E132: SEC goes after crypto giants, Sequoia splits, LIV/PGA, Messi's deal + LIVE Q&A!

26:00And Gensur is not giving a framework. He's just trying to basically put them out of business. Okay, look, I think we've gone around this topic. This has been a great conversation. I'm going to move forward to the next topic, which I think is really interesting in the vein of both de -globalization, but also the scale at which venture firms have gotten to. Sequoia decided this week and announced publicly that they're splitting off their China and India, slash Southeast Asia funds. As you guys obviously know, Sequoia capital is a venture capital firm. Within that firm, they manage multiple funds.

26:39Some of the funds that they've raised and managed have been specifically targeted in China where they have $56 billion. I don't know if this number is accurate, but that's an incredible number. $56 billion of assets under management focused just in Sequoia, China. And then they have a Sequoia India fund, which has about $4 billion of capital raised in just the last three years. And now they are separating the management company on the oversight of those funds into separate management company. So Sequoia capital will no longer oversee those China funds. A new firm has been formed called Sequoia China that is now owned and run by a separate management team based in China.

27:20And Sequoia India is now called peak 15 partners, which is owned and operated by a separate team of managers out of India. Roll off both though, we'll manage the US and European Sequoia capital. Neil Chen will oversee Sequoia China and Shalendra saying Neil Chen. I'm sorry, Neil Chen. And Shalendra saying we'll oversee Sequoia India. I guess this is a question of did Sequoia get too big or are they caving to pressure of the political issue, the rising with having deep relationships and ties with China, or as they have said, a lot of competition between these different portfolios and companies within these portfolios amongst each other.

27:58Chimoff, what's your read on the action? Is there anything to read into this and anything to extrapolate from it? Well, it's been a parade of missteps for Sequoia in the last couple of years. And I'll let Sequoia figure out who to blame for this, but the reality is they, I think, think felt a lot of FOMO post -soft bank, they raised this large mega fund that kind of straddled all of the sub funds and straddled all of the regions. And so they dangled the carrot of trying to get into the early stage US fund by investing in this big mega fund that also had China and India exposure and growth exposure.

28:36Then they tried this like very convoluted evergreen structure right before the market could fell apart where you could basically become a permanent capital vehicle. And as far as I can tell from the outside looking in, it just seems like a taxid tax play for the GPs to not have to sell and realize capital gains. But that only works when the stock market keeps going up, which it didn't. And then it's similarly crushed tax stocks 80 or 90 % so that was a misstep. And then when you put all these things together, now that China is contracting and we said this before, I think China is largely uninvestable for the next 30 or 40 years, it just makes sense to jettison it.

29:23Now I will say though that Neil Shen is elite. If you consider in investing, I would say I have a simple rubric. Anybody who's made more than a billion dollars for themselves as an investor, I consider elite. Neil Shen is elite. And so he'll do just fine running that Sequoia China business. I was surprised about why they would allow India to leave. There's nobody that elite at Sequoia India by that rubric. But India is a country growing at 6 % a year. It literally looks like China in 2008 and 2009. And so I'm not sure why you would let them leave. I think that you would want to attach them to yourself because it makes the US business look better.

30:08You probably gets differentiated and smoothed up returns. But I think this is a little bit of a take - A little bit of competition, Jamat, that there was competition between the different portfolio companies. And it was leading to the conflict. I mean, that's dumb. That happens in the United States. Sequoia has always been known to fund everybody that they think will make money, no matter how much they compete, no matter where they are. So when they back YouTube and more it's with sitting on the board at Google and Sure, look so quite so Koya as an organization is elite there to make money for their LPs period end of story And so all of the other words that can go in any press release Basically, I think try to hide the fact that this is an organization that's hats and missteps They're not on solid ground.

30:54They've lost a lot of money and they're trying to figure out what to do next I, however, if I was running that organization, would have probably done nothing and just let the dust settle. And I think that all of these actions are too close together and it's a little bit to me of flailing in the water. And so I don't think it was a good idea to let India leave. I think it made a ton of sense to cut China. But I think all of this stuff started happening a few years ago, starting with that $8 or $9 billion megafund that they raised to try to compete with soft bank. So, Ax, any read on this? Yeah, I mean, I think it's a problem, an example of decoupling and decouple globalization going on.

31:41So, I agree we have to treat India and China separately. With respect to China, I just think it's become harder and harder for Americans to do business in China, both because we don't really have the visibility into that system. And there's too much political uncertainty, so kind of touch on the point about it being increasingly uninvestable. But I also think that geopolitical concerns. It's just very hard to straddle those concerns now because the geopolitical competition is heating up so much. I think it's investable for people like Neil Shen, who are insiders in that system. So I think elite Chinese investors can, I'm sure, make money in China over the next few decades, but I think it's just too hard for Americans to figure that out.

32:27So I think them parting ways makes a lot of sense. I think it's going to simplify Sequoia's life a lot. India, I agree with Jamal that that's sort of a different question because India is going to be a huge growth economy over the next few decades and they are a U .S. ally. So it doesn't pose the same geopolitical risk. But my guess is that it was just kind of unwieldy. That it's too unwieldy to kind of merge funding sources and firm management across two firms that are really pretty different, right? The U .S. acquired firm and then this Indian firm. So my guess is they just decoupled because it was just going to our to manage.

33:07And if you're an LP, don't you just want the ability to say, okay, I'm going to allocate this much money to India. I'm going to allocate this much money to the US. I think LB is probably like it too. Sequoia China is frankly over the last 15 or 20 years as good and probably is numerically better than Sequoia US. So that was an elite organization just by itself. Sequoia India, I don't think has much to talk about. And so maybe what Rolloff decided is this team is just not very good so it matters well, just cut it and we can revisit it later. They probably have some number of years of a non -compete and then they could come back into the market five years with a totally new team and that may be easier So it may be easier just as just maybe the team they actually wanted to eat separate look It's hard to cross returns from two totally different funds, right?

33:56Because one side one side can be unhappy with the trade right? Yeah, I can I can give you the J. K. Health got actual information to share Well, no, I mean I have no closest I think I have the closest but they were in your company right J. K. Well, I'm an LP and they're funds and they're printing money for me. They back my second startup, rule off some of the board of that company and still with me. And I was their first scout when they started the Scouts program, which is the highest percentage performing fund. I think they ever had. Squarespace 20. And you're our resident captain America. So as a patriot, how do you feel about the...

34:29Well, they are, put that aside. Squarespace 20 % of an Aztec. This is the greatest venture firm of all time, hands down. And the Squarespace fund, which Shemoff referred to. The companies they've invested in, the more in -counter, those 20 % of the mass, I guess. And so the reason the Sequoia fund came out, this Evergreen fund was because a lot of their LPs wanted Sequoia to manage the public equities going forward because they didn't want to sell them because they realized that the massive gains, the gains from Google, Apple, et cetera, of these investments that they did when they were private companies Cisco, So the gains from public forward were greater than the gains in private.

35:10And I've been in on these presentations. I've sat through them with the Sequoia team. And so when you manage those public ones, we've all talked about the denominator problem here. The denominator problem is, hey, are they venture returns or are they part of the public equity? So in a giant endowment, they want to put them into the equities bucket, get them out of the venture bucket. And Sequoia store an opportunity there to manage this evergreen fund. And I'm sure there are tax advantages to it, of course. But with relation to what they did in China and India, these were incredibly prescient and innovative things they did in 2000 and 2005 when they started India and then China was 2005, I believe.

35:51They found domestic teams. You need domestic teams to do this properly, especially in places with different governance and different regulations. and it gives them autonomy, they were incredible investments. But what's happening right now is all venture investments because of AI and chips and the decoupling with China are now under massive scrutiny. So they can say there's brand confusion, you can talk about the collisions and who's going to back this Chinese entrepreneur and Indian entrepreneur who also is operating in the US, right? These businesses operate in the US. And so what really is happening is the government is gonna stop all US venture investing in China.

36:32That's what's gonna happen in the coming months. And so they're just getting ahead of that. And now they will compete. And it really has to do with chips and AI. You may have seen these stories. And nobody's gonna invest. If an American invests in AI in China, that's gonna be bad and the same with chips. Yeah, you're right. There are a bunch of stories about whether US investors should be investing in AI in China. and people were saying this was un -American because it was basically gonna give China an advantage against us in this key industry. And I think that point is a good example of what I'm talking about with the geopolitical concerns.

37:06It's just getting too complicated. Yes. For Americans to invest in China, it raises too many geopolitical concerns. And I think Sequoia is mostly simplifying its life by disciplining these things up and being out. Did you see Keith Roboi's tweets on this? Yeah, that's what we're referring to. Yeah, Keith Roboi tweeted basically, like it's un -American to invest in China at this point. We've talked about this before. I mean, look, the Chinese relationship primarily used to be seen as an economic relationship and people were looking for win -win basically trade scenarios. And it was not seen as a moral to invest in China.

37:39Now the relationship is primarily seen through a geopolitical lens, which is to say the balance of power, which is a zero -sum game. It's about, you know, how much better is the US doing? How much more powerful is it than China? And anybody who's perceived as helping China in that rubric now is looked on skeptically with any of the United States. What do you think about that? Well, I don't think that's going to change. So I think Sequoia is doing the right thing to kind of like I said, simplify its life. But what your personal opinion of curious? I think that it should be possible to do business with China without it being seen as either unpatriotic or immoral.

38:15However, there are strategic technologies that are just going to be, I think, it's too hard and too risky to be supporting China in. Chips in AI? Yeah, I mean, look, if somebody is using Chinese manufacturing to make toys or clothes, I don't think that's fundamentally strategic in a geopolitical way. But if you're helping them make the next generation of chips, that's going to raise a lot of questions. So a VC firm, Freiburg can't take out chips and AI from their investment. Hold on, I want to say something because this reminds me of when benchmark actually had benchmark Europe and then they cut it.

38:56Do you guys remember that? Yeah, I do. Yeah. And kind of retrench, they weren't retrenching from a position of strength. They were retrenching to reestablish themselves after a bunch of missteps. So I think typically these retrenchments happen when there's a little bit of internal chaos and mismanagement and underperformance. That's not the case here I can assure you. Yeah, but I actually think retrenching is good because it simplifies things. You want to be a simplified? Yeah, I totally agree with you. My point is when I saw that overlay fund, I was like, this is questionable. But then when I saw that weird, evergreen fund, that to me just seemed like a tax arb.

39:31And I thought to myself, as a person who's looked at this exact stuff for my own stuff, what I did was I just converted it to a family office. and from a tax perspective, it was much simpler, but that exact same structure I looked at for myself. And the reason that that structure exists, and Jason, I know you want to think, it's because these endowments want them to manage public equities. I still work with a few endowments and pension systems. They don't, and the reason they don't is they're not allowed to. They're not allowed for concentration purposes. They pay other people to manage it. They have these outside consultants.

40:04And for fiduciary perspective, you have to do all of these things with respect to managing risk and one of the most obvious things that these foundations do is they get distributions and they sell. They don't hold. And so the reason why you'd want to look at the long -term gains of a stock that you distributed is because the GP sold to early. Not the LP. And I just don't I'd think that you should not just be a blive surrogate on this topic and actually really think about. Well, I mean, I don't think you need to... Well, I'm not, I'm not, and square, if you look at something like that, you know, rule off still on the board of square, I believe.

40:39So, they, Sequoia has realized over time, you know, as it's been explained to me as an LP, that, you know, these companies grow, the outliers continue to grow massively when they become public, and Sequoia is now staying on the board of those companies, and so they actually have the most insight into it, because they backed it when it was two people, and then they're still on the board. That's not the public. Money is not infinite and if you're a foundation and you're legally obligated to distribute some percentage every year You need the money back and the foundations do get to choose some foundations want to go along Harvard or whoever I'm just picking You know one of the large ones if somebody's got 30 40 billion dollars They may not need to liquidate that and they might very much I'm just telling you the only person that is in a position to actually hold for the long term because it's so tax advantageous is the GP That is why that fund was created and I will bet you if you ask him under oath, why they did it, I'll tell you it was for themselves.

41:33I mean, people have the choice. I bet you a million dollars for charity. Whatever you want to do, I bet you. If you put them under oath and you subpoena him and you ask him why he did it, he'll say he did it for himself. And that's fine. All I'm saying is that's the kind of complexity that Saks is talking about that does not add to success. It is over -complexifying something that doesn't need to be complicated. Yeah, disagree with you, but we can just move on. Well, we agreed to disagree sometimes here on the all -in podcast. We're going to move on for our last topic today with the Good talk messy.

42:03Can we talk messy? No, no, no, we're not because we're going to do one last topic, which I think is And messy go together. Yeah, so let's just talk about the PGA. No, we don't have time guys. I appreciate the messy interest, but we're going to talk about something less messy Or even more messy. Okay, I actually think it's pretty interesting for a couple of reasons. So as you guys know, the PGA tour has been around since 1930, I think the PGA tour makes $1 .6 billion a year if reports are correct. I make 1 .6 billion a year boring. That depends on the year. All of the players on the PGA tour are independent contractors.

42:39So Saudi Arabia's public investment fund. And this is what I think is one of the more interesting aspects of this story and maybe speaks to a broader kind of set of geopolitical transitions that are underway. The Saudi -Rabian public investment fund started LIV Golf as an alternative to the PGA tour. Live Golf. Live Golf. They invested $2 billion of capital and offered guarantees to golfers to come and get on their tour. They ended up offering at one point Tiger Woods reportedly got at $800 million guarantee To join their tour which he turned down Phil Mickelson got a reported $200 million guarantee which he took to join the tour Hedekimatsuyama got offered $750K $750 million which he turned down so seven of the ten top paid golfers in the world actually signed up and And it caused obviously significant disruption to what has effectively been a monopoly, which is the PGA tour in golf, in professional golf.

43:44And here we are two years later, and it was announced this week that live in PGA are merging. And the current PGA tour commissioner, Jay Moynihan, will serve as CEO of the new entity. Just by way of reference, Jay Moynihan makes a reported $14 to $15 million a year in salary as CEO of the PGA tour. He will now be CEO of this combined organization. One big question mark is how much is he getting paid and did that help secure and solidify this deal getting done. But I think another big question is do we think this will actually close? Will this face regulatory and antitrust scrutiny? Will this face syphias because it is the Saudi Arabian public investment fund that is effectively taking a large stake in the PGA tour?

44:28Let's go to our resident professional sports team owner or former minority owner, Jamal. Any takes on this announced merger? What does it say about the PGA's ability to hold action? This is what's so crazy about your topic selection. Messi was offered $1 .6 billion personally by the Saudis. And you don't want to talk about that because you want to talk about a whole organization playing an antiquated sport that itself generates $1 .6 billion. $1. Welcome to being the moderator. Zach, what's your point? I don't care about golf. I don't care. The reason this is so controversial is that they're calling it sports washing, trying to make the reputation of Saudi more palatable in the West by using sports, things people love.

45:18The reason this has become controversial is because of the hypocrisy of it. But the PGA fought against Liv. And this guy, Jay Moynihan, who is the CEO of this, he basically evoked the 9 -11 families and went on a whole thing about how Eva Liv was only to then secure the bag. And then there's some backtrust here about, well, there was a lawsuit between the Liv golfers who are now banned from playing the PGA when they signed up. Yep. And anti -trust off. And so the hypocrisy of the group is what's being pulled into question here. This is why it's important because the players who took the money were ostracized as supporting an evil regime.

46:04Right. And now it's clear that they were smart and Tiger should have taken the money. And actually the guy who said as much at the time was was Trump. You know, he. You know, he nailed it. It's like one of these once again, the support. It's it. Once again, he's, no, he said, he's basically said that take the money from Liv because eventually Liv and PGA are gonna merge and then the guys who stuck with PGA are gonna get nothing and they're gonna feel like idiots. He was totally right. He's split the magic. Come on, come on, Timoth, you don't think that that's insane. I mean, come on, it's pretty amazing.

46:37Tell me when you get to messing. And the fact that these guys were proclaiming that if you're gonna go join this tour, you're joining, you know, you're lining up. I don't understand whether, I don't understand whether you're naive or dumb. This is like about money. It's always about money. Professional sports is always been about money. What are we talking about? Money, money, money, money, money, there's your answer. Money drove the answer. Money drove the split. Money drove the deals. Now money drove the merger. I don't understand. Can we talk about messy please? It's so much more interesting.

47:06Okay, go talk about messy too, Martha. I mean, the messy thing is so incredible because Chris General Ronaldo went to a team in Saudi to play in the August of his career the last two or three years. And this has been a thing that started with Pele in the 70s. Pele came to the New York Cosmos and played. Beckham famously did it as well, came to the LA Galaxy. But Beckham did this one interesting thing, which is he said, okay, I'm going to come to play in the MLS on one condition, really, which is I'll take a huge pay cut and all of this stuff, but I want an option to buy an expansion team for $25 million.

47:42in bucks. Fast forward, he ended up buying inter Miami. That team is now worth $585 million. So Messi is 36 years old. He's about to enter the August of his career. He's won everything. He's done everything possible. He is so incredible. I mean, I love him. I love him. He gets offered $400 million a year for four years to go to Plan Sad Arabia, a $1 .6 billion dollar deal and you know there's no income tax here so that's like 1 .6 billion dollars right in his pocket except the deal that he did which was for a lot less upfront is really interesting. He basically said I'll come to the United States and play an inter Miami for the Miami football club but I am you know basically I'm not sure he said this so I'm using my own words.

48:36I'm the greatest player in the world. Every time I do something magical on the field, I'm creating content that will sell tickets and create brand awareness and move the interest level of soccer in the United States. I'm a content creator. So I want a piece of this content. And so Apple, who signed a $2 .5 billion 10 -year license for the MLS said, you're right. You're probably going to sell more subscriptions for me. I'll Adidas said, you know what, you're right. You're probably going to sell more shoes for me. I'll give you a piece of those shoes. So in one fell swoop, I think what's amazing is messy is not an athlete in this deal.

49:16I think going back to a theme that we've talked about a lot is he is this ultimate pen, ultimate, whatever. He's an elite content creator. He's the equity who is now creating incredible, who will come to the United States to create this incredible content that will move viewership, move merchandise, and he's going to monetize that. So it's effectively like becoming the Jordan brand, getting a piece of Netflix all in one. He has the equity in those businesses, basically. Yeah, this is subtle points amongst making. In the deal, you have the person who's responsible for distribution. So this would be the same as like the NBA on ABC ESPN or TNT and TNT or ESPN saying, You know what?

49:58You're so important LeBron James to play in this or Steph Curry. We're going to give you a piece of the subscriptions to ESPN So Apple is giving him rev share on their Apple TV league pass for MLS That's nuts like and this is I think it goes back to the live Deal with PGA, which is people are looking at these sports leagues and saying let's get creative It goes back to a different one the the NBA just signed a new collective bargaining agreement that they're gonna ratify I always thought that the real thing that the NBA players association should be asking for was equity. Yeah. And that equity could be fentom equity in the teams because it's clear that in the absence of the players, there's no viewership and there's no appreciation in the value of those franchises.

50:46And so the idea that LeBron, you know, Steph, Dre, KD, don't own a huge piece of the underlying equity gains that they're creating in the period in which their players is pretty crazy. Now, the ownership, their perspective is, well, we translate that in terms of revshare, but it's really not true. Because if you look at the Kager, the IRR of the franchise values versus the Kagering of the salaries, they're not equivalent. So I just think it has huge implications to all the professional sports leagues because these big stars should be asking their agents and their managers, how do I do a deal like message?

51:26I am the ultimate content creator in my league. The dynamics are changing. It will no longer be an employee capital labor situation, but capital is merging with labor. And labor labor is basically becoming the equity in the equation and they are going to be into the business. Just like the Silicon Valley. And by the way, the reason we see it happening so much is because of the social media agent. It's really incredible. It's, but it was like, I know you have more to say, We all have more to say I just want to highlight I need to go I have to go to a kindergarten graduation. Congratulations Congrats close to chef you I love you guys.

52:01I'll see you later But what's really interesting Chimoff to your point about the CBA is they're gonna make these huge salaries They're not gonna give them the equity as part of their Five -year deal they make the money they then have the ability to invest in a team So you could be LeBron and you could be investing in the NICS maybe if somebody wanted to sell a percentage of it You can invest in any NBA team any sports betting team any sports betting I actually think there's a simpler way to do this Which is it's I think it's fair to say that when you join a team. It's like joining a company Yeah, and you can create shadow equity and that shadow equity says you came in at this point Right you left at this point here was the delta of the value and I think a good agent should be negotiating on behalf of a player.

52:50Most players will not get that much. A few basis points of that value. Yeah. But the idea that a LeBron James can go to a Miami and double the franchise value. Double. Yeah. Right? From one to... Or step. Steps a better... Okay, great. Step comes in at 480 million and is now 5 .3 billion. So that's a 10X -ing plus of value. Is step responsible for 10 or 15 percent? Should a billion dollars of that go to step, Drey and Clay? I think you can make a great claim that it could. Yeah, absolutely. Put them on the map. So yeah. It would be, and it would be pretty easy to do. And what this might do is keep people on the same team longer, which is what fans want.

53:29Exactly. Why do people moving around? That's a great point. And private companies like Cargill or Coke industries, they have these shadow equity programs that they've had for years, for decades that they've run on behalf of their employees. So we know how to run Phantom equity programs in private businesses and I just think the leadership of the NBA players association the NFL players association Is right now still lacking the sophistication To understand this well enough to then propose when the next time it is to to negotiate This kind of a deal, but when you see things like this messy deal I think it's a game changer.

54:10It is a game changer. And I think for sports, I don't know if you saw Adam Silver give a little press conference with the finals and everything. He was talking about the J -Morant situation with the guns. It's just a lot of topics coming up. But one of the topics that was probably underappreciated was he was talking about the bundle, the cable bundle is going away. And that people can't watch like the NBA on TNT, whatever that is with Charles Barkley, etc. And he wants that to be available for free. So he's going to challenge people in the new TV deal. If you want to have the NBA, you have to have it available to everybody because the number of people who can see NBA games has been going down.

54:49I have a question for you. Because if you think more people, do you think more people would pay for a subscription to watch the next games? Wherever they happen to be all over the world or a subscription to watch Step Curry, no matter what TV plays on. The old generations are loyal to the teams. The new generation is loyal to players. So it's a generation. New miracle, numerical question, which one's great? It's probably a jump ball right now, but it will eventually be the fall of the players. Because this new generation follows players like our kids like, I don't think I've been brought from I've team to team.

55:18I think you could probably sell a few hundred thousand subscriptions to the Nix and I think you'd sell mid millions for stuff. What's going to happen now is I think they're going to, they just want this to be ad based and to directly subscribe. So I directly subscribe to the NBA. I get every game for $200 a year with no ads. I love it. You know what we should do? I actually have a great idea. What we should do is we should, what live did to the PGA, we should do to the NBA. Let's get together $20 billion. Let's start a competitive NBA league where we give the players all. I'm curious, a structured, phantom equity plan, pay these guys a hundred million bucks a year, get all the big guys to come, everybody else will come.

55:58And just build the whole thing wide open. By the way, that's the blueprint now. If you want to really compete with the NFL or the NBA or the NHL, this is what you should do. Put together 20 or 30 billion, which is not that much money and go for it. You only need to get a couple of stars to blow it up. And if you give stars the equity and the league, they'll convince all the other players to come. Let's give Saks some red meat here. you, Saxon, give you a little red meat. You want Tucker on Twitter. There's your red meat choices as we wrap. You want Tucker on Twitter. You want a Russian controlled damn being destroyed for a major flood.

56:31Or do you want Chris Christie joining the race? Which red meat would you like? Which red meat we put in front of crazy hair? Well, I mean, what's happening in Ukraine is really the big news this week. I mean, the Ukrainian counteroffensive has, well, the Ukrainian counteroffensive have started in earnest. And yes, in conjunction with that, you had the destruction of that major dam, which it's not clear who did it. I mean, both sides are pointing the finger at each other. So and there are reasonable arguments for why either side may have done it. In terms of who benefits, it seems to benefit the Ukrainians more because the destruction of the dam washed out a bunch of Russian defensive fortifications and villages of Russian speakers on the other hand, the Russians were in control of the dam, so it would have been easier for them to carry it out if they had wanted to.

57:24We just don't know. But I think, you know, events have now moved beyond that, and we are now probably in the third or fourth day of the Ukrainian counteroffensive. Of course, it has not been officially declared, but there is major, major fighting happening now, where or Ukrainian armored divisions are seeking to penetrate Russian defensive lines around Zaparitsya. And so the long way to Ukrainian counter -offensive has certainly begun. How does the dam relate to the Nord Stream pipeline? Because these are both situations where people are like, who actually did it? What's their motivation? And let's face it, these are chaotic actors at times and figuring out who has the motivation to do these things seems like a leveling up kind of game because you can't put it past either party in some cases, but in the case of Nord Stream, people saying, hey, it was the Ukraine, but then there's this argument that the Ukraine's not capable of doing it, or maybe it was sanctioned by the US or the West and then executed by Ukraine.

58:25Where do you wind up with all these? So on Nord Stream, we're now on our third cover story. The CIA sourcing their stenographers that the Washington Post have now claimed that it was six Ukrainian dudes in a yacht who blew up Nord Stream. No, seriously, and if you look at this boat, I'll put a photo of the boat on the screen. It's pretty silly. The dead great. Yeah, the Italians do not have a navy, and they certainly don't have navy seals. I don't believe they have the capability to, by the way, this destruction in Nord Stream, Nord Stream was this huge underwater steel and concrete structure.

59:01It's not that deep though. because it's only 150 or 200 feet deep at the lower point. It's deep enough and it took a lot of explosives, so they had to know what they were doing. I dove 120 feet once, so it's that. But the point is that when Nord Stream was first destroyed, the media rushed out to say, well, the Russians did it. Even though the Russians had no motive to do it, it was their pipeline. As their pipeline, they could just turn it off and they wanted to. But this is what we hear is that every time something destructive happens, it's the Russians did it. Why would they attack themselves because they're so crazy?

59:33We heard this with Nord Stream. When Belgorod, which is a Russian district just across the border from Ukraine, was attacked, it was claimed that the Russians did it. These were Russian insurgents. No, that's pretty silly. It was Ukrainians dressed in Russian uniforms. And just recently when they were throwing attacks on Moscow, we were also told that it wasn't the Ukrainians who did it. Russian dissidents or something, which again makes no sense. So this is not to say that the Russian didn't blow up that damn is just to say that whenever the story is rushed out that the Russians did something highly destructive, we need to see some evidence here and we just don't know.

1:00:09It's just hard to know. The fog of war is thick. All right. What did you think of Tucker's first show? And we're not getting sued. But he got, the tweet got at least like 90 million views, which means the video probably got 10 % of that or something. So probably the video yesterday was at 17 million views. I'm sure it's more today. So no, he's getting huge distribution through Twitter. Arguably it's more distribution. It's almost certainly more distribution than he got through Fox. Fox was 3 million, right? That's how many viewers he gets on Fox. Yeah, well, Fox is half of that now because they've, they've attritted so much viewership after Tucker left.

1:00:47But look, the only thing that I think Tucker got through Fox was access to, frankly, a viewership base that's not very online. There are a lot of old people who watch Fox who just aren't on social media. That's it though. Everybody else can see it on Twitter and he's getting more distribution on Twitter. Super distribution is the way to go. He's gonna get 25 million people. Of course monetizing it is the hard part because Fox is subscription revenue and everything else is advertising. Yeah, but apparently he's creating a list. You know, he advertises the website I'm Mike Tucker -Grossen .com at the end of his video.

1:01:23You can go there and sign up for it. You can subscribe, direct, and get it on his website. Well, I don't think he's monetizing it yet, but you can sign up for alerts and so forth. So he's clearly creating a list of some kind. That's probably because he, yeah, with his contract, he's still getting paid. So he's like, yeah, Daily Wire is the model. I mean, they have got well over 100 million in revenue, I understand. And they have a massive subscription business. So there's a clear path. All right, listen for the world's greatest moderator living in the Bay Area, David Friedberg, and the Dick Kitter himself, Chimapapatia, and the architect hosting any number of fun raisers for any number of politicians.

1:02:03David Sacks, the Rainman. I am the world's greatest moderator taking a week off. We'll see you next week. And enjoy some Q &A here from the live angels summit, 100 people in Napa. Thanks for coming. Best is I appreciate you. Love your voice. We're in the event. Love you, Busties. See you next time. Bye -bye. Bye -bye. All right. We'll come to a baptism. John the Baptist. Are you ready to accept Christ, Freiburg, into your soul? I honestly have no idea what I'm doing here. I have no idea who these people are or what this is or why you're all wearing white. I mean, seriously, I'm sure you're very nice people, but I have no idea what this is.

1:02:48Have you seen the wicker man? Jake Al is like, we're taping an episode in Napa, and I'm like, what? On an off day, what was this? Today's Monday. It's Monday. Are you okay, buddy? Yeah. You low blood sugar? Yeah, actually, I do bring this like a cheese plate or something. Can we get a cheese plate? A cheese plate, please. And guacamole and chips. Please. But honestly, like, I didn't sign up for this. I thought we... I thought we disagreed to a podcast, and somehow we've been roped into doing some dog and pony show for J .K .L .P's. By the way, these are a bunch of your LPs as well. You just have never met them.

1:03:29Literally, okay I'll drink it. Yes, yes sir. Literally, somebody's like, J .K .L, I'm with this incredible endowment where incredibly successful. I'm like, oh that's great. Yes, you heard I'm raising a fund. They're like, no, no, no, no, no. We heard, uh, Saks is gonna be here. I'm like, yeah, you wanna meet him in the festivities? Oh no, we've invested in all this funds. We just never met him. That's for the point. And I said, wow, that's one way to do it. That's how successful Saks is. Pretty funny. Two things they've never seen. Saks and a distribution. Hey, hey, hey, hey. We're off to a hot start.

1:04:00Great fucking decision, whoever you are. You're a real fucking genius back there. Oh my God. Well, except for the fun we already paid back. Oh my god. I lost control of it in the first 90 seconds. Why should it tonight be any different? Except for the five -year -old fun that's already fully returned. Okay, of course. All right, whoa, easy. So welcome to the Angel Summit. These are my besties. We do a podcast called All -In. We thought we'd do it live. This is the fourth time we've ever appeared on stage together. the first two times we're at freeberg's LP conference in the Presidio, yeah. I resented that one too.

1:04:42We know you are. Exactly. It's the first time coming out to see humans. Yes, COVID. I think he went in his mask, he took his gloves off, it was very uncomfortable for him, but he eased into a seat. And then of course we did the all -in summit last year in Miami. And this is the fourth time. So it's great to be out here. We have a couple of news items on the docket we could start with or we can go right to Q &A With these many audience members who have a lot of questions. What would you gentlemen like to do? Simoth has a few words he'd like to say go ahead What do you guys want to do? Shemoth is drunk by the way He texted us You can see that grin on his face That's the Shemoth grin he gives when he decided Like ex -tapital That he would not have LPs and he would just invest his own money.

1:05:27He does not care So it's the gloves are off. Let's do Q &A. J. Levy is a sacks. What's the path for DeSantis to win the nomination and get the base of Trump? Oh, red meat. Oh, good. I think the path basically is he has to win Iowa and or New Hampshire. This is that simple. But keep in mind that Trump did not win Iowa last or in 2016 tech I have a cruise dead. I would tend to be more religious. I think Santos is trying to outflank Trump on the right, actually, on certain issues. And so he's on the ground there campaigning. From what I understand, he's generating a lot of interest and enthusiasm.

1:06:11And he's going to keep plugging away at it. I think he's going to out hustle Trump. I'm not saying he's going to win, but I think he's going to work harder. And the path would be that over the next, what is it like, nine months that Trump's style and message, which is admittedly much more entertaining than DeSantis, but kind of fatiguing, whether that kind of gets old and DeSantis is more like discipline messaging, people just kind of wake up and say, you know what, like, I don't really want to go back to the chaos of the whole Trump show. This seems like better to me. So that's basically what I think has to happen is Trump fatigue has to set in and People realize that there's a different was that CNN town hall assigned that Some group of people find him incredibly entertaining and the media themselves want him back because it's great for ratings Allah Mankin on session or Is it a sign that like my god that's so fucking exhausting like you're saying sax?

1:07:10What do you think? I think that the the base like the town hall because is it was Trump walking into the lion's den, standing up to the mainstream media, which is what they like. But I don't think it did anything to help him in the general, because I think that viewers who don't like Trump or aren't entertained by Trump, I mean, there's nothing there to really grab onto, I don't think. So, but look, I think your point about, who does the media want to get the Republican nomination? Definitely Trump, because he's good for ratings. And really is that simple. And they think they can beat him. So right now the Biden people, the Trump people and the media all want Trump over to Santa and that is why like, to Santa is getting dispatched by everybody right now is because, you know, everyone's kind of aligned on this.

1:08:00But the minute that Trump gets the nomination, it's all going to turn. The media all of a sudden is going to turn on Trump and then we're going to see what the real campaign is going to be about. To Santa is in show business as they said on succession. Was that the quote? He's show business. He's box office. box on his not box yeah to send us his box office is a is somebody who actually can execute running right right but also that's that's why he'd be a good move for republicans i think is because he doesn't give the democrats as much to work with yeah far less entertaining but he gives his enemies so much to work with all right another question from the back go ahead stand up tell us your name yeah uh sell down her from Boston and uh the question is much less exciting And regarding sort of the problem of bank loans and bank insurance by the Fed and bailing out average people, bailing out wealthy people.

1:08:55I've heard a lot of solutions about this. I've been in some careers in banking for a while. The idea of having senior management in the board have direct liability if the Fed's have to step in to rescue the bank. Do you think that that could be a step in the right direction in presenting banks from taking risks they really shouldn't have taken? I mean the 2008 disaster the subprime crisis could have been addressed with this. I think this crisis with SVB could have been addressed with management just having a lot more to lose. Okay, so let me just first take issue with the terminology of bailout.

1:09:31I know that's what everyone calls it. A bailout in my mind is when the shareholders or the bondholders of the bank get bailed out by taxpayers that happened in 2008. It did not happen here. Here the question was whether depositors get made hole or not. I personally don't consider that a bailout I understand there are people who do but it is a slightly different issue. As to the bank management, you know, you're talking about like a strict liability standard here that I mean basically you're talking about piercing the corporate and making the bank executives and their director's liable for mismanagement of the bank.

1:10:10And that is... That's a pretty high bar. That's a really high bar. And the problem with it is that I would never serve on the board of a bank. I mean, I probably wouldn't anyway. But if you told me that I could be liable... Yeah, piercing the bell. Yeah. For that, even though... Right. We have a thing called the business judgment rule in Delaware where if directors and officers of the company perform their job in a good faith way, making the best decisions they can, and it goes wrong, they're not typically liable for that. Maybe the corporation's liable, they're not personally liable. Yeah, I'd look, if you did that, the managers wouldn't invest the cash in anything, because they wouldn't want to take any risk of loss.

1:10:53In order to operate the business, which has a bunch of people working there and a bunch of banks that they got to operate, they're going to charge you a fee to hold your money for you. And so what happens is interest rates turn negative and you basically have to pay someone to hold your money for you And that's what's a little bit messed up about the way the banking system works today is you're effectively giving a money manager The right to invest your money for you. They take your money. They pay you a low interest rate And they go invested in high interest rate stuff by taking on risk with your capital and ultimately they can take losses on that And if you want it to make them liable for those losses, they're not going to take that risk and the bank is going to have to change its business model from being an arbitrage business to being a service fee business.

1:11:29And they're going to have to figure out other ways to charging service fees, including charging you to hold your money in order to make money. And that's what a lot of the banks are now doing. First for public and others have now proclaimed that they're going to start charging a lot more service fees to hold your money and they're going to start taking a lot less risk. So we're already headed in that direction. But that's fundamentally what I think would be the next question from the audience. Good evening. I'm Lisa Song Sutton, Las Vegas, Nevada. G .P. and the veteran fund. As investors, you all invest in entrepreneurs.

1:11:58They're radically support American entrepreneurship. What role, if any, do you think VCs should have in shaping, advocating, supporting, conservative economic policy in the country? Shemoff? Zero. I think that we have to know the role that you're doing if you're a venture investor, which is you're buying a deep out of the money option. And I think that you want to motivate the people that you are partnering with to take really thoughtful but outsized risks. And so I don't think there's a lot of room for conservativism. I do think that there's room for misallocation of capital. And I think that there's people that can help guide that.

1:12:44But the reality is that when you start a company, It's 95 % likely to fail and the venture investor is signing up for a 70 or 80 % probability that they lose capital maybe a 10 or 15 or 20 % chance that they get their money back and then the small 5 % chance that it becomes reasonable. So in that lens, I don't think that's where conservative economic policies really should play a role. I think you just kind of got to go for it. And if it's going to win, it's going to win big. And if it doesn't, you lose one extra money. I think where you want conservative economic and rational thinking is when you go to the extreme other end, which is just like the large scale decisions that affect the economic vibrancy of the country in which you live.

1:13:38And there on the margins, you probably want to be more rational than irrational. But as a venture investor, I think you want to be irrational. But I also think you have to be very judgmental. And the reality is that most companies aren't going to work. And most people, this may seem controversial. Most people, actually, when push comes to shove, are a little afraid of the decisions they need to make to be truly successful. They're not willing to fire the people that they need to fire. They're not willing to be extreme in the product they want to build. They're not willing to price it. They're not willing to go to market in an extreme way.

1:14:13and it tends to be that these companies fail because of that. A lack of courage, a lack of conviction. I was just a lack of courage or conviction because that's a very heightened word. I just think that when push comes to shove, most people implode with the pressure of making a very, very hard decision. Interesting. All right. In my experience, it could be yours. Could be. I agree with you largely when a startup does fail. If the experienced people around it are watching and can't get through to the founder of the founding team, And it's typically they are blocking their own success, they're unwilling to fire their co -founder, their CTO as the example you're alluding to perhaps or raise the price of the software and lose some customers or to drive people to work harder because you've got to compete in the space.

1:14:57And that's why you see extreme people win in our pursuit. And I think there's been just a great fallacy that's gone on that you can have live work balance or life work balance. And you could have this Nirvana where you have it all. The fact is, the great companies are made by people who make great sacrifices, period full stop. If you're not willing to make the great sacrifice, you're not going to have great outcomes. Hi, David Samuel. Earlier today, Jason, you had kind of a doomsday or AI panelist. My question is, you guys have been thrust into the public spotlight. We look at deep fakes in the next year or two.

1:15:31As you talk about tweeting on Friday versus Wednesday, how do you think about somebody having each of you saying things that you did not say and like how might we know whether Chimoff said that or it was a deep fakes saying it. I already have that problem. Yeah, because you were so good. It was a lot of business insider last week where somebody was saying I had a phone call I never had. So how do we solve this? Especially for you as public. Well, as public two things. Two things. One, I don't think people can say more outlandish and damaging things in AI than we say ourselves on this podcast at times.

1:16:07But number two, you know, as we've discussed many times on this podcast, we have rebooted our trust in institutions, what we read, what we say, and I think people are now assuming they're being manipulated, assuming something might be fake news or doctored. And I think it's like people are building up a much higher resiliency to bullshit lies manipulation. And if I were to ask a hundred people, what is the bias of CNN, New York Times, Fox, MSNBC, NPR, 90 out of 100 Americans could describe it almost exactly. People are not dumb. This is another fallacy. I think we have in this country is that people are dumb and they're going to get suckered.

1:16:51People are kind of figuring it out. And we've seen deep fakes for what, five years, 10 years now. And they're like, like, yeah, Luke Skywalker didn't look really good in the Mandalorian, but there's a kid who redid it, and now, Dolly II is doing it. I think we're kind of inoculating ourselves to what do you think, Freeberg? Deep fakes and truth. When the Gutenberg press was invented, a bunch of fake shit was printed and people believed it. I don't think the current iteration with deep fakes is very different from any form of mass media being used to help people on truth. I'm gonna call it Crusades.

1:17:29What's that? Call it the Crusades. Yeah, no, I mean, but look, I mean, you're 100 % right. But I don't wanna speak about religion negatively in that way. It is one of many institutions of power that leveraged mass media historically to get people to believe things, to do things, and to ultimately be able to tax people and get them to provide capital and labor in the interest of those who are in power. And the system of deep faking is one of a long string of using the current toolkit to take mass media and follow that same track. So it will be dealt with in the same way that things have been dealt with that have been fake news in the past, which is that there will be an opposing voice and there will be counter arguments and there will be debate and it will be rancorous and it will be noisy and it will be hard to discern and alternatives will emerge and tools that identify deep fakes will emerge and it will be the same ongoing battle and seeking of the truth that humanity has tried to do since the dawn of mass media.

1:18:33You know, yesterday's conspiracy theories or like tomorrow's Pulitzer Prizes, I always say, like if you look at Shinino Khan or ripping up the Pope's picture on Saturday Night Live, in protest and saying like this is the true enemy, they're molesting children and And then the Boston Globe and the movie spotlight is about them a decades later, winning a Pulitzer for uncovering what anybody who's in the room who's Catholic in the 70s and 80s knew or had heard was going on. And so, maybe the timeframe is shortening between when we're being lied to and when we figure it out. I actually think it's interesting and good because it forces us to find ways to find the truth more effectively.

1:19:12And, you know, it kind of, without the antagonism, I think it's, you know, it's absent. What is the truth? You don't force that debate, you don't force that question. And this will start to reveal ways that we can kind of find things that are actual evidentiary things versus things that someone told me. With either historically anecdote or innuendo or I'm a person in power or I'm an authority or I'm an expert. And nowadays it's like, I'm a piece of media, you should believe me. Or here I'm an image of a person and that's not going to be the case anymore. Hi, I'm Jeff, a full -time corporate VC and part -time angel.

1:19:47My question is about AI and higher education and it's actually some covert parenting advice so you can decide who's that relevant for. My son just finished his freshman year of college and I'm questioning what the future is for him in higher education given all the change that AI is going to, going to have on every career and every profession. And I'm wondering what advice you'd give to your child or someone who's in college right now for what what's an area of study that won't maybe won't be disrupted by by AI or or an area that AI you'll get leverage from your education through AI. I think the reality is that most of the existing jobs that we have in the United States are going to go to lower cost locations that have that tool chain to accelerate their capability.

1:20:45So we are going to have to reinvent the workforce and the things that we do over the next 30 or 40 years to stay relevant. That's probably like I think that should just be the operating principle. If you think about it, we used to run great call centers. Okay, those call centers were outsourced to the Philippines in India. But in the next, you know, five or 10 years, you'll have this flawless, unaccented English or even more eerily, perfectly accented English for the zip code of the person that's calling in so that it sounds like they're talking to somebody that's literally their neighbor. That's like just makes so much sense, right?

1:21:25So it's like all this stuff is gonna happen. Where like all these classes of jobs are gonna go away. I saw this article where a lawyer, two lawyers used chat GPT to submit a legal brief. The problem was that it cited cases that didn't exist and now they're gonna be disbarred. So this is like serious business, right? Like you can't do that. Like that's like real legal malfeasance. So what are your kids studying? So what are your kids studying?

1:21:53So what are your kids studying? So what are your kids studying? So what are your kids studying? from my kids, I would probably tell them to do something mathematical or biological. The reason I would point them to math is that I think that it's irrefutable. There's this great clip between Ricky Jervais and Stephen Colbert. You guys should go and Google this. But it's a clip where he's on the Colbert show and Colbert is a deeply devout Catholic. And he's offended by the fact that Ricky Jervais doesn't believe in God. God. And he asks him, why don't you believe in God? And Ricky, your face says, look, if we wiped out all the books in the world, in a thousand years, everything that scientific and mathematical would be reestablished.

1:22:34But everything that is religious or theoretically not, you know, mythical, if you want to say, would look very, very different. That's why I don't believe in God. I'm not trying to question that. But it's a way of answering this question, which is, I would try to point my children into the body of knowledge that's largely irrefutable, which is biological and mathematical, versus belief oriented because I think these tools will change one's beliefs. I've been thinking about this a lot too. I think teaching them to be entrepreneurial, resilient, worldly, ability to communicate, ability to lead other people in teams, that stuff's not going to go away, communication skill, etc.

1:23:14and I'm encouraging everybody who I work with to just use ChatGPT4 and Bard everyday for every single thing that they do. My base thesis right now is that the job freezes, the hiring freezes that all these companies is indefinite. I'm assuming it's indefinite because the amount of work it takes to write a job requisition is more work in some cases, then actually automating with AI or ready, the job function. And so I think 20 person companies might, you know, double in size in the next two or three years, but still have 20 people. This is gonna be a big challenge for the first society. And if that does come to pass, there's just gonna be large swaths of people who are not gonna be able to get job interviews for anything other than service jobs.

1:24:05And you know, we need a lot more plumbers, electricians, waiters, et cetera, those probably jobs won't go away, especially if we don't let people immigrate. So I am super enthusiastic about that efficiency, but I think it also means you have to be entrepreneurial because if you can't get a job and you can't get mentored, you better create your own opportunity. You better create your own company. And that's what I'm seeing. That's the game on the field right now. Two or three people who don't have job offers from Uber and Airbnb and Google and Facebook just saying, fuck it, let's start a company, because there's nothing else for us to do.

1:24:36And those are highly skilled people right now doing that. I'll say two quick things about this topic. So one is, I think there's a lot of AI fear porn out there right now, and I just think that like all of these tumor scenarios are, they're not gonna play out overnight. I mean, this is gonna take a while.

1:24:56Second, if you think about like job elimination, it's gonna be some super specialized jobs. So for example, I wouldn't want to be a radiologist right now, but doctors will be fine. So I think if you're thinking about like going into a job category that's super specialized and clearly in the way of AI, then that probably is not a good idea. Most general skills, like you're talking about, and most job categories are going to be fine. There's just going to be some specialities within them that may get dislocated like I wouldn't want to be a truck driver either, you know, because of self -driving But transportation companies are still going to exist.

1:25:39So I think You just want to be careful about super specialization, I think but building general skills is always really good That really should be the point of college. Where would you put lawyers and accountants on that? I'm curious There's sufficiently general that I don't think they're going to be eliminated But will they be able to do five times the amount of work? Therefore we won't need as many? They may be able to get more done. Yeah, I would expect them to get more done. Yeah, but I don't think necessarily think that Means we'll need less of them. I mean the old story about lawyers is that there was one lawyer in a town had no business Second lawyer came to town and they were both more busy than they knew what to do with

1:26:19Litigation lawyers get 30 % more productive. They file 30 % more lawsuits and you know, we're good Yeah, yeah, let's take another question. These are great questions, so for hey guys Rick Spencer. I hope Jamal gets to choose the wine this evening for dinner. I did not get to choose your wine, so I apologize in advance. What kind of a trick? Yeah, this is the last one. This is the 2018 Shatokon Le Phan. We're so out. That's I love the best. Okay, question. So you've talked recently in an episode about the speed of AI, the adoption and how the winners are still unknown. That was reinforced in the session today.

1:26:51A room full of investors. How are you thinking differently about your investment, your strategic investment decisions and your strategy? Are there opportunities to look at venture investing differently like venture studios in the future of AI? I had this conversation earlier today. I think I started a company in 2006, where we took large data sets and we built predictive models from those data sets. And we use those predictive models to make analytical tools available to a specific vertical, in our case, agriculture, farmers. And the models were both deterministic, meaning there was kind of definitions, algorithmic definitions of physical parameters.

1:27:30And there was like all the statistical inference that you get from large data sets. And it made recommendations for farmers. What a lot of people are calling AI today is fundamentally a predictive model on text, on language. which I am making a language predictor that gives you a sentence. And it seems so profound because it is how we all interact with computers and interact with one another. And as a result, it is kind of viewed as the sea change across all of these industries instantaneously. It's this whole new era. But the fact is that generally speaking, the digitization of things and the amount of data that's being generated on Earth is going up by some order of magnitude every number of months.

1:28:14and our ability to make predictions and build predictive models that are useful to specific vertical segments is improving every sequential cycle that this is happening across every vertical. And it is continued and it hasn't changed and it's not any different. So there's in this area of genomics and bioinformatics, there is an absolute sea change happening in human health in synthetic biology and our ability to understand and predict the biological world and make changes in creating new drugs, create new systems for producing molecules, for producing things that humans consume. And it is all buoyed by machine learning applied to large data sets in genomics and other metadata associated with human health and biology.

1:28:56And we're seeing the same thing in other areas, whether it's chemistry, material science, industrial application, consumer markets, and so on. The era of what people are now calling AI is an interface layer of language that's really creating transformational opportunities on how these tools, how these systems, how these models can be utilized and provided to all these different verticals and allows us to rethink business models to rethink interaction models and to really change the economics of different businesses and the utility and the productivity of humans because it is about speech, it is about communication, it is about what we fundamentally do as a species.

1:29:32So I would argue that the general trajectory of machine learning, the general trajectory of data generation and our ability to make predictions generate value across all these different markets is continuing in the way that it has been continuing for the last 20 years. And it is profound in its own right. And I wouldn't say that there's a massive sea change in that evolution because of large language models. Large language models create another set of opportunities. So I would kind of create a distinction and make sure that the categorization of the investment opportunities in large language models be assessed on its own And everyone's all over the place as you guys probably heard today foundational models are getting disrupted every other week.

1:30:12They're being decreased in size parameters are being reduced They're being commoditized you can run these things on M2 chips Everything is up in the air right now and it's friggin nuts You're gonna invest in a company at a 500 million dollar valuation and six weeks later It's gonna be worth zero because someone opens source the exact same thing that you can now do for a hundred K So that's very difficult and very different than, but there are still like these incredible points of inflection happening across all these other industries with respect to machine learning. And that's where I spend my time.

1:30:40Shemathi, want to add what you're looking at? I think this is going to be the big question. Six or seven years ago, there was a Google earnings release where they talked about building their own silicon. I've told this story before, but I pinged those guys and I was basically like, I just want to meet the team that built the TPU. Long story short, a year later, I put them in business. And, you know, we've been building silicon for this moment for years. It's been really, really hard. And the reason it's been really, really hard is that Nvidia is just really, really good. CUDA is very, very complete.

1:31:19And it's just very difficult to justify why one would build, once you have something that you think is profound, through, you know, implement multiple SDKs to like multiple points of silicon, just doesn't make any sense. That being said, I still think you need to be at the absolute bottom of the stack and the absolute top of the stack. I think I'm a little too biased for saying the former, which is I'm hoping that there's vendor diversity and silicon diversity, because I think it's going to be really important. I don't think we want to have a world where Nvidia runs away with it. So I think there's investment opportunity there just because I think everybody should want that to happen.

1:31:58And then at the absolute top, Freeberg's right that all these foundational models I think are changing so rapidly that the thing that you want to figure out is like, what are you seating it with to drive learning that's unique and that's a data problem. So there's an example that I've given. This was an example given to me by Nick Escherroira. So I'm not going to take credit for it. He's a CEO of Paul Alton Networks. But he was telling me, you know, when you look at travel, the travel space, all the public travel companies are like $300 billion of public market cap, Expedia, travel velocity, all these companies.

1:32:37But they're pure middlemen. And they sit on top of the data feed that comes from a handful companies. One of them is Saber. And so I went and I looked at Saber. Saber is like a $1 .3 billion company, a small little company. But they are the ones that go into all the airlines, extract all this gobbledygook data, normalize it, and allow Expedia Travelosity Booking .com to exist. In a world of machine learning, where an AI, where theoretically you can have conversational language is inside of WhatsApp or Messenger or Instagram, you see this beautiful picture. You're like, book me a ticket to that place.

1:33:18Well, Saber is actually the key value creator there. And all these expedient examples that are plug -ins at GBT make no sense. They make no economic sense. Those companies should go to zero. So I've used that as a way, a forcing function for me to try to prove that there's really these two barbells. It's a barbell bookends. One is a silicon and one of these sort of like data providers. That's probably an investable thing that's defensible. Everything in the middle, I think what Fieberg said is true, which is today it looks like it's worth a couple of billion dollars tomorrow's worth nothing. And so I think you have to be very careful.

1:33:56If you listen to, there's an interview that Stephen Wolfram did with Lex Friedman. If you guys listen to it a few weeks ago. I had him on my pot. The look up weeks ago, but I haven't heard the free. Wolfram? Yeah. He's incredible. Yeah, he's incredible. If you listen to that interview, I think Wolfram does a great job of describing the difference between inferential models or statistical models and computational models Statistical models are where you take large data sets and you build statistical models that infer and predict things in the future or predict things that you ask it to predict from the data set that it's trained on and Then it creates a statistical representation as a probability of being right or wrong in every prediction it makes and it creates a distribution of outputs from the model.

1:34:37And you can train a model from nothing today using a bunch of tools that are open source and generally available and a bunch of great Silicon and all this amazing stuff that's now out in the world. But there's a bunch of things that you can't generate data and you can't necessarily train models on and that requires computational models. Models where you actually have to build some system that creates a deterministic outcome And the terministic means that it doesn't have a distribution of things that could happen, and it has one thing, and it calculates it. Like, 2 plus 4 is 6. There isn't a probability distribution on it being 6.

1:35:132 plus 4 is computable. It is calculable. It is 6. The great unlock that I think is ahead of us still, generally speaking with respect to large language models, is the connection back to computational models. Is the connection back to structured data where you can make requests and integrate structure data into the output combined with inferential output and computational models where you can take the inference, you can take the request and figure out what computational models can I now run in addition to making a prediction about an output. And that's where so much of the value is going to lie and it's going to require incredible software engineering talent, applied maps, statistics, all the stuff that's made data science generally speaking so successful over the the last two decades is going to continue, and it's going to be this integration between computation and inference, and it's going to be applied in lots of different markets, and it's going to be really powerful, and we're all going to have our minds blown.

1:36:13Just in terms of the seed stage, or super early pre -seed stage, two or three people who are obsessed with this technology who are playing with it every day, who are keeping up to speed on it, and who understand some customer base, whether it's delighting themselves or delighting some other customer base, I'm willing to take that small bet on, that 100K to 250K bet. Because in the previous paradigm shifts, or platform shifts, cloud computing, apps, and before that desktop computing, and the web, you saw people start tinkering with stuff. And whatever their first two ideas were, are long forgotten, because they figured something else out.

1:36:51And I kind of feel like that's the stage when there were a lot of people who were playing with iPhones in the App Store and they made a calculator or a flashlight that got built into the operating system as I think Freeberg is specifically pointing out. You could just be part of the model in your whole business as wiped out. We have one company that's trying to make it kind of rareries for travel. I looked at what they're building and then they're figuring out prompts, they're figuring out the interface, they're figuring out what people want. I did the same searches on Chatship ED4 and I was like, it's not that much better what you're doing, but it's better and your ideas are better.

1:37:26And so I think that the win the race and they only have to please, you know, whatever number of users. And this company could wind up being, like I said before, a 20 person company that does 50 million in revenue. And I think that's going to be a very interesting future. And it reminds me of the app economy. There were a small number of acts, things like distro kid or Instagram, where small teams built things that printed money and had incredibly high margins. So I think that's part of the opportunity here. I do agree with Shamath's point. Data's the new oil. Whatever data set you have that you have that's unique is incredibly powerful in terms of defensibility and could help you to outpace one of the generic models.

1:38:07This dude's been waiting. Okay, dude, who's been waiting? All right, thanks. Lightning round. Thanks David for the mic. My name is Raad Musriou transform BC in San Francisco. My question is for you, Shamath. The last, finally, Jesus Christ of Egypt. What the fuck these guys are doing? So last one or two episodes, I can't recall. You brought up this whole idea is how do we get non -US -born American patriots to run for president? So as the growth hacking, drunken master, what do you recommend? How do we propel this idea? How do we have it pick up steam? and not have to wait 25 years or whatever, you know, it can't happen in the next few years.

1:38:51I do think there's a small probability it could happen in 25 to 30 years, but like the problem is that the people that would take out can be president on the stage. Yeah, the three of us are all worked up. This is, but I'll put you guys in my cabinet, but this is the, I think the how is that you have enough bottoms up citizen journalism and opinion formation that people can independently decide that on the margin this is a good idea. Like look I I'm not interested in running for government but if David were in charge of something very important treasury or state I would have immense confidence if Freeberg were in charge or something, I would have immense confidence.

1:39:39So the idea that guys like this,

1:39:44the idea that guys like this, and oh, because I'm born here, so you don't have to say that. Yeah, no, you'll get the department of sanitation or death we gotta win. No, so for sure I get away. I do this faster general. I do think it's a little crazy that guys like these two get disqualified just because they emigrated when they were like four and six. That's insane. So I think that if we're in the business of actually deciding that you want the best people for this country on the court, so that we keep winning championships, you don't tell Johnis, oh, you know, you're born in Greece, so chow chow, you don't get to play, that's crazy.

1:40:27Put them on the court and let them win. So I do think it takes 25 or 30 years though, of us saying this because it has to be a grounds for all of people that say, I just want to win because I'm seeing all these other countries starting to win more and I don't think I want that for my children. I do think it takes a generation. I don't think it happens today. Alright guys, in a couple of hours it will be the Sultan of Sciences birthday. And Alan Keedings. And Alan Keedings. And Alan Keynes. So I thought it would only be fitting if 100 All -In Super fans took a moment. I'm going to sing an Italian.

1:41:06And sung Happy Birthday to Dave Freberg. Three, two, one. Happy Birthday to you. Happy Birthday to you. Happy a birthday dear free bird Happy a birthday to you and many more All right, Sultan of science I know your wish was to be a top 10 podcaster It's come true finally I'm like I got to go into podcasting Yes This is SO naive!! Ho, hi! Welcome L amor Cr die!

1:41:57Welcome to LoL This is myscheda Oh, it's so cold That's my dog, take it away, I wish you're driving away. So, wait a minute, I'll get there. Oh, man, my ham is the actual meat, the ass, the shit. We should all just get a room and just have one big hug, George, because they're all just like this sexual tension that we just need to release that house. What, you're the beef? What, you're the beer of beef? Beef, what? We need to get my cheese on. I'm going, darling!