IPOs and SPACs are Back, Mag 7 Showdown, Zuck on Tilt, Apple's Fumble, GENIUS Act passes Senate

27:14Apple obviously. There's a lot of regulatory overhead. So Tesla losing solar and EV tax credits. Apple being told to onshore and stop buying from China. So there's supply chains being disrupted because of tariffs. Those two companies in particular are far more affected than the rest. And even Amazon, there's been some conversation about tariff effect on Amazon. But obviously that's offset with some of the benefits they've been realizing and promoting is Jesse's book and his letter this week from AI. So I think that there's a variation here that's probably a little bit more Thomas kind of tuned to these conditions that aren't necessarily call it natural market forces, but are kind of influenced market forces associated with the new administration and some of the policy choices that are being made.

28:05If we were looking at those, number one and number two, which one you think gets to AGI first? Thomas? Well, where do we hold on? And by the way, the other thing you should note, Jason, which I find really interesting is nobody's talks about AGI anymore. If you listen to the language of all the companies, it's all super intelligence, which is a much more achievable goal because it's defined as being, you know, multiples more intelligent than a human being. But I think you're, I think if you actually did a search for the number of times AGI is being said today, it's meaningfully less because I think people have realized that that's not in the offing.

28:37Yeah. By the way, another lens, Chemaat that I think about on these is who controls their own destiny of these seven companies in AI, right? And I would argue Tesla does. Tesla does. I would argue Tesla does in Vitya. And then it's kind of interesting, right? Neither Amazon doesn't have its own foundation model, right? They're kind of dependent on others, right? Microsoft 49 % does, right? Because of this kind of relationship they have with OpenAI, it's both, you know, They own a big share, but they don't control it. So there's kind of interesting. And then maybe six months ago, we would have said, well, meta absolutely does.

29:15Maybe Zuck's churning a question that a little bit. And it's fun, in my opinion, to kind of bring different lenses to this list. Right, there's a regulatory one that Friedberg was just talking about. I kind of think about if I were to CEO, do I control my own destiny in this market? And I expect these companies are not going to want to be dependent on others. And they're going to at least want to say, I know, I'm going to control my own destiny, whether I win or lose. Who's your number one? Who's your number two, if you had to? Could only bet on two here to achieve super intelligence, AGI, let's just say, win the AGI, or eat, win the AGI, big prize, the big prize, super intelligence, AGI, you know, in the midterm, five years, five years from now, we're sitting here.

29:56Thomas, give me your number one, give me your number two. Look, I think to me number one, I still think in video, right? I don't see the GPU kind of getting displaced. I see additional architectures kind of coming on board right and growing the market but At the end of the day all roads still lead to the GPU for all of these models. So I would kind of still put Kind of in video on that My number two more of a dark horse, but I would pick Tesla I Do think it has the most potential for vertical integration right from all the way the silicon to the model to actually the hardware right then might become super important, not just in cars, but in Optimus.

30:35So in video one, Tesla is my dark horse. Wow. Stunning. Chimoff, who's your number one in number two? In the midterm, five years from now, we're sitting here on all -in, episode 700. Tesla's one and Google's two. And the reason is because they are the closest to having that vertically integrated stack that I spoke about. I think that Tesla has the best vision models. Now with XAI, they'll have one of the best LLMs and reasoning models, and they'll be able to eventually stick that on Dojo. And then all of that will be in all of the physical AI that you will interact with in your daily life, whether it's a robot or whether it's a car or whether it's a robot taxi.

31:20So that's number one. And then number two, for many of the same reasons, I think Google, because you'll have the the Gemini family of models, which just absolutely kick ass, like VO3, which we haven't really spoke about, is going to destroy Hollywood. Like in the next year, like Hollywood is done, I think. But they're landing model after model. They have the TPU and the next generation TPU, I think, is exceptional. They're baking quantum and then they have an entire funnel of billions of people that they can direct experiences to. So test the one Google too. I'm curious on Google. This is the, because I oscillate a lot on this particular name.

32:03Can Google win if search declines? Yes, and I think that what probably has to happen is, bear with me when I say this, but if you had to boil down Google's economic North Star metric, right? Not the value North Star metric. The economic North Star metric would be price per click. And I do think that Google is extremely well positioned to pivot that to price partoken. And I think that they have some emergent classes of physical AI, but they have the largest pool of people where they can generate a price partoken value framework through YouTube, through Gmail, through workspace. I think through search, but probably it's a different kind of model.

32:46It just requires them to rip the bandaid off at some point, but yeah, I think the Google can do it. I'm going to go with you, Tremoth. I'm one, my one and two are either Google or Elon. And I'll just say Elon because I, like you, I spent a day up at XAI and I saw what a magnet for talent he is. I got to sit in some meetings and just he was interviewing people and he was working with that talent eight o 'clock at night. There's a lot of people there on a Saturday, grinding it out. It was nuts. I first went to XAI. in the 15 minutes that I was in the parking lot finishing a call, the kinds of people that were walking in and out of there, you could tell they were big brains.

33:26Yeah, I don't know how, you know what I mean? Like from every walk of life, they all just looked much smarter than the rest of us. Yeah. And some of them were like chain smoking cigarettes and just like stressed out, it was crazy. I had a couple of zins, I'll be totally honest. But the reason I say Elon versus Google is, I think Elon's in a unique position. I don't have any insider information here. and I haven't talked about this or not back -channeling from Elon, unless anybody aggregate this. I think what Colossus has done and what Tesla has done, both of these things, Tesla with their own stack of hardware, to your point -chim -off hardware, plus software, plus the user application of FSD and Optimus, then you put that together with the data, the real -time data of X, formerly known as Twitter, plus what he's building with XAI, and obviously those two companies merged.

34:12I think Tesla board, XAI board have to get together, put those two companies together. Yeah, I agree. The trillion, one for the hundred billion. Okay. Put them and just have all that brain power going in one direction as opposed to Elon tests switching between the two. You do that, I think he wins number one. You don't do that, I think he either gets one or two and then I think Google is going to have a better search product, Thomas. I think it's a really important point. Do they lose search share? It doesn't matter. What I think matters is, are there ads more effective? is their ad network more effective.

34:43And I think based on what they know on you from your chat searches and your discussions and what they analyze in your email, just analyzing your Gmail and your surfing behavior and Chrome if they get to keep it, your Android phone, if you use it, your YouTube list and when you drop off all in and when you start listening to another podcast, whatever it is, all that data, all that data is gonna lead to an ad network that performs so much better that even if they lose search share, their ad network is gonna continue to grow. and I think it will increase in velocity. So those are my top two. Frebra, I'm curious from your position, which one you think is number one, and number two, I saved you for last, because you know what we do here?

35:21We saved the best for last, Frebra, go ahead. I think there's a difference in how I would kind of lump them. I think that Tesla probably has the, it is the best place to invest if you want to have a shot at a massive new industry. So they've got a baseline business in obviously the automobiles, but I think this humanoid robot opportunity is absolutely mind -blowingly ginormous. And I don't think that there's a better company on earth positioned to execute against this humanoid robotics opportunity than Tesla. So, you know, it's sort of like I would call it a low probability high upside sort of call option and embedded within that business.

36:07And obviously you're paying a premium for that, because it is still a very healthy premium you pay for that business. I think in video, Tatamis' point, I think the common thesis is it is the most protected, the durability of the business is there. But I would argue that there's actually a low probability but very high severity risk to Nvidia in China. There was just a demonstration last month of a one nanometer semiconductor manufacturing process out of China. I think the more that we continue to try and isolate China from a policy perspective, the more we are emboldening investment in China, meaning from the government, from private industry into China to create alternatives to the chip stack where the United States companies, particularly in video, have emote today.

36:53So I do think that there's going to be an emergent competitive threat coming out of China to Nvidia. And just like we were knocked over by deep seek, I think we will be knocked over by some semiconductor manufacturing processes coming out of China in the near term. But the overall kind of, by the way, Dave, just on that point, I think SACS work on the diffusion rule. Just generally, I don't think has kind of gone enough attention in the rescinding of the diffusion rule, which essentially handicapped our ability to even arm our allies with our with our semiconductor technology, in my opinion, was kind of a milestone and very important moment to try and offset exactly what you were just described.

37:37Exactly, right? I mean, there was a report a few months ago and I mentioned it on the show, or maybe I didn't, or maybe I sent it to SACs and we talked about it offline. I can't remember, but it was about a $40 billion investment being made in developing competitive semiconductor manufacturing, full stack solutions out of China. So I do think that the lithography IP mode is being crossed in China. I do think that China is developing actually new technology for DUV and EUV systems. I do think that there's a risk to Nvidia's core. Now look, Nvidia's such a durable business. There's great modes, great advantages, but we're creating every incentive for an alternative to Nvidia to emerge from China.

38:17And then my third kind of categorization would be what's the portfolio solution. I think that's Google. I think that there's a diversification of high beta bets inside of Google of any one of which could have called it a trillion dollar market cap outcome ranging from Waymo to quantum computing to the biologics work that Demis is working on out of isomorphic. There's a number of things that do not get a lot of attention at Google. So yes, there's a core business that that maybe at risk Thomas, but I think that there is a portfolio of options you get at Google. And you just need any one of them to hit to kind of make up for the loss.

38:59But I do think also Sundar, in my interview with him, which we put out a couple of weeks ago, is very thoughtful about where Search evolves to. And he is being, I think, reasonably aggressive in trying to evolve the Search product architecture to meet the market, to meet the consumer. I do give him credit for that. So Google would be in a good place for me as an overall kind of pick. in that set of options. So just to be clear, Nvidia 1, Google 2, or Nvidia Tesla. Like I said, I think in terms of like having the right sharp ratios, how I would think about it, the alpha and the beta adjusted returns.

39:30I would put Google number one. I would probably put Tesla. Tesla's valuation, I think, already has a premium associated with those options. I don't know. So I don't know if I would really pay that premium. I think, well, aside from the valuations, let's take valuations out of it. just the game here is who wins the AI prize five minutes. That's how I understood it as well. Yeah. So evaluation irrelevant. Valuation irrelevant. Who wins the AI prize? One, you're saying Google, two, you're saying Tesla. I think Google's in such a position. I mean, look, Demis, Demis I think has been fairly coy about where they are.

40:05They obviously promote Gemini 2 .5, but there's a lot still coming. And as Jamal pointed out, it's not just LLMs. There's a pretty sizable family of models, including a lot of these graph -based models that are being used in really novel applications that no one else is even close to, no one spending time on. I mean, some of the weather forecasting, it might seem small and trivial, but it's a demonstration of Google's competency in core model development that shows an understanding and adaptive research and work that goes well beyond LLMs. So I'm pretty bullish on adaptive talent, the full stack.

40:43And whatever they learn there could apply to Gmail, could apply to search, could apply to ads, could apply to YouTube algorithm, right? It just goes up and down. Yeah, from a product perspective, I do think you see this kind of multi -model emergence that we're now seeing. No one talks about this single model that sits behind the application. There are multiple models that work together and obviously this agentic architecture or unlocks another layer of not just kind of solutions to complexity. Sure. And so there's quite a lot, I think that's emergent here, that Google will start to kind of benefit from in the year ahead.

41:20I mean, for those of us who'd love tech, right? If we stack back for a minute, I really feel like to use the analogy of this podcast. We are now at the WSL World Series Apoker. We got seven companies around the table. Well, the stacks are trillion in size, right? And all of us are gonna get a front row C to see what happens over the next five years. I mean, and on top of that, we're gonna get to analyze but ourselves on who we think's gonna win. We know there's some other companies that are pushing to get at that table, right? With some sharp elbows. I mean, what a time to be doing what we're doing.

41:55I don't know if I love the analogy because I don't think, first of all, it's a zero sum game where there's this X number of chips and someone ends up with all the chips. I do think you could see as an example, just talking about the scenarios we just described, Tesla developing an extraordinary humanoid robot business that's worth a trillion dollars. Google building, you know, to Chimoff's point, a media empire based on generative AI and media, and then, you know, in video building an entirely new chip stack that everyone's participating in. So all of them in an ecosystem based way could be major winners.

42:26Yeah, you're right. I didn't mean it in the zero sum nature of it. I meant it more in the stakes, right? And there's a lot of hands to be, I like the analogy because there's a lot of hands to be played. And there is a price pool, right? And you could have three or four people at a table. One thing I just want to point out here is just speaking of regime change, what is going on at Apple? Like they, Siri was just the early idea of an AI agent. It's just totally disgusting. It's disgusting. It doesn't work. It's embarrassing. And then their biggest developer conference, they're redoing the UI. I like this is happening.

43:00Is it time for regime change at Apple? No, this has happened many, many, many times in many industries before, which is that companies that were stalwart organizations, transition themselves from being a growth business to being a cash cow. And these are well documented transitions. And it requires an extremely brutal reset if you want to shake that up. Yes. I think that the same thing that I think you have to respect Apple for, which is stability, the duration of some of their best longest serving executives are there for 20 and 30 years. On the scale of innovation, it's a horrible thing. And the reason is that we all just get old.

43:47Our skill sets become rusty. And we don't have the energy or the capacity to think about what the future actually looks like because we are not living it. And then what happens is you task those decisions to people that you try to hire, but you saw it in the clip of Sam. Even in all of that crazy recruiting chaos that's happening right now for these brilliant machine learning and AI people, maybe that's a fight between open AI, meta, and maybe Google. But what you don't hear is Apple. So who's Apple getting? I have to think that Apple is not getting any of those people. So by the time you end up at Apple, it's just a different caliber of person.

44:30That is true. And they're living inside of a cash cow organization that's going to optimize for don't make mistakes. Right. But that's happened to HP. It's happened to Lotus. It's happened to Intel. It's happened to General Electric. It's happened to umpteen companies. It's just shocking. And it's happening to Apple. So we should just not sweat it and move on. I don't know. Thomas, what are you guys? I mean, it's kind of shocking with all that cash and they don't acquire anything. They had Project Titan, $10 billion to build their own car and they just shut it down. Imagine if they kept going with that.

45:06You think regime change time, maybe Tim Cook retires and put somebody who was a product person in charge of it or maybe they should merge with Tesla and put Elon in charge of it all. There just seems to be no new products coming out of there. Like, it's absolutely confounding that they're optimizing for share buybacks and earnings per share instead of having some amount of that money go towards innovation and acquiring companies. Biggest acquisition is beats. Give me a break. I mean, it's interesting, right? For me, and I've studied Apple, basically my whole career. And it's kind of interesting, right?

45:40Because if you think about the their defining competitive advantage, right? Was the integration of hardware and software that led to the beautiful math book that we're all using, it led to the iPhone, and the fact that they were so coupled between hardware and software, the user interface, you know, et cetera. And I think it directly led to them winning, let's call the mobile era, right? But I think back to Chemos Point, and I think the analogy holds in AI, they're the opposite, right? They don't control, you know, the silicon, and they don't control the underlying models. And so now they're back to maybe using a historical analogy, the PC makers who didn't control the OS.

46:20That's right. So I think the good news for them is, look, they still have a monopoly on users. They have 3 trillion of market cap to kind of play with. So I think it's way too early to count them out. But I think the market, let's pause it. What's the most extreme thing that they could do? right, just for intellectual sake, right? By opening eye for 500 billion. I'm just going to put a crazy thing out there, right? So you think, okay, that's the most extreme. Well, is it even that extreme? And what would Apple stock do that day? Go up. That's my view too, right? I actually think it would go up, not down, even if they did something like that.

46:58So I do think they need to be kind of aggressive. I do think to your point, I think Freeberg it is important that, you know, all seven of these companies could actually win and do well. That is an absolute possibility. But I would love to see them be a little bit more aggressive. I mean, you guys remember when Steve Jobs bought finger works, right? It was this tiny acquisition. They made this little track pad that you could use your fingers on. No one figured out why they did this and then in turn into multi -touch and scrolling, right? So I think it's going to be fascinating to see what they do.

47:31Thomas, that was a great question I was about to ask. If Apple could do one thing they could do one internal project or buy one external company. Maybe we could do both around the horn. What would we advise them to do? My number one is build a humanoid robot. How does Apple not have a humanoid robot? That seems like that's obviously the next giant consumer market is having optimists or figure in your house. FreeBirt, I'm going to go to you first since I went to you last last time. Is there a product that they could do, that they could build, that they would be uniquely suited to that would turn this all around?

48:04If you could pick it on their roadmap, what would it be? I do think there is. I do think they're doing it and I do think they have a shot at winning, which is this kind of ambient AI assistant. I don't know about you guys. I must own 30 friggin' Apple devices. I have many Apple computers. I use in different offices. I have phones. I have many AirPods. I got everything. Watches, everything. I'm ubiquitous on the Apple platform. So I'm an easy transition into this if it works. So as everyone races to build kind of the the agentic AI assistant that is sort of in my ear all the time or available where I don't have to stare at my freaking phone like this.

48:41It is a great unlock for humanity. It's a great unlock as a consumer. It's feasible technically. And I'm sure Apple of everyone that we've referenced today is best suited to both access the consumer design and engineer the solution in a way that can be truly transformative. I think it references a little bit what Johnny Ive and Sam Altman have been talking about doing, but I do think that this is exactly the direction Apple is headed, and I do think that they've got a very great shot at winning at it. I don't think they need to own the full stack to be successful here. Got it. Okay, so we've got Optimus.

49:17We've got the device you're talking about. This ambient assistant is part Siri and part maybe appendant that records your behavior in the world and gives you feed back to it. And that's what they're calling a puck. Perhaps that Johnny Ive has made or these pendants that record everything. Thomas, what you're thought on the one product they could create. To that point, it's interesting to think that the air pod business at Apple is 3X OpenEI's revenue base today. That's right. And that's the air pod business. And by the way, let me just say one thing about this. We all think about devices in the context of a single device being an assistant.

49:55I think if there are more devices integrated into our lives and the assistant is ethereal and ubiquitous amongst the devices, it's almost like the Star Trek next generation you walk in, you say, hey, computer, and there's always a device available that's doing things, there's always a device observing, there's always a device able to take care of things for you. Whether it's in your ear, whether it's your phone, whether it's your watch, but basically these devices all, instead of acting independently, they all know what you've been asking or talking about with the other devices. And so you could get in your car and you could pick up the conversation you were having while you were sitting in your office in front of your computer to do work.

50:33And so the agent effectively is almost like the sephereal ambient assistant. So everywhere you go, the agent is there. They can even be in a candle lit bath with you. Friedberg, they could be in there. Well, I mean, by the way, think about also having identity. So it knows who you are. So I could be in your room, in your home, J .K. I'll not that I would ever get invited to your home. But let's say I was there, you know, I could walk into the living room and there's your puck and it starts talking to me because it knows who I am. And yeah, it knows me. Or you would not have a bath for two. You would not be a candle in that for two.

51:05I think we know that when each of us are fighting over what music we want to play, the assistant will, you know, hear about the debate. You could share and play this. Shemaki, you have a device before we go on to IPOs here. Do you have a device or an angle for Apple to go after if they were truly ambitious or maybe they are and it's just in stealth What do you think you think it's the goggles the glasses you think it's appendent you think it's optimist? What do you think? I don't think they have any chance to anything Great love it. I would take the exact opposite of what freebrook says look at this chart and I'll tell you why Okay, it was this chart is not this chart is not a strategy So this is a chart of apples revenue and what you see is iPhone is completely stalled out And so to Thomas' point, where do you make money?

51:46You make money in other hardware. This is not a strategy of success. This is a strategy of inefficiency. I lost my AirPods. I need to buy a new pair. Oh, the cables changed. I need to buy a bunch of those. This and that. And this and that strategy is not a strategy. It's a tactical play for revenue optimization in the short term. A company that focuses on this kind of revenue growth is not capable of creating something that's exceptionally unexpected. That will come from a new company who has no ties to the past, has no nostalgia on the fact that we're going to swap out the connector type and, you know, book another billion dollars.

52:25The what Thomas said is an indictment actually about their ability to do it. When your AirPods business is two or three times bigger than OpenAI, what there is internally when you try to have a strategy meeting about what to do is is a division about opening on because you're like, that's small and even our air plots business is three times big. That's what some smart ass MBA will say in that meeting and it'll shut the meeting down. So how do you expect that culture to then all of a sudden get their act together? I think it's exceptionally hard. It's a good point. And here's the clip on cue. Play the clip, Nick.

53:01It's a great point. Here's the clip on Apple Nostalgia. Me too. Bring Steve Jobs back. Watch this, Lunacy. You probably saw that Johnny Ive is linked up with OpenAI to create some sort of future AI device. Yeah, I don't know what that is. I don't either. Them. Is this a space that Apple's looking at? Is this a space that goes beyond what you have in the current lineup of devices? Something that is more personal. Maybe you wear it, glasses. I think we have some extremely personal, wearable devices. If you want something that's aware of your environment with audio, I think you're wearing one right now on your wrist.

53:40If you want something that you can capture the environment with and see and also receive visual content, you might just have one in your pocket right now. Are there other form factors that can make sense to AI? Sure, but pretty hard to beat something that's with you all the time and glanceable or provides a nice screen that you can interact with. So, yeah, I don't know what they're working on. What do you think, Trimoff? Again, I think I want to be very clear about what I'm saying. That is a very competent, Craig Federici, very, very competent executive. And whoever the person beside him is, that guy's, I'm going to assume competent as well.

54:22They're competent at making money, the way that they've made money, for the last 17 years with no meaningful disturbance. And I think it's just something to appreciate that after 17 years of unmitigated linear success, it's very difficult to retool yourself. It's like asking Michael Jordan to go and all of a sudden become an all -star baseball. It doesn't work. And so I think it's okay though, this is my point. It's okay guys to have creative destruction of companies. Like, there was probably a version of us blathering on about HP and being nostalgic about the transistor radio that they made. And the, you know, HP 12B calculator that they made.

55:08And oh my God, why can't they figure their shit out? And where are we today? HP doesn't even exist. It's okay. I mean, just Thomas, the fact that they launch Syria, they bought that company and Syria can't do anything other than like an alarm, can barely play a song. It barely can do directions. I mean, literally we're in year like 27 of Siri, and it can't do anything. And then I have the Google and GROC voice. And when I turn that on, it does whatever I want. It will load on my pixel. It loads other applications, fires it off, the specific tasks and it's absolutely disgracey out. On your pixel?

55:46On your pixel? I have a pixel. When I flip open my pixel. I have a... It's not an inch to you. I have the pixel line. and Jamoth, it's the Anaconda of smartphones, Pixel 9 foldable. It's the greatest assistant ever. It's what's Siri. It's what Steve Jobs showed Siri. I had you at nine. He had me at Anaconda. I had you at nine inches. And we can all aspire, maybe get Roman. Get that extra inch, Thomas. Jamoth, I would argue to you that I think this management team has done it once. And it's in the transition of their gross profit base, which doesn't show in the chart that you just highlighted. But was something that I kind of lived doesn't amlis covering the stock for a long time where if you remember over a decade ago, 90 plus percent of their gross profit was a one -time hardware sale on the iPhone, and no one thought that they would ever be able to get away from the drug of selling that one iPhone unit, right?

56:40And cut to, you know, over a decade later, it's 40 percent, right? And I don't think they get enough credit for actually transitioning from hardware to a recurring gross profit base. But look, you might argue that that was an easier pivot and challenge than what they're going to face. And so let's see whether they can do it. The other thing guys, I wonder about, let's, I know we want to talk about IPOs, but I do wonder whether Zuck buying scale for 15 billion gives air cover for other companies to really start being aggressive, right? And to me, as we think about Circle and CoreWeave, two companies that have gone IPO recently, It's kind of amazing kind of numerically that the charts are almost identical, even on a dollar basis, on a share price, right?

57:30Because to me, what it says, we were talking about the dispersion of the Mac 7 before, right? Which are going to do well, which are not. I expect we're going to have a lot of opinions on this over the next few years. And frankly, they may change. We may think Apple one way today may change in a month, right? But I do think the market is starting to realize that there is dispersion, that AI might create some all winners or some winners and then some losers, right? And is starting to think about, okay, how do I want to be positioned for the next five years? What are big open -ended growth opportunities?

58:02And here comes two companies, one lever to crypto, right? And the other lever to AI. So I don't think it's a surprise to meet these things are intertwined. You're 100 % on because here's the thing. The average profit margin of the S &P 493 is drum the average growth of the S &P 493 is drumroll please single digits. So to your point, why would you be long any of these 493 companies that make turnaround in one day just get decapitated by something you don't even know? That's getting cooked up by a couple of kids in a garage using open AI or GROC or what have you. It just makes a lot more sense when you find investible companies in the big themes of the future to add a minimum hedge, right?

58:50Be less long the past and frankly make some bets about the future. And I think that that's where you're seeing these IPOs just absolutely rip. What is a better comparison in my opinion are the companies that are truly lever to the future themes of AI and crypto versus any of these IPOs that have happened of companies that are not. And I think what you see is there's a dispersion there as well. And they are being treated almost as similarly, Jason, as the S &P 493. It's like, yeah, it's good. Yeah, it's fine. They get some reasonable gains. But if you're leveraged any of those two trends, you're off to the races because it's just so disruptive, people don't want to be back holding these old legacy companies.

59:36We're already into our next topic, which is IPO is an M &A. Lena Khan is no longer in the building, and M &A is back on the menu. As our IPO's, as Tom has pointed out, three IPO's March 28th, June 5th, and June 12th. Core weave circle and chime. Obviously, Core weave up four acts after going public, $81 billion market cap, absolutely stunning. Circle, 25X over subscribed, six X from its opening price, $48 billion market cap, chime. That's a neo bank, like new bank, which is already public. look, that was up 40 % in its IPO price, but then it went down 20 % $12 billion market cap. On the other side of the ledge, we have a ton of M &A this year.

1:00:16So when you look at what's happening under the Trump administration, look at what's actually happening. The game on the field is three major IPOs. And then massive amounts of billion dollar acquisitions. Obviously, we talked about Google acquiring Whiz for 32 billion. Soft bank bought and peer. I don't know what they do. six point five billion, open AI bought two companies, one for three billion, one for six point five billion, developer co -pilot, windsurf, three billion, Johnny Ives, IO, making some sort of a puck or hardware device. Databricks brought Neon for a billion, Salesforce did need billion dollar acquisition, and then interesting door dashboard two companies, Uber made two smaller acquisitions.

1:00:53There is a ton of activity here. What does it say about the market, David Friedberg that we're seeing so much M &A and these amazing IPOs coming out all within the last three, four months. Okay. So let me just follow up to a comment, Chimoff made and ask Thomas, his view. I have a theory and I haven't looked empirically to see if it makes sense. For most of the S &P 500, the fundamental profit growth is pretty anemic with the exception, obviously, of a couple of the big tech outliers, the Mag 7 and a few others. But for the majority of the S &P, this is a pretty kind of anemic environment relative to the transitions that are underway in the world, fundamentally with AI and celery technology.

1:01:43So are the institutional fund managers hungry for access to some of these new, you know, high growth offerings? And they have been held off, because just to kind of go back, I think it was around 2008 or so, public institutional fund managers started to cross over investing into private equities and that scaled up and scaled up and it entered obviously a stage where it was a heavy flurry, a lot of activity and a lot of crossover late stage investing, you know, right until 2021 when things started to pop, 2022. And because they were overexposed with their private equity portfolios relative to their public equities, they came out of 21, 22 with the market declining and they now had a higher concentration of private equities and they were supposed to have.

1:02:31And so they have been kept out of the market for the last three or so years of the private market. And now is there kind of this pent -up hunger or pent -up demand for new issuances for high growth tech issuances? Is that what we're seeing? Is there kind of this pent -up demand because they've had to stay out of the the private market for three years? And if there is, obviously boats well for a late -stage growth startups that are looking to go public because the demand will be there. And I think the reports were that the CHI myPO was like 18X over subscribe. I think you're right. And in something that, you know, I've talked about with you guys and was a big conversation at the All -In Summit last year, was the health of the private ecosystem, right?

1:03:12And we talked about the concept of, look, if you put a dollar in, you need to get a dollar out, right? And so I do think that we're starting to see a healthier market where we know a lot of dollars have gone in, but now we're starting to see some dollars coming out. So I think that's both in M &A, by the way, it's also an IPO's. So I think that's one element. But I also think the second element, which is where the tailwind of the mobile and SaaS era, right? And even if you look at the SaaS companies, we kind of put this together in our deck when we were preparing it for our conference this week.

1:03:44Jamath, I think you'll find this interesting, right? If you look at SaaS in 2021, the median growth rate for SaaS companies was 17%, and a quarter of those were growing over 25%. Okay, if you look at SaaS today, the growth rate has been cut in half, 17 % to 9%, and only 5 % of that cohort is now growing above 25%. So I think Dave, what's clearly happening is other sectors which were predominantly seen to be growth are now slowing down. So that's kind of one piece. So the market can no longer just rely on saying, oh, I'm just going to own the best simmer, sass index, right, for the next decade and I'll do great because those companies have really slowed down.

1:04:29And I think it's starting to look forward and think, okay, now over the next five to 10 years, what are the companies that can compound it? Maybe 25 % per year over that time frame. And I think companies like CoreWeave and Circle and Chime, by the way, and others are going to kind of fill that gap. I really like this chart. If I had to guess about what has changed from 2021 to 2025, is that most companies have realized that buying yet another vertical software solution is not going to help their business. That it typically adds bloat, it adds cost, and it adds people. And I think starting in 2023, what people started to guess is at some point in the near future, you're going to have some AI way of rewriting all of this vertical software.

1:05:27And I think that's why it stopped growing. I don't think this SaaS market ever had the return on equity that it was supposed to. And I think so many companies have woken up from this hangover saying, there's got to be a better way. It can't always be yet another tool yet another program yet another multi -year delay yet another price escalator and I think that the jig is totally up for software You're referring to the sales force and the SaaS category Chimoff and what you're doing at 8090 specifically Well, it's not just us, but like if you look at anybody that's rebuilding software It is so much easier to rebuild software from scratch today.

1:06:13Like my team of 30 people can transact hundreds of millions of dollars of work, not because we are so prolifically amazing, but frankly because, well, I think the team is good, but honestly because the underlying tool chain gives you a level of leverage. And so if you rebuild the software development lifecycle using these tools, you can't help it but become much more efficient. And you can't help it but deliver custom solutions that are meaningfully cheaper. And I think Jason, if you look at the entirety of the software that runs the world, we're gonna rebuild it. Sooptonuts, all of that. And the tool you're referring to just for the audience is the AI co -pilots that are making, that are contributing 30, 40 % to code basis at Microsoft and Google.

1:07:01Less specifically that, because those are good for individual people, but the software development life cycle is more the horizontal end -to -end -to -end -of -making things. So what we do internally at 8090s, we have an entire process that starts from the PRD all the way out to the functioning code, and we use different techniques at each step. But what you get is a 50 -60 -70 % increase at each step, which then compounds. And so you have the ability of a team that would otherwise be able to service tens of millions of dollars Be a team that can service hundreds of millions and then a team that would otherwise service hundreds can service billions Let me ask you guys your response to this theory if there is going to be this kind of accelerated Call it custom software rebuild of business models and you take the S &P 493 do you think that we enter an era where there is a similar dispersion as we're talking about seeing in the Mag 7 with the S &P 493 where there are going to be probably the biggest money -making opportunities for investors that we've seen in decades between those that do adopt and do rebuild using AI and those that don't know or are like 100 % now.

1:08:16I had a call yesterday with one of the largest private equity funds in the world. Hundreds of billions of dollars under management, and we're doing something with them at 80 -90 with one of their most important assets. And when you're an owner of a business, and you can direct very specific change, and you can rip out hundreds of millions of dollars of software licenses and replace it with tens of millions of dollars of highly customized software. It's an enormous lift to OpEx and business model quality. So why doesn't it happen more? The reason it doesn't happen right now for this S &P 493 is that the IT organizations inside all companies essentially speak a different language than the CEO, the CFO, and the board.

1:09:10So if the CEO, CFO, and the board of directors of the S &P 493 speak English, the IT organization speaks Mandarin Chinese and you get away with saying all kinds of bullshit. I'll give you an example. I went to a CIO conference, one person that I met, an $18 billion a year IT budget. What the fuck does that actually even mean? To spend $18 billion a year on IT. I'm not saying that this is a mag seven company guys. And when you take that example and you multiply it by 50 and 1493 examples of people spending money, there's an entire cartel of influence that's been built in software that's going to get undone because you're not going to be able to justify it free, bro.

1:09:58Absolutely correct. Tremoth and the response from the Thass industry is changing from the per seat model as the number of employees that these companies continues to get lowered, obviously Microsoft, a lot of layoffs, Andy Jassy talking about layoffs. They're moving from the per seat model. They're not taking this laying down. They know that people are going to make custom software. So what they're doing is they're moving to a consumption model. So you're seeing people charge per call, per customer support call, etc. I know, but that's not so hard. At, well, it's, I'll tell you why it doesn't work.

1:10:29It's working in combination. Hold on, hold on. Let me finish. The other thing they're are doing is they're dramatically lowering the number of people and the developers they have on their team. And then a lot of what's happening in the background is the third piece they're doing is they're starting to do roll ups and people are starting to talk about how can we take you know, 20 of these SaaS companies lower them just like you're doing to compete. Tremoth you're though. I was just going to say playbook. Well I just wanted to comment on this like consumption based pricing. It doesn't work. And what I mean is you can have some adoption in the short term.

1:11:00the best example is snowflake, but in the long term, it destroys your business. And the reason is because you don't know which data is valuable, and you're not going to put up with a variable business model that increases more and more costs because you need to trap everything. And so what happens is all of these other companies develop around you. People go back to Post Press, people go to SuperBase, they find all of these ways of saying snowflake makes no sense. And the reason is because in this world, nobody's going to pay consumption because you're like, how do you expect me to hold and store and pay for terabytes and terabytes potentially a day of data?

1:11:38It's not sustainable. Well, see if Intercom, Salesforce, HubSpot, we see if all of those people start slack, start losing their customer base or if they lower their pricing to make it just too easy to keep those systems in, Thomas, sure thoughts. Yeah. So two quick thoughts. Number one, Chema, to put a kind of a mathematical frame on this, right? We know that Anthropic is kind of the level zero of cogeneration. They're doing incredibly well powering companies like Kerser, right? I think in this is order of magnitude correct. Then Anthropic in Q1 added 70 % of the net new AR in the SaaS industry, right, defined by public big SaaS companies, right?

1:12:17So let's just think that the company in AI that is most powering the disruption of SaaS added three quarters of the net new of the entire industry, right? So that's kind of point number one. I think Friedberg point number two, I think what we're seeing in the Mac 7, right, where we're starting to have debates about whose well position and who isn't, who's going to win and who isn't, right? Is actually as it was in the past five years, going to be a broader lens into the S &P 493. I think inside of boardrooms, inside of every investment committee, you're going to see the exact same conversations that we've been having about the max seven, right?

1:12:52Who who's well positioned who can win? What are the management teams? Maybe like suck that are being aggressive and bold and capturing the opportunity and which are the ones that are not so for me as a stockpicker, right? I think over the next five years, I couldn't think of the more interesting time where we're actually going to see dispersion between winners and losers. And do you think that these roll -up models make sense? So you've probably heard, and I don't know if you guys have considered this, but obviously some fund managers are putting together pools of capital to go out and buy businesses that they can then apply.

1:13:26They're know how they're bringing smart people in AI to then create a category killer and go after that market. And are you guys participating in that? And how do you kind of view that opportunity? Are all the public companies basically to mature or some of them going to kind of go after this model as well? It goes back to whether you can attract the talent to go and do these things. My advice to this large private equity firm is you can probably try to stand up your own AI org, but I suspect you're going to get the person that didn't get an open AI offer, didn't get a meta offer, didn't get a Google offer, didn't get an 80 -90 offer, then didn't get an Apple offer, and then that's the person you'll hire.

1:14:06how good that person will be, who the hell knows. I think the problem is that even if you take some of these kind of meh industries and roll them all up, you ultimately have to find a buyer who wants to own that business after you. So the question is like if you were to buy a bunch of accounting firms or law firms or IT services firms and you do an incredible job. Who wants to buy that in seven years? Meaning, if you talked to like, if you went to the OpenAI demo day, there was this really interesting chart where Andre Carpathy talked about integrating Google login into one of his apps. I think it was his menu, Jen App.

1:14:52And the comment he made, which profoundly hit me, is like, why am I doing any of this? Why isn't this just one click behind the scenes? And you could take that generalization and apply to all of IT services. Why does any of that exist? Why is it all one click? And eventually if these agents become smart enough, the fear that I have is that there is no terminal buyer for many of these companies. But they could still be public to them. I mean, they could trade at some multiple of cash flow, and you're basically arbitising the cash flow. But I'm not talking about the private equity trade. I'm actually talking about the public equity trade.

1:15:29If you look at the 493 companies, Those are better position. I think like instead of an IT roll up, I think what you could do is probably sort, like here's what I would do. I would take the 493 and the filter that I would apply is what offline assets do they have, what online assets do they have, what percentage of those assets are defensible and unique and exist in a post -day eye world and what percentage of those assets disappear in a post -day eye world. And I think where I would end up is I'd like own a specialty chemical company or something. You know, like you're still gonna need lubricants and stuff and you can find some way to make it But if you're like a super you need lubricants.

1:16:08Sorry, God. You know, I love the lubricants But no daddy. No, daddy. But a baby oil making, you know like just By the crate. Tim off. Do you want to talk about your spec tweet? Oh, you know the markets back Can you see this much? Can you play the siren? Can you play the siren? Well, as with all my to go combo like a couple of each party. As with all my tweets, it starts when look here. Here's X is an incredible platform. I use it for tweeting. I use it for a lot of things. But what I fill in phase right now, and you can full super villain. It's so great. I love it. The retweet is more important.

1:16:49Yeah. I love what retweet. Here we go. Here's the tweet. Shemaat says, incredible, that almost 58 ,000 people voted in his tweet if he should launch a new spec. So give the people what they want Shemaat or what? Well, I first started this because I use X sometimes to just to like sound off because it destresses me during the day. I like to troll people or whatever. And then I just did this. And I was so impressed that 58 ,000 people voted. But really what happened was I had a lot of very smart money people on Wall Street and some crypto folks call me that I respect. And basically what they said is like it would be really good if you did it.

1:17:27So I don't know if I'm going to do it, but I'm heavily leaning towards doing it. Well, the argument to do it is you learned a lot since last time. There's a lot of inventory there. You've got a lot of access to pre -market companies. I think what people need to understand is when you're doing SPACs and correct if I'm wrong. Here's what I'll say Jason. This poll and this community note will be in every single document I do. Nobody that is listening to this should participate in this. This is going to be for me and a handful of advanced, large pools of money. You should stay as far away as possible.

1:18:02So there's a different, ever I do next. Don't participate. Don't participate. That's the rule here. Stay on the sideline. Do something else. Don't come in the arena. Because we're trying things. Timoff, don't you have enough going on? Like, why would you spend? Why would you do this when you have? Cause faith loves irony. Faith loves ironie bro. Faith loves it. It's the weirdest. It'll be the greatest IPO of all time. If the poll is back, if the poll was yes, I'd be like, oh, this is the last thing I need in SPAC. Let's go. Thomas commentary. Thomas, are you going to buy the all in SPAC? What's coming?

1:18:33The SPAC market coming back. 90 SPAC or all great companies come into the public market. Love it. I mean, But I can tell him it's gonna ask you a question like tell us about the state of liquidity and actually about IPOs and spax in general like where's your where's your temperature on it? Just give us a read on what you think I mean look I think we're getting real -world data Tramath ride like in real time Not just from kind of higher visibility companies like circle and core weave, but chime also did really well carous Company, you know more in Dave's Wheelhouse, right Also just coming out. And then wait till we see the flurry of S1s that have already been filed.

1:19:16Figma is a generational potential company that's going to be coming. So I think we're going to see fantastic assets coming out. And I think the market is saying we're open for business. The Mac 7 is controversial. To Dave's point, the S &P 493, there's going to be lots of winners and losers. It's maybe not as obvious. There's gonna be some dispersion. So bring on the new cohort. I think it's the first time you could probably argue that you could go short the S &P and pick a couple of winners. It might be the first time that I would feel in the last 20 years because I'm pretty negative on people being able to kind of pick stocks.

1:19:54But I do think that this is such a transformative moment that if you really have a sense for what's possible, you could start to see category, killism, or jetty, and it's an opportunity to short the S &P and pick a couple winners. Totally. Thomas, but do you care about how these companies go public? Do you care about SPAC versus direct listing versus IPO? I do. I only care about the quality of the underlying asset and what I think it can be worth five years from now. Now obviously, I do care about the liquidity that I'm getting in the IPO, Tramoth. So, you know, am I getting a million or a hundred million or a billion as the float, right?

1:20:30That's number one. And obviously, I also do care about the percentage that is floating, and I do care about the lockup, right? So those three elements are really important in terms of a company going public and how we think about participating. Give the listeners the guidance there. So for the first thing, bigger is better than smaller. Correct. So it's number one. Can I even buy it, right? If the IPO is so small and we can't get a large enough position, it does really make sense for us. So that would be point number one. Point number two is how much of the company is publicly floating? We could be better there as well.

1:21:10Correct. You get a true price when a higher percentage of the company floats. votes. It's also most likely going to be less vodal and less susceptible to pricing, predatory pricing and manipulation and things like that. What's the percentage flow that matters? I think 20 % is, in my opinion, kind of a minimum. Some have gone out. I think I remember a correct, the trauma that you may know this. I think LinkedIn went out at like 10 % or something. I remember it being really small. And a lot of us thinking like, wow, that That is a very controlled flow. Yeah. Which ended up, by the way, being very volatile.

1:21:50So number two, the flow, and then number three, the lockup. Is there one in a direct listing? There may not be one, right? You may get in that scenario to a true or price faster. But Thomas, why do you think there's been no direct listings? Why has that totally fallen away after? I mean, Spotify did one. We did one at Slack. And then where are they like why why don't people pursue those? So here's a statistic. I actually had to double check this because I couldn't believe it right if you look at the cohort of companies that went IPO in 2021 right and and I'm actually not including spax in this particular analysis right.

1:22:30If you look at that cohort, T plus one year, the cohort was down about 40 % on average, right? Okay, fine. Maybe they went up to high 2021 was a peak. They didn't do well in one year. T plus five years, it's down 50%. Right. Which really kind of shocked me. Right. So I think there's kind of scar tissue on both sides of the table, on the by side about, wait, hold on, what am I really buying? and how do I make sure that it's kind of a sustainable kind of company, but frankly, probably also from boards, right, who are taking their best assets public and may just want to pursue a more conventional approach in the beginning stages, right?

1:23:15I can tell you for us, direct listing versus IPO makes no functional difference. You know, I think each has a benefit and I think in some depending on how concentrated created your ownership bases, how understandable your business model is and things like that. But we just want these companies to come. There's a market behavior, by the way, in direct listings. And I've mentioned this once, but I've been in two transactions with direct listings. The first was Slack. And in the execution of it, we mis -executed. We meaning me, because I had a huge ownership of Slack. But I didn't know what to do with it.

1:23:52And I ended up distributing portions along the way. And it then went through all kinds of turbulence and then it got acquired slightly above the IPO price. And what I learned in retrospect was the best trade is actually the first day trade on a direct listing. So then when it came back around and I got a distribution the day before of Coinbase and I mentioned this to Brian, this was not a judgment on the company. I said, if this direct listing process is going to map to what I've experienced that slack. The right thing to do is to sell. And I sold that on day one at $335 a share. And it's just, it's, I think Jason, it's still not at the IPO price.

1:24:35It might be getting close, but no, it's not back. So these, yeah, so these direct listings are not what they're trying to be either. Yeah. Yeah. If we look back on SPACs, I think so far, it's above the price. And that might have been one of your Eastern month, Joe be getting close. these were venture investments. These were late -stage venture investments in your mind, Thomas, and then retail tried to become venture capitalists, and they didn't have the five, ten -year horizon that we as venture capitalists have. Is that your assessment of it? Are there any great ones that came out of the SPAC movement?

1:25:05Well, I mean, the direct listing era, as an example, let's talk about Spotify, right, which basically has seven X's over that period. So, again, it's hard to talk about. I'm a causation versus correlation. That's why I think ultimately for me as an ultimate kind of long -term owner of these businesses, I really just care about the quality of the business and whether you chose to go back or direct listing or IPO is a mechanical decision. To me, the output is quality of business and that's ultimately what wins out. Okay, I wanna end on this. You just shared a chart of app loving and the massive revenue per employee.

1:25:48This is just astounding. Thomas, Apple, as we can see here, had 3 .6 million revenue per employee in 21 now up to 7 .6 million. They peaked at 1 ,000 employees now down to 750 -ish. It looks like in related news, obviously, Microsoft, we talked about the other week, let go of 3%, they are planning on massive cuts again for sales. These are organizations that are at record cash, record revenue in an industry where we had a tradition of not firing the gray beard and some people had been at the company for more than 10 years. Andy Jassy didn't come up as like one of the companies we think is going to win at AI, but it might be the company most impacted by deploying AI inside their enterprise.

1:26:26He launched a misive, here it is, I suggest everybody read it, when you send a misive like this to your employees, you're trying to communicate something to them and to the public markets. So he published it on his website. He talks about dozens of AI projects, AI tools for advertisers, obviously, GeniI for sellers, their product, detail page. He's talking about Alexa coming back with a brand new version, shopping assistance, everything. But then he started talking about the work for size. He says in this manifesto, in the next few years, we expect this will reduce our total corporate workforce as we get efficiency gains from using AI extensively across the company.

1:27:05So my question to you, Thomas, is when you hear public CEOs talking about lowering the number of employees while they're growing 10, 20 % per year, this is obviously awesome for earnings, the share price, but there's going to be a massive job displacement. Any thoughts on the job displacement, job replacement, and society navigating that, and just as well, Andy Jassy specifically and what you think of Amazon as a business and them being a player in AI and AI being a player in their business. You know, I think it's an important question and I'll defer to what Jensen answered on this topic because in my view, it's still the most credible and cohesive answer I've kind of heard, right?

1:27:47And Jensen is known, the CEO of NVIDIA, an incredibly long -term thinker. And in his view is he looks at a population that's getting older and he wonders who are be all the young people that are going to take care of all the old people, whether it's nurses or doctors or other things like that. And in his view, we better get a lot more productive to deal with our inverted demographic tables. So I ultimately think this is going to enable more young people to take care of more old people. And it's just going to create, I think, knowledge workers are incredibly flexible. They can take their tools from one particular skill set to another.

1:28:23So I think this is going to unleash incredible opportunities for the economy. I think it is going to make us more productive and wealthier. So I'm definitely on the more optimistic side of the scenario. Jamat, any thoughts on Amazon? They didn't come up, but obviously AWS crushing it and they're a major player. And they have their own silicon they're making. You mentioned that being an important part of the stack. And then you have Optimus and robots figure that are going to be in their factories. That's a lot of jobs, delivery robots. They're doing drones like zip line. They have their own version of it obviously, and they're doing suks.

1:29:00So if you just look at their behavior and you look at their investments, they're massively, massively investing in robotics, self -driving, and chips. So they're pretty hardware focused, yeah. For physical AI, they're a king maker in parts because they're a sink for demand. So they'll just generate so much demand for robots. So if figure lands the BMW or the UPS robot successfully, Amazon will buy a Gajillion of them. If Optimus lands a successful robot that they tune inside the Tesla factory and then are ready to sell, Amazon will buy a Gajillion of them. If there are drones that are delivering things, Amazon will buy a Gajillion of them.

1:29:37So on the one side, there's a lot of typical op -x lift that Amazon will get. I think the problem is more with AWS, which is that their success is actually their biggest bottleneck. The success is that they are not necessarily king making. They're about being a purveyor of many, many, many different things that you can find inside of AWS marketplace. And so, you know, the thing that they'll have to embrace is, well, do I differentiate my own hardware from NVIDIAs at some point? Do I actually make a real bet on models and try to frankly bi -entropic, which is probably their only solution, and tightly couple it in and say that, you know, if you want to have next generation co -gen experiences, they need to run inside of AWS.

1:30:25These are the difficult decisions that I think that Andy will have to face, and he's going to have to spend hundreds of billions of dollars. But yeah, the Amazon retail side is going to be a kingmaker for all of these physical AI things. freeberg any thoughts on Amazon just as a company broadly to about saying hey they're a kingmaker that seems like a really interesting insight you have any insights there on Amazon and they're playing a part here in the future of AI. I don't. Thomas and any closing thoughts here on you know the sort of old old guard Microsoft Amazon and their employee count and the cuts we're seeing there and what these companies will look like in the future in terms of revenue per employee.

1:31:09They're not hiring young people. They're getting rid of the old folks. They're just advancing. It seems that they're adopting AI pretty severely at these companies. Where are your thoughts there? I'm going to play the role of J. Cal and I'm going to ask a question to all three of you guys. Oh, here we go. So Microsoft's employee count peak that about 250 ,000, you know, call it about a year ago. Who here believes that in five years, Microsoft will have more employees than it does today? More. I'm going to say the same. I think they'll have just about 250 plus or minus 10%. I don't think if I get picked push as the answer, I would pick push, which is they're going to get 10 % better every year with AI, 20 % more efficient.

1:31:55therefore they don't need to add people, but I also don't think they atrophy much more. So maybe they have 25 to 50. Why do you say more so quickly? I'm curious. Oh, so this chart, which I think is like a very dangerous vanity metric is why? So what Microsoft touts is, what percentage of code is generated by AI without answering the more important question, which is that code useful and good. And if you ask that second layer, Nick, I sent you this tweet from Jan LeCoon. And I'll tell you that this is my lived experience as well, is most code generated by AI is crap. And most of the tools that we use, you know, the reason we call these tools app crappers, is because most of the code that it generates is crap.

1:32:46So it's great in a single player mode, but transitioning from single player mode to a complex enterprise environment is not possible today. So I think that Microsoft puts these metrics out because they want to seem that they're on the front line of it. But I suspect that this is just like you know how used to hire McKinsey consultants to fire people because it was good air cover. It's probably just air cover to fire a bunch of folks that they probably wanted to get rid of anyways, but it's not related to that chart. And the reason is that Yon the Coons tweet is true. When you allow these models to run over complicated tasks over long periods of time, the error rates compound to such a degree that the resulting output is not worthwhile.

1:33:28And so until that problem is fixed, which I'm sure it will be, and I'm going to bet that it will be, the idea that all of a sudden it's because of coding agents that people are getting laid off, I think, is a fallacy. So I suspect that Microsoft Microsoft business on the margin grows back to Dave's point. Some of the 493 shrink and go away. It'll be cheaper for Microsoft to bundle together a bunch of other products that are point features today. And so they'll have more people. They'll indeed more. The people will be different. They'll have different skill sets. But I suspect Microsoft's employee base grows free.

1:33:59Burke, what say you? I think shrink. Wow. So by the pretty interesting thing about we have one decisively more one meeting about the the same, a plus and a less. I only say that because I do think that there's a real probability of revenue decline in the next five years. So if you look at the enterprise install base, I think that cloud gets competed away. So I do think like on the application software layer, they're gonna have a really hard time in this new world because the old school customers that buy Microsoft are gonna die. They're more likely to die in their marketplace compared to the folks that are gonna build native software, native workflows.

1:34:39And I'm not really where Chamoth is. I think you may be right about where AI written code is today. I don't think that that's true three years from now, four years from now, given the pace of improvement. And so in a world where you have software written workflows built for you through agentic tools, I think that Microsoft's core business is gonna decline. The losers are their biggest customers and the winners are not gonna use them. So I, you know, that would be - Where are you at, Thomas? Maybe you're the child breaker. I'm in Chimass camp where I actually think the Microsoft business will be bigger if anything on kind of kosher alone and that at the end of the day, we'll just need more people to support it.

1:35:22I just think they'll be more relevant. They'll have more productive employees, but they'll still be more of them. I'm predicting incredible growth and the same number of employees. So you guys are predicting incredible growth, adding employee growth. I think that's interesting. Sorry, let's have a new lesson, boys. Interesting. So the thesis as your grows is basically where the application dollars go effectively is one way to think about this, right? So the application dollars go there and that more than makes up for the decline in that business over time, right? And there's multiple clouds. By the way, I went to the Google next event last year and so I ended up going to these like special dinners or whatever, a couple of cocktail dinners thing because I spoke there and I saw they put me with a bunch of these people and I see IOs of, you know, whatever fortune 50 companies.

1:36:14And all of them said that they're multi -cloud. Like they're not, no one's going to standardize on one cloud. So everyone has to be on Microsoft and Google. And I had never really recognized this or thought about this as being a fact that it's not necessarily the best or the lowest price. At the end of the day, these guys are going to distribute their exposure. And so I think that maybe supports your case. I'm very easily able to see other arguments today. I'm very convinced. Here's the revenue. What a spectacular revenue. One. Just wow. I think all four of us would agree that if we could synthetically own AWS, Azure and GCP, if I could somehow automatically create an index of all three of those businesses, right?

1:36:56Well, for the next five years, you wouldn't need to own anything else. 100 % you don't have anything else. I wish Elon would take that. So why don't you put up with the shitty part of the rest of their businesses and just don't all three and that's it. Call it a day. Because you've got to assume that if one of them wins over the other two or accelerate ahead of the other two, it's going to more than make up for the losses that the other two might experience in their other businesses. The multiples aren't crazy on those three companies, by the way. Correct. Quite reasonable. Yeah. I think if Elon took what he did with Colossus and he had an AWS competitor, he would be a serious competitor in the space.

1:37:27This is like this this is the last year which he can build out data centers is extraordinary. This is where Elon does better because he can actually get a better like fundraising In the private market with xai Then what do you have to deal with? He's really struggling with that Not what I'm saying. Yeah, no, I'm saying it's a better form right hey guys look who's here? Couldn't stay away David sacks look it here You can't get away from it 11 o 'clock happens on the Thursday and you start jonesing for your besties Welcome to the czar. David's act. It's good to be back. Jake, how are you? You're not like.

1:38:04I'm an L .A. This is. You're someone's guest house. Yeah, actually, this is one of your guest houses. You just kind of look like my wife. I don't know. I still have the key code. It's a Jake Cal, Cal, Jake Cal, Cal is your guest house. Jato, Cal and Jato, Cal and here I'm here. Come down there. You also get that reference. It's going to kind of date it now. Oh God. Kato, Cal and his ride or die. I mean, he would jump on a, a Vente or a Grande for you for sure. Let's talk a little bit here since they got you sacks. Would you be willing to talk a little bit about the Genius Act? We just passed the Senate.

1:38:35I think you have your fingerprints on this. Is that true? Yeah. Tell us everything. Well, it's definitely something we supported and this is, I think, a huge milestone. I mean, just, you know, what basically happened is we had this Genius Act, which is the stablecoin bill passed the Senate with 68 votes, got 18 Democrats, they came on board. We had to hit that key threshold of 60 votes in the Senate. That's the threshold you need in the Senate unless, you know, it's a narrow exception for reconciliation. So it's very, very hard to pass any bill out of the Senate and you need a significant amount of bipartisan support.

1:39:11And we got that. Now, when you consider where we were a year ago, you realize what huge progress this is for the crypto industry. A year ago, you had crypto companies being prosecuted. You had this whole regulation through prosecution approach where Gary Gensler was the chair of the SEC then. He wouldn't tell Star Wars what the rules were, but they would just announce prosecutions. And this was driving all the crypto innovation offshore. and I think we were basically poised to lose the crypto industry in the United States. What happened then is President Trump adopted this cause. He announced that he wanted to make the United States the crypto capital of the planet.

1:39:51He really campaigned on this. And as part of his administration, he in the very first week signed a new executive order, making it clear that his administration supported crypto. We've been rooting out all the Biden war on crypto rules and regulations at the agency level. And now we have this first major legislative win. And I would expect the House will act in the next few weeks on this and then the president will have a bill he can sign. This is a great work and it's really important because to your point, Gary Gensler's concept was, hey, there's an existing playbook, there's existing rules, just follow those.

1:40:25But none of these things actually match the existing rules perfectly. So you need some new rules they need to evolve. It was much worse than that because he would say things like, well, just come into the the SEC and talk to us. So in other words, you got to come in and talk to us and get our approval. But then when it starts, we go in there and talk to them. There'd be enforcement people there writing down everything they said. And the next day they get a Wells notice and then we get investigated. Honeypot. Yeah, they were honeypotty basically. And so the response, the industry was, okay, we're just gonna leave the United States.

1:40:56And that was what was in the process of happening until President Trump won the election and then changed the tone in Washington. I think there was one other really significant thing that happened because, you know, obviously President Trump has gotten Republicans on board with this cause, but the question is why are Democrats on board with it? During the Biden administration, Elizabeth Warren really called the shots on crypto, and it was well reported that Gensel was sort of her ally and her pick. I've kind of joked that Warren controlled the Biden not -open on crypto because she really did exert that kind of influence.

1:41:32So the question is, well, what changed? And I think one of the big things is that in this last election, Sherry Brown, who was the chair of the banking committee for the Democrats in the Senate, lost his seat in a close election against Bernie Moreno. And I think there were many reasons for him to lose that seat. He was far to the left of voters in Ohio. Nonetheless, he had been a successful politician there for a long time. And one of the reasons why he lost is because a crypto industry really got behind Bernie Moreno because Sheryl Brown was just a total blocker to any crypto legislation in the mold of Elizabeth Warren.

1:42:08And I think that a lot of smart Democrats looked at that and said, why are we dying on this hill again? You know? Yeah. And I think she was also extraordinarily popular sacks with consumers and businesses. So there is a demand here in Korea. You've got something like 50 million wallet holders in the US and their voters. So that's one of that of five Americans. Right. So I think a lot of Democrats said, well, wait a second. Why are we just blindly following Elizabeth Warren on this? What is exactly so harmful about this? Particularly when what we're talking about here is creating a regulatory regime.

1:42:42You know, it shouldn't be hard to sell Democrats on new regulations. But in this case, the reason why there's brought bipartisan support is because the crypto industry itself is calling for those regulations because having regulatory certainty is better for them than the possibility of the return of a Gary Gensler -like figure who just prosecutes them without telling them what the rules are. So this is why I think you're getting some significant bipartisan support. And as you said, bringing this on shore is such a great portion of it. There are tons of actors who some people might describe as bad or gray or dark tether comes to mind with a lot of regulation against it.

1:43:23And now those folks who are running away with the industry, Thomas, now they have to compete with people like Jeremy Lairn Circle, which are totally buttoned up here in the United States. And it levels the playing field. So it's an example of actually good regulation bringing this opportunity back on shore and taking it out of the gray area. Just on the whole offshore versus on shore. So it is true that the number one stablecoin an issuer on the planet right now is an offshore company. And that is partly because there has not been a regulatory framework in the US and there's been hostility towards the crypto space.

1:44:00And so the logical reaction to that is to either not get involved in the crypto space, which is what the banks have done until now, or you go offshore. Neither one is good. And you can see in the wake of this genius act, the stablecoin bill, that the banks have now talked about getting into stable coins, they're going to issue one. And then also, Tether will, under this act, will have three years to come on shore, but the bottom line is they will have to operate in the United States. And that's a good thing for consumers as a good thing for the rest. Oh, they gave them three years to get compliant.

1:44:34They have three years, but they have to move on shore. Now, all stable coin issuers under this bill will have to be audited quarterly. really. By a real audit, not just at a station nonsense, like real audits by American real audits and it will verify that every stablecoin that's been issued is backed or fully reserved on a one -to -one basis with real dollars in an American bank accounts that are in US T bills or money market accounts. And so what it does is, by the way, I'm not saying there's anything wrong with Tether, but this This does provide additional certainty and confidence because you know that all the companies are onshore and they've been fully audited and we know that they're fully reserved so that when you want to redeem and cash out your stablecoin tokens, there's a real dollar waiting there to cash out.

1:45:26You prevent the under collateralization issue. By the way, I'm not saying that there is. But what I'm saying is now we create total certainty and confidence, which is good for market. What happens if a stablecoin issuer does not, like, can you issue US dollar stablecoins and not be governed under the system? Or no, you're saying because the US dollar is a US government instrument, then no matter where you are or no matter where you issue from. All the issuers will be governed by this. And if you're a legacy offshore issuer, you're given this time period to bring yourself into conformity. But yeah, otherwise what happens if they don't?

1:46:04Well, it's a good question. And I mean, I guess the exchanges won't be able to carry their tokens and they won't be able to set foot in the US. There'll be infightlation of US laws. It's not a good place to be. Yeah, I mean, you don't have to guess. There have been dozens of actions and accusations like legitimate ones against Heather and New York's Attorney General did a major settlement with them in 2021. They've been banned from many jurisdictions and Senate hearings. Tether should just go public in America and be done with it. Well, and the issue was there was deep concerns that they didn't have the deposits and now they're really trumpeting the fact that they're massively profitable, obviously.

1:46:45So there's been tons of, you can just search Tether and allegations and you'll find all that stuff in our country. You know that I should hear. Tether founders are telling you. Sax, I got to give you a lot of credit. We knew that you would bring an efficiency level and some expertise to this administration, but I got to give you your flowers, we're five months into this administration. You can disagree about many things. One thing we can't disagree about is that this piece of legislation is here and we're only five months in. So maybe you could speak to the velocity at which things are getting done and then any other closing thoughts and any other get back to your day job.

1:47:18Jake, a lot of people deserve credit for this. I just want to give out a couple of shout outs. So Senator Bill Haggardy from Tennessee was the principal author of the legislation. He did an amazing job getting democratic votes and also bringing the Senate bill into greater alignment with the House bill. So hopefully this can pass the House very quickly. Chairman Tim Scott, who's the chairman of the Banking Committee, was also incredible. The majority leader, John Thun. And then we had a few co -sponsors of the legislation, Cynthia Lemus from Wyoming. And then two Democrats actually were really important.

1:47:49Kirsten Gillibrand from New York and Angela Also Brooks from Maryland. All of them did a great job. And we've got great leaders on the House side as well. Friend Chil, who's the chairman of the House of the Services Committee, Tom Emmer, who's the whip, and Mike Johnson, who's the speaker. So, who does all of them? Because I think that it really is a pretty incredible achievement that they've been able to get this bill through. Again, just a huge sea change from where we were a year ago, where crypto was basically under attack. It was being driven off shore. And now, we have it as one of the first major piece of legislation by this new Congress.

1:48:21And again, that's all because of President Trump's leadership and prioritization of this issue. So thank you to all of them for making this happen. Congratulations to you, David. Hey, one tactical question I forgot to ask you. The float on these, this is like how Tethers making billions of dollars a year, and this is how people anticipate they're going to make billions of dollars a year. Are they able to split that with consumers yet? Because I remember reading an early legislation that you weren't allowed to pass on the interest made from a stablecoin to like the consumers, I guess. So you wouldn't, it couldn't be an interest -sparing account.

1:48:51If you buy stablecoins, you can't get interest on it, but the issue were like circle. Well, that's their main business model. So that make it into the final and maybe you can give us some background on that. No, no, it did not. The way the framework works is that the stablecoin issuers cannot pass on interest to the token holders. Why is that? I mean, I don't know if there's a great principle reason. This was a compromise that was necessary to get the support of the banking industry quite frankly. Ah, they see it as competition, I'm betting. Well, there was a lot of concern from community banks that if stablecoins were paying five percent interest, So it put them out of business.

1:49:24I personally, I think that that concern, although understandable from them, I don't think that that's what would have happened. But these are the types of compromises quite frankly that you need in order to pass legislation. I hope that at some point in the future we'll revisit that and allow stablecoin issuers to kind of just do what they want to do. And that'll be easier once the banks get into the act and they're participating in this industry. But right now they're total outsiders and you can understand the fear factor. All right, Sacks, I'm gonna drop you off, man. I wish we could have you on for the full show, but you're busy.

1:49:56You got a lot of things to do. Love you do. Shed a little tear and miss my bestie. See you soon, guys. All right, thanks guys. All right, bye guys. We got two hours of classic all -in. In part two of the show, we're gonna do an hour and a half on the Israeli conflict with Iran. We've got 90 more minutes coming up here. And we've got Ukraine. Ukraine. Mir Shimer and Jeffrey Sacks joining us in the second in the third and fourth hour of the All in Podcast. How is he going? How is He going? How is All in Summit? You know, we might get, Jason, can I go to the side? I want to come from Alibaba. Who's in touch with him?

1:50:33Hi, I'm here. Thanks to Philippe. I just want to do one quick shout out to our friend and fellow bestie Vinny Lingam. Oh, yes. He is, movie's coming out. A friend of ours did a documentary on, it's great. Freeberg, you're going to love this on all the, I didn't know, I didn't know, I love Vinny. I denounced it so great. It's totally amazing. Anyways, it's called animal. Oh, it's great, Doc. And perfect. It's amazing. Where can people watch it? I think he's got a couple of deals. It's coming out. Go to any local slaughterhouse and put it on your phone and watch it at the slaughterhouse while you're there.

1:51:07Here's the idea. You're gonna consume a certain number of calories from off. Us humans were designed to eat meat. That's the number one thing we should be doing as a species is eating meat. Nick, can you put the trailer in the show notes So that they can get a little play actually play us out with the trailer. You can play us out with the trailer on the show We'll do it. I gotta go eat. I have a photo shoot in two hours. Oh Is it gonna be you showing the legs are just the top this time. What are you shooting? I'm gonna do it. I'm gonna do it Laura out the anaconda. You should do picture late the anaconda.

1:51:35I hope it's Italian Vogue. What are you shooting Thomas is in the general neighborhood? I can't comment Nice how I should leap it out. Give me a call. I gotta talk to you about this weekend Okay, love you guys. I'll see you at the end. Are you guys still doing the tequila launch? Yes, I am. We'll see you Saturday night. Absolutely. Go to all in .com slash yada yada yada to sign up for the all in summit. Apply there for Thomas LaFont. Shemaq Paihapatiyah, Dean Freiburg and the Zarr. David Sacks, I am the world's greatest executive producer. We'll see you next time. Jason at all in .com. Bye, Nose.

1:52:12Play the trailer. We're two good of hunters. We came out of the trees, not to eat the grass, but to eat the grass eaters. Meat is the most nutrient dense food that human beings can eat. We're carnivores, but we're not living as carnivores. We are just better designed and more efficient at getting nutrition from meat. Kiyada, remember where we came from and where our food should be. It will change your life.