E126: Big Tech blow-out, Powell's recession warning, lab-grown meat, RFK Jr shakes up race & more

32:44I agree. I agree. And it's not, this is not a five-year, 10-year prediction. This is like five-quarter, 10-quarter prediction. We said that the first organizations to use this, like the Canary and the Coal Mine, would be the consulting organizations. And today, when Harvey got announced, one of the things that, right on the heels of that, PricewaterhouseCoopers announced like a billion dollar investment into AI, which makes sense because as a consulting organization full of lawyers and accountants and IT folks, those are the services jobs that you get tremendous leverage if you were to use these tools.

33:16Freeberg, any thoughts? I don't know. I mean, I think we kind of beat this horse to death. We've talked about it for a couple of months, and I think we just keep repeating ourselves. Are you doing anything when you're firsthand? Are you playing with it yourself? Yeah. Tell us about that. By the way, one thing I will say, we all talk about cost reduction, and then, oh, you know, knowledge work is dead, and we're going to save money and all this stuff. what that is always the first reaction to any new point of leverage, realized from some novel technology. The second is suddenly people start doing things that use that leverage to do things that they couldn't have done before.

33:54So it's not just about dropping costs, it's about enabling new things that does 100 times more or unimaginable things prior. And I think the next phase of this AI shockwave that kind of hit us and hit the world and, you know, kind of hit enterprises is going to be the evolution of integrating those tools in a very unique way with other tools to drive very novel things forward to create new things, new projects, new progress that was unfathomable before. So it's not just about cost savings, it's going to be about new stuff. I shared a link on Twitter yesterday. There was some guy, I want to quote him correctly.

34:35His name is McKay Wrigley. So shout out to McKay. On his Twitter page, it says that he didn't know how to code in 2019. He learned how to code for the first time he taught himself. And he put together an object recognition tool with ChatGPT. I saw this video crazy with his webcam and basically he holds up like a diet coke and he's like you know tell me how many calories what is this and how many calories are in it and it's like oh there's no calories in it it's a diet coke and he does this three different times with three different objects and he hacked this thing together in a couple of hours that is a product that was like theoretically unfeasible or you know kind of very very difficult to kind of see how you would put that piece together quickly and easily with one person in a room in a few hours, a year ago.

35:28And here you see a demo of this person who didn't know how to code not too long ago, putting it together and creating this product that would have been such a profound startup. Imagine if you went to VCs 18 months ago, and we're like, look, I've got this thing, and I hold stuff up in front of it, it tells me all about it, and it talks to me. And I literally use my voice to talk to it. And he basically strung together a text to speech, chat GPT, an object recognition tool, all of this stuff completely open source, and a plugin that does web browsing. And the whole thing is basically like your own interactive visual robot.

36:01It's an incredible product demo. And I thought it was so amazing and profound. I sure it's a prototype, and it's kind of janky, but it was done in a few hours on almost a no code basis. It's incredible. So what's going to come from that is a whole set of new products, and ideas, and things that we are certainly not thinking about today, but in six months, is going to become almost mainstay. And many new categories of products, many new industries, many new businesses are going to emerge that we're not even thinking about. So the Luddite argument of Oh, this is going to destroy jobs and destroy the economy and drop costs by 90 % lawyers are going to get cheaper, etc, etc.

36:37I think that doesn't even matter. It's the tip of the iceberg. What's more exciting is all the new evolutionary stuff that's going to hit the market that's really going to transform the things that we can do and that we didn't realize we could do. There's an incredible analogy for this because what you're really talking about is more people being able to use tools and be creators. And what happened in the 80s and 90s when the NBA started playing exhibition games around the world was more people around the world started playing basketball. And then you started seeing people like Luka or before him Yao Ming, Mutombo.

37:11you start to have people from around the world who had never been exposed to basketball just incredible porzingis incredible talents emerged because you just had more people playing with the basketball i think you're going to have more people playing with code and building products so you're going to have incredible amounts of creativity from people who maybe you didn't expect because they didn't go to school for coding or have that opportunity hey um i mentioned i was in fidey and i was at uh fenwick's office and then wilson's and zini's offices to law firms being the law firms in uh the financial district in the embarcadero it was an absolute ghost town and when i say ghost town i mean like serious ghost town like weird like this is uh still like being in some dystopian science fiction thing we're the last man on earth and then uh we saw in the group chat today 350 california street was worth 300 million dollars four years old it's a 22 story glass and stone tower it's a picture of it it's going up for sale and they believe according to the wall street journal that bids will come in at 60 million dollars an 80 percent decline and we talked about this commercial real estate uh would have this moment a lot of the banks uh the smaller regional banks own this debt sacks what do you think is going to happen here who is the person who would buy an office tower in downtown even at an 80 discount knowing that you have to pay all those carrying costs and there's so much vacant office space and it's only increasing right what's your who buys this it's called land banking okay explain so in other words Okay, what I mean is, you're right, there's 30 % vacancy in San Francisco right now, maybe going up even more in the next few years as leases roll, and people take less space.

39:07You may have a countervailing effect in terms of new companies moving back because of AI or expanding. So it's possible you start to see some growth in the office market in San Francisco. But the bottom line is 30 % plus vacancy is going to take years and years of growth in order to absorb. So you're right, this building, they can slash its rent, but they still probably can't fill it. I mean, there's just no demand. So you're going to be sitting on that property for five years, 10 years, before the market comes back the way that you need it to. But there's some value, right? Oh, it's going to trade way below its replacement cost.

39:45If you were to build that building today, it would cost you many times what they're going to pay for it. The problem is you can't finance that purchase with debt because the building is not going to generate enough revenue. So that's what I mean by land banking. It's going to have to be an equity investor who's willing to think long term and say, I'm going to buy this at a super distressed price and I'm just going to sit there and hold it and wait. Carry it, like you said, bury the carrying costs until the market comes back. But J. Cal, I want to say something. I think it's a great analogy because public growth stocks have declined 70 plus percent, right, since the market started to decline.

40:21And we've talked a lot about the statistic that I've shared a bunch publicly on how 70 % of publicly traded companies that have gone public since 2020 are trading below their total cash invested since founding, which should translate to an estimate that call it somewhere in the order of 70 % of private companies are probably worth less than their preference stack. And so they're not worthless companies, they just have a capital structure that is upside down, those companies are making products for customers, those product, those customers are paying money for those products, there's value there, there's real value there, the value has just been reset.

40:56And so it's interesting, it's not just the asset class of growth stocks and the asset class of private companies or private tech. It's also, you know, in commercial real estate, we, we try and treat each of these as if they were in isolation. But But the problem is many of these assets were funded with some degree of leverage preferred stock is leverage. And you know, it is a form of debt because it has a preference over the shareholders, the common shareholders, the equity holders. And the same is true with this commercial real estate market that there was a certain amount of debt. So the availability of low cost capital, securitized against some asset in the form of debt or in the form of preferred stock in a private company has the same effect, which it allowed the valuations to balloon on the equity.

41:41And now that the market has re rationalized the prices down 70 plus percent across all three of these connected but you know somewhat disparate asset classes, you're kind of having this big reset moment. And funny enough, the other statistic is the cell phone traffic down 70 % in downtown SF, right. So it's funny, all four of these numbers are pretty much on track. Yeah, this chart is crazy. It's literally like, you have some cities that have more cell phone traffic than they did last year or a couple years ago and this is downtown by the way not the whole city yeah and sam i mean the wider bay area is is i don't want to say booming but it's vibrant yeah i said on last week's show i was looking for a place to host the accelerator in san mateo area i got dozens of people contacting me hundreds of locations and offers at 25 of what their carrying cost is or like that the carrying cost the the rent was and people offering me major companies offering me free space just because they would like to have founders hanging around and there was one project that i really like the person's like i'll give it to you for whatever just because i want to get more people to downtown san mateo so that that does sort of prove the point that there is a what i and i saw this in new york city during the 90s when things were so cheap people just got creative with space it inspired people to say i'm going to create an art gallery i'm going to create a performance space and i don't know when that happens in san francisco with these spaces but feels like it's going to be a while i don't know what you when do you think there would be demand for this space sex if you had to pick a year over and give us an over under i mean five years plus i mean And just to give you some numbers, I think a healthy vacancy rate in an office market is 5 % to 10%.

43:30A high vacancy rate in a city was considered like 15%. Like you wouldn't want to be an office investor in a market that had 15 % vacancy. 5 % to 10 % was sort of the normal range. If you were under 5%, it was a super hot market. And then 10 % to 15 % was sort of a not great market from an investor standpoint. So they're at 30 % plus. And like I said, it could get worse before it gets better because as leases roll, people are going to shed more space that they might not already be subleasing. So the real number might be like 40%. So I don't know. I think it's like, yeah, it doesn't seem like a decade.

44:08It's a decade assuming that San Francisco gets this house in order and companies come back. Speaking of that. And new companies are created and they don't completely wreck it. It's not clear to me that like things will go in the right direction. I mean, speaking of that, do we want to bring up this horrific bear spray attack now? You want to cue that up, Sax? I mean, we're like in full-on Gotham City now. Now we have vigilantes. Right. There was a story of a fire commissioner named Don Carmignani who was beaten with a metal pipe by a gang of homeless addicts who were encamped in front of his mother's house.

44:45And apparently they were harassing her and they were doing drugs, smoking drugs or whatever, right in front of not pod. It was like fentanyl or meth or crack, something like a hard drug. And so what we know is he went down there, had words with them, bada beep, bada boop, you know, and they bashed him upside the head with a pipe. and uh now it turns out that he was accused by the defendant's lawyer the one who assaulted him so we don't really know what's true here of using bear spray on them first so the da dropped charges the lawyer for the defendant in that case is saying that he apparently was the perpetrator of these bear spray attacks on on homeless people going back a number of years i guess there's a like you said pretty gnarly video of of that but we don't know that it's him we don't know that's him but obviously the da thought something was kind of hinky because they dropped charges against the the guy who assaulted him shouldn't the person who sprays the bear spray and the person who beat somebody with a pipe shouldn't both people yeah yeah yeah of course listen there's video of somebody bear spraying homeless people and that's clearly wrong however that was from a couple years ago the one that was released is from 2021 we have video from the night that carbon yanni was assaulted that they were chasing him down they're chasing him down yes with the metal pipe and even even if they were acting in self-defense you can't go chasing the guy that's not self-defense more damage on exactly that's vengeance that's not self-defense yes so they took it out of that zone of self-defense and they were chasing after him and if you saw what he looked like after the attack they were using deadly force he could have been killed and you know if donna gotten killed by the metal pipe i don't think it'd be a defense that he bear sprayed them first no it would have been an excessive use of force so yeah but in any event i mean where the da ended up on this it was just a drop charges from that night but i don't know that they're going to drop those charges i think that that's going to be untenable no they already they already dropped the charges they have to i mean justice has to be blind correct i mean you're you're you're a trained lawyer here we have to apply the law equally to the sadistic insane person who and wait a second they arrested the guy who hosed the person down didn't they arrest them as well i remember seeing a perp walk we talked about that on a previous show anyway it's got them city folks this has gone to pure yeah i don't think this just proves anything i mean again what they're trying to say now is that because of the actions that Don took, that San Francisco is safe and there's nothing to worry about.

47:27And these - Addicts. People who are encamped on the sidewalks doing drugs, doing hard drugs, there's nothing to worry about because somehow they were provoked by Carmignani. And I just think, I agree with you that this is part of an overall pattern of chaos and lawlessness in the city. It is like Otham City. So, you know, it doesn't make me feel a lot better about what's happening on the streets. It's nuts. chamath you wanted to add something i want freeberg to oh riff on lab meat uh yes well there was actually a story about this i guess there's two types of lab there's two types of mock meats i've had the impossible burger hey i've never craved an impossible burger there's so many great burgers you can get out there shake shack five guys in and out why would i go to get this impossible burger unless i was doing it like vegan stuff but then there was also supposed to be 3d printed meats and this stuff seems to be taking forever where is this at because there was a story in the Wall Street Journal about how poorly this is apparently going.

48:23So there's three categories of these alternative proteins to traditional animal protein. The first is these call it alternative proteins where you use things like soy protein or pea protein. Beyond Burger is a good example. They have a pea protein based burger. And so that category was kind of hot for a minute where everyone was like, oh, it's an eco-conscious decision. People will make the shift. And, you know, Beyond Meat had this massive IPO and the stock went crazy. And someone said it was the biggest return ever for Kleiner Perkins. But it really was just taking plant protein, processing it and trying to make it sort of mimic the texture and flavor and taste of animal protein.

49:09And it's more expensive. So I've generally been fairly negative on whether that really moves the needle, right? The needle for me is can you replace animal proteins traditionally and stop using all this land and putting all this carbon into the atmosphere and all this water and all these resources that we use to make all these animal proteins, which I think is both kind of ethically incorrect, but also extraordinarily environmentally costly. Sorry, can I ask you a question? Qualifying question. Do you think it's also important for it to not just replace natural products, despite all of those externalities you talked about, with artificial products, with chemicals and sugar?

49:44so first of all everything is a chemical so that you know that i think the the categorization of you know all chemicals are bad is silly because everything is made of chemicals i think it's a question of are there bad things that are being put in there that's not good for your health to make it flavorful or whatever and that that may or may not be the case it's really product dependent i don't think it's a good generalization but do you so you think when i eat a salad i'm just eating chemicals it is chemicals yeah got it but healthy ones right healthy chemicals are in a salad. There's good in there or bad.

50:15Yeah, for sure. And then bad chemicals are in like sugary cereal. Yeah, like refined sugar is bad for sure. Right? That's a bad chemical. And I know I'm just, I just want to understand how you just viewed as a spectrum of chemicals. Some good, some bad. Yeah, there's things that are good for you. There's good fats. There's bad fats. There's, you know, and even in the category of sugar, some people say all sugars are bad. Some people say some sugars are better than others as measured by the glycemic index. You know, there's a lot of ways to kind of look at this stuff. Is beyond meat and these P1s, they're all processed, highly processed.

50:46They got a lot of salt, they got a lot of fat, right? They're not good for you. So the way that beyond and impossible and others have tried to make it taste good for people is they've added a lot of, you know, saturated fats, which is a way to drive the mouthfeel and make it taste good. But then a lot of doctors at the American Heart Association came out and said that those fats are really bad for your heart, and you shouldn't eat them. and also there's been a general kind of consumer sentiment shift so a couple years ago these were the hottest products it was like all the food ingredient companies were shifting to plant-based proteins and they were building plant-based protein business categories and it was this big hot thing and then they came out and they're like wait a second this isn't going as we thought what happens is people try them out and they're like yeah that's a cool thing i want to do good for the planet but would i rather pay five bucks for a do good for the planet burger that kind of doesn't taste that good?

51:35Or would I rather pay three bucks for a burger that tastes really good? And what happens? B, B, I choose option B. Yeah. And so to most people, right? And so almost all people and I've that's a point I view I've always shared I said, it's just, it's not going to win the hearts and minds of the world unless it's cheaper. And it's tastes better and healthier. And it's identical. Yeah, and doesn't damage your health doesn't make you worse. Exactly. So the more challenging technical solution is the other two categories. The second category is can you synthesize animal proteins using recombinant DNA.

52:06So this is where you take the DNA that codes for the protein, whether it's the milk protein, or the egg protein, or the cheese protein, and you put it in a bacterial cell or a yeast cell that are used to ferment, that we used to make wine that we used to make beer, and they eat sugar, and then they spit out a product. And in the case of wine and beer, they eat sugar from grapes or from malt or whatever, and they spit out alcohol, ethanol. And Genentech was the first company to really pioneer recombinant DNA at a mass scale, they basically use recombinant DNA to make insulin. So they took the DNA from humans that codes for insulin, the gene for insulin, they put it in E.

52:42coli bacteria, and then they put the E. coli bacteria in a big tank, and the E. coli start to duplicate, and they make all this insulin. And that's how we make all the world's insulin today, it's using that biomanufacturing process. And it's how we make all of biologic drugs, all antibody drugs are made this way. It's a$300 billion a year market just in biologic drugs. So when CRISPR kind of came about in 2012, suddenly the toolkit to go in and do a much better job and a much cheaper job of editing the genomes of little microbes to make them more efficient at making these proteins became standard.

53:14And everyone said, let's go use this new category of what's being called synthetic biology or symbio to make all these animal proteins that we use animals to get today. So can I just ask a question? Is the idea that if you use recombinant DNA in this process, it would taste better and be healthier and all this chemically identical. So it's the exact same protein as you get. I understand it the exact same under a microscope or whatever, but would it taste the same case exact same totally exact same. So that's the whole point. Do we know that or was that that was the guess? No, we know that it's the same protein, Chamath.

53:47So whether you get the protein from the cow, or you get the protein from the yeast cell, it's the same protein. So what's the issue? It's too expensive to do this process? Too expensive. So the key metric in that second category is productivity, grams per liter per day. How well can you get that little microorganism to make that protein? The more protein it makes per day, the cheaper the price per protein. And we're still a far ways off from getting this to be price competitive. So that's a challenge category right now. There's a lot of I'm invested in a couple of companies in the space, where we're trying to make it faster and cheaper to do that strain engineering, to edit the genome up front and make them make those little cells more productive to bring the price per gram down, and hopefully make it compete ultimately with the traditional market for eggs, cheese, milk, etc.

54:29But what is the constraint? Is it an energy constraint? Or is it natural biological incapability? No, so the great thing is our first principles basis, this, the biophysics indicates that this should make proteins cheaper. And that is good for the planet. It's good for human health. It's good for everything. We should be able to make eggs, cheese, milk, all this stuff exactly the same as what you get from an animal without the animal, because the biophysics of a single cell making it is better than the biophysics of a whole animal. Think about a chicken, it grows feathers, it clucks, it walks around, it has energy, it makes heat.

55:00So the chicken as a system is not that energy efficient. But a little cell that just eat sugar and it's programmed to do one thing and one thing only eat sugar make protein each sugar make protein and spit as much of it out you theoretically can make it way more efficient exactly now we're making great progress but we're not there yet we're not a commodity price point why i'm trying to ask why where's the failure point there's two failure points sorry i should i should say there's three the first is strain engineering which is you want to shuffle all the other genes in the organism to stop doing things like growing a bigger cell wall or you know taking your time to duplicate, you want to change the genome of the cell to get it to do stuff faster.

55:36The second stage is process engineering. When you put that cell in a tank, you're changing the sugar, the methanol, the CO2, the oxygen, the pH, everything about that tank and the condition of the tank has to be adjusted. So there's about 60 variables. And those 60 variables all need to be tuned and tweaked before you optimize the performance of production. The third category is the hardest, which is scale manufacturing. There's about 100 million liters of biomanufacturing capacity on earth today. 95 million liters is owned and operated by companies that use and when I say biomanufacturing capacity, I'm talking about big stainless steel tanks, you pour water, you pour sugar, you pour your cells in, they make copies and they make your stuff.

56:16Of that 100 million liters, 95 million is owned and operated by companies. 5 million is available for rent. Of that 5 million liters, 4 million is rented for its entire lifespan by some company, usually a biologic drug company, because very little of this is being done in food today. So there's only a million liters left to rent. And there's 200 sin bio startups trying to make animal proteins. And they've all competed for this this capacity. So the capacity cost has gone up by about fourfold. But it sounds like the the latter two, you can overcome with capital, but the first one is really bounded by science.

56:48It's more engineering, because what you track is kind of what's called the tighter curve, which is grams per liter. And the more experiments you do, the higher that number goes. And so if you can increase your experimental rate, and the few the few grams that it does produce today, when when a normal person tastes it, they're like, Yep, this tastes the same as a wagyu ribeye. No. So remember, I'm talking about proteins right now. I'm not talking about cellular meat, I want to talk about cellular meat last, which is the hardest category, which is what you're talking about. I'm talking about taking that protein and then using it to make a product like a like a cheese, or, you know, using it as an egg replacer, that kind of stuff.

57:24it's the same protein as what you would get from eggs or milk or what have you. This all just sounds so hard. Well, it's a big problem and it's a lot of money. So is it a problem? Eggs alone are$200 billion a year. I mean, the methane released from cows is one of the largest contributors to global warming. It's a real problem. Also, we're going to need to solve this, Jamath. There's a lot of resource constraints. If we're going to colonize Uranus, we're going to need to get food there. I just asked a question. like if you if you go after the high emission categories first, do you give yourself room to leave these things because you're doing so much already?

57:57Just a question. Animal agriculture emissions are one of the largest and unfortunately, one of the biggest drivers because it's people's GDP per capita increments. The first thing they spend money on is protein. No, no, I get it. I'm saying something different, which is if we just invented better heat pumps, you'd have industrial heating and cooling, which represents like almost a third of all greenhouse gas emissions, you get that off. And you give yourself a lot of time and space and room. And maybe you let the cows roam and belch and burp, because the tape, the meat just tastes better. And you don't have to spend a bunch of time and effort.

58:28I don't think it's an or I think it's an antemoth. I think we should be doing all these things. And I think that I'm a big believer, as you guys know, in markets. So I'm not a believer in transition, for the sake of, you know, carbon saving, because people aren't going to pay a premium as we've seen with the kind of alternative meat market$15 people want cheaper hamburgers are not markets want cheaper, cheaper, cheaper. So if you can make proteins, it's also a great ROI, you can make money doing this. And the market will buy it because it's cheaper protein. How the third, sorry, I just want to I just want to hit on this because we keep sidetracking a little bit.

59:01The third category is the one that the article was about, which is cellular meat. So cellular meat is where you're trying to make your wagyu or your shrimp or your fish, you're trying to make cells, not just proteins, but entire cells. And those cells stick together and they look and cook and feel and taste like cellular meat, like like muscle, like what you eat when you eat fish or beef or whatever. And the problem there is you're trying to take a cell and cells normally grow on, you know, bones and on tissue. And so there's scaffolding and all these systems that hold all the cells together. And so to get cells to grow in a tank and stick together and replicate without other cells signaling them turns out to be really expensive.

59:41There was an executive at Merck I spoke to a few months ago, and he said, we're going to sell fetal bovine serum, which is basically like this liquid that they get from the fetuses of cows. And this is how cellular meat started. They took a cell from a cow and they put it in a tank with fetal bovine serum, and the cell started to replicate and duplicate. And then they could take those cells and try and turn them into a beef into a burger and sell it or try it. That was the million dollar burger, if you remember that a couple years ago. And fetal bovine serum market has gone through the roof because so many companies are trying to make cellular meat.

1:00:11And the Merck exec was like, we're going to sell a billion dollars of fetal bovine serum, and then we're going to sell zero, because no one's going to be able to make money doing this. It's just impossible, you're not going to sell$500 burgers. So the technical challenge there is you have to edit the cells to get them to duplicate, you have to get them to grow in suspension, meaning in a tank, instead of growing on bones and growing next to each other and scaffolding. And then you have to change the feedstock, so that you're creating all these other proteins and signaling factors and hormones that you pour into the tank that trigger those cells to grow.

1:00:40Is there any chance that after all this, it actually just tastes slightly different? Or better? It may. Yeah, it may, but likely not. I mean, let's be honest. These are, you're taking a cow cell or a salmon cell. The reason I say this is that, I don't know if you, I mean, you don't eat meat, so maybe you don't know this, but depending on where the water that they drink, the actual grass that they eat the meat does taste different and that's part of the whether the cow is massage i mean look at the acorn fed cows that we used to have at poker before austerity measures life was so good in 2021 well that's that no we can't get it anymore yeah i know we're on a budget i get it no not us we can't get it anymore because they sell it through one channel um but But yeah, like that tastes so good.

1:01:28Yeah, the variation you're talking about is obviously at an echelon and a class of eating chamath. It's probably not mainstay. Like, you know, the$30 ,000 a year McDonald's burger and chicken nugget eater is probably happy to take a burger and a chicken nugget that tastes... I disagree with you because if you go into Whole Foods and you actually buy like a USDA top sirloin, there's a certain taste that it has that things that are not USDA don't have. So even at like the most basic layer of the food pyramid, you can differentiate on taste based on the same. This is why I'm saying I think it's just a very complicated, long, drawn-out process.

1:02:04And I just wonder if the people that are in these businesses, if they actually love food or not. I understand why they love the science. I get it. And why they would love to save the planet. I get that too. But unless some of these people are also food lovers, they're going to miss, I think, the thing where it all dies anyways. I just want to restate again, for the final time, these are these are identical cells and identical proteins to what you're getting from the animal. So they are not like what we talked about in that first category, where you're trying to get other stuff to sort of taste like meat.

1:02:35You're literally trying to create the meat and create the protein using these systems. I'm just trying to tell you that salmon, two pieces of salmon can taste totally different depending on where it's swam. right and i guess what i could say is same protein yeah you could probably adjust the conditions in the tank if needed to change the the characteristic this is my point like you don't even know where to start how is it the fucking kelp in the atlantic ocean like what are you changing look i don't know what kelp uh affects on the salmon i don't know if salmon but this is my point nobody does atlantic ocean this is why we pay so much for the acorn fed beef i get it but most beef is not uh kelp from the atlantic ocean fed salmon it's animals grown grown in very large feedlots fed corn and water.

1:03:17That's it. Let me just say that again. 90%, 95 % of animal protein consumed is cows, pigs and chickens grown in feedlots fed corn and soybeans and water and that's it. Right. But if you if you go to different countries and taste the meat that's fed in that exact same way, it tastes different. So for example, if you go to Argentina, I appreciate what you're saying, but the point I'm gonna make is you can recreate whatever the system is that you're talking about. So I want to just get back to the unit economics, the cost per kilogram or the cost per gram of the protein, we are still many orders of magnitude away on cellular meat.

1:03:51So the problems you're laying out are really down the road problems of optimization. Right now, we've got more fundamental problems on how do you actually get this stuff to be cost competitive. Now, fortunately, the tools of CRISPR and since CRISPR Cas9 came out 10 years ago, there are now hundreds of variants that are open source, IP free royalty free, and used very broadly and generally and DNA sequencing costs continue to decline. Those are the two basic tools that are being used by biochemists and engineers to do rapid evolutionary iteration needed to produce the recombinant production of proteins to produce the new cells to produce the feedstock for those tanks.

1:04:26And there's a cost curve that we're trying to get over. It's not happening overnight, hundreds of millions of dollars, and in several cases, billions of dollars have gone into these systems. And it's very likely that these companies may need several more years and several billion dollars, we are going to get there, the technology is progressing, the rate of progress is a little slower. And it's a little more challenged, I think, than the first round of investors had hoped. But I do think that scientifically and first principles, it is absolutely feasible. It's a function of engineering our way there to giving Chamath and everyone else that eats burgers and chicken nuggets, everything that they want, hopefully at a lower price, if you put it on the curve of self driving cars, you know, we have crews doing some automated taxis in like a very constrained area in San Francisco, but we don't have it everywhere.

1:05:11Where do you put this on the curve? It's a great question. So what's happened, by the way, as we've gotten down the cost curve, we are unlocking new markets. So new products are being produced existing proteins that are come from animals. There's a good example of a product called pepsin. It's, it's extracted from pigs today, it's very expensive, similar to how we used to make insulin. And we're replacing the sourcing of that product, we replaced insulin, which we used to get from pig spleens, we now make it recombinantly. We're now replacing pepsin, we're replacing the the rennet that's used to make cheese.

1:05:43So as we move down the cost curve, these high what are called high value proteins are the first to fall those markets collapse because we now make them recombinantly. They were sorry, they collapse in price. Because they're now cheaper using recombinant systems instead of taking from animals. And eventually we'll get to that cost curve where they're ubiquitous for all proteins, or for all types of cells. In the meantime, there are pretty sizable markets to go after these are multi billion dollar markets that are getting knocked down. We don't talk about it every day. It doesn't show up in the news, but it's really profound and interesting to see that this technology is working.

1:06:14It's overturning multi-billion dollar markets. It's making progress. And, you know, hopefully it'll get to the point that, you know, everything from the chicken nugget to the kelp fed salmon can... Have you guys tried a Beyond Burger or an Impossible Burger? I've had it. I've tried them a long time ago, but I've not tried them recently. they're like it's like eating something mushy that's 60 of a average hamburger it's not worth paying double for certainly for somebody who's a hamburger eater so while we were talking by the way amazon's results came out they crushed it earnings per share of 31 cents versus 11 and uh stock is up 10 10 off hours and it was up four percent today where the insider traders how do you feel about your recession prediction i'm sticking by it i think we're still going to have a recession but it is an interesting paradox here so i think there's only a couple possibilities either tech is sort of immune or they forecast down so much they were so conservative in their forecast thinking we're going to be in a recession that it was easy to beat.

1:07:26Or look, I could be wrong about the recession, but Powell is saying it. And Powell is saying if it's not a recession, it's going to be less than 1 % growth. It's going to be around a year to recession. He's not credible. So I'm not revising my forecast. Well, I think Powell is credible when he's giving us bad news because their incentive is always to fluff it up and make it sound better than it is. So when he's telling you things look bad. Maybe they're looking really bad. I don't know, man. But look, it's a tale of two cities right now. I mean, the big tech companies seem to be doing really well.

1:07:58So it's definitely a paradox. Yeah. All right, everybody. Well, the whole RFK thing. Okay, that's a good topic. Yeah, great topic. Go ahead. I think we should tell people what he's about. Where are all ears? I think he gave a terrific announcement speech. Okay. And just to give you some background for the younger viewers who may not know. So Robert F. Kennedy, his father, ran for the Democratic nomination in 1968 after his brother John F. Kennedy had been president, was assassinated, as we know, in the early 1960s. What happened is at this time, before the 1968 election, Lyndon B. Johnson was the incumbent Democratic president.

1:08:36And everyone thought that he'd be the party's nominee and he was going to get reelected. And he was brought down by an extremely unpopular war, the Vietnam War. And it was RFK Jr.'s father who was a great critic of the Vietnam War, and he ran for the Democratic nomination. And I think that he very likely would have gotten it. On the night that he won the California primary, he was assassinated. By Sirhan Sirhan, right? Yeah. If you go back and look at the things that he was saying in that campaign, he really was saying a lot of beautiful things that are in his son's ad that I think would be worth playing here.

1:09:09But I think you have maybe the setup for a similar situation here. You've got an incumbent Democratic president who is sort of not that popular. He's sort of old and out of it and incoherent. He's presiding over a war that is rapidly becoming a debacle. You don't hear so much about the spring counteroffensive anymore. These new Pentagon papers that were leaked show that the Ukrainian casualties are at least five times greater than they've been publicly admitting. It looks like Russia is certainly not losing the war the way they used to be. They've captured 90 % of Bakhmut, which has been the most violent, bloody battle of the war.

1:09:44And Biden at this point has no strategy to bring that to an end. In fact, he's rejected multiple attempts at a peace deal. And so now it looks like it's the Chinese who are in the driver's seat, potentially putting together some sort of diplomatic settlement. So I think, listen, if the economy ends up going into recession and this war ends up becoming the fiasco that it's increasingly looking like, you could have a setup like 1968, where people are wondering, why the hell is this guy our nominee? And let me tell you, RFK Jr. is already polling at 19%, which I think is pretty good, considering he just came out of the gate, and people don't even know the substance of his campaign yet.

1:10:20Marianne Williamson's at 9%. So, if she dropped out, you'd be at 28 % for the alternative. And I think he could go up from here. And I think if you watch the speech he gave, I thought there was a lot of really beautiful sentiments in there. It was very good. He said that Biden has made Ukraine a pawn in a geopolitical battle that has put the flower of Ukraine's youth into an abattoir of death in order to exhaust Russia. He channeled America's anti-war traditions. He quoted John Quincy Adams that America should not go abroad in search of monsters to destroy. He quoted Martin Luther King Jr. There was a direct link between poverty and violence and oppression at home and war abroad.

1:11:01He talked about the role of the CIA during his uncle's administration, where he said that John F. Kennedy eventually realized that the purpose the CIA had become to create a steady pipeline of wars to feed the military industrial complex. And he talks about how JFK came to distrust the CIA and realize that it was lying to him. And the biggest applause line of his speech was when he quoted JFK approvingly saying that he wanted to take the CIA and shatter it into a thousand pieces and scatter it to the winds. And this very same week that he gave the speech, we found out that five former CIA directors had participated in a giant hoax on the American people by claiming that this Hunter Biden story was Russian disinformation.

1:11:46They knew it was not. They knew it was not. The information on the hard drive was real. It showed that Hunter Biden received multimillion dollar payments from foreign governments, including China and Ukraine. OK, and regardless of what you think of that story, it should not have been suppressed by social media. And it certainly should not have been suppressed in a psyop by 51 former intelligence officials, including five former directors of the CIA. And if that's the way they're going to behave, if they're going to meddle in American politics that way, I think we do need to start over. We do need to ask what's going on with the security state.

1:12:22They're not supposed to be meddling in American politics that way. So I think if this is the way they're going to act, I say shatter away. Scatter that thing into a thousand pieces. Hey, it's Catholic. I'll vote for him. And he's called out the insanity of COVID lockdowns and mandates. I mean, that's the thing that he's, I guess that's the big controversy is he's anti, he's an anti-vaxxer. I guess that's the one thing they're trying to position him as. And he does a little bit of conspiracy theory stuff. So listen, if you go back and look at his record, he was an environmental activist for most of his career.

1:12:55He did the Washington Project in New York where they basically bought the land along the Hudson. I remember I was at some events for it. They wanted to clean the Hudson up and they just bought the land and people donated the land and they bought it. They raised money. And the Hudson today has like, you know, it's flourishing amazingly. and he's directly responsible for that. He was a big critic of the way that corporate greed could lead certain big companies to engage in environmental pollution. And at a certain point, he realized that big pharma had a similar incentive. Now, I don't know if he was right about those vaccines, but I do know that he's right in the case of COVID.

1:13:29They had an incentive to push this dubious mRNA shot on us so that we'd get boosted a zillion times. And he's right about that. He was right about the fact that this should never have been mandated. We shouldn't out of the lockdowns and you know what in his nomination speech or his declaration the word vaccine was only mentioned once so this is not what his campaign is about i look forward to having him on yeah and to be honest i mean look at all the other things that were deemed to be conspiracy theories that ended up being true oh yeah not that monster not that could go either way or it could be embarrassing let me ask you this sacks if it was him versus trump who do you vote for well i'm gonna i'm gonna reserve okay i'm gonna reserve versus trump sex i'm not gonna take position on the general yet but but in in the democratic primary i'm definitely endorsing rfk jr in the democratic primary okay i voted the democratic primary i would if i could i'll do an event for him all right everybody all right to all the amazing people who got together for the episode 125 unbelievable over 40 or 50 of them ray great job shout out to ray shout out to ray I dialed into a bunch of them in, I think, Europe and, I don't know, all over the place.

1:14:45No one got robbed or mugged or bear spray? Hopefully. I don't know if they did any in San Francisco. There's no bear spray instance, so that's good. They had a big turnout. Not in the marina. Not in the marina. All right. For the Sultan of Science, the dictator himself, and the... Mouthfeel. Mouthfeel. And Rain Man. I am the world's greatest moderator. We'll see you next time, everybody. Love you, boys. Bye-bye. Bye-bye. We'll let your winners ride. Rain Man David Sack. I'm going all in. And it said we open-sourced it to the fans, and they've just gone crazy with it. Love you, Wesley. I'm the queen of Ken Y.

1:15:26I'm going all in. Let your winners ride. I'm going all in. Besties are gone. That's the cold 13th. That is my dog taking notice in your driveway. Oh, man. My habitasher will meet me at Blaine's. We should all just get a room and just have one big huge orgy, because they're all just useless. It's like this sexual tension, but they just need to release them out. Wet your feet. Wet your feet. We need to get merch. I'm doing all in.

1:16:05I'm going all in