic variability around that. And you want AI agents to be able to write back to those systems and you want to be able to write back to those workflows. So what's happening here is that it's not a written replace. Their layers are getting built. You've got the database layer.

Then you've got applications and workflows. And then you've got agents. And then you've kind of got the AI user interface. And that he often saying that the AI is now the user interface. He's basically

“acknowledging that he's leaning into it. Now, here's the thing, I talked to him this morning actually”

and a point he brought with me that I think is underestimated is that he says there's a lot of trap value in Salesforce. Meaning we know it's got this incredibly broad rich platform with tons of

functionality. The average user's never going to find all those things. But the agent will. So

think about all the cases where now the agent is going to go to the user and say, hey, I just saw that these actions you could take in Salesforce that seemed to line up with what you're telling me to do. Do you want me to do this? And the user is going to say, yes, you know, and then verify Salesforce as the system of record. Yes, that's exactly because now think about the agent as a power user of Salesforce. I know how to use Salesforce perfectly. You don't necessarily

need to hire this like team of highly priced consultants to figure out Salesforce. The agent knows how to do it. So can unlock the full value of Salesforce and all these actions. And then after you develop trust in your agent, you the user are just going to click the always allow button and now the agent can basically tap the full capabilities of Salesforce. So I mean, that's where this is headed. But now it raises the question, okay, so how do SAS applications play into this AI and agent wave?

“You have to have great APIs and you have to have a great CLI that command line interface, which is”

how the agents are going to relate to the SAS tools. I think in the past the way that most SAS products thought they spent a lot of time on their user interface. And now they really got to think about the agent interface, not just user interface. You have to build the best agent interface. And you've got to I think relax the idea that you're going to fully control the customer relationship. You have to think of agents created by the AI companies as being an extension of your platform

and not feel threatened that you're losing the customer relationship. If you can do all those things become a source of truth and a system of record, then you've got a big opportunity. I got to say he's like one of the most underestimated and underappreciated product and sales executives in our industry because I was talking to him when we were at Davosax about Slack and he was like, tell me about what you're doing and I was like, listen,

you have all my data. I can't get my data. My team wants to move off Slack. They want to use his open sort of product specifically so I can get all this information. He again to your point free book. Put me on with this else team and now I have complete God access to our Slack and they built a product called Slack today which they've been slowly rolling out and it does the promise of open claw. And what Sam did by buying out the founder of open claw, right after he bought

open claw's founder Peter and he started working at Open AI, just open claw just faded like no more innovation. I'm not trying to say this, say Sam did something nefarious or that open claw is terrible or anything but they just lost their edge. And now the version of Slack today is like a seven out of ten and it's getting like 10% better every couple of weeks I'm noticing. So he's going to do a parallel link sacks. He's going to have his own agents and he's

going to let you come in with your agents. His agents might be a little bit behind but you're also going to get those agents for free inside of Salesforce. It's like a two ways to win. You know,

“look, I think I think that SaaS products can offer their own agents and they can offer their”

own AI and co-pilot and all that. But I think the reality is is that most of the action with

agents is going to happen outside those products and simply want to interact with those products and basically get the data from them, use them as the system of record as the source of truth and then write actions back to them when appropriate. And I just think that founder should lean into that trend instead of fighting it because if you fight system control and say that only our agents or the way to interact with our system, then people will move to the leave. So are you

long vertical SaaS or are you short at like free burger and iron? I think it's specific to the company and what its modes are and how good a system of record is. Okay, I don't think vertical SaaS

This is the key point where these horizontal monolithic companies like Salesforce

are just unique, work day or a goal with respect to their GL. It's just very difficult, SAP, IFS. It's very difficult to see a pathway. You can replicate these businesses and they become the repository and the single source of truth, as you said. But vertical SaaS is workflows

“and it's a process and I just wonder what survives? Well, I look, I think it's a it's a good”

question and I think it's case by case, but look just a few months ago, everyone's saying that horizontal SaaS wasn't going to survive. And one of Leopold's major positions in that fund was to short all these SaaS products, including Salesforce. And what we've seen is that has turned out to be well known. Or so to be fair, I don't know that he understood the difference between vertical and horizontal SaaS because that was a funding short problem. Meaning he had to go to the big

stocks in order to be able to short enough to be able to get the leverage that he wanted. So I think he may have just worked backwards from his own mental narrative to make it all sound correct. But I suspect it was a leverage trap where he's like, I need to be really massively net long these other names and his prime brokers like, well, you got to find shorts, liquid shorts, and he's like, okay, Adobe and Salesforce. Well, but look, I mean, to be fair, I think that was

the dominant narrative as of just a few months ago, a SaaS apocalypse, and Benioff Stock was

“going hammered by the market and in down 50% now it's up back 20. So I think a lot of people were just”

indiscriminately selling all SaaS. And I think that if I had to say there's like one takeaway from the news today is that I think simple extrapolations of the future based on these trends don't work out. Right? The simple extrapolation here was AI agents can code therefore all software is going to zero. That was the simplistic extrapolation. Now what we're seeing is, you know, actually there are certain systems of record that are extremely compatible and complementary to AI agents, and if they are

positioned right by their founders, they can lean into this trend. And by the way, I think the job loss narrative is another one of those simplistic extrapolations. What is the job loss narrative is, now AI can do knowledge work, therefore knowledge workers are all going to lose their jobs. It completely ignores the fact that there's ways for knowledge workers to take advantage of the tools and lean into it. So the same way that many off is taking advantage of the agent trend.

Knowledge workers are taking advantage of it and they're going to be able to lean into it. We've got the technology you survive if you don't you die. I mean, pretty straightforward.

I just wanted to also point out within videos, incredible results. Two things that happen very

quietly. And Jensen is clearly open source maxing now. He bought hugging face for 12 billion. And he did like one of these aqua higher deals with pool side for six billion total, about 20 billion in 20 billion in acquisitions, which is far less than 1% of the market cap of Nvidia. And thank God you can do M&A again in this country. But he's now owning the distribution layer for open source. If you don't know pool side, they make the coding model in the Guna.

So now in video has the place where developers and hackers go to figure out which I don't think

“that's what went over. My understanding is that because Jason Warner tweeted this morning”

about a new model drop, I was confused by this because there could be two things that they're buying. The hundred engineers that are going over to Nvidia, they could be working on what poolside has, which is effectively a version of cursor and cloud code that runs, you know, on-prem, that runs in a source. No, then they also have a model. What I'm saying is they have a model and then they also have this agent harness that that you can direct a coding. So I don't

it wasn't clear to me in the announcement. I didn't read it carefully. Yeah. What it is that they bought. And then we're kind of bearing the lead here. By the way, it's like, look, the reportedly doing these deals with poolside and hugging face. And those are big open source acquisitions, if the reporting is true. But look, here is the lead today. I think is that,

first of all, Nvidia had a blowout quarter doing over 100% year over year. A billion a day in revenue.

Yeah, almost 100 billion in revenue just for the quarter, $60 billion of profit, 75% gross margins. I mean, excluding one off items, this was the most profit ever generated by a company in history. Jacob, let me just underscore what you said in the intro, which is really, I think the reason why the stock is up 8% today is not just the great quarter, but the fact that they guided to 70% growth next year, whereas the street was only expecting around 45%. So that's pretty amazing.

And that's 70% number would have been higher, but they said they were spike in strength. Yes. So, you know, what is the takeaway? I think for the larger market here, it is that the AI boom

bubble. It's basically going to end very soon. And what Nvidia is basically saying with its numbers and forecasts is actually, this AI capex is going to continue well into the future. It's got real

legs. And the amazing thing is that after these numbers, even despite the 8% bump, Nvidia is

only trading at 12 times earnings. Yes. And that reason is people think that competition obviously

“cerebrus and the point I was going to make earlier, I think Jensen is going all in on open source”

based on these two acquisitions, hugging face and pool side. And I think Sam Altman poke the tiger. If you look at what he did, he had done that huge $100 billion deal with Nvidia back in 2025. And then he announced the AMD deal. And Jensen was clearly not pleased about that. And he talked about right after Sam kind of did this announcement that he's going to make his own inference shift jalapeno and that he was going to do the deal with AMD. Then Jensen came out was like,

well, by the way, we don't actually have to do these investments in open AI. And I think he's speed running open source. And you're going to be able to buy from Nvidia next year, just your entire stack, he is going for he is going to own open source. And that is a really interesting moment in time for us to look at because we were sitting here six months ago, 12 months ago, open source

would never catch up. He's doing an open source self-driving project and now he owns hugging

“face the leading open source indexer where everybody goes to try the new models. I think this is a”

this is actually the huge story. I think the generalized takeaway should be that you're going to see all of these businesses converge and they're all going to be competing with each other in every which way possible. So this idea that you have this very delineated separation of customer and supplier, I think is melting away. Nvidia still relies meaningfully on the hyperscalers for their revenue. I think it was $24 billion in the quarter, but they now have built up a neocloud business that was

equivalent, which is incredible, right? Yes. And I think what you're going to see is as more people try to compete with them. So now your customers, the hyperscalers are saying we're going to spin our own silicon. It's completely appropriate for Nvidia to say, well, we're going to spin our own models. They do that. And then you're going to see them go up the stack and host the model. Then you're going to see them supply APIs and supply inference. And they're going to be a cloud

provider. And so to your point, Jason, I think the right way to think about it is in business one point out. It's like you used to be like a capex business, right? And people would say, okay, what's your return on investment? Or you'd be a software business and you're like, okay, what's your opx, right? And what's your return on investment? It's all melting together. Every company is going to do everything. You're going to look at these big companies in five

years. They're all going to have their own cloud. They're all going to have their own models. They're all going to have their own silicon. They're all going to have their own data centers. Soup to nuts. They're going to go top to bottom. And then it's going to be about which is better. And that, I think, is actually better for the broader ecosystem. It's better for all of us. Absolutely. All right, let's keep moving through the dock at Besson's new bond strategy.

Got criticized by his mentor, Stan Druck and Miller. Last week, 30-year treasury hit a 19-year high. 5.3% you've been talking about this a whole bunch of reburks, but I'm interested to get your take on it. In response, Besson doubled the treasury department's elongated bond

“bybats from $2 billion to $4 billion on August 19. So you have to see reported Besson is considering”

ramping up bond buying and Fox Besson said he wants to put the fear of God into traders that are shorting long dated bonds. So a lot of interventionism going on here. Stan Druck and Miller, Besson's former mentor, published an op-ed in the Wall Street Journal, opposing his plan. His main point was Besson is wrong for trying to manipulate prices rather than fixing the core, raising yields arising. America has a spending problem. We've talked about it

over and over here, $40 trillion, no more doge, no more cutting costs, and obviously we've got a war that's quite expensive. Every five months free burger, I think you said last episode, we had a trillion. So we're adding 2.5 trillion a year. We'll attend trillion during this

second Trump term. Here are thoughts on what's going on here, free burger in terms of the bond,

market, and Besson and Druck and Miller are going back and forth to Matthew and I can also talk about using AI to write pieces, right? You're the pieces. Yeah. I'll start with the relationship as you highlighted Besson and Druck and Miller work closely together and our close and respect each other and Kevin Worst in a similar position. He was working with Druck and Miller at the last number of years in his office every day. They're extremely close. This is a triumvirate

leading in kind of market activity with Druck, one running treasury and the other one running the

fact. It's pretty unprecedented to have the sort of closeness in those positions. And you know,

“I think what's that? Yeah, right. I'm going to call it a triumvirate. The triumvirate. Who sees”

or who's Pompey and who's crosses? I'm going to leave that to them to debate. But if you pull up the yield curve from a COVID era, I think it's worth just taking a look at the treasury yield curve. So this shows, depending on the duration, it's at a one month or 30 year treasury bond. So across that whole time duration, what's the yield? You know, how much does the federal government have to pay an interest to get people to loan them money for that duration? And so this is right

around COVID era, kind of 2020. You can see that because interest rates were low and the inflationary effects of stimulus that came about during COVID had not yet hit the market. We were looking at sub half a percent, sub a quarter percent all the way out to the three year and five year. And then a slight climb up where you could actually get 30 year treasuries at 1.7%. Again, going back in history,

it's always easy to rewrite history. The federal government should have rolled all of its debt

into 30 years at this point. But the debt is balanced across this treasury curve. So let's look at where the treasury yield curve is today. So this is what is the market charging the federal government to loan it money to pay its bills. And on the low end of the treasury curve, you're looking at just under 4%. So for the federal government to borrow money for one month, they have to pay at 3.8% big to the lenders for that money. And if you go out the 30 year

is now at 5.2%. So it is very expensive now to borrow money if you're the US federal government. And the reason is persistent inflation, I would argue because of excess government spending on social programs and other things. And the big problem at this point is the federal government

is spending so much that if the federal government were to cut spending aggressively, the argument

and the concern is it would hit unemployment and it would cause a recession. Because the federal government is such an intricate part of the economy. Now that's the argument. But it's causing inflation. And it's causing deficit spending. So this year, the deficit will be roughly call a $2 trillion. And as a result, the market is saying we're worried about the US fiscal solvency over the long run or there's a higher risk. As a result, we're going to charge you a higher

interest, 5.2% on the 30 year. Now, what does this mean for the federal government? Well,

“today, the federal government's average cost of debt is 3.4%. That's what we're paying on”

interest on average on the $40 trillion of debt that the federal government has outstanding. For every 1% change in the interest rate, the US government has to pay 1.25% of GDP in excess interest each year. 1.25% of GDP in interest each year for that 1% change in the interest rate. And we're now looking at a 30 year at 5.2 and a short term rate over 4. So the federal government has a problem because over the next 12 months they have to refinance $10 trillion of debt.

That debt is coming due. Those bonds are now due. They have to pay the principal back to the bond holders. And they got to go back to the treasury market and sell more treasuries to borrow more money to refinance. So the borrowing cost now is going to climb up. And when that borrowing cost climbs up, the federal government's burn goes up. And the fiscal deficit goes up. So my theory and my argument on this is there is no action that best can take. That's actually going to have a meaningful effect

on the long end of the curve. We have fundamental fiscal spending problem with the federal government right now. And I think that the note that struck wrote whether AI wrote it or he wrote it, it doesn't matter. The point of the note is correct. And the note is meant to provide cover to

“the best thing. He is saying it is not best since fault or best since responsibility to solve”

the yield curve problem. It is Congress's responsibility. It is the president's responsibility. It is the responsibility of the holders of the budget and the accounts that should stand up and say we are going to cut spending because if we don't cut spending, there is going to be a spiral which we are now going to face over the next 12 months as we have to refinance $10 trillion of debt. So best in doing his job as treasury secretary. He's saying I'm going to market. I'm going to buy

Treasuries. I'm going to try and lower it. But he only has maximum maximum of $10 trillion he could use to buy debt. He still got to go sell $10 trillion of Treasuries in the next 12 months. 10 trillion he's got to sell. So even if he maxed out his buying authority in the near term, that's only a trillion of buying and then he's got to turn around and sell 10. Is the market is? Is the market is? Is the market is? And so drugs?

Drugs note is coverage for best and at a pointing responsibility back to Congress,

So is this like K-F-A performative between the two of them and they're kind of like supporting each other?

They don't think they're allowed to talk. I don't think they do talk. I don't think they drugs a lot of talk to Kevin or I don't think any of them are allowed to talk to each other. So I don't think that's happening. But I think that drug is sending his signal to the market and saying guys, this is not essence responsibility. Got it. The burden is not on his shoulder. He can't be atlets. He can't lift this earth. He can't solve this problem. You guys have to act.

“So I think it's a coverage for best. Got it. Okay, that's what I'm sort of getting at.”

Chumov, your take here on what's going to happen going forward, you know, we're past five percent. Does this break? What does it do to interest rate cuts and how bad could this get if we can't get it under control? The tactical answer to your question that you asked before is why is he in the market buying bonds? It's called yield curve suppression. Meaning when you buy bonds, you bit up the prices and the implied yields go down, which allows Scott to then finance at a lower

borrowing cost because then if yields are 5.1 versus 5.3 and then now you're issuing bonds, they're marked against that 5.1 print versus 5.3. So the yield suppression is trying to help what Friedrich talked about, which is just this refinancing tsunami that is coming. Okay,

but look, just just take a step back for a second. I think the very big issue is that

Congress is ultimately responsible for spending. Congress is completely unable to do anything to get these budget deficits under control. It is consistent. It's not a Democrat nor a Republican problem. It is a congressional problem, meaning both sides consistently spend way more than they should. So you have the debt growing at 7% and you have GDP between 2 and 4%. So that's a recipe for

“disaster. What Drugs said in that note is you have to cut entitlements. He's probably right.”

The question is when and who will force the United States to confront this issue? Who will force the United States Congress to confront the issue? And what he is saying is the bond market is going to start to do this because that single price is the true reflection of the good faith and trust in the United States. And as that yield goes up, the very simple rubric is going down. Yield goes up, trust goes down. The other thing that I would say is this is happening at an

incredibly awkward moment which is that we are supposed to be in the middle of an enormous financial build out to support AI. And if you go all the way back like 100 years, you know, the Industrial Revolution, the Grand Bargain, all of this stuff, the United States government was the balance sheet. They are the ones that were able to step it. And unfortunately, because if it's financial situation,

“the US government is not able to do that, that's why, thank God, we have companies like”

Nvidia and Google and Microsoft and meta and Amazon who take on that burden. And so I just wanted to tie to this other thing because there's so much chirping by the way on the internet about the balance sheet of Nvidia and blah blah blah. And I think people completely missed that these guys are putting the entire US economy on their back. A hundred years ago, it would have been the US government that did this. But the US government is not in a position to do it because Congress

cannot get their act together on spending. The president actually has done something pretty

incredible, which is on the tail end of those trade deals. If you guys remember, he was able to find

$2 trillion to pump into the US economy to support this build up. But the practical reality is that 2 trillion comes from other nation states and their processes are long and meandering. So you have the situation where all this money has to be invested, it should be backstop by the US government. It's not in a financial situation to do so. The president has done some magic to try to relieve it in the short term, but it's only a short term bandage. The real solution as free

purposes is Congress needs to come together and realize that they must now fix this problem. Because if you see yields, if you see the 30 year at 6%. It is the beginning of a death spiral. It's not going to be immediate. Okay. So don't freak out. But it is the beginning of some extreme pain. And that pain will last years. And the only thing that solves it now is getting the budget under control, which is a congressional act. It must happen. Whether it's this year or the next year, it just has to happen.

Sex, the president was quite vocal about cutting costs early on in the presidency, but we haven't heard much from the commander in chief about this. Is the issue that no politician can touch

It's the second and only term hopefully. I think it's nice to take it there. But he hasn't been

vocal about this. And is it just too radioactive for anybody in politics? And you've got to spend

“a little time. You dip your toe there in DC. Is it just too toxic for anybody to take on spending cuts?”

He sent Elon in there. That was pretty spicy. And it's obviously not occurring now. We're not cutting things massively. And in fact, the deaths going faster than it had started a year ago. So what's your thought here, Sex? Maybe you can move it out from just Trump. Yeah, look, part of it is it is a tragedy that commons. Meaning you've got four hundred and thirty-five members of the house, a hundred centers, and they all get a vote. And then you've got

the president and no one of them controls the spending. In fact, the spending, the power, the person originates in the house, and then goes from there. So it is very, very hard to control spending when you have so many people weighing in. If it was just, you know, a couple of people getting together in a room and storing this out, they probably could do it. But when so many people have an incentive to basically protect their programs, it gets very, very hard. So that's the tragedy the commons

part of it. And the reality is the president doesn't have a line of veto. It'd be great if he did.

He doesn't have the powers constitutionally to completely reign this in. And despite what the resistance liberal say, he's not a king. I mean, he doesn't have those kinds of powers. That's basically the heart of the problem. And you're right, he did back to the health. He's the only president to ever back something like that. And what happened? Elon got to the point of cutting one agency or one sub agency. And the hysteria was so great that they accused him of killing millions

of children who was total nonsense. But Tesla dealerships were getting fireballed. And that's the

“other piece of this is, how do you make reform? How do you reform spending? How do you reign it in?”

When the media isn't on your side, it's not willing to report this stuff accurately. That's the worst part of it. I mean, the media, they don't have an incentive politically to engage in log rolling. But they do absolutely nothing to report the story accurately. I mean, just think about how the media is reacting to all of that. So it's really a difficult problem when you start off with the fact that no one person controls it. You know, it really is this tragedy, the comments. And

then you're on the media, basically doing a good job reporting this accurately. So, you know, I don't know how we get reform on this. And let me just say that if the Republicans lose control of Congress, I don't think that's going to make it better because you see now that the political energy and the Democrat party is all towards these massive new spending programs that the DSA wants. So, you know, if you vote for quote unquote change by voting the Democrats in,

that's not going to help either. Because again, they just want more and more spending. So I don't know what the solution to this is. Freebra, give us a timeline here. Obviously, the Republicans love to cut taxes and the Democrats love to increase spending. And here we are, this has not gotten better through three or four presidents. The last person who did this was, I guess, Clinton balance the budget, but this has been getting worse and worse. At some point,

we're all in agreement. This is going to come to do. And we're going to have to have some austerity

“measures. When does that hit in your mind? Is there a breaking point in terms of interest to GDP?”

Maybe the people on the other side just saying, hey, I want 12 percent. You guys have bad debt.

I want 12 percent on it. And we just say, we can't pay 12 percent. And we just have to go into full on austerity measures. Is there a breaking point? If so, when? Well, the question is, what does it break to? We as a democracy have this recursive solution, which is as the people feel some sort of pain they react with a vote. This goes back to this point about, do we break for socialism? Because what ends up happening post the midterms? So I think

sometime between 26 and the election cycle in 28, the inflation problem and remember the inflation problem is fundamentally rooted in government spending. So deficit spending is correlated very nicely with the cost of housing, with the cost of health care, with the cost of education, and with the cost of everything else. So the more the government is spending on various things, the more expensive things get. And so inflation is persistent because what we thought were temporary emergency stimulus

measures during COVID, very quickly got normalized and became persistent spending cycles. You know, if we went back to 2019, we would actually have a budget surplus right now as a country our economy has grown so much since 2019, that if we had the same spending levels as we had in 2019,

taken this emergency spending and made it a permanent spending. We did the same thing by the way

after the global financial crisis in 2008. There were some crazy stimulus things that happened,

“and we persisted that spending. And so the question check-out is really like, what happens next?”

So if the inflation remains high, people's affordability continues to go low, they're going to vote for something that's going to give them a solution. And I don't see a political message winning that says the federal government will now spend less. We're going to cut a bunch of stuff. So I worry that the one way solution here is something that is very damaging to individual liberties, to a lot of the rights, a lot of the things that make a free market work. And that is some of

these more kind of socialist principles and socialist candidates. Asets, I think that's kind of the

breaking point. So I think it's more of a spectrum and then the reaction during that kind of transition

phase 26 to 28 can be negative. Then the next big thing is going to happen around 2030 to 2032, and that's really where social security doesn't have any money to pay anymore. And even during that era is also when a lot of the states are going to become bankrupt, we're not going to be able to pay their obligations. And when the states can't pay their obligations around 2030 to 2032, you're going to have both the social security bailout and restructuring as well

as the state bailouts and restructuring. And that might be the time that all of this stuff breaks. Wow. And to your saying, we'll see, Munis, yeah, and people will default on their debt in the states. That would be cataclysmic to have to bail out something like California because the obligations

on the unfunded pensions in the states are so significant. And not to mention just the debts.

I mean, look, California's got tens of billions of dollars. It's spent on this stupid, f*ck railway that goes nowhere where there's no f*cking tracks. And they're talking about the political or even stop that. It'll be the easiest cut in the world. Like just think about the idiocy, like no one is saying, we shouldn't do this. Why is no one saying we shouldn't do this?

“That's what I'm saying about the media, they don't. Dollars, especially anybody who is in favor”

of a railway to nowhere should just be shamed out of existence for a train from San Francisco to Fresno that costs more than an airline ticket is so idiotic. It's like the movie don't look up. Like look up. This thing is absolutely ridiculous. Turn this thing off. Why is no one even just saying turn it off? It tells you everything you need to know. Private company built a bright line in Florida, and they seem to figure out how to do it at a fraction of the price. So like what are we

even talking about here? Like private industry, if this was a good idea, would have built it. Yes, free burn, private industry would see an opportunity, and they would have built it. There is no opportunity across the board. These government programs cause more harm than good. When the government intervenes in underwriting student loans and gives everyone a loan, administrative costs went up by 6x and tuition skyrocketed, 8% a year, compounding for 30 years,

because the government said we'll underwrite any student loan. The same with housing, and now no young people can afford a house, the same with healthcare, where they said we'll pay people to stay home and not work to take care of people, and we won't check on whether or not they're actually taking care of people, and the cost of healthcare skyrocketed. You go across every one of these government programs, and every one of them has the adverse effect of driving up costs and inflating

everything. We need to have a root of inflation in this country. The core root of it is government spending, and the reason we are going to end up becoming a socialist country is because we aren't raining in the government spending and looking it in the mirror and saying, guys, this is idiotic. What are we doing? We need to now the markets to Jamoth's point are telling us, this is idiotic. We are not going to underwrite this bullshit anymore. And we need to have to your point about

media sacks, 160 minutes, whoever it is to just say, hey, this spending, this fraud is not acceptable, and we need to send people in to go recapture that money. This is like we're burning money that we don't. The fraud is the layer one. There's like 18 layers to this. Layer one is fraud. Yes, of course. And given the tragedy, the common is the structural nature of it, that there's no one person who's in control of it. You need mass of public pressure to control it, and there's none of that,

and there's no effort to create that public pressure by the mainstream media. So it's like how do you even get out of this? I don't think it happens that way. It has to be in a cute moment. Yeah, you're saying that has to be a crisis, and then people will react, but then to freeberg's point, we may get socialism because people may not connect with the real causes of the crisis are. No, I mean, that's my question for you. Socialism is much more likely when 100 years ago

“when these things are less interconnected. America can't decide to do that. You understand? Why?”

Because all of our debt is interconnected to domestic actors, international actors. It's not a

So I think the reality is that we will hit some kind of a fiscal wall.

Something will get terribly broken and like in COVID or like in GFC or like in 9/11. Those are the only moments where you can have structural changes and expectations. The structural changes that have the most impact on our lives happened in these acute moments in 9/11 in GFC and in COVID. Yeah, and every one of them ended up becoming a never let a crisis go to waste moment where it always argued in favor of some big power by the government.

What was your question for me? Okay, so you think about like a fortability of houses, right? That depends on mortgage rates, 30 or mortgage right now. I'm looking at the average of 6.73%. A little under 7%. It's about 150 basis points above the 30-year treasury, right? So do you think the average person can connect the dots here that higher spending means higher treasury rates, which means higher mortgage rates? And that leads you to not be able to afford the

same level of house that you would because your monthly payments much higher. I mean, do people connect those dots about what's happening? No, no, the people want to blame someone. Every time there's a crisis, this group, even us, when we get together on a podcast, something bad happens,

we always have this question, who is to blame? Is the first thing a human does? Yeah, I'm not really

“human, that's the human, that's the human brain, that's how it works. It's like there's some”

problem, who do we blame? That's the first thing you're about. You don't think, you don't think objectively what's the solution to the problem, you think, who do I blame? That's the first thing you want to do. And then the question is, when mortgage rates go up, who do you blame? The current president, my congressman, blah, blah, blah, reelect someone, that's the response. And the person that shows up and says, I'm going to give you free housing, I'm going to give you a free boss,

I'm going to give you free mortgages, I'm going to take away the land from the landlord and give it

to you, you vote for that person. So I do worry that the kind of mechanistic response to what

you're describing, sacks, which is a very problematic situation for people is the lack of affordability of being able to get at home is give the keys of the kingdom over to someone that's going to put more fuel on the fire. And the fire is government spending, and the fuel is more government spending to try and, quote, solve a problem that's caused by the fire. And I think that's really where I worry about this. So I think I know how we can blame Daria. Okay, so we're going to

“wrap. What are you doing? Here's the thing. Our only hope is AI, right? Because only AI can create”

the exponential growth necessary to make our economy grow big enough. We can grow that. We can grow out of the palm. Yes. And if we hold back AI by creating some new regulatory apparatus that takes years to approve new model releases, then we're cut. I believe Daria and Canada and Kooten, those are the three people who are willing to. I'm just kidding. I'm just kidding, I'm just kidding. I'm just kidding. I'm just kidding. I'm just kidding. I'm just kidding. I'm just kidding.

I'm just kidding. I'm just kidding. I'm just kidding. I'm just kidding. No, seriously, come to an all in some it. Listen, I want to just but no, I mean, people, we are kind of counting on AI as the Diaz Ex Machina to grow a out of this thing. And we really need, I mean, we need more quarters like in video and Salesforce just posted, like we need that to happen for like 10 years. This takes to grow a out of this thing. One of the

things that is a great silver lining is that we're seeing people migrate around the country or to other countries as a way to vote against out of control spending. I lived in New York, Los Angeles, and San Francisco. And I did not appreciate how evil, the socialist and limousine liberals were until I got to Texas. After a couple of years in Texas, I have seen what having affordable homes does to a family and individual. You have people in those cities who are so miserable because they

can't afford a home, they're paying exorbitants and these people who already own their Victorian homes, etc., in San Francisco, refuse to build and then in the great state of Texas. If you look at this chart, housing prices, since the 2022 peak in Austin are down, down, not up, sacks, down,

“27%, since March of 2020, 25%, it can be done. You need to have leadership that says,”

housing is a priority. Therefore, we're going to let you build more houses. It's being done in Texas, in Florida. Those conservative, let the free market work environments, let them build the bright line. They have high speed trains going 125, mother f***ing hours miles per hour because

trains. This is the distinct issue in certain groups where they want to stop progress. They are

desaling the creation of homes. And when you get homes, people feel great about their lives. People in Texas are f***ing happy that they have a home for $250,000. They're everywhere.

“These things can be solved. It just takes leadership and that's what we don't have. It's leaders saying”

enough already. We're just going to let people build more houses. All right, let's keep moving to the bucket. I love a good J-Cal political. I'm just f***ing pissed off about it because, you know, it's a total non-secret or two. It is a non-secret in some ways, but, you know, we're dancing around here. Who's going to be the leader? Who will set? Did you practice that before? No, I didn't practice it. I'm just just came to you at the top of your head. It's just that's not for anious.

Yeah. Well, actually, I had sex as writer to do some punch extra. I'm putting on the side. It is obviously a leadership issue. It's too expensive, sure. I'm gonna watch. Let's do a little side quest here. What did you think of Druck and Miller writing his piece with AI and getting busted and then the Wall Street Journal saying, hey, it's totally fine. I thought that it was

“the left that virtue signal, but I actually think it's a class of people that virtue signal. Okay,”

we go. And they judge and their judge mental and they can't see the force from the trees. And this is probably they're like the loudest troopers in the PETA gallery. Stand Druck and Miller is the

most incredible investor of our generation. Maybe, sorry, maybe like top four, and so just shut the

f*** up and read what he says. And you have an opinion and you're like, oh my God, he has an M-dash. Oh my God, he used the AI flourish. It's like, you're missing the script. He's telling you what's about to happen. Sacks, you agree? You think that the opinion piece is in the Wall Street Journal New York Times should be written by AI, not the person who puts their name on it. Still written by him. He didn't say it was written by me. He admitted it's 100%. He prompts it. He shapes it. He guides it.

Yeah, I'm more precise way of putting it is that take his his. And then he uses the AI to help him write it. Look, I don't get all the pearl clutching about this. I mean, you got to be pretty dumb. These days, not to use AI to help you write. And he's definitely not dumb. This is his opinion.

It's his take. It's consistent with everything he's been saying in the past for decades. And in

fact, the piece sites. And many times. Yeah, he's right. Yeah, the piece mentions the many times of the past. He's waited on this. I think that this clearly came from his mind and he uses the AI to help him write it. The morons on X should be like, wait a minute, how does this affect my company? How does it affect my portfolio? How will affect my 401k? What will it do to my parents retirements? How should I think about hedging this? Instead of that conversation, all of you people

were like, oh my god, he had he was AI. I think you know, do you have a problem with this? You want to go as a problem? I do think it's kind of the lip syncing of writing as a writer. I find it offensive to like let the system give your entire opinion as opposed to using it for research, which is totally fine. Use it for proofreading, totally fine. But to me, it feels like I went to see a Dell and she's lip syncing. I really want to hear him. Don't use the cell. Only go to the guys that use do hands.

“No, no, no, no, no, no. Here's the thing. I will grab down. He's like a Dell. I said, I'm saying Excel.”

I don't trust those guys. I'm going to give your opinion and it's not written by you. To me, that is disappointing. That's not disclosed. I think it's a much higher standard to say, I'm going to write this in my own voice. Sure. I could have somebody who's a ghost writer, help me polish it. I could check my gram with it. I could do research with those are all the value uses, but I don't like this idea that you're going to write something in AI and then I read it and I don't

know that to me feels Iki and it feels insincere. I would prefer people just say upfront. I didn't write this, but these are I'm kind of in agreement with what the AI magic guessing word box said. I find it personally offensive. Yeah. Interesting opinion. Do I respond? Sure. I was trying to get you. What do you think is the difference between that concept and having artists be required to disclose whether or not they used Adobe Photoshop and the very specific filters that they used in

Photoshop or DJs that use specific software to use create electronic music as opposed to doing analog recordings of the music by hand with guitars or people that for example are using Microsoft Excel to create spreadsheets as opposed to writing it all down. Do I have to disclose that I used Excel or that I used a calculator or that I used a synthesizer or that I used a photo shop as opposed to doing it in an analog way. At the end of the day digital tools for creativity and

creative output are done in parallel with the human ingenuity and the human craft and the human

of is someone using AI is as nebulous as the rest of those which is am I using quote AI to improve

my spelling to improve my grammar to create novel sentences from scratch to create novel paragraphs from scratch at the end of the day if I give the AI a whole bunch of inputs take the outputs and edit that output and my quote using AI. This is I think one of the fundamental issues is we treat AI as the standalone simple kind of intelligence replacement system and the heuristic is not accurate with respect to how humans actually use it and how it is like all other

tools a magnification of human creativity and ingenuity and potential. Go ahead. The reason is the expectation of the reader. The reader has a high expectation and this is an important issue and the reason why people were so disappointed in this in a very large way was not because they're virtuously because they actually care about Stan's opinion and they want to consume his opinion

“and make sure it's not the AI slot opinion. That's why people felt betrayed by what he did.”

Now this is a new trait. I think they did. Yes, because they also felt the Wall Street Journal betrayed them because the Wall Street Journal should be checking that anything submitted is not AI slot. The same way professors should be looking at students work and making sure their papers are not AI slot because we want them to have learned something and they want the same thing when a teacher is teaching. People don't want to pay for a teacher who uses AI slot either and so we as a society

have to decide when do we need it to come from the human and understand it's 100% human or 60% human and when do we think we trust the AI on it? I want to hear his actual opinion. I have questions. Many questions. Question number one. Are you suggesting that Stan didn't read this thing that was generated or do you think sure he did read it? Yes. Okay, so when he read it before that's an old question. Did he? Okay. I think he, well he defended it. Yes, he wrote it.

I hope he did. Okay, so do you have an issue with the fact that he read it? He thought, yeah, this is what I think and hit the send button. That's a betrayal to you.

“I think not disclosing it is the betray. If you want to give me your opinion as interpreted”

through the AI magic guessing word box, you need to sound me. I just want to tell everybody. I understand now. I just want to understand. I just want to understand. I just want to like to make. What is this standing disclosure for all future publications that I put out

including tweets is that I try not to publish anything without running it through AI first,

to fact check it, to line edit it and to help me make the best argument I can. So this is a standing disclosure that if I've written something and published it, it's probably been thrown online. I totally find it moving. I have more or less of a proofing to be clear, proofing fact checking great uses of AI, grammar checker, great use of AI. Now you're debating the slider of how much he proved checks. You need to try for things. I understand you don't understand this concept.

You're not enjoying journalists like I don't look, but I can tell you there's a distinct difference between being proof read and having somebody plagiarized or write some shit for you.

“And that's what this is. And that's why people object question is stand,”

Drunken Miller, his next op-ed. Is he allowed to use a computer? Of course. Of course. Okay. Okay. Let me keep going. Is he allowed to use a word processor or is it just like the no pen? I mean, you obviously understand. He can use any of those tools. Okay. What about somebody else? He should discuss it. That's right. What about grammarally? Is he allowed to use grammarally? I'm sure he will use grammarally. I'm sure he'll use grammarally.

Grammarly. Jacob, what do you think his process was on this post? Do you think that it was simply delivered to him fully baked? And then he just said, go with that. That's what the AI detection software said is that this is like, that's not what it says. 90% written by AI. I'd be so proud if that was his process. He has, like, no, it's just a guess because I don't know. This is just a guess. I don't know. My guess is he had the take. And he probably told the AI

the take. Either in writing or just speaking to it or essentially speaking to his assistant

who basically dictated it and put it in the AI, and then he probably got an output and he

probably made corrections and edits to it. And that was probably something like his process. I don't really believe this thing was just put out as AI slopp and then he'd have said, I didn't print it. Jacob, this is Jacob. This image of what happened. He's sitting in his office in New York. He gets in front of a browser. He opens chat GPT and he writes, yield up bad. He gets a whole thing printed out in his files. emails. He opens. If you can't appreciate the

tasty thing, must have come from him. If you can't appreciate the lip syncing analogy, it's interesting. Okay. Here's the problem with the lip syncing analogy is he's criticizing

about something very specific. But the Secretary of the Treasury just did. What's the lip syncing? A lip syncing is when you have a song that's been performed a thousand times, this is novel and new. Even more evidence of why he should write it himself.

“It's really about the most difficult to dictate it. You should respect the audience,”

enough. I'm saying it to take the time to write it yourself, not let be in. I think that's why I think I was part of the audience. I was part of the audience. You can have different audience. That's a lot. I was like, oh, this is a useful data point for me about totally fine. A reminder about the difficulties of yields. Wait, can I ask you, did you read the article and have an opinion about the substance of it? Yes. Well, I wanted to know if they were coordinated

and this was some sort of like, no, no, that's not the substance. Did you know that it's a generated before someone printed that on the timeline that? Well, no, it came up in my

title. I know. I mean, exactly. I read it. It came up first. I saw the plagiarism, the AI,

SLOP, whatever. It's the whole frame of your own. That's how that's how people will try to read it. Hold on, I read it when it first came out. I didn't see the stuff in the timeline about the software supposedly detecting it. I got hit by the AI first. It sounded completely consistent with the many other times I have heard, Dr. Miller speak about the debt problem, okay, on podcasts and written versions or whatever. I didn't know. So if he's plagiarizing from

someone, he's plagiarizing himself. Yeah, I mean, this is plagiarizing the right analogy here. It's not perfect because this is a new thing, but it is, he's taking it right. It's not listening. He's taking it. He's taking credit for what the AI wrote and I would prefer him to take the time to respect the audience to write it himself because I have respect for him and I want to understand his true opinion, not as interpreted through a high. Just like when I hear somebody sing a song,

I would like to know that they don't auto tune it and they haven't post-produced it to the point

“of absurdity. That's me. I believe the artist should give you their actual art, giving you their actual”

position without using the AI. That's just my opinion. That's my point. Even the top performing

artists use auto tune and like all these other tools to basically make themselves sound the best.

And in a similar way here, we know that AI gives people superpowers. Dr. Miller said I'm not the greatest writer. What makes him interesting is he's a thinker. He has a take. It's a long held position that he's had and he's willing to even criticize his former colleague and I assume friend because it violates his view of the world. He's saying he uses AI to basically make his writing better. I don't get it. I don't have a problem. This is very interesting. I just don't like the

idea that it wrote it in full, which is what the claim is. Now we don't know. We'll talk to the families at the event. We can move on. I will tell you, I prefer listening to a band like Mark Naffler where he actually can write the song, play the guitar riffs. I prefer that in my art or in an opinion or in a novel, too, being written by AI. That's my preference. And that was the expectation of the audience. But this is a new, now that you know, drop will continue to use AI

because he said it. Will you just ignore what he asked to say? No, but I will not think as highly of him and I don't think it's respected. So you're saying the substance of what he says will now longer matter to you or you're going to disconnect the substance last. No, you just said that. I think you're going to take it out for me. I will wonder. I will wonder what is his actual opinion. But what you're saying is I can try to grade which came out. Okay. Personally, you're going to trust

the greatest macro trader in the world less tomorrow than today because he used the tool to write it. We're beating it. I will wonder if it's actually his opinion and how much work he did and I

“feel as disrespectful that he didn't do it himself. That's how I feel. I will wonder. It will make”

me wonder if that is actually his perfect opinion and crisply his because I think he's phoning it in. And I just don't like people phoning it in. It's only 800 words right at yourself. Work with a proof reader. It's totally fine to do your research that way. Listen, we're going to agree to disagree on this one. See, I director made an unannounced visit to Moscow. John Rackliffe made a

surprise visit on Tuesday and flew back the same day. First visit by setting CIA director since

November 2021. I was when Bill Burns went to Warren Putin, not to invade Ukraine, invaded pretty much later obviously. Foster General reporting Rackliffe was there to Warren Russia. It should not attack a NATO country. New US and tower reportedly shows Putin could be planning to test NATO's resolve with a limited assault in the next few years and from cyber tax, small land and coercion, etc. Polymarket says only 21% chance we get a Russian Ukraine ceasefire

and what's going on here? There's wild speculation, Wall Street Journal and others have reported that the message that was delivered was don't invade NATO and don't use nukes on Ukraine. So there's been this kind of wild speculation about what this means. It just seemed like there's some thing meaningful going on, but to sex is point in our group chat. This is speculation. There's no evidence or Putin's maintenance. More than that, the president I think called into a show to

basically say that that story was not true and the contact was routine and then the Russian

“readout said roughly the same thing. So the truth is we don't know what the meeting was about,”

but, you know, quite your amount. I think I think it's all speculation. I know what it was about. Oh, here we go. Drucks AI infuse memo. The lost feature. He was warning Putin to not use AI to write his next Putin or his next. Maybe we flew over there to deliver a very strict message, which is we expect non-AI tool usage because we are journal the set of our core. Yeah. I think it's possible, Jake, how that the train journalist got this one wrong and we're

engaging in wild speculation and hyperbole without actually knowing what the meeting was about. I mean, wild speculation is what we do here. It's a podcast. It's the whole point of the show.

It's speculating what the hell is going on here. First of all, both the American and the

Russian side have denied these dramatic speculative claims that somehow Rackliffe was there to warn the Russians not to invade Europe. I actually believe those denials because it wouldn't make sense for the Russians to invade NATO countries. This is the same kind of threat inflation that we've heard for years from Nio Kahn's about Russia's supposedly imperial ambitions to conquer all of Europe. There's simply no basis for believing it. And frankly, the war is not going badly for the

Russians. It's certainly taken a lot longer than anyone thought and Russia has paid a heavy price

“and casualties. I don't know that the numbers are what you said freeberg. But I think if you look at”

most of the sources now covering the war, what they're saying is the Russians are making slow but steady progress. And it's Ukraine who is suffering the most. First of all, the Russians have air superiority. The Ukrainians are basically out of air defense. So Kiev is getting bombed on a routine basis. The Russians are able to pretty much destroy whatever they want at will. So the Ukrainian infrastructure is paying a heavy toll. And this is coming on the eve of what is expected to be,

you know, a pretty cold winter and Ukrainian power is getting taken out. Moreover, Odessa and the Black Sea ports of Ukraine have been bombed and basically shut down. So there are economies paying this incredibly heavy price right now. They're not able to export grain. So their economy is basically getting destroyed. And they're running out of money. Zelensky is running around saying that he needs

another $35 billion or they're going to be out of money. The U.S. is not funding that but he's

trying to get that from the Europeans. And then their casualties, although we don't know the numbers, are also huge. And now there's been stories about them potentially drafting women because they're so low on soldiers. Keep in mind, Russia has four or five times the population of Ukraine so they're able to sustain much greater armies. So things do not look great for Ukraine. And frankly, Zelensky

“should have listened when President Trump told him, "You don't have the cards in this war. You should”

make a deal." Zelensky didn't want to do that. He didn't want to make a deal. He still doesn't want to make a deal. He should make a deal. And frankly, I don't think Ukraine's going to come out on top on this thing. -Chpap, everybody. I think you want to add there? -Oh, I'm just wrapping. -Yeah. Thanks to Meta for solving my biggest problem, which is imposing limits on Instagram. -Yeah, okay. We even get to that story. I started playing guacamole with my kids and I can't do it.

And they have fake accounts and secret accounts. And this and that. Yeah, please, thank you. You should have done it sooner, but I'm glad you did it. -Yeah, I will give them some amount of credit for, yeah, they got your ad kicking and screaming to do the right thing, but now they're talking to you too. I hope TikTok and YouTube do the same thing. And it'll make it'll make the life of the parent much simpler. It'll allow us to actually parent versus just

policing device usage. I'd love to see Android. It's exhausting being able to hear a part of her child with a device. It's exhausting. -And it's terrible for young women to be on these Instagrams. We held the line to 16 years old, but 17 where we lost the battle. Where did you hold the line? It's mom. The kids for social media? -No, my kids aren't allowed until they're 16, but if that's not the point, it's just that, look, we've talked about this. I've been

I applaud Meta for doing what they did. I hope that TikTok and YouTube do the same thing. These limitations are coming around in Australia and Canada and the UK. They'll probably appear in other places. It's physiologically and psychologically, really helpful for kids to have these limits. So yeah. These parental control apps aren't that great. They do a decent job. They don't do a

great job. So we're always on our, I'm always on my back foot as a parent. And it's frustrating.

And I would rather just spend time with my kids on other things other than screaming at them to get out their phone. -Yeah. It's the tools are hard to implement. -Hey, Freeberg. What's going on with Summit? How are we doing for the Summit? -Well, I'm excited to share with you the Beall and Summit is just two weeks away. This year we've got some incredible sponsors helping us bring some big ideas to life. Iron is back as the presenting sponsor of the All and Summit. Big thank you to our

friends that I run. Make sure you visit the Iron House at Summit. -Oh, it's great time. Make sure you visit the Iron House at Summit. That's the onsite lounge where you can kick back

“relax and hang out between sessions and new this year. -Do. -You guys remember it?”

-Sure. -Napa the gifting boutique brought to you by merch.com. Every attendee fills a bag with all in merch. Plus special offers from sponsors. You walk in. You walk out. You got a bag full of goods. You're going to be very happy. Oracle is back. They're bringing an F1 racing simulator to the Summit. If you've ever wanted to know what it feels like to take a corner at 180 miles an hour sort of like being in a debate with Jake out here on the All and Hots. Without ending up in the

hospital, this is your chance. And EY is taking care of business, bringing their meeting pods, which is a quiet space for folks to step out, take a call, close a deal, do meetings, which by the way, happens a lot at the Summit. People are doing deals. Just the tip of the iceberg. We've got other

major stuff happening to our amazing sponsors and just the tip. We are keeping everything else

under wraps. More fun stuff coming. We're excited. We will see you all at the All and Summit.

“It's going to be a great party. Hey, Freepard, what's going on with this cancer vaccine?”

And the stock that tripled in the last two weeks. We didn't get to it last week. But I know I want to hear about it. I'm sure they want instance. -Yeah, Moderna's stock. I think he's what you're talking about, right? -Yes. I think they went from like a 20 billion market cap to 60 billion market cap on the positive readouts from this thing that's being called a cancer vaccine. And I think it's worth highlighting how this cancer therapy system works. This goes back to the 90s

where there was this idea that you could create what are called neoantigenes. These are small peptides or proteins that mimic a peptide or protein that's unique to a cancer in your body. And so that antigen, which means that your immune system sees it as an invader, causes your immune system to start to make cells that destroy that protein. And so by putting that protein in your body, your immune system gets activated and it gets turned on to go and find that protein

in other parts of your body and destroy that protein. So the objective is, figure out what is the protein that is unique to a particular cancer, make that protein, stick it in your body, and your immune system will go and destroy the cancer that's in your body. And so this immunotherapy,

the system of basically using an antigen that's designed for a cancer in your body to go and

attack it has been around since called the late 90s. And there was this big revolution in DNA sequencing where we identified that we could take samples of cancer, put them in a DNA sequencer, and look at the sequence of the genes, the proteins that are made because they're made from genes that are unique to that particular cancer. And therefore make a personalized new antigen that's personalized to the unique cancer that's in your body because all these cancers mutate and they're

“different and no two cancers are identical. How do they get that key for me personally versus you?”

How do you get that they would take a sample of your tumor or cancer cells? So when you take your, let's say you have melanoma. And the reason that melanoma is one of the kind of biggest targets for this immunotherapy is that melanomas have very kind of unique DNA mutations because of UV light hitting the skin. And so the particular cancer that you'll get in a melanoma that you have is going to be very unique with respect to the rest of your body. It's going to be a very unique

mutation. So they take the, a little bit of the melanoma, they get the DNA out of it. And when you do DNA sequencing, you multiply the DNA by millions or billions of times. You put all that DNA DNA sequencer, it gets chopped up and read. And then the sequence data comes back and it says, "This is what makes this cancer unique. It's this little sequence of the DNA." And that sequence

idea or fingerprint of that cancer. They then take that DNA and make protein from it, put that

“protein in your body. And now your immune system goes crazy and starts attacking that protein because”

it's like, "Oh, antigen antigen, I got to go get it." Now that, those cells are activated, those immune cells are activated to that protein. They'll eventually go destroy that cancer. So this has been successful. There have been hundreds of trials with this Neal antigen-based therapy for many different types of cancer. And there's all these trials that have tried to figure out what's the right technique for delivering the Neal antigen. Do we make the protein

and then stick it in your body? Or, in this case, with what Moderna did, make mRNA and stick it in your body. And the mRNA causes your own cells to now make that protein and spit it out and up in your blood. And now your immune cells got activated. So rather than making the protein X vivo, which means outside of your body, you're putting the protein in your body in vivo. And now your body's making the protein. So the idea with the mRNA concept is you can get one shot.

That shot goes into your body. And now your body's making that protein just like we made the COVID vaccine. Yes. Your cells will make a particular protein segment that would activate your immune system and it will go kill that cancer. There's other questions around, what are the other adjuvence? What types of cancer can you use this system for? And then combination therapies. Are there other cancer drugs that you can do this in combination with? And the all the trials that

have been going on are all about the delivery mechanism, the technique that's used, the types of cancer, the dosing, and getting all of that stuff right. Now, what's interesting about this is it is much more of a technique than a drug. In the traditional sense of process, it's a process. Right. So the process customized per person. So there's some cost to doing it per person. That's right. But the cost, because I do DNA sequencing at my company all day long, getting that sample,

very cheap, getting the DNA data, very cheap. And actually doing a lot of the upfront work, very cheap. Now, theoretically, making the mRNA or making the protein should also be pretty cheap. But it's human trials and human safety. And so there's a lot of questions around, how do you make sure that everything's safe? And what's the right combinations that people don't get over-reacted immune systems or that people don't have adverse side effects? So that's all

of the tuning of this. But I think what frustrates me the most about all of this and everyone's

kind of lauding this is some unique breakthrough and special and powerful. And it's not.

Because a lot of people are going to places like Montana and they are getting peptides printed for their particular cancer sequence and they are making their own neo-antigenes, putting it into their body and getting cured of their cancer. You can pay someone $50,000 to do this for you today. There's a lot of clinics that'll do it and it's not a special FDA approved drug to your point check out its a process. The process is take the DNA sequence from my cancer, make a protein,

put it back in my body, my immune system goes into stories to cancer in my body. Great idea.

“So why is Moderna saying that they're going to charge $500,000 for this? And that's what”

I think frustrates me about all this. Everyone's lauding this and everyone's very happy about this. But I'm actually pretty sad and frustrated and disappointed by this. I don't think that this technique, which has been largely developed through several decades of iteration, research and development, which was largely funded by NIH and other public funding dollars

that has led to this incredible concept of neo-antigenemunotherapy for cancer,

which can eradicate or theoretically eliminate many different types of cancer, should now be patented, FDA approved and charged half a million dollars for people to get treated for this. And so what I don't like about this story is that a private pharmaceutical company has seen their market cap go from $20 billion to $60 billion because they went through this regulatory process to create what in my mind is a form of regulatory capture and making the case

that it's all about safety and trials and we've got patents and all this other stuff. When fundamentally there's an underlying technique that was funded by a lot of public research

“dollars that I think should be more open sourced, more ubiquitous and every hospital”

should be trained on how to do this process to treat cancer patients. Do you think to become much more of a ubiquitous thing? Do you think that people have two questions that we can end it on that, but do you think they're going to be able to successfully defend this patent in the United States and then also globally because there's obviously a global world here and people do travel for treatments now, medical tourism is a thing. So if it's a half million dollars here,

can it be done for $50K in South Korea, Japan, other places? What ever happened with mRNA and the

COVID vaccine and a lot of the concerns people had, we never got an update on that, but obviously

this podcast started during all of that and that was the first role out of it at scale, correct, for mRNA. Yes, the technology is very easy for you. For Europe,

but it's a really immunotherapy because a vaccine means you prevent yourself from getting something, whereas in this case you're actually getting rid of something you already have,

so I don't like the word vaccine. But Moderna worked on this for years and they never really

kind of got to market with it and then COVID came about and they pivoted very quickly and got this COVID vaccine out. Moderna has a whole bunch of patents on the techniques and tools that they use to make mRNA and to make sure that it's not integrated into the human genome and it doesn't actually use a traditional kind of replicating system. So you can't actually replicate that mRNA, which means it won't start propagating in your body because your cells typically might start

making copies of RNA if it ends up in yourselves. So there was a lot of stuff that Moderna developed

“that made their particular mRNA technology patented and safer and so on. So I think that they do”

have strong patent coverage on their particular set of tools for mRNA. But when I described earlier, so if I take the sequence of your cancer cell and I look at the DNA of it and I'm like, I found what makes it unique. There's a little sequence and now I take that sequence of DNA and I can stick it in a bacterial cell, E. coli, in a little tank by what's called a bioreactor and that bacterial cell will now start to make that protein because I've taken the DNA and put it

in the E coli cell so now the E coli cell is holding that DNA into RNA into proteins because that's the sequence right DNA turns into RNA turns into proteins so that E coli cell is billions of copies of those cells they make billions of copies of the protein. You isolate the protein out of the bioreactor and you can inject it into your body and when you inject that protein into your body and now your immune system gets activated. So you don't necessarily need mRNA as my point and mRNA is a really

effective way of doing this. It's super cheap because you don't have to go make all the protein outside the body. You can literally just print the mRNA and get one shot and you're done. But that end-to-end system, the real cost of doing that is very low. And so this is one of those things where we have a very big fundamental question that we should all be asking, which is like should we be giving them an opulion cancer treatment to this company that went through this FDA process

and filed a bunch of patents on certain techniques, but the general theory, the general thesis, the general therapeutic process is well described, well understood, generally understood and should

“be available everywhere. And I think over the next couple of years, we are going to see this”

cancer immunotherapy based system start to proliferate and you will see this happening overseas very cheap. It is very efficacious. And we actually have a friend in common who's kind of standing up a business to do this, a very cheap way up in Montana where you have a right to try and they can make this stuff. So we are going to see, I think, more of this come to work. But it is for certain types of cancer, very efficacious, very safe, very effective. So I'm excited about this news.

Just for people who are listening to our normies, all of this cancer treatment requires early detection. And that's something that people have been working on with the blood tests that

gallery I believe it's called. So getting to the cancer and getting regularly tested is a critical

part of this. Yes. So you're talking about a gallery test by Grail. The blood test, yeah. The blood test. Yeah. Just early testing is the key piece for all of us to keep in mind. Get tested early and often for cancer. Yeah. And remember, there's a bunch of these new what are called modalities, new modes of therapy, therapeutic modalities that are being used to destroy cancer. One was carty therapy where you take T cells out of your body and you use CRISPR or some other

“system to reprogram those T cells to go after, remember that protein I described. So you actually”

program the T cells to go find a specific protein in your body and destroy it. So they go find the protein that's unique to a specific type of cancer cell and the T cells get put back in your

body and they destroy it. Carty therapy. Carty therapy costs a million dollars. And for people

with blood cancers where the cancer cells aren't clumped together in a tumor, but blood cancers, the cancer cells float around individually in the blood. And so by putting T cells in your blood, it's very easy or it's much easier for the T cells to find the cancer cell grab them into the storm. And so for blood cancers like multiple myoloma, the efficacy is incredible with carty therapies now. So that's a new type of modality, this is a new type of modality,

this mRNA or neo antigen therapy. So there's all these new techniques that are being used to destroy cancer. And I think in aggregate we should be very excited and optimistic about where this is headed. Wow, thanks for sharing and let's hope for the best with implementing this and I love this right to try. That seems to be something we should talk about in a future episode. We'll see you all next time. I'll see you all next time. Bye bye. Bye bye.

I'm going to wish you a good day.