Mag 7 sell-off, Wiz rejects Google, UBI, Kamala in, China's nuclear buildout, Sacks responds to PG

oh no gosh I'm having some technical difficulties freeberg there's something happening oh you got a bit oh something breaking in what's happening oh no my camera is not working but I sense something is happening guys it's like a transformation I'm going through you're not going to believe it yes it is I nois I'm here I'm here nois has arrived I have predicted the hot swap Sachs can I get my flowers now from you saxs you you need to bring yeah I give you I absolutely give you credit for that you also predicted a speedrun primary which is the opposite of what happened okay so one out of two is not bad though no Stanis did not account for the Democratic party being run by the Deep State H but I'm having a vision producer Nick there's a vision for you coming in to view yes your uncle has been bought out of the o podcast is going for Maga and he he got the $25 million buyout deal and he gave you 20% we're leaving we're going to start a new podcast and Jared Kushner is the new moderator here oh no wait it's JD no it's Alex Jones starting next week Alex Jones the new host oh wait I'm going away let your winners ride Rainman David and instead we open source it to the fans and they've just gone [Music] crazy all right let's get started here we've got a full docket we've got Civil Wars everything is going down in all in land it is episode 189 you're not done with us yet folks the world's number one podcast is still publishing the world is still spinning hey did you announce that you're you've moved to Texas I did I did I I did a little tweet I uh we moved to Austin a little earlier this year we have a horse ranch and um you know we've always wanted to move to Austin we looked during the pandemic thanks for asking jamath and we wanted to have a ranch and horses and live a more homesteading lifestyle and obviously a lot of our friends are in Austin so I'll still be spending a lot of time in the valley in New York like I always do in Miami but the home base and the girls are going to school and in Austin how is it going so far it's super hot you know isn't it in the summer the summers are hot but most people DeCamp so we'll DeCamp for Tahoe or Park City or something during the summer months and the winter months uh to go skiing in get a little Lake time or whatever and uh yeah we're really really excited we found an incredible horse farm and we're going to raise animals and horses and just enjoy these last years with the girls while um you know some big announcements coming in terms of my accelerator and my investing in startups in Austin so I'll I'll save those announcements for maybe the fourth quarter some big announcements will happen and um yeah I'm just super excited obviously I'm going to miss you know the weekly poker game but I will be back uh on the regular and uh we'll just do a double session play Friday Saturdays we'll do you got to get this for two days in a row we'll just do a full Friday session everybody take up Fridays I'm sad to see you go the one thing I'm saying about is like missing the Thursday game but I'll be back regular don't forget science Corner today we got a great science Corner lined up absolutely ABS is looking forward to it SX has been texting me all week about it he's like I can't wait for science corner I'm thrilled he was shaking nervously he's ready sax does not look amused all right let's get started whiz has declined Google's 223 billion offer and it intends to IPO some big news there last week we talked about Google offering to acquire this Cloud security startup for 23 billion CNBC reported whiz decline Google's offer wow that's big time because whiz was valued at 12 billion in its most recent funding round they've got about 500 million in ARR uh so this $23 billion is a massive massive 50 times current Revenue 23 or so times forward looking Revenue they think they'll hit a a billion in AR this is a company that was founded in 2020 and just so if you don't know what they do they help people secure their data in clouds like AWS Azure Google Cloud all that good stuff but high growth SAS businesses are trading at a 10x Ford Revenue multiple there's the chart this is obviously an absurd premium and two potential reasons that I can think of and I'm curious your positions gentlemen of why they would do this I guess chth there's two reasons one they think they can grow this company at a high percentage maybe fill in that premium Google was willing to pay or maybe they're scared that they can't get this deal through you know Regulators what's your take here and then we'll go talk about the wider cloud and Google cloud and AWS in a moment but what what's your initial take here of why they would do this tomor I actually wonder whether this deal would have had more probability of happening had the whole AT&T snowflake leak not happened because I think that when you have moments like this there's a non-trivial possibility that it supercharges sales even more I think the reality is that if you're a hyperscaler so if you're Amazon or Google or Microsoft your business is pretty fragile and brittle if the services you provide or the services that third parties like snowflake provide through you are not reliable and so I've never heard of a business that has generated so much ARR so quickly I mean from zero to half a billion dollars in four or five years I mean how do you even build the product surface area quick enough to capture that much revenue I think it just goes to show you how bad security is in the cloud and how needed it is so it doesn't surprise me that Google wouldn't buy something like this I think Amazon and and Microsoft would probably want something like it as well I suspect that if you had to guess why they said no is because they thought that they could grow Revenue much faster because of recent events as well as their own just natural momentum and I think that if if this thing had not happened I wonder whether they wouldn't have just sold all right sax I want to get your take on this after showing you a couple charts here Google's Cloud Revenue growth has been absolutely stunning here is a chart they're going to hit gosh in the first half they did almost 20 billion so they're on a run rate of $40 billion this year last year they did 33 back in 2017 he only did four and if you compare this to Amazon's AWS again these are cloud services people can buy compute in the cloud AWS if you look at those first seven years the all the crack all-in research team put these side by side uh Google is tracking almost identical in Revenue to aws's interestingly meta and and apple do not have a competitor here you said on this podcast shth I think last year that would be a pretty bold move by Apple to have a cloud computing platform since they have all the app developers sax what what do you think of this just tremendous run by Google Cloud also known as gcp in the industry well all the cloud service providers are doing extremely well I mean cloud is still the future of software and the cloud service providers are still growing really strongly on Whiz I think the most likely explanation is that they just want to keep building this a standalone company I think they're probably also worried that they can't get the deal through the multiples that we have right now are not that insane I mean I think the long-term median software multiple is around a seven so you know you see here the mid growth median 7.7 we're about tracking at the Historical preco mean and we had that really frothy bubbly period in 2020 and 2021 and that's clearly over now in terms of how our friends at altimer break this down I think that high growth means a 30% or greater growth rate and then I think the mid- tier is more like what is it like 10 or 15% to 30% and then the low growth is like you know yeah under 10 yeah so my point is if whiz is growing at 100% 100% I mean I don't know if it's still growing at 100% but I I mean I guess they're projecting % yeah would be yeah they're they're projecting a billion in AR next year up from what is it roughly 500 like that offer may not be that crazy again you know you're getting 10 times at a 30% average growth rate so you know let's say they get to a billion in AR next year and then they're forecasting you know whatever it is the the year after you know the 23 may be reasonable so I can see why these guys would just want to go for it if they think they're building a big stand loone company uh freeberg let's talk a little since you were a googler at some point um this gcp product maybe you could tell us a little bit about uh and I know you know some of the people running it um how meaningful this is becoming to Google or how much of a priority it is uh YouTube obviously Android priorities there at the company then you have like the next year down Nest weo you know some of those other projects but but how important is gcp right now to Google well gcp in the last quarter did 10.3 billion in Revenue which is up from eight billion in Revenue the year before in the same quarter of the year before and importantly in this past quarter they're running at a $1.2 billion operating profit out of gcp so you know if you kind of think about what cloud margin should be over time and kind of call it 20 to 30% margin This Cloud business could be generating 20 to30 billion a year of free cash flow now in the last year if you kind of look at or even if you look at the last quarter annualized Google's generating currently about $60 billion a year in free cash flow as an overall organization alphabet is um and they have over a hundred billion in cash so you know what can I do to accelerate This Cloud outcome given the risks the challenges The Slowdown with respect to the core consumer business cloud and AI based tools really is where it's at and so Google's asking this important strategic question I would imagine what can we do to accelerate outcomes in the cloud and what can we do that is going to be big enough to matter and what can we do that is going to past antitrust muster so we can actually get it through antitrust authorities so Cloud security kind of comes top of mind it's a fast growing segment as evidenced by the results with with whiz and it's a an opportunity for Google to cross sell and to secure more enterpr customers and theoretically cross sell more Enterprise Revenue by getting folks on a platform um that Google could now offer I would imagine that what saak is saying is probably right I have absolutely no sense of what these individuals and board members at whiz are thinking but I think what saak is saying is right this is an incredibly fast growing business Peter teal made the comment once which I think is totally right either the buyer pays way too much or the seller sells way too early um when you have a fast growing business like this it's really an important question to kind of acknowledge that if whiz continues to grow at this rate it's conceivable they could be in the range of a Palo Alto networks's hundred billion dollar market cap in a couple of years um you know given uh given this momentum and if you if you progress it forward so if I was them I would ask that question could we reach a 100 billion if we feel reasonable reasonably confident this may be a risk worth taking and what's the downside right the downside is they go public next year anyway and maybe they're only valued at 15 billion or 20 billion there's not a lot of downside from this offer and certainly seems to be quite a bit of upside but I think for cloud the thing to to watch is what they're going to do next Google wants to accelerate Beyond AWS they want to become the leader and they're going to look for other sizable transactions that will pass antitrust muster and so I think you could see them perhaps looking at some public m&a in the same space and I wouldn't be surprised to see them start to get active in that sense YouTube and gcp are the are the two money printing machines inside the organization that have actually paid off Android it's paid off in terms of dumping more search you know from the default search buttons or boxes but I guess the to steal me on the other side if you're on the board and you want your cash you know you get 100% of it you take no risk and what if Google decides they're going to make this product free and bundle it as we saw Microsoft do in a number of cases and they just Microsoft teams this or Internet explore it I guess that would be the risk is if Google feels uh some Vendetta here and puts this product out for free as you alluded to chth it was a big week for cyber security crowd strike had a really rough week last week when they knocked out eight and a half million Windows machines just to briefly explain what happened here obviously whiz is cyber secur and so is crowd strike crowd strike instead of working on data sets in the cloud they work on securing your laptop your desktop your servers all that kind of stuff for threats and uh they did an update and when they did their update a sensor configuration update as they called it to Windows machines they basically bricked them and this wasn't a Cyber attack they a cyber security company they weren't attacked they updated it and it crashed all these machines and these machines all needed to have a hard reset by it it wasn't something that could just be field swapped apparently people had to go back to their offices in some cases Delta was hit hardest they canceled over 6,000 flights and there's a Department of Transportation investigation going on now Shares are down 25% since Friday so that represents $24 billion in market cap crowd strike CEO it's been uh clown for his apology and explanation and uh the good news though is they sent everybody an Uber Eats gift card so I'm super happy about that shamat saaks looking at this and duve telling with the last story this is going to be an ongoing story and and one of the big trends in our industry yeah major outages like this I I think the reality is that that code is still really brittle and there's gaping holes everywhere and I suspect that the reason why foreign adversaries don't hack us is because we could hack them back and so I think it's almost like a mutually assured destruction is the only reason why these things stay up every day so at some point we're going to write better code maybe these AI agents will do it and there won't be like memory leaks and all this other random stuff but in the meantime I think you just have to assume that everybody will get access to all of your information and that eventually everything is hacked and everything is leaked yeah and act accordingly and act accordingly yeah assume every the worst conversation you ever had on social media or on uh DMS is going to come out all right I think we've kind of finished this anybody have any thoughts on the scratch strike thing seems like it's over now I don't have a lot to say about them except actually this is that that company has some murky connections to the Deep state and yeah well apparently yeah their fingerprints were all over you know Hillary's bleach server then there's been other reports which I don't know exactly what to make of I can say this that in the wake of this Elon announced that he was removing crowd strike from any of his company's servers similarly I had my it department check and make sure that we didn't have it running anywhere we don't I'm just gonna be frank I don't trust this company all right there you have it uh deep state tinfoil hat deep State deep State AC accusation tin foil hat today I forgot you believe what you want that's what I don't this is the first time hearing about it I don't have my chin foil hat here but uh who knows I guess uh use your products if you want to you have it folks and sax is as a puts his endorsement B paler definitely not deep State paler paler look there's no question that paler paler sells into the deep state but know that that makes a deep State well I they're on your team as oppos to the other so no hold on I'm not on any team and respect I don't really understand what you're saying there I'm just goof I have shares in the company I think it's a good investment oh okay there have all right let's go to the stock market it just had its first days I gotta get a t hat for a bit here one thing I want to say none of us are at any risk of running paler in our servers okay crowd strike is running in the background of many many companies who may not even be fully aware of it and they were certainly surprised when all those Airlines computers went down right so my only point is maybe you should make sure about whether you're running their products or not and then make a conscious decision whether you think that's a good idea that's all that's all just a little tip from the more you know from David J J move on I'm trying I'm trying my best all right the stock market just had its worst day since 2020 on Wednesday clearly this is because of the January 6th insurrection and the NASDAQ which is the most tech I'm joking the NASDAQ which is the most tech heavy F 3.6% S&P down 2.3% bunch of The Magnificent Seven companies were in the red but you got to put this in context NASDAQ and S&P still up around 15% for the first half of the year record setting territory obviously if that holds up or increases there's a lot of theories about this that people are rotating out the max 7 tech stocks which were a place that maybe got a little overheated with the AI here's the top gainers that are not in the max 7 as you can see financials energy materials over the last six months S&P financials up 11 S&P energy 9 S&P materials 9% as well broader index up 11 as we said Tessa dropped 12% after missing on earnings but they had a massive runup earlier this year Google dropped 5% I guess YouTube was what most people pointed to their revenue came in lower than expected so maybe some softness in the advertising Market which would then correlate with consumers Nvidia down 7% metad down 6% chth any thoughts here on what we're saying you talked a lot about the consumer weakening on an episode about six weeks ago I believe so is this just the manifestation of that prediction you made not this specific thing I think that when you see a broad-based set of Revenue misses that that will kind of mean that the consumer is really Under Pressure I think I still think that that's more in the fall but we're headed in that direction I think what happened here is that the market is just priced to Perfection and all of a sudden we had all kinds of volatility you had the former president almost assassinated you have the current sitting president resigned you have a somewhat convoluted process to pick who replaced him that at a minimum was opaque and all of these things create doubt and anxiety in the people that own Financial assets and so if you saw the volatility index the vix that has spiked and so whenever you see that stuff happen people go risk off right and when you go risk off what do you sell you sell the things that are deepest in the money where you think that they probably don't have that much more room to run and that was the mag 7 and so what you actually saw was a huge rotation out of those companies into everything but those S names and I think that that's a pretty reasonable thing to do so I think we're in the part of the cycle where people are getting a little bit more sober and risk managing we're also in the middle of the Summer where a lot more vacation is taken which how it manifests is that people tend to be frankly more riskof and be more liquid because a lot of people are in and out of the office and I think it the real setup is for what happens in September maybe there's a cut which will help maybe maybe there isn't which won't help and then the whole consumer cycle the consumer credit cycle that doesn't look good to be honest and so I think the fall is going to be complicated yeah absolutely what an eventful week on a political front we'll get towards that in a moment but uh freeberg your thoughts here is it just people trimming their perfect positions and maybe a dispersion going out people wanting to own some other assets that maybe have been undervalued in this market cycle no I think it's definitely this mini AI bubble deflating a bit and transactions are let me get out of some of these high multiple tech stocks that are expected to grow rapidly get of AI and shift more into Stable Market recovery interest rates are going to get cut type trades that will benefit there so I think it's just a rebalancing and as a result of the high concentration of the mag 7 in the S&P and in the q's the indes look like they're coming down but yeah there's obviously a lot of complexity in what's going on in the economy right now but I do think that that's been a big trade for PMS for portfolio managers over the last couple of weeks makes sense yes ax if you owned a bunch of Nvidia and it ran up meta Google Apple other companies that ran way up you might want to trim your position here and and deploy capital and balance things out yeah sure I just don't want to overreact or over read into one day in the market I mean today is up yesterday was down it's these are blips in the grand scheme of things even a 2 to 3% move is just not that unusual yeah especially given the context but definitely something worth keeping an eye on is what the earnings reports will say for Q3 and Q4 and those will come out towards the end of the year okay some interesting news Sam wman did a Ubi experiment a couple of years ago he put 14 of the $60 million into this experiment that was done by by a firm called open research that's a nonprofit group that was founded in 2015 out of an accelerator called why combinator first I'm hearing of that one well here's the experiment they did this took place between November of 2020 October of 2023 3,000 low-income adults in Texas and Illinois making just under $30,000 a year on average were selected a thousand participants received $1,000 a month for 3 years so on top of the $30,000 they got1 $2,000 a year taxfree so that's nearly a 50% pay increase for doing no more work 2,000 control participants receive $50 per month over the same period and the research collected and studied a bunch of data they did blood draws to do uh health impact uh they had a custom app that tracked time usage work play Etc and they checked everybody's credit reports and Bank balances So brly speaking the research found almost no lasting impact on everything they tested from overall health to work to education and here are the quotes directly from the paper and I'll get the gentleman's take on this Ubi is super fascinating obviously the cash transfer resulted in large but short-lived improvements in stress and food security we find no effect of the transfer across several measures of physical health we also find that the transfer did not improve mental health after the first year and by year two we can again reject very small improvements final quote we also so find precise null effects on self-reported access to healthare physical activity so fascinating and reinforces a bunch of intuition that I think we would probably all have you have you guys seen these studies where when somebody has an amputation or they get paralyzed they study their pre levels of happiness their inim level of happiness and then they just kind of mean revert to their natural state of happiness independent of what physical Calamity they may have gone through and I I'm when you were talking about it Jal I was reacting in the same way which is in the absence of I think purpose and Community I think children in many cases it just doesn't meaningfully shift any of these curves that really matter I think your happiness levels mean revert I think your health levels mean revert so it's great to kind of confirm at least my intuition which is that Ubi is a wonderful idea that I think doesn't really understand how humans are both motivated and wired freeberg your thoughts yeah so I definitely agree I think I've talked about this we talked a little bit about it with Jonathan height there's some great studies that have shown in the past that the change in income is a better predictor of happiness than absolute income eventually everything normalizes so I think you bi makes no sense for three reasons the first is this normalization of spending level so once you've kind of had this increase you have a moment of happiness and then you actually start spending differently or spending more and effectively every human has one innate trait desire and desire is what drives Humanity it's what drives progress It's what pushes us forward because no matter what our absolute Condition it's our relative condition that matters relative to others or relative to ourselves in the past or perspect itively in the future and so we always want to improve our condition so a Ubi based system basically gives a flat income so the only way for it to really work is if you increase the income automatically by say 10% a year so in a Ubi world no amount of money will actually make someone satisfied or meet their minimum thresholds because those minimum thresholds will simply shift and you know the second issue is just the the net economic effect if we gave 350 million Americans ,000 bucks a month that's $350 billion a month that's $4 trillion a year our prospective budget for next year is 7.3 trillion at the federal level so you know that's already more than 50% of the total projected federal budget next year finding the mechanism for funding this at scale is not what this study actually looked at because if you look at it the net effect would be inflationary and that's the third major reason is that ultimately this would have an inflationary effect anytime we've stimulated the economy with outside money with government-driven money we see many bubbles emerge and we see an inflationary effect so look at covid there were all these little bubbles that popped up in the financial markets we had nfts we had crypto we had all these sort of new places that money found its way to and then we had an aggregate inflationary effect food prices are still up 30 40% since covid and so net net I think that the study provides an interesting insight into the micro effect the psychological effects the social effect but macro effects are what is so like simply arithmetically obvious which is inflation and an inability to actually fund us at scale and fundamentally people want to work so they'll take that money and then they'll go find ways to work and generate more money and you have this inflationary effect so I think N Net Ubi does not make sense Sachs participants were 5% more likely to start a business by the third year maybe that was the most encouraging part of this people work slightly less 2% decrease in labor participation but that seems negligable people in their 20s had a 2% increase in enrolling in postsecondary education again very tiny impact there were major benefits to stress and mental health in year one but by year two as we talked about it reverted to the Baseline how do you think about Ubi in a world where let's say I don't know we lost a large amount of jobs in a short period of time because of AI so in that hypothetical situation and we hit 20 or 25% unemployment from the historic low we're at now now how might you think about Ubi well that's positing a future that I don't think's going to happen at least any I tried to yeah that's why I'm trying to give you a hypothetical yeah no I just I I don't really buy that and so I think this whole idea of Ubi is premature and very expensive and it doesn't work I mean I think what we saw from the study just to Echo what freeberg said is that cash transfers don't work we saw this in the Great Society just handing people money doesn't solve poverty it actually tra people in conditions of dependence we also saw during covid that all those stimy checks it might have had a macro effect in the economy of kind of boosting the economy during what could have been a covid depression however at an individual level what did we see we saw people quitting or quite quitting their jobs they spent more on Leisure alcohol and meme stocks in other words it wasn't tremendously productive so I think that what we've seen in the past is just handing people money doesn't create the types of outcomes that people want and you know is all this virtue signaling sax is it virtue signaling kinda kinda I'm kind of that from you yeah I think it's I think it's a combination of virtue signaling combined with let's assume that you want to become the first AI trillionaire and people are concerned about job loss you're going to virtually signal in the direction of well let's just give everyone money and a lot of people in power will love that because it creates a lot of dependence yeah so it serves the interests of tech Moguls and people in the government but I don't think it serves society and I think one of the most interesting data points in the study please confirm if I get this right but what it said is that the people who got the thousand a month Ubi saw their incomes rise to $445,000 on average while the control group who only got $50 a month increased their average income to 50,000 actually just sh 51,000 so the people who didn't get the larger stimi actually genuinely bettered themselves over the course of the study while the ones who got the 12,000 a year stayed in place and that's kind of what you'd expect right which is if you just hand people money without having to work it doesn't motivate them to work harder it actually motivates them to do less yes and let's say that you're in a point in your career where you need to learn you need to get mentorship you need to advance yourself by giving people Ubi you could be kicking out those bottom rungs of the ladder where you know the work isn't necessarily that fun but you're picking up very important skills that are going to help you rise up in the ladder and being a cashier like sending your kids to be a cashier at a restaurant or a bus boy or a waiter like that teaches them a work ethic I was a dishwasher I did hard work as a child like I was a bender I mean look these are all jobs that have dignity I mean I think work has dignity and you need people to start somewhere and if you just give them the stimi or the Ubi it demotivates them from starting their careers and you trap people at this lower level so I just don't think you're doing anyone any favors by doing this and I just want to say you know my production company's in full swing and we are actually working on a remake of Cheers with David Sachs yeah as the bartender as the lead character it's it's a really great show looking at um the back of the envelope matth here I had the crack research team take a look at this welfare $1.1 trillion budget in 2023 eight different federal agencies you know Medicare I'm sorry Medicaid is in there as well unemployment $33 billion paid across 1.8 million participants last year food stamp safety 113 billion we put all those numbers together and uh we got about a 100 million people participating in these programs in some way for $1.2 trillion per year this is all back of the envelope it's imperfect but that turns out to be about 12K each uh which is exactly what the study did so not perfect math but that's totally reasonable I grew up on welfare and we needed it to make ends meet and we would have completely fallen through the cracks without it and so I'm glad that I was able to be raised in a country that has welfare I guess my question to you choth is do you think all these agencies put together you know with all this Administration and this complexity would it be better if we take something from this Ubi of maybe consolidating down no no no okay no because I I think like you need to be motivated as sack said and so even though we got support from I grew up in Canada so the Canadian government there was still an expectation where certain things were not covered and you still had to work and so you had to find motivation to pick yourself up and go out and get a job and it just so happened that in situation even welfare and what my mom made as a housekeeper and then as a nurse's aid wasn't enough and my dad didn't have a job so I went and I started working at Burger King and to sa this point it's pretty eye openening when you're 14 years old and you know you're working the night shift and people come in after going to the bars they're drunk they're puking all over the place sometimes you see people that go to your own high school and it's a little bit embarrassing because you're working while they're going out but at the end of the day was very motivating and I think saak is right if you take that away from people I think that you end up with a worse Society I don't think that you have a motivated group of people that want to go and better themselves I think they just become really lazy I think it's well it's well stated and I think the pressure cooker that immigrants are under or you know people who have tough situations like it it can create the diamonds and man I I I do think a lot of the folks here on this podcast went through that pressure cooker and does create a on your shoulder and and when people criticize these entry-level jobs I'm and they're oh they're not sustainable well they're we do have a safety net in both countries I think that that's not I think the problem is not the entry-level job I think it's the expectation of people and freedberg just mentioned this but what you have is that there is this desire Doom Loop that we've Fallen ourselves into where what social media does is amplify in many cases a fake ception of what your neighbor has that you don't have and so you're in this constant desire Doom Loop so if you go to a job and you're expected to work for four years I'm just going to make up a number before you get promoted and the perception is that your neighbor is getting promoted after eight months you're going to be mad and you're going to be angry and you're going to feel like life isn't working out for you and we have to figure out a way of resetting that back to normal so that you know that that is a lie that is being told to get clicks and likes and the real truth is you're going to have to just put your nose down and grind at something to get what you want and life is not perfect and it's complicated and it's messy and we need to do a better job of that let me ask you a question freeberg if you were going to do a 2.0 of the study I was thinking about it you know where do you go from here I just had this idea like well what if you put like half of the money into like a a perfect portfolio wealth front one of those services and um allow people to take out maybe 5% of it every year some sustainable amount so they see you know and get some education around that or maybe put the money into a business formation fund people can apply to get grants to you know maybe form a business and you you kind of reframe how this Ubi is distributed with milestones and maybe some education baked into it that that was my thought on where to go next with it do you have any thoughts of where you would do a 2.0 test of this or would you just well that's that's not Ubi right and what you're describing I think exist and there are incentives and programs and opportunities out there people can sign up with Roth IRAs they can contribute some percentage of their paycheck to a 401k if they have a job that has a 401k setup for them there's a lot of systems and mechanisms out there and you get tax breaks for doing that so there's mechanisms and incentives out there to do that sort of thing the the concept with Ubi is can you pay people a flat amount of money so that they don't have to work and then they end up being able to explore and do other things with their life as the robots and AI does everything for them and I've just always been of the belief that I don't think that there's this natural border that we hit Beyond which humans don't work I think that AI based tools and automation tools are the same as they've always been when we developed a tractor people didn't stop farming they could get much more leverage using the tractor and farm more and new jobs and new Industries emerged and I expect that the same thing will happen with this next evolution of technology and human progress humans will find ways to create new things to push themselves forward to drive things forward and for the natural market-based incentives that fundamentally are rooted in this internal system of Desire will create new opportunities that we're not really thinking about so I don't believe in this idea of Ubi in some utopian world where everyone's happy not working and letting machines do everything for them I think that the fundamental sense of a human is to find purpose and to realize that purpose to drive themselves forward and progress themselves and I think that that's always going to be the case the closest thing to leisure and leisurely Pursuits that we have today in modern society is the nepo baby and if you look at the no but and if you look at the nepo baby they're the most miserable group of people I've ever met they're so unhappy with themselves and so and part of it is because they've only ever lived a life of shout out to Alex Soros no I'm I'm not name checking anyone I'm just saying when I when I when I observe it I think that you can see it right in front of you which is that there's just so much inherent unhappiness because you're not motivated to do anything and then that's Amplified typically by guilty parents because they've been working so hard and I so I don't think you need to run a second study a different version of an idea that friend of the Pod Brad gersner is working on which I think deserves a shout out is this idea of giving every kid when they're born a retirement account and I think that that's interesting idea where you give them some amount of money and it just matures inside of an index fund that gets unlocked for you when that kid is 65 or 70 years old that's great because it helps you have a soft Landing in retirement I think that that's very Humane and a right thing to do but it doesn't rob you of that motivation to work in your 20s 30s 40s and 50s and that's a much better idea than Ubi and I think by the way it's really important to state that Ubi can be more of a trap than a benefit it takes away the opportunity for individuals to progress because you no longer have a system that says you progress you get richly rewarded It ultimately drives to an outcome where you spend all the money and distribute it equally so everyone ends up having some sort of stasis and I don't think that that's really human nature I do think that systems and government programs that support people's ability to succeed to work hard to work smart to progress while providing these necessary safety nets is a better solution there's no right or wrong way it's just it's it's a very complicated system that's needed and I don't think that this like this Ubi concept is fairly naive and I think that you'll see it play out at at both a micro and a macro scale as being I think net net negative so yeah you know just wrapping up here so we can get on to the rest of the very juicy docket we have today it it does seem demotivating to just have money drop in your head that's why like my experiment I was referring to freeberg of just forcing people not like having these programs that you have to go find out about and have the social capital and fabric around you that you know about small business loans Etc but hey these three things are happening to you right now this Money's been put into your account automatically and you can decide what to do with it and just raising the education level and empowering people is a much better idea I feel like whatever the education system is schools or whatever like actually teaching the vocational skills or the skills on how to succeed in the workplace like here's how you go get a job here's how you build a business here's how you start something those are the sorts of skills that are not taught in the educational system that I think are generally lacking and then people kind of learn a bunch of history or some algebra or whatever they learn in school and they they pop out the other end and it's like okay go figure out how to survive go figure out how to get a job go figure out how to build a business to just build on your idea we need more healthcare workers if you paid somebody $1,000 do a month and you paid for their school for one year to become a nurse doctor nurse practition or whatever that would actually have a dramatic impact and solve a problem for our society while not giving a hand out I think we all agree on this one let's keep moving through this amazingly juicy docket all right there is a battle right now for rer Murdo media Empire the times reported on a behind the-scenes fight for control of Fox News Wall Street Journal New York Post and just tons of TV networks in Australia the UK I think we all know the newscorp holding Set uh bit like the TV show secession uh which makes sense because they based it on the Murdoch family it turns out this article in the times is based on a sealed court document that was obtained by them Murdoch to remind you is 93 years old now and his trust would have given control to his four eldest children however he changed the uh trust to ensure that Lin Murdoch who is more conservative and would take over these assets as opposed to James Elizabeth and Prudence who are more moderate in laan and they are engaged in a massive court case now that's going to start in September the trust is irrevocable but it contains a provision allowing for changes so long as they're made quote in good faith and with the purpose of benefiting all member so rert argued that the change is in the best interest of James Elizabeth and Prudence as it keeps them formally separate from Fox News without having to worry about its political point of view Fox News obviously has massive influence and has been a bit of a disaster over the last couple of years they did the largest settlement ever in a defamation case with Dominion Aid $787 million you remember Tucker Hannity Laura Ingram all of them privately uh trashed the people who lied about the Dominion case on Fox News and that all got shown in text messages and it was a disaster for them saaks any thoughts on this and and how collection of assets and the GOP have you know collaborated over the years I wouldn't necessarily call it collaboration I call it a market position I mean Fox News has carved out a powerful and profitable Market Niche by being the one Cable News Network that appeals to conservatives now if you know let's say the more liberal members of the family like James take over and change the content and the programming to serve their own political views they're going to lose viewership they're going to lose their audience it would be a foolish idea just from a business standpoint so I think that Lachlan is the right choice I've met Lan before by the way nice guy look I think a pretty mainstream conservative type of guy he's clearly the right guy in the family to run this and the siblings I think could really screw it up and I'm talking about not just from a Content standpoint I'm talking about from a a revenue and profit standpoint if they take it in a different direction I would already say that Fox News has a has a market position problem which is that rubert is very much a neocon and neoconservatism is on the way out in the Republican party in favor of a more populist conservatism that you see with Trump or now his running mate JD Vance rert and fox waged a really strong campaign to keep JD Vance off the ticket obviously lost that battle rert fired Tucker by far their EST rated and most profitable host ever and it was over again this populism versus neoconservatism Direction so I think that fox already has a problem where they are becoming misaligned With Their audience and regardless of what you think of the politics this is bad for business it'll be really interesting to see if laan Will realign things in a more populist Direction but definitely going in a liberal direction that like James or the siblings want to go in that would be a disaster freeberg chth any thoughts on this uh media Empire and secession planning man I think probate and wills and trusts are of the devil's making nothing good comes out of these things and I don't know I just think some of these assets should just be left to shareholders just sell them and or just sell them and take the money give it to the kids hopefully raise good kids they can all go and pursue their own path because again I think the point is like the path and the journey is the fun and these kinds of battles are really brutal and I'll tell you to me the thing that I'm I'm sad when I hear this whole thing is like you have four siblings that I'm guessing grew up together yeah and now are they ever going to talk to each other again or is it like three versus one or two versus two or and I just think that that's ugly over what power and money I would have just if I was the father I would have sold the asset given the money to the kids or to charity or whatever and hopefully they would have found happiness in a different way but that is what they did with the Disney deal they took the cash and they distributed it to the kids so they each got a pretty big windfall and then you I think the concept was this remaining asset would be managed over the long term maybe I'm speaking out of school a bit but I thought that's what happened there Fox the studio and yeah that the library in the library and that brings X-Men Fantastic 4 Wolverine back together with the Avengers which is most important 20th C clearly they didn't no it's all coming back together now now they just got to get Sony to give up I mean we want to talk about interesting IP Marvel just sold these characters to the highest bitter in perpetuity such a crazy weird deal but it's like it's like me saying you know I uh I've collected some really nice belts and so I'm just going to have like a death match between my five kids to see who gets the best belt yeah it's just I mean and it's not it's not even about money actually because they have enough it's clearly this is about power picked no and it's about being picked imagine if your father picks your sibling and not you why why would you why would you do that yeah like is there is the asset so important as said there these are self-managing because business people will make rational business decisions so put it in the hands of a r bus keep the family intact because if you lose the family what what do you have that's what I don't get that's what I don't gam we might as well just go to our next topic Joe Biden has been hot swapped as no sh and as predicted the speedrun primary maybe that's been subverted uh as we all know Joe Biden formally exited what's your version maybe it has been subverted maybe possibly could have been subverted inadvertently knocked over forgotten it could be an oversight anything's possible Joe Biden formerly exited the presidential race on Sunday after donors and party leadership politely asked him to enjoy his retirement NOP they shived him by most Insider accounts Biden was not happy about the decision and felt betrayed nonetheless public has backed his VP Cala Harris who appears to have already wrapped up the nomination survey conducted by AP on Monday suggested that Harris already had the Endor ment of enough delegates to secure the nomination in the first round of convention voting so this won't be official until the DNC that starts August 19th in shy toown so far no one has stepped forward as a arrival for Harris and in fact many of her would be competitors have already endorsed her that includes Shapiro Pennsylvania's Governor Nome California's governor pritzer Illinois's governor and Whitmer Michigan's Governor all of those I guess potential VP candidates she is now the 90% favorite to get Democratic nomination I'll stop there and ask our panelists what they think of this turn of events jamath do you want to start us off I mean I don't think the process was super open and transparent and Democratic but I don't think they had much of a choice and I think we've talked about that because too much of the money would have had to essentially been returned and I don't think you can fight a federal election in 2024 with one hand tied behind your back so she was the de facto nominee even when the rumor started and now I think the whole point is to figure out where does she stand I think the thing that she will have to overcome is that these last three years three and a half years she's been relatively under the radar Mia some might say and I think that now there's this like this whole controversy I don't know if you guys have seen this where like she was named the borders are but then she was not the borders are and I think there's a there's a mainstream media it's sort of fighting with itself from six months ago about the whole thing but the point is that we don't know what she believes and we don't yet have a sense of her agenda really you know and I think that over these next two months it'll be up to her to really create a very clear case of what she believes in and it'll be really interesting to see who she picks as her VP candidate and then people I think will be in a position to judge and I think that that's what you know what if I've been kind of like reading the tea leaves from the folks that I've talked to is sort of what they say which is TBD and we need to figure out where she's at freeberg your thoughts on uh this unbelievable 10 days in the history of our country where president was nearly murdered by an assassin and Joe Biden resigns and a 39-year-old political neoy venture capitalist is picked as VP I mean this is consequential what are your thoughts on this 10 days that's a lot of stuff I think we talked about that last week but the kamla Harris deao nomination that took place over 48 Hours um I think was a little bit shocking to a lot of people I've spoken with that there wasn't a bit more of a process to identify a nominee besides KLA that effectively the party lined up now what I think is is relevant here is that for the first time it's exposing people to the way the electoral process actually works in the United States that it's not a direct democracy where every individual in this country votes for their federally elected people remember the United States was set set up as a Federated Republic that there was meant to be States the states were in a federation and then the states would elect electors that would go and figure out who should be the president who should run the the federal office and the states would elect their representatives their Congress people to go represent them in the federal government and so I think a lot of people you know whether it's just without thinking about it or based on President assumed I get a vote and who gets to be president what you get to have is a vote and who gets to be the delegate to represent your state in picking the president and so this process where delegates very quickly fell behind kamla Harris because of the the the significant coalescing of power and influence within the parties the two major parties in the United States has I think exposed a lot of people to the lack of a democratic process for Federal Executive role in this country and I think that's a little bit shocking to people but it is the way that the way the nation was set up and and the same thing with the popular V vote versus electoric college right people keep getting confused by that that's right and in this very unusual condition where a candidate who's earned all of these delegates drops out of the race yeah is shocking and surprising to people that they don't get to go and make a vote again individually and I think it feels unfair and I think that a lot of people are feeling that way I do however think that pretty quickly there's a lot of people who are anyone but Trump that are going to Rally behind her and she seems to be pulling well in the polls that have come out in the last couple days here so all right let me hand it off to sxs then you had a situation where Trump was The Runaway favorite and this unbelievable Unity at the RNC and immediately after the RNC the Democratic party hot swaps Biden for kamla and they've got a lot of great VP picks that they can choose from Mark Kelly looking like the possibility which would obviously give them a lot of support in Arizona and with moderates and Law and Order folks so saaks were looking at uh essentially a dead heat some polls have them tied some po Reuters ipsos has Harris with a 2% lead CNN has Trump with a 3% lead what's your take on forget about how we got here you know how does this affect the race itself this is a dead heat now what are your thoughts on the race going forward who's the VP pick that you're most worried about going up against the Republicans well look this clearly reshuffles the race to some degree I don't think it's a dead heat the polling shows that Trump is still ahead in most of the Swing States but look Harris has more upside than Biden does because she can actually campaign I mean Biden clearly was a shorefire loser and that was exposed in the presidential debate and that's why there was a total panic in the Democrat Party after that debate they're like we got to get someone new and they drove him out I do want to just say a word about that process you know throughout that process remember it started with Biden doing that Stephanopoulos interview he said that even God Almighty won't get me out of this race then he said nobody's pushing me out I'm not going anywhere I'm campaing next week he expressed that what was happening in the party was a revolt against him and then boom all of a sudden he's out and you know all we really know from the public reporting is that Nancy Pelosi said you know Joe we can do this the easy way or the hard way and he was out again less than 24 hours after he said I'm in and I'm campaigning next week and even his surrogates on the Sunday morning shows were saying that he's definitely in the race the White House staff didn't know his campaign staff didn't know it kind of came out of the blue it's a very strange process and it happened via him just posting a photograph of a letter that was on personal stationary not even like an official White House memorandum and we didn't get an update we didn't hear directly from the president about one of the most consequential decisions of his life and of his presidency until Wednesday well he did have covid so that you know for an 80y old is pretty hard yeah fair enough that was the the the story but still I mean for us to be left in the dark wondering what was really going on for three days it was very strange it certainly was not what you would call a democratic process there was no speedrun primary as you wanted Jason there was no open convention what happened is the delegates fell in line instantly as I predicted because I said that they would not be able to handle the chaos that they wanted to basically fall in line immediately and end the chaos and they fell in line behind kamla Harris who has never gotten even one primary vote who are you most as a VP candidate give us that because we understand that I'll be honest with you I think that the guy the scariest the one I would pick is Josh Shapiro he's the governor of Pennsylvania rising star look if he can deliver p Mania for the Democrats that's powerful because one way for Harris to eek out a victory is if Shapiro can get her Pennsylvania and then if she sort of taxs back to appealing to the Arab and Muslim vote in Michigan to eek out Michigan and then eeks out Wisconsin with one point in other words if she can hold on to the blue wall and then she loses the swing states that Trump is very much ahead in like Ariz Iona Nevada Georgia North Carolina she can still win this election by 270 electoral votes to 268 it' be the closest margin in presidential history so that's a scenario and it's probably her best path to the to Victory is to win by one one electoral vote that's the scenario I'd be most worried about as a republican now the other candidate you hear a lot about is Mark Kelly the cater from Arizona who on paper looks fantastic he's an astronaut his his wife was a victim of a of a gunshot moderate right super moderate I personally don't think he is that moderate but I think he presents as one and he's he's made noises he he comes across as tough and and comes across as as someone who's wanted to be tougher on the border which is a huge weakness for Harris yeah if he can deliver Arizona then he becomes a strong Contender but I'm not sure that he can so if it were me I'd probably go with Shapiro I mean I hope they're not listening to me I hope they go with Kelly chamaa obviously even in this heated thing the good news is that both sides are going to accept the election results we have that fairness and and that honorability and both parties will accept even a close election there'll be no drama after it but what's your thought on the strongest ticket do you think Shapiro do you think Kelly CNN said hey and this went viral do we think a Jewish vice president the country's ready for it they got kind of dragged for that what do you what do you think is the right VP pick here Cham what do you think the right VP pick here here is and which one is the scariest to a trump JD Vance ticket which is a very strong ticket in of itself so if you look at Trump's VP pick it's about aligning a philosophy Donald Trump created the Maga movement this populist conservative right-wing movement and I think JD Vance has an opportunity now to carry that torch post Donald [Music] Trump and that is an ideology that spans States I think this idea that you pick somebody because they can deliver a state is pretty misguided I just don't think that that in reality is what happens so I think that kamla has to decide what she stands for and figure out whether she needs somebody on her flank that represents a slightly different set of ideas that will then maximize her appeal or she wants to double down and then she has to pick somebody that sort of like aligns with her philosophically and again I would just say that it's not super clear yet what she thinks I think that Joe Biden was more of a traditional Centrist that had to appeal to the progressive left in order to get his work done so that kind of makes sense you can understand it you don't have to agree with it but it's it's pretty obvious I don't know what she where she's at politically so I think that that's the first thing she needs to explain herself is she a Centrist is she more of a moderate Democrat is she more of a progressive Democrat and then we can then understand who the best person to align her with should be but if I was if I if I was in the Democratic kind of like Star Chamber yeah I would kind of try to figure that out first because I think the Donald Trump pick makes a lot of sense because it basically moves the Republican party in a very firm direction that die is cast for the Republicans for many years to come now okay freeberg your thoughts who is the VP candidate what do you think of this race and give us a prediction you know you're you're famous for your incredible insights and predictions in politics give us your prediction R who should she pick who will she pick and why I think there's a lot of talk about Roy Cooper in North Carolina saak didn't mention Cooper but sounds like could be in the running and could be a leading Contender for the slot I think the Harris Trump poll is not out or there's a recent one that shows Harris yeah 4448 Trump in the lead in North Carolina so there's uh some some room there if you can get the governor in that spot that's a lot of electoral votes in terms of who I think should be I'm not sure but I do think that might be a top Contender from folks I've talked to any thoughts on Shapiro and CNN's positioning that the country is not ready for a Jewish vice president so you know I was shocked recently to hear about a board a pretty you know important board because it represents a large organization and there was a an individual on the board who was supposed to be elected chairman they went in for the for the vote and in that board meeting this individual who happens to be Jewish there was a conversation that ensued about you can't be the the chairman at this time because having a Jewish chair would be really difficult in this current climate and I was shocked to hear this it you know it was it was not expected by by folks going into the meeting things were supposed to be quite different in the vote and ultimately the decision was made that a Jewish person should not be the chair of the bo at this time jcal to your question I think that behind closed doors these are the sort of conversations that are going on that there's a perception given the Gaza conflict that there is a risk of having Jewish leadership being put into powerful positions right now Jewish leaders being put into powerful positions wow that is shocking that's insane it's R it's just this is this is what is going what this is just yeah it's shocking and deranged and and the anti-Semitism right now social media and what we're seeing online is just absolutely heartbreaking and infuriating in equal parts saak anything you want to add to this as we uh wrap up our what the well I mean just talk about Shapiro saxs is the country ready for this you saw the CNN clip and you know sort of ask question can I just ask I'm sorry go ahead what what what does it solve what does it accomplish less heat coming into that board less protests less less protests the protesters now have I guess what I would read into this correct me I'm War here freeberg is the protesters have now won in that they've intimidated people to an extent that they don't want to go near Jewish leadership am I interpreting correctly a possibility here sorry say that again the protest was what so these protests the Gaza conflict have reached a point where people do not want to have Jewish leadership because it would be polarizing and create more protests that's right that's that and that's the conversation that I hear going on behind closed doors or I'm hearing about and so you know it's almost like a cancel culture against Jews because of the risk of a Jewish person being in a leadership position that could yeah which is exactly what CNN was bringing up with the VP choice of Shapiro and that's right I think it's totally crazy however I definitely have seen people online I mean articles online like saying like is this an issue with putting Shapiro on the ticket now I can't believe this is a problem for the voters of the country however I think if you're one of the democratic masterminds and you're trying to engineer enough electoral votes for Harris to win like I said you're trying to win that blue wall you're trying to get not just Pennsylvania but Michigan and the problem that Biden and had and now Harris has in Michigan is that the large Arab and Muslim population in Michigan is really against the administration's support of Israel now this is why Harris just snubbed Netanyahu when he came to Washington so they are imately trying to reposition that issue and remember the margin of error in Michigan is like 2% so if they can win back that vote by seeming to be more Progressive on the whole is Gaza War then there's a big electoral Advantage for them so I have to wonder if this is where this talk about you know is it an issue for Shapiro to be Jewish on the ticket or whatever again it's nuts to me that we could be even having that conversation in this country but it's possible that that that is what's going on is it's it's like can you win Pennsylvania but not lose Michigan well the inevitable outcome of identity politics by giving everyone a definition on their race or their gender or their background or their religion is that you ultimately end up picking winners and losers and you don't just get to pick winners when you when you make selections or prioritize things based on identity like this you also deao pick losers and that's where this unfortunate snowball when johnf Kennedy ran for president it was a big issue that he was Catholic I mean you guys don't remember this but 1960 right a major thing in our family was major point of Pride that we had an Irish Catholic in the White House yes yeah and specifically what people asked is would he be loyal to the United States or would he be loyal to the Vatican and the pope you know who is his ultimate Authority and he made a really clear look I'm going to do what's right for the United States and he neutralized that issue I think that what matters about Shapiro or any VP is their views and their accomplishments their policies and whether he's Jewish or not really is secondary even if even if you're a principal concern is Gaza there are still plenty of Jews who have a wide spectrum of views on that issue so it is nuts to me that this conversation is seriously happening all right there has been a Kur fuffle a Donnie Brooke online between Paul Graham and our bestie uh David Sachs here here Paul Graham threatening you Sachs on X do you really want the full story of what you did to Parker being told publicly because it's the worst case of an investor maltreating a Founder that I've ever heard and I've heard practically all of them this Paul Graham the founder of Y combinator I was talking recently to another investor about whether you are the most evil person in silon Valley Frank to you David sax he thought about it for a few seconds and agreed that he couldn't think of anyone worse the second tweet about you being the most evil person David Sachs in Silicon Valley has been deleted well that's nice your response it's nice to know yes that's nice to know there was also another unhinged tyde that he had against me a few months ago okay where he was commenting in the Ukraine debate and uh was responding to a Ukrainian partisan who this guy is like a propagandist for Ukraine who was embedded in the asof Battalion people may know what that is any event Paul went out of his way the the thing is I've never met Paul Graham I I don't know him I've never I've never done business with him so it's just weird to me that he had this animus and this vitriol towards me it's hard to know exactly what this is based on I think that part of it is that he thinks he knows what happened at zenitz even though he wasn't involved at all and he's just listening to one guy who's been nursing this Vendetta for many years and then other people are speculating that there could be other things involved I don't quite know you want to set the record straight on zenitz and just say what happened what is it that you guys want to know Parker apparently has done several public interviews where he kind of made claims I think I don't know if I've listened to him I've just read the summaries but J you probably know that par say you ran a coup on him obviously for folks who don't know there was an SEC investigation and Parker was ousted from zenitz as the founder CEO he's very bitter about that did a Revenge start up Rippling which is doing quite well from what I understand and uh he blamed Sachs for all of this even though he was sanctioned for doing essentially Assurance fraud by helping people lie on a test for their insurance certifications and he he got sanctioned by the SEC for it and as you pointed out sax he was the only person who was sanctioned for that so he broke some rules and he got pretty pretty serious penalty yeah do I have that basically I mean that that that whole experience was like the was easily the worst year of my entire professional career having to deal with that mess that he created and look anybody can now say anything almost 10 years later in a podcast but the situation there was thoroughly investigated by Regulators who had subpoena Powers who did extensive Discovery they looked at everyone's emails throughout the whole company they also interviewed something like a dozen people under oath and took witness testimony from them and then they sanctioned him they find him and they published an account of what happened I personally think it's a huge waste of time to be like rehashing events are almost a decade old but I guess I'm being forced to by this smear campaign that he and Paul Graham have engineered against me if you want to know what happened just read what the SEC said read what the other Regulators said there was only one person who was named as being aware of the misconduct and there was only one person who was fined and held accountable by Regulators in fact he was fined more than the company now if he just said yeah look I learned from that mistake and I you know I made some mistakes moved on and apparently he does have a successful company so I don't really understand why he's so bitter he seems to have like a you know he's like disturbed about it then it would be fine I mean there would be no reason to be talking about this but the guy refuses to admit that he did anything wrong and instead he's created this elaborate story that his departure from Zenit wasn't related to massive compliance issues and that somehow it was related to him missing a sales Target or being the victim of a coup that's not what happened this was a regulatory crisis that unfolded over many months and kept getting worse and worse and we kept discovering new compliance violations and this created a 50 State Insurance investigation that could have shut the company down yeah and he controlled the bll he didn't have to leave if he didn't want to he ultimately perceived that it was in his interest to leave and let us clean it up and then he went on to go do this other startup which I think he was planning to do all along so his plan worked out for him which is he left a big mess for us to clean up and he very successful now with the new company so right right sax I remember I will just say I remember how hard you worked at that after you were uh in the COO seat and then you were promoted to CEO and I was really impressed watching it and seeing what you did because you chose to step up and take care of this company at a time where you expressed to all of us privately how hard it was and what a challenge this company had found itself in and you had investors that were friends of yours that were involved in the company that were on the board and I think you did what felt like at the time and from my experience interacting with you during the time the right thing which was to step up and address this rather than just throw your hands in the air and say this guy screwed things up or this company screwed up and walk away from it you had personally put money in your friends have put money in and you worked hard to try and help the business recover after this miserable period of time and it was really impressive to watch you do that work so I just want to highlight my kind of experience watching you it was it was miserable and obviously pretty thankless and I did it for no compensation I did it because like you said I had a lot of friends who invest in the company I just thought it was the right thing to do to do this cleanup the lawyer said it would take two years we managed to get it done in one year we got a clean bill of health from Regulators we had to remediate all the compliance failures and when I then handed the torch to the new CEO we had $200 million in the bank and 60 million of ARR with a clean bell of health so you know but I didn't know I'd have this like crazy founder like lobbing bombs at me the whole time and frankly if I known he was going to do this I would have just said listen man you clean up your mess and he would have continued playing games and stolen Walling The Regulators and it would have been a much worse situation for sure Cham you want anything here before we wrap up on this because I'll I have two points to make but I'll let you go first look I think that part of what happens in Silicon Valley is that there's these clicks and there's definitely a a YC click and they protect their own in absolute terms and so I think there's a level of morality that everybody else has to live by that's not necessarily the the rules that apply if you're a YC CEO now that was accepted in Silicon Valley because in the early days they were frankly one of a very very small handful of games in town with respect to high quality deal flow when you started to do series a b and c and as a result of that I think venture capitalist essentially looked the other way because the returns were so good the companies that were coming out of the incubator were so good but as with all things when you're successful and you try to scale returns Decay and this is not a a flight on YC's returns but it's what happens to everybody so if you look at blackstone's returns they were incredible when they started then they're okay today when you look at sequoia's returns they were incredible when they started they're okay today YC's returns were incredible when they started they're okay today and this is nothing against any of these folks it's that in the business of building an organization and scaling that's what happens and when that happens and a lot more competition emerges on this seen the old tactics that you used to use to run a protection racket if you will just doesn't work anymore and I think part of what's spilling out in public here is that that kind of immature form of bullying and intimidation is just kind of dumb because it's it just doesn't hang together anymore so I don't know I thought the whole melee if you will Ruckus Jason fraus fraus Donnie Brooke bruh a clash yeah was more about a guy that was engaged in this trying to do what he perceived to be the right thing for a YC founder in his community but probably just he just needs to get back to work and do something productive and probably this wouldn't happen the next time I'll just make two points here why combinator has always like much of our industry they're not unique in this been in favor of rule Benders Breakers and naughty is actually something in their interview process that they optimize for Sam Alman has talked about this very publicly I had a ycl Alum who was trying to get funding for me hack my voicemail and change my outgoing voicemail and that was like a big brewhaha and Hacker News Etc and you know we kind of celebrate a little bit of bending and breaking of rules and what everybody needs to understand is sometimes if you bend or break a rule like insurance certification like Parker did here you know that that can be fatal for a company which it was and it can be you know really really dangerous and so then you superimpose on top of this to your point chamama Y combinator very big powerful organization some folks say a mafia and they described it as a bully stack you know y combinator does circle the wagons they do bully people and they do put out a presentation that we are the only people in Valley who are founder friendly you know even though they're getting 7% for 125k like we do in our accelerator techar does while also saying everybody else is the enemy everybody else is taking advantage of Founders the truth is we're all working really hard every founder you know is going to H hack their way to success sometimes you take it too far like Parker did here he learned a lot of lessons like some people say Uber did like some people say Airbnb did there's always been rule breaking and bending in the entrepreneurial middle class and then you superimpose on it Paul Graham's feelings you know uh in the Middle East Sachs your strong feelings about Ukraine and politics and now the footprint of Silicon Valley is just so powerful so influential on the global stage when it comes to politics it just reaches a level of toxicity here that it doesn't need to we're all on the same team let's all build great companies let's put this ugliness behind us and get back to work that's my final statement No shanis is spoken I like that statement and if we were just talking about somebody who had learned their lesson this wouldn't even be an issue this is like events that happened a decade ago such a waste of our time and energy even be talking about the problem is that you have people really we're talking about Parker and Paul Graham who are trying to smear somebody as a way to you ex yeah they're trying to damage your business let's be honest they're trying to get Founders to not work with you for sure they're doing that and that's by the way look Parker has this very complicated story and the whole purpose of it is to exonerate himself to basically say that he didn't engage in any wrongdoing and somehow he was set up okay it's ridiculous I mean I don't have that kind of power over the SEC the SEC they sent us a list of people they wanted to talk to I was not on the list and I was like well wait don't they want to talk to me I'm the new CEO of the company and the lawyer said no your Discovery was clean as a whistle they don't have any questions for you they only want to talk to people who you know they saw in the discovery there was an issue so The Regulators prosecuted they basically conducted this investigation I had no impact over that it was a very serious issue this was not made up so I I I just think it kind of defies belief to now say that this you know all the Regulatory Compliance issues which played out over months were not an existential issue for the company it certainly was but look we have better things to talk about do you see Ali resnik's tweet this is pretty dark Ali Resnik tweeting here Paul Graham reached out to the key SV firm so Valley firms to attempt to get Jewish VCS fired post October 7th no idea if that's true or not but there has been this Paul Graham is anti-Semitic you know sort of meme going around I don't think he's anti-semitic but this is a pretty bold charge here and I don't know if it's true or not well I can speak to some of it okay go ahead yeah I've talked to a few people who are involved in this look I think what happened is that in the wake of October 7 there was obviously a very heated debate online PG is on one side of that he got into it was supporters of Israel on the other side they accused him of saying anti-semitic things he took offense to that and basically went over their heads to their bosses of a couple of different VC firms at least two that I know of where he basically went to the heads of these firms to express his displeasure I guess with these exchanges and I I think the feeling on the part of the junior VCS because the people he was going over the heads of were were not senior Partners or whatever these were lower level to mid-level VCS at firms you can understand how they would receive that the head of YC is going PA is a giant yeah yeah so he he's basically going to the heads of their firm to seek a correction in their behavior even though this wasn't like a workplace activity and so they certainly felt intimidated and silenced by that or in the worst case that he was trying to get them fired in his case I guess he's trying to you know say hey this isn't cool to call me an anti-semite on Twitter publicly and the truth may be somewhere in between I mean the great irony of this of course is he's out he's concerned about his reputation being damaged and I know YC took it very seriously the claims that they're anti-semitic and Paul Graham's anti-semitic they took that very seriously as they should but here he is out there trying to damage your reputation so it's a little bit of hypocrisy here I think if he's outwardly trying to destroy your reputation with Founders and then he's concerned about his reputation well clearly there's a double standard here because PG doesn't like being called names on Twitter yeah he doesn't like his views being labeled and he's willing to take those debates offline go over the heads not talk to the people who said those things but then go to their bosses the heads of their firm yeah maybe not threaten them maybe not say I don't think he said fire this person whatever but like you said there's always an implication of retaliation because people understand the way that YC operates and certainly those junior level VCS experienced it as a form of intimidation I mean this is the classic cancellation Playbook right and this is what people will do to the left or the right or they'll do it to advertisers they'll try to get advertisers to cancel it feels similar to that cancel culture even if that's not how PG intended well it's also like rather hypocritical when he's super sensitive about this type of thing but then he's instigating this pylon when on this whole Zenit thing he's basically single Source from a disgruntled founder who has this Vendetta who's been nursing this thing for years he's never talked to me like I said he's never even met me but he's willing to call me the most evil person in all of Silicon Valley and then again instigate this pylon with like all these other people from YC yeah I mean how dare him you the most evil person that's my job here on the podcast yeah exactly and then I saw like other people from YC like Michael seel who I think is actually a really cool guy oh he's awesome yeah supportive Founders and then he's tweeting that like I somehow I put up my Founders who were there were a lot of Founders who basically spoke up and actually said including many Founders who came out of YC say you know actually David has been a great VC to us and he's saying oh saxs must have put them up to it no I never asked anybody to do that and a good reason why why is I don't want to trouble my founders with into this drag them into it so I'm not going to make them do that so I had nothing to do with that but but frankly you know old saying that every accusation is a confession maybe the reason why people at YC think that I might have done that is because that's kind of their playbook is they create these online mobs but like what gives him the right to to do that I can tell you go for it he doesn't have enough to do he's sitting around he's got a lot of money I mean he's been very successful and as far as I can tell he's just getting into dust UPS on Twitter and then like like I there's a lot of amazing people we all know them that are so good when they're under pressure focused and grinding and then when you take a little bit of the pressure off they just go crazy and they don't have enough to do and it's Amplified by money and it's Amplified their own perceptions of themselves so I don't know may maybe you should just go back to work so everybody back to work when these things get heated here's an interesting idea for everybody go get a cup of coffee with the person you disagree with sit down like we do here at the all-in podcast and have a vibrant debate it makes life richer it makes you smarter it gives you more perspective and so PG Sachs anybody else involved you just all sit down and have a cup of coffee try to Hash this out okay good coffee in San Francisco that's my Rx freeberg I've been talking to saaks privately he has been complaining to me for weeks that we've had too much Politics on the program and not enough science corner so I acques to Sax's appeals to me and all of his supporters to to get a science Corner in today let's talk about nuclear power everybody's got nuclear power on their mind obviously China is doing a really good job of executing on it and uh there's some new science here so fill us in sax looks so engaged let's go well SX might like it because it's it's a bit of an economic story and a bit of a China competitive story which I think is the main point here the story is rooted in a paper that was published out of China on their new high temperature gas cooled Pebble bed reactor which is a new type of nuclear reactor technology that shows that this thing cannot melt down which is an amazing new technology but I want to just take a step back and talk about General electricity production in the US versus China and where it's headed so today the US has roughly one terawatt of total electricity production capacity China today has about 3 ter of total electricity production capacity and about you know 2 to 3% of that is nuclear today for China so by 2050 the US has projected to build out an additional terawatt to getting us to two terawatts of capacity so we're going to double our total electricity output by 2050 China meanwhile has a plan stated to increase electricity production to 8.7 tratt so basically tripling between now and 2050 88% % of their power by 2050 will be Renewables and by 2060 they've stated this goal that they want about 18% of their overall power to come from nuclear reactors they currently have 26 nuclear reactors in the construction phase they've got planning going on around building 300 of these and they've already got stated plans around 500 gws of capacity just to give you a sense of that 500 gws which is what China's got plans for is half of the total us electricity production today that's in their nuclear buildout today just to give you a sense on the relative cost of electricity China's about 7 to 9 cents a kilowatt hour the US is 17 to 25 cents a kilowatt hour and China is projected to drop their price to less than 6 cents due to the expansion of Renewables and nuclear power in the country so the US cost is about triple what it is in China to build out new electricity capacity that's a really important point so currently we have about a third of what China has China's going to Triple we're going to double by 2050 their cost is already lower than ours and it's going to get lower and their cost to build out new electricity is a fraction of what it is in the US so this is a a massive difference the International Energy agency estimates that the electricity from nuclear power cost 65 bucks per megawatt hour in China compared to 105 in the US and 140 in the EU um and recent data has us costs looking like they might be anywhere from five to up to 10 times what it costs to build out in China so this is a real important long-term competitive point china has more electricity production it's cheaper to make electricity and it's cheaper to build new capacity and they're building at an accelerated rate and this really highlights the industrial challenge the United States is going to have in the decades ahead we talk a lot about wanting to onshore Manufacturing in the US build out new Manufacturing Technologies But ultimately all of these industries particularly AI are going to be driven by the cost of power so Nick if you pull up this chart so what's going on in nuclear well there's uh effectively considered to be four generations of nuclear reactors the first generation was all the early prototypes and I've got an image up here to to show uh to show this comes from the Department of energy the second generation which was the first kind of commercial power reactor started to get built out in the 1960s 7s 80s and then these gen 3 reactors were these lighter weight reactors that were kind of more advanced Gen 4 is the next generation of nuclear power reactors and their next Generation because they're meant to be much more safe where they cannot theoretically have a meltdown you can't have a nuclear meltdown like you had with Fukushima or with Three Mile Island and to be clear Fukushima was generation two those are the boiling water reactors yeah yeah and so these these These Old reactors have this risk where if the the where you pump water in to cool down the reactor and to drive the turbine and if the the water pumping system fails and you can't get the rods out of the reactor then the the reactor keeps reacting the uranium keeps having this kind of chain reaction gets hotter and hotter and eventually gets so hot it melts all the walls and all the surrounding materials of the reactor and all of the nuclear rods start to evaporate and all this nuclear material is released into the environment that's the risk of a meltdown ultimately this is not a nuclear bomb just to be clear this just about really high temperatures melting the facility and then radioactive material escapes the facility the Gen 4 reactors are designed where that isn't possible and so one of the first uh if you go to this next slide you'll see just kind of an image here this is the new reactor called the the pebble bed reactor China started this facility I don't want to butcher the the the the name but I think I will it's at the Shia Dawan site in Shandong Province it's a 210 megawatt electricity production um reactor they started Construction in 2012 they finished um and started Ed uh doing operational tests in December of 22 they ran all the safety tests in the summer of 23 where they turned off the cooling and basically simulated that the system failed to see if it would melt down and that's the results that they just published which was the test they ran last summer and even when they turned everything off the system did not fail it did not have a meltdown it it maintained its ability to control its temperature and not have a meltdown and the way it works as you can see here is that these little Pebbles kind of like billiard ball sized Pebbles have uranium in their core these Pebbles kind of drop into this um the center reactor chamber and when the uranium is close to other uranium a chain reaction starts to generate heat that heat is actually in this reactor concept captured by your helium gas that's circulated inside around the reactor that hot helium gas heats up water turns a turbine generates electricity and then these billiard balls fall out the bottom so what they did is they simulated that the system stopped circulating that the power went out and measured what happened ultimately it was able to recover it didn't melt down and this is quite different Nick if you show an old model of an old nuclear Rod system so here's nuclear rods they're made of uranium they they go inside these chambers that have other uranium and when they touch each other or get close to each other they heat up and you have water that has to be pumped continuously to keep it cool to maintain a low temperature what happened in Fukushima and other facilities where we've had meltdowns is that the water stopped pumping everything kind of evaporated away and the rods didn't get pulled if the rods can't get pulled out and the water can't keep pumping you have a meltdown where things get so hot it melts everything around it and collapses so this Chinese site just demonstrated this Pebble bed reactor which is a Gen 4 reactor and it has extraordinary safety profile there's you know basically no no condition where the system would have a meltdown so these Gen 4 reactors are smaller they're more modular they're they're much much safer they're more efficient they have much less waste you still have to store those used Billiards somewhere so you still have to kind of take them and put them somewhere and keep them underground for 10,000 years but compared with previous reactors you know this plant is designed to be much more efficient much safer and they completed the safety test they published the results on the safety test and I think it really shows the the performance is there and this was always meant to be future technology these Gen 4 reactors China opened up commercial operations with this reactor in December of 2023 so it's running it's producing power it's on the grid and you know this design funny enough was first proposed in the 1940s and it took us nearly a 100 years to get it to Market which makes me also point out why I'm so optimistic 100 years from now on Fusion technology which seemed crazy at the today and this this sort of Technology seemed crazy at the time but you know 80 years later we've gotten there so you know this was an exciting outcome but I really do want to highlight the competitiveness with China lower cost to produce lower cost to run and and they're expanding like crazy and the downstream is they can power more h100s the US this is why this is why and this is why I asked Donald Trump when he came on the show and I want to make my passionate plea this is why investing in and deregulating nuclear reactor technology in the United States to enable a competitive playing field with the United States and China in the decades ahead is so critical because if we don't China will beat the United States industrially and we will eventually find ourselves in a greater point of conflict with respect to this Rising power that is going to be driven by lowcost highly abundant power and the United States does not have that power equals AI you don't think that distributed energy can basically deliver effectively energy at a marginal cost of zero yeah so the the the solar build atum off is in the the US forecast where we can get in an optimistic scenario a doubling of power output from one terawatt to two that's in the system today in the forecast but how do we get to nine that's where China's going to be at by 2050 and we have to have this ability to more rapidly kind of accelerate you know high power output systems like nuclear because while solar is great it's a low power output you need you know much more volume So This is highly concentrated system and the cost per megawatt hour you know can be significantly competitive if you use these small modular reactors and accelerate about carbon what about carbon based Solutions as a fall back difficult to scale I mean we're not going to open up 500 more coal power plants in the next couple years what about oil and N gas yeah so today n gas is 44% of of us power production capacity and we are going to build out and we are building out new n gas facilities but that's in the forecast so all of our forecasts today for the US are mostly n gas going out and and a lot of solar and wind going out to 2050 to double our capacity and it's already a stretch for us to be able to double our capacity so the only solution is to to rewrite the regulation we have to get nuclear going in the United States and these systems are safe they are scalable and if the United States embraced this and we took a public policy perspective that this is about competitiveness with China it's about National Security I'm hopeful that whoever comes in to lead the executive branch in this next Administration will be really thoughtful and make this a top priority so that's my plea and my reason for going through this today yeah I agree with you yeah this has been another amazing episode of the Allin podcast for what have we what have we learned Jason it's important to have a job otherwise everything just goes to pot yeah do not retire keep your mind sharp and shout out to our friend Phil helmuth doing really great at the World Series of Poker happy birthday Xander happy birthday to our guy Xander yada yada and for the chairman dictator the uh sulan of Science and your Rainman architect yeah David Sachs I am the world's most moderate we'll see you all next time byebye let your winners ride and instead we open source it to the fans and they've just gone crazy with it love [Music] youen besties are that's my dog taking a your driveway wa yeah oh man myit meet me we should all just get a room and just have one big huge orgy cuz they're all just usess it's like this like sexual tension that they just need to release [Music] somehow we need to get merch [Music] our I'm going all in