OpenAI's GPT-5 Flop, AI's Unlimited Market, China's Big Advantage, Rise in Socialism, Housing Crisis

25:52You got it and freeberg's noses. You got to be a little careful when you say what, where the electricity coming from and what the additions are, right? So the US, our additions are like 80 % solar to wind, but the install base, it's, for sure. So I think that's that you're saying is probably at best additions, not insurance additions, for sure it's additions. But they're, you They bring it out a lot of power every year relative to the install base of the United States and a lot of it is solar Holy here is Here's an interesting chart. This is China's Solar surge this country balloonberg China added more panels last year than any other country has in total So in other words they added more than the US it looks like US India Japan and Germany they added in one year And that's a 2023 number.

26:44I think 2024 took a massive jump. So here's the question. See, Jake, and Freiburg, here's the question that I would about Secretary Roy. Do you care about that slide? Because if you care about that slide, then you would have done different things in the one big, beautiful bill. And you might not care about that slide, but we're certainly not attacking the problem on that slide. So as well as we could. Right. And they're also putting, they have 150 plus nuclear actors in some state of deployment. We've talked about that here countless times. So circling back to you, Ben, winning AI, do you consider that existential for America as somebody who's not in the industry when you hear this discussion that we had in DC last week when you hear technologists like ourselves who obviously are investing in and this is our book of business right now.

27:43Do you think we are in an existential race for humanity to win the aires race with China? Or do you think that's like a construct maybe? That's just everybody wins, and it's not an existential race. That one person wins and the other person loses. As you might imagine, I'm definitely in the existential race category. I just need, look at how China has utilized TikTok as a siapp weapon in a myriad of ways gathering data, putting out its own propaganda at scale, and think about how they would do that with control of the tools that everybody uses in all of their businesses, and that's putting inside the military connotations.

28:20I was talking to my friend, Mike Gallagher, who's a congressman on the subcommittee on China, and who's now over a palancier doing policy over there. And he was pointing out correctly that China's capacity, if they win the IRAs militarily, is going to explode. And that's going to mean an awful lot for things like freedom of the seas. It's going to be a lot for our allies, for America's economic dominance in the world. And so that opens up a whole can of worms as goes to the Trump administration's policies in regard to Nvidia. And what kind of chips we should be allowing Nvidia to ship over to China.

28:55Which we're going to get to on the dark at a moment. Interestingly enough, did you, did you, did you, gentlemen, see the Luckin Coffee announcement in New York City and the social history action to it by chance. Nobody saw it. Okay, so people are not spending too much time on the TikTok. TikTok has a bunch of young socialists, New Yorkers, in communist t -shirts going to luck in coffee and talking about how Starbucks is our capitalist and that they're glad that the Chinese company Luckin, which does $2 coffees, has come to America to destroy the American company Starbucks and Duncan because communists know how to do capitalism better than Americans.

29:43That is like the central position in my hometown of New York City right now. Here's the TikTok, it's hilarious. Watch this. Pull his up for a second, Nick. It's a it's a it's a worthy diversion. This should just some red meat for my friend. We're getting two dollar cup of communist coffee. So this specific coffee shop has more locations in China than Starbucks does. Um, okay, I'm gonna come back to make a video there later. But no, this company went through a $300 million accounting scandal where they faked their profits because capitalism sucks. And then they started paying their workers and putting the money back into the coffee and what actually matters.

30:20And now that they're more successful than Starbucks, back in Soho. So of course this location is right by NYU campus. Should have paid your workers. I think we get the idea. I have a new theory, Ben, that the Chinese, because I do, I'm with you on the existential threat of that competitor. I have a theory. They're going to try to beat us on capitalism and then use brands like we've used brands, like Apple and Google to defeat us. BID producing cars now for half the price of American cars, and they're shipping them on their own shipping containers, lukking coffee, infecting the US now. And I had a third example of, oh, in TikTok, the example you just gave, competing with, and using that.

31:05What do you think of my theory, Ben? I think that's totally right. And the truth is that what you're talking about in China, obviously, is in communism. It's state -sponsored corporatism. and so you can pour extraordinary resources into one path dependent part of industry. And you could have competing coffee if you decided to subsidize that at extraordinary cost, and then you can undercut the rest of the market. Now this is one of the things President Trump is totally right on when you talk about the Terra floors. I've always been in favor of terrifing a living shit out of China. I think that's actually quite right.

31:34My problem when it comes to the Terra sign, I'm jumping ahead in the docket here. My problem is that if you're going to do it, what you really ought to be doing is boxing in China with free trade networks with literally everybody else and exclude China from that network. You have to do all the preliminary steps before you box in China. Otherwise China is able to sort of climb out the window, which is I think what they've done on everything from Nvidia Chips to TikTok to their actual Terrafrade, which I believe is now lower than the Terrafrade we have against Canada. Let me bring it to you, Freiburg, because I think this is like a super interesting discussion.

32:06Our Bestie Bill, Gurley has a position that, hey, everybody can win. It's or we win, I mean, obviously it's a competition, but there could be many winners. What's your take on all this, Dave? And if any? Well, I'm in the place, like I've said before, it's kind of like who's gonna win the internet? If we said that back in 1996, like no one quote wins the internet, it's an open standard, it's a platform, it's an evolution of access for markets, of productivity for the world. I think AI is very similar. I don't think that there's, you know, There's this concept that you end up in some sort of state of super intelligence that perhaps reign supreme and create superiority, but there's many vectors of competition.

32:52So within drone warfare as an example, there's going to be a massive vector of competition. Pretty clear that remote autonomous devices are going to be the kind of front lines in battles going forward. and China has both a manufacturing, productivity, materials advantage over the United States on that front. So it's not about having the best model. It's about having a supply chain that can support their ambitions in warfare. And similarly in economics or in business, there's many dimensions upon which we're gonna have advantage over China and China may have advantages over us that are gonna be enabled, accelerated, to magnify by tools in AI.

33:33Actual models, I think, are going to be this continuously evolving set of systems that it's unclear where things are going to head. But to bring up your point, I do think that the CCP has a unique ability to throttle up and throttle down entrepreneurship to drive productivity in that nation. When they throttle it up, you end up seeing massive gains in individual capital accumulation, which is counter to the Communist Party's intentions. And so then they throttle it back. And as you can see in this image from the financial times, this shows the number of companies founded in China by year, could peak in 2018, which by the way, aligns pretty well with the peaking of venture capital investment in China from the United States and from VCs around the world.

34:20And then it began to rapid decline because there was a set of policy changes. You guys may remember, Jack Ma disappeared and these other sorts of things happened around that time. And so there's this challenge to the CCP that resulted in them throttling back the entrepreneurship. I don't think you can have massive, true natural market progress without having entrepreneurship, without having a more free market. And so they are, I would say, rate limited at this point by this particular chart in terms of their competitiveness. We can argue about their resourcefulness and their ability to do central planning and central command of the economy.

34:56But at the end of the day, much of what brought the Chinese, there was a great podcast on this by the guys from the Brookings Institute years ago Where they talk about what got China out of poverty? You know where their GDP per capita went from whatever it was 3000 to 30 ,000 in a very short period of time And it wasn't the government central planning. It was the entrepreneurship of the peasants and Their ability to kind of self -organize and self -mobilize and build build business and create better productivity from the ground up. And it was the individual Chinese citizens that drove that economic boom, not central planning, central planning had some enabling factors, but that was really important.

35:33And so I do think one of the challenges ahead is this entrepreneurship suppression that's manifest. And Gavin, are you have a point on this? Yeah, well, I was gonna say Gavin, the East West conference that our friends at Cotu do was named after like this really amazing boom period. We had 15 to 10 years ago before Americans were not allowed to invest in China. Not only that, people had to American companies have to, like, basically divest. They shut down in China, all the education companies that were venture backed, nationalized those. Jack Ma went for painting lessons, et cetera. So he's an incredible painter right now.

36:09By the way, some of those oil prints are, I think, are much bigger in their impact than Ali Baba. But Gavin, you would, I think, agree, like we, in investment in China, we were on a really great track that got shut down. Do you think when super intelligence comes that that is the race? Because we're looking at general intelligence, you know, a lawyer and accountant, a developer, but super intelligence, I think is where people get to the existential piece, yeah? Yeah. Well, they for sure believe it's existential. I have it on good authority that if you work for deep sea, you are not allowed to be in the same room as an American while you're in China, and you have kind of a CCP minder with you most of the time.

36:50And that's kind of astonishing. You know, so they believe it's existential. The second thing I would say is I do think they are making an effort to throttle it up. You know, Xi Jinping had a dinner with kind of, you know, 20 entrepreneurs. I think Ponimah from Tencent was there. You know, the deep Sikhs CEO was there. But they kind of gave pride of place to the people who are making physical goods plus deep seek and maybe deemphasize some of the social networks. And the last thing I would say just a stat that just builds on what David just said about, you know, how entrepreneurship amongst kind of like rural Chinese is kind of what jump started China's economy.

37:29I think at the towards the end of the Soviet Union, they could not produce enough food using kind of socialist systems. So they let 2 % of the acreage in the Soviet Union kind of like be more entrepreneurial and self -organized and that 2 % of the acreage produced a majority of their food. Just kind of shows the superiority of capitalism to socialism in a world in which there are resources constraints. What's better fell capitalism and democracy, capitalism and communism? You know, long term, I think we all agree. We have the winning combination, I hope. But in the short term, this sounds like an incredible advantage to put your finger on the scale and say, hey, BID cars can lose money forever.

38:17We just want to kill the American car industry, we want to kill the German car industry. Well, nothing can lose money forever. But the one thing I think is implicit in what Dave and Gavin said is you need rule of law. You can't just have innovation. You need rule of law. And it's yet to be shown that China can do that in a way that will create long -term success, absent, government, propping it up. And I'll give you an example. We've had factories in China, one making wind blades. And basically every day was a renegotiation on terms, no matter what you want to do. And if you didn't control the chop, the thing that made the stamp, you didn't actually control the factory.

39:03That is not a long term recipe for success. And I think eventually, no matter how strong the centralized government is, you've got to have a rule of law if you really want to see decades and decades of innovation. Okay, Gavin Goed. Just 100 % agree you need rule of law. It's essential for any system of government, but particularly for capitalism. I mean, in some ways capitalism is the rule of law with private property. But I wouldn't say going back to 2018 being like kind of glory days for China, they were working. These kind of internet entrepreneurs, they did create kind of the only kind of internet companies that were capable of challenging American internet companies, not just in China, but globally and obviously most American internet companies aren't allowed to participate in China.

39:52But the problem was those CEOs became so powerful that they were started to feel comfortable challenging the CCP. And Jack Ma made some comments in 2000. I don't remember exactly when that we just vaguely critical. And that was it. Then he disappears. Okay. Can we stop with it? Hey, well, hold on a second. Pull up my hold on. Pull up this picture. Gavin, you keep saying he disappeared. He opted in to oil painting. This beautiful painting, Jack Maude here went out auction for $5 .4 million to an environmental nonprofit. I mean, he didn't just disappear for saying that the old people in the God, I think the quote was something like, oh, we got to pull it up.

40:34That the government was a little old and didn't get it Ben, you've been a little quiet here, but in politics, Asia, willhouse, question for you. We've seen a centralization of authority in the federal government. And we're sitting here talking about, hey, central government plus capitalism doesn't work as well as rule of law. Do you worry sometimes, hey, Biden wanted to use executive orders to do the student loan thing and, you know, Trump obviously has taken tariffs and there's a big question. Maybe the tariffs are my understanding is they're supposed to reside with Congress. And there's a lawsuit about that baby that goes back to the Congress.

41:08He has been centralizing Biden with centralizing even Obama was centralizing and solidating power. Is that necessary for us to compete because we're kind of seeing overtone overtures like that even at our AI summit two weeks ago. There was this point that you know, Saxas made on this podcast and the president made, which is we have to have federal AI legislation. We cannot allow the state, you know, states have any say in AI, the most important technology in the world. I'm kind of torn about that. I'm curious what you think of centralization occurring here and then the bigger picture with China.

41:41Yeah, I mean, I think that when it comes to sort of the bigger picture, the temptation and politics is always to look at, again, corporate states, which always get out of the box really, really quickly because they look good. It's like you can mobilize an enormous number of resources on this one target. I mean, what capitalism does, of course, it allows you to mobilize extraordinary resources across a wide range of targets. But a corporatism allows the government to basically put you over one target and one target alone. And if you're just looking at that target, it looks great at the very beginning.

42:08This is true for Italy. When Mussolini took over, this is true actually for Hitler's Germany at the very beginning economically speaking, when you are seeing extraordinary rates of growth, corporatism starts to look really good, particularly in a messy democratic system like ours where the human beings at the top don't have full control. I think one of the things that I think is frightening to people like me about AI is because you are seeing such a consolidation of AI. Yes, extraordinary spending, but that extraordinary spending is relegated to a relatively small number of companies. Again, and not just that, you're seeing, it's so much spending going to one thing.

42:41And so the race for superintelligence that you're talking about, which China clearly, Gavin is totally correct, sees as adversarial. If they get there first, then corporatism wins. And so the temptation is to sort of imitate that from our side. And maybe you do have to imitate that. Maybe it's more like, maybe it's more like Manhattan project for AI than it is like a market -driven thing. If you actually do see it as a true existential threat and we should treat it more like a military program than like anything else. I think the temptation is to extend that across the rest of the economy to industrial policy, to steal and copper tariffs, to everything else.

43:14As far as the federal AI versus state AI thing, I think that that maybe slightly a red hair in just because what you're really talking about there is not the federal government that you're surfing state authority, what you're talking about is the federal government trying to preempt state authoritarianism. I think that's what that's, I think what David is pushing is sort of the idea that the federal government ought to prevent the state of California from filling the field with some really bad AI legislation that essentially destroys competition. That's right. I'm throwing all the various players.

43:40Good for you. Good in there. I have a question. As an investor, not a policy guy. I don't quite get Democrat versus Republican on the topic of how they give support to the private sector and what counts as picking winners and what doesn't count as picking winners. When I look at this administration of the previous, I'm not sure I see, I think they're both very activists. They both kind of see the pick winners and losers. And I feel like that distinction kind of lost a little bit. Is that, is that basically sense to you? What had the IRA, but then the other has like, rare earths or this or that?

44:19It's very hard. When they switch like that then, it's really hard to know where solid ground is as an investor. I mean, listen, I totally agree with you on that. And I do think that the centralization of power and the federal government and the choosing of the winners and the losers over the course of the last several decades actually has been really denigrating for private industry. I mean, I'd prefer that nobody was picking winners and losers. But I think that if you basically are now relegated to a choice between the winners that are picked by the Trump administration and the winners picked by the Biden administration, you know, from a political point of view, I'm going to pick the winners picked by the Trump administration.

44:51I think they're doing a better job picking the winners, but just on a principled level and on a general market level, I prefer that nobody be doing these sort of subsidies. I don't like industrialized planning and central industrial policies. This is why. But let me just, I think I would, I agree with you almost 80 % and David, this is where I think I disagree with both you a little bit. The subsidies, right? I have really helped solar, wind, EV, a lot of other industries outside of energy as well. So I think what I would love to see is rational subsidies that consistently last through Republican and Democratic administrations.

45:30And we had that a little bit with Bush and Clinton with some of the renewable stuff David like governor Bush put in wind requirements in taxes that carried through But if we keep flipping back and forth we inhibit one of our greatest strengths, which is our technology innovation and Freight once again is good great point fell by the way great point here's a counter argument I'd make the subsidies while they may have benefited those two particular industries created a financial disincentive for investing in nuclear. And so there's always a loser. And the loser isn't always necessarily the target.

46:07The target was oil and coal, or oil and gas and coal, or whatever it was, carbon -based energy systems. That was the target when there were subsidies for solar and wind, which let's accelerate these deployments and get this market to start moving. It does two things. One is it doesn't force a natural market dynamic where you have to ultimately get the cost of solar or the cost of wind turbine production low enough that it makes economic sense from an ROIC basis that investors would natively want to make that investment. They're making the investment because the government's paying half the cost.

46:38And the second thing is it then makes nuclear non -competitive. And therefore the R &D investment dollars that were supposed to go into nuclear that would have allowed us to accelerate to gen 4 systems, which by the way China has now done went away. And so now we are several decades behind where China is with respect and nuclear, which is ultimately the most scalable energy production system we have. Phil, go ahead. And then Phil, I want to get through a couple of the charts you trick the time together to put together here as we wrap energy. Before you go into energy, I do have a politics kind of question I'd love to pose to benefit.

47:11That's okay. Yeah, please. So my parents were visiting me for the last week and we had a lot of lively political debates. rates. And this trend of the Imperial President in America, which I think really accelerated with Biden and now is further accelerating with Trump. Their hypothesis, which I think is correct, but I'm curious for Ben, is that is a function of the fact that Congress, by and large, can no longer effectively legislate every once in a while. They'll do the IRA or the one big, beautiful bill. But by and large, Congress is not doing their job. So for 30 or 40 years, a lot of the governance was done actually by the judicial branch.

47:53And if we have to choose by being governed between the judicial branch, which is unelected, and the executive branch, which is at least selected and accountable, I would rather have an imperial president who we can judge and vote out of office than an imperial judiciary. Just curious for your thoughts, Ben. No, I mean, I obviously think that's true, but I think the trend goes back more than a few decades. I think that if you're really going to go to the deep roots of this, you have to go back to the administrative state in the early 20th century because the reality is the reason you have an imperial presidency is so the federal government just does way too much.

48:26I mean, the federal government is just way too big, way too intrusive, they're way too powerful. And so once that becomes a giant grab bag of cash and whoever controls the federal government wins, and now if you're a legislator and you can kick all responsibility for your policy making over some unelected bureaucrat in the executive branch, that's precisely what you're going to do. the founders game for ambition checking ambition they never really game for people trying to kick responsibility from one branch to the other they they've thought the other way they thought congress is going to defend its own prerogative against imperial overstep by the presidency and instead thanks to the administrative state congress people and senators started to realize hey what if i just passed like this very vague omnibus package and then i kick it over to a bunch of regulators and the regulators do all the work and take all the heat and i can go back to my hometown and tell him how much money i brought home it's fascinating uh hundred percent situation.

49:14And when you kick it back to home, I don't know if you guys saw this town hall that went exposed. There's been a number of them, Ben. You must have covered it. Why are you pulling it up? I do want to say that I do think we don't want to throw the baby out with the bath water. That is to say, the government, and a number of government employees, career civil service, servants, are doing God's work, whether it's on safety or defense or intelligence. And what I don't love is a tone of critical, criticizing lifelong government workers when none of us would really do that job as the pay they're taking.

49:58And maybe I don't mean to make it, let me not say the people on this call don't know as well, but many of my friends, and I do think there needs to be a beat for those people that are doing incredible work. For a little or no recognition or case, we can't paint with too broad a brush. I'm not blaming. I'm not blaming. I don't know what you're about that. I just said we don't hear enough of that as long as that. I'm not blaming the bureaucrats who are there and are given responsibilities to do a thing. I'm blaming Congress for having kicked them the authority in the first place. If you're going to place, you know, blame with somebody, you have to give it to the branch that actually abdicated its duty and decided to construct an entirely different branch and then throw off all of the accountability to the branch.

50:39and there are things that the American party doing what the Tea Party did getting, you know, or the America party, I guess is what Elon calls an American. The America party saying, Hey, you know what, forget about the presidency. Elon did that work pretty effectively. I think we'd all agree he had a significant if not the deciding factor and getting Trump reelected, probably also something to do with the other, the Democrat, who the Democrats ran, putting all that aside. If an American, if the America party or another party were able to secure a couple of Senate seats, a couple of House seats.

51:12Could that reverse this trend where maybe the House takes back a little responsibility in your mind, Ben? Is that a strategy worth pursuing for moderates? I think that actually this is not going to get solved at the federal level. I think what's actually going to happen is that the federal government is going to lock up and it's going to be essentially rotating elected quasi dictators until the end of time, except that the American people are going to be unhappy with that. And you're seeing already more authority now now kind of being taken up by state actors, which is why you're seeing a necessity for things like federal legislation on AI to preempt the states.

51:43What you've seen over the course, you saw this during the Biden administration a lot. I moved from California, which is obviously a very left -governed state to Florida, which is very right -governed state. But the difference in governance are massive, and you're seeing governors pick up the mantle of saying, okay, well, the federal government is unworkable, they're not doing what we want to do, so we're going to do our own thing down here. We're going to challenge the federal government in a wide variety of ways. And I think that's actually the proper solution. That's actually a reversion to what the founders wanted in the first place when the federal government was essentially so small that you could walk into the White House and just talk to the president and state governments were the ones with the vast majority of authorities.

52:18So trying to solve it, what I would love to see for the America Party actually is to instead of try to take over the federal government, try to take over some state legislatures. That's actually an easier lift in some ways. They try to win a governorship, try to actually do some of these libertarian -minded policies at the state level, which is where most of the power resides and then bleed dead up into the federal government as an ethos. It seems to me like nobody's happy. If you missed it, there was this like crazy town hall. It occurred in Nebraska and everybody was upset. Freeberg, I wanted to make sure you saw this.

52:53I should have sent it to you earlier. I'm not sure if we talked about it in the group chat, but you had people who were at once upset in Nebraska about the government spending too much, then not the Medicare cuts, Medicaid cuts. People were universally on both sides absolutely infuriated at the stadium. There's nobody's happy now. Freeburg, your thoughts on this sort of, you kind of predicted it with the socialist side, but it does feel like my prediction will ring Even fewer than any of us hope, socialism will sweep over this nation. I fear and I think it's a cancer and it's going to be worse than what we saw with woke stuff.

53:36It's going to be just like I'm losing out on everything. I mean, people are stagnant in wage growth. There is no one in the United States, including wealthy people who haven't taken significant notice of the increased cost of groceries in the increased cost of buying home goods. it's Jason I'm assuming you must have noticed as well. How much growth series have gone up in price? Everyone's rent goes up every year. There was this TikTok rant that went viral this week about this woman that's like, why does my rent go up every year? My salary doesn't go up. We're in this really difficult moment because of what Ben pointed out, which is that we've basically funded the government to do everything for us.

54:13And by my calculation from last year, I think nearly half of Americans are employed directly or indirectly by the government at this point. And as a result, because of that, and the inefficiency of government allocation of capital, everything in flakes and cost. And we're entering this era where some people make the joke that the train has left the station. All right, let's finish up with these two charts here, fill on energy. And then I want to get into time. I just want to say what they gave it. I still think when it comes to innovation, rule of law, capitalism, freedom, We are the best at it.

54:52I think there's still gravity. There's still gravity. So at the end of the day arithmetic is arithmetic. When Jimmy Carter lost the presidency, there was 12 years of Republicans and then there was Democrats. It may be the socialist, I don't think socialists in every United States, the way left, let's say, the left side of the Democratic Party wins for 12 years, David, maybe I don't see that, but if you want to see that, you can. But it will swing back. this country is incredibly resilient and I have complete faith in that resilience. The love it. Can I just add optimism? Okay, let me just get these two charts out of the way real quick.

55:27Finish up the energy charts here and then we'll continue the discussion as we pivot over to tariffs, which is obviously related to all this. All right. So David. Yes. I want to go back to this because I think I can't emphasize enough how much I love you and think has smart you are. And I also think the last argument made was absolute bullshit. Regardless of the idea, the idea that the subsidies that went to wind and solar were at the expense of Duke is nutty. And let me tell you why. The issue with nukes, and you say this so wonderfully on China, the issue with nukes is regulation and what Ben was saying over, were stifling innovation there.

56:12And we've got to figure out a way, and I think the Secretary of Energy, the President, had a great job of this to rationalize the regulatory framework around nuclear power. What's bothered with Hertz -Nukes is not their cost per kilowatt subsidy. It's the massive amounts of bureaucracy around it. So if you were to give the nuclear power industry five or ten cents a kilowatt hour, that doesn't help them with their big problem. So, and with its own, that's to give them. And the sizes are different as well. And ones who distributed resource and ones are centralized. So I guess what I'd say is, I don't think we have to treat them the same.

56:52I'm 100 % with you that we should be subsidizing nuclear power to lead. It's base load, it's reliable. We can do small module reactors. They can be used for data centers, all of the above. We don't have to pit our children against each other. And in this case, they really aren't against each other. And they chart your showing, explain the chart you just showed. And then I have a second question for you, which is, why should we subsidize nuclear when we have hundreds of billions of dollars being spent by the most powerful max having companies in the world and sovereign wealth funds who want to invest in it?

57:27Why did the taxpayers have to pay for that? You can get to that in a second. But walk up me through this global electricity generation chart you pulled out here, just real quick. So, so with this chart shows is how quickly electricity is come on from solar, the growth rate of solar. And so actually, there may be a chat GPT chart on the uptake in AI, but when you see it's the yellow, the hyperbolic growth of solar. And so this goes to the fact of it really has been its excess cost rate on 80 or 90 percent, and it's beginning to grow. And I agree with David, eventually you have to have storage with solar.

58:04So you can't quite match gas to solar, but we've had incredible success reducing costs of solar and wind and incredible growth. And so that's what the result of those incentives have been. It's been successful that way. And that's why - And now the second chart here, the OBV chart. The OBV chart, this just goes to show that when you take away incentives, You lose some generation. And so the point of this chart is, if we really need all we can eat on energy for artificial intelligence, and if artificial intelligence, the race is the race for national security and dominance in the world, this is saying we're taking a step backwards on this supply.

58:51And again, it's not either way, David. I would say, do as much solar and wind as you can, as much SMR as you can, do as much energy to make us a dominant player in artificial intelligence as well as other things. That's what I said. In a front, free -barrier response. Yeah, so again, I think the point I was trying to make, Phil, is by driving the private market capital into solar and wind because it is now discounted. So you got a high rate of return by applying your capital there. you're not likely to put that capital in the development or the extension of nuclear technology. And the lack of investment in improving nuclear technology, yes, you could argue that's regulatory burdens and so on, but it's largely been inhibited because there have been these other subsidized paths to market with energy.

59:43And as a result, we missed a window to catch up to Gen 4, which is just so everyone understands what that means. These are these very clean, meltdown proof, nuclear energy production systems that are being deployed at scale in China now, and the US doesn't have any, and we have no path to getting these deployed. Secretary Wright's going to speak it all in some way. He has said that the development of energy that in the United States we are likely going to have a Gen 4 reactor deployed or started production in 18 months, but we'll but we are so far behind because no capital went into it. And that's because the capital was redirected into these subsidized markets.

1:00:21And that's the disincentive that arises when the government gets involved in markets. The government creates these financial incentives that number one, create bubbles in those markets. And number two, take away the incentives for capital to flow to the best path for long -term returns, which is what's happened in energy in the United States. Yeah, so in this small module reactor, Gen 4 stuff, We as well of others have investments there. A great company we like called Exeter She, spoke about both there Jason. But I think it's fair to say that the money flowed into those sectors when the hyper scalers committed to them and showed they were serious about the demand side from the private sector.

1:01:04And they have been, there's been a catalyst for the administration because it's had four or five executive orders trying to get rid of the bureaucracy. So I guess I would say David in my experience as an investor to space, the dollars flowed when the market spoke and the hyperscalers said they wanted it were behind the SMRs. And second, it was further invigorated when as Ben says, the government took a step back and stopped being a yolk on the industry. Neither of those have anything to do with subsidies to solar and wind. Can I just say one thing about socialism? Because that was a really important thing that David said, but it's inevitable.

1:01:41I would just say to me so much of it comes down to Mom Donnie, if like I disagree with every one of his policies. Well, admittedly they're dumb. So dumb. But yeah, they're obviously stupid. But if you have not watched him, he is an incredibly charismatic, effective politician. And absence has been every socialist revolutionary leader. For sure. But just I think the key question will be one, you know, unless Adams or Cuomo pulls out, he's almost certainly going to win. And then if he wins, you know, does he go through with these policies? Because if he goes through with them, they're going to be epic failures.

1:02:19We know what happens when you defund the police, you know, there is a government run grocery store somewhere in Kansas and it's a disaster. So they won't work. And I think that'll be a quick, that'll be like a quick end to socialism. But if he's a, I, I disagree with this. I mean, start all like an issue. No, no, no, yeah, yeah, please go. Here's the problem. It'll take a year, two years for those policies to actually hit and destroy all of New York and it'll be like the end of Planet of the Apes and we'll all be wandering on the beach looking up at the Statue of Liberty. I'm asking why we blew it up.

1:02:53But, you know, the problem is you did it. You did it, you madman, you did it, you fired it, you did it. You did it. So crazy bastards. You did socialism in New York City if I'd enter capital of the world. But the bigger problem right now, and this is why this does go to tariffs. It also goes to crypto policy. It goes to the, it goes to AI right now, the kind of normie in America who doesn't know that much about AI, doesn't understand how crypto works, doesn't understand even how financial markets work. Right now, they're all willing to kind of stand back and say, okay, well, I trust President Trump, I trust the administration.

1:03:27I don't want full -scale redistributionism in government control because things are kind of okay, they're kind of okay. If things take a downturn, then the backlash is going to be a lot stronger than anything that any of us can say about the failures of Zorn Mamdani. Because what it's going to be is, look, the rich got richer and we got poorer and it's going to be a redox of 2007 -2008, but with a much even further to the left than Obama ever was. And that I'm deeply afraid of. That's right. Because the market crashes if unemployment goes up, then this exacerbates and makes the point. And for a socialist, all you have to do is say, don't you want free X, Y, and Z, whatever the popular thing is a free phone, less rent, free buses.

1:04:08It's the easiest pitch in the world. Yeah. Cheaper food, free food. I mean, and if you fall for it, but it's a self correct from socialism too. I just like, I think it's the idea that we kind of immediately flip back after he's torn down a fail or something. I mean, San Francisco has yet to have a Republican governor. They've been trying to scrap for several decades. I'm from LA.

1:04:29I've was Richard Reardon, right? I mean, like this, like, you can always blame those crazy, those financiers who got rich, and they all moved down to Florida to avoid our tax rates, and that's just really cleaning out the base of being more of a government. To follow up on that, I'm sorry to interrupt, but like something that's really important about what you just said is it's not a binary switch that gets flipped, you're socialist or you're not. What happens is these policies, where you have big government policies that provide greater and greater economic, financial, and social support to the population are slow burning policies, the big policies in the federal government started 50 years ago.

1:05:07And they've gotten bigger and bigger. It's a snowball effect because when they're not working, if I'm not getting enough money in the food stamp program, for example, the solution isn't, hey, let's cut the food stamp program. The solution is, let's make the food stamp program bigger. When rent control didn't work in San Francisco to bring housing prices down, the solution was let's get the government to start building housing. The solution is never, let's reduce the government's role. The solution is unidirectional, which is to get the government to do more to solve the failings of the policies.

1:05:40So whatever policies he does enact, if they don't work, the answer and the response from that socialist type movement will be, let's do more, let's have the government do more. And then you increase the burden on the people because you end up increasing taxation, increasing regulatory burdens. And as he said in one of his interviews, ultimately, you see the means of production. And that's the end goal of his government. It's so simple to solve this problem. I hit to make it too difficult here. But if we had the super funds like in Australia and people had the directional ownership and social security gets retired for people actually having, you know, being in the market and we just crack the regulations on housing and build much more housing, this will change everything.

1:06:22The housing issue is so oppressive to this generation and the cost of their education is so oppressive. Now, they have opted out of education. They're starting to look at and go, I'm going to UT. I'm going to be in a state where I can pay, you know, 50K in total for my degree. So young people are getting smart about this. Thank goodness. And they're going for trade degrees where plumbers and electricians are making 150K a year, but you have to solve housing. I have watched this so, so acutely in my move to Austin, I suppose, Ben, when you move to Nashville and Florida, you saw the same thing with your teams.

1:06:57When people don't have to spend 60 % of their not on their housing, their anxiety level goes down massively. And when they feel they have ownership in a home, it goes down massively. Why we cannot fix this problem? why neither president just says I am going to make housing when I run for president president Jason .com. I am going to just make housing. I think we're building 10 million homes and the government's going to build two new cities and we're going to make housing affordable. Although I got to tell you, you know, one of the things that I think this goes to a deeper malaise actually and this is maybe just a human problem.

1:07:31You know, one of my kind of favorite charts, it's a sad chart. One of my favorite charts with regard to the American populace is geographic mobility over time how much people move because what what what you actually see is that that has wildly decreased in the united states why there's this impression that everybody you know now because you got on plane you can go somewhere and it's you can get a truck and i'll no one moves now people why he said that i mean i think i mean i think one reason is because originally people were moving from you know rule to to cities and now they're in the cities this is the same city but i think part of it is also again because of those government dependency programs once you feel like the government is going to step in and solve your problem into York as opposed to you having to go cross -amount and live in a cabin somewhere, then you tend to stay.

1:08:19And you do that enough broadly speaking on a federal level. And what you end up with is people who really believe, I think that the vice president has grown a lot of things, but he made a statement in his RNC address that they really kind of forcibly struck me, which he suggested that the American dream was to live and die where your grandparents lived and died. And I thought to myself that actually is not traditionally kind of the American dream. The American, that's kind of a European dream actually. The traditional American dream for most people was cross in ocean. Go to a place you don't know.

1:08:47Yeah, if that doesn't work. Cross, right, cross a mountain. Build, I mean, the Togelville talks about this in democracy in America that Americans were famous for basically building these kind of ramshackle huts, trying to set up shop. And if it didn't work, it was just a band in it and the forest and then move on to the next place where they could build a ramshackle hut and try and try it again. And so that sort of innovation and entrepreneurship and this idea that you have to move in order to succeed and that you might actually have to You know move from the city that you grew up in and go find a job somewhere in North Dakota I was asked a question by by one of my listeners recently and they said well, you know You're always talking about this stat that there are more open jobs and there are people applying for the open jobs But what about me in my industry?

1:09:23And I was saying well, yeah, but it doesn't apply to every single industry That's it. That's an aggregate statistic and so when you talk about job mobility and people being able to stick and move and and change what they're doing in the marketplace. Now, if the American people don't keep up with that, and if they're unwilling to move to places where the real estate is cheaper, then you are going to get more expensive real estate. And maybe you can build your way out of that, or maybe you can't, but it used to be, that if you had a problem with the housing prices in New York, you moved somewhere else.

1:09:50Yeah, you went to San Diego or something, you pioneered a new area. And, well, I'm seeing that amongst a lot of young people and they're getting the benefit. Let's talk about tariffs. graphs. And so we'll get into the more specific granular ones that we've been dealing with over the last 10 days, but just big picture. Here's what's happened. It seems to be the Trump administration has done what they said they were going to do. And we'll talk about the ramifications of this. But Tara for revenue was up to 30 billion in July, 127 billion so far in 2025. And obviously this is three months of data, basically.

1:10:28Here's your chart. in June the trade deficit trying to 60 billion or so. And that's the lowest since June of 2023. Now, by doing this, of course, inflation, which is a trailing indicator, could pop up at any time. We've seen a small tick, like 10 % up in inflation. And if we cut rates in September, October, and November time period, and maybe 50 bips comes off this, inflation's definitely going to go up. People have more money, more investment goes around. We'll probably see a three -handle again. So we're going to trade one for the other thoughts. And then here's your polymarket. We made a polymarket here on the pod and polymarket is an official, is the official marketplace of the all -in podcast shout out to my guy Shane.

1:11:08Let's go next. How much revenue will the US raise from tariffs in 2025? Here's a polymarket. And right now it's looking like the number is 200 to 500 billion, 86 % of people are believing that will be the case. And then here's ours. I had set, will tariffs generate greater than $250 billion in 2025 or sitting around 15 percent? Maybe this is free money in this polymarket, and that was when I created. Gentlemen, who has that opinion on the tariff policy and the revenue it's bringing in? It's going to be hard to get to that number just because the tariffs only really kicked in middle of the year.

1:11:4830 billion, that's $360 billion annualized right, bang in the middle of the estimate, but you didn't have a lot for the first six months. Yeah. Maybe you hit the low end of that with 30 or 40 billion for the last six months, but but we'll see, but for 2026, that does seem reasonable. 250, we're halfway there. We're at 125. So we'll see if they can keep it up and then what the impact is. Fill what are your thoughts on this tariff policy and the revenue it's bringing in. Is the juice worth the squeeze? I assume the president wouldn't the president say you already hit it because he got 500 from the Japanese.

1:12:26The reports have come out that that might the Japanese perceive that as a loan maybe or they're going to invest in it. So maybe and none of that has been officially paper. That was a both sides in the EU deal were also handshake. So let's keep that in mind. These things still have to be paper and then there's this potential that tariff powers could reside in the house and Trump will not be able to do any of this and it all gets reversed in our very polarizing time. So I'm just going to speak about the part of this that I have a little bit of understanding on. Let's say you tariff solar panels coming from the Chinese.

1:13:05You could do that for a variety of legitimate reasons, equalizing and playing fields, et cetera, but you are at the end of the day increasing your energy costs. So to me, what I struggle with is globalization throughout my lifetime has been a net plus to the world in the United States. We've now increasingly focused on supply chain security and at the expense of globalization. I don't know and I'm not smart enough to know whether that's a long term or good term, good, good trend. And so that's what I can't quite play out of my head. And fairness, nobody knows. This is a complete reversal of what we've done.

1:13:48Ben, your thoughts? Yeah. I mean, I think that there's a lot of triumphalism a little bit early on this policy. Give it six months and see where we're at. I think one of the indicators that's sort of fascinating is the lack of inflation because because obviously a lot of people were expecting that inflation was going to pop as soon as the tariffs hit. It hasn't been a lot of time, but one of the problematic indicators is maybe inflation didn't pop because demand dropped. What you're actually watching is a temporary spike in the kinds of revenue that are coming in via the tariffs because it's almost a one -time expenditure and then the demand is going to drop.

1:14:23What you will see is the tariff revenue coming into the country go down, demand dropping, inflation coming down, and that's when you will see the Federal Reserve step in and lower or those interest rates in order to sort of artificially juice the economy. I do not, I understand, I think, kind of what they're trying to do sort of, and I think they're trying to do multiple things at once, some in conflict with one another, because you can champion the amount of revenue that we're raising off of tariffs, but you can't do that at the same time that you're championing, reshoring, because if you reshore, then that revenue's gonna go away presumably, right?

1:14:55You're not gonna be buying product from overseas, you're gonna be buying product domestically, and then no one is gonna be shipping anything here in the first place, those two things are eventually mutually exclusive. And then if you're doing all of that while attempting to also either box in China simultaneously but kind of not box in China, it seems very confounding. And the thing that I'm getting from most of the investors that I'm talking to is just confusion at this point. It's just a feeling as though we're kind of riding in choppy waters and there's no sort of stability or stasis. And so I'd like to see something, something, anything kind of sit for a few months so we know what the hell is going on.

1:15:28Trump's so sure this is going to work, Ben, in your mind. What's the most charitable interpretation of this? Or is this, he's living in a different paradigm, one might say, an older paradigm of manufacturing in the US? When it comes to President Trump and the economy, he's always been more of a zero -sum thinker than a sort of grow -the -py thinker. When he looks at tariffs, he says somebody's winning, somebody's losing. This is why his tariff rates are based on trade deficits as opposed to actual tariff rates, right? He was saying we're going to do reciprocal tariffs. And then we looked at that big board he was holding up and it had literally nothing to do with the tariff rates that Vietnam had on the United States.

1:16:06It had to do with the trade deficit that we had with Vietnam. It's why we just hit the Swiss with a 39 % tariff and all they produce as Orson Wallace chemistly says in the third man is Kukuklok. It's like, well, what exactly are we doing here? It has nothing to do with the actual tariff rates. I think to have some chocolate, I've never had that chocolate and Swiss watches and cuckoo clocks, right? I think Swiss is made here. If you have that cocoa, you're watched. Yeah. So Phil, you're in the target. You're the target. Exactly. No, but not just in nailing the Swiss here, but is it? But yeah, I think one of the things that he thinks is, okay, we're getting back what's fairly ours.

1:16:41We're forcing other countries and you can see how other countries have picked up on this, which is why you're getting Japan saying at least titularly, we're going to put a bunch money into the United States so he can get a headline and a win. But it's not a sort of systems approach to the economy. It's more of kind of an ad hoc approach to winning individual battles. And I think that that's maybe conducive to short -term headlines. I think there are basically three systemic changes that he's making. Two of them are good and one of them I have a problem with. One of them is ensuring low taxes, which of course I'm very much a fan of.

1:17:11The second is deregulation. Again, big fan. And I think both of those are pushing investors to feel some sense of solidity with regards who's approached the business. And then the third is the tariff war, which I think is actually creating a pretty significant dampening effect on economic growth right now. You know, we'll say things like the stock market is at record highs. I mean, effectively the S &P 500 right now, or the Dow Jones industrial average anyway, is currently riding almost precisely what it was when he took office. I mean, we're essentially flat since January. And so one way to look at that is look at all of the insanity or, you know, heterodoxy to put it kindly, that's been inflicted on the economy and we're still sort of flat.

1:17:47The other way to look at that is what if he hadn't done that where would we be if we weren't in the middle of a gigantic trade war and he had to Regulated and he had done differential tax Obviously ripping even more more jobs. I mean more Testing you saw Stephen Moore do this right Stephen Moore got up in that in that presser yesterday And he held up a chart showing how President Trump's economy did in the first term versus Biden during his term and he was saying that You know the the median wages were exploding under you and they didn't doing anything under Biden I mean, I think there's a reason why it was not a chart for what's going on in this term so much.

1:18:19That's the big difference between term 1 and term 2. We did lower tax ins deregulation. We did not do a gigantic historic trade war. Additionally, India was hit with a combined 50 % tariff that's going to take effect later this month if it does. A lot of this is fluid. As Ben says on his podcast a lot, Trump says a lot of things. That's kind of Ben's rule number one. mine is always wait 72 hours and see if it's still something he cares about. 25 % of that 50 % tariff is for what Trump called unfair trade practices. I'm trying to figure out what those unfair trade practices are. It's not exactly specifically noted.

1:18:56And then 25%, this is super notable. And as you know, Trump and I, both the three of us, all are in sync, that, hey, maybe Russia shouldn't invade democracies. And so that is a punishment for India buying Russian oil, which is interesting that he's now, you know, basically taking the Biden playbook, which is, hey, we're gonna provide arms to, on a loan lease, they're gonna have to buy them to Ukraine. And we're gonna start penalizing people for buying oil from Russia. I'm curious Phil or Gavin, and what you think of the the the tariffs overall. Confounding to you. You're in favor of them. You're you're willing to see what happens a year from now.

1:19:39And what happens Phil? If it doesn't work, what would this do to Trump's second term legacy? If we're seeing here a year from now and it doesn't work or if we're sitting here conversely a year from now and hey, he's printing money and we're getting all this incredible investment and maybe some of this money goes to pay down the deficit or we're neutral, which is kind of their overall plan. and they think these tariffs can help us become neutral in our deficit accumulation. I'm clearly not a tariffs expert, but I would say he does. I think one thing about these tariffs, this goes to David's point on government and socialism.

1:20:14Seeing a president take action in a way that's never been done before, whether it's doge or tariffs or tweeting. I think does even for a diehard Democrat like me, It's refreshing and David, maybe it goes to show that the inevitable creak of government doesn't have to happen. And so even from a Republican, I find that part refreshing. It's refreshing to think the same. The flip side of it is, he does seem to sometimes it seems like there's spaghetti being thrown against the wall or positions or reverse very quickly. And we don't know what the long term affects. You say, Jason, of course we don't know, but there are a lot of people, some of your co -hosts who don't aren't willing to concede, we don't know.

1:21:03And if he's wrong, and if the economy is in terrible shape in the latter part of his term, the whole world is going to be upside down. Gavin, I almost think of it as like, you know, an out of consensus of you on where this stock would end. I mean, if we have low stock market, high unemployment, high inflation, then things don't look as good for J .D. or Mario Rubio and will be in a different world. I hope David not in the world of socialism, but that's what's at stake here. I think GCNP, if it doesn't work out, then... Andy Caput, chances it works out, chances it doesn't. Give me a percentage, Phil.

1:21:45And then Gavin, you're giving the percentage. I mean, I guess I'm going to say 50 -50, which sounds wimpy, but it's pretty damn scary that is 50, 50 on such big things. I just don't know what the unintended consequences are. It just has started to see it. Well, Gavin, your thoughts. I mean, we are in uncharted surgery. We haven't had a tariff war like this. And I don't know, 50, 100 years. When was the last one? Well, I'm sure Ben knows, but these are actually higher average tariff rate than smooth hauling out. So more than 100 years. Yeah. 100 years. So to say we're in uncharted territory, there's nobody on the planet who was an adult when that happened.

1:22:20So we are literally, we have nobody with firsthand experience. Your Gavin chances this blows up, chances it is brilliant. And I think on a percentage basis, you're being forced. You're in all end, you got to, you got a state of specific. I'm not letting you off the hook. Predicting the economy is a really hard thing to do. I would just say he showed his hand in April. You know, he looked into the best. And if it is clearly not working, he showed that he will change it. And then I think he also kind of learned, you know, just that other countries, you know, specifically China, they do have leverage, especially with these rare earths.

1:22:56I just worry that, you know, business, capitalism, economic growth, it does best with stable policy. And I think he really enjoys headlines. and you know, something is definitely not headlined unless it's a change. And so I do think for this to be a success, you know, his presidency to be a success, at some point we do need stability. And this goes to, you know, you know, what Phil is saying, it goes to my point about it's better to have an imperial president than an imperial judiciary. If his policies work, great, they'll be continued if they don't work. Well, we'll try something else. So what do you think?

1:23:4050 .50. I mean, the 50 .50 campus is going to work, not work. Coin toss for you. I think he's. I am inclined to think that he is much more sensitive to the market. Then he left on back. I mean, he don't want to do the taco then, because I think that's used to provoke him. For sure. And that's not smart to do with him. For sure. I think just to say he is thoughtful. I'm going to say he's flexible. He's flexible. He's flexible. He's flexible about the market reaction. He's responsive. If it's not working, he'll change. And just the question is, if it's not working, does he change quickly enough?

1:24:20Got it. So you're speeding down this highway. Can you not go off the cliff? Is there enough room to break? Freeberg your thoughts on this. I'm going to wrap there and then we'll go on to our next stop. I'll give you a fine word of freeberg. I've spoken a lot on Tara. I'm good. You're good. What is your general sense of the state of it now? It feels like we're in the end game and then there was one thing actually I'll bring up free bargit reaction to. He did say when he was giving his keynote two weeks ago, you know, I don't know if you guys saw it. The one where he's he thanked me. I don't know if you saw the one where he thanked me in this.

1:24:52Thank you. Thank you. Even and even Jason Calcana's a good guy. A good guy. I meant a lot to my parents, so I'll give him credit there. He knows how to work the room. Can I say one last thing on tariffs? I think it's actually good as a country that we're trying them, whether they work or not, it will just be nice to know. A nice experiment. Tariffs were traditionally a democratic policy position. Clinton ran on the Obama ran on them to a slightly lesser degree. They're generally talked out of them by kind of their treasury secretary who generally came from Wall Street. But you know, they've been an animating feature political discourse for 30 or 40 years.

1:25:31Now we're trying them. We're going to see if they work. We're going to see if they don't work. I would say thus far, probably they have been less damaging than a lot of people expected. You know, the core of kind of why you don't want to do tariffs is, you know, the retaliation was expected. We have not seen retaliation. Which I think in some ways, you know, validates some of their points of views just that we do You have a lot of leverage in where you're using it. And other countries are charging America much higher tariffs than we're charging them. You know, maybe that made sense 50 years ago.

1:26:00Maybe we're hitting reciprocity, which we could all agree on, but he's not abusing them, which shows that the American consumer in the American market is worth, you know, maybe getting to reciprocity. So, if anything about reciprocity, it sounds good to everyone, but the whole principle of comparative advantage is maybe you don't want reciprocal tariffs. But nonetheless, we're trying them. We're going to see the early returns have been, I think, less damaging than people would have expected because maybe he backed off some of the more extreme things because he is flexible. So we'll see, come back in a year, come back in 18 months, and one or another, we'll have run this experiment.

1:26:34Friedberg, did you notice in that speech he gave, he said, I don't need to know the 180th country. Maybe we just, you know, it's the top companies we need to worry about. I kind of felt like, I don't know if you caught that in his talk day where he said, I don't even know the name of the country, maybe I don't even know the name of it. Okay, so maybe we don't need to worry about the tariff. That to me seemed like he was signaling an endgame. Like maybe he's, I don't know, I don't want to say bored, but he's, you know, he's milked this one as far as he needs to. What do you think? Did you notice that?

1:27:07Quote he did. Like I've said in the past, he's proven, which is his game theory, optimal way of negotiating to be unpredictable. So I'm not going to sit here and predict. Okay. Okay, I think there's a lot of gamesmanship going on that we're not privy to. And again, let's see what happens. I do like running the experiment. I like running experiments in general. I would love to reduce taxation, direct taxation on the American people. But I would also like to reduce the size of government. The thing I most worry about with respect to tariffs is if it does create a new revenue source for the federal government, it gives the federal government another crutch to keep spending.

1:27:47So, I'm pretty well -fun. Here we come. A little slush fun there. All right, speaking of trade, Nvidia GPUs are getting smuggled into China and alarming pace according to reports on Tuesday the DOJ arrested two Chinese nationals in California, accusing them of illegally sending tens of millions of dollars worth of GPUs to China, which actually isn't that many. The press release didn't name, and H100s from Nvidia, but they mentioned they were shipping the most powerful GPU chip on the market. So fill in the blank. The two were charged with violating the Export Control Reform Act of felony with the max penalty of 20 years in jail.

1:28:24One was a legal permanent resident. The other was an illegal immigrant who overstayed their visa. Here's how the scheme works. They operated a US -based company called ALX Solutions. They would buy GPUs in the US. ship them to Singapore. I think Trimoth pointed this out back in the day. On this podcast got a little push back on it in Malaysia. They were shipped to Malaysia as well. Where they would be rerouted. Quite easily to China, according to the DOJ, the rerouting through countries is common when smuggling chips to China, despite setting the chips to Singapore, ALX was getting paid from Hong Kong and Chinese -based companies.

1:28:57These guys aren't the sharpest knives in the draw. financial times reported at least $1 billion worth of Nvidia chips have been smuggled into China in the past three months after President Trump tightened the US export controls. FT says there's a rampant black market for these GPUs in China and they go for a 50 % premium. Gavin, you're in the chip business. You're taking a couple of these. One, I think it's going to be hard to stop it. We can't keep illegal drugs out of America and we're trying really, really hard to keep them out. China is doing everything they can to bring these chips in. So it's, when something is so valuable and so important, it's hard to stop it completely.

1:29:39But secondarily, I would just say a billion dollars worth of GPUs. It's not enough to really move the needle, even if they are black wells, the latest and greatest. It's better than having none if you're China. But I mean, it's just, it's not like a $10, $20 billion black well cluster, or like our big stood up all over America by hyper scalers. So I think it's gonna be hard to stop. I think it's happening at a scale that is, you're not comparable to Colossus. Yeah, it's not comparable to Colossus. So it's just, it's not gonna be decisive in this AI race that's certainly China believes we're in.

1:30:24And then, like I said the last time I was on, I do think it was very smart to resume, you know, the H20s and whatever they're going to call the kind of despect black well, letting them be sold into China. And hopefully that, you know, you know, the theory is if you legalize drugs, it, you know, reduces, you know, the kind of drugs of what we're doing here. We're not sending them our best. There's exactly that. But that's not sending them the high -potency stuff. It's actually a hilarious analogy. It is literally like the H20 or the B50 or what it was we called. It's like legalized on marijuana.

1:30:57Yeah, exactly. We're just finding another brand, Gummy. Yeah. So I just think it is what it is. I think you'll see those articles and it's going to be hard to stop. But I don't think it's all that despositive. Yeah. And not a career. Anybody else have thoughts on it? It seems like a minor story. All right. Well, and on this, Apple has bought back. Let this sink in. $700 billion dollars worth of shares over the past decade. And the most innovative product in my mind that they've released in that time are AirPods. Maybe there are M4 chips. This user on Twitter, Charlie Bill. Hello, Bill. Oh, you know him.

1:31:39He tweeted this crazy chart here. We'll pull it up. Here it is. Apple buybacks start. Apple shares outstanding. You get the picture. they've bought back almost a trillion dollars. Let that sink in a trillion dollars. It's at $700 billion now and it's not stopping. That's larger than the market cap of all but 12 companies in the S &P 500. I famously, or notably said maybe 10 years ago, Apple should buy Tesla for $50 ,75 billion. Back when Tesla was, you know, in kind of dire straits, and that was three times more than the next closest company Google bought back $190 billion. For that money, they could have bought Disney for 150 billion Netflix 150 billion Towso for 100 billion in 2020 Uber for 100 billion in 2021 Robinhood for 110 billion in 2022 and BMW Steve Jobs is favorite Carc company for 70 billion in 2020 the rent's a lot of 120 billion left over What would have been the better move there to do all these buybacks Gavin as a public market investor or to Invest in R &D and actually release a car they had project Titan Gavin then what do you think of this Apple strategy?

1:32:50Well, I mean, as an investor, buybacks are great. And I think there's often a false dichotomy made between buybacks and R &D. I mean, Apple certainly could have afforded to do both. And maybe it would have been better. What was the status? It was a trillion dollars. Maybe they should have bought 700 billion dollars instead of a trillion. Well, 700 billion is trending towards the end. Okay, okay. So maybe they should have spent 200 billion less and spit that out data centers and been like a real competitor in AI. And I just continue to be baffled by apples. And I think they're very comfortable being linked to markets.

1:33:30The iPhone was not the first smartphone. The iPad was not the first tablet. Yeah. There was the palm pilot, that there are all those devices from the bubble. But I'm just shocked at their inaction in aptitude and AI how bad the products are from user perspective. I mean, they're terrible. They're getting worse, serious worse. Serious worse. And it's just, how is that possible? Yeah, I mean, it almost, I guess at the limit, and, you know, malice is incompetence is indistinguishable from malice, but I mean, it almost feels like they're trying to lose. Literally, if you said here's a playbook on how to lose, they would have written it.

1:34:19Yeah, they're the... People were to thought it was a joke, right? Yeah. So it's astonishing to me, they're a lack of execution on, um... What's what happens? I mean, if you put a... If you put Tim Cook in charge and he's a supply chain guy, he's going to do the optimal thing for that. Ben, your thoughts on it? Yeah, I mean, I'm with you guys. I'm waiting to see, you know, when are they going to make something cool again? I mean, I'm just an ignoramus on this stuff. And it's like the last time I saw something they came out from Apple that was exciting, it's been many years since they brought out anything that excites me as a consumer.

1:34:49Yeah. And so I'm looking at that. And then the only headlines I see are Tim Cook trying to cut a deal with the president to again, sort of shore up his own supply chain. So if he's a supply chain guy, then I guess that that's his mandate is to shore up the supply chain with the president of the United States. These are the iPhone, but if that's the best you're going to do, then I don't know. Things don't look great over there from the outside. Phil. Many thoughts on Apple and their ineptitude time for Tim Cook to start thinking about hanging it up maybe and put a product person in charge? Not by Eriha Jason.

1:35:23Not by Eriha, I'm going to pass that out. I would say, I do think it's fair to us. It would shock me if they do not have the best augmented reality glasses on the market in three or four years, it's so placed to their strengths. And maybe they feel like that is what they're focused on. And eventually, you know, they'll cut a first. One of the last time you heard them to bring it up though, Friedberg, one's the last time Apple Vision was even brought up in a keynote. Are you sorry? Demo, they, they seem to, those are VR, not, not AR. Like I think they are. Well, but their eventuality is to be AR, right?

1:35:54You can turn them on to see through them, I guess. But yeah, I mean, that, and that's actually an interesting point, Gavin, and as you and I are sitting here like, is it AR or VR? Because you, you know, they're just not talking about it. Where's the version two for developers? Good. Rumors of apples, demise, or 30 years old. Okay, this is every year, the same story, lack of innovation, copycatting. Where is it, the iPad, the same amount of people. Wait, somebody said that under Steve Jobs? That there was a lack of innovation. Steve Jobs was running the show. Even during the no jobs era, when the iPad came out, I don't know if you remember how controversial it was, because they were making fun of jobs, he's lost his luster, what is going on with this guy, total flop, they made fun of the iPad, they called it like the MaxiPad or something.

1:36:39You know, remember all that stuff? It was like this thing, like who the hell's gonna use this thing? It's a total disaster. All of a sudden, they stole 10 million units, then 100 million units and everyone's like, holy shit, I would not count Apple out. There's a system there that's built unlike any other in corporate history. Let's see what happens. Yeah, I think that's right. They have every right an ability to win. they just, they need to start trying. I mean, the fact that you're not even in the running and they're losing talent, they're losing talent. I tried the Apple Vision in February 2024 and that's literally the last time that I've tried it.

1:37:15Like there was that hot moment where I was like, let's try this thing out and it's like, this is pretty cool and then you're like, yeah, but I'm also wearing a medieval helmet. I'm like, it's gotta be, and we all agree it's gotta be sunglasses. I got the, I bought the Ray Bands from Metta And I used them on my recent trip to New York. And it was quite compelling to wear them in live stream or to wear them and take pictures of the kids. And video, we took the fairies. It's a really nice fairy system in New York now that they've kind of brought back. And we took the ferry around the island and did a couple of things.

1:37:43And it was just really nice to not have people pose when you're doing a video. If you have kids, I think it's the must have product. This is so elegant to just, and then if you look at something, it will tell you what it is. So the AI plus these glasses is going to be phenomenal for when you're looking at a monument and you say, hey, tell me about Ellis Island, tell me about Governing Island and just starts reading you facts. I think it could be magical, but. Thanks, Jason. Just one thing. One thing is like, if you take your ranch, you may have like a backup generator, solar, power wall, EV. Great.

1:38:18Everything. Eventually, someone's going to want to control all that making it easy for you to control, aggregate it. There's going to be a whole infrastructure in the US on this. And that's something you could see Apple coming to. Apple Home. Yeah. That's actually a brilliant one. I don't know if you saw this. You must have filled. There are smart panels, circuit breakers. Have you seen these? Where you put it in and you take out an app and each of your breakers is in the app and you can see breaker breaker, or your energy consumption, you could turn them on and off. I mean, it felt to me like something that should be in the Apple wheelhouse as well as so on us, but they just don't like to buy stuff.

1:38:59Right. Well, one thing is, there's a gap, like when you take the number of cars that are gonna be in the country, the electric EVs, and then you multiply them to, you say there's gonna be, let's say, I think the estimate is in 2030, 30 million electric vehicles, let's say. Yeah. And they're 80 to 100 KWH in them, freeberg. that is something like 2400 to 3300 gigawatts of storage that's moving. And if you add autonomy to that, that is a lot of flexible distributed power. And so whoever controls and thinks about that is going to make a ton of money. So you're saying you could take a fleet of a thousand and cyber trucks and send them to a natural disaster, plug them in and power a city or power some homes, which is how that is constructed currently.

1:39:51You can use your actual cyber truck to feed into your home and keep it awake for a couple of hours. Right, maybe in the short term, just think about the parking lot of menna. Like, you know, having all those cars there when you charge, discharge. The control of that, the management of it, the operating system, if you will, of that will be very valuable. All right, we're gonna end on this summer reading. Everybody likes to read a book in the summer. from assuming, and one of us likes to write a book this summer, anybody got a book they read and over the summer, or a series they consumed for our dear audience.

1:40:24Ben, you got a show or a book that you're obsessed with? We can do a show. I'm trying to remember what's wrong. Or Broadway musical for Ben, I know you love your musicals. I do, although no good ones have come out recently, which is unfortunate, but shows have you guys seen this department queue show on Netflix. No. It's not enjoying it. It's a fun one. It's called department queue. Yeah, it's a seven. No, it's like a sort of court case. Yeah, cold case is exactly. It's well written and it's a fun show. I'm enjoying that one. I like that one. Any books, Gavin, on your shelf that you decided to break open at the beach while you're working or you're just too busy?

1:41:08No, I am enjoying. I like post -apocalyptic fantasy. Empire of the East by Fred Saber -Hagen, but a new, a relatively new series is called Moonfall by James Rawlings, and I'm enjoying it. I will just say it's a slow start, like a lot of great fantasy and science fiction where you have to do a lot of world building, but I've enjoyed it. You ever think about writing your own sci -fi fantasy? You ever dabble? I do, but I haven't yet to dabble. Freeberg, anything on your plate, other than running O 'Holo and doing these incredible all -in events. He looked exhausted, my brother and babies. You got a lot on your plate.

1:41:45I wonder if you had the time to read a book or watch a series. I've been reading because I never read it. The Andy Wear Project Hail Mary Book. You read it, Gavin. It's awesome. It's so good. I am disappointed. I like Andy Wear. I interview Andy Wear. Halfway through, I got disappointed with one of the core assumptions we'll discuss another day. But I give you permission to just go with it. It's it's well, I think that's the whole idea that this alien race all died in the spaceship from radiation sickness when there's so advanced they have Spaceships, but they don't understand that there's radiation in space But they took it right out of the story, huh?

1:42:21Just the whole the whole story line up for me and I'm like what that doesn't make like and then it traces back to all these other things that they do understand Which in inherent in all of them would have been an understanding of photons and electromagnetic energy So that kind of blew me up a little bit, Gavin. I don't know if you're great, but... I was happy to suspend disbelief. Yeah. Does that even like Andy Weir? Yeah, I like Andy Weir. Is it cool, Kat? Literally, when he was doing the Martian, I asked him to be on the sweet and start -ups like years ago, and he's like, yeah, if you come down to my condo in like San Diego, not San Diego, in San Jose or somewhere in the South Bay.

1:42:58And literally, it's got this like a little modest thing. And then he's like, I just sold it. And you know, it's gonna be like a major actor is gonna be in the Martian, but he was broke. But everybody in our industry was talking about it. It was really, really charming. And he's like, I think I'm gonna move to LA. I was like, oh, you totally should move to LA. They'll be buying everything you do. They love sci -fi or shits brilliant. And sure enough, here we are, Phil Deutsch, your thoughts. And he, and by the way, Phil Deutsch, when I go on a plane where I would fail, he's got six newspapers with them.

1:43:28You got to read the paper every day, every day. I mean, four papers. He gets through five minimum a day. He's like, Charlie Rose. Gavin could use the assumption. Gavin says, I'm in Truro, which is the middle of nowhere. And there are so few papers out here. I have to get up at five to go to the time of the farms to get the F .T. the journal of the times before anyone else does. So I love reading these papers. I'm a newspaper boy. Read papers. I laid to, but just finished the BUSK book, which was phenomenal. I thought, I'm not good. I have someone. Yeah, I know him laid, but it was great. I'm reading a book on the Making of the King James Bible, which is a tough slog, but well worth it to sound pretentious and smart.

1:44:14I watch Superman, which I highly recommend Ben Shapiro's review of, because he's got Get on. What did you say, Ben? Well, give us a teaser of what people look at up later. You didn't like it. Why didn't you like it? Too woke or you didn't like the... No, no. No, no. Or you crane kind of references. I just think any of that stuff was there, honestly. I just thought it was Superman. Like, the whole thing is just, it's James Gunn being very, very James Gunn. And as somebody who likes sort of the legend of Superman, you know, the sort of grandeur of Superman is part of the American iconic landscape.

1:44:47kind of reduction of Superman's, it's slapstick comedy surrounded by a bunch of other characters so I don't care about. And then just kind of, there's a part where it just turns into James gun doing Guardians of the Galaxy, but with iconic characters. It was a little derivative, I will say. My kids loved it though, which I was happy about. Continue, Phil. Ben, this is a tough one because it was a fun date night, but F1 I thought was a little be plushish. It could be better. And then my winners, I thought the penguin was fantastic. Oh, serious. And dope, and dope thief is very good too. I would just add second season in 1923.

1:45:25I think also very good. I will give you an interesting. Oh, interesting. I used to be in the magazine business. I haven't subscribed to a magazine in well over a decade. And I just subscribed to monocle .com, which is a bunch of designers. And it's like literally they have a print newspaper they put out once over the summer. And then they actually have a bound magazine. But it's an incredibly curated look at the world of design, hotels, restaurants, art, fashion. And it's kind of uncompromising. They're just like, hey, we just like things that are incredibly well thought out. And I have started taking some of the replicate recommendations and they don't miss monical .com And you guys know I love biographies and I went biography crazy this summer.

1:46:17All about me by Mel Brooks. Amazing. And he reads it. So a great audiobook. I'm almost finished with Who knew by Barry Diller who had 24 years old. Yeah, that's great. It's incredible. Did you read it yet or? I don't know. I just, you know, it's a little skim, plus I heard him talk about it. Yeah, you know, I've met him one time. His career is unlike anybody else's. It's like 24 or 25. He's running power mount pictures. And then the bench he has there is like he hires Eisner, Katzenberg as his assistant. It's the most amazing story of young people running a muck, running these media businesses.

1:46:54We have to do a Barry Diller interview for all in. Um, and then, uh, that would be incredible. Comedy. Did he do Godfather to Jason? Wasn't he? He did Godfather to yes. And he basically took over for Bob Evans. And if you ever see the documentary, the kid stays in the picture or that book. That's great. Is in both of them are incredible. Comedy Samurai by Larry Charles, I just finished a couple of weeks ago. And that's the was the guy who did Barat, uh, Borat. And, um, what was the gay character that Sasha Baron Cohen did? Bruno. Thank you, Bruno. And he also collaborated with Larry David. And then finally my fourth pick for bios of the summer.

1:47:35I regret almost everything by Keith McNally, who is the restaurant tour. He had a stroke. He has an Instagram where he's like pretty spicy and he did balthazar pastis, odion, on all these incredibly iconic places that in my youth, I hung out in and to hear him, it's a most self -deprecating, you know, sort of British tradition biography ever. So I love biography, so many lessons in there. If you're young entrepreneur, I highly recommend all those, would love to have all those people in the pod. It's been an amazing summer episode. I really appreciate y 'all taking the time out of your schedule, Bada.

1:48:13You gotta come to all in some an instant, but you're our guest. We gotta have you there, come out. I love to see if we can make it. That'd be awesome. Seven, eight or ninth, bring the wife. I don't know how old the kids are, but we'll get you backstage. We'll give you the VIP pass, the whole treatment. Okay. I don't think you want my 11, 9, 5 into your old there, but yes. No, they can't come. No, we can't actually. I take it back. We have a surprise for one of the parties that they would love to come to, but I'm going to leave it at that because Dave has been given a Dave loves doing the parties and he He has a blowout spectacular party that will be unrivaled.

1:48:46The scholarships are open. If you're young and a fan of all in or young in your career, I should say, and you can't afford the normal ticket, we let a select group of up -and -comers buy a discount to ticket so we keep the vibes really fresh and we like to have as many people as possible. So go to the website and you can apply. Don't apply if you can afford the ticket because we would like to give it to people who really can't and those scholarships are there. You'll hear in a week typically, because we get so many scholarship requests, it takes us a little while to get through them, shout out to the team, Kimber and John Hal and the whole team over there.

1:49:20Nick, we're putting so much into the amazing, amazing, all -in summit. And yeah, thanks to my friend, to be presenting me my new ass. Dave has freaked out my knee. Just make that shot, Nick. It's not even funny anymore. Just leave it out there. Next time on the number one podcast in the world after Ben Shapiro's, Love you besties. Thanks everybody.

1:49:56Bye guys We're at all kids. Oh man, my ham is a bit extra when we eat the apple. We should all just get a room and just have one big hug or two because they're all kids. It's like this like sexual tension but we just need to release that. What you're the beef? What you're the beef? Beef is what? What you're the beef? We need to get mercy on that. I'm going to leave.

1:50:37I'm going to leave.