Big Beautiful Bill, Elon/Trump, Dollar Down Big, Harvard's Money Problems, Figma IPO

28:14So the White House view is also a view that you could look at and say economically I could see a path here that does make sense. You're reducing spending only on mandatory programs, you're going to come back with an appropriations bill to address discretionary spending. And then the final kind of action that the White House might take, which we've heard about separately, is impoundment, that at the end of the fiscal year, they may come back and say, all the money that we saved by not spending it, we can actually recover through impoundment. And the CBO has not accounted for tariff revenue. And just looking at the recent deal done with Vietnam, Vietnam's about $130 billion a year of imports to the United States.

28:56And they did a deal that they announced two days ago with a 20 % tariff on Vietnam, which, you know, if Vietnam's import volume does not increase, it's about 26 billion year of incremental revenue for the federal government. So there's an argument that Besson and Lutnik and others are making that you guys have failed to recognize that we've got a few other things we have up our sleeve that we're going to do. We're we've got more revenue coming in, net net, we will get the deficit down to where we need to be. In fact, Scott Besson was on TV saying over and over, we're going to get the deficit below 3 % of GDP, which is the key target here.

29:35But the immediate reaction to this bill, I think that Elon is having is the same that I've had, and it is the same that Senator Johnson had, and is the same that many others have had, which is what the effort we're doing. We are in a fiscal emergency in this country, and we're not addressing it. So I think both points of view can be valid, And both sides can have a good kind of argument for why the bill should be passed and why the bill shouldn't be passed. The White House has declared that this is the only way they're going to get some of the programs done that they believe they need to get done for national security, like the ice border stuff.

30:08And these are things that they believe they need to get done. But a lot of folks are looking at the numbers and saying this just isn't enough and you're now increasing the deficit by cutting taxes. One of the things the CBO does not do though is they don't have a strong model and there's a ton of economic debate on this point, which is how to tax cut stimuli GDP growth and job creation and income growth for people with jobs. The one argument is when you cut taxes, more dollars flowing to the economy, more jobs are created, more businesses are created, the GDP growth, income for other people growth.

30:43The alternative argument is it's a tax cut for the rich. What are you doing? They're going to put that money in their pockets. It's only going to benefit themselves. So that's, I think, a key crux in the argument that you'll never get to a resolution on. The one side will use that one argument and the other side will use the other argument. So look, I mean, with respect to Elon and Trump, I will say one thing very importantly. I don't think MAGA can exist successfully without the tech alignment. I don't think tech can exist without MAGA because of the government alignment and the importance of the government allowing these new technologies like AI to come to market and to proliferate.

31:21I don't think that these two can exist in isolation and in conflict with one another. Elon is the de facto king of tech. He is the person that is saying, look, if I'm in conflict with Trump, tech is in conflict with Trump or that, at least that is the perception on the Maga side. And I think that that is very risky for both sides to allow a conflict to kind of endure. And I do think that both sides have heads that are going to be cooler that will prevail here. And I do think that these two are going to recognize the importance of being codependent, if you will, in being able to progress their respective agendas.

31:56Tremoth, your thoughts on the kerfluffle seem to be winding down and maybe reaching some sort of endgame. It feels like we're in some sort of an endgame here. And if there is one, what is it? I mean, I think it's just important to recognize that on the one side, you have the most powerful person in the world and on the other side, you have the most important powerful entrepreneur and richest man in the world. And when you have people that are that accomplished, it's thought as if you're going to get along 100 % of the time. So I think a lot of the breathlessness around all of this stuff is overblown.

32:37I think the reality is that when push comes to shove, I think that they agree on more things and they probably disagree. And I think when everybody realizes that the alternative is essentially some insane form of socialism and redistribution, I think the alliance will hold and that they'll find some common ground. Jason, what do you think? Well, I think you're right. These two individuals are used to speaking their mind and they're both really good at social media and then there's no better media cycle than covering the two of them battling it out and trading barbs. But I think what Elon did, this cycle was really interesting.

33:27He started a preference stack for Trump and that cascade preference Cascade, Preference Act, however you want to phrase it. You know, I think played a large role, if not the role in getting Trump elected. People can debate that. I don't know that you can perfectly know what that $250 million and all that effort he put in, you know, what that did in terms of Trump's chances. Trump probably wouldn't want any way versus Kamala, but maybe not. Putting that aside, the platform Elon has refined during this political cycle is one that resonates. And I think it's a really good idea for him to maybe if he's going to be involved in politics pull that string and just crisply define it.

34:10And I was thinking about it over the last couple of days. And I think it hits into four basic groups, balance budget and government efficiency. That's kind of one fiscal responsibility, sustainable energy, which obviously has been passionate about and he's the leader in solar batteries, EVs. and then manufacturing in the United States, which he also was the leader in and pro -Natalism and just the population crisis. He really cares about those four issues. So what I think he should do is take that America pack and instead of making it like just pro -Maga, he should just clearly define what it is that he believes, small set of issues.

34:47And then you should go and back the people who are running to be in Congress and senators and just say, hey, here is what I would like you to be in favor of and do what Norquist did with his no -new taxes pledge. Do some sort of pledge like that? I don't know if it needs to be a new party, but just really crisply define what matters to him. If he's going to be involved in politics, then get people to agree on it. And if he wants to give them donations, as is his right, as is his tax right, to raise money, he could represent, I think, a very world -positive view, sustainable energy, just incredible execution, and a really efficient government.

35:24He's technical excellence. Technical excellence. Excellence writ large. And America, just go for it. And it doesn't have to be personal against Trump. One of the big problems with Trump is he has a bunch of sick offense around him. And the more you kind of appease him and just blindly follow him, I think the close to you, the perception is that's the closer you get to him. I don't know that that's true. I think he likes debating stuff. So I think he should embrace the people who debate it with him and then those people should just crisply say, here's what I stand for and I'm putting my money behind it.

35:56I hope we're in alignment, but I'm going to stay in my lane and I'm going to prioritize what matters to me. And Elon's priorities are exceptionally sharp and well -defined and he should pursue them. Yeah. Jerry's out on where the sense of and the broader picture. You guys will get annoyed because I've talked about Radolio so much, but I think he's done an amazing job in the last five years, basically explaining everything we've seen from global conflict to the internal conflict, the rise of socialism in the US and the relationship to the debt and deficit cycle. He just posted on Twitter yesterday that he went to DC to discuss the budget deficit with senior people on both sides of the aisle and he said, it's clear to me that we are unlikely to change the debt trajectory we're on and avoid the painful consequences.

36:45And he talked a lot about this concept of absolutist politics. And this is the same reaction I've had every time I've gone to DC. And we've met with members of Congress. And if you guys remember from the beginning, I said, doge isn't going to be it. As much as Elon can identify and resolve to a better way of operating the federal government's agencies, you cannot change the spending without a change in statute from Congress. You have to get Congress to act. And every time I met with members of Congress, they're incentive is to keep the money flowing to their districts. That's what they focus on and every year their districts want more.

37:16In different contexts and different forms through different programs. And that's what their job is. Their job is to go to DC to represent their state's interest or their local district's interests and say we need to make sure that we're taking care of as the money flows. And as a result, everything keeps getting bigger and bigger and spiraling away. At the end of the day, the way we economically save America, if we even have a shot without money printing, which a lot of people like Bologi and Dalio and others are now indicating is what's going to happen. If we're going to end up inflating away or printing away all of the debt that we've taken on, it's to get to a 333, which Bessent has highlighted is also his goal, 3 % federal deficit to GDP, 3 % GDP growth, and 3 % inflation.

37:57And just to give you a sense of where those numbers sit today, the current estimate is 6 % deficit to GDP, 2 .4 % inflation. So we've actually got a little bit of room to run on inflation and GDP growth this year of 1 .4%. So will the tax cuts in this bill increase GDP growth? Will AI increase GDP growth? The jury is out. Will the tariff revenue reduce the deficit more than the CBO is estimating? And the increased GDP growth reduced the deficit? The jury is still out. And what will happen with inflation? And if the Fed cuts rates, you're going to see inflation climb a little bit more. or maybe the tariffs effect on inflation will still come through.

38:35Some folks have said that hasn't hit yet, but it will come later this year, will we exceed 3 % inflation, TBD? So the jury is still very much out on whether these actions that are being taken, which Bessent has declared, is going to get us to that 333 number. But then a lot of folks who are looking at this with cold stare, with like no political influence, with no political intention, not representing a party, not representing an administration like Radolio are saying what the fuck? There is no way we're going to get to her. Bology, I think, you know, pointed out in his tweet, his point is actually very good point, which is our debt is not just the federal debt, but there's other debt that we're not even accounting for.

39:18Consumer debt. I said, I said this in the past. There's actually corporate debt, the business debt, consumer debt. There's also state and local debt. And then the one key number that we never talk about is the unaccounted for liabilities and public pension funds, which is on the order of trillions of dollars more. So when you add all of this up, someone's gonna pay the bills on all that debt or we're gonna have to inflate away that debt by printing money. And at some point, the trains left the station, a lot of people are saying we're done, there's no way out of this. So, you know, the Elon Trump battle is like an interesting kind of side -for -fuffle, but it's not really the big story here.

39:54The big story is the trains left the station. You know, I think if we're, if we look at this as the first year that tech really got actively involved in politics. Obviously Peter Tio has been at this row a little bit longer in his support of JD Vance the Vice President. I'm looking at this as like maybe this is year one that Gen X is truly engaged in making a difference in Washington and setting an agenda. That agenda has 25 years ahead of it. If everybody remains this engage, whether it's people like SACs or TL or Elon or countless other people, you know, what is JD Vance's position on this when he runs for president four years?

40:36What will these other individuals, Dean Phillips, who've had on the program if he decides to run? I think this is, you know, maybe 5 % into the impact this could be having and already, and in Freeberg I always give you a lot of credit for this two years ago when you said you started bringing this up incessantly on the program and to the point of which is really It was during COVID I started doing this. Yeah, three years ago. And, you know, like, yeah, you're admitting, you've been annoying for three or four years. I think actually it's the sand that might make the pearl in the oyster. We need to address this.

41:12It's become a top issue of our time. That's actually success. The fact that this issue is now the issue of our time, our budget, our fiscal responsibility, austerity, that's actually a really good thing. and yeah, maybe it doesn't get manifested in this bill, but maybe it will get manifested in JD Vance's, you know, presidential run or Dean Phillips or the both of them will be discussing it in three and a half years or three years when they're on the presidential trail. So that could be actually the early sign of success for this. I'm an optimist. Good luck. So I'm gonna get that. It's over. Yeah, I mean, we sit here and we parked on this topic dozens of times, we keep talking about how we need to do this, we need to do that.

41:54But at the end of the day, when the bills get passed, when Congress takes action, you get to see where their heads really at. And I do think that this bill has indicated that the administration has a set of incentives, which is they want to get the actions done that they promised they would on the campaign trail. And then Congress has a lot of incentives to keep the money flowing. And I think we've seen that in this negotiation to get this bill done. And I'm not faulting anyone for it. Congress is looking out for the interest of the people that they represent. And the White House is looking out for the people that voted for them.

42:28And they said, this is what we're going to do. And we have a mandate. And now they're getting it done. And that's just the way it is. But this is the key part of the whole storyline, which is at some point, once the spending levels get too high, and the country, the individuals and the businesses become too dependent on that spending, yep, which is effectively what happens at the end of every empire, you can't back out, you can't stop spending. And everyone just votes themselves, the dollars. So it's a scary moment. And I've said it before, I do think that the GDP growth is the one path that's left to resolve this.

42:59I don't think we're gonna just cut spending. And so we need to kind of be really thoughtful about making sure we don't hamper GDP growth, particularly as it relates to AI, which is gonna unlock a lot in you industry, a lot in you growth, a lot in you opportunity for jobs. And this is why I worry a lot about this patchwork of regulation in states, making it really difficult for AI to see. The only need five more people like Rand Paul and Tillis, right? If you get a couple more of those, Chimoff, this could be a completely different discussion. If you want to pivot to the next topic, I mean, one way to look at this is how the dollar is trading.

43:30Yes, so the US dollar is now down 11 % this year. And that's against every single major currency. Here it is. So the dollar was down over 10 % through the first half of 2025. This is the worst start in over 50 years. Take a look at this chart and you can see it. It's kind of shocking. Keep in mind the dollar jump 7 % after Trump was elected. It kind of peaked in mid -January. So if you take the pre -election dollar index number 103, it's down 6%. It's then not record breaking, but significant. And obviously economists are saying tariffs and global trade are a big piece of this. And as we just discussed, and we'll keep discussing the US debt load at $37 trillion.

44:15It's more expensive for Americans to travel abroad and it's less attractive maybe to invest in the US. Let me just follow up on the point I just made. But this is where, what do they say the chicken comes to roost? What do they say the chicken comes to roost? Yeah, the chickens have come to roost. This is it, the rubber meets the roost. This is where you start to see the inflationary effects of the spending and the spiraling debt, is things get more expensive. and your earning power doesn't increase commensurate with the higher expenses. So what will happen is you'll see here, the US today imports four to five trillion dollars a year.

44:48So that's four to five trillion dollars that US consumers and businesses are buying from abroad, and then we import into the US and use those products and services. So the cost of all that just went up by 11%. As the dollar declined in value against the average of all these currencies, and that's outside of increase in prices that may arise because of the tariff effect where folks may say, Hey, let's charge more for tariffs. Whether it's the cost of tariffs or the cost of the debt, the dollars that you have to spend now just went up by 11 % to buy the same thing. And if that compounds and that continues, and your earnings are not growing and your assets are not growing commensurate with that, that's where dollar devaluation happens, and where asset devaluation and income devaluation.

45:27And that's where, again, we open up the door to a thing like socialism where people are like, it's now twice as expensive to buy my groceries, it's twice as expensive to pay my rent, and I'm not making any more money. man, I need a solution. We got to get together and get the government to make everything free. And that's why I'm so convinced that there's a rise in socialism in this country because in this sort of an inflationary environment, like we're seeing so far this year, you don't see them the dollar inflation numbers, you see it in the currency numbers, you're going to say, man, I need an alternative.

45:56That's why I agree with you. That's why I agree with you. That is free stuff. It's not free. It means increased spending, which means you're stalling the plane even more. So, drop any thoughts here on the dollar. I think the dollar is devalued 50 % in the last 35 or 40 years. So, I think it's somewhat useful to look at any single couple of months in time, but this has been a one -way trade for a very long time. And it's probably important to understand why that is. And I think it generally has to do with the fact that the United States finances a lot of growth and that has been the right decision.

46:44So unless you see a complete collapse in the currency, I suspect that this decay continues to happen. So the question is, is it a bad thing? And the answer is it depends because if asset prices increase faster than the dollar devalues, you're still ahead. You may not be ahead as much, but you're still ahead. And if you look at asset prices in the United States relative to asset prices any place else in the world, it is the flight to quality, which is to say that it is the thing that everybody wants to own. And you see that in the equity markets, you see it in real estate, you see it in hard assets.

47:23So I don't know, I think that it's part of the fact that until we run surpluses and or completely eliminate the debt, there will always be a reason to be somewhat short the dollar. But the reality is that a lot of people still want to own these assets more than they want to own any other asset and those assets are dollar -denominating. And so as long as that continues to hold in the push and pull, it'll be a slow bleed, but it's probably manageable. And that's just sort of like the mathematical trend of it all. So, I don't know, unless there's some cataclysmic collapse in asset prices, I think that this is just a thing that you have to deal with.

48:06It's sort of like the carry of it all. And it happens. There's all kinds of other trades where you sort of pay a carry. And that's okay. Is there a relationship you're going to explain to the audience between the stock market ripping and the dollar devaluing? Well, I think the reality is that, you know, if you think about a country that all of a sudden has to pay a tariff. So let's take the Vietnamese example that Freeberg said. Let's just say that they had to prepay one year of it just to make the math simple so you can understand. They have to come up with $23 ,000 ,000 billion, I think, is what Freeberg, the number that you set or something like that.

48:43So yeah, like $26 ,000 ,000 on $130 ,000. How do you do that? Well, the first thing that you're going to do is you're going to sell dollar -denominated assets that you already own. And you're going to generate those US dollars and then you're going to send it to the United States Treasury. So you may be selling bonds. So you would think, okay, well, that's not really good for asset prices. Okay. But then what you quickly realize is that all of that is far outweighed by the fact that all the rest of the stuff that you own, whether it's gold denominated or whether it's in local currency denominated, you want to actually go and buy these dollars because you want assets that are safe in turbulence and volatility.

49:21And so would you rather belong the Vietnamese dong or the Vietnamese equity markets to a degree yes. But if you have obligations that the Vietnamese government needs to fund, their central bank is probably deciding that they need to belong U .S. bonds and fixed income. And other people who hold assets in that country are probably going to be on a weighted basis adding exposure to the United States while all of this stuff is happening. Why? Because you're seeing the balance sheet of America burgeoning and growing, trying to be billion from Vietnam, tens of billions over here, tens of billions over there, it all adds up.

50:00So, again, I think that this is like a very complicated multi -variate problem, but the net takeaway is that the dollar devaluation is not something that's new. It is a phenomenon on that has existed through market cycles for 50 plus years. It's a decay that has happened and will continue to happen. So I think the way that I think about it is there's a drag, but can the drag be overcome by the increase in asset values of the hard assets that are dollar -denominated? And the answer is yes and meaningfully so. And so as long as that's the case, I think you're going to continue to have a bit for equities.

50:37If all of a sudden the Mag 7 decision, decided to be list and not be American companies. And all of a sudden showed up in the CAC 50 in France. Yeah, we'd be in big trouble. But I don't think that's going to happen. And so as long as there's American ingenuity and American supremacy again, which goes back to the other thing, which is we can't kill these golden geese, nor should we kill the emerging and growing golden goose, which is AI. And as long as those things are the same, there will be a constant bit for American assets. and that will keep the enterprise of America going for far longer than most people would guess.

51:15Up to a point, but pull up this chart that I said. I think that this is why Buffett sort of speaks about this in these extremely long arcs, that you're always ultimately going to be on the wrong side of the trade betting against the United States. And it's probably important to then say, well, what would a boundary condition be? I don't think the boundary condition is the dollar. I actually don't think the boundary condition is the debt I think the boundary condition is if something were to happen with the quality of the human capital inside of the United States and its inability to innovate Then we're probably in trouble, but even that story will take 50 to 100 years to play out.

51:56I just think for most of our lifetimes This is a safe trade because it's a winning trade Well, I mean, it's winning if you can put up with the currency dropping 11 % in six months. And if you pull up this chart and I get it, Chimoff, I agree. But I mean, look, businesses are booming in India. Businesses are booming in China. Businesses are booming in other countries now in the way that businesses use to boom strictly in the US. There are other markets that seem to be having their day. And you can see this number which I think is a really striking number in the last 10 years US Treasuries held by foreign holders has declined from 34 % This is a good round I mean it's good in one context you put my point is people foreign Countries and foreign businesses and foreign investors only this is only good as much as they've got it There's nothing bad about this chart This chart shows that people don't want to hold US Treasuries.

52:54No, this chart shows that foreign governments and central banks have less and less influence on the direction of American fiscal and monetary policy. Better. Who's going to buy our debt? It turns out that when you're the largest economy and you're growing, there's a lot of internal people that will do it. Right. So that's a key point here, which means that the debt is going to get more expensive as there's a smaller market. That's not necessarily true either. Okay. Well, one thing is that we're investing a lot of money and there's a lot of dry powder. the amount of money being invested into data centers and AI and the amount of cash that's moving into investment, specifically in our borders, that has to be a creative, right?

53:34Yeah, the amount of cash in money market funds probably exceeds a sum total of all of the equity markets around the world. That's insane. Well, and it's like now people are talking about building 10, 20, 30 billion dollars worth of data centers and nuclear power plants again. So there's something going on here with American exceptionalism, speaking of American exceptionalism, Harvard is still battling it out with Trump, and their $50 billion endowment is being questioned. And it actually relates in many ways to what we're seeing in private companies tech and VC. It's going to take a little bit of a securitist route to get there.

54:12Since Trump has been inaugurated, Harvard borrowed 1 .2 billion due to uncertainty around their federal funding. Remember, Trump administration canceled over $2 billion worth of research grants to Harvard earlier this week. The administration formally accused Harvard of collerating anti -semitism on campus. The White House said it will file a civil rights lawsuit via the DOJ ASAP unless Harvard comes into compliance and does a deal with Trump. Here's what they're looking for, Trump White House. First, canceling the EI initiatives, third party oversight of admissions, mandatory actions to combat anti -Semitism.

54:46Harvard has declined to do a deal so far. And you're right. You might remember House Representative Elise Stefano. She asked the SEC two weeks code to investigate Harvard's financial disclosures. So she got into the disclosures when they set up that one point, whatever billion dollar line of credit and loan. They did a bond deal, I think. They should like $750 million a bonds. Yeah. So those 750 million bond offering on April 9th was sent out. And six days later, they sent out a supplemental swooshing with more information about the White House civil rights investigation, which she claims to have changed.

55:26Harvard's Cooked and I think this is really good for America. Explain. It turns out, and there's been a lot of people that's posted about this on X. But there continues to be rampant Title IX violations with respect to admissions. I think Kremio, Nick, you can probably find it. I think he published one that Columbia was continuing to discriminate against Asian students. Harvard's original case was against Asian students. There was a bunch of woke stuff at other Ivy League schools like UPAN. There's all this rampant anti -Semitism. It all needs to get fixed. And so I think that if you get a deal done, Harvard will have to capitulate.

56:08I think President Trump holds all the leverage in all the cards. And there's nothing mathematically that Harvard can do. They can stall for probably another year and a half, but at some point they will not have the budget to sustain themselves. And they're going to get into a huge world of hurt. What they will have to do in order to finance their budget in probably 18 months is start to actively sell their private equity portfolio, which by the way, from 2019 to this year, almost double from 20 to 40%. So an insane asset allocation, frankly an asset misallocation at the top of the market to the most illiquid asset class.

56:49And when people sniff this out, what they're gonna do is Harvard was able to sell a billion dollars recently of private equity stuff and managers that they didn't want to support anymore at a 7 % discount. There is no smart money on the street that's going to look at any private equity portfolio from Harvard without asking for 20, 25, 30, 35, 40 % discount because your back will be totally against the wall. If you don't ask for that, you're just a bad businessman. If you put all of these things together, they're going to need to reestablish federal funding, but in order to do it, I think the president has been very, very clear.

57:26And for whatever reason, they've refused to want to address these issues. But the Ivy League, there's just something fundamentally broken. Well, and Freeberg, the Wall Street Journal reported on Wednesday that Harvard would face a billion dollar budget shortfall every year. If Trump followed through on his funding cuts and tax hikes, he was also saber rattling that he would get rid of their non -profit status or maybe change how the endowments worked. A lot of tools I think that he could deploy here. And there's a big size tax, by the way, in the BBB, that taxes foundation assets. I don't know what the final language was, but there was a version that I saw where ex -size tax on foundations was upwards of 8 % a year.

58:13I don't know if that was the final version, but that's an enormous amount. Let's just say it's half that. Let's just say it's 4%. But if you're paying 4 % tax on your endowment every year, all of a sudden starts that up. That's like, you know, for Harvard, like two and a half extra billion dollars in your year that they have to pay. And Freeberg reportedly Harvard is at the table and in discussions with the White House after a couple of months of defiance, which your take on this is this an important priority for America and for the Trump administration. Is it a side show? What are your thoughts on the larger ramifications of this?

58:49Let me just suspend the brand and history and legacy of Harvard for a second. Sure. And just talk about these, call them prestigious higher education institutions. What are the two primary functions of these institutions? The first is to educate students, and the second is to conduct research or to create facilities for research. Remember, these institutions do not direct research. They recruit and enable researchers who apply for grants to get funding to do their research. And then they educate kids. I think the internet was the first leg on the stool to break higher education. The internet democratized access to information and knowledge.

59:32You can watch MIT graduate courses. All of the core kind of educational content that is delivered in prestigious higher education institutions has been largely democratized and is broadly available for free on the internet. That's an incredible transition that's happened for humanity, for society, for the world. AI is the next leg of the stool to break. And I think that AI may actually break education. It may break higher education and then eventually it may make its way all the way down to childhood. In terms of rethinking from first principles, how do we educate? How is an individual getting educated and where the other benefits they get from an educational system besides just core domain knowledge.

1:00:16There's also socialization and experience with project -based work, but I think that AI fundamentally re -rides the ability for an individual to get a good quality education. And we could see kids in Africa and kids in South Asia getting the equivalent of a Harvard graduate school degree at a cost of zero through personalized tutoring enabled through AI and ubiquitous access to knowledge and information. So that core function of the university, I think, is broken. And they're now starting to reconcile what that actually means for the long term viability of all of these higher educational institutions in the United States.

1:00:53The research function, I think, is also being rewritten. Around the world in Europe and in China and in Asia, there are independent research institutions that get research funding that can show up and say, hey, this institution is just being used to run research. It doesn't necessarily need to be within an educational framework. It can be an independent research institution that focuses on either a topic or a domain. So I do think we're going to see more and more independent research funding happening with the grants that come out from the federal government from nonprofits, from endowments, and foundations that fund research.

1:01:27So I think that there's a real reckoning underway. It's almost like these guys have created a monopoly. They've accumulated this capital, which allows them to build these great buildings, to practice great researchers, and then get the research funding to fund those researchers, and then use that to raise more capital and their endowment and build an ex building and keep this thing growing. And I think that that's breaking. I have one question for you. I like where you're going with this, but there's one whole that I would like you to address, which is I don't think any of that is nearly as valuable to most of the kids applying or the parents forcing the kids to apply as it is brand and then the cycle that employers put back.

1:02:06So how do you fix that loop? Yeah, well, I get it like you can. So you tube your way to something and you can AI your way to something, but at the end of the day, Goldman Sachs loves to recruit from Harvard. And that's a really big deal because that's a wonderful company. I think the Tiel Fellows program has highlighted that you don't get exceptional performance by exclusively going to people that have higher education degrees from prestigious institutions. The T .L. Fellows program, which for those who don't know, offered significant funding to kids that are coming out of high school, 18 -year -olds.

1:02:43And I think the T .L. Fellows, Jason, you probably know better than I do, what they've created, right? Yeah, a lot of startups. And like amazing startups. Yeah, I know. But how do you deal with 500 million kids graduating a year globally? with no with no brand differentiation. I think that's an important question. So how did Tiel Fellowes do it? And how do you hire Timoth? You just did a program for 80, 90 to define people. Right here. Yeah. Well, yeah, so we did a coding challenge. I guess what I'm saying is though that, you know, what's the alternative to that coding challenge? I mean, yeah, no, no, the best way to determine freeberg to answer your question, the best way to determine if a person can do a job, If you don't want to outsource it to a logo like Harvard or Stanford, which have worked in the past, is to watch them do the job.

1:03:30That is the number one day to do it. And the way to do that is to hire them for projects or do internships. And that means you have to invest in what's called professional development. And that slows companies down. So the hack is to just pick a logo. But I, for example, in our venture firm, created a training program for associates. And we invested in that. and we hire three at a time and two of them make it on typically. Sometimes just one who hit our notes and the other ones move on. And so I think you have to invest in your own professional development in your organization and the organizations that do that then succeed and have a massive competitive advantage because they have their own training program and way to evaluate talent.

1:04:11That's one way. Doing a code -a -thon and scoring people is another way. Having an AI interviewer is another way, so you can interview 10 ,000 kids instead of interview the 50 that you chose out of Harvard because Harvard is your first filter. So the real question to Mop is, what are the mechanisms by which employers are going to create new filtering systems? And I think that there's a lot that we just, we just kind of went through three examples. But I don't know if the brand holds over time. Well, here's the thing that what you're saying doesn't address. us. There are just a lot of kids that aren't ready to bloom when they're 18 or 19 or 20 or 21.

1:04:46And I'm not sure that, you know, I'll just take myself as an example. I was a marginal performer in university, but I had co -op. I did well in co -op jobs. Those co -op jobs were because these employers only wanted to recruit from the University of Waterloo. Now, if I had to compete with 50 ,000 kids, I'm pretty sure I would not have gotten it because I was a bit of a layabout. But then, you know, when I got into the professional working world after a couple of years, everything just kind of clicked. So I think the problem that we'll have is in the absence of brand, it's just going to be very difficult to differentiate oneself and filter people.

1:05:26And I think that what Jason says becomes the huge problem, which is then the burden of professional development for all these young kids is extremely heavy. So I think that the idea of all of this tooling is good and it's necessary, but I think it's insufficient. There's something else that we need because I think that being able to differentiate yourself in a coding challenge is not the future either. It's for a very, very narrow class of person. Look, project -based work, social adjustment, There are clearly other really important skills and development cycles that are needed for people. It's not just dumping knowledge into your brain.

1:06:03This isn't like the matrix where you can just turn on the knowledge and gain it. So I do agree. I think that there are other systems by which that will happen. And those systems will output filters. I'm just not sure it's the same system that we've used for the last 250 years. It's not. I think that's the really interesting part of the discussion we've got to freeberg is that that we had an incredible system of a series of layered iconography that indicated, hey, you get 10 people from this group, 100 from this group, and you slot them in. And hey, your company is going to operate. And then parents don't have to worry.

1:06:38The students don't have to worry nor do the companies. In this new world, the companies have an opportunity by creating professional development. And you know what? The people who couldn't get into Harvard because they didn't have the connections. they weren't legacy or they didn't have the wherewithal to pay for SAT tutors or whatever bullshit that it took to hack your way in and have a legacy family member or whatever racist policies they had didn't let Asian people in because they didn't have the right personalities. All that nonsense goes away and that actually benefits their grades or their grades were too good.

1:07:08Right. Exactly. The performance was too high. It's so dumb. It's like the dumbest thing I've ever heard. But here's the good news. Anybody can build a project in the world and refine their skills right now based on all the information that's on the internet. And you and I, Shemoff, are part of that group of people. We made our own luck. We made our own projects. We had some level of grit and autonomy and self -reliance to do that. And you know, the feedback I got from our previous discussion about this is everybody talking about how poor people as a group can never, ever strive and never build anything.

1:07:48The truth is, it's the easiest it's ever been to build a company, to build a project and to be independent as a creator of a product or service in the world. It's the easiest it's ever been. It requires the least capital and the least amount of time. So we're selling a narrative to people that they're helpless when in fact they are super, super empowered. The only thing you can't to do is put yourself into $200 ,000 in debt, because you'll never get out of it. I actually think this is a huge, beautiful opportunity to reset the system, but it's not gonna be like going to a supermarket and picking the brands you want and then filling positions.

1:08:28You're gonna have to be self -reliant for all the students out there. And that's where Peter Tiel got right. You gotta give a shout out to Peter Tiel here, I think, Freiburg. When he did the Tiel fellowship, the way they picked people was there, they had a mission to accomplish something in the world and they were making progress towards it. That's actually the criteria they used. Did you have enough inner resolve to actually pick a mission and did you actually do anything to steer yourself towards it? And when you make it a competitive program like that, they just pick the people who picked the most interesting missions and had made the most progress.

1:09:04But there's definitely going to be a whole left -and -susciety, if these degrees do not correlate with performance and reality. All right, on Tuesday, Grammarly, in the huge fan of that product, acquired superhuman. That's that amazing superfast AI email tool from Raoul, of which I was the first investor in. Superhuman had raised 114 million, was valued at 825 million during peak zirp. According to Reuters, superhuman has annual revenue of $35 million, dollars and Grammarly seems to be building a little bit of a suite of AI workplace tools. They bought Coda, was not an investor in, but I am a huge fan of that product as well.

1:09:45It's similar to Notion, another product I'm a huge fan of. They bought Coda back in December. And then on top of that, Figma filed their S1. They Acquewon revenues 228 million. You remember they were going to get bought by Adobe before it got stopped? And they have 13 million monthly active users, a billion and a half in cash, no debt. and turns out CEO Dylan Field has 75 % voting power. So he's in founder mode, very nice. And also a Tiel Fellow, a really interesting cat. I'm gonna have to put, Figma's gonna try to raise 1 .5 billion in their IPO. That would match core weave. That was the biggest tech IPO of the year so far.

1:10:23And we are on a heater circle went public that was up to 7X from its IPO peak. And Chime went public slightly higher than its IPO price. She had E -Toro, Hinge Health also went public, Wealthfront, which I was an angel investor and they just filed to go public, Yum Yum. And a bunch of M &A transactions, we talked about DoorDash, Me Too purchases, Sam Altman bought two companies at OpenAI and tons of M &A happening at the same time. According to Polymarket, 52 % chance of a rate cut in September, 46 % chance of no change. So we're definitely not getting an increase. according to the sharp money.

1:11:04And I think Powell said he would have cut if there weren't the tariff you know curveball thrown into the system, which is I think what most of us thought and Tremac, you talked about all this sideline cash sitting there in money market accounts, markets at an all -time high, Uber, Blue past, 88, so I should be retired right now. What are your thoughts on M &A, IPOs? Feels like man, we've got a really frisky, hot market right now. Is it making nervous or does it feel like this is where we should have been all along and that Biden maybe was putting a headwind against all this. Yeah. So here's the crux of the issue.

1:11:45I think this is the intersection of a lot of really interesting things happening right now. You have meta giving individual human beings 300 to $500 million packages like their NBA first team All Stars. Open AI, their revenue numbers just leaked. They're forecasting 13 billion in 25, 2025, spiking to 125 billion in 2029. You have anthropic their revenue by 2027 is forecasted to be about 35 billion. So what does all of this tell you? To be honest, it's telling me that the state of software is a little unclear, meaning I actually believe the OpenAI and Anthropic numbers. I understand why Facebook is now spending as if there's an existential risk.

1:12:43And I think the existential risk is that these models could be so foundational to how social experiences and work are done that it starts to absorb a lot of other stuff. So the question is how do other tools fit into a workflow when these things become so central to how people both enjoy their free time as well as spend their productive time? And I think when you look at that, you look at Figma, what I would say is on the surface, in the absence of these AI businesses, I would say, man, what a gangbusters business. Growing by 40 something percent of your at this scale, they're adjusted, I think, operating margins are 18 percent.

1:13:26I don't like adjusted because it's adjusted for stock price comp. I don't know what it is when you add that back in. But the point is, it's a phenomenal business. The question that I think the institutional investor will have is what am I by? And does this revenue growth sit adjacent to core model revenue growth? Because the big question that we have yet to answer, and this is not a Figma specific issue, it is an industry -wide issue, is how much do these foundational models absorb into what they do for what you pay them. And I don't think we know the answer to that yet. So if all of these things just become excellent coding tools, then all of this high -level software is free and clear, it's in the safe zone.

1:14:13But I think the problem is we don't know that that's the case. And so I think in the IPO, what you're probably going to see is people approach this company the same way that they approach all non -core AI IPOs, which is that it's a business that you love to own for a year or two, but if there's a depression and valuation, it's because people cannot underwrite years three, four, and five. Freeberg, do you believe that the Star Trek communicator just double -click on your pendant, ask the computer to do something, means there's one piece of software in the world that does everything and all this long tail of business software just goes away and if so on what time line?

1:15:01No. Okay. Yeah. I mean this speaks to revenue quality, revenue stability. I think you used the term how brittle is it? Chimoff? What are your thoughts on Chimoff's angle here of that unknown? Where would you fall either way? Are we going to have a suite of products or does it? Yeah, I mean, I think we're narrow. Well, it depends for what application. I think Figma has done a classic like land and expand in terms of who they initially go after. And then what the suite of tools that they offer does by expanding that, they now can offer a bunch of different people within an organization a set of tools to help them all collaboratively develop products and services.

1:15:45And you can see that in some of the numbers. revenue growth is on the order of 40 some odd percent. They ran a 43 % operating cash flow margin in Q1. So in Q1 of this year, Figma generated $95 million of free cash flow. They've got net revenue retention of like 130%. So this land and expand is proven out. And there's real durability it looks like to this business for now. But to Chimau's point, like what is three to four years for now look like, does this get absorbed into chat GPD? You could say that about any software at any point in time. And I think the thing that makes this AI era different is that that transformative shift can happen overnight.

1:16:22Or suddenly someone else launches a service that completely obvious another service because of what AI can do. But I think Figma has done a great job staying out of the curve. The free money I think trade instead of having to bet upper down Jason on AI, I would, if I could get like $50 or $100 million of Figma, I would probably be long it and I would short an equivalent quantum of Adobe and I would just book the spread. and I think you make a ton of money that way. That's a safer trade because even if the AI model thing comes around the corner, we don't see it. The person who's gonna take a retrained on valuation faster than Figma will be a doby.

1:16:56And so you'll be hedged and you'll probably make money that way. We look at something in terms of not just the quality of revenue in our investment firm, we look at the durability of it. Like, can this exist two, three, four years from now? And is the value accruing so much to the user that the amount they're paying, they just never think, I should swap this out. I should replace it, right? And the revenue durability of your iPhone is a good example of it. Despite people not renewing your phone every year, you still can't think there's no better option than an iPhone right now. Even my Google Pixel 9 fold as great as it is.

1:17:33It just feels like that revenue is still durable. I wonder when it becomes less durable. Can I push back on this? I think the question that it brings up is not whether the individual person can whip out a card and pay for it in four years. It's whether that individual person actually exists. And so that consumer with that amount of money to spend? No, no, no, no, meaning like we don't know what the layoff cycle and the pattern of layoffs inside of companies may be with AI, meaning if we all become more generalized skill workers and there are maybe many, many, many more companies. Then the odds are more likely that you provision highly skilled, vertically specific work to a set of agents.

1:18:21If that's true, then the tools that created incredible durability when the organizational chart of a company supported vertical specialization won't exist when instead you have horizontal capabilities that you work across. An example. I think that's the big question that AI will bring to bear. Again, it's not going to be overnight, but that's where people will front -run those trades and the market specifically if they sniff this out. We'll want to price that 24 and 36 months forward and say this is what the end state looks like. A way to sort of, for people to understand that is, imagine you outsource HR and you don't have a six person HR company, like you talked about two years ago, and then you don't need HR software.

1:19:14So your point, each group has a set of software and tools it uses. If that group goes away because it's just abstracted into the AI machine outsourced, there's nobody to buy it in the organization. There's nobody going to the CFO saying I need this HR software. I need this project management software. I think it's a really interesting point. And the way as you for a founder freeberg to avoid this is to have a product that services many different needs for those customers or that organization. I think that's why I like these tools like Coda and Notionist. They kind of affect many different departments in the organization.

1:19:50This has been an amazing summer episode of the All in Podcast. We weren't going to do it this week, but we said, If you know what, we wanted to talk about a couple of issues for Eidberg. We wanted to see each other and it's the slowest news week of the year, but we wanted to get together and hash out some of these issues. Anybody got to take plans for the weekend and any recommendations for people. I did some books to read. You guys got any shows or books you're reading right now, any albums you're listening to, anything you're obsessed with. I'm reading Modern Poker Theory by Michael Lasavito.

1:20:21Oh, really? If this goes into GTO and that kind of stuff. Yeah. Yeah, that was book. And what's your big takeaway thus far? Do you have something that you wrote a note about or you highlighted? No, I mean, I'm just tuning up my game. Always tuning up my game. Oh, you're doing a little tuning tune? I mean, I hope that's correct. Is that because we're having something going on in November? You want to talk about that? You can't talk about that. Well, I don't know if this poker thing happens. Maybe we can't play poker anymore in America. Oh, yeah, we didn't mention this, but the big veil says, I don't know.

1:20:55No, maybe you can't be. We should have talked about that. We need, we didn't talk about it, but man, that's the reason to get up and arms about this bell. If it gets rid of the poker ledger, what do we do with the ledge? No, the ledger will survive actually. Actually, this reinforces the value of the ledger because you'll just run the ledger infinitely forever. We may have to have an infinite ledger. Never settle. Never settle. I was thinking my proposal for the ledge was if you're under a hundred dimes, you roll. If you're over a hundred dimes, you're clear, you know, like each year at the end of the year because it's just not worth the, you know what I'm saying?

1:21:26It's not worth the tax implications. But we may have to create like an offshore blocker, fund it with stable coins. I mean, the whole thing is going to get a lot of our lawyers and accounts are going to have a field day with this. Just so we can flip coins and play bomb plots. Freeberg, you're watching any shows or movies. Maybe you could, um, maybe you could give us one of your great, deep pulls for a science fiction film that people should watch this weekend. and if they want to get some jewel ID, three -learned. You like silent running. That's a good run. Logan's run. Silent running. Those are good.

1:22:011967. Yeah. And I think 74 for. Oh, I watched the Bob Dylan flick on the flight to Italy. Oh, how was it? It's a Timothy, Shalemhe. What a great film. I mean, he, I have to be honest with you. I was not a super fan of Bob Dylan's music before. Yeah. But then I was like, wow, the body of work is really impressive. Let me give you two, and sorry, and Joan Baez and their music together. Incredible. I mean, let me give you, I was, I was a little short on Joan Baez too and I was like, this was a mistake. I just, let me give you three albums to listen to. Blood on the tracks. And once you listen to Blood on the tracks.

1:22:40Then I want you to listen to Infidel's, another, which is like his best of the 80s. Infidel's and Blood on the tracks. Those are two, and Empire Bolesque, a third one. Empire Bolesque and Infidel's from the 80s. This is Dylan at the really interesting height of creativity and then Blood on the Tracks post his 60s, 70s, faux, rock stuff and that transition. People consider Blood on the Tracks the Seminoleum. I will also give you a deep Polish street legal with an incredible track changing of the guard. This you'll love, Chimoff, because you also like the War on Drugs. War on Drugs, very influenced by that era.

1:23:18So you got blood on the track street legal infidel and empire burlesque those are Jay cows Dill H. Ruggs War on drugs the bond Dillon do drugs. I mean it was famous that he I think he was on speed for a little bit in the 70s Reportedly, and that's where he had a lot of productive days But I think he introduced the Beatles to LSD was the rumor freeberg your thoughts on my Dylan selections and you have one of your ring I'll leave it to you, Jake. You got any movies or something? I did recently where you watched the arrival by Denis Villain -Neuf. Howdy, Prince of the Last Name. Villain -Neuf. Villain -Neuf.

1:23:58He's doing the new bond. That's going to be great. He's doing the new bond. All right, everybody. We will see you next time on The World's number one podcast, Saxi Poo, we'll be back. We'll love you, Vesti. Love you, boys. We're like your winners ride. Rainman David Sack. We open source it to the fans and they've just gone crazy with it. I'm going to win a queen of kinwap. I'm going to win a queen of kinwap. What are your winners ride? Besties are gone. That's my dog taking a wish.

1:24:42You should all just get a room and just have one big hug or two because they're all just like this like sexual tension But we just need to release that

1:25:06Me SPD!