Inside the White House Tech Dinner, Weak Jobs Report, Tariffs Court Challenge, Google Wins Antitrust

25:26This is an important, I think, moment in time to just say Trump 2 .0 is engaging the business community and meeting them where they are and saying, how can I help you grow faster? How can we compete? America is not the only game in town now. As you saw with Modi, you know, creating this alliance with Xi and Putin, it's imperative for the American companies to excel and create jobs. And we have the lowest unemployment, we'll talk about employment today, there's some new statistics. We have the lowest unemployment of our lifetimes. It's for a reason. It's not because of any presidents because of these great companies.

26:01We should be celebrating them. And the president's done an exceptional job of doing what all Americans do. We celebrate these companies. We love the iPhone, we love Teslas. We love these products and services people are building. People love Google, they love chat GBT. It's fantastic. And so it's easy to be cynical, you know, about business or business leaders, but this was really, I think, a great show of force. And it shows the country's getting in sync on what matters. And that has, it should be independent of political parties. I was very proud of you, David, that you built this bridge and you built it brick by brick.

26:34And I think, to have a great job. Well, just to be clear, I mean, obviously the president already had access to all these people. And in fact, many of them were already on speed dial and he already knew them. And he's the one who can be in them at the White House. I've just been helping with policy. So I don't want to just be clear about that. Well, I'm not overstating it, but I'm even going back six months when you guys held the fundraiser and then just, you see, like a very close friend of mine, Mark Pincas, lifelong Democrat has donated, you know, probably eight figures to the Dems in total over the years.

27:06And he got frustrated at a certain point that he couldn't get his calls returned or he couldn't have important discussions. Well, here we are. He was at that dinner. And I think that's a very important lesson. The Democrats need to field moderates, business leaders. They got their Bob Igers, they got Jamie Time and they got a bunch of people who could help, you know, build an agenda that's not lunacy. Yeah. And what I would say is, is look, maybe half the people at the dinner have actually moved to the center or to the right relative to where they were. And I think Mark Pinkis has basically put himself in that category.

27:38So there's people who have like been red billing and moving over to our side. And then I'd say the other half of people in the room haven't necessarily changed their politics. And there's there to do business. They want to have a good relationship with the government. But the same is true on the part of the president. I saw some conservative influencers saying, how can the president meet with this person of that person? He's been such an opponent in the past. I mean, look, the president is doing business as well. He asked all the attendees of the dinner, how much are you investing in America? What do you need to invest more?

28:06He wants to see the infrastructure investment. Why? Because it benefits all Americans not just software companies. It benefits the construction industry the trades the electricians the carpenters the Energy companies fracking and so on so he's there representing the interests of the country and then many of those CEOs are representing the interests of their Companies and there's a dialogue going on It doesn't mean that everyone has to like suddenly become a Republican or change their politics But it's constructive and this is all in furtherance of having the US economy grow better All right, perfect segue.

28:40We got lots to talk about in terms of the economy. And first story here, Trump's tariffs got overturned in court, federal appeals court ruled 7 -4. That Trump exceeded his authority when it comes to the Emergency Economic Powers Act. Okay, we'll get into the details here. Historically, Congress was in charge of tariffs, but under an emergency, a national emergency, the president can get involved with tariffs and they cited the 47th administration fentanyl crisis at the borders, Mexico, Canada, China, etc. And the trade deficits. Well, the White House got sued by a group representing small businesses in May, two federal courts ruled that he wrongfully invoked the IEPA.

29:30And the White House appealed that they've now lost and Trump's tariffs will remain in effect until October 14th, allowing the Supreme Court to appeal this. These tariffs have been tremendously unpopular in the business sector. I think maybe 70, 80 % of business leaders in a recent survey, Zach said that they're not crazy about them, but they have, on the other side, generated over $150 billion in revenue in a couple of short months, so they could generate trillions of dollars in the next decade according to estimates. I guess the question I have for you, SACs, is you guys are moving at the White House there in this administration, the executive branch at startup speed, moving fast and break things as something we talk about doing in our industry.

30:18And is this just the natural extension of that? The president is doing a lot of aggressive things and sometimes they're going to be allowed, sometimes they're not, which would take? Well, I'm not concerned about the fate of tariffs at the Supreme Court, even though it's probably a coin flip, whether the Supreme Court's going to allow the tariffs under IEPA, but there are five different laws under which the president has the authority to impose these tariffs. So there's a chart here that we can throw up on the screen. There's Section 232. There's Section 201, Section 301, Section 122, Section 338.

30:52There are at least five different bases for the president's authority to impose tariffs. So at the end of the day, I think it's actually quite unlikely that the Supreme Court is going to force a change in tariff policy. And I don't think this report sees it as this urgent matter that requires a quick resolution. So I'm not particularly worried about it. In terms of the popularity of the tariffs, my guess is that they're not going to be reversed in the future by a future president because I think they actually are quite popular with the country with workers. Among the business elite, it's more mixed.

31:26I'll grant you that. But if you change the way you ask the question, from are you in favor of these tariffs, too, are you in favor of raising $4 trillion in revenue over the next decade through tariffs to fund a tax cut like we had in the Big Beautiful Bill, then that might change the perception of it. So that's really the question is, how do you want to raise revenue for the government? And between big, beautiful bill, and the tariffs, what you see is a substitution from taxing Americans to taxing foreign companies, unless those foreign companies that make a big investment in America. So, look, there's no great way to extract revenue from the private sector.

32:09All taxation is unfortunate and undesirable, and we better if we didn't have to tax so much. But the reality is I think that if you have a choice between taxing American people or imposing tariffs I think tariffs maybe the better way to do it And I just want to note that the CBO Has now increased their projection of what terrorists will raise to 4 trillion over the next decade So 400 billion a year. It's pretty significant right and initially it started as a lower number and it completely pays For the one big beautiful bill Shemoth, here's the chart. Trump's tariffs were meant to help manufacturers do manufacturing firms think they're helping has your business been impacted by higher tariffs this year and Here negative impacts 72 % of manufacturers 3 .7 % think it helped and 17 % said no impact 7 % don't know yet Your thoughts on tariffs.

33:03They're obviously unpopular with people in retail manufacturing and those businesses but as Axe points out, hey, maybe the American people like them and they like the idea of a new revenue stream. What do you think about Shema? I think that the tariff some balance are a pretty smart masterstroke of strategy. I think that we did not understand what the impact of tariff would be except for hypothetical econ -wong talk. And so that hypothetical econ -wong talk basically said that tariffs were always going to be a disaster. And if you ask them, well, what is the actual practical data that you would point to?

33:44They didn't have any. It was just more hypotheses. But what is the practical data now? I think that the United States is going to book probably close to half a trillion of incremental revenue. It's actually forced a stabilization in the dollar, which I think that people were always very concerned with. What's gonna happen to the dollar complex? Everybody always screams like with their hairs on fire, but the dollar complex is stabilized, I think because of tariffs. So there's been some real positives. And what SAC says is right, which is whoever is president over the next, five, 10, 15, 20, 30 years, There'll be some Democrats, there'll be some Republicans.

34:34It's going to be very hard to justify why you would undo this now, because this source of revenue is going to be an incredibly important one. Well, and also, it's not just the fact that the revenue is very important. You raise a great point, which is the US government is going to come dependent on that revenue, but also just workers. I think the tariffs are very popular with blue collar workers, certainly the auto workers really like it. Well, here's what I was going to. The pie chart that you showed is not accurate. And the reason it's not accurate is that the investment cases that you would underwrite because of tariffs and the big, beautiful bill haven't happened.

35:10So I'll give you an example. I am a person that started a business that is building a factory to make batteries in my specific example in Michigan. So to de -lever away from China for the battery supply chain and what I will tell you Jason is after the big beautiful bill and because of tariffs It is much easier now for me to underwrite why because I have a hundred percent depreciation across all my capex It's a complete changer on the IRR of these projects So before where I would have to raise billions of dollars from outsiders I can subsidize a lot more of it internally because I can actually underwrite to a better gain because the tax savings are so meaningful.

35:53Same thing for this data center that I'm building in Arizona. So in all of these cases, I think that A, you have this uptick in revenue because of tariffs on the short term. And B, the important thing is to redo this pie chart in probably a year like for example, our groundbreaking in Michigan will be in July of next year for that factory. It'll be online two years after that. But the real story, Jason of all of this will be really known in that period. But right now what I tell you is the underwriting case for putting a ton of money into the United States has changed to the positive because of these because that 100 % depreciation.

36:29It's a huge deal. Yeah, whether you're buying a plane, yum yum, all in aviation. Freeberg here's your polymarket. We'll tell our generate greater than 250 billion. It's a peak that like 30%. It's come back down to five most people are betting so this could be a case of free money if people want to go get it on polymarket Because it has a pretty good chance of hitting that but the number the number I said Jason is like a yearly run rate So technically if you just look at the calendar 25 you only get a stub of eight months because it's our people first eight months 50 K a month 50 billion a month it to 400 billion so they should be able actually think they're gonna hit that bogey but free bird the reports from people who have been impacted by tariffs, obviously these could become inflationary, but the people who are being impacted said they've been eating them to date, but they're not going to be able to eat them forever so it could become inflationary.

37:24What are your thoughts on the tariff, kerfluffle here and the legal battle over them, as well as the impact it might have on inflation, which is something we do not want to see come back. And we have been teetering just under that 3 % number, which then puts the Fed obviously in difficult position with their mandate to get to 2, Freiberg. I'll address the legal kerfuffle point, which I think is a good one, because I do think that the great debate that's going to happen from this presidency and will likely shape the next set of presidencies will be the right for presidents to declare emergencies to move forward their legislative agenda.

38:05And arguably the tariff institution by many members of Congress should have gone through a congressional process. In the meeting I did with Rand Paul this week, which has now been posted, he talked about the challenge that they have had with Democratic presidents, Biden and prior to that, using emergency authorization vested to them under the National Emergency Act, which is a 1976 the six -tacketary authority to take action. And then in order for the emergency powers to be turned off, Congress actually has to vote. And they can only do so after 30 days. And when Congress makes that vote, the president can veto their vote.

38:49So the president can then send it back. So then they have to get a two -thirds super majority to get it to pass. So it creates a system whereby the president can have this emergency authorization to progress much of their legislative agenda under the guise of emergency powers, which for many people they would say is not the right way to do it. So, Senator Paul and others have proposed bills, for example, that the president has to get any emergency power reauthorized after 30 days, and then it can only be a maximum of 90 days without Congress enacting a renewal. And so it requires actual congressional action to continue the authority of that emergency power.

39:28Depending on what the Supreme Court does or doesn't do, I think it is going to catalyze a legislative push, and the Republicans are likely not going to embrace it this presidency or this term because President Trump is in office. But I think the conversation that's, you know, out of the box Republicans like Senator Paul and others are saying is, well, what's going to happen next time? What's going to happen when there's a Democrat president? And we don't like what they're doing. The president AOC is going to take emergency powers to do something you might not like, right? Is this your point? Yeah.

39:56And so as it relates to both the IEPA of 1977, which is the act that this case is about, but also the National Emergency Act of 1976, should they go back and pass a new law that basically forces the president to have to get congressional approval for any emergency to last longer than 30 days? So I do think that's going to be the big debate that's going to come out of this. As it relates to the Terra for Evenue, I am most worried about the fact that we use the tariff revenue, as I said before, to offset spending. And basically keep a baseline of spending without actually getting ourselves to that deficit target.

40:32Right now we are going to vaporize and create debt of $2 trillion this fiscal year. So we're using the tariff revenue under the CDO scoring to basically say, hey, we can do these tax cuts because it's offset. But the goal shouldn't be to offset. that the goal should be to get cuts to actually reduce the deficit. And so that's the biggest concern I have with respect to the tariffs long term is it's now a new revenue source that we don't actually treat as incremental to reduce deficit. We just use it as a way to introduce new spending or continue spending. Sax, just to talk about three branches of government, wouldn't it also be an option for the president just to go to Congress with some of these tariffs and say, hey, can I get these approved?

41:15Would that be the worst thing in the world? Wouldn't it vote for her? I mean, but yeah, things take time. Do you have concerns that president AOC might do some things with executive powers that the Republican Party might be opposed to if she winds up winning in 2028? That's an important question, SACTS, is if AOC's president, and then she uses her emergency authorization to do things that you disagree with, wouldn't the Republicans then feel regret that they didn't pass one of these acts that limits emergency authorization and power? Well, look, I think that in general, when you have a policy that you want to last for a long time, the best thing to do is to codify it into law because executive orders obviously only lasts until the next president decides they don't want them anymore.

42:00So yeah, it may make sense after the administration, hopefully, wins its case, to seek to codify these things into law. We have a few years to do that. But I don't think it makes sense to wait for Congress to act because they may never act. And in fact, it was President Trump who shifted the whole debate on this topic. I mean, the whole establishment of both Republican and Democrat parties were very against tariffs. And it's pretty obvious that nothing would have happened on this issue. And he's completely moved the debate. So this is just one where I think he's acted unilaterally because he had to.

42:34But I think that once he's tariffs are in place for a few years, I don't think they're going to get pulled back by a future president because I think they're going to come quite popular. Too much money. Okay. In the other cases, two more lower courts have ruled against Trump once at the deployment of the Marines in the National Guard were illegal. One said he can't freeze research funds for Harvard. So again, back to moving fast and breaking things, these cases are making their way through the courts and there has been some resistance to sending in the National Guard, which is something that's been a bit of saber rattling chimoff about maybe going into Chicago next.

43:13Where do you thoughts on the national party should they should look here's the thing who is against safety and security who and why I don't understand. So if you can't do your job look you have to remember Jason. Let's take where we live in California or you used to live up. Yeah, not anymore. 13 % of our income goes towards state coffers. And then we pay real estate taxes and all of the stuff that goes to local municipalities. What are you doing with that money if you're not making the places we live safe? And then the second thing would be making the schools good. And so if you can't do it, if you can't do it, of course somebody else should step in.

43:58And frankly, what I have heard consistently is even though the talking point has to be, Oh my God, what was me? We can do the job. Everybody behind the scenes like, oh, thank God they're here. Anybody who's being impacted by crime would like to see an actual guard come in and remove in captments or drug dealers or get drugs off the streets. Sachs, you know, you're a, my perception would be that you think that there should be separations between the executive branch and maybe the states and that this rule breaking of sending in the national guard that would go against the rules of the sovereignty of the states.

44:32So putting aside to Mox Point, which is completely valid, that they haven't done a good job here. It is illegal as the judges are pointing out. You have concerns about that. Okay, well, first of all, I reject this characterization that is the Trump administration that's move fast and breaking things. If you recall what happened, I would just say moving fast. Well, I think the president is taking swift executive actions that are popular. And you see this actually in his poll ratings, he got the highest approval rating he's ever had just in the last week And a big part of it is because of the reduction in crime in DC I think you got to 55 % approval on poll rating and even in DC by the way the mayor and her staff have said all sorts of positive things about the help They've received now from the National Guard and from the federal government and the citizens are extremely happy crime is down.

45:23I think we had the first two weeks where there was no murders and the Capitol in a long time. The residents are very happy. So this is definitely working. Now with respect to California, let me just point out that the National Guard wasn't called in specifically to enforce laws on the street. What happened was that you had ICE and Homeland Security agents and workers were doing their job and they were conducting some deportations and then you had protests turn into riots, and those protesters were threatening to burn down their headquarters, and that's why the National Guard had to be sent in.

45:59So it wasn't the Trump administration breaking things. It was rioters who were breaking things. I can't understand for the life of me why the administration wouldn't be able to send in the National Guard to protect federal workers against rioters, but apparently that's the case. So look, I think that court reached a very specific decision about what happened in California. yet we still haven't had a case adjudicating the question of whether the proposed interventions in these blue states to clean up crime will be allowed over the objections of democratic governors we don't know. I think it's pretty clear that the DC intervention will be allowed and it's extremely popular.

46:37And look, the DC one he's legally allowed to do. So yeah, he's got his got his what was it a 30 day mandate he can take it over and so here's your popularity from the economist. It is taking up, but Trump and the country still seems pretty divided. 41 % approved, 55 % just approved, 3 % unsure, but he has moved up significantly in the last week. Today, some big news came out Friday with the Soft Jobs report. Pretty much bad across the board. Jobs came in super like 22 ,000 added versus 75 ,000, expected most of the gains. came from part time jobs, US lusts, 357 full time jobs while gaining 597 ,000 part time jobs last month.

47:18And this is after a bunch of revisions, you guys remember we talked about here a couple of times with these revisions and we'll show up some charts with long term revisions. July revised up slightly by 6K, 73 ,000 to 79. In June was revised down significantly. I can't really remember that, him back to the market by 27 ,000. This makes June the first month with a net loss of jobs since July of 2021. So there is an account on XCO, VC letter, and they did this revision chart. It's pretty crazy, as you can see. May and June revisions were in the six figures. And they're constantly revising these down, it seems.

47:59All right, free broadcasts of internet, connectivity issues apparently, But Shamaaf, let's talk about the revisions here and the softness in the job market concerning. Did maybe the Fed take too long to get towards cuts in September? What would you read on this? And the endless revisions? Look, I think that I've said this yes last week, I think, right? So I'll just say it again this week. You can't run the most sophisticated economy in the world if you have data that is completely unreliable. in either direction. And so the problem with this jobs report is there are already two competing versions of the truth.

48:42One group of people are trying to paint the jobs report as everything is working. There's nothing to see here. Another group of people are saying, oh well hold on, there's a birth death number where if you extract that out, the jobs numbers is actually negative. I don't know which one is actually better in terms of where we want to be right now going into a rate cut cycle. So my general commentary is the following. The BLS and their approach is incredibly brittle. It doesn't work. I think commerce has taken the first right step, which is to start publishing useful economic data into the blockchain.

49:28I think we need to figure out a way, and this is where Congress should get their act together, and pass an incentive or a requirement for certain parts of the critical economic infrastructure of America to report their data in an anonymized way into a broad set of blockchains. And the reason is that you will have very astute and precise pricing oracles help distill that information. So if you're ADP, if you're American Express, if you're Stripe, there's an imperative now for you to contribute the information you had into a broad collection of information so that we have an accurate sense of what the hell is actually going on.

50:09Because I can't react to this number because I don't know how it's going to change. It could literally swing by 200 ,000 in either direction, Jason. This is a, I think, a really good point. Here's some research. I have my, I put one of my researchers at launch on this. Here's 2021 in the initial reading first revision and we did this for the year sacks. So as you can see in 2021, they missed it by 1 .9 million, which was about 15%. 2022, they miraculously nailed it. 2023, they were off by 10%. 2024, it looks like they were off again by 10%. All this is revising down by the way. Jason, sorry. Let me just finish the chart.

50:47first half of this year, initial reading, 95, first from revision 732, second revision 497. So they were off by 50 % so far this year alone. This chart is itself inaccurate. The table is and it's because it's coming from the same people that measured. So you're asking the people that measured to grade themselves. And I suspect that the answer is actually much worse than all of this. Now, what is the implication of it? The The implication of it is, if you take the most positive view possible, it's that the people that then control the levers of the economy don't actually have accurate data, so they'll be hesitant to act until the data is overwhelming.

51:28The most important flens of that will be the Fed and what they do with rates. And so everybody's like, oh, wow, there's a 99 % chance of a 25 -base point cut. That may be wildly, wildly, wildly conservative in terms of the total amount that they need to be thinking about and how they should face that in. But how would I actually prove that to you? I can point to a whole lit me of private data, but the problem is the federal actors use public data. And this data is not useful. And I think that when you get private data into your hands, which I know that other folks have hedge funds, banks, the White House, what they see is different than what the Fed sees.

52:18So what I would tell you from this job's report is it's going to start again, this clamor of what is your plan? Clapping is not a strategy. So a 25 basis point cut to a $32 trillion economy is not a strategy. And I think that the reason they don't know what to do exactly is because they have extremely faulty data. Again, this is not, I'm not taking a position on this or framing it as if I'm taking a position. I'm just reporting the data here as they've reported it. So I'm just doing that here just to be clear here that I'm not endorsing any side of this. I'm independent. I'm moderate. I'm just giving you the data as it stands.

52:57Here's the Fred chart just so we can zoom out and see unemployment since the 50s were still at historic lows. and there's a slight uptick, 4 .3%, which is the highest unemployment since 2021, but it's absurdly low historically. So even when we're looking historically sacks, we're still at very low, but do you have concerns that the economy could be slowing and that we could have a jobs issue? That, I guess, is the question that is filling the error waves on CNBC and that everybody's talking about in group chats, are we maybe didn't make the Fed cuts in time for what clearly is some amount of slowing?

53:34Now, we could argue over if they get in the data right or not, the Fed says they look at all data, not just this data. They say they look at the private data as well. But where do your thoughts here, SACs? Well, we had 22 ,000 jobs added in August, and yet, while the number of jobs went up, unemployment rose, like you said, from 4 .2 to 4 .3%. which is a little bit of a contradiction, but that happened because more people started looking for jobs. But there are huge error bars around this data, like Jamal said. I mean, like you should. There's roughly 50 % revisions to all of this data over time, over the course of a year.

54:11So we don't really have great visibility in what's going on. And that's why you see such huge disparities in how people are interpreting this data. So if you want to look at some of the people who are pessimistic, You've got Kobe EC letter, but their press must stick about everything. You've got Moody's economist, Marcus Andy, he says we're on the press press recession, and he has a bunch of reasons why. But then if you look at Polymarket, people on Polymarket are strongly betting against a recession this year. I think the number is at about 8%. So it appears that most people still feel like the economy is doing well.

54:44And remember, we just had a 3 .3 % GDP growth rate for Q2. So I'd be surprised if there's a recession. I think there's a lot of factors against it. I guess I would also note that if there's any weakness in the job numbers, it's coming from foreign -born workers, more than native -born workers. Around two million more American -born workers have jobs in 2025 so far. And I think, meanwhile, about a million foreign -born workers, roughly, have lost jobs. So what you're seeing is a re -patriation in a way of jobs within the economy. The other thing that's happening is a reprivedization of the economy.

55:29So in August, the federal government shed at about 15 ,000 jobs, and there's been 100 ,000 federal jobs lost over the course of the whole year. So that makes the overall numbers look worse than they are, but a lot of us would argue that having fewer federal workers is a good thing for the economy. So you've got those factors. Then you've got blue collar real wages are rising, the second fastest in history. You had 3 .7 % wage growth this year versus 2 .7 % average inflation. So you have a net 1 % wage growth. During most of the Biden presidency, it was negative. And then I would also point to I think several factors which would make me optimistic about the economy moving ahead.

56:11You've had massive investment in the US by both private companies and foreign governments, you know, according to these new trade deals, I think roughly $8 trillion of new investment. You've got this AI boom you're seeing that. And that's going to land over the next year, right? That doesn't actually have been dubbed in. Yeah, this should see that in 2027, maybe late 2026, yeah. Yeah, this is the outlook for 2026 and beyond. I mean, this would be the bull case. is number one, $8 trillion of new investment in the U .S. economy by private companies and by foreign governments. Number two, the AI boom, we've got this massive build out of data centers and AI infrastructure underway and that includes energy and the manufacturing sectors are going to boom alongside tech.

56:54Number three, this has been the most affordable summer at the pumps since 2021 and low gas prices don't see it going anywhere anytime soon. So lowest gas prices since 2021. number four, you have these huge new tax incentives for business expansion. You've got the accelerated depreciation on equipment purchases on R &D. I think those are going to kick in once the big beautiful bill goes into effect. And then the last thing I would say is that interest rates cuts are coming. I would say that now and a lot of the latest jobs report, Powell should really cut 50 basis points. In September, yeah. In September, I do 25.

57:31Yeah, I doubt he will. It's probably going to be 25 and then hopefully another 25. But I think you could make the case that they should do 50 now and then 25 after that. But regardless of what it is, I think that most people think interest rates are coming. And that's going to juice the economy and further improve our fiscal position. So look, for 26, I think there's a lot of bullish factors here. All right. Just before we wrap here, Google, as we know, was found liable in this antitrust case. But the sanctions seem to not be as harsh as people thought they would be. Judge Mehta rejected the request that Google have to spin off Chrome, Android, and point it out that Google is having massive competition.

58:16So we had four years of Lena Con, you know, in these aggressive cases. There were tactical things we talked about here, like dark patterns, etc. that we all agreed with, I think there was consensus there. But this one we found a little confusing because Cox Google's under so much pressure. What are your thoughts on? I thought this really was excellent. Unpack it all. Essentially, the crux of the ruling was, look, there are some restrictions that Google has to live by. Don't get me wrong. But the most punitive remedies that were suggested were thrown out. And the reason they were thrown out was because the judge very eloquently cited competition and a fair and free at open market.

58:58And that is incredibly refreshing because the real question is, would this judge have had the wear with all and the courage to actually be able to rule this way a few years ago when there would have been an enormous amount of political pressure, they probably would have found a way to run this case in a different place, et cetera, et cetera. But now what you saw was just very simple logic, intervene. And at the core of it was, when we started this lawsuit, things like OpenAI and Jack GPT didn't exist. And when you fast forward, it's incredibly fast moving. We are reallocating hundreds of millions or billions of users' intentions as a byproduct where reallocating tens of maybe hundreds of billions of dollars of revenue.

59:43And so the judge said the most severe remedies aren't necessary because the free market is doing this job. So I just think that's incredibly refreshing because we forget that if the market is left to deal with these issues on its own, they do a very good job of cleaning things up. And it's because, as you said earlier, Jason, consumers want creative destruction. They want the next best thing. They want to be in crisis, better services. It happens by the free market. And they're willing to reward better companies and better products. So I think the great news for Google is that this takes an enormous risk off the table and now I think that they probably have even more Ambition and energy to just go for it and try to compete because they're not going to be worried About everybody on the outside and probably some percentage of employees on the inside who are always trying to slow things down Yeah, and that's excited out correctly and I'll just comment on this, Zach, is that they did get some tactical penalties here, and they make sense doing deals that are exclusive when you are a monopoly player like getting Firefox and Apple to only do an exclusive deal with you.

1:01:00They're not going to be allowed to do that. And man, that would change the game on the field if somebody like DuckDuckO or Bing or a new entrant perplexity whoever was doing search, we'd be able to say to Apple, we will outbid Google for 10 % of the searches. We'd like to buy 5 % of the searches from the Safari browser, going to Firefox and saying, hey, we'd like to one up and we'd like some percentage of that. So that seemed like a good part of the ruling your thoughts overall about this. So on this podcast, I think it was two or three years ago, when this case first came up, I think I took the position that Google Street broken up into two or three companies, because I thought it was this invulnerable monopoly and I don't think monopolies are great for the star ecosystem.

1:01:41And what I mean by that is they had the Google search monopoly and that YouTube business which is basically a monopoly and so forth and so on. So I wasn't favorite breaking this up but I've got to admit I was wrong about that for the reasons that the judge said which is Google for the first time in a long while is accidentally threatened by what's happened with AI. I mean, their cash cow, the core of their business is search. And people are starting to substitute in droves from traditional Google search, which they own or keyword search, where they have this monopoly or dominant share to AI. And if you look at AI revenue, I think something like 90 % of it is going to open AI.

1:02:22I mean, they have the dominant position among consumers for now. And there's let's say five major AI companies that are hot on their heels and very competitive and Performing equally if not better on performance benchmarks. So the point is just I think everyone can now see That the search business is either going away or transforming into something else Which is it's basically merging with the it's called AI chatbot business It's an answer's business now. It's not like giving links. It's just giving the damn answer Right, and we've been talking about this for a while where it's so obvious that having AI just give you the answer is better than 20 blue links, especially as the quality improves and it gets better at synthesizing those 20 blue links into the exact right answer and the speed improves.

1:03:11One of the things that Google is really good at is this fast response is they've always shown you in milliseconds how long it takes to give you the search result and obviously if you're looking for something quick and AI chatbots are going to take 30 seconds, you're going to go with Google, but that's going to get better too. So I think Google is kind of in the fight of its life right now. And I think this is why Surge has come back. We saw him at the dinner at the White House yesterday and he's very involved in Google deep minds again. He's going to the office all the time. Right. And so you're seeing that founder involvement again because they know that they've got a real existential thought to their business.

1:03:47And this is the argument that opponents of strong antitrust enforcement have always is made, which is that the free market will eventually break up even the strongest monopolies if you just give it the chance to do it. And that's what appears to be in motion right now. By the way, I'm not saying that Google is going to get destroyed. I'm not saying it's going away. I'm just saying that they have to pivot here in a big way. Their business is being disrupted. And they suddenly have competition, I think, in their core business like they've never had before. So I do think that we don't need to bring the hammer down on them in the same way that maybe we did a few years ago, I still would not let them pursue anti -competitive tactics against, say, applications in the Android store where they basically have a do -opily.

1:04:33So, I'm not saying I would let them do anything, but I certainly agree with this judge that we don't need to break up that company right now. Yeah, and there's rules in the field that need to be adjudicated. So, having a very simple approach with the FTC of saying, hey, these exclusive deals when you have 90 % market share, That's not allowable, but you can compete and you can fight versus the five new entrants and Have added and give consumers a better product at a cheaper price That's really the goal of the FTC is to have some basic rules of the field We saw it in the media business as well.

1:05:06We spend a decade or two trying to fight the consolidation of media companies and then Netflix Has trounced them all and YouTube as well in terms of viewership Netflix and YouTube are crushing the cable monopolies that we spend all this time trying to regulate. All right, everybody, there's your episode. We have to get back to work and get to Los Angeles for the amazing fourth edition of the All In Summit. It's going to be amazing and all the great content, including some surprise speakers. That'll be released over the next week or two after the event. So you need to get massive amounts of content.

1:05:41And make sure you go to the YouTube channel, subscribe, and click that bell so you get alerts. Go to allin .com, put your email in. We'll invite you to more events from up and I might be doing something in the poker space. That could be a lot of fun. My guy TK and I, we might be doing a little back amin' tournament. All right, everybody, thanks for tuning into the All In podcast. We're finished. Bye -bye, besties, lucky. Love you guys. Bye. We'll let your winners ride.

1:06:14We open source it to the fans and they've just gone crazy with it. I'm going to the US. I'm going to the US.

1:06:26Besties are gone. That's my dog taking a wish to drive away.

1:06:37We should all just get a room and just have one big hug or two because they're all just like this like sexual You'll be a pension but you just need to release a thousand. What, you're the B. What, you're the B. You're the B. B. What? We need to get merch. I'm going on leave.

1:06:59I'm going on leave.