SpaceX-Cursor Deal, SaaS Debt Bomb, New Apple CEO, SPLC Indictment, Colon Cancer Spike

And the SPLC files. Do you have a comment?

No, I'm not on the SPLC files. Yes, you are you have a just in your SPLC adjacent and you're What does that mean in the Venn diagram? Thank you. Oh, putting me in the cross air is a bubble. He's got got a really good way to select. There's a reason why I'm carrying this guys Oh my god, because the people What the f*** is going on is a reason why I carry a stiletto at a p35. What the f*** are you doing?

“It's a reason if you want to jump the f*** meds feel free”

Shakehouse All right everybody welcome back to the greatest podcast in the universe episode 270 of the all-in podcast your podcast was favorite podcast with me again your Sultan of science David Freeberg the dick Tader from out the polyhoppetea and yeah The rain man is back. Yeah, it's definitely David David's sacks. He's definitely in DC with a

With podis. Yeah, podis lets him drive in the drive way Sacks what's going on you you pushed back. You a big shot at the entire crew and push the show back in an hour Simple text. He's like with podis Start later. Okay Okay, okay daddy. Look at him. All right. All right big shot. What's going on? No, look. I was in DC today and it does at the White House and

I just asked if the president at time and he made time and we did have a little meeting and so we did push back the pod for that One thing I just want to say is just What a pleasure he is to deal with you know when I read in the media

They're always describing him in a certain way that

You know, he's yelling at people or he's moodier or something like that and that's never ever been my experience with him He's always Pleasant to be with he's always Genius super ask questions. He's interested in the subject matter. It's just a completely different portrayal

“I don't get where the media is coming from at all on this. He's Charming A.F. What's the call it when?”

He's Charming maybe if you double-crossed him maybe I don't know but I've just never seen any evidence of How they described them at all and I think on our issues of AI I think we're really lucky that he's the president who's in the White House when the say I revolution is happening I mean doing all-tisseries acts what would happen if Kamala Ding-Dong was in right now and we'd have like no data centers Would have no data centers and they'd be using AI to censor us and they'd be promoting DEI values through AI

That was in the Biden Executive Order President Trump just wants the country to win and be successful and he doesn't have these like Doomer neuroses about it. That's not to say we don't support any regulation at all But we should have specific solutions for specific problems as opposed to being cowering and fear over this and just trying to halt all progress And I think I really got an example of that was his idea around data centers where he said over a year ago before data centers

Even became a hot political topic that we should let our AI companies stand up their own power generation behind the meter And that's a much better approach in the Bernie Sanders approach if just shutting everything down

“So I don't know. I think we're like very fortunate that he's the president during this critical time”

And they've album in this technology and like I said he's always been interested in it

He talks a lot of business leaders. I'm always actually very impressed with what he already knows He listens to like all the top guys in the industry and he synthesizes what he hears. I think he's very good at that He was talking about the end for all the guys and he was like these are brilliant guys And he was like giving the flowers to them and how genius they were and that they were working on a deal and he insides there about the Relationship between the White House and anthropic

I thought what he said was very balanced and accurate like you said he said that they were very smart guys They do have a great product. I've certainly acknowledged that. He also said that they were very left wing But that was something we could work through Didn't have to be a deal killer. He said they tried to tell the Pentagon what to do, which the Pentagon didn't like but in any event I mean look he once American companies be successful and he he I think genuinely really does like high IQ people

I mean he says it all the time and people think he's joking, but I actually think it's like one of his core convictions is he just really likes smart people He likes being around smart people loyal people smart people people people people who are good on camera seem to be the three circles and Hey, sacks you fall into to the right All right I topic one

SpaceX has signed a huge deal with cursor You know cursor. That's the AI coding startup really the they define the category X ai and cursor

be the world's best coding and knowledge work AI here's the deal as it's been explained space X

Well either buy cursor by the end of 2026 for 60 billion that's 10 billion more

Then they were rumored to be raising at or they will pay cursor 10 billion dollars for their collaboration together Bloomberg says you can think of that 10 billion dollars essentially as a breakup fees

“So I think it's fate a calm plea that this deal is going to get done”

Curses run rate two billion at the end of February. This is a money printing machine. They expect to end 2026 with a six Billion dollar run rate. They're going to triple it space X projected revenue Between 22 and 24 billion and 2026. So this is quite a creative to the revenues story at space X at the IPL of space X which is now targeting evaluation of two trillion Which would be trading at roughly 80 times top line revenue which is a you know people would say it's a high valuation

But also a commissioner with the opportunity cursor's valuation would be 30 tax So this is a good deal. I think for everybody at the end of the day cursor started. I think built off of And phropics LLM you could use any LLM previously on it But in March, cursor released the second version of their proprietary model Composer two and

Here it is. It's ranked pretty high right now. It's between GPT 45.4 and Opus 4.6 You can see on the screen the key part of the story here Is that Elon has 550

Thousand GPUs in Colossus. He's scaling up to one million and then of course he's going to bring it to space

So if you believe that Infrastructure matters and it's pretty clear. It does this is Incredible for cursor who has been compute can train so this is peanut butter and chocolate if you put these two together I predict that this is going to move space x x

x ai and cursor to the front of the coding leaderboard within 12 months. That's my prediction schemoth careholder in space x via the acquisition of the Starlink company that you were a backer of what are your thoughts? The acquisition was essentially negotiated

“and the way that it's structured is so that the S1 doesn't go stale. So I think the way that it was”

announced has more to do with the fact that they don't want to slow down and have to rewrite parts of the S1, have to redo the disclosures, have to redo the risks. And so I think what you're going to see is that this will get done. In fact, the deal is effectively done but what's so smart is that where is space x today? Let's call it a trillion. Where could it be just for the purpose of this argument? Let's say two trillion. So when the deal

gets done on a stock for stock basis, it's going to be, again, if it's 60 billion in tomorrow dollars effectively Elon's gotten a 50% discount and what has he bought? He can issue 60 billion dollars stock at a two trillion dollar valuation and get a model and a service that I think is extremely compelling and coding, which is where we know all of the immediate and short-term revenue gains are. It's also patterns that are hard-fought and are really valuable in reinforcement learning.

He gets all of that and then he gets a very cracked team, which we've known for a while that the cursor team is absolutely excellent. If you look at the grock usage, it shows why he had this excess capacity. There was a moment where grock had a very steep and very aggressive discount on their output tokens and in that moment there is just a lot of experimentation and usage and over time that sort of went away. So there was a lot of capacity and relatively low utilization.

I think inside of Colossus that he was able to turn around, Jiu Jitsu moved the whole thing and basically acquire the most interesting and valuable third-party rapper service in AI right now. And the fact is that they got it effectively, I think, at this price for $30 billion. So I think it was a really good deal. Really smart deal.

“Satch your thoughts if you want to unpack it a bit. Under the framing, I think it's be interesting for you.”

If we were sitting here three years ago, the Biden administration didn't invite Helon to the EV summit and the SEC and other organizations, Delaware. They were explicitly involved in

law fair. They were trying to put Elon in prison and here we are the most important company in the

history of the United States, SpaceX AI and Tesla now on the verge of just creating the greatest products in the history of humanity between SpaceX clusters in space and optimists. You're those. Well, you're right. I do remember a press conference where Biden said we got to look at this guy.

SpaceX. A scientist. Remember that? Exactly. SpaceX, which they can't under eye guard.

They couldn't exactly under eye guard. Anyway, that's all interesting. So let's put that behind us. Look, I agree with your guys analysis on this. I think these two companies are very

“complementary. First, obviously is very strong in coding. That's what it brings to XAI. XAI”

brings compute and they bring a foundation model. And the problem that cursor had is that even though coding is kind of like the white hot area of AI right now, when it got started, it was really competing against generalists in the form of open AI and a thropic. But now those generalists have decided to vertically integrate in this area of coding, right? And so, cursor is not competing against quadcode and open AI's codex. And so, they were dependent on foundation model companies that

were getting in the business of competing with them, which was just not a good place to be. Right? So now they have this new alliance with the different foundation model company, which also brings the compute. This makes a lot of sense. And then they bring cursor brings to XAI, the training data, a lot of enterprise clients, and the experience encoding. And I think this will accelerate XAI in this area. It's actually, you think they're going to dump kimi k2.6. Because I think

cursor composer two uses the moonshot model. There's no reasonable way that Elon's going to

pay $60 billion dollars and not run on top of grog. I got to think that it seems like it. Yeah,

“likely, but I don't know. I think it might be tough depending on the users. One of the things”

that makes cursor so good. Do we say more on that? What do you mean? So I think that the different developers want to have choice in that sense. There's a toggle. So one of the things that it's really good about cursor is they've got this very well built out IDE. This application layer that puts them probably from a UX perspective, meaning developers are using the tool above codex, above claw, above anything else. You can use a third-party IDE and integrate the models

or integrate whatever other third-party service you're using. But I would imagine that the developers are going to want to continue to have at least some choice on what's actually writing the code for them. The thing that people are waking up to in the last 120 days is just how much of the value of AI is being realized by writing software and we've kind of got this wrapper term. We call it agents, but agents are fundamentally just quickly spun up applications. But for all of them as we're realizing

very quickly, you end up making too many agents. They end up being super inefficient. They need to be engineered and you still need to have a strong software engineering capability and competency to fix all the agents, to build all the harnesses, to make everything work well together.

“And that's why having a strong developer environment, a strong IDE actually solves that biggest”

problem. So eventually all the enterprises that are getting hot and heavy on agents are going to be like, whoa, wait a second, we've actually got to fix how this is all being done. As we saw this

week in that story with Amazon, where there's like a million agents being spun up inside and everything's

wasting resources, redundant data creation, redundant data stores, redundant API calls, et cetera, tons of money being wasted. So you have to centralize still. You have to have good software engineering talent that's making good infrastructure and good use of these agents. And that ultimately will require an integration of the AI tooling with a standard software engineering front end, which is the IDE that cursor has. So I think that that's probably where everyone's

waking up to the fact that having the software engineers may end up winning you the arms race here and seems pretty smart for you long to buy cursor. What other piece of it, you mentioned, can we, K-2.6? Yeah, I mean, so I think that one of the things that can become a priority over the next several months is the idea of optimizing because enterprises token bills are going through the roof right now. I mean, just month of a month, they're spending increasingly large amounts

because their employees are just building more and more software. But I'm not sure that anyone's been incentivized yet to be efficient about it. And it really only makes sense to go to a frontier model for a frontier task. But more mundane things could be done using an open source model or less expensive model. And I think like you're saying whether it's the IDE or something else, there needs to be some sort of middleware that determines which model you go to and how much

you're willing to spend and what the most efficient way of getting the tokens is going to be. I am deep in playing with X-A-I suite of products and I would predict we're going to be sitting here in six to 12 months and they are going to be dramatically, dramatically improved. Let me just flag one other area that I think is maybe the White Hot Center within this red hot area of coding, which is cyber. And I think mythos has kind of woken everybody up to the potential

defense. Now the issue with mythos is as very large and expensive. It's something like a 10 trillion premium or model. And there's a lot of reports that Anthrophic just doesn't have enough compute to be able to serve. And I'm not sure it was ever built to be a commercial model to

“be honest because I just think it's so big and expensive. But I think what will happen is”

these companies will start training dedicated cyber models. Let's say mythos comparable models but with a lower token cost. And I think there's a real race on right now to get those products to market because I think IT departments and CSOS are very worried about the risk of hacks right now. AI powered hackers. So this is something I think over the next three, six months will be, again, this maybe the hottest part of the market. Pauli Market says all of this is fate a complete

SpaceX acquiring cursor 74% chance SpaceX IPO by the end of August 80% chance. So this is happening folks. All right, let's keep. By the way, I think that deal structure is smart because I mean, to Jamass Point, yeah, it prevents the IPO process from being disrupted. Also, it kind of gives a huge motivation to these cursor guys to bus our ass and make it work over the next I don't know six months. Yeah, they have a 10 billion dollar break up fee but I'm sure they

want the deal to be successful. Well, the 10 billion dollar break up we will go back to SpaceX anyways because if they actually run the compute and they're not owned by SpaceX, they're going to have to pay for it. That is not cheap. I mean, we saw a bunch of these X AI co-founders leave after the acquisition by SpaceX. I don't know if that was the reason why, but all of a sudden they're sitting on SpaceX stock and they

may have felt like they had it made, you know? Well, it's always a problem. It's always a problem with

with M&A. This cursor thing came up pretty quickly because okay, let's just say friends of ours who are supposed to wire into that round or like where's the wiring instructions. It all just evaporated. Here's a tweet from Elon. We don't have to speculate too much here, Sacks. He was very clear that X AI wasn't built right. The first time around the quote X AI was not built right. First time around. So is being rebuilt from the foundations up same thing happened

with Tesla and that tweet is from about five weeks ago. How crazy is it that when he tweets he gets 50.8 million views? It takes the four of us seven months to get 50 minutes probably are

“collected. It's unbelievable the distribution he has. Also, how many of us will just fast up like that?”

So yeah, that we didn't do it right the first time now rebuilding it. I mean, most really,

not quite willing to say that. He's a magnitude for talent. He's a magnitude for the right kind of talent and the SpaceX talent has his philosophy. He inherited, I think, a lot of, you know, maybe a people for X AI or for Twitter that were not in his mold and they're clearly getting aligned. And it's also going to make his day-to-day life much easier when all of these things are occurring in the same building with the same team. The continuity of not having to task which between companies

is going to be great. We talked a little bit about the possibility of Tesla and SpaceX merging. Even Walter Isaacson now is on the Tesla SpaceX merger train. Hmm. There you go. He just did a pod. Everybody's confirmed it. It's going to happen. We called it here first. Okay, topic two is there a SaaS that bomb in private equity. Toma Bravo. We had Orlando Bravo at the fourth all in Summit. Last year is nearing a deal to hand its portfolio company Madalia over to its creditors. This is a

SaaS for customer experience company. TB acquired them in 2021 for 6.4 billion all cash

at the top of the market. As part of the deal, they incur $3 billion in debt. And for background in 2021, this company had $470 million in revenue growing 20% a year earlier this month. Bloomberg reported that TB's debt servicing costs for Madalia were about to triple from 100 million a year to $300 million a year. Blackstone and other firms refused to extend a lifeline to the company to the SaaS company. So it looks like Toma Bravo just handed the keys back

and wiped out $5.1 billion in equity tomorrow through your thoughts. We've been talking about the

“SaaS headwins for a bit. You've been quite vocal about it. Well, first of all, I think Toma Bravo”

is an unbelievably well-run organization. There returns our bonkers and Orlando is really, really, really good investor. So what do I think happened? I suspect that they probably got enough of their equity, if not all of their equity. There's probably a decent chance that they did at least one or two dividend recaps in the last five years. And if I had to guess, I suspect

keys over becomes easier. Because you have to remember, in private equity, the entire playbook

is for transformations of assets that are at some point not working. Right? It's very rarely that they're buying the same kinds of businesses that the four of us would buy, which is just sort of this clean, white sheet, denovo, grow it all costs kind of business. So they have operating partners and all of these other people waiting in the wings to unf*** for situations. That's the whole playbook. So to turn it over, I suspect means that there is a core rot that people couldn't fix

combined with the fact that they have probably gotten enough downside protection that it's not a huge thing for them. Now, this is an issue for the bond holders and then that'll maybe flow through to the borrowing cost that Tomov Bravo has to pay maybe for a subsequent deal. I don't know, but I doubt that they would just walk away from a business. So I suspect they probably got most of their money out. I don't know if that's true. There was someone that published some

internal data showing that the sales team was like 18% of target at Medallia. You guys know what this company does? Medallia. Customer support is the general arena and customer experience. Customer experience

management. I don't know what that means. Yeah, they'll basically send like you go on Caribbean cruise

ships and you get a survey afterwards and then they use that survey data to provide management insights and operational insights to the leadership team and the operating team on how to improve the quality of their product or their service. So it's sort of like this feedback surveying loop. So if I were to tell you guys, hey, you want to build a feedback surveying loop to run your business better.

“Are you going to buy SaaS today? Are you going to ask your AI to spin up an agent for you to do that?”

And I think that's a big part of what's happened is all these sorts of companies where the alternative to buying a SaaS product has to spin something up internally. And it's much cheaper and easier to spin it up internally. You get a custom workflow. I agree with that. I'm just saying in the last five years, you think they sat on their hands and didn't take a dollar out. They're not that dumb. Maybe they took cash out. Maybe they didn't. But there was still a big

debt overhang in the debt. That's clearly gotten impaired. The debt holders, the debt holders are clearly screwed here. Yeah, the question is, don't let Bravo's screwed. And I would say, if you sat around for five years, that's not their style. They generate too much money. They're too good. So they may have taken cash out and covered some of their costs. But the equity got fully impaired. And then the debt is clearly impaired because you can see how the debt and the CLO's are

trading, which indicates that this business is just not doing well. And then someone else on Twitter posted some internal information from Adalia saying the sales team is just not hitting their

“targets. They're like way way off their sales targets, which I think speaks to the underlying problem here.”

Yes. Which is the own piece. Yeah, so the underlying problem is that these businesses in the SaaS space, where you're driven by net new sales every year, how many new customers you're signing up and then you're trying to manage retention and you're trying to increase sell through on routine customers. They're just having a really hard time sourcing new customers and there's probably higher than model detrition. That's right. And when you have a very kind of typically

historically predictable business where you can say, hey, I've got a net revenue retention of 118% or what have you meaning I'm I'm selling into my install base by 18% over what I'm making last year. And then I'm signing up new customers. You can leverage that business, right? You can borrow money against those cash flows because it becomes predictable. And what's happened in the last year in particular is agents have become so good and so fast and so cheap that many enterprises

can simply spin up an alternative to a vertical SaaS solution. And that's crushing the sales teams ability to sell in. That's who you're competing against. Now, I want to make one point just link this with something else that happened this week. And that's Kevin Worsh is hearing for Fed Reserve chair. Kevin Worsh went and talked a lot about the deflationary effect of AI. And I actually think we all talk about the SaaS apocalypse as if it's the sort of like isolated business phenomenon

with the SaaS companies are getting blown up. I think another lens to look at what's going on is the incredible deflation of how much it costs to successfully run a business and you don't have to pay a premium price for SaaS products anymore. Meaning that that piece of the business

“that's really get much cheaper. That's why AI is delivering on its deflationary promise. I'll just”

say one thing about what Worsh said. Worsh spoke a lot about the deflationary evolution promise by AI

and that he expected it will drive productivity growth like we've never seen before. But he said I don't

know what that's going to do to the job market that there may be a dislocation between that productivity growth being realized and how the labor markets are going to be able to respond to those things. But fundamentally, he's saying that we're going to see economic deflation. The problem with economic deflation is that when it occurs, it means some business is seeing the revenue

piece of the economy where it's supposed to always always always grow, like a SaaS company's

top line is always supposed to grow, suddenly that debt gets impaired and that can have an economic ripple effect that is adverse. But what he's pointing out is that as a result of deflation because it's not coming from some cost cutting or economic contraction. What he's saying is that the deflationary forces ultimately lead to economic expansion because other parts of the economy will now grow. So if I can suddenly cut you know, call it 50% of my SaaS budget and I can reinvest that

capital in other ways of growing my business instead of managing my expenses, all of a sudden, my enterprise will grow. And the economy will grow. He also said just doesn't aside and I want to make sure I cover this so that we're really clear. He said the way that we've been measuring inflation is wrong and that he doesn't agree with the way the Fed has been measuring inflation because you can do a survey of any household and they'll tell you my God, everything's so expensive. So all of the

indices and bullshit that are being used to calculate an inflation index is completely misrepresenting what the average American is actually feeling. And so he wants to rethink how the Fed is addressing inflation from an interest rate perspective. But he does think that the overall kind of economic picture is one of deflationary pressure and productivity gains coming out of AI.

“Saxo, oh, drop the stuff to you. I think it's pretty clear what's happening here is that the loss”

Sass's loss is the token dealers gain, right? And startups are now, you know, and we always see

that they're the tip of the spear. They're writing their own tools. They're making their own dashboards. I see that every day. And if you look at the Sass product index, here it is, sells for us down 32 percent in the past six months, shut up to best be betting off. Best guest we've had on sex at the summit. The service now down 54 percent, snowflake down 43 percent, Adobe down 33 percent, Figma, which had a huge IPO pop. And is now down 67 percent. So what is the role of venture capital

and then private equity in addressing the software market? Software was eating the world. Now tokens are eating the Sass business and the software business, yeah? Well, I'm off two minds about this. I'm going to talk about the opportunity for private equity. Let me just say backing up that historically we only had two good exits for software businesses. One was IPO the other was M&A. And then these big private equity shops came along and gave us a third

potential exit, which is you would sell to them. And then they would raise the capital based on, I don't know, one third equity in two thirds debt. So it's debt financed by outs. Which is something that's been around and let's call it the nontek part of the economy for a long time. But was a relatively new entrant into the world of technology. And the reason for that is that if you're going to debt finance a purchase, you need to have very stable cash flows. Because if you miss

if you're cash flows missed and you can't pay your interest on the debt, then you're going to lose all your equity because the debt holders will foreclose. So in order to do a debt financing of any kind, you have to have very predictable cash flows. And it was belief for a long time that software did have those predictable cash flows. At least for the mature businesses, the ones that were at the stage where they could IPO as a potential alternative. So it was a very attractive thing.

Like I said, I think it was great to have that third option. I'm of two minds about where the private equity businesses today, on the one hand, the pricing now has got to be super attractive for them. I mean, we're seeing public SaaS companies that are very big. They're fair. They're free. 20% growth rates, 80% growth margins, and they're trading at three times they are aren't.

“50 cents. So is that an opportunity, Sachs? Do you think it is rock bottom? You should do a roll-up?”

Well, on the one hand, I do think that the pricing has never been more attractive. If you're a

private equity shop looking at a business like that, I mean those companies used to be valued at 13 times they are are now it's three. I'm talking about like a category leader. Now the downside of that is there's nine percent today. I don't know if you guys saw this, but the market's absolutely tanking today after the medallia announcement came up. Right. Okay. So that would be like, you know, I said amount of two minds about it. So I would be bullish for private equity just based on

pricing, but the bearish part is that in order for their business model to work, you have to have predictable cash flows. You can't have a SaaS company go from, I don't know, 120% net dollar attention, one quarter to 80% net dollar attention, six months or a year later, because a big part of their customer basis is a trended to using tokens. Right. Or to basically creating some

“post-books software. You just said the absolute critical thing in all of this, which is you have to”

have predictable cash flows. I think what happens is when you're a startup, you typically have to figure out how to disruptively price to enter the market. So you're like, okay, if I deliver $10 dollars a value, I'm going to charge a dollar. And that's that's the normal playbook, like a 10% ratio,

then you stack growth equity into it, what you're effectively creating in the preference stack of your company is that you are creating a higher return hurdle. Right. You got to clear 300 million,

“500 million, a billion of press. And then you have to return 15 or 20% on top of that.”

So what do people do as they raise more money? They increase price. But the problem is at some point

when you increase price, you engender a ton of competition and you put a huge target on your back. Private equity is the last stop because when they come in and they've layer in billions and billions of dollars of not just equity, but also debt. And that has to then be completely predictable and paid back. They're only leveraged to raise price. They can never cut price to take share. They don't, they can't underwrite that to pay back their debt holders. And so Sachs part of the big problem here

and why nobody wants to touch these companies is that they are overpriced. Yes, they're making a billion dollars of ARR, but the unit cost has gotten out of control. It used to be 10% of value. It's probably now 30% of value. And everybody's looking at their contracts thinking, well, when it comes time to a renewal, I'm going to just cut this in half or I'm going to cut this by two thirds. I'm going to cut this by 75%. Because the value isn't there anymore. Or they can threaten to

and negotiate a better deal. And it becomes even worse because the minute you make these products headless, right? And you say, I'm just going to communicate with these products via MCP and with agents, you can't charge on a perceived basis. What do you do that? Freebird doesn't need 50 seats of you know, work day. He needs two seats because the agents act as the way to write in and out

a work day. So he wants to pay for two seats, not 50. And then if you multiply that by a million

“companies, that's what gets us to this place where it just feels like a falling knife.”

And I think it comes down to these unit costs, the unit costs and the price to value of these products are out of whack with what the market needs and wants. And until they reset that or you find new products that can do a cheaper, we're not going to get a cleansing and a clearing here. Yeah, I think the way sales force today is down 9% 140 billion enterprise value on 15 billion of free cash flow. This thing is trading at less than 10 times free cash flow. It's unbelievable.

I think I may be a bargain to be honest. Yeah. It sounds like bargain. I'm taking what if Benny off was the king of acquisitions. What if he just starts? Well, we don't. And we don't put this on the market, but did you guys see his kind of headless product announcement? Yeah. Did you see this? It's absolutely very, very smart. Yeah. I mean, there's very smart. There's ways that that business can maneuver, right? And I think they're pretty unique. It may

be that of all the businesses in the scape, like the ones that have that scale, that have that multi-product platform, that have a lot of your data. There's a lot of opportunity for them to maneuver their way into an evolution of the first one. And because, like, if you look at it,

“and you compare it, for example, to other companies, I think the work day response was to say,”

you can't have an AI interact with us without paying some kind of like toll. You're exactly right. Or is it any else is exactly exact opposite, which is he's like, okay, we're going to go headless for the whole thing, which is really exactly right. You're exactly right. I think that's that's going to be the distinction of the winners here in the losers. And are you on the wrong side

of this? The problem is that we have to figure out what is the bottom clearing price, and that

has nothing to do with business quality. And so is Salesforce a good buy at 10 times free cash flow? Historical artifacts would tell us a screaming yes. The problem is that if you cut everybody's cash flows off at year five or six or seven, then all of a sudden, I think you see the natural compression to between three and five times free cash flow. And that is nothing to do. That's that's crazy. That is nothing to do with business quality. That just says you literally mathematically take

year seven through end of the future, and you discount it to zero. And having free cash flow in a war chest gives massive optionality. We've seen this with Salesforce. We've seen it with Apple. We've seen it with meta with Google, with Uber, just having massive free cash flow. And you've got tens of billions of dollars, you can put it to work, and you can weather these items. Jake, I think another way to think about this is to the question about maneuverability,

and who has the gumption to make the hard choices right now? Look at Benny off. He's the founder of the company. He's run this thing since it's sounding decades ago. He is willing to bet at all. He's willing to make the change. And it may be that the index you buy in this era of AI transformation is the index of founders, that the founders who are still running their businesses are going to be the ones who are most likely to see them burn the boats. They'll burn the boats. They'll burn the

boats. They'll burn the boats. They'll burn the boats. They can call it all of the guys who have

which is trying charge fees and trying maintain the old way of doing things as opposed to reinvent for the new future. If you look at the 10 case, if we could figure out what the unit price costs and the trend and the inflation is of a per seat license for these products, I will point to the ones that are going to die first. Can I make two quick points? Yeah, wrap us up. Yeah, one is yes. I would like fully endorse what you said about Benny off. He's made every

previous wave work to his benefit, whether it was social, whether it was mobile, whether it was big data, all that kind of stuff. What are the odds he's going to make AI work to his benefit? I'd say pretty good. So his stock might be a bargain right now. So that'd just be point number one.

“Just on I want to say just a quick thing about venture debt, which is, I look, I think it's”

fine when private equity guys use it because they know what they're doing, but I've always hated

when founders take on venture debt. I know Jake, how you agree with me. Part of it is that founders forget that they have to pay it back. They treated it like venture capital and they forget about that. And then they get surprised. But the other thing I've never liked about it is it makes you more fragile. It basically subjects you to a bunch of business covenants. And it makes it harder for you to do an abrupt shift in your business because now you've got a bank looking over your shoulder and

they want to make sure they get paid. And they have to review your financials and all the rest of it. And to your point, Jake, how the companies that have free cash flow right now are the ones again of the most maneuverability. I hate taking away maneuverability from founders. And that is what

debt does because it's a subject to you to a fixed schedule of payments. And so this is always

to think to remember whether you're a business or you're an individual. When you put on that debt, it makes you more vulnerable to big disruptions in the market. Yeah, it's just you become incredibly brittle and founders who are listening. When you get that in peak markets, peaks are you're going to have venture debt people offer you tons of cash. And then the problem Dave and I saw up close in personal many different companies where defenders would look at it as

economic spending my runway. Well, if you're a hot start up, there's always more venture capitalist, always more people who want to own equity. The equity sale gives you optionality. And you have more people on your team, more people rooting for you and aligned with equity interests. As opposed to now you have a debt instrument, they have a different goal. They have different downside they're trying. No bank wants to be your last three to six months of runway. Because that

means that in a high percent of cases, they're going to lose their money. Yeah. So they're built to try to believe that. I've never seen venture debt work well to improve the quality of a business. Not only only only ever seen venture debt, 100%. That damage companies. And if you get the

venture debt, you can never actually use it. So the venture debt investor is that ultimately make money.

It's because they put money in a company and the company never actually used the money they gave them.

“I hate this business. I think venture debt is like the worst vulture like business in Silicon Valley.”

It's terrible. If you get down, if the last money in the bank is the debt you owe to the bank, they're going to run you. That's when you get rugs. 100%. You think they can afford to lose a 100% of their money when they're getting an 8% return or something like that? No way. That's not how it works. VCs can afford that because we have the opportunity for a 10x or 100x or 1000x for that moon shot. So we can accept a bunch of zeroes. The bank can

accept a bunch of zeroes. Well, and then when they when they do get scared and when they do think they're going to lose their money, what do you see, what they extract in terms of value, what they ask for. They will ask, they'll double the interest rate, the last for warrants. It's basically like being in debt in prison. Chamathi can talk a little bit about your experience when you were in debt in prison. It's not going to be pleasant. I've been in debt. I mean, I've had

a $420 million credit line. And I had a moment where it was reflexively kind of collapsing inward because the assets that I was using to secure it shrank in value in a moment of market disruption. I was scrambling. And then at the same time, there was a risk. It was the worst moment of my professional working life. I had like a couple hundred million dollars sitting at credit suites and they were about to implode. And so on a weekend, I was trying to figure out whether

my money was still there. I had always had this rule. Don't have debt. And then I violated it to try to run the number up. I almost got run over. I almost lost everything. I will never do it again. And if I ever do it again, if you guys ever hear me do it again, please just come and punch me in the face. We will. We've been waiting for an excuse. Can we put you in the face for other things, too?

“Both of us have this line about. Yeah. That's how smart guys go bankrupt is. They take on debt.”

debt equals prison bitch. Keep it in your mind guys. You will be. Unless you socialize the debt, then then everyone thinks it's okay, which is what we do with governments and that's what we're going to start

In the 1950s, all the corporations in America had pension plans, where you would get some guaranteed

“payout at the end when you retire. And they were all like, we're all going to go bankrupt,”

because a pension plan is either significantly overfunded or underfunded. If it's underfunded, you're bankrupt. If it's overfunded, you've wasted all this money. You can't do anything with it. So, they all moved to 401(k)s and everything got moved to define contribution plans, except governments. And that's because the government employees bought public employee unions. And they're like, we want to keep the pension plans. And now the pension plans, it turns out,

70 years later are going to bankrupt all the governments in the United States. That's the answer. By the way, our expense are Pratt, who's running for mayor. He started uncovering all of the salaries of the union folks and their pensions in Southern California. It's bakers. They're making $4,500,000 a year right before they go on pension. Then they double their overtime and they get two durs or half. The pension doesn't work.

You got to go super-annutation fund. I don't know how many times we've talked about it here. But you don't need a station fund. You just need a 401(k). Let's sure. We'll have an account. They got their money in their account. Yeah, but it's just a way to force people to contribute to it. So a forced 401(k) is different than a 401(k). You got a forced people and you're not allowed to force people into the 401(k).

I know. As we've seen in California, everything related to the government is a giant griff. It's a giant scam. There's tons of fraud going on. We've talked about the homeless industrial

complex 12 billion a year at a homeless nest, but the number of homeless keeps going up.

There's a million examples like that. The racism industrial complex? Yeah, let's shift to SPLC because I think it's a good example. Well, we'll get to. We'll get to it. Yeah, but it's even better. You can just pass a law like the Nick Shirley Act and you can put your fingers in your cover your eyes and say la la la la la and just pretend the fraud's not happening, which is their reaction in California.

Hey, how much fraud is Nick Shirley uncovered so far? And Kelly has a billion. He should be a billionaires. Yes, he should be a billionaires. You know, he should be doing it privately and then getting the whistleblower awards. I think that actually would be a better strategy for him.

“We told him that was, uh, we told him that this is mild, remember? Yeah, no, he, I think it's a”

dickity to the views, but I mean, he could literally raise money on his making concept. He's making thousands when he could be making billions to pre-pure. No. Well, but it's better, it's better for the public that he's doing what he's doing. Thank God for Nick Shirley. So I think he initially, whether you could be making more money or not what you're doing is not what he also did. He shamed the mainstream media, who's forgotten about

investigative journalism, who forgot the ability to knock on a door and just ask a basic question and now Barry Weiss would CBS has deputized one of her reporters and she's doing the exact same playbook and meeting him punch for punch. We're CNN. Anderson Cooper should have an Nick Shirley on his team. Can New York Times should have a Nick Shirley. The LA Times should have a Nick Shirley. Why don't they? That's your talk. You're talking about old media that does things

one way and the point about Nick Shirley is that's new media. It's citizen journalism. It's people on the street distributing, fact-finding, distributing information gathering and old media in order to survive became an opinion on it. It didn't the media used to care that the Pentagon was paying $900 for a hammer or what have you. Yeah. Like 60 minutes used to do things. Now it's like the

“media just wants to protect the ways from abuse no matter how it reaches it is. Remember that guy”

Dennis Kuzlowski, the CEO of Tyco who went to jail and they had it just the field of brothers. I'm Brella Stan. The six thousand dollar I'm Brella. I'm free from like, I know you bought that. I know you bought that. I know you didn't change your box. It's actually so right. People really used to care except when it was their team. And then the minute that it was their team, they're like, "I don't know, let's just look the other way." It was your right. If it's a CEO, if a CEO basically engages

some misbehavior and I'm not defending it. The press will be all over that. All over. When the government does it, they don't do any free pass. In fact, we had one of the most successful probably the most successful entrepreneur of our generation donating as time to the government to find waste. And the media basically drove them out. They vilified them and drove them out. They made it untenable. Well, this is whoever comes up with a way to eliminate waste

for our interviews. Light-dosed it and they productize that and make them make that their platform. That's the way to win in 2021 and going forward is to convince the public that they don't need to have their taxes raised. They can have their taxes reduced just by eliminating the minimum

of 20 or 30 percent of waste for our interviews. There is in the system. We'll get to Tim Cook

stepping down in just a moment. But I want to remind everybody, liquidity sold out. I'm sorry. We added a couple of tickets. We burned through them immediately. But you can still get into the all-insummit. This is our fifth edition in Los Angeles in 2015. All in dot com slash events to apply. Please apply

buy your damn ticket and don't get left out. I have a liquidity announcement. Oh, yeah. We are going to do one political panel. Okay. And it's going to be Dave McCormick and John Fetterman, the two sitting senators from Pennsylvania on stage with us talking about all topics from a left and right

perspective. Amazing. So Fetterman's coming, which means the dress code is now sandals,

shorts and construction sheet. Yeah, construction sheet. Get your timber ones back. I mean, is he really going to show up looking like a hobo? I love his hobo style. It's great.

“McCormick's very fit and handsome. So like he, he'll kill balance amounts. We should that's what”

we should program it as like he should wear his best re-only suit versus the old baby for better men who are at better. All right, listen, just rapid fire here on the Tim Cook resignation and moving on this guy, John Ternis is a 25-year vet. He did lots of hard work on iPad, AirPods, and he was the favorite on Pauling Market since day one. He's a bold decision maker, according to reports and unlike Tim Cook, Cook, Tim Cook did a great job of squeezing

every last nickel out of Steve Jobs's product line, which lasted for a decade. iPhone, Apple TV, watch it on YouTube, repeat them. But here we are, we got a product person in the seat, which is what we all know they needed. Because hey, these tools are getting a little bit stale. Serious, discratch the odd, AirPods, discratch the odd. The whole system is not built on innovation

“anymore. It's built freeberg. I think you would agree on just bringing more profits, more profits.”

What's your hope here? Because man, they miss so many great swings at that. They didn't get the Oculus, Ray Bans, that Meta did, they canceled their self-driving car. What would you hope that this new CEO of Apple focuses on freeberg in terms of innovation? They don't have a problem cell in phones. They don't have a problem cell in laptops and making a ton of money. But if you were in the seat, if you were on the board of Apple, which wouldn't be a bad idea

for them if I'm being honest, what would you tell the new CEO to focus on David Freeper? I mean, I don't know. The software layer of the future is not the software layer of the past. So it's pretty obvious. I don't know how much there it's to talk about, but you just need the Siri equivalent that ubiquitous in all of your devices, knows who you are, personalized to you,

“seize your email, seize your calendar entries, knows what kind of music you like, has connection to”

your home, basically build that AI layer for your life and make it ubiquitous in all of your

Apple devices, that no matter what device you're using, it knows who you are, you can engage with it, using kind of a natural language method, and it's, you know, it's pretty obvious. Yeah. They should buy whisper flow. I mean, I don't know how they're running the business, but... Well, they're running it for profits, obviously, SACs. I would say buy whisper flow and just replace the Siri team with that because Siri's been just the fact that Siri can't

spell polyhopeteer or calicanus after 20 years of us giving them 20,000 dollars for iPhones as disgraceful. SACs, if you were on the board of Apple, again, not a bad idea, what would be your hope for the company would be your sage advice for the new CEO? Well, I mean, everybody is going to be asking the same question, which is what you're going to do about AI. I don't know that they need it to be on the bleeding edge of it, but they are going to need an answer at some point,

and Siri can need to be AI empowered. Probably the way it should work is that you get to choose your model. I mean, I don't know that they need to pick just one model provider. It could be a setting where you go in and you set up your account with whatever touching PT or grok or claw to what have you, and you can choose your model provider, and then you'll have more customization and more ability to control your storage. Let me just say, just on Tim Cook's retirement, he had an incredible

run as CEO of Apple. I mean, he ran it very effectively for 15 years, the market cap of the company went up by over 10x, the revenue grew from roughly 100 billion a year to over 400 billion a year. He also improved the quality of revenue by moving the mix into services. Yeah, that's probably why

you got, well, I got a higher valuation. And, you know, people say that, well, they never did an

innovation under Tim Cook, but, you know, I've seen people tweet lists of products that were least under him, and there were a lot of them. Now, it's true. Nothing is big as the iPhone, but they did release a lot of products under Tim Cook. And then, just finally, I mean, you look back over the last 15 years, and there really weren't any public snuffers or scandals or broglios with Apple. It's one of the few tech brands that is still, I think, beloved by the population. I think a major part of that was

users do appreciate. And, you know, he even, Tim Cook even got praised from the president. I

think it was unsolicited where the president talked about how Tim Cook didn't call him up that often, but when he did, it was something important, and therefore the president tried to help them out. Seems like he nurtured a good relationship with the president over the last decade or so. So you just have to say that he navigated what could have been a turbulent period with a great deal of grace and a plom. Clearly, Chemoth, he was a great steward of the brand, even though

that list of products were all developed under Steve Jobs, and they were just executed well, but he didn't bring in a lot of new products or services, any final take. Actually, kindly ask your question. What do you think other than AI, you know, AI-powered Siri, let's say? What do you think he missed? Yeah, clearly. What should Apple have done that they didn't do? They would have out by now a pair of glasses that weren't 17 pounds like the

Apple Vision Pro. They would have gotten glasses that pair perfectly with your phone, take videos, for kids, and they're coming out with it. It's just on a really broken timeline. They would have had a killer Siri. They would have had a search engine,ish, perplexity like product. They would have had a self-driving car. When you went to the Apple store, you would have been buying two or three very important products, glasses, a car, and probably a television set. If you

“look at actually what they did innovative under Jim Cook, I think that they have great taste and”

Apple TV produce a lot of great programming. He was working on a television set, not Apple TV clunked onto the back. I think those three products would have been four products. Siri, glasses, car, television set. Those would have been extraordinary. Who knows what he would have come up with when they lost Johnny Ive and obviously Steve Jobs passed away. They lost the soul of the company. They lost the innovative ground-breaking soul of the company, and they just

went into profit and iteration mode. But no acquisitions of note, nothing important was acquired, and nothing important was released. Vision Pro. You can give them like maybe that's like the sixth best product or something. But it obviously hasn't hit the mainstream. Trim off any final

thoughts for me. Yeah, I have three specific things to say. The first is that he had

“honestly like an impossible job. It's sort of like you play basketball with Michael Jordan,”

and then you're asked to be Michael Jordan. And I think that that's an impossible task. And on that dimension, I think he has done just an incredible job. He has been an incredible steward of the business. Sox is right. No major staffers. I think he did a really smart thing around doubling down on privacy. And just as a practical matter of being a great CEO, like if you, I think you can categorize CEOs and two buckets. One is the innovator, the person that's pushing the envelope.

And then the second is just a great steward. He's at the top of the top of that second category. I sent you a couple of charts to show this. And he found the lane that allowed him to separate himself from Steve Jobs. So, you know, as an example, like what does it mean to be a steward? Well,

when you're a steward, you're allocating resources. And the two most important resources you control

“is capital. And people. And I think on that dimension, what Tim did, if you just look at this,”

is he was able to invest appropriately in R&D. They completely divested their need of Intel. They spun their entire new line of silicon that silicon it turns out. And this will be important in the future is very useful in AI with all of this open cost off. And, you know, some of you guys are completely addicted to it. And they've kept the acquisitions light. So, he was very capital efficient. If you look at the, the next chart, what's so interesting is like,

it is the exact opposite of what Steve Jobs did. Look at the amount of money that Steve Jobs returned to shareholders in this tank for an apple. It's easy to count. It was zero. He loved to keep that money on the balance sheet. And he probably, or maybe I'm guessing, would have directed that at some huge shot on goal. In the Tim Cook era, it was very different. He shrank the share count by almost 50%. I think it's like 44%. So, he's saying is there he was, he was, he was, he was,

did that to him? No, he's, he's been a prolific shareholder friendly CEO finding ways to give us money back, which I think everyone who's own the stock has very deeply appreciated. The last thing I'll say though is what is the future for John Ternus? And I think it's in this final chart. We talked about the problematic nature of increasing per unit pricing and SaaS. And what I would say is if you look at the iPhone,

is what Freebrook says is going to happen. AI rips open the canvas of the devices that we will use to interact with information and knowledge. We are going to live in a much more heterogeneous world in the future. It's not going to be two devices and two different operating systems that get you to knowledge. There's going to be all kinds of stuff, hands, orbs, who knows Jason, your glass is whatever.

And so the problem is if you get too addicted to a single thing that has an incredibly juicy profit margin and

“great stickiness and the ability to raise price, it's a hard drug to get off of. So I think really what John Ternus has to do”

is figure out how to move to this world where everybody will be launching umteen devices, via MCP or otherwise, all of these services will be open. It'll be a gently talking to everything. I think the modes decay. And I think if that happens, that's problematic. If you're too reliant on a single thing to kind of keep it going. Yeah, and just expanding on what you said, like whereabouts is where they really made some good inroads and terms of getting people to use them, whether it's AirPods or the watch. And the next variable like this is a plot pin that I used to record.

You can put it here, put it on your wrist. That AI synchronicity of having your eyes, having your ears,

having your watch, having your phone, your desktop, all sing together with AI could be a huge product line. I'll also add a fifth robotics. You know, I think to I think Steve Jobs, if you were alive today, would have been looking at Rumba, he would have been looking at Optimus, and he would have said,

“hmm, consumer robotics in addition to a consumer car, those are two things I think he would have”

absolutely executed on at a high level. Okay, let's keep moving here. Just come right, we love to have you on the pod, John. So just come on the pod when you're ready. We'll have you come sit in. Good. It's actually get the final word. This one last point on this is that I think the succession at Apple is reminiscent a little bit of the succession at Disney. And apparently Steve Jobs and Tim Cook had this conversation back when Steve was alive and Steve told Tim,

"Don't do what Disney did, where basically after Walt Disney died, the company kind of languished

because it felt so beholden to Walt's vision that they never really iterated." Now, when Walt

died, his brother Roy took over and Roy was ready in the business. He was sort of like the business co-founder. He was a COO type, a little bit like Tim Cook. And he kept the magic going for about five years and then he himself died. The things around 1971. And then you had this string of CEOs who took over kind of uninspired and it wasn't until Eisner came in in 1984 that he sort of revitalized the business. And so as I understand it, Steve and Tim had this conversation.

And Steve told him, "Don't be too beholden to my vision. You need to figure out your own and extend it." I think that you could argue that Tim in a way was like the Roy figure here, very effective business partner of Steve. He got a 15-year run, Roy only got five. And I think, again, he added a zero to the value of the company market gap when up over 10X. So you have to say fantastically, successful run as CEO. I think the question now for John Turner says, "Okay,

you're now passed. Let's say the Walt Disney and Roy Disney part of the business. Is it going to be like the 1970s? Disney or is it going to be more like the 1980s? Do you figure out

“way to revitalize it or do you have to go through a funk first?" Yeah, I think it's a really”

illustrative of this discussion, Eisner and Iger. Because Eisner's innovation was he realized that Disney was, I think he called it the Walt strategy. He would, and we probably remember this from our childhoods, he would re-release all into theaters, all of their IP every seven years. You couldn't get some of those bambies, whatever, Snow White and the seven dwarfs. You couldn't get those products except in theaters and he figured out a cadence to keep publishing. But then

Iger came in and said, "Hey, what if we use this balance sheet and we use this distribution at the parks with their brand to buy Pixar, Marvel, and Star Wars?" And so there's multiple ways to do it. There might be something there in terms of acquisitions, bold acquisitions, with the Apple balance sheet, could be super-acreda to shareholders as opposed to lowering the share count and just distributing a ton of cash. All right, listen, we're going to talk about the Southern

SPLC managed to accumulate $822 million in offshore bank accounts. Yeah, this is incredible. These

“are big numbers. Okay, SPLC, how is that possible? What is going on? All right, let me tee it up here”

for the team. It's like one of the biggest griffs of all time. Anyway, this is a big one. SPLC has been indicted and died it, not found guilty yet on 11 counts of wire fraud and money laundering. Keep that in the back of your head wire fraud and money laundering. Here's the core allegation between 2014 and 2023. The Southern poverty law center used hidden bank accounts to funnel $3 million in donor money to paid informants. Like these are confidential informants.

Like the police or FBI might use, they use these as a nonprofit NGO to infiltrate hate groups. And so the official mission of the SPLC is, quote, to be a catalyst for racial justice in the south and beyond working in partnership with communities to dismantle white supremacy, strengthen intersectional movements and advance the human rights of all people. Okay, sounds great on paper. Examples of organizations they were trying to infiltrate KKK or

a nation, you're Nazi groups and the United the right organizers, proud boys labeled as a hate group by the SPLC. Both keepers not listed as a hate group, but part of the militia movement my friend Sam Harris, he was not listed as a hate group, but he was also penned by the SPLC as like hate adjacent in their hate watch headlines. And this is something that I had a major problem with this organization on, which is they would just very loosely label people as hate speech

and try to get them canceled. All of this kind of came to a head, the revenue before Charlottes

“will you remember the incorrectly flipped Charlottesville hoax where they said Trump said bolts”

good people on both sides, but they didn't give his full quote, very unfair to President Trump. We found out later, and that was the reason Biden, of course, ran. He said the Charlottesville

both sides thing was his inspiration. 58 million in 2026 to your point. Chama doubled and spike to

136 million more than double and it's remained elevated ever since. Here's some, you know, images for the indictment. And I'll wrap on this and then get everybody's feedback. They had F-37 as one of their confidential informants. He was a member and this is according to the indictment, quote, member of the online leadership chat group that plan the 2017 United the right event in Charlottesville, Virginia, and attended the event at the direction of the SPLC. F-37 made racist

postings under the supervision of the SPLC and helped coordinate transportation to the event for several attendees between 2015 and 2023. The SPLC secretly paid F-37 more than $270,000. That's the legal case here. Let me pause there. Can I add one thing? Sure, keep it up. So there's a lot of detail to this case. Yeah, so you're right that the SPLC allegedly did fund $270,000 to help plan

Charlottesville. In addition to that, they secretly funneled more than $3 million to a bunch of violent

racist extremist groups, including the Klu Klux Klan, the American Nazi Party, Area Nation,

“United Clans of America, and it goes on from there. So I think don't think about the 3 million”

bucks. So this group that was supposed to be fighting racism, in fact, was fermenting racism by paying these groups to basically organize protests that SPLC could then point to and say that America has used racism problem donate to us. And that's basically what happened after Charlottesville. They increase the amount of money that they were able to fund raise by $81 million. So that $270,000 investment led to an $81 million return pretty good. But this is kind of the whole point of the

story is that these guys were basically running a graph. And one of the ways that you know this is a graphed is because according to the indictment that they opened bank accounts under fictitious entities to conceal the payments that they were making from their own donors. Because if they're donors new, that they were funding the KKK, they wouldn't be getting all these contributions from Hollywood celebrities and all the rest of it. So it's really just this unbelievable story.

I had really boggles the mind. And just to clean up a little bit there, these are allegations. They haven't made the jump from planning these events and the SPLC claims they were not planning these things. They were monitoring. So that's going to be their argument on this side. I'm not saying I agree with that. You're right that the SPLC's cover story is that they were simply paying informants. That's what they've claimed. But there's two problems with that story. Number one is

groups. And second, these leaders, they weren't paid to inform. They were paid to ferment the activities.

“So I'm just saying that's the flaw. I understand they have this cover story that they were just”

paying informants. I'm just saying I might view that is not hold up. And again, if they were just paying informants, why the extraordinary efforts to conceal the payments from their own donors, if they were proud of these efforts to infiltrate these groups, they should have basically informed their donors what they were doing without they hid it. And well, here's the reason that it was hidden according to them. Again, I'm not taking this side. SPLC is not an organization.

I'm endorsing in any way. Their version of this is we didn't plan any of this. If we put SPLC bank accounts together for informants, that would be like the FBI sending a check to an informant from an FBI account. That's their explanation of that. They're not a law enforcement agency. Well, that's actually the question I had about all this is like, what is a nonprofit doing hiring confidential informants to infiltrate these organizations to what end. And then if you show

me an incentive, you're going to see an outcome. And the outcome here is, hey, we'll get more donations. If there's more racism, you're though it's just generally speaking here. Trimoth. Again, all of this is alleged. These NGOs have completely run a buck. They're caused playing as these overlords and power brokers in our lives. And it needs to get stopped. They should all be dismantled. The people that donated to the SPLC should sue them. RIP open all of the documentation. Get their

money back. Because just so you guys know, if you are listening or watching and you have donated,

there's $822 million for your money sitting in an offshore bank account waiting for you to

get it back. Okay. And then separately, if you are thinking of donating to any of these organizations in the future, unless there is a full transparent auditing of it, you actually may be doing the opposite of what you thought. If you are against racism, you may be supporting racism. If you are against discrimination for gays, this could be actually promoting discrimination for gays. If you are supportive of trans rights, this may be pushing back against trans rights. Because the playbook seems to be

do the opposite to create the narrative, give it to your friends in the media who will look the other way and just amplify it, tell the lie, create the craziness, and then raise a bunch of money, make a bunch of stink and try to curate power. Freyberg, you think this is in your estimation or your gut, tell you this is arsonous firefighters, they're lighting things on fire so that they can go put it out. Or do you think this is like a law fair as some people are claiming because there

hasn't been to Trimots point, they don't have donors taking this action, they're being accused of wire fraud on behalf of donors who haven't shown up yet to do a legal action, what you're taking on all of this freedom. The IRS definition of what a 501c3 nonprofit organization is meant to be doing is to engage in exempt activities. The definition of exempt activities is charitable, religious, educational, scientific, literacy, public safety, or fostering amateur, sports competition,

or preventing cruelty to children or animals. You tell me how the f**k, 90% of what we call nonprofits today fall under that definition. We have completely f**ked our eyes to the fact that organizations, regardless of political affiliation, social interest, have fundamental commercial and probably not aligned interests with the definition of a 501c3 and we've allowed them all to get away with it for far too long. I don't think that this is a blue or red thing.

“I think that this is a thing where we let these organizations make it easy to get money,”

to hide the money, and to do whatever the hell they want with the money. And we need to stop it.

And I think that it's an amazing opportunity right now for everyone to kind of reset the decks

by cleaning all this sh** up and getting all of these organizations flushed and make sure that any organization that wants to do whatever bullsh** and affairs things they want to do by all means do it. But it's not a non-profit and you shouldn't get a charitable donation deduction and the government should not be putting money into these sorts of things. This is an entirely different sort of activity in the social order. And as a libertarian, I'm all for it. But I don't think

that they should be tax exempt and I don't think they should be getting government money. And I don't think that individual should be benefiting from giving them money.

“And if we could fix all that shit up, I think a lot of these problems are going to go away.”

And I think this is a major problem. I think the theme of this episode is audit everything, whether it's government waste and abuse, or it's these NGOs, or it's people like Dow making these chemicals that 30 years later, perhaps are correlated with cancer.

Red, this is not red versus blue. It's green. This is clearly a monetary incentive and it

is incredibly disruptive for society to not know the truth about what's going on with race in this country. I got absolutely, you guys may not know this, but this is part of the cancel culture moment in time where they tried to take people having reasonable discussions about race in this country and tried to cancel them. They tried to do this to me in 2014. Very famously, you guys may not know this, but I have won a couple of awards in my career. Most offensive tweet ever by

“vice in 2014 was my alleged racist tweet where I said, hey, if you want to get into blogging in journalist,”

there's no racism in check journalism. All you have to do is publish for a couple of years, a blog post, nobody could stop you and there'll be a ton of jobs available to you. And then what they do is they tried to cancel me and tried to cancel all my media properties, my investing. And this stuff had like a modest impact on me maybe for a year and then now it's obviously all being bored. I'm not sure I understand, Jake, how you're saying the SPLC put you on a cancellation list?

No, they put Sam Harris on it. Vice put me on a cancellation list. I didn't get picked up on the SPLC, but I experienced the same thing, which was they said because I said, you know, race does, race doesn't play a role in hiring. You're so careful about your virtues signaling. I'm just shocked that I won't try to cancel you. Well, that's what's shocking about it is like, I know, I'm just very clear. I said, in journalism, like a very vertical thing, you and I have a lot of experience.

Very skilled virtue signals. So, I mean, they tried to cancel me guys. I don't, you know, it's they tried to cancel you to. You have a question from me. I'm un-cancelable. Yes, because I don't give a heart. That's what we found out through while this is going to

you care about all these idiots think. No, I never have. Jason, I have a question for you.

Go ahead. What percentage odds now do you keep in the back of your mind that your petite little lustiest human rights watch is actually creating human rights abuses to try to this is actually a very good point. You know, a lot of the human rights organizations from back in the day, what is the organization that you're, what does it call? Amnesty International. When I worked at Amnesty International, a very fine mandate. The mandate was human rights abuses as described

in the universal declaration of human rights created by Eleanor Roosevelt and the, this is like science corner, and if this is done, science. No, but it was torture. It was people being put in jail and

“being tortured. It was people being censored because of freedom of speech. And that's what I”

worked on when I was at Amnesty International. These groups went a drift. In order to get money, human rights watch included and then they started taking on things like, you know, transgender rights, this rights, that rights. And censoring people, they went after Sam Harris because he had >> You have an answer from us. >> Well, stop with all this bullsh*t.

>> I'm asking for a 50 chance that all these organizations are involved in this. >> So you think 50 50 50 chance. >> Depending on the organization. >> And we shall see I'm going to guess 95%. >> Yeah.

>> And the international you think is 50 50 that they're engaging in the fairies bullsh*t to try to whip up people's belief that they're human rights abuses happening that are not happening. You're saying it's a quite flu. >> I think it's probably a point. >> Yeah.

“>> That's what I would say today because these organizations all got co-opted.”

S.P.L.C. might have had a great origin story, but now I admire your intellectual honesty and I appreciate what I'm saying that. >> Well, I mean, just based on facts, so let's see what this legal case brings about. >> Well, let's clear. >> This is not, let's be investigating S.P.L.C. >> 100%.

>> When you bring a grand jury indictment, you've already previewed the evidence. This is not like some guys trying to whip up law fair. >> Okay. >> Actually, you don't have to bring all the evidence, but that's a side thing. >> And they're very frisky about allowing you to indict somebody as we've experienced with Trump.

>> Grandjuries are a whole different animal. >> Yeah. >> They will indict a ham sandwich as the line. So we'll see.

Let's give them their day in court as always my position.

>> Well, I mean, regardless of what happens in court, if it's true that the S.P.L.C. is funding the Coup-Clicks game, and there's a lot of money. >> Here's the systemic problem with nonprofits and NGOs, and let me just contrast it with business. In business, you set up a company, the company has to make revenue, has to make profits. And if it doesn't, it's going to go out of business, right?

Because it'll lose money. So there's a feedback mechanism from the market. The company has to create products that people are willing to buy, and those products have to make money. With an NGO, non-profit would have you. They raise money, they don't sell things, they fundraise from donors in order to engage in activity.

But what happens over time is the actual activities may stop mattering, and all that really matters is they're able to keep fundraising, right? Because they're just trying to figure out a justification to keep going back to donors, to get more and more money out of them.

>> And then if it's your job, exactly. And then if it's an NGO that gets money from the government, then it's even worse because all they do from that point forward is try to lobby the government to get more money. And it doesn't really matter whether the program is working or not, all that matters is whether they can spin it as working. >> Why wouldn't the Southern Poverty Law Center focus on Southern Poverty, which is an issue that actually still exists.

“>> You have to be a further thing. And why do you call it one thing, focus on racism, and then all of a sudden whip up.”

>> I'll tell you why this is my theory, here's my theory on it is I do think that at one time in this country civil rights was a noble cause, a very legitimate. >> Of course it was of course we had the legacy of segregation in Jim Crow, and there were groups that were set up to basically change that. And they succeeded, but again, no one in an NGO or a non-profit. >> One, two, and it's victory.

>> They're never going to say you know what, like we addressed this problem, we solved it.

You know, I always saw that in 2008, but I don't mean fire me, my job's done. >> Yeah, well when Obama got elected in 2008, I thought that regardless of whether you liked Obama or not agree with his politics. I thought that at that point, most people could see that this was not a racist country, but whatever else you could say, the fact that the highest office in the land was not denied to anybody showed that this country was not holding people back based on their skin color. And instead of just basically packing up shop and saying, okay, we've achieved our goal, the goal post all got moved.

Remember, that's when the whole anti-racism thing started was around Obama's second term. And what anti-racism was, it said that it's not good enough not to be just not to be racist. You actually had to be anti-racists, but what anti-racism meant was, was basically that all the distributions had to match the population. Basically, it meant a quality of outcomes, not a quality of opportunity. So effectively, this whole goal post was moved from a quality of opportunity to a variety of results.

“>> Once you see it, you can't done see it, it's like they sat around and they said, now what?”

And what person was like, I got an idea. >> Well, and big racism again. >> All right, but if they just said, if they just said at that time, you know what? We're going to move the goal post from a quality of opportunity to a quality of results.

We're going to basically make everyone equal at the finish line, which is to say, I guess communism or some sort of identity socialism.

People would have said, and no, we're not on board for that. So instead, they created this whole new terminology to justify it. And it's taken us years to unpack that and realize what's really going on. >> Gosh, I don't want to put myself in a position of defense. >> Yeah, I'll see. They were partners with the FBI for a long time to your point, Shemoth, or Sax's point, rather.

>> There was probably a time when it was important to infiltrate the KKK and the Nazi groups.

“>> It's not in 2025, it's not in 2026, like I think that's necessary to be doing this work.”

>> It's not in 2026. >> It's not in 2026. >> It can handle it in 20. >> Okay, I'm going to give you guys a new slash. I just got this just hit the wire, this is really important. >> Breaking news here.

And here I got is profoundly less racist than you think. >> Okay. >> Okay, breaking news. Wake up, Friedberg wanted to do a surprise science winner. This is the first. We don't know what he's about to talk about, but David looks like he's been working really hard.

He needs an app so. Friedberg, you have the microphone. >> That's good. >> This was a surprise science, yeah. >> This is not necessarily a big surprise, but there was a really interesting paper published this week.

I'm trying to elucidate the underlying cause or predictor of colorectal cancer. So I don't know if you guys know any young friends, but colorectal cancer, Nick, if you could just pull up this first image or colon cancer, has become now the third leading cancer over the last 20 years or so. There's been a scary rise in the number of young people, people generally under 50 years old

that are getting colon cancer. That number is climbed by over 80% in just the last two decades. Historically, it's been an age related disease. So as you get older, over 70 years old, your probability of getting colon cancer shoots through the roof, but this rise in young people getting colon cancer has been pretty alarming. And there's been a real question mark on what is causing it, what's the underlying trigger.

So this research team out of Barcelona in Spain did an amazing study where they looked at the

difference in the epigenome or the gene expression in tumor cells of patients that are under 50 years old and those that are over 70 years old, the sort of data will show you what different environmental triggers are associated with those changes in gene expression. So whenever we're exposed to something in the environment, whether it's some food or some

to that chemistry or exposed to that environmental trigger have genes that get switched on and off.

“And you can see which genes are on and off by looking at the RNA of those genes, which tells”

you that those genes are expressing RNA to make protein or not make protein. And you can look at that gene expression to determine what is changing when a cell is exposed to a particular environmental trigger. And so they were able to get these samples of colon adenocarcinomas from the cancer genome atlas, which is funded by the federal government. And they were then able to take a look at these cancer cells from colon cancer in patients that are

under 50 and patients that are over 70 and look at the difference in the gene expression profile and what environmental triggers are associated with that gene expression profile.

So that will tell you, hey, these environmental triggers are more likely the cause

or an underlying driver of the risk of getting this colon cancer. And one thing rose to the top. So they looked at a whole bunch of things. They look at lifestyle factors. They look at eating, index, how much you ate, how overweight you were, alcohol, birth weight. They adjusted for gender. They adjusted for all these different things. And as you look down this list, you'll see this is the difference between people that got colon cancer that were over 70.

When you typically have a very high chance of getting it. And people that are under 50 when you don't. And what is going on with people under 50? And you can see there's this one row here. That's all orange. That row is a pesticide called piclorum. Piclorum is a pesticide that was developed by the Dow Chemical Company in 1963. This is the chemical formula for that pesticide. It's related to oxen, which are these hormones that plants make. And in the 1960s,

there was this big rush to try and make synthetic plant hormones that you would then apply to a plant. It would cause the plant to overgrow and the plant would quickly die. And piclorum became a very widely used herbicide in our environment. It's used to manage weeds in range land and pasture land where cattle graze. It's used to control weeds near roads and near railroads on industrial sites to clear weeds away from highways and utility corridors. And the problem with piclorum,

one of the things that's been known about it is it's very persistent. It doesn't buy it to grade very well. Piclorum sticks around for well over a year. It stays in the water. It moves into groundwater. And it's persistently in the environment after it's been used for some period of time. I went back and looked at the EPA data on this chemical. The last time there was an EPA safety study done was in 1995. And so this was before we had this capacity

to do epigenomic studies like what was just done to elucidate that even though a chemical might not be causing cancer immediately and you can't apply it to a cell and see it trigger a cancer. The long-term use or exposure to certain chemicals in our environment causes a change in the epigenome, which means that these genes are being turned on and off. And when certain genes are turned on or off in the wrong way, it can trigger cells in the tissue to start to malfunction

“and go haywire and ultimately lead to cancer. And I think that this paper shows a pretty strong”

effect of piclorum in driving colon cancer in young people. It will very likely lead and it should lead to an EPA review on whether this should be legally allowed. But it should also lead to a new mechanism by which we assess chemistry that we're using in our food supply, in our environment, in our industrial applications. Because we can now look at all of this sort of epigenomic data to try and figure out what are these chemicals doing to us before we see them cause the problem.

So I thought this was like an amazing paper done by this team. They did a lot of work to try and

make sure that the statistics were sound and the studies that they did. It really, I think elucidated something pretty scary. Is this like a monsanto thing? We're like one company makes it or piclorum is broadly available. It's off patent now and so I'm pretty sure my guess, I haven't looked into this but my guess is most of this is made generically in China and it's probably packaged up with lots of different brands in the US and all over the world. So it's one of these chemicals

“that's just become ubiquitous in our use that just shows up everywhere. But I think it really”

speaks to the fact that historically, think about 1995, you can look at what the immediate chemical application of something does to a raft or a human cell. And you can say like, oh, it didn't cause cancer. It's good to go. Let's go, you know, didn't cause co-toxicity. Can I ask you a question in that study? Are you exposed to piclorum based on where you live? Because that's a great question. So I was going to talk about this. Thank you for asking

that. They then took that piclorum exposure. And then they looked at all the counties across the United States. They were able to gather data where there's enough data in California, Connecticut,

from the pesticide national synthesis project and trying to do some places where piclorum was

highly used and not highly used. And once again, it elucidated signal, which is that when piclorum was used in the environment in the counties more frequently, there was a much higher frequency of colon cancer in those counties. And that are squared as weak or strong. Reasonable strong. The odds ratio is like three acts. It's very strong. This is accomplished freeberg from a combination of big data and this science study board.

Yeah. And then increase testing as well, right? So you have this confluence of increased testing, increased data, you know, knowing where these instances are occurring. And if you add a layer of AI onto this freeberg, this is like a really positive use going back and looking at all these compounds and figuring out which ones we need to eliminate. Yeah. So I'll put my

“p-cast hat on. Thank you David Secks for the role. And I think this speaks to one of the important”

roles that government has in doing fundamental science and fundamental research. So the national

cancer institute and the federal government stood up this genome atlas with a hundred million

dollars a couple years ago. They spend only a few million dollars a year now to maintain it to get cancer tissue samples and then create the availability to scientists to use those cancer tissue samples to do the sort of epigenomic analysis and study supported by, you know, government grants or in this case supported by a foreign university getting funding to do it. And so there's an important role that fundamental science still has in elucidating this

that we would have otherwise not been able to see if we didn't have this resource available to us from the federal government and federal funding of scientific programs like this. And that leads to this discovery. You don't need fancy AI for this to be frank checkout.

There's an incredible amount of data that's available or resources that are available.

What's happened in the last couple of years is what's called RNA sequencing where you can actually look at which genes are on or off, not just what's the DNA, but in the DNA, remember we talked a lot about the epigenome, what genes are on or off. And how that changes when you have different cancers or when you have different chemicals. And when you have a certain chemical like piclorum, your colorectal cancer goes through the roof. And you can see

that relationship in those tissues. And then you can put all the data together and say, oh my gosh,

“there's a lot of evidence here that points to this connection. Very powerful. I think it's”

important that it opens up the window that the shouldn't just be a one-off research project conducted by a team in Spain, but maybe should be a fundamental role that some of the government agencies play, which is to stop Americans and the world from getting friggin cancer. Let's figure out the things that we got wrong in industry and go back and delete them out of our food supply and out of our industrial supply. And I think this is a really good example of that.

So, exa, how does Freebirds focus on Uranus inform your co-leading of Pcast here? Are you going to go deep into this call and research? How deep do you plan on going? And how will you get through eight of these presentations a day at Pcast? It's all good. This is why we hired Freebirds. Yes. By the way, you guys are going to handle Mars Neptune and Uranus. Go deep into Uranus and clean it up. We need to clean up Uranus. Great work.

“Great work. Great work. I think this is important. And I don't think there's any news”

attention on this since it came out a couple of days ago. So, I thought it would be worth bringing up on the show. Absolutely. Thank you, people. All right. But thank you guys for sitting with her. Well, no. It's great work you're doing there. I just read the paper, but yeah. All right, everybody. That's it for episode 270. Of the world's greatest podcast, I am your world's greatest moderator. Thank you, Tramoff, I have a tea of David Sachs and David Freebirds for the episode

to your friends, your neighbors. And we'll see you all next time. Bye, bye. Love you boys. Bye, bye. David Sachs. We open source to the fans and they've just gone crazy with her. Love you, S. I Queen of King of War. It's like it's like sexual tension that we just need to release it out.