Jason Calacanis: All right, everybody. Welcome back to the greatest podcast in the universe, episode 270 of the All-In Podcast, your podcasters's favorite podcast. With me again, your Sultan of Science, David Freeberg, the Dick Tater, Shamont Poly Hopetia, and yeah, the Rainman is back. Yeah, it's definitely David David Sachs. He's definitely in DC with a with Pus. Yeah, POTUS lets him drive in the driveway. Uh, Sax, what's going on? You you pushed back. You uh bigshotted the entire crew and pushed the show back an hour.

Chamath Palihapitiya: Simple text. He's like with POTUS started.

David Sacks: Okay. Okay, Daddy. Look at him. All right. All right. Big shot. What's going on? No, look, I was in DC today and I was at the White House and I just asked if the president had time and he made time and we we did have a little meeting and so we did push back the pod for that. One thing I just want to say is just what a pleasure he is to deal with. You know, when I read in the media, they're always describing him in a certain way that, you know, he's yelling at people or he's moody or or something like that. And that's never ever been my experience with him. He's always pleasant to be with. He's always genial.

Jason Calacanis: He ask questions. He's interested in the subject matter.

David Sacks: It's just a completely different portrayal. I don't get where the media is coming from at all on this.

Jason Calacanis: He's charming AF. Let's just call it what it is. He's charming.

David Sacks: I mean, maybe if you double crossed him, maybe. I don't know. But I've just never seen any evidence of of how they describe him at all. And I think on our issues of AI, I think we're really lucky that he's the president who's in the White House when this AI revolution is happening.

Jason Calacanis: I mean, do an old history, Sax, what would happen if Kamla Ding-Dong was in right now and we'd have like no data centers?

David Sacks: We'd have no data centers and they'd be using AI to censor us and they'd be promoting DEI values through AI. That was in the Biden executive order. President Trump just wants the country to win and be successful and he doesn't have these like doomer neurosis about it. That's not to say we don't support any regulation at all, but we should have specific solutions for specific problems as opposed to being cowering in fear over this and just trying to halt all progress. And I think a really good example of that was his idea around data centers where he said over a year ago before data centers even became a hot political topic that we should let our AI companies stand up their own power generation behind the meter. And that's a much better approach than the Bernie Sanders approach of just shutting everything down. So I don't know I think we're like very fortunate that he's the president during this critical time and development of this technology. And like I said he's always been interested in it. He talks to a lot of business leaders. I'm always actually very impressed with what he already knows. He listens to like all the top guys in the industry and he synthesizes what he hears. I think he's very good at that.

Jason Calacanis: He was talking about the anthropic guys and he was like these are brilliant guys and he was like giving the flowers to them and how genius they were and that they were working on a deal. Any insights there about the relationship between the White House and Anthropic.

David Sacks: I thought what he said was very balanced and accurate. Like you said he said that they were very smart guys. They do have a great product. I've certainly acknowledged that. He also said that they were very leftwing, but that was something we could work through. Didn't have to be a deal killer. He said they tried to tell the Pentagon what to do, which the Pentagon didn't like. But in any event, I mean, look, he wants American companies to be successful. And he he I think genuinely really does like high IQ people. I mean, he says it all the time and people think he's joking, but I actually think it's like one of his core convictions is he just really likes smart people. He likes being around smart people. Loyal people, smart people, people who are good on camera seem to be the three circles. And hey, Sachs, you fall into two of the three. Uh, all right. Let the audience figure that out.

Jason Calacanis: Uh, topic one, SpaceX has signed a huge deal with Cursor. You know, Cursor, that's the AI coding startup. Really, the the they defined the category. XAI and Cursor are building and collaborating on a new AI coding model that would quote be the world's best coding and knowledge work AI. Here's the deal. As it's been explained, SpaceX will either buy Cursor by the end of 2026 for 60 billion, that's 10 billion more than they were rumored to be raising at, or they will pay Cursor 10 billion for their collaboration together. Bloomberg says you can think of that $10 billion essentially as a breakup fee. So I think it's fate a calm plea that this deal is going to get done. Curser's run rate 2 billion at the end of February. This is a money printing machine. They expect to end 2026 with a $6 billion run rate. They're going to triple it. SpaceX projected revenue between 22 and 24 billion in 2026. So this is quite accretive to the revenue story at SpaceX at the IPO of SpaceX which is now targeting a valuation of 2 trillion which would be trading at roughly 80 times topline revenue which is a you know people would say it's a high valuation but also measure it with the opportunity cursor's valuation would be 30x so this is a good deal I think for everybody at the end of the day cursor started I think built off of of uh anthropics LLM you could use any LLM previously on it, but in March, Curser released the second version of their proprietary model, Composer 2. And uh here it is. It's it's ranked pretty high right now. It's between uh GPT4 5.4 and Opus 4.6 as you can see on the screen. The key part of the story here is that Elon has 550,000 GPUs in Colossus. He's scaling up to 1 million and then of course he's going to bring it to space. So if you believe that infrastructure matters and it's pretty clear it does this is incredible for cursor who has been compute constrained. So this is peanut butter and chocolate. If you put these two together I predict that this is going to move space xxx AI and cursor to the front of the coding leaderboard within 12 months. That's my prediction. Chimoth shareholder in SpaceX via the acquisition of the Starlink company that you were a backer of. What are your thoughts?

Chamath Palihapitiya: The acquisition was essentially negotiated and the way that it's structured is so that the S1 doesn't go stale. So I think the way that it was announced has more to do with the fact that they don't want to slow down and have to rewrite parts of the S1, have to redo the disclosures, um have to redo the risks. And so I think what you're going to see is that this will get done. In fact, the deal is effectively done. But what's so smart is that where is SpaceX today? Let's call it a trillion. Where could it be, just for the purpose of this argument, let's say two trillion? So when the deal gets done on a stock- forstock basis, it's going to be if again if it's 60 billion in tomorrow dollars, effectively Elon's gotten a 50% discount. And what has he bought? He can issue $60 billion of stock at a $2 trillion valuation and get a model and a service that I think is extremely compelling in coding, which is where we know all of the immediate and short-term revenue gains are. It's also patterns that are hard fought and are really valuable in reinforcement learning. He gets all of that and then he gets a very cracked team, which you know, we've known for a while that the cursor team is absolutely excellent. If you look at the Grock usage, it shows why he had this excess capacity. There was a moment where Grock had a very steep and very aggressive discount on their output tokens and in that moment there was just a lot of experimentation and usage and over time that sort of went away. So there was a lot of capacity and a relatively low utilization I think inside of Colossus that he was able to turn around Jujitsu moved the whole thing and basically acquire the most interesting and valuable third party rapper service in AI right now. So uh and the fact is that they got it effectively I think at this price for 30 billion. So I think it was a really good deal really smart deal.

David Sacks: Well, you're right. I do remember a press conference where Biden said, "We got to look at this guy." And so on the heels of that, the DOJ brought a a lawsuit attacking the company for not hiring enough. Remember that? Anyway, that's all ancient history. So let's let's put that behind us. Look, I I agree with your guys' analysis on this. I think these two companies are are very complimentary. Cursor obviously is very strong in coding. That's what it brings to XAI. XAI brings compute and they bring a foundation model. And the problem that cursor had is that even though coding is kind of like the white hot area of AI right now, when it got started, it was really competing against generalists in the form of open AI and anthropic. But now those generalists have decided to vertically integrate in this area of coding, right? And so cursor is now competing against cloud code and open AAI's codeex. And so they were dependent on foundation model companies that were getting in the business of competing with them which was just not a good place to be. Right? So now they have this new alliance with a different foundation model company which also brings the compute just makes a lot of sense. And then they bring cursor brings to XAI the training data a lot of enterprise clients and the experience in coding and I think this will accelerate XAI in this area.

Jason Calacanis: Sax you think they're going to dump Kimmy K2.6 six cuz I think Herser composer 2 uses the moonshot model. There's no reasonable way that Elon's going to pay $60 billion and not run on top of Grock. I got to think

David Friedberg: I think it might be tough depending on the the users. One of the things that makes Cursor so good.

Jason Calacanis: Wait, wait, say more on that. What do you mean?

David Friedberg: So, I think that the different developers want to have choice in that sense. There's a toggle. So one of the things that's really good about cursor is they've got this very well-built out IDE this application layer that puts them probably from a UX perspective meaning developers are using the tool above codecs above clawed above anything else you can use a third party IDE and integrate the models or integrate whatever other third party service you're using but I would imagine that the developers are going to want to continue to have at least some choice on what's actually writing the code for them. The thing that people are waking up to in the last 120 days is just how much of the value of AI is being realized by writing software. And we've kind of got this rapper term, we call it agents. But agents are fundamentally just quickly spun up applications. But for all of them, as we're realizing very quickly, you end up making too many agents. They end up being super inefficient. They need to be engineered. And you still need to have a strong software engineering. capability and competency to fix all the agents to build all the harnesses to make everything work well together and that's why having a strong developer environment a strong IDE actually solves that biggest problem. So eventually all the enterprises that are getting hot and heavy on agents are going to be like, "Whoa, wait a second. We've actually got to fix how this is all being done." As we saw this week in that story with Amazon where there's like a million agents being spun up inside and everything's wasting resources, redundant data creation, redundant data stores, redundant API calls, etc. Tons of money being wasted. So you have to centralize still. You have to have good software engineering talent that's making good infrastructure and good use of these agents. And that ultimately will require an integration of the AI tooling with a standard software engineering front end which is the IDE that cursor has. So I think that that's probably where everyone's waking up to the fact that having the uh the software engineers may end up winning you the arms race here and seems pretty smart for Elon to buy cursor.

Jason Calacanis: Okay. Topic two. Is there a SAS debt bomb in private equity? Toma Bravo, we had Orlando Bravo at the fourth all-in summit uh last year, is nearing a deal to hand its portfolio company Medallia over to its creditors. This is a SAS for customer experience company. TB acquired them in 2021 for 6.4 billion all cash at the top of the market. As part of the deal, they incurred 3 billion in debt. And for background, in 2021, this company had 470 million in revenue, growing 20% a year. Earlier this month, Bloomberg reported that TB's debt servicing costs for Medallia were about to triple from 100 million a year to 300 million a a year. Blackstone and other firms refused to extend a lifeline to the company, to the SAS company. So, it looks like Toma Bravo just handed the keys back and wiped out 5.1 billion in equity. Shimath, your thoughts. We've been talking about the SAS headwinds for a bit. You've been quite vocal about it.

Chamath Palihapitiya: Well, first of all, I think Toma Bravo is an unbelievably well-run organization. Their returns are bonkers and Orlando is uh really, really, really good investor. So, what do I think happened? I suspect that they probably got enough of their equity, if not all of their equity. There's probably a decent chance that they did at least one or two dividend recaps in the last five years. And if I had to guess, I suspect that they are positive return. It may not be the return that they would want. And so turning the keys over becomes easier because you have to remember in private equity, the entire playbook is for transformations of assets that are at some point not working, right? It's very rarely that they're buying the same kinds of businesses that the four of us would buy, which is just sort of of this, you know, clean white sheet denovo grow at all costs kind of business. So they have operating partners and all of these other people waiting in the wings to unfuck [ __ ] situations. That's the whole playbook. M

David Friedberg: so to turn it over I suspect means that there is a core rot that people couldn't fix combined with the fact that they have probably gotten enough downside protection that it's not a huge thing for them. Now this is an issue for the bond holders and then that'll maybe flow through to the borrowing cost that Tom Bravo has to pay maybe for a subsequent deal. I don't know but I doubt that they would just walk away from a business. So I suspect they probably got most of their money out. I don't know if that's true. There was someone that published some internal data showing that the sales team was like 18% a target at Medallia. Do you guys know what this company does? Medalia

Jason Calacanis: customer support uh is the general arena and customer experience management. I don't know.

David Friedberg: I don't know what that means.

Chamath Palihapitiya: Yeah. They'll basically send like you go on Caribbean cruise ships and you get a survey afterwards and then they use that survey data to provide management insights and operational insights to the leadership team and the operating team on how to improve the quality of their product or their service. So it's sort of like this feedback surveying loop. So if I were to tell you guys, hey, you want to build a feedback surveying loop to run your business better, are you gonna buy SAS today or are you gonna ask your AI to spin up an agent for you to do that? And I think that's a big part of what's happened is all these sorts of companies where the alternative to to buying a SAS product is to spin something up internally and it's much cheaper and easier to spin it up internally. You get a custom workflow.

David Sacks: Yeah. So the underlying problem is that these businesses in the SAS space where you're driven by net new sales every year. How many new customers are you signing up and then you're trying to manage retention and you're trying to increase sell through and retain customers? They're just having a really hard time sourcing new customers and there's probably higher than modeled attrition. That's right. And when you have a very kind of typically historically predictable business where you can say, "Hey, I've got a net revenue retention of 118% or what have you, meaning I'm I'm selling into my install base by 18% over what I'm making last year and then I'm signing up new customers, you can lever that business, right? You can borrow money against those cash flows because it becomes predictable." And what's happened in the last year in particular is agents have become so good and so fast and so cheap that many enterprises can simply spin up an alternative to a vertical SAS solution and that's crushing the sales team's ability to sell in. That's who you're competing against. Now I want to make one point and just link this with something else that happened this week and that's Kevin Worsh's hearing for Fed Reserve chair. Kevin Warch went and talked a lot about the deflationary effect of AI and I actually think we all talk about the SAS apocalypse as if it's this sort of of like isolated business phenomenon where these SAS companies are getting blown up. I think another lens to look at what's going on is the incredible deflation of how much it costs to successfully run a business and you don't have to pay a premium price for SAS products anymore. Meaning that that piece of the business can suddenly get much cheaper. that AI is delivering on its deflationary promise. I'll just say one thing about what WarCH said. Warch spoke a lot about the deflationary evolution promised by AI and that he expects that it will drive productivity growth like we've never seen before. But he said I don't know what that's going to do to the job market that there may be a dislocation between that productivity growth being realized and how the labor markets are going to be able to respond to those things. But fundamentally, he's saying that we're going to see economic deflation. The problem with economic deflation is that when it occurs, it means some business is seeing their revenue go down. And if that segment of the economy is levered, if they have debt sitting on top of that piece of the economy where it's supposed to always, always grow like a SAS company's top line is always supposed to grow. Suddenly that debt gets impaired and that can have an economic ripple effect that is adverse. But what he's pointing out is that as a result of deflation because it's not coming from some cost cutting or economic contraction. What he's saying is that the deflationary forces ultimately lead to economic expansion because other parts of the economy will now grow. So if I can suddenly cut, you know, call it 50% of my SAS budget and I can reinvest that capital in other ways of growing my business instead of managing my expenses all of a sudden my enterprise will grow and the economy will grow. He also said, just as an aside, and I want to make sure I cover this so so that we're really clear. He said, "The way that we've been measuring inflation is wrong, and that he doesn't agree with the way the Fed has been measuring inflation because you can do a survey of any household and they'll tell you, my god, everything's so expensive. So all of the indices and [ __ ] that are being used to calculate an inflation index is completely misrepresenting what the average American is actually feeling." And so he wants to rethink how the Fed is addressing inflation from an interest rate perspective. But he does think that the overall kind of economic picture is one of deflationary pressure and productivity gains coming out of AI.

David Sacks: Well, I'm of two minds about this. I'm going to talk about the opportunity for private equity. Let me just say backing up that historically we only had two good exits for software businesses. One was to IPO, the other was M&A. And then these big private equity shops came along and gave us a third potential exit, which is you would sell to them and then they would raise the capital based on I don't know 1/3 equity and 2/3s debt. So it was debt finance buyouts which is something that's been around in let's call it the non- tech part of the economy for a long time but was a relatively new entrant into the world of technology. And the reason for that is that if you're going to to debt finance a purchase you need to have very stable cash flows because if you miss if your cash flows miss and you can't pay your interest on the debt then you're going to lose all your equity because the debt holders will foreclose. So in order to do a debt financing of any kind, you have to have very predictable cash flows. And it was believed for a long time that software did have those predictable cash flows, at least for the mature businesses, the ones that were at the stage where they could IPO as a a potential alternative. So it was a very attractive thing. I like I said, I think it was great to have that third option. I I'm of two minds about where the private equity business is today. On the one hand, the pricing now has got to be super attractive for them. I mean, we're seeing public SAS companies that are doing a billion ARR

Chamath Palihapitiya: You just said the absolute critical thing in all of this, which is you have to have predictable cash flows. I think what happens is when you're a startup, you typically have to figure out how to disruptively price to enter the market. So you're like, okay, if I deliver $10 of value, I'm going to charge a dollar. And that's that's the normal playbook, like a 10% ratio, right, of price to value. The problem is when you start to stack venture capital into it and you then you stack growth equity into it, what you're effectively creating in in the preference stack of of your company is that you are creating a a higher return hurdle, right? You got to clear 300 million, 500 million, a billion of pre and then you have to return 15 or 20% on top of that. So what do people do as they raise more money? They increase price. But the problem is at some point when you increase price you engender a ton of competition and you put a huge target on your back. Private equity is the last stop because when they come in and they layer in billions and billions of dollars of not just equity but also debt and that has to then be completely predictable and paid back. Their only lever is to raise price. They can never cut price to take share. They don't they can't underwrite that to pay back their debt holders. And so Saxs, part of the big problem here and why nobody wants to touch these companies is that they are overpriced. Yes, they're making a billion dollars of ARR, but the unit cost has gotten out of control. It used to be 10% of value. It's probably now 30% of value. And everybody's looking at their contracts thinking, well, when it comes time to a renewal, I'm going to to just cut this in half, or I'm going to cut this by 2/3, or I'm going to cut this by 75%. because the value isn't there anymore

David Sacks: or they can threaten to and negotiate a better deal.

Chamath Palihapitiya: And it becomes even worse because the minute you make these products headless, right, and you say, "I'm just going to communicate with these products via MCP and with agents, you can't charge on a per seat basis." What do you do then? Freeberg doesn't need 50 seats of, you know, workday. He needs two seats because the agents act as the way to write in and out of workday. So, he wants to pay for two seats, not 50. And then if you multiply that by a million companies, that's what gets us to this place where it just feels like a falling knife. And I think it comes down to these unit costs. The unit costs and the price to value of these products are out of whack with what the market needs and wants. And until they reset that or you find new products that can do it cheaper, we're not going to get a cleansing and a clearing here.

Jason Calacanis: Okay. Topic two. Is there a SAS debt bomb in private equity? All right, listen. Just rapid fire here on the Tim Cook uh resignation and moving on. This guy, John Turnis, is a 25-y year vet. He did lots of hardware, worked on iPad, AirPods, and he was the favorite on Poly Market since day one. He's a bold decision maker according to reports. And unlike Tim Cook, Cook, Tim Cook did a great job of squeezing every last nickel out of Steve Jobs's product line, which lasted for a decade. iPhone, Apple TV, watch, I don't need to repeat them, but here we are. We got a product person in the seat which is what we all know they needed because hey these tools are getting a little bit stale. Siri descriad Airpods discretad the whole uh system is not built on innovation anymore. It's built Freeberg I think you would agree on just ringing more profits more profits. What's your hope here? Because man they missed so many great swings at bat. They didn't get the Oculus, you know, Ray-B bands that Meta did. They cancelled their self-driving car. What would you hope that this new CEO of Apple focuses on Freeberg in terms of innovation? They don't have a problem selling phones still. They don't have a problem selling laptops and making a ton of money. But if you were in the seat, if you were on the board of of Apple, which wouldn't be a bad idea for them if I'm being honest, what would you tell the new CEO to focus on? David Freeber.

David Friedberg: I mean, I don't know. The software layer of the future is not the software layer of the past. So, okay, it's pretty obvious. I don't know if how much there is to talk about, but you just need the Siri equivalent that's ubiquitous in all of your devices. Knows who you are, personalized to you, sees your email, sees your calendar entries, knows what kind of music you like, has connection to your home, basically build that AI layer for your life and make it ubiquitous in all of your Apple devices that no matter what device you're using, it knows who you are. You can can engage with it using kind of a natural language method. And it's, you know, it's it's pretty obvious.

Jason Calacanis: Yeah, they should buy Whisper Flow. Yeah. I mean, that would be

David Sacks: Well, I mean, everybody is going to be asking the same question, which is what are you going to do about AI? I don't know that they needed to be on the bleeding edge of it, but they are going to need an answer at some point. And Siri is going to need to be AI empowered. Probably the way it should work is that you get to choose your your model. I mean, I don't know that they need to pick just one model provider. It could be a setting where you go in and you set up your account with whatever chat GPT or Grock or Claude or what have you and you can choose your own model provider and then you'll have more customization and more ability to control your your storage. Let me just say just on Tim Cook's retirement, he had an incredible run as CEO of of Apple, I mean he ran it very effectively for 15 years. The market cap of the company went up by over 10x. the revenue grew from roughly 100 billion a year to over 400 billion a year. He also improved the quality of revenue by by moving the mix into services which is partly why it got why it got a higher valuation and you know people say that well they never did any innovation under Tim Cook but you know I've seen people tweet lists of products that were released under him and there were a lot of them now it's true nothing as big as the iPhone but they did release a lot of products under Tim Cook and then just finally I mean you you look back over the last 15 years and there really weren't any public snafuss or scandals or brogleos with with Apple. It's one of the few tech brands that is still I think beloved by the population. I think a major part of that was Tim Cook's dedication to privacy and keeping the company on the right side of that which I think users do appreciate. And you know he even Tim Cook even got praise from the president. And I think it was just unsolicited where the president talked about how Tim Cook didn't call him up that often, but when he did it it was something important and therefore the president tried to help them out. Seems like he nurtured a good relationship with the president over over the last decade or so. So you just have to say that he navigated what could have been a turbulent period with a a great deal of grace and appl.

Jason Calacanis: Racism Corner. Let's go to race fake fake racism corner. I want to know how the SPLC managed to accumulate $822 million in offshore bank accounts.

Chamath Palihapitiya: Yeah, this is incredible. These are big numbers. Okay, SPLC. How is that possible? What is going on?

Jason Calacanis: This is a big one. SPLC has been indicted. Indicted, not found guilty yet, on 11 counts of wire fraud and money laundering. Keep that in the back of your head. Wire fraud and money laundering. Here's the core allegation. Between 2014 and 2023, the Southern Poverty Law Center used hidden bank accounts to funnel 3 million in donor money to paid informants. Like these are confidential informants like the police or FBI might use. They use these as a nonprofit NGO to infiltrate hate groups. And so the official mission of the SPLC is quote to be a catalyst for racial justice in the South and beyond, working in partnership with communities to dismantle white supremacy, strengthen intersectional movements, and advance the human rights of all people. Okay, sounds great on paper. Examples of organizations they were trying to infiltrate, KKK, Aryan Nation, neo-Nazi groups, and the Unite the Right organizers, Proud Boys, labeled as a hate group by the SPLC. Oathkeepers, not listed as a hate group, but part of the the militia movement. My friend Sam Harris, he was not listed as a hate group, but he was also pinned by the SPLC as like hate adjacent in their hate watch headlines. And this is something that I had a major problem with this organization on, which is they would just very loosely label people as hate speech and try to get them cancelled. All of this kind of uh came to a head. revenue before Charlottesville. You remember the incorrectly clipped uh Charlottesville hoax where they said Trump said both good people on both sides, but they didn't give his full quote. Very unfair to President Trump. Uh we found out later and that was the reason Biden of course ran. He said the Charlottesville both sides thing was his inspiration. 58 million in 2026 to your point Shimoth doubled and spiked to 136 million more than double and it's remained elevated ever since. Here are some, you know, images for the indictment. And I'll wrap on this and then get everybody's uh feedback. They had F37 as one of their confidential informants. He was a member, and this is according to the indictment, quote, member of the online leadership chat group that planned the 2017 Unite the Right event in Charlottesville, Virginia, and attended the event at the direction of the SPLC. F-37 made racist postings under the supervision of the SPLC and helped coordinate transportation to the event for several attendees between 2015 and 2023. The SPLC secretly paid F-37 more than $270,000. That's the legal case here. Let me pause there.

David Sacks: Yeah. So, you're right that the SPLC allegedly did fund $270,000 to help plan Charlottesville. In addition to that, they secretly funneled more than $3 million to a bunch of violent racist extremist groups, including the Ku Klux Clan, the American Nazi Party, Aryan Nation, United Clans of America, and it goes on from there. So, I think don't forget about the 3 million bucks. So this group that was supposed to be fighting racism in fact was fermenting racism by paying these groups to basically organize protests that SPLC could then point to and say that America has a huge racism problem donate to us. And that's basically what happened after Charlottesville. They increased the amount of money that they were able to fund raise by $81 million. So that $270,000 investment led to an $81 million return. pretty good. But this is kind of the whole point of the story is that these guys are basically running a grift. And one of the ways that you know this is a grift is because according to the indictment that they opened bank accounts under fictitious entities to conceal the payments that they were making from their own donors because if if their donors knew that they were funding the KKK, they wouldn't be getting all these contributions from Hollywood celebrities and all the rest of it. So, it's really just this unbelievable story.

Chamath Palihapitiya: these NOS's have completely run a muck they're are cosplaying as these overlords and power brokers in our lives and it needs to get stopped they should all be dismantled the people that donated to the SPLC should sue them rip open all of the documentation get their money back because just so you guys know if you are listening or watching and you have donated there is 822 million dollar of your money sitting in an offshore bank account waiting for you to get it back. Okay? And then separately, if you are thinking of donating to any of these organizations in the future, unless there is a full transparent auditing of of it, you actually may be doing the opposite of what you thought. If you are against racism, you may be supporting racism. If you are against discrimination for gays, this could be actually promoting discrimination for for gays. If you are supportive of trans rights, this may be pushing back against trans rights because the playbook seems to be do the opposite to create the narrative, give it to your friends in the media who will look the other way and just amplify it, tell the lie, create the craziness, and then raise a a bunch of money, make a bunch of stink, and try to curate power.

David Friedberg: the IRS definition of what a 501c3 nonprofit organization is meant to be doing is to engage engage in exempt activities. The definition of exempt activities is charitable, religious, educational, scientific, literacy, public safety, or fostering amateur sports competition or preventing cruelty to children or animals. You tell me how the 90% of what we call nonprofits today fall under that definition. We have completely closed our eyes to the fact that organizations regardless of of political affiliation, social interest, have fundamental commercial and probably not aligned interests with the definition of a 501c3. And we've allowed them all to get away with it for far too long. I don't think that this is a blue or red thing. I think that this is a thing where we let these organizations make it easy to get money, to hide the money, and to do whatever the hell they want with the money. and we need to stop it. And I think that it's an amazing opportunity right now for everyone to kind of reset the decks by cleaning all this [ __ ] up and getting all of these organizations flushed and make sure that any organization that wants to do whatever [ __ ] nefarious things they want to do, by all means do it. But it's not a nonprofit and you shouldn't get a a charitable donation deduction and the government should not be putting money into these sorts of things. This is an entirely different sort of activity in the social order. And as a libertarian, I'm all for it. But I don't think that they should be taxexempt. And I don't think they should be getting government money. And I don't think that individuals should be benefiting from from giving them money. And if we could fix all that [ __ ] up, I think a lot of of these problems are going to go away. And I think this is a major problem. I think the theme of this episode is audit everything. Whether it's government waste and abuse or it's these NOS's or it's people like Dao making these chemicals that 30 years later, you know, perhaps are correlated with cancer. We need to audit everything. We need to take a fresh look at this because it's not red versus green. Red, this is not red versus blue, it's green. This is is clearly a monetary incentive and it is incredibly disruptive for society to not know the truth about what's going on with race in this country.

David Sacks: Listen, here's here's the systemic problem with nonprofits and NOS's is, and let me just contrast it with business. In business, you set up a company. The company has to make revenue. It has to make profits. And if it doesn't, it's going to to go out of business, right? Because it'll lose money. So, there's a feedback mechanism from the market. The company has to create products that people are willing to buy, and those products have to make money. With an NGO, nonprofit, what have you, they raise money. They don't sell things. They fund raise from donors in in order to engage in an activity. But what what happens over time is the actual activities may stop mattering. And all that really matters is they're able to keep fundraising, right? Because they're just trying to figure out a justification to keep going back to donors to get more and more money out of them. That's what perpetuates the organization

David Friedberg: Yeah, this is not necessarily a big surprise, but there was a really interesting paper published this week on trying to elucidate the underlying cause or predictor of colorctal cancer. So, I don't know if you guys know any young friends, but colurectal cancer, Nick, if you could just pull up this first image or colon cancer has become now the third leading cancer. Over the last 20 years or so, there's been a scary rise in the number of young people, people generally under 50 years old that are getting colon cancer. That number has climbed by by over 80% in just the last two decades. Historically, it's been an age related disease. So, as you get older, over 70 years old, your probability of getting colon cancer shoots through the roof. But this rise in young people getting colon cancer has been pretty alarming. And there's been a real question mark on what is causing it. what's the underlying trigger? So, this research team out of Barcelona in Spain did an amazing study where they looked at the the difference in the epiggenome or the gene expression in tumor cells of patients that are under 50 years old and those that are are over 70 years old. the sort of data will show you what different environmental triggers are associated with those changes in gene expression. So whenever we're exposed to something in the environment, whether it's some food or some drink or whatever else it is, some chemical in the environment, the cells in our body that are exposed to that chemistry or exposed to that environmental trigger, have genes that get switched on and off. And you can see which genes are on and off by looking at the RNA of those genes, which tells you that those genes are expressing RNA to make protein or not make protein. And you can look at that gene expression to determine what is changing when a cell is exposed to a particular environmental trigger. And so they were able to get these samples of colon edinocinomas from the cancer genome atlas, which is funded by the federal government. And they were then able to take a look at these cancer cells from colon cancer in patients that are under 50 and patients that are over 70 and look at the difference in the gene expression profile and what um environmental triggers are associated with that gene expression profile. So that will tell you, hey, these environmental triggers are more likely the cause or an underlying driver of the risk of getting this colon cancer. And one thing rose to the top. So they looked at a whole bunch of things. They looked at lifestyle factors. They look at eating index, how much you ate, how overweight you were, alcohol, birth weight. They adjusted for gender. They adjusted for all these different things. And as you look down this list, you'll see this is the difference between people that got colon cancer that were over 70 when you typically have a very high chance of of getting it and people that are under 50 when you don't. And what is going on with people under 50. And you can see there's this one row here that's all orange. That row is a pesticide called piclorum. Plorum is a pesticide that was developed by the DAO Chemical Company in 1963. This is the chemical formula for that pesticide. It's related to oxin, which are these hormones that plants make. And in the 1960s, there was this big rush to try and make synthetic plant hormones that you would then apply to a plant. It would cause the plant to overgrow and the plant would quickly die. And piclorum became a very widely used herbicide in our environment. It's used to manage weeds in rangeand and pasture land where cattle graze. It's used to control weeds near roads and near railroads on industrial sites to clear weeds away from highways and utility corridors. And the problem with piclorum, one of the the things that's been known about it is it's very persistent. It doesn't biodegrade very well. Plorum sticks around for well over a year. It stays in the water. It moves into groundwater and it's persistently in the environment after it's been used for some period of of time. I went back and looked at the EPA data on this chemical. The last time there was an EPA safety study done was was in 1995. And so this was before we had this capacity to do epigenomic studies like what was just done to elucidate that even though a chemical might not be causing cancer immediately and you can't apply it to a cell and see it trigger a cancer, the long-term use or exposure to certain chemicals in our environment causes a change in the epiggenome, which means that these genes are being turned on and off. And when certain genes are turned on or off in the wrong way, it can trigger cells in the tissue to start to malfunction and go haywire and and ultimately lead to cancer. And I think that this paper shows a pretty strong effect of piclorum in driving colon cancer in young people. It will very likely lead and it should lead to an EPA review on whether this should be legally allowed. But it should also lead to a a new mechanism by which we assess chemistry that we're using in our food supply, in our environment, in our industrial applications because we can can now look at all of this sort of epigenomic data to try and figure out what are these chemicals doing to us before we see them cause the problem. So I thought this was like an amazing paper done by this team. They did a lot of work to try and make sure that the statistics were sound in the studies that they did. It really uh I think elucidated something pretty scary.

Chamath Palihapitiya: Yeah. Sorry, that's a that's a great question, Shimat. So, I was going to talk about this. Thank you for asking that. They then took that piclorum exposure and then they looked at all the counties across the United States. They were able to gather data where there's enough data in California, Connecticut, Georgia, Iowa, New Mexico, Utah, Washington and they were able to look at pllorum use estimates from the pesticide national synthesis project and try and deduce in places where piclorum was highly used and not highly used. And once again it elucidated signal which is that when pllorum was used in the environment in the counties more frequently there was a much higher frequency of colon cancer in those counties

David Sacks: reasonably strong the odds ratio is like 3x it's very strong

David Friedberg: Yeah. So, I'll I'll put my PCAST hat on. Thank you, David Saxs, for the role. And I think this speaks to one of the important roles that government has in in doing fundamental science and fundamental research. So the the National Cancer Institute and the federal government stood up this genome atlas with $100 million a couple years ago. They spend only a few million dollars a year now to maintain it to get cancer tissue samples and then create the availability to scientists to use those cancer tissue samples to do the sort of epigenomic analysis and study supported by you know government grants or in this case supported by a foreign university getting funding to do it. And so there's there's an important role that fundamental science still has in elucidating this that we would have otherwise not been able to see if we didn't have this resource available to to us from the federal government and federal funding of scientific programs like this. And that leads to this discovery. You don't need fancy AI for for this. To be frank, JCL, there's an incredible amount of data that's available or or resources that are available. What's happened in the last couple years is what's called RNA sequencing where you can actually look at which genes are on or off. not just what's the DNA but in the DNA. Remember we've talked a lot about the epiggenome what genes are on or off and how that that changes when you have different cancers or when you have different chemicals and when you have a certain chemical like pllorum your colorctal cancer goes through the roof and you can see that relationship in those tissues and then you can put all the data together and say oh my gosh there's a lot of evidence here that points to this connection very powerful I think it's important that it opens up the window that this shouldn't just be a one-off research project conducted by a team in Spain but maybe should be a fundamental role that some of the government agencies play, which which is to stop Americans and the world from getting faking cancer. Let's figure out the things that we got wrong in industry and go back and delete them out of our food supply and out of our industrial supply. Um, and I think this is a really good example of that.

Jason Calacanis: All right, everybody. That's it for episode 270 of the world's greatest podcast. I am your world's greatest moderator. Thank you, Chimoff Hatia, David Saxs, and David Freeberg for the episode. To your friends, your neighbors, and we'll see you all next time. Bye-bye.