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

I'm pretty good. Pretty good. I'm sitting here doing the podcast. Just next door to David. Ah, yes. There you go. Door reveal our locations. Please don't dock. I didn't put my address out there, dude. Oh, that's true. Don't worry, Mondami did. He's outside. Your house is right now asking them to point 9% or something.

“Yeah, he's he decided to reach people left in New York, so he's looking for us. Is it 3.9% a year? Is it per year?”

Or is it around the percentage of the release yet, but the speculation I've seen is 3.9%, but I don't think that's final. But yeah, it's a piano attack attack. So if you have a year, second home, yeah, every year.

Wow. And by the way, it's for any home over 5 million. There's no homes under 5 million in Manhattan.

This is not a rich person. This is within 15 miles of Midtown Manhattan. You're paying an extra tax. Uh, but only the J. Kalene, if it's a piano terror. So what it means is that the most. Well, you have the most elastic part of the market is what they're targeting for this tax. So in other words, people who don't live in New York, who just have it as a second or third home, who could buy that property anywhere. Yeah, are now being taxed the most. So what do you think that's going to do?

It's going to have a massive impact on demand for second homes in New York, which will crash the whole market. Yes, congratulations, man, dummy. But in a weird way, that'll be good for housing affordability, do you? Well, that's sort of the claim, but I don't think it'll be good for it because there'll be no incentive to build more. Yeah, all units matter. Every time you add units, people upgrade, and it's not like these are going to be low-income housing. Like penthouse on 57th

“screen or, you know, in grammar C, that's not low-income housing. You have to break it into seven units.”

Makes no sense. But by the way, I don't know if you guys saw the video, not to get too serious, but he's doxing a certain billionaire who owns a certain place and he's literally pointing at his home. No, I said that to Jason. He's not doxing because everybody's known for years that can Griffin bought that place. Everybody knows that address. Everybody knows that unit. We all knew it. It was marketed widely. I don't think that's really doxing. He doesn't live there and everybody knew

he owned it. It would be very different if it was a place where somebody was keeping their primary residents and you didn't know and they stood in front of the house. That I would agree with you. I think this one is a little bit more tenuous. Okay, fair enough. Well, what I will tell you is it's a dog whistle. Crazy people. And this thing's been seen by 30, 40, 50 million people now. It's a dog whistle. That's true. That's true. That's the next United Health Care CEO. And in the

week that a fire, a Molotov cocktail in a bullet gets shot into Sam Altman's house. It's deadly

serious. And if you reverse it, I always reverse it. What if we're a public in sat outside of Bernie

Sanders, second or third home and said, we should, this is his Pia to her. This is his summer home. We should add, you know, taxes to it. And I'm sure you could look up Bernie Sanders home pretty easily. So just before you point at people's homes and say, this is the villain, be careful folks, because then if something does happen to that person, like, you know, what I'm to Sam Altman this week, you can feel how if you want about him. But nobody deserves out of their house fire f*** bond

or shot at, period full stop. I just think that it's going to kill the demand for, you know, maybe people who already have a home in New York, like in Griffin, they probably are just going to suck it up and pay the tax and keep whatever they have. But if you were a person who is thinking about buying a Piauter in New York, you either know what you would do it now. Because you don't know what the tax rate's going to be. And it's going to keep going up. After decade with interest and inflation,

you've effectively almost doubled the price here units. So if you're going to buy a $10 million

unit, you're probably then looking at a $20 million purchase price just to break even after about 10 or 11 years. That's crazy. The math doesn't. What is the downstream effect of these individuals not coming to New York going to a next game? Nothing. Going to a restaurant? No, they spend money. They spend money in New York. They're birthday parties. I'm not a big fan of the Piauter culture. I own one house. I don't like this whole multiple houses you flitter flattering everywhere. It

“ruined London. Because when you look at London, where do you vacation? Where do you vacation?”

I go to a hotel. Okay. So my point is this that I think the way that it works is it's not just Piauter. If you own a home that you fully run doubt, but that is not the primary residence of the person who is renting it. It's also a problem. So this is any even like a, you know, you had a

else's second home. The owner still gets, gets hit. So the rental, the sort of rentals of like

folks who want to come to that city or who don't want to own in that city. But it's a second place.

“The second place thing goes away. So maybe this is just good for hotels. I think it's good for”

hotels. But if you look at London, it's probably the best example where there was a lot of people who used London as a place to store assets. Real estate became the primary way in which they would do that. It hollowed out parts of London where it's not as if it was unlivable. It's just that it was unlived. Nobody was there. You drive around Chelsea. You drive around certain parts of London and it was like a ghost town on like a Thursday night where Friday night. That is an issue. It's

the land banking. It's like your Bitcoin is hollowing out a neighborhood and there is something there. But you know what the whole housing thing is, complete cap and utter bullshit because if you move to a place like Austin where you are in Nevada or Florida, you see what happens when you allow people to build units. In Austin, three years in a row of rents and housing prices have gone down, wow, net migration has gone up. But that's been good for Austin, you guys would say.

That's incredible. Yeah, amazing. Austin has roughly doubled the city over the past decade and yet

the rent for whatever one or two better apartments gone down. That's incredible. So in other words, if you let people build to satisfy the demand, you won't have this problem. And then who's stopping the building? It's democratic cities. It's in B people. And then in a Republican town, they're actually building units for and affordability. So you have one group saying they care about affordability and they're doing nothing about it and they're stopping it. And in

another place, they're like, we're just going to let you build because it's your right to build because it's your land. That's the approach in Texas. It's your land. You have the right to develop it. Go. By the way, the high end of the market in London has basically turned over and collapsed socks

“to your point like they introduced the stamp tax, which I think is equivalent to this tax that”

the New York City mayor is proposing. And if you look at London as a guide, the real estate market just bid it at the high end. And that's going to be good for that city or even the UK as a whole. There's a handful of cities where people do what you say, which is kind of park money there. The reason why they do that is because they believe that that city A has the rule of law and B is unique world-class city that's going to keep appreciating. And if you have new management,

that doesn't really believe in the rule of law, that basically keeps imposing all these arbitrary taxes, that money is going to flee and find other kinds of investments. People aren't going to park their money there. That has to be a bad thing for the city. It's like, you know, who cares if the top floor of that building work can Griffin lives is owned by one guy who is there so much. It's not going to affect the city that much, but having all these billionaires from all over the world

decide to park money in that American city has to be good for the US, just like it's good for the UK. And if you give that up, then again, the money will just go somewhere else.

“Well, the only thing is they're already paying taxes on the property and because they're not”

there very often, they're not using city services. So they're paying taxes on the property. They're not using city services. They're profitable to the city. Yeah. Think about a developer who's underwriting some new project. You know, the fact that a whale like Can Griffin is willing to overpay in the sense of price per foot for that top floor might make that whole project pencil. And this is what contributes to the vitality of New York is just constantly development going on.

There's constantly frames. And so you take out that part of the market that in effect was price in sensitive and was subsidizing all these projects. And I think development's going to dry up

to a large degree. He's paying. He must be paying three or four million in taxes every year

and getting no services to your point travels. Good point. Like all profit for the London also did something else, which is that they essentially crippled what's called non-dom status, which is the big tax are if you're moving or parking assets in London. And to your point sacks, what did all the rich people do? They just redirected themselves to Zurich to Lugano to Milan. And they took advantage of more hospitable tax policy in other places. Now what the people

in Britain would tell you, I actually met with the UK government yesterday. They don't see a meaningfully enough measurable impact yet where they think it's a five-along fire. So the real question is is it more of a slow bleed and a slow melt? And at some point it's just hollowed out and it's very hard to reverse because there's not going to be a cataclysmic acute moment where people say, oh my god, we need to reverse these policies. It doesn't seem like that's in the

office. You know, L.A. did something a little different but similar as they introduced that 5%

Yes, San Francisco got that chance. Actually like 6%. In San Francisco, it's 6% over 25 million

and it starts at 5 million. So there's a transfer tax and excess transfer tax above 5 million dollar properties that scales above 25 million to an extra 6% on top of your brokerage commission. So when you sell a house in San Francisco, you're paying 13% now. Which is why you look at the transaction volume in the L.A. real estate market and it's just completely dried up. You know, people aren't doing the house flipping anymore like that kind

of stuff because the transaction costs are too high. But it just shows, again, this tax was imposed retroactively. For example, I had my house in SF and then they just take, you know, a couple of rooms of it. And we talked about this on the show and it happened. But my point is just your property is not safe in blue states and wealthy people who have a choice of where to park their money

“are going to increase and realize that and they're not going to buy, I think real estate in”

blue states is dangerous because the political clashings that they can take a chunk of it and, you know, wealthy people are going to react to that and they're going to move their money elsewhere. All right. Let's go to topic number one. Open AI is apparently suffering from a bit of an identity crisis on Sunday. Open AI is chief revenue officer Denise Dressor sent a four page memo to employees. Obviously it leaked immediately. Probably the point of it. And she called out

in profit. She said they're $30 billion a run rate is cap inflated by 8 billion due to a revenue

share in some accounting with AI model providers. You might be pointed that out in the last couple weeks. Also, she said and for Epic stories built on quote, fear restriction and the idea that a small group of elites should control AI, obviously she's a fan of the pod. She also laid out open AI's pivoting and she said they are going hard after business customers and they want to win the agent platform layer. If you remember, they hired the architect of the open source project, open

clock. They didn't acquire open clock. So Peter Steinberger is working at open AI. Seneca people said, hey, maybe they want his next set of innovations to go inside of open AI's products as opposed to the open source one. I kind of agree with that direction. This obviously perplexity computer is doing really well. They quadrupled their revenue. And I was over at XI I earlier this week with Elon. I can tell you he's got some very cool

stuff coming and this new model. Spud is coming from open AI. Here's your poll mark. It's 75% chance. Spud is released next week. Additionally, and we'll go to the panel in just a second. On Tuesday, two days after this memo came out, obviously people write these memos to go directly to the press. So they're obviously trying to undercut anthropics valuation. And they feel that's the threat that's my take. The FT cited anonymous opening eye investors who are frustrated with

the company's lack of focus. Here's the anonymous quote quote, you have chatchipyte a 1 billion

“user business growing 50 to 100% a year. What are you doing talking about enterprise and code?”

It's a deeply unfocused company. And we talked about this chatchipyte's market share is going down as the number of users is going up because Gemini and Claude gaining significantly. And meta just last week released their first proprietary model. And Apple doesn't have a product in market yet, but they do have a lot of users. So here's your Gen AI website traffic. Let's start Chimuth with you. Your thoughts on open AI should they be pivoting, trading to business, developers,

and getting focused on that? Or should they stay focused on the consumer where they are the verb? Has it relates to complex, long horizon coding tasks? What I can tell you from my team at 8090 is codex is better generally than anthropic. And so what happens is from the more day-to-day work, I think it's more reliable to use the Claude ensemble of models. But when you're dealing with something that's very tricky and very complicated and a little bit more long horizon,

“codex is really functional and really good. So I think if you're looking at it through the lens”

of Open AI, what they're probably saying is, hey, hold on a second, if we allocate our resources and just double down in crush consumer, that's probably three or four trillion of enterprise value. And then if we slowly refocus the company with the rest of the resources and double down on codex, and we do something meaningful in enterprise, we can probably capture two or three trillion there. And now all of a sudden you can paint a picture for a $7.89 trillion market cap in the fullness of time,

You have to separate the two businesses. You can't have a lot of overlap because there's too much

“context switching. You got to let the consumer team run and then you got to isolate the enterprise”

team and let them do what they think is right. Travis, there's a big debate going on amongst

the investors, the FTPs, also questioned the $850 billion valuation of Open AI secondary markets,

have now priced and Thropic higher than Open AI for the first time. This is the flippening that people predicted one investor said, Open AI would need to IPO at evaluation of 1.2 trillion, the last round to make any sense. But there's no buyers currently at the $850 billion valuation that Open AI just closed according to Bloomberg. Travis, how do you hand to cap this race between these two meeting frontier models? Growth is king right now. In this world, in this segment,

growth is the whole damn thing. And if Anthropica is growing faster than Open AI by a significant clip, the investors right now are going to play it forward. And you start to get network effects around compute network effects around the number of tokens you're pushing out for various customers, enterprise or consumer. And ultimately, it's not great today, but how that plays into reinforcement ring and the things getting smarter over time. There's so many, there's so much upside to

volume in scale that if they are growing faster at the same size, even if Open AI is still growing, but if they are half the growth rate, a third the growth rate, a fifth the growth rate, I would be I'd be worried. And you saw this at Hoover specifically when you accelerated away from the competitors like lift and door dash. Yeah, you had to yet network effects was the whole thing at the end of the day and network effects was based on scale. So yes, I'm sort of like coming

from my very specific experience. But if you believe there's network effects with the scale of data that you have and the scale of customers and the revenue that's is cash that's coming in that you redeploy into compute. And so say there's network effects of large compute. I'd be very worried if I'm open AI and seeing somebody growing faster at the same size. So freeberg, when you look at this race between these two giants, maybe your thoughts on the fly

wheel as it relates as Travis is pointing out to advantages in compute, reinforcement learning. And then also the ability to fundraise. One of the great things that Travis and the team did was as they were pulling away, they just sucked all the oxygen out of the room by using capital

“as a weapon. So your thoughts Dave on this high-stakes game. I think there's also a point”

at which you understand on this. There's a point at which you could run off the cliff. You raise so much money and you deploy it so fast and the revenue doesn't catch up to it. And then you go public and the markets don't believe the stories. So your thoughts freeberg. I don't know the financials of the two companies. Well enough, obviously Sam has no problem

raising money. The guy didn't just close like $150 billion around or something.

I'm $222 billion. $122 billion. Largest round ever raised in any market, I think, private or public. Yeah, probably. Yeah. I mean, that's crazy. That doesn't seem to be an issue. What I've noticed is just the pace of innovation at anthropic is for my experience unprecedented. I mean, there are release cadences, extraordinary. There's basically supplanted open claw already with this release. I did a few days ago and then today the new opus model got dropped.

So there's something about the momentum, not necessarily just a user growth, but in how they're operating this business that just seems to be head and shoulders above everyone else in the cadence

“of upgrades. If I looked back six months ago, I think we were pretty heavy on cursor and Gemini.”

And now I think we're probably 90% anthropic in just the last six months at my organization.

There's something very powerful about the flywheel they have going on. Yeah, but here's where I just

real quick Dave is mad respect on a 120 or 130 billion dollar raise. I mean, this is obviously next level, but you can use capital and investment to acquire scale and network of facts associated with it. But if somebody is getting that scale with revenue and let's call it contribution margin contribution profit, efficiency will outstrip subsidy and it will you can't just keep raising $100 billion things forever. That's where the train will stop. And if anthropic is funding there's through revenue

and other folks are funding it through investment. There's like a short term, that's a short term

contribution profit that then soaks up the need for investment. That's a very scary machine if you're computing against it. Which is exactly what the legacy Mac seven are doing. You have massive profits from META's core business, Google's core business that are being redeployed into infrastructure. And even Tesla, which has a lot of profits in SpaceX, which has a lot of cash on hand and they're building out Colossus and other assets including Elon is working on building a fab as folks have

been talking about. So is there a chance for the legacy companies to Mac sevens to compete in this or are we looking at open AI and anthropic are one and two and then everybody else can fight for

“third place and the bronze as it were? Well, I think Google's clearly in the mix. I mean Deep”

Mind has an outstanding team and I think Elon's soul in the mix with XAI and then you've got META also has the resources and they're seem to be further behind but they're going to compete. Look, let me just go back to the central premise here. I agree that there are some valid criticism that open AI has been unfocused and should be moving forward more focused in what they do. I have no idea, for example, what they're doing buying a podcast. That's not us. So I don't know

what that was about. If you were going to buy a tech podcast for $1 million, I mean, we were here.

We're here. Dario reach out. All potatoes for you guys, those small potatoes. They didn't even afford you. They can't afford you guys. Yeah, they thought we were too expensive. Little did they know. We would have sold out. But um, pledge the ticket, Dario. But look, this other part of the criticism of open AI that they shouldn't do enterprise is totally misguided. One of the reasons why they should have been more focused is to do more enterprise and get

enterprise more correct. Now, why do I say that? To Travis's point about growth rates. It's true that open AI and Anthropic as of the beginning of Q2. So let's say two weeks ago,

they were both around 30 billion of revenue. And that memo from that open AI employee was right

that if you compare them on an Apple Stapples basis, that Anthropic is about 20% less. Because

“they are including revenue made by their channel partners. But that doesn't matter what matters is”

the growth rate. You know, again, to Travis's point. And let me just put some numbers around this. The open AI growth rates been around three to four X a year. The Anthropic growth rate has been around 10 X a year. So they went from, let's call it one to 10 billion of ARR last year. And by the end of Q1 this year, they were ready at 30 billion. Again, they're called their revenue. And they're on their way, you know, like Brad Gerson was saying in our podcast, I think in the last couple of weeks,

they're going to end this year at 80 to 100 billion, at least on the current trajectory.

And so you can plot their revenue on a logarithmic graph. I mean, again, no one's ever seen thing like before, where every unit on the Y axis is 10 X and it's a straight line. Now it's crazy. It's crazy, right? So if it's taking Anthropic, let's say one year to 10 X and it's taking Open AI two years to achieve a 10 X that is obvious which one's going to win. Now what is the reason for this is because Anthropic was very focused on enterprise, specifically coding. And what you're

seeing is that businesses are willing to pay for coding, code tokens on a meter basis. Let's call it like electricity. The more they use, the more they're willing to pay. And their usage is continues to scale on scale. Consumer is completely different. I mean, consumers are the thing that open AI prioritize. Consumers have a lower willingness to pay, maybe only three or four percent of them are willing to convert to premium in the first place. And what they want is a $20

a month, all you can eat subscription. So the revenue simply doesn't scale the same way that enterprise

“does. And so if you want to tap into the scalable revenue sources in the market right now,”

you have to go after enterprise. So, you know, again, where I would agree with the criticism of Open AI is maybe they should have been more focused, but they need to be more focused, specifically, to pursue coding and enterprise. And if they don't catch up soon to travel this point, then you could see Anthropic taking a lead here that, let's say over the next one or two years, could be insurmountable. Just by the way, let me just say one thing is,

even though Anthropics revenue has followed this graph, this exponential graph very predictably, it can't do that forever, right? Like let's say it does get to, you do 100 billion this year.

right? Yeah. And the reason is because as you hit new levels of scale, you encounter new

problems. I mean, you're simply getting around out of compute or electricity data centers, you know, infrastructure. There are physical limits, or there's limits in the physical world that you're going to hit. And there's already some evidence that Anthropic is hitting some of those limits. Users were complaining, for example, that Claude was thinking less. Did you guys see this? That, that, you know, a typical Claude Prompt, they, they seem to have

cut down on the thinking time by about two thirds. Now, I saw someone tweeting today that they just released Opus 4.7, replacing Opus 4.6, and the thinking is back. But, you know, maybe they're charging more for that hard to say, but they're going to hit some sort of physical limits. And I do wonder if over the next year, Anthropic will reconsider whether it's support for all this like doomer and nimbusum was the right call, because it kind of made sense for them from a business

standpoint when their competitors were building data centers, and they were just getting compute from the hyperscalers. But now that they're, I think, going to have to move into the game of building their own data centers, they might regret salting the earth for data centers all over the country.

And I wonder if that'll be the natural limit of their growth, is that we always run their own

pitard of doomer nimbusum. And they're also using the coding platform to build and propick itself better. So that in and of itself is the reason to now coding. You, you get the double whammy, you can make a better product, and you can get paid for it. Yes, I know, hold on, because if you look into it, or people are panning Claude desktop, and what they said is this is all a bunch of

“live coded slot. I think we have to remember, if you keep these agents on task and their guard”

real properly, this stuff is a force multiplier. The problem is, nobody knows how to do this really well yet. Nobody is built real products of scale, largely using agents yet. Nobody knows how to give an example of how an orc structure should be redefined. Nobody knows how to budget properly. We have the CTO of Uber, say, I give up. I fit my token budget. The problems I see it

are too full. The first is just a build on sexes point. All of these front to your labs have a

very serious issue, which is both open AI and anthropic are growing so fast that they're at a point now where they need their own infrastructure. It's kind of like when you first start building any kind of company, you're just much easier renting capacity from the hyperscalers and it's a dependency. Yeah, but then it becomes a dependency. Exactly. And now when you're so big, it's actually strategically a huge mistake to not have your own compute supply. Why? Because if you look at who's leading,

the front to your labs are leading and sacks to your point. You mentioned this on X. You're like, there was all this doomerism, but maybe it was tied to compute capacity because when bedrock opened up more capacity for anthropic, all the doomerism went away. You're left wondering, like, is it really tied to just the fact that they were just trying to throttle usage? So, if you're a front to your lab, you don't want to have to go through Amazon and GCP and Azure and

Tim Cup for access and capacity, what you'd much rather have is go straight to your customer. On the other side, if you're a Gemini or Microsoft or Meta, and you have all this compute, because I saw a stat this week, the hyperscalers control 60% of all the compute. So, the game theory there is, if you can e-capped the front to your labs, it'll give you some chance to catch up. And it gives you time to catch up because no matter what the demand is on the

“upside, remember, you guys remember, like in social networking when Friendscher was the cat's meow?”

Yeah, that's meow. Remember what the biggest problem at Friendscher was? Friendscher was slow as a dog. Yes, yes. And what happened, then my space came in and took all the share, then we came in Facebook and we took all their share. So, there is a way where you can hand-e-capped and knee-capped these companies by throttling compute access to them. So, A, they are forced to now go and get in the game, which is weird because, look, OpenAI has tried to displace some of the stargate spend.

I don't see any path except they're going to have to do with themselves, and then Thropic will have to do with themselves. But then separately, the other problem is, when you change the subscription model in enterprise, and you say, hey, we're not going to subsidize any more tokens, what's going to happen is all these token budgets are going to go crazy and what Freebrook said is going to happen, or he's like, hey, guys, why are you spending all this money? What are you making?

And you inspect the code and you're like, what is this flop? And you're not going to add 30, 40, 50% off-backs to produce nothing. So, I think that that's an open question and that question will become more amplified over the next year as they push the costs off of them. So, as Travis

“said, no more subsidy from the capital, you have to grow into it, but you're not going to support”

negative gross margins. So, you're going to pass through the token costs. So, I think it's a very

the most, right now, people have forgotten about Colossus, which he wants been building. He's expanding

to 555,000 GPUs across three buildings, 18 billion investment. He, if, and then if you look at

Prometheus, Meta's planned 2026, that's 150,000 GPUs. So, this is what you're going to just announce a deal. He announced a deal this morning with Kursher. So, Elon's renting a bunch of capacity. So, he's now getting effectively into the data center business. He's going to be a hyperscale. So, he's going to use as much as he can for XA and whatever's left over, he'll give to, well, in this case, he's giving to Kursher to train their model. And he could give you,

saying, Elon's will overbuild capacity because that way, your own models will be in a privileged position and you can sell the rest to your competitors. 100%.

“Jamoth to your point about the thing I was saying on X. I actually, I think I was retweeting Mark”

and Dreson who pointed out that one of the reasons why and Thropic might have wanted to hold back mythos is they simply didn't have the compute to serve it. The model was huge and very expensive to serve. Something like maybe even 10 or 20 times the token cost of, of say, opus. They knew opus 4.7 was coming out, right? So, they hold it back knowing that they don't have the compute to serve it anyway and they save their compute for the next iteration of opus and then

by holding it back, they create this impression of scarcity and altruism and it turns into this gigantic marketing event for their product because everyone in the government's like, oh, wow,

they're holding it back because it's so amazing. Now, look, I think it may have been genuinely

altruistic as well in the sense that mythos does reveal coding vulnerabilities that people

“didn't know about before and, you know, it does make sense to give time to companies with large”

code bases to patch these dormant bugs and vulnerabilities, but it's looking more and more like in Thropic could not have offered that model commercially anyway because it was just too big and expensive and they need to create space for opus 4.7. So, it's an interesting theory on what actually happened there. All right, guys, before we go to our next story, some breaking news here, here's your poly-market gentleman, I don't know if you're placing some insider bets here,

free bird, but looks like the all-in-podcast and Thropic, now 37% chance of buying the all-in podcasts. This is live. What time? From poly-market, yeah, this is by the end of the year, okay, I end it a year, so this isn't real, is it? Yeah, absolutely. People have been trading on this, this is heavily traded. It can't be, says, not 92 million dollars of Lyme, the census, the number three largest poly-market. There's no way this is real to this.

All right, breaking news, guys, I don't, I don't control the news, well, this is J. K. L. Slop. This is no way this is real. That's anybody who has a prediction market, I guess. Hey, what's the volume of that thing? 92 million. It's not real. It's not real. There's no way that's real, guys, come on. Guys, it's all good. It's all great. Guys, I'm talking to upgrade the planes. I just, hey, guys, just, I don't need the P.C. 24. I'll take somebody's G650, whoever's got a G650,

go up to the 800. It's going to be trickled down to J. K. Let's do it. I'm giving up, I'm going to divide your plan. I'm going to start a trickle down. I'm going to trickle down avionics. All right, listen, story number two. Triple down it. Yeah, man. It's good. It's good. It's really good. Okay, number two. All birds, speaking of data centers. All birds just pivoted from ugly sneakers, despite the odd to AI, the stock has rips. Talking about public bubble behavior, podcast,

getting bought by frontier models and sneaker companies pivoting to data centers. All birds, as you know, is the ugly sneakers on the planet. And this became a massive delusion in our industry that this company was worth billions of dollars. They went public in 2021. This might be one of the peak's earth moments raised $350 million in their IPO. Sacks were you an investor in this thing? All birds? All birds? Back in? No. No, you're thinking about the scooter company.

So that was a company. That's right. Yeah, it was a dollar mine. Me if the investor said in order.

“But no. Bird was crazy. This reminds me of the late 90s, where all you have to do is change your”

name to whatever dot com. Yeah, yes. And you get a huge pop in your valuation. And you could

spin it out. Barnes and nobles dot com. And then Barnes and nobles. And so the stock crashed and never

looked back. There's your stock chart. They sold off all their brand assets for 39 million by 10% of what they raised in the IPO. Congratulations to Everone's ugly ass sneakers. Why were they worth four billion? They sold collective delusion, collective delusion, people in Silicon Valley like

in Silicon Valley where people rewarded rapid growth without really looking at gross margins or cost of good sold. People didn't really make the distinction between software and everything else.

Right. Right. Software. You never really had to worry about cogs or gross margin because

the incremental cost of serving a customer with software is like almost zero. So people in Silicon Valley weren't really trained to look at gross margin. And there was this rash of physical world companies that all of a sudden started getting crazy valuation. Travis, quite frankly, you might have the success of Uber. Yeah. And this is you might have ushered in this era of, you know, these physical world companies that started getting valued like software companies, even though obviously they didn't

deserve it. David, thank you so much for that. Chad. Anyway, let's get back to you. No, hold on. Hold on. There was a pair of 21 is super interesting, though, guys. I don't believe

“it was a physical versus digital thing. I believe it was a moment in time in the COVID Zurk”

massive money going in. We hadn't seen inflation yet. It was all of that happening. And the investor class was basically deciding we're going to look two and three years forward on your current growth. And it wasn't one year forward. It was like two or three years forward. And that's where these crazy

valuations got weird. So if you went from zero to hunt, you know, if you went from 100 to 300 million

dollars in the last year, they'll play that two, three years forward and go, oh, yeah, you're totally 20 times bigger. We'll pay you for that now. Yeah. That's where it got weird. It got weird. Hey, birds, good. This was valued at two or three billion. They were doing micro mobility and you're just trolling MJ. I'm no, we're giving everybody their flowers for incredible investments. And even the mighty sacks could trip up. Did you sell those series? Yeah, yeah. No, no, we don't

do that. It was a series A we did. I mean, look, we got it right in the sense that it was a total phenomenon. Yeah. But then the cities just cracked down on and killed it. Look, if the series and we didn't do it. Yeah, look, if the cities had reacted differently, if they had leaned into it, if they had created, let's say, a scooter or like a small EV lane, it could have transformed cities. I mean, it would have been a lot easier to get around. But instead, they banned it. They

limited it. They didn't create designated areas for it. And then the, the kudagross was basically when they would take a city where bird had already had like 80% dominant market share. And then they would say that what we're going to choose for operators and give them each 25% of, say, a thousand scooter allocation, that's killed the comics for everybody. There's no market anymore. There's no market, yeah. Yeah. There was no marketplace, not work effect, right? Yeah. When they're basically just picking

the winners and deciding the market. Yeah, you can't compete and splitting it even so then. Yeah,

“I think there's no competition. And you can't drive value. Regulatory capture at its worth.”

Guys, like, we should watch for this in the, in the autonomous car space, too. Cities make you, in start doing things like that. And, and what they did on scooters, they could do on cars. Oh, that's a really good point. Yeah, you're right. Instead of just letting the market play out, they say, well, we're only in a half next number, a thousand autonomous cars. New York is literally doing this right now. They're doing it. You're in Boston. And then the prices go up.

The innovation doesn't get realized, consumers don't benefit. No one benefits. Basically, you've deleted the market. Yes. And anyway, just to wrap up this story on the shoe company, they're now new bird AI. They bought eight, eight, one hundred's. I think

we're $50 million in a convertible note. And the stock has gone up eight. Stop eight. Really?

No, it's not. I'm going to joke. Obviously, the stock's now $14 a share. It's up 450% in the last week, shout out to Wall Street Betts for staying. Can I see something clearer than the shorts can stay solvent? Can I say something serious? Yes, please. There are a handful of transactions that have happened in the last few days that if you look far away, our head scratchers. So this is one. I don't know if you guys saw recently, but Jane Street did a billion dollar investment in essentially

a new Neo-Scaler. And then also did a six billion dollar compute deal with them. That was like a

“little interesting. So what would I like to say about this? I think the thing that the capital markets”

are getting right is that we are massively compute constrained, massively. And those are two problems. One is the power. So if you look at companies like Bloom Energy, it has gone absolutely straight up vertical nuclear. And the reason is because Bloom has a solution that allows you to use not gas that allows you to do something onsite and critically allows you to get your clean air

And so instead of waiting for years to get on the grid, if you wanted to build a data center,

you can now use their services. The other part that's going absolutely nuclear is the actual

“land and the shell because it's turning out it's impossible to get these approvals. Now why is that?”

And I sent an economic image. The reason is because underneath that the core of it all is there's a tide that is shifting on AI. The American population is incrementally getting more and more negative on the whole subject matter writ large. And it's not clear exactly why they're doing that maybe it's the doomersum, which we talked about last week. Maybe it's the fear of the job laws that Jason has been talking about. Maybe it's just this idea of yet another way of innovation

that's only going to benefit a few in an extreme way, minting trillionaires all over the place. While everybody else stands still, I don't exactly know what's causing it, but the sentiment is shifting. And as the sentiment shifts, the most scaled action that they can take, they're taking, which is then they are going and voting down data centers. Here's an example, which was insane, a town approves a six billion dollar data center build. And then half the the board gets

hosted, just voted out overnight so that they could put a new people to undo the decision.

So if you look at this all around the country, the answer is not, we're only going to build in

Texas. That doesn't work. There's not enough power. There's not enough grid capacity. There's not enough net gas that allows that to happen. Maine just passed the bill that bands all data center buildings. So I think the reason why all birds went crazy is a very, very small canary in a very

“important coal mine, which is we are absolutely compute constrained. I think if you play this out,”

the real problem, again, goes back to anthropic and open AI, if I were them, it is a five-alarm fire for them. They more than anybody else needs to get their hands on compute. They need to have land power shell, but otherwise that revenue couldn't either slow down or hit a wall and it will not be because of product quality and adoption. It will entirely be because of the friend's perfect. You just couldn't keep to sign up. And I think that that would be a huge huge problem for

everybody. -Sax final thoughts on data centers and the building. -Well, I think I think Jamoth is right that the data centers come very impopular, probably in 30 states, there's going to ban them outright. And then it's very hard to get projects approved. Look, I think there's a few reasons for this. One is that there are a lot of, let's call them real estate developers who are kind of wild caters who are out there trying to get entitlements. And they did bring a lot of projects

up for local permits where they didn't have a power solution. And there's no question that local communities do not want the data centers drawing off the grid, thereby increasing residential prices if that data set is not bringing its own power generation. And the administration agrees with this is why the president did the right-payer protection pledge where we got all the major users of the data centers, you know, all the hyperscalers to agree that they would not build new

data centers without bringing their own power. So again, it was designed to be power neutral to the grid. Or in fact, it would increase amount of energy available to the grid because these data centers would give back when they're not at peak usage. So that's sort of like category number one is there's this fear of electrical rates going up. But there's a couple other categories

“I think of groups. So the second one was future of life in a lot of these like doomer groups saw”

that data centers were a way to stop AI progress. And there are interviews with some of these doomer folks who say things like we have to meet people where they are meaning that they've been unable to convince people that AI is going to lead to the Terminator, but they can convince them that AI data centers are going to use up their water for example, which isn't true. And so a lot of the nimbiism has been kind of astro-turfed by a lot of the doomer groups which have

a lot of money. Thanks to contributions from a few tech billionaires like we've talked about in the past. So that's category number two. category number three ironically again is anthropic itself. It has a light itself politically with a lot of the doomer groups, a lot of the nimbi groups.

It didn't seem to matter in the first couple of years because anthropic had made this strategic

decision not to build his own data centers. So they probably thought that they were just throwing sand in the gears of open AI or XAI, their competitors. And they would just rely on hyperscalers to get their compute. And I think that that strategy has now backfired in the sense that they apparently have reached the limits of the compute that's available to them by buying

interesting to see how they adapt to that and how the message around data centers changes over the

next year as let's call it the effective altruist to side that all of a sudden data centers or certain kinds of data centers might be a good thing because they serve their mission. So I think that's going to be a very interesting thing to watch. I'll tell you the one thing I think you're missing which is that most people in America really are starting to really hate rich people. And there's no physical space that better represents the wealth in America, the wealth creation that's

happened that a lot of people feel left behind from then the data center. What other physical spaces there to go to? It is the temple of the wealthy. It is the mechanism, the tool, the machinery of the wealthy. It is the way that the rich elite tech kind of political connected billionaires that we're obviously all attached to are taking from the poor, getting themselves ahead, shooting themselves to space, leaving everyone else behind. And the data center, I think, is the

representation of their progress. And it is a representation of the progress that others don't feel.

“So that's why I think it is physically like the manifestation that people want to attack and destroy.”

There's very little rationale about let's stop AI robots from killing us. I think people just don't see the value in AI. The average person doesn't see the value in AI today yet. Like we just talked about so much of the value of AI is showing up in the enterprise and in the rebuilding of enterprises. But for a consumer's life to actually be altered in a meaningfully positive way, most people don't feel that you have the best thing they see is some medical advice they're getting on chat, GPT or something.

And that's kind of the end of it for them. So I think there's a lot of this populism that's swollen and that's taken over, not just the US, but probably good chunk of the West and the data center is the target. It is the peer to tear of this space. In a way, this is their attack vector. To David's point, they'll probably ban data centers in 30 states. Data centers can output an input at the speed of light so they can be anywhere. I mean, the reason you put data centers

in different states is cheap power, low latency. So maybe you get a couple of milliseconds of latency. So the data centers can go anywhere. So as soon as all the states start banning the data centers, the data centers will just go to space, to Iceland, to Texas, and then everyone will be forced to move on Travis. They'll basically find the next target for populism, which will be something else. The peer to tear, the data center, what's next? You know, this is part of what's going on right now,

Providence, where we've got this kind of level of debt from the, I always bring it back to this,

because I do think this is at the root cause of populism is the fact that the government promise so much is so inefficient and as a result, it's destroyed the value of a dollar, not given any, one, anything that they thought they were getting. And we do have the right pair, pledge, sacks to address the energy issue. That was a big win. I think, and you worked on that, I believe.

“But hold on, can I just say something? I think that right pair pledge is important.”

It doesn't change the business model of the utility, meaning what the utility is allowed to do is every year build the budget. And the way that they decide how to charge you is that they are allowed to make investments, right? And then they're allowed to earn 10% roughly on the amount of investment that they make. What do you think they're incentives? Their incentive is to find ways to keep investing and upgrading the infrastructure. So I suspect what you'll see is independent

of what the data centers do on site, which I think is smart and good. And I'm glad you guys did that. It doesn't slow down the actual fundamental business model of the utility, because those are local monopoly licenses that are granted at the state and county level. And so when you go inside and you look at those utilities, what they're allowed to do is say, well, I'm going to bury the lines

underground because there's a wildfire threat that's going to cost 10 billion. And they present

that the PUC has to say yes, and they're allowed to make 10% on 10 billion. So the business model of the utility has to be looked at because it is independent of all of these other things. And they

“have an incentive like insurance companies to just walk prices up over time. That's true. That's why”

I think behind the meter. So I'm so important there for sure. But look, I mean, this idea that the data centers don't create jobs just wrong. I mean, it's been a huge boom for blue collar jobs and the construction industry. Well, they're building the data center. Yeah, but that construction could be a wave that goes on for a decade or two decades. I mean, the capex is not going down. It's increasing. Listen to, for example, what Jensen says about his projections. I mean,

it's not like the capex is the one-year thing. We're seeing tens of thousands of new construction jobs being created. And 25 to 30% higher wages for electricians, carpenters, the guys who hang drywall, a poor concrete, create roads, and stall equipment. I mean, these are blue collar jobs.

It's not a bad thing. I think the issues. It's not a good thing. But it's not the same as a fab where the jobs are permanent. And they're there. We can debate it all we want. I don't know. You can, there's about 100 data centers right now that are being contested. The data is for every hundred that are contested about 40 get canceled. That number is increasing for this year. It's more than doubled already from what the number was last year. And the total economic value of those

100 data centers right now is about $162 billion. Jensen, the thing is is that there are permanent

jobs because what where's the energy that's powering that? Where's the semiconductors? It's powering that. You know, there's a lot. We actually have Chase from Crucio and Michael from Corriev on the All-in-Internet Review Show. And they said they're bringing energy with them. That's their big big big BYU, OE, bring your own energy to the space. They're bringing in NACAS, they're bringing in diesel fuel. They're bringing in solar. BYU is the model. Well, can I also say, listen, if you were

of the opinion that you didn't want more data centers in America because it was using up save, scarce energy resources or something like that. But you weren't just anti-progress all together. Then what you would want to do is at least see more data center construction among U.S. allies,

right? Energy rich U.S. allies. Well, a year ago, that's one of the things I worked on was allowing

“the gold states to build data centers with American technology for American companies. And remember”

the controversy that caused everyone accused us at somehow this was like serving China. Well, those data centers are getting bombed and I don't think they'd be getting bombed right now by Iran if they were serving China. These were very strategic. Yeah. The IRGC has put these data centers on a list of assets that they've threatened to destroy because they're American assets or they're assets of our gold state partners in partnership with American companies.

This whole idea that somehow this was a threat to American national security was a total hoax. Just like the data center uses too much water. And what I'm saying is that a lot of the same forces were behind this hoax as are behind these data center hopes. Now, freeberg is right about the resentments. But those resentments get whipped up and marshaled by people who have an agenda. And that agenda is well funded and strategic. And I can tell you then the case of the GCC

data centers and thropic was adamantly opposed to that and they were lobbying against it

“and they were against salting the Earth against those projects. And I think the whole issue is kind”

of moot now anyway because I think the data center has been blown up. But they've been threatened to. But it just shows how ridiculous and what a cyop, some of the opposition to these ideas are. And it's a cell phone in many ways. If you think about who are the top two spokesperson for our industry and what they're communicating to Americans versus say how the Chinese U.A.I. which is incredibly positive. We've got Dario who says it's the end of days. Everything's going to be hacked.

All your files are going to be hacked. All your accounts are going to be hacked. And then on the others and everybody's losing their job. That's our top spokesperson in Dario and thropic. The other top spokesperson just had a 70,000 word piece written about him where Ronin Farrow said, "I had a dozen people tell me unpropted. Sam Walman's a sociopath. Those are the top two spokespeople. Those people cannot be the spokespeople for this industry." And this industry's

got to get focused on fixing the big three health care. It's going to be dramatically improved by AI. Housing could be dramatically improved. I'm not sure who's working on that. And obviously education, the cost of education, we need somebody out there, a Michael Dell, you know, Jensen, Elon, just explaining how world-positive this could be. Because right now AI is as popular as less popular than ice, the Democrats, and the government of Iran. Joe Lehman at Alpha School,

“on the education side, I think you just have to look at Alpha School. It's working.”

All right. So that's your story, Chema. That's the story of all birds, the most overvalued startup. But we're going to play a little cue, the music here. We're going to play a little game show for everybody. This is the price, David Sachs is wrong. Yes, this is the price was wrong. The price of the startup, Travis, is wrong. And this is the game show where we guess which overvalued disaster are we talking about. First of all, Helen from Austin, Texas, and enforcer in the PayPal

Mafia, it's Mr. David Sachs. Welcome to the program, David Sachs. Are you ready to play? All right. Let's do it. We ready to play. Okay. All right. Here we go. The price is wrong.

This startup was once valued at over $13 billion. They're made business model selling

JPEGs for fake internet money. People lost their minds and started spending millions of dollars

Billing. 13 billion for is that like the board apes thing?

Okay, you're closing in. Remember, form it in the name of the question. I know. I know. I know. I know. I sell in JPEGs for fake internet money. Me, me, me, me, pick me, pick me people.

“That's your chance. Should me. Oh, I think I know what you're talking about.”

Okay. I let you lost their mind. They're spending millions of dollars. Okay. Okay. I said, can I say that? I said, you're turned to steal. Oh, I'm with the open scene. Correct. Oh, I'm just right. For Trimoff, probably Hoppetea. Okay. An amazing steal and amazing steal. And as a board. I put. Okay. Here we go. He puts the dick and dictator, helling from Palo Alto, California. It's your favorite door dasher. Okay. Trimoff, Pauli Hoppetea. How long you've been door dashing there, Trimoff? Nine years. Nine years. You like that? What do you like about that?

Is it the interaction with the people? Is it the tips? Is it stealing a couple of franchise? What do you like about being a door dasher there? I typically take four fries. I lick the breeder. Okay. What do you bring us? Did he just say lick and buries it? This is what I would need. Robot delivery. Oh, what delivery driver does that mean? That's coming. It's coming. Okay. We don't want our face size being licked. Let's get them used in coming here. This startup wants value at four a billion. Oh, lounging to talk to other people on your mobile device during COVID. And you could listen to mid-VC.

Yes, yes, yes. I got it. It's called generic star device. Can you name that overvalued startup? Oh, my God. It's called clubhouse. Oh my God. He's on a heater. That's 200 points for Trimoff, Pauli Hoppetea. Hey, that's a lot of door dashes. He's going to do very well here in the final round.

Amazing memory. How soon we forget? I couldn't place any of these names. Okay. Finally.

Yeah, streaming in from a potato field at an undisclosed location in Idaho. It's Dr. David Friedberg. You're in the potato sciences, correct? Mr. Friedberg. All right, okay. You like the potatoes.

“You have a favorite potato dish. It's a scallops. What do you like to do with your taste? What is your name?”

What is the host name? What is your name? It is me, a jockular Jake Al. Let's go. Here we go. Shock it. We're Jake Al here at the home. You like a certain type of potatoes there? Do you like your particular? It's a particular calicanus. And what do you like there on the potatoes? What's your favorite there? You like a creamy macaron. A little cheesy. You're liking the cheese. Okay, very good. Okay, David. This startup was one valued at 270 million dollars. She's your favorite. I understand you're a vegan. They sold juice. These juice packages. One to a juice. I know. I know. I know. I know. I know. I know. I know. I know. I know. I know. I know. I know.

I know. I know. I know. I know. I know it. I know it. I know it. I know it. Take me. I know it. Take me. I know it. Take me. You'll have a chance to show you. You're a juicer. Oh, that's a hundred. What are you? Are you searching? It looks like he's searching. Do you start? Oh, my God. You want your device? He looks like he is. This is life. Internet free. Internet free. Yeah. Yeah. Yeah. Yeah. Yeah. All right. So we're going to have a clear winner, Chimoff Polyhoppetea. Tell him what he's one. He's one. A trip to

temptations to in Kabul. You're going directly to temptations to an adult resort. That's for you and two of your friends. Okay. Enjoy temptations too.

“Chimoff Polyhoppetea. Two of your friends. You're going to bring you this. You can bring your throttle. I think this is going to need to be”

come a regular feature of the park. Great. I've only had a bit of an end. Everyone forgets the unicorns that don't work. They just want everybody to hear us the ether. All right. All right. There you go. You

want a Pieda tear on day. On a fishing wall. You got a Pieda tear available to you as your first place

winner, Chimoff Polyhoppetea door dashers. All right. All right. Listen, there's been a lot of shenanigans going down in D.C. the most boring city in the world. We're apparently everybody's getting a little frisky after hours. TMZ launched a news bureau. Eric's law is out of the governor's race. There's a lot of dark stuff that's been released. He is innocent and so proven guilty, but it's not looking good. He also resigned from Congress, J.K.L. And he resigned from Congress as well. And freedberg

are investigative journalist now working as a stringer for TMZ, freeberg, what have you learned? What's in freeberg? My um, okay. You have an analysis then, maybe. My anecdote on this is back in December when it was first rumored that's wall well was going to run for governor. I started making some calls to various folks to be like, hey, you know, what do we think of this guy is he going to be a good candidate? You know, obviously I and a lot of other people before

I spoke to several people who independently told me that there's knowledge about this guy

sending, you know, picks to employees and that this guy has a bunch of stuff that's going to come out about him. So I heard all of this, not for one person, but from several different sources, this was back in December going into January. And I largely kind of dismissed it because I was like, if this is true, this would have all come out already. I'm like, there's no way this is true. If it was true, like people would have talked about it, they would have made a thing about it.

If multiple people are telling me about this, then I've got to assume that it's a rumor that's being used to block him from running for governor versus it being a real thing because multiple people had this knowledge and this information. So this was December January where I had these

conversations and at that point nothing had come out. So I was like, okay, it doesn't seem like this

is real. And then everything that I had been told started to come out in the last week. So the striking aspect of all of this for me was how much knowledge there was about these various incidents with the guy, how so many people had this knowledge and how no one had actually brought the knowledge to bear, which begs the question, why did they not do what was right by the victims, or why did the victims sit on the sidelines waiting for the right moment to all come out together? Because this was

broad knowledge within the community of people and they made the choice not to bring it forward

“with that knowledge. And that's what was so striking to me about this whole thing. I had honestly”

dismissed the whole thing as just being rumor-mongering to try and just merge the guy and it turned out that these were all being held back purposefully and deliberately for a very particular moment in time when they were all brought forward to be used. And let me just be clear, these are all allegations. Nothing's been proven in court. He doesn't get his day in court. It's absolutely nice. We just want to make sure there's a bunch of alleged here. No matter how bad it was.

And all that I'm saying is that people had pulled me about these supposed claims five months ago, four months ago multiple people and had chosen not to bring it forward and that the victims had not come forward publicly with these claims. And then there was this coordinated effort to bring everything forward at the same moment. And that's what was so striking to me is just how coordinated all of this. Who's controlling it? Who do you think like is there like a meeting? Is there like a

counseling? Nancy Pelosi. Jesus Christ, it's so. I don't know if that's true. Well, I don't not just her. I'll tell you my sense of it. My sense of it is that there are certain insiders and he's not an insider. And those insiders are like the Katie Porter's of the world.

“Katie Porter, I think, is who the Democratic establishment wants to be governor. She's an insider to”

national Democrat. She's an insider to California Democrats. And I think that she's the preferred candidate, Tom Stier. She's a spousal abuser. I don't know that Katie Porter is like this ultimate insider. But I think there are, look, there are clearly insiders. The Democratic Party is a machine that exists to siphon off as much money as possible from the public till to the interest that support the party. And it's their gravy train. And they're not going to let everyone stop that.

They're not going to let that gravy train stop for one second. Now, the Democratic Party had a huge

problem in this California governor's race, which is that the Democratic field was very fragmented. And so the two Republican candidates actually were pulling the highest. And so the viewers have context. California has this weird jungle primary system where the top two go to a runoff. They don't have a Democrat lane in a Republican lane that's take the top two jungle primary and then they go the runoff. Even today, still, Hilton and was a Bianco, whatever, they are pulling at both around

like 14 or 15%. And if the election were held today, you'd have two Republicans in the runoff. So the Democrats needed to win the field down and have fewer candidates. In addition to that, they must have been concerned that all this opo on swallow will come out once it was him versus, say, Steve Hilton. And they didn't want it to come out later when they could lose the elections. So the powers that be made the decision to advance the boil, probably there was a

“conversation with him to tell him to get out of the race. He didn't listen. And by the way, remember,”

this feels a lot like what happened with Joe Biden when he had to drop out of the presidential race. Don't sound surprisingly like that. The whole Democratic establishment and all the mainstream media were saying that Biden was sharp as a tack. Okay. And then he had that disaster to debate performance with Trump and it became clear. Yeah. And you could just see the text messages were flying during the debate between the Democratic Party inciders. And by the time that debate was

over, they had congealed on a new position, which is, I'd buy and had to step aside. And then

easy way. Imagine that. Like telling the president of the United States, we can do things the

hard way or the easy way. And then Biden disappeared for a week. And magically, he stepped aside

“by tweet. Remember that? He published a statement that appeared to be done by an auto pin.”

People were speculating whether he was even behind this or the staff pushed him to do it. The whole thing was extremely weird. But he, you know, was clearly muscled out of it. Just a few days before, he had said, I'm not leaving the race no matter what. Me, it was like straight out of that wolf wall street meme. They're not getting me out of here. And then a few days later, he's resigning by tweet. And again, Nancy Pelosi appears to be the figure at the center of both these things.

She was, you know, I was like, Pelosi is reported as having been swallows mentor. I guess she

found him roughly 20 years ago to run for Congress in the first place. When the Republicans wanted

to kick Swallow off of the intelligence committee, the house intelligence committee, for allegedly being involved with that Chinese spy-fank thing, it was Pelosi who protected him. So she sort of been a central figure in his career. I'm not saying she approved anything he did. But there's no, there's no way that that button gets pushed without going up Pelosi for the sign off, right? I mean,

“she's like the boss of this operation. And I think that the same thing happened to Swallow”

that happened to Biden is they went to him and said, we can do things the hard way the easy way. He was too dumped to listen and they did things the hard way. Yeah, shout out Nancy Pelosi, random day trader and shout out to a friend of the pot, Roe, who's now beaten Nancy Pelosi. I think his trades this year, he's actually even beaten, he's a Pelosi.

That was the world that was the time. Roe Kanna has traded $100 million a stock.

Can you trade more frequently to send out securities? What? I mean, it's incredible. Yeah, where's his Piano Chair? I want to get him on the Congressmen. You've been supporting for your sex is a great stock trader. Yes, apparently we should have been talking to him not about taxes. We should have been talking to him about trades. There were things I liked about Roe Kanna. I mean, he did support free speech with a whole Twitter thing. No, he didn't know what was.

Is that the overton window shifted so much. He supported him. Yeah, when I supported Roe Kanna, freedom of speech was a big issue and he was one of the only Democrats to support that. He was also, I think the only member of the progressive caucus to support a diplomatic track for Ukraine, which I supported and I gave him credit for that. And yeah, I knew that he was in favor of wealth tax, but I thought that was just a very un-serious proposal that, you know, it wasn't in play in any way.

Well, the overton window shifted so much that now the wealth tax really is a possibility. So, you know, things have changed. Here it is. Shout out to our boy, Roe Kanna. Look at this. Right about now. It's a lot's thinking about making a managing director off for years. I mean, Roe, if it doesn't, if you get booted out of office, you could become a managing director at all. That's like, statistically, like, even if you had insider information,

making that much money is, like, very hard. Holy cow, Nancy Pelosi is going to ship Roe Kanna next. For not giving her the, giving her the inside track on whatever he's betting on. What did he bet? Well, look, any, as we all know, any investor can have a good quarter year, but to put up the kind of returns that Nancy Pelosi has done over decades is nothing short, miraculous. It's a generation. It's a general one. Give her her f*** flowers.

She substantially better than Warren Buffett. I mean, the boss of every stand, drunken miller and Nancy Pelosi are three of the most accomplices of all time. Whatever you did to the poor Buffett fans, Traumafe, are incredibly angry at you for decorating his legacy. I didn't desecrate his legacy. I pointed out one unavoidable fact,

“which is his returns are bi-modally distributed pre-imposed Reg FD. When you have to follow the rules”

of disclosure, everybody's returns got kneecapped. When there was no disclosure rules, his returns were off the charts. That's just a mathematical truism. Now, what's interesting to note is the reason why Nancy Pelosi's returns are so consistently good. It's Reg FD does not apply to people in Congress. That should be the takeaway. They can learn things. They've got to stop them. They can learn things in their committee meetings. In fact, there are situations where things are

disclosed and then they are trading in real time. Shout out to the skiff. Get out of the skiff quick and get that trade in. I have enormous respect for Warren Buffett and what he's done. He's the good at goats, but the returns post Reg FD are just materially worse than they work with Reg FD. What are you going to do with that cash position? You're not speaking of Buffett.

value, so if you look at Schiller as an indication of value, it's peaking. If you look at the Buffett

index, it's peaking. So there are things that when you look at it, look like all-time highs. And the problem with that is you would say, oh man, but there's this weird dispersion happening in

“the market. Dispursion means literally a few companies are hitting all-time highs. I think it's like”

eight or nine. And everybody else is not. So it's a really complicated moment. It's hard to understand what's going on. But he's got a lot of cash. If he's sticking to his knitting, he's looking at the Schiller in Drex and he's looking at his own indicator, which shows all-time highs and he's waiting for a correction. He's not really in charge anymore. Like Berkshire Hathaway is not Warren Buffett anymore. Even though he's at the government, he's not really doing it. But I mean, the fact that they're

sitting on that massive polygast or something that they're not putting it to work in the market says they don't see an opportunity yet. Sax Travis, I'm curious your takes. Either one of you can go on whichever order you want. On how is the market crushing it while we're in week seven of a war? And we put a hundred billion dollars or something into this military activity in Iran. And the market is pricing it in, shrugging it off and we're hitting all-time highs. I don't know if

“you feel back to first. Yeah. Yeah. I mean, look, I think it's pretty straightforward, which is”

that in the wake of the meeting in Islamabad, that the market is feeling confident and pricing in that the war is going to get resolved. The president also recently said that it's very close to being wrapped up the military objectives are close to being achieved. And he's made it sound like

it's going to be resolved. Yes, a deal was not signed in Islamabad. I always thought that was an unrealistic

expectation that these two countries which are at war with each other in fact have had hostile relations from most 50 years are going to resolve all their differences in 24 hours. It's not realistic. But the impression that the market I think has and clearly is trading on this is that that war is going to be what Donald Trump said, which is an excursion and something that is on its way to being resolved that they've made progress. And Jake, how you're right, all week has just been incredibly

“strong. I think by Tuesday, the market had recovered all of its losses since the start of the war.”

I think it made a new high yesterday on Wednesday and it's making new highs fresh highs today on Thursday. So you just have to say that at the present time, the market thinks and I would consider the stock market to be the ultimate prediction market that this war is on its way to being resolved. Just to qualify, I'm not speaking as a member of the administration. Of course, I'm not saying that I know something. Okay. I don't know what the market is. No clipping.

I'm not representing anyone and I don't know anything different than what any of you know. I'm just saying that I think this is what the market is clearly pricing in and I'm paying attention to what the statements are of the president vice president. And this Travis, you were never talking the other day while you were slaughtering me and back him in one or eight point match. You're almost caught up about the taco trade. Not Trump, boys, chickens out. You have a theory

about Trump, always cares about optics on back at first Travis. Yes. So while I was beating you back

am in, I sort of had it. You know, there's like because Jake had asked me, and the inside is is like, and I think this maybe is just the more simple view of things, which is Trump's weather vein is a stock market. Like we see follows up, we see the vix is really high, but you know what, the SNP is trading in this ban that's actually fairly tight given the crazy ship that's going down. And everybody's nervous, but actually he moves in the policy space. He does not let the SNP go down

to low. People also get the sort of the panic in thing now, which is like he gets people nervous. He makes moves and then he comes back to sort of reality and gets things done is practical and and probably the better parts of what he might be, you know what he does well. And people are pricing that in. So there's all the things Sachs is saying about the nuances and the details, but that sort of super high level, like I'm in low earth orbit view is like the stock market is

Trump's weather vein. And he's like we'll go to the place that makes the stock market come up and if he's going and if it's up and it's too high, he almost feels like it's too easy. So he

I think. Yeah. It's like a month with Allen Keating. It's just like how is this guy solvent? He's literally playing every hand of poker. He's losing tons of money and then all of a sudden by the end of the night. He gets two big pots and he's got the nuts both times and he pulls out of the stall, which you take on the market today, Chema. Yeah, I mean, I'll just do it again, but I think the Schiller PE neck I sent it to you shows near

all-time highs. Then the second is the Buffet Index, which is the sum of all U.S. equities divided by GDP,

“is also at all-time highs. So this would generally mean that you need to be increasingly a”

little bit more risk-off. But then the opposite side of that, and I sent you a third one, and this is why it's so confounding, is you have signals showing everything, which is which typically doesn't happen. And this is this dispersion point where when you see this performance and it's up

five percent in the first half of April, typically the market is up almost 32 percent on average

for the rest of the year. And we were already up a sac said, you know, seven and a half percent already. And this is crazy. This is crazy. I don't even know what's going on here. This is just a dispersion. But the idea of all of this is, I think we're in a moment where you can find a piece of data to underwrite your bias. And I think that's where there is a lot of danger. I don't know. For me, personally, I'm generally more risk-off right now.

And more importantly, I'm waiting for these IPOs so that I can to be very honest with you,

“deliver and get some chips off the table. I think that it is a crucial that this basic”

IPO get done ASAP. And then I think it's even more crucial that one of anthropic and open AI front run the other one and get out first. And the first two charts are the reasons why. It's fairly obvious to me what's going on here. You have these multiple trends going on at the same time. The reason people are traders are valuing this. And I think there is some smart money in the market right now is what you're seeing in terms of the earnings potential of these

companies as they deploy AI, as they have unlimited intelligence and the top employees at the top

companies become 10 or 20 or 30 times more productive. That's never been seen before.

Microsoft Office may have made you 30% more efficient. The internet may have made you 50% more efficient. But none of these things made you 10 times. And you had a really interesting point that you slipped in earlier, which was, nobody knows how to harness these things yet, right?

“And it's producing SLAP. The truth is, 10% of people do know how to harness it. 20% maybe.”

And I watch this in my own organizations and I watch it in 600 portfolio companies. The ones that do deploy it correctly, they are running the table on the ones that are not. So the efficiency boom that we're going to see at these companies, whether it's meta or Uber or Airbnb. Maybe I'm just saying, if you execute it properly, it's going to be font, nama, no. The earnings will be insane. Maybe I'm an idiot. But it has not translated into tsunami of more revenue and more profit

from me. Maybe I'm the only one. And maybe it's everybody else. But me. But I haven't seen it. I see it in a lot of companies. So I think in private companies, we have two companies as just two examples. Micro one, which is doing data, you know, dark pools of data for these language models. And they have built technology that allows them to build data and allows them to collect data to help the large language models companies grow. And they are on a tear by using this to identify

and find great people who can then contribute to these purposes. And then we have one tax GPT that is making the account, I think they have six or seven percent of all accountants using their budget. And you agree with me with the following statement. Small companies nibbling at the edges is not where these guys will build a multi trillion dollar market cap. I think we're both in alignment. Big companies, dumb companies, slow-ternut technology

startups. No, they are. They're not implementing new technology. No, no, no, no, no. It's the laggards when it comes to implementing new technology. The reason that they are slow is not because they are dumb. The reason that they're slow is their businesses much more sophisticated and much more complicated than many other businesses. And what I'm saying is, if you can't prove that this works in the big time, prime time, big league use cases, it's a toy.

All right, Sachs, where do you stand? Are you in a J-Cal position? The startups are showing the way

there'd be massively efficient. They're growing revenues like we've never seen in the startup community

before with less people, or in the Chumov camp, big companies are not having a drop to the bottom line in their smart or both things are true. Where do you stand, Sachs? Be the adjudicator of this case. I mean, honestly, I'm probably closer to you, J-Cal, I hate to say that. Yeah, and listen. Because look, I think people are still figuring out how to drive business

So what's happening right now is there are a lot of transformation projects at large enterprises that are failing. There's like a big McKinsey studying on that. But if you look at activity from

“the bottom up, I think it's very interesting and it's becoming more interesting. And over the last”

several months, obviously with coding, reaching a new level, we're starting to see very interesting things happening there. And obviously the revenue that's not being generated from these coding

models is, again, it's exponential, I've never seen before. So the ROI is finally there at the

model layer, meaning before people were saying that it's a bubble because you had all this massive capex of the data center level. And there was no ROI coming at the model layer. Now we have the ROI at the model layer. And I guess we're sort of questioning whether the ROI will be there at the application level. But hey, Van, I think things are progressing. I mean, look, I thought I'm laying on bullish on this whole thing. Okay. I don't know. So let me play. Hold on, hold on.

Okay, guys, ma. Obviously, I'm bullish. I'm in this, I'm in this space. I'm doing it here in the arena. We have seen in every single wave. In the mobile wave, we need a consumers to show up at scale. So we need a consumer experiences. And it was very obvious that there were these consumer businesses that were going to be, if not already, incredibly, incredibly profitable, Google and Facebook.

We're profitable within the first few years. They never look back. And all I'm trying to point

out to you guys is there is not one great example yet. If we believe enterprises were all the money

“is, and if we believe that's what's going to underpin these trillion dollar valuations,”

just please somebody show me a couple of good examples of scaled profits. Okay. Fair enough, Travis, find a word here on. I think, I think Jamoth has a good point about being a risk off right now, because if you just look at valuation metrics, they do seem to be quite high. And I've seen other versions of those metrics as well. So look, it's very, very hard to time the market. I don't try, but I think you could make an argument just based purely on valuation levels, not events,

that you want to adopt more conservative posture right now. I think the bet you're making then Travis is or these valuations. So high right now on the standards that the efficiency that AI could bring to these companies is not real enough to continue the growth from here. It's not a catalytic enough technology. And you know, when you look at the opposite, you know, all these traditional companies have horrible valuations. They've been crushed. So my point is if AI is real, the upside

is also real. All I'm saying is the details, guys, matter, it's very hard to take a very complicated business and all of a sudden quote unquote, transform it. It's not as easy as it sounds. That

is a very easy to say for sure. Travis, go ahead, find a word. Final word from Travis first is

“when it comes to big companies. I think the big thing about let's call it the autonomous enterprise”

is change management is the big boy. And in change management actually is about all the people that already worked there, the middle managers, the technocrats, the bureaucrats, the whatever, the crats, the crats, getting the change management, the change management going there is a human thing. And it's very tricky with very complex processes, many of which are not even documented. And in theory, it's just all going to happen real fast, but in practice, like that's hard.

So that's part one, part two, what I'm seeing with true tech companies. Real companies, public, I would say public, like hard for public companies, I mean, like, you know, founder led, you know, folks that are really cranking public companies and tech companies that are sort of up in commerce. I talk to CEOs across the board and they're like, they are fired up about the development, the sort of the the productivity and deployment schedule. And like the new features they

were able to roll out much, much, much faster because they've pivoted their culture sort of very pro-AI development. And I'm getting, like, almost at this point, a consistent feedback from real founder CEOs that like, this stuff's real and it's, it's, it's not just hype. Now, there are folks pushing, you know, selling their book that are like, oh, we're at AGI and all this. Anybody who's worked with these agents and done the AI dev stuff.

There's a lot of good stuff, but they're not, they're not that smart yet. They're just not that smart. Anybody who's done, like, I got a side quest where I'm just investing,

it's silly how dumb the agents are, even their best agents to be honest.

“Yeah. The agents are what you, you have to be human in the loop with the agent. The agent has”

no taste. The agent can do repetitive tasks. The agent is not going to do something novel. And they quickly can get lost in the forest. We have to spend a lot of time. We have to spend a lot of time with our investing agents getting them on board with the idea that if you want to make money investing, you can't be on both sides of the same bet. It's just like that way. That's where we're at. It's the AGI's not here. And it's kind of silly

for folks, I think, to sort of suggest it is. Absolutely. Hey, guys, we got a wrap. Travis, you didn't get to play the prices wrong. I have two more. You guys want to do a bonus round of the prices wrong. Yeah, do it. Do it. Do it. See if Travis gets it. Okay. You guys can steal. You guys can steal here. Let me get my back of the music. I got to give you the music. Travis, you're going to get to do the bonus round here.

Let's go. Everybody, we got Travis Calenick. He's here. He is a professional water sports player from Tallahassee, Florida. How is it down there in Tallahassee, Florida? I understand you do a little handy work to pay the bills. But you spend your most of your time out there on the lakes and the oceans doing water sports. Yeah, you like the water sports. I love the water sports. I'm doing water ski lessons on the weekends. Anybody's interested. All right. I'll be out there.

I can Tallahassee, Florida. Okay. Now, here we go. It's your job to figure out the price is wrong. The price is wrong. Here we go. That's so funny. The price is wrong here. Here we go.

This is Florida's round. Yeah. All right. This start up raised 900 million and a nine billion

dollar valuations. This is a big one. Before dissolving in 2018 and their famously deep voice, founder, CEO is currently serving an 11 year sentence in a federal prison. Yes. Can you name that Ms. Price star now? Can you name the Ms. Price star? It rhymes with Schmarinos.

“Schmarinos. Okay. You're closing in here. Be careful. Yeah. You have to hurry to question. But lose to”

is the old answer. There it goes. There it goes. Okay. Very good. A hundred points. You're on the board. And here is your next one. This is your next one. Okay. This is the overtime. All three players get to play this one. Whoever's the first and says it. This is your final. That's the Ms. Price start up here. The price is wrong on this start up here. Come on. If you can do this, come on. You got this now. Here we go. You can do this. It's short form.

Mobile first streaming platform raised 1.7 billion. Hoppin vassers.

What does it kind of yell it out? Hoppin vassers. >> Oh no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no are going down there. I think if you need methamphetamine or a date, you're going to have

an easy time there, Chimoth. Okay. Oh, hey, Chimoth. I'm getting hammered with people who want to come to the sold out liquidity. 500 was the cap you put on it. You've been dicking around

“as dictator. Can we add 50 seats? I think we can add 50 or 100. I don't know. Lisa, can we add 100?”

Get a simultaneous room going. All right. We'll see you all. Oh, and the all-in summit tickets are on sale. Go to all-in.com. And yeah, don't get shot out of the summit folks because this happens every time. You guys email me two months out. The tickets have been sold out for four months. So get

your tickets now at all-in.com. Another amazing episode. Love you boys. See you next time. Bye-bye. Bye-bye.

, I'm going to get my keys on the door. I'm going to get my keys on the door. I'm going to get my keys on the door.