主持人: All right, everybody. Welcome back to the number one podcast in the world, the Fantastic Four, the original.

其他发言人: Oh, the cast is back.

主持人: The cast is back.

其他发言人: Our brothers in arms.

主持人: Brothers in arms. Here we go, boys. We got a big Newsweek. David Saxs is back and he's in the great state of Texas. How's it been, Sachs? How's Texas been for you so far?

Sachs: It's been great. Although, I just got back from DC. I got like three hours sleep last night. So, but we had a lot of news this past week.

主持人: Yes. And we'll be talking about PCAST and your role in the and da and your role going forward in the Trump administration. Big news that we'll be talking about today also relates to you. Oh, Sultan of Science David Freeberg with your background from the iconic film for those not watching. Looks like the iconic Thelma and Louise. I wonder if that has something to do with the budget of California, which you've been outspoken about recently.

Sachs: Great rant, which I retweeted.

主持人: Mega rant with I retweeted it, too.

Freeberg: If only if only you could be allowed the time and space to do those kinds of rants on this pod.

主持人: Thank you very much. If you kept talking, here he is. He's going again. He's going again.

其他发言人: There it is. Dr. Doom. Dr. Doom, your mayor, your new governor. Are you would you consider it freeberg after Ohalo running for governor? There is no after oh halo.

其他发言人: Oh please do it after.

其他发言人: Oh please do it.

其他发言人: Wow that'd be so great.

其他发言人: I'm tempted to buy a hollow for like five or six billion. So he just politics California politics is dirty man.

其他发言人: I don't even know what it does. I'll just have somebody else deal with the oppo research. But the amount of

其他发言人: No no no no. We'd get him elected. He would do an incredible job. He would save the fourth largest economy in the world. It would be incredible.

其他发言人: It'd be amazing. I would love the

其他发言人: Here's the oppo resource act. David Freeberg went to a rave in 1999 and stayed up until 10:00 a.m. We have witnesses

其他发言人: once he he got tilted at the poker game, stole a bunch of pistachios and lactate and ran home.

其他发言人: He did.

其他发言人: Let your winners ride.

其他发言人: said, "We open sourced it to the fans and they've just gone crazy with it."

主持人: Anthropic on a generational run and open AI crashing out a bit, boys. Let's chop it up here. Just looking at Anthropic pretty major heater this year. January, they launched co-work for business users. You know what that does? Cron jobs. You can connect to your Gmail, your notion, whatever it is. And then opus 4.6 which consensus wise everybody thought this is a major step function Jensen Michael Dell everybody's called it out Jensen actually called it back in November an inflection point and the first agentic model and uh opus 4.6 has basically Dell said hit a threshold that we haven't seen before in terms of real productivity in teams. February, they dropped a bunch of claw code plugins that caused the SAS apocalypse. Not the SAS apocalypse, the SAS software as a service.

Sachs: It was a SAX apocalypse, too.

主持人: Yeah, there was a little bit of that back and forth as well.

Sachs: No, I mean, as a SAS investor, it was a SAS.

主持人: It was a bit of a you you were the tip of the spear there. We'll get into it.

Sachs: My exit comps were affected, that's all.

主持人: Yes. It seems like you may have divested at exactly the right time. All right. $6 billion in annual run rate was added in February alone. Brad referenced a couple of weeks ago here on the pod. Earlier this week, they announced computer use. A new agentic system for enterprisegrade kind of openclaw functionality. Now you can use the clawed app from your phone to control your desktop computer. Really slick feature. Here's the calendar release over the past two months for the team at Enthropic. Dario, come on the pond anytime. Uh Sachs, you've had a couple of flare-ups uh and obviously the administration uh and the Department of War had their kurluffle, but just, you know, looking at it objectively, what's your take on the the surging anthropic generational run as I've described it here?

Sachs: Well, I've never been a critic of Anthropic's products. I've always been an admirer of their products. I think last year I gave him credit for MCP. I agree that they seem to be performing very well now. The company made a big bet on coding as the kind of big breakout use case. Whether that was done for business reasons or ideological reasons, I'm not sure. Anthropic is sort of the most AGI pill of all the frontier labs. And I think they made this bet on coding as their way to get to recursive self-improvement. As it turns out, it was a very good business move as well because code is the gateway into enterprise and enterprise IT budgets. And so they've been able to grow revenue pretty quickly as a result of getting into enterprise. Also, coding seems to be the basis for these other product extensions. So like you said, they went from cloud code to cloud co-work. The idea being that well if you can generate code you can also generate powerpoints or spreadsheets and you do that by generating the code to create that output. So that was the first extension. Now they are extending into agents. This computer use product is kind of like an open claw knockoff. So it looks like the generational run for Mac Mini is just about over. Look, I think they're firing on all cylinders. My issues with them in the past were related to what I have called the regulatory capture strategy. They do want a permissioning regime in Washington for chips and models, meaning you have to go to Washington to get permission to release new models or to sell GPUs anywhere in the world. I think that's excessively heavy-handed. Their motives for doing that may be pure. It may not be regulatory capture. It may be ideologically motivated. Regardless, I do think it is a form of regulatory capture because it plays into the hands of the big companies and creates moes that new entrance will not be able to overcome. So I have, let's say, philosophical objection to that part of it. But again, I'm not a detractor of their products by any means with respect to what happened between them and the Pentagon. I'm not involved in that. I've stayed out of military procurement in general. I don't get involved in what are called party matters. I just focus on policy matters which affect

Emil Michael (引用): the whole space. I saw Emil Michael making this point a couple weeks ago on our podcast that if you as a company don't want your products to be used in war, don't sell to the Department of War. It's in the name, but if you do, you know, if if you do decide to sell to the Department of War, you should expect it to be used for all lawful uses. So, I think that was a very pragmatic observation. Again, I just have to underscore this again. I'm not involved in that dispute. It's the base of a lawsuit right now and I don't want someone trying to draw lines between dots that aren't there. So

Sachs: yeah, and in fairness, I'm staying out of that one.

主持人: Objectively, they've been treated the same as any other large language model. Even though they're not fans of the administration, they're not donators to the administration. They have specifically been critical of the administration as a company perhaps cynically Freeberg as a strategy to get uh you know it's one of the conspiracy theories here in Silicon Valley is Daario is taking the position of being anti- this administration anti-president Trump in order to get all the PhDs you know there's like three or four thousand of these highly sought after PhDs and it's a way to have them you know vote with their presence to come work in anthropic your thoughts on that and then just generally their general

Freeberg: I think he actually believes it and I think they've actually created and fostered a culture of that since the beginning and I think that they're representing it as a branding exercise at this point but I don't think it's made up I think it's directly representation of the people that work there and what they believe

Sachs: yeah and it's a strategic advantage because probably of those 3,000 PhDs 90% of them are left-leaning uh and wouldn't want to work necess necessarily. I mean like like most things we see in the world today, in economics today, in markets today, in business today, everything seems to be politicized. And you have a left and a right version of everything. You have a left and a right version of media. You have a left and a right version of what food to buy. You have a left and a right version of what AI tool to use. So, you know, this effectively may just be the natural manifestation in the AI market of what's going on elsewhere in society as we all kind of fracture and hustle over to our side.

主持人: Uh, Chimath, before I go to Open AI and their recent moves, any thoughts on Anthropic and Daario's positioning of the company?

Chimath: Look, I think both are incredible businesses. We're in the part of the cycle where we're trying to create drama where I don't think drama exists because they're still fundamentally in very different gotomarket motions. Now they may converge and compete over time but I think it's important to separate where each of them are good from an enterprise lens which is where I see most of the action particularly through 8090 it's all anthropic all the time and I agree with Sachs my philosophical issues with the management aside around their ideology and sometimes how they use some of the capital for things other than tech and R&D. I have issues with those things. But in terms of the quality of that technical team and what they create, it's head and shoulders above anything else. It allows us to build a vibrant business. Now, do I have issues with how much it costs? Yes. Do I have issues with how fast we're consuming tokens? Also, yes. But I think those will get sorted out. And those are really tactical issues. So the reason why I think we're all breathlessly trying to pit open AI versus anthropic is because we want some drama. But the reality is these are very different businesses. And Nick found this tweet which I thought was really interesting. And because even at the absolute highest level, these things are sort of presented in an apples to oranges way. And there's like these very basic issues of revreck that are fundamentally different. And you may say, well, who cares about revenue recognition? Well, the people that are trying to write the headlines that say one is overtaking the other and this or that sort of miss the fact that they're in completely different businesses, which has guided how they even think about growth. And so, if you normalize these two businesses, what you would see is OpenAI is still the overwhelming revenue generator in this space. And that over time, Anthropic is catching up. And so this is this little diagram that tries to explain this. OpenAI is 3/4 consumer subscriptions and a quarter API. Enthropic is almost the exact opposite. OpenAI is used by consumers overwhelmingly. Antropic is used either directly or through things like GitHub and cursor. OpenAI as a result has a very conservative way of recognizing revenue. Anthropics, they sort of recognize gross tonnage as their revenue. And so when you start to hear these things about like, oh, this thing is at 20 billion and OpenAI is at N billion, they're two totally different conversations. And I think right now it's more about the press cycle of trying to create clicks than it actually is about the underlying quality of each business. Both are incredible businesses, as this demonstrates. And by the time it goes public, both of these two businesses will have a very clean and I suspect normalized way of telling a story so that you can actually compare. But what I would tell people right now is everybody is running with numbers to try to create a narrative that I don't think makes sense or applies to either.

主持人: Yeah. And there's been a lot of strategy change. Open AI, some people are saying, is crashing out in panic mode. Obviously, they own the consumer with chat GPT. they are the verb like you know taking an Uber or googling something people consumers always just say hey did you check chat GPT but obviously other large language models are catching up here's

其他发言人: can we say something to that Jason cuz like

其他发言人: you mentor tons of startups

其他发言人: sax has done it free has done it I do it

其他发言人: what is the one thing we tell folks focus focus focus focus

其他发言人: 100%

其他发言人: do one maybe one and a half things, but do it incredibly incredibly well and everything else you start to bleed and smear. What was that Brad Garlinghouse term? Peanut butter. Peanut butter. Yeah, you smear the peanut butter too far out. And so this is a good moment, by the way, if either of these two companies are in the smearing phase to recalibrate and reset because

Freeberg: yeah, you just can't do everything.

主持人: Speaking of smears, I couldn't help but notice that Emil Michael was smeared by an article. Was it in Lever or something like that accusing him of of having a conflict in the anthropic dispute? Did you guys see that?

其他发言人: I didn't. No.

Sachs: Yes. I saw the art. There was an article that said that he was an investor in perplexity and therefore he's conflicted in his negotiation with Anthropic. That's what the article said pretty much.

其他发言人: Perplexity is LLM agnostic. That's a stupid claim, right?

Sachs: Well, it's obviously written by people who don't understand anything about AI really.

其他发言人: Okay.

其他发言人: Perplexity is a rapper. You're like you're saying, it uses multiple AI models.

Sachs: And I don't think they sell to the Pentagon. They're not a competitor to Anthropic. And moreover, as I understand it, Emil's ownership of shares in that company was blessed by the Office of Government Ethics. Nonetheless, I think the timing of this is very suspicious. And it reminds me of what happened to me when I started opposing Anthropic and all of a sudden there was that hit piece in the New York Times accusing me of having conflicts. And I'll just say that Anthropic may pose as this company that's on the side of the angels, but they've hired a number of very seasoned brass knuckle political operatives in Washington. And you know, members of the Biden administration, Laura Loomer, actually just had a piece today on one of them. I'm not going to rehash that. But the bottom line is this is I think frankly a political operation that's willing to get down and dirty and they're not always on the side of the angels. I think they can be quite ruthless.

主持人: Saxs, remember I told you you get one Biden mention a month in 2026. So you just used it up. So I don't want any more Biden Biden Biden. He's retired.

Sachs: That was not a Biden mention. No, but the truth is these [ __ ] whoever wrote this story, the actual best feature or amongst the best features of Perplexity, which is actually got a really great co-work competitor called Computer I've been playing with. I'm not a shareholder to be clear. There's no book being pumped here. The model council is like the greatest feature.

主持人: Yeah.

Sachs: That they have. And what is really brilliant about it is you ask it a question sachs. It will go to all three different major models and you can pick which ones including open source. Then it tells you where they differ and it tries to figure out why they differ. This is like one of the great features of the product. I think perplexity is like could be a a really great company as well even without a language model.

主持人: But let's talk a little bit more about OpenAI here and their market share because I think you're correct Chimoth, but they are getting off their game. Here's what's going on. Quick look at the consumer market and obviously they started with 100% market share, right? They created the category in 2023, dropped down to 85% market share 2024, 75% market share 2025.

其他发言人: But by how much has the market grown

主持人: precisely? So uh the market is still growing. So on terms of number of searches and queries, they're obviously growing tremendously, but they have major major competitors and the market share is going down. I had my team over at This Week in AI do a more thoughtful analysis of where this is going. And if you take a look at this, um there's three players, and I'd like to get your guys' take on this who really haven't shown up yet. Apple, uh Meta, and obviously Windows. All three of those underrepresented. If you give them credit for just getting, you know, a half point of market share here and starting to intercept, which I think those three players were here, will be here, they're going to be well under 50% market share. And I think CHPT is going to have some big challenges there on the consumer side. While they're doing this stuff in consumer, uh they uh are cutting back on all their side projects. So, uh you probably heard about the Sora video app that's been shut down. This is kind of major news because Disney was going to put a billion dollars into opening as part of it and they had done a licensing deal and they were going to integrate Sora, this you know short video product into Disney Plus. All of that's now been cancelled.

其他发言人: The billion is not going in.

主持人: The billion's not going in. The licensing deal, all of that. And then in addition, there's supposedly at OpenAI a newfound focus on chasing Anthropic down the enterprise path. So getting off their game, getting a little discombobulated perhaps or maybe getting focused on what matters, which is enterprise apparently in terms of revenue. OpenAI also offered private equity investors a guaranteed minimum return of 17.5% of as part of a joint venture that would help PE firms deploy AI and ease the high upfront cost of that. So, lots of questions here. Chimov, I don't know if you've tracked this PE uh model, but obviously a lot of people are doing rollups in services, uh, accounting, legal, uh, Josh Kushner's got a big effort here, a bunch of private equity firms trying to essentially, I guess, endrun the transition process and arguably what you're doing with the software factory at 8090. So, your thoughts on Open AI and this pivot and this private equity I think it makes a lot of sense for Open AI to focus on a few things and do them exceptionally well.

Chimath: I disagree slightly with your first part, which is I think that people like to make new decisions about new experiences and I think that OpenAI has incredible consumer mind share. I just see like how my kids use it. They started there and it's very hard to get them to switch. Even when I say, "Hey, have you tried Gemini?" They use Gemini. And to your point, the reason is because they stumble into it more.

主持人: Yeah. Yeah,

Chimath: but if you give them a cold navigation experience, they rely on chat GPT and it's the same by the way on the other side in the enterprise. If you give us a cold, my default reaction would be to use anthropic. Now, I actually think that that's quite healthy because you're going to segregate the market. And I think look if you go into the way back machine when we first started talking about this thing this is sort of how we all postulated this would work where even if open AI just won the consumer business it is a multi- trillion dollar company with enormous scale in value and I think that that's okay. So I think that what they probably need to do is say where are we the strongest? Where is there the most obvious traction? Can traction in another market like an enterprise bleed into consumer usage? If it's true, then you have to win the enterprise. I think winning the enterprise though is a very different game than winning consumer. Very different set of features, very different set of expectations. So, I think people either have to decide you're going to compete everywhere or pick one thing and just nail it. And if I was open AI and you had to pick one thing, you would pick consumer because they're the juggernaut and they're the clear leader and they have an enormous brand. Freeberg, let me pull you into this because my base case here is that all consumer queries are going to be free. Apple's going to make them free. They're already free for Google. I think Meta is going to make them free and actually have a decent product soon. And Microsoft, same thing. Chat GBT has decided to push off advertising. They were going to put advertising in it. You remember they got mocked by Anthropic with their Super Bowl ads. So, what do you think is going to happen on the consumer side? Consumers generally don't pay for services. That's usually five to 20% of the market is paid services and everything else is free and ad supported. But it looks like Apple and and Google are going to just let it rip. So that could take the revenue oxygen away from Chat GPT. So what is your thought here on who wins consumer?

Freeberg: I don't think that it's going to be free. I think there's 290 million subscribers for Spotify. They're paying what are they paying 20 bucks a month or something?

主持人: Probably less than average because it's global number, but yeah,

Freeberg: Netflix has 325 million paid subscribers. and AI that can book your travel, answer questions for you, track your calendar, do your email, etc., etc., etc., etc., is likely going to be the most valuable, call it meta service that consumers have ever seen. And I think it's very likely that we're going to end up seeing many more consumers subscribe to a consumer AI service than we've seen even with cable television. I mean, think about your cell phone. Everyone's paying 50, 60 bucks a month for a cell phone. Why not pay 80 bucks a month? More bucks. you pay 100 bucks and by the way in the pandemic remember what we saw the two things that people refused to cancel

其他发言人: was not your mortgage payment or any car payment you were willing to go into aars and into default the two things that people would would always keep was the cell phone number one and then electricity number two chat GPT will be there

Freeberg: so I think that's going to be the case with these consumerized JL I think that they're all going to be like ultra valuable and they're going to layer in services on top of them like for example do you want to watch video embedded in your consumer app. Do you want your consumer AI app, you know, do your finances for you? And it could be that the consumer AI apps much like the iPhone was for the app economy. There could almost be whether it's through kind of connectors or embedded tools, an incredible ecosystem that where traditionally advertisers actually pay to be embedded and show up inside of the AI app and the consumer can either pay for it or the advertiser can pay for it. So I think there's going to be um a very different economic model and still very early days.

主持人: Sachs the numbers right now would uh be more in my estimation about 50 million people subscribe to chat GPT. They got a billion users or they're they're trended to a billion. I think they probably hit it in the next month or two. Certainly they had 900 million two or three months ago. So it's about 5%. Where where do you think this winds up? Do you think it becomes, you know, 300, 400, 500 million consumers are willing to pay 20 bucks a month for this or do you think it's more free and the data and the ad supportedness of it? Go the meta and the Google route.

Sachs: I think it's possible that you could get a few hundred million subscribers for the premium tier. Look, I think most consumers will take the free service in exchange for advertising, right? Some adup supported model, which by the way, I think could be quite successful. when chat GBT started displacing Google for search, a lot of people were predicting the death of of Google's model because who'd want to look at 10 blue links. I think that's true, but I think you can do something much more compelling in AI chat compared to just a list of links. So, in any event, I think adup supported models might make a comeback here in addition to premium models. All that being said though, you know, as an investor, I always liked B2B businesses better than B TOC because it is hard to monetize consumers. Their willingness to pay is not that high and they tend to have high churn rates. Whereas businesses tend to be very sticky and you can upsell them and you can get more than 100% net dollar retention year-over-year. So, if you can make an enterprise business work, it's always been a model I've I've liked. But you know that being said obviously some of the most valuable companies in the world are consumer companies. Meta, Google, Apple, these are all consumer first companies. And look I think ultimately both models can work.

主持人: Obviously both can work. Question is which one? I guess it really comes down to how motivated do we think Google and Facebook will be to build that bridge from their ad networks to their AI offerings. Obviously Facebook is kind of MIA in all of this but Google is not and I think that will be the determinant here is

Sachs: well Google is going to compete very vigorously for the consumer because it is existential to them I mean it's very clear that search and AI chat are kind of merging into one space that means that ad links will kind of merge into being in chat advertising so they have to adapt with that and compete for the consumer I also think that Google is in an outstanding position to do the whole claw thing because they already have access to your calendar, your documents, your email.

Sachs: So, the agent doesn't really have to earn your trust because you already trust Google with all of your stuff, right?

Freeberg: So, I'm kind of waiting for the Google version of Open Claw because I don't really want to share all my documents with some new service.

Chimath: They're the only one that has so much free cash flow that they can almost view it as two separate companies, which it effectively is. you know, GCP over here runs the enterprise play and then Google consumer over here runs the consumer chatbot play and they can keep them segregated. That's so much harder for a startup to do because on top of just keeping everybody organized, you have the financing problem of constantly having to raise more money because you don't yet have a profit engine that spits out cash. They're probably the only one. And you can see it in the valuations actually which I'm going to get to in a second but people believe the durability of Google more than they believe the durability of anything else.

主持人: And uh Sax I think you weren't on the pod last week or maybe two or three weeks ago but Google has announced Google workspace studio to do AI automation and it's uh yeah it's online and people are playing with it already. So they have joined the open claw party. By the way, Jay Kcal, you asked a different question earlier as well, which is around the PE story. And I think the PE story is a window into the rest of the broader market. The real open question is what are these companies worth? There's like a very threshold question. It's sort of like a very important fork in the road right at the outset, which is do you believe that we're on a path to super intelligence where everything is incredible, where there's infinite abundance, where you can magically describe things and beautiful things appear? complex things appear, groundbreaking things appear, or do you believe that it's good next generational software? And the answer to that question is really important because we're financing things like it's the former

主持人: and uh GC has a big move in this. Hamont was on the program in January when we did the interview show and he's got GC buying up and rolling up accounting firms, etc., healthc care firms, hospitals, etc. This seems to be part of the future of venture capital is taking AI sacks and actually buying out or I should say big VC kind of starting to look like private equity buying out hospitals accounting firms business processing firms in India putting them all together and then running them with AI. So any any final thoughts on that Sax as a business strategy? Well, I think it's interesting. They're kind of betting on the idea that they can own the change management around AI.

Sachs: And this is the thing is everyone just kind of assumes that you throw AI over a wall and a business just automatically knows how to use it and drive efficiency from it. And what we're seeing is it's pretty difficult. Chimath, you've seen that. There's McKenzie studies showing that like 95% of enterprise pilots aren't successful. There's tremendous value, latent value in AI, but it's hard to know exactly how to deploy it at this point in time. So, I guess what these private equity firms are saying is that we know how to drive value from this and if we own the business and then own the change management, then we'll be able to, you know, create value that way.

Chimath: Their business model makes solving this problem existential. And this is sort of along the lines of this essay that I wrote. Let me just give you the thought exercise and you guys react. Today we live in a world where the whole market is trying to debate what is the PE ratio that you'd be willing to pay. So Facebook is incredibly durable. I'm willing to pay 30 times. Nvidia is really durable. I'm willing to pay 40 times. Tesla is incredibly asymmetric to the upside. I'm willing to pay 200 times. And then Caterpillar or John Deere, I'm willing to pay 15 times. I'm just using these as an example. And what it's effectively signaling to you is how durable all of these cash flows are. And all we do in the public markets when we make an investment is we're just guessing when do the cash flows run out and we try to say, well, here's how much it's worth and here's how much I'd be willing to pay for today.

Chimath: But if you go back to this example and you say, well, what if there's this super intelligence on the horizon? I think it's fair to ask the question, what is anything worth? And what is anything worth in year 10 or year 15 or year 20? Because if you have infinite abundance and you have all this creativity, won't all companies be disrupted? And won't we be in this constant churn of everything getting disrupted all the time? And if you were faced with that problem in the public markets, how would you react? And I think the canary in the coal mine are the SAS talks. Yes, we jokingly call it the SAS apocalypse, but I think it's much more important. I think it's a big societal question. How do you view capital markets? How do you view the health of a company in a world where we've been told there's a super intelligence on the horizon that makes everything much more fragile than it was before? And the market reaction is to put all these companies on a spectrum and they started here in software and they're rerating everything down and they're changing the way that things are being framed from price to equity to a multiple of the cash that you have on hand. And I think that has huge implications mostly to Silicon Valley and largely to employees because we all sell the dream. we start a company and we're like okay small salary big equity upside but that's implicitly saying in 15 or 20 years this thing is going to be worth some gigantic number but if instead every business gets disrupted every 5 or 6 years all you're going to end up with is just the cash and so what should employees do the rational reaction from employees will say you know what I don't want your equity give me more money

Chimath: and if all of a sudden you do that the valuation multiples and the complexity changes again so I had my team put this chart together. Okay, what is this? Took a handful of SAS companies and took the mag six and I just said, okay, if you take the market cap and you divide it by the annual free cash flow, what that tells you is how many years does it take to get back? If you bought a share of stock, how many years does it take from the free cash flow to come back so that you've earned back the cost of one share? Snowflake in 2023, it would have taken you almost a hundred years. And where is it now? It's been cut in half. Service Now, it's last year. Workday. You see it. And I think what this speaks to is the beginning of this rerationalization in the public markets of saying if super intelligence is coming, we have to be very careful about what we're willing to pay for these things. But if you look on the right hand side and the Mag 7, what's so interesting is Apple, Microsoft, Meta, and Alphabet, the market is completely ripped the other way. And what they're saying is, we believe that these cash flows are essentially monopolistically durable forever.

Chimath: That's the only reason why you would walk them up like this. except Nvidia, which is the most unbelievably accreative, well-run company, highest margins, you know, making $200 billion, and they're treating it like they're treating Service Now and Snowflake. I just think it's so interesting what's happening. I can't explain this, but here, this data sort of shows this reset that we're going through, a very complicated reset in the capital.

主持人: Free, what's your take on this reset as Chimath describes it? You'd think this is just a flight to the quality of the free cash flow of the Mac 6 and just how much cash they print and then maybe the other ones are smaller footprints and they're just more disruptable. We had this discussion many years that Google and Apple, Microsoft, they would all be disrupted at some point, Facebook, and that just simply hasn't happened. They've gotten much more nimble at copying products or incorporating, you know, features and products into their core offering. So, your thoughts? It's probably generally correct that there will be a decline, but there's also the selective opportunity. Did you guys see the LP slides that went on the internet from Toma Brava's LP conference?

其他发言人: Yeah, those are great.

Freeberg: Nick, maybe you could find that. They kind of highlight that within the broad marketscape, there are companies that are not just going to sit idly by and let AI kind of delete their business value, but they're integrating AI themselves and they've got highquality people to do so and they're reinventing their product themselves. So, they've already got a beach head, they've already got customer access, they've already got enterprise users. And in fact, if they can integrate AI into their products and into their tools, there's almost this like selective dispersion that happens in the market. And so the winners are going to win I think truly in every market not just in software but across every market including in industrial supply chains on who is going to implement and utilize AI tools and agents uh to do work and it's going to expand the work uh productivity of that organization not just create new features which is what we focus on when we talk about software companies but really imagine a complex business being able to do 10 times the output it can do today with the same capital equipment and the same labor force. What do you pay for in a world of super intelligence versus in a world of nons super intelligence in terms of the durability of a business?

Sachs: Yeah, it's hard to say, man. I mean, we don't know, right? And that's why all the discount rates are going through the roof and that's why the valuations are collapsing because we just don't know what multiple or what discount rate you apply or what terminal growth rate or which which effectively implies.

Freeberg: What do you do in your PA? Like do you say I don't think Disneyland is going anywhere? You know, I think there's some stuff that you could say is the counter AI portfolio. And the counter AI portfolio, I think, is like physical experiences.

其他发言人: Halo. They call it halo. High asset low obsolescence.

Freeberg: Okay, that's a great Yeah, I'm not a big investor trader like you guys, but that makes a lot of sense. I mean, I think that's like intuitively to me that seems to be an area where people are going to be spending a lot of time and they're going to they're going to have durability in those businesses. I I think businesses like Nack Gas Production, you know, I just bought LNG that Shener company

其他发言人: I bought Shener given um all the craziness in the Middle East and you know I visited there with Doug Bergam so it was the first time I'd ever been exposed to this business and I checked out a great business. It's a great business really well business.

Freeberg: So I think that's got durability obviously unless it gets blown up by some enemy. Uh that that would be a problem. So the Adams thesis that TK shared Adams real life mining is a great one. Obviously I think the space industry is going to be a lot bigger than we recognize. I actually think there's probably a 15 to 30 trillion dollar a year economic opportunity on the moon. That kind of a business like you're going to see with SpaceX's IPO is going to have an insane multiple. So I think to your point Jimat, there's a lot of stuff getting steamrolled here with crazy high discount rates where you just don't know. And there's a bunch of stuff where the pathway over the next 15 to 30 years is maybe independent or unlocked because of AI. And then there's a bunch of stuff that's just unaffected that and that that starts to get a higher multiple because that's where capital starts to flow.

Sachs: Sax there are probably three things that we would agree are great modes for businesses brands network effects and the management team. Those come into play here as well. Yeah.

Freeberg: I don't know if I would consider management team to be a moat. I mean, it's like Warren Buffett says that you want businesses that are so strong that they could be run by a bunch of monkeys because one day they probably will be.

主持人: Well, I was thinking more like obviously Elon and Tesla is going to just relentlessly innovate.

Freeberg: It's a great point by the way and it's true especially in the age of agentic AI.

Sachs: Yeah. I mean look I think though that just upleveling a bit I think you are right that the key question is moes because I do think that there are still strong moes in a lot of different kinds of businesses and a lot of them are very subtle like you said some are network effects some of them are the the difficulty of producing physical world products things like that so there's a lot of different types of modes out there and that is the key question as we enter a world of let's call it digital abundance

主持人: yeah the the network effect of Apple's ecosystem and they have hardware, right? And they've been just on that path of making their own silicon that's incredibly defensive and they have brand, right? So that that is pretty strong for Apple. And then you take Tesla, the same thing. You got Elon relentlessly innovating and it's hard hardware stuff.

Freeberg: And then if you look at Meta and Google, these are incredible brands with great management teams.

主持人: My assumption and constantly innovating.

Chimath: If I had to bet, I'm gonna bet that brands go to zero.

主持人: Really?

Chimath: Yeah. Because I think that when you can make things that are as good or better and you can make them in a cheaper, faster, better way, people want that abundance more than they want an affiliation to a brand.

主持人: Example.

Chimath: So the perfect example is actually what Tesla did to BMW. You know what Tesla did to Mercedes, what Tesla did to Porsche, what BYD and Gily have done to the car manufacturing cycle in China. This is a fundamentally cheaper, faster, better product. Yes, it's got a great brand, but nobody's going to pay a premium for these products. The reason why Y has outsold everything else is because the Model Y is priced better and it's superior on every operational dimension of comparison. That's also true for the cars in China. So, I think it's the opposite. I think that brands and the pricing power of brands other than maybe premium luxury goods but even that's eroding like look at the stock like I don't know Nick show the stock chart of LVMH or Ferrari this is not a commentary on the quality of the actual product but what this shows an erosion of pricing power all of these things are being eroded away

主持人: yeah this would be the value prop most people in brands would just say value propositioning So JetBlue is a value brand, a Tesla Model Y, perfect example of a value brand. And if you look at Apple's recent cohort, what did they focus on? The Apple MacBook Neo, which is a value laptop, 600 bucks, 700 bucks. So they're even going down market to try to capture that value. And to your point, maybe the right word is abundance. Like the brands that bring abundance, that bring more to the table than their competitors, and they are able to bring more at the same unit cost or less. capture share. That's probably true.

其他发言人: You know what's interesting about that, Shama, as we open up the aperture of this, if you the one of the thesis we talked about here a couple years ago, I say, "Hey, what happens with AI disruption, job disruption, etc. costs coming down on cars with Model Y getting cheaper, Cyber Cab coming in, BYD, obviously if you go to any foreign country, BYDs are everywhere and they cost 15 grand. Then you look at Apple making the Neo, that's a $600 laptop. Everything getting cheaper seems to be happening.

Sachs: I just think it's very hard to know which of these companies going to be disrupted. A year ago on this pod, we were saying that Google was going to be toast or some of us were saying it because it looked like,

Sachs: okay, fine. But, you know, it looked to us like Chad GBT was taking a massive share from Google search and the Adwords model was becoming obsolete. Now, because of the success of Gemini and the potential for personal digital assistants, personal agents, I think we're probably pretty bullish on that company. And look at their stock chart. It's reflects that. I mean, I think it's doubled in the last year. Now, you take something like Apple on the other hand, and I'm not saying this is going to happen, but I'll just throw out a counterfactual, which is what if your personal digital assistant or a personal agent gets so good that you don't need to check your phone, you just tell it what to do, and you don't need the wall of apps anymore. I mean, the way that you call an Uber won't be to punch a few buttons. You'll just tell it what to do. So, you could imagine the phone operating system getting disrupted if the agents are good enough.

Chimath: you're on to something huge because what you're saying is I can confirm this to you 89 we sell enterprise software I'll tell you three conversations with huge enterprises asked exactly what you just said and we jokingly called it strangulation as a service which is they all say the same thing what you just said okay look get all this complicated UI out of the way get all of these products out of the way find a way to create a shim where I can just write what I need tell it what I need it to do it deals with all this complexity in the background I never want to see these things ever again. And that's what people want to your point. They want they want to be able to like say, "Okay, pay this with my Venmo or use my MX in this situation or get me that flight in some way and have all these wonderfully smart agents do all the work behind the scenes."

Sachs: And that's actually tracks with exactly what I've seen with Open Claw, Perplexity Computer, Clawed Co-work. instead of going to your notion, instead of going into your Gmail, instead of pulling up your calendar, you ask it, "Hey, what's on my schedule this week?" It brings it to you. So, you could you could have a dumb, you know, flat terminal, you know, chat interface on the $100 device and it would do just as good.

Sachs: Just to make the counterargument against myself, I mean, yeah, even though I think that you'll just increasingly tell your agent what to do instead of be clicking around or, you know, touching the screen, you still need a a dashboard or a user interface to like check on it and just see readouts of information. You still need to be able to visualize it. Where is the Uber that I've asked to be sent to me? How far away is it? Still want to see it on a map. So, I could imagine that even if let's say, you know, Siri++ becomes the dominant way of interacting with your iPhone, you'll still want that Apple user interface. Hard to say. I mean, I see a lot of people out there tweeting that Apple is brilliant for kind of missing the whole AI wave and not spending a lot of money on data centers or capex. And then there's other people who say, well, wait a second, they're they're missing critical capabilities. Then there's a question of will they be able to make deals for you know an AI powered Siri? I don't know. I think this is very hard to know at this point in time.

主持人: All right. And we will be discussing all these hard topics at liquidity May 31st through June 3rd. Chimath some big announcements here from you. You have taken control. This is what happens in the game of thrones known as the allin corporation LLC.

其他发言人: the partnership. If we partnership,

其他发言人: the chaotic partnership,

其他发言人: no mids there, it literally is chaos.

Sachs: Wait, wait, wait. Why are we doing this in California? I don't even think I can I can go back to the state at this point in time.

主持人: You can come for 48 hours make an appearance.

Sachs: Zero days in state at this point in time.

主持人: I love it. I love it. You can do 48 hours. It's okay. Well, Gavin Newsome might meet you at the airport. You could get up at the airport.

其他发言人: The By the way, the airport is about 10 minutes from the venue. You could fly in and fly out same day and you don't have an overnight.

其他发言人: No overnight.

其他发言人: Is that how it's counted?

其他发言人: That's how it's counted as an overnight in California.

其他发言人: Head on pillow. Yeah. You can come in on Monday, then fly, fly out to incline, sleep at, you know, at our friend's house and then fly back in on Tuesday and then fly back out. You'll be fine.

其他发言人: Or you could fly to Vegas, do a blackjack run overnight blackjack run, and then you come back in the morning. We just freshen up. Just

其他发言人: get your fresh shirt,

其他发言人: nice and rested.

Chimath: Let me announce the next two speakers.

主持人: Oh my god, I'm so excited. But just for background, Chimath comes into this thing. Liquidity was this little conference I did. It's now part of Allin and I start setting up all the speakers. And then Chimath goes, "Not good enough. I'm not showing up unless I pick all speakers." And you know what Freeberg and I did? Well, finally this melon farmer is going to actually do some work. Great.

其他发言人: What did you call me? What did you call

主持人: melon farmer? It's a when um they play a Quinton Tarantino movie on like TV. Instead of saying Mother Effer, Samuel Jackson says Melon Farmer.

其他发言人: Oh, I see. So this Melon Farmer took unilateral control of the 10 speakers. 10 speaker slots. Very coveted.

Chimath: Okay. So we've announced Dan Loe.

主持人: We've announced Sarah Frier.

其他发言人: Incredible.

Chimath: And I'm very very very honored and excited to announce that Bill Aman and Andre Carpathy will also be speaking at liquidity.

主持人: Four heavy hitters, six to go.

其他发言人: Two more goats on the roster of goats.

其他发言人: So goatated.

其他发言人: And we have a handful of other

其他发言人: Yeah, there might be some surprise guests and unannounced guests show up.

其他发言人: Can't can't say DVD.

其他发言人: TB.

其他发言人: More announced soon, but we're making

主持人: Let's get Daario to show up. Daio, come to the show. Come hang out with the All-In Boys.

Chimath: I'm really excited. I You know what Andre is gonna do? What Andre agreed to do is he's going to do like uh five or 10 minutes of slides on like the future of the world with AI and then we'll do a fireside.

主持人: Love it. That's going to be tremendous. And you know, he's uh he's been on a heater himself with his recursive uh GitHub.

其他发言人: Oh, dude. Auto research is incredible.

Chimath: And Bill Aman has a ton of points of view on all of this stuff. So, we'll get a lot of his thoughts. I want to give a shout out to Freebrook because when we did the interview with Jensen, he's like, "Guys," I was like, I like had a glass of wine on a Sunday. I like coded a replacement to my HR system. I asked all my team to do and I was like, "Oh my god, this is incredible." So I asked our folks, I'm like, "Hey, I don't like the website. This is 8090." And the next day they're like, "Yeah, we vibe coded a new one. We'll have it up." And then I'm like, "Well, do you like the CTAs and how it's doing?" They're like, "No, no, no. We put it into auto research and we doubled the click-through rate. And I was like,

Chimath: to Freeberg's point, this was this would have been many man months, tens of people, and instead all these recipes, by the way, in these playbooks, you know, like the person that runs growth at OpenAI publishes his recipes.

其他发言人: Yeah. You've been clawed. That's it. You've been oneshotted.

Chimath: It's really incredible. This is why like I I mean, you commented on my post yesterday. I wake up every day and my head spins. I'm like, what is what is going on in the world?

Freeberg: It's crazy. Like, every day feels like a new era right now.

其他发言人: Yeah.

其他发言人: And

Chimath: it's it's disoriented because because I I think what's really interesting is you pull what would have normally been something that's call it a period of time out, like a year out or two years out, and you can pull it in and say, I can get that done in 3 days, and I don't need to hire people. All the sequencing and staging that would normally go into accomplishing something has been reduced, and then the time rushes in. So all your ideas rush into you and they're all like immediately accessible and that's why it's like so every day it's like oh my god like that is I I have I bought the domain name annotated.com like 15 years ago for four grand and I wanted to create a service like a bookmark service where you like highlight a paragraph from the New York Times and then you write your comments on it saves it and you basically have this service and I was talking to some developer about making it and I literally vibecoded it and the Chrome extension this past week and I was like, "Okay, I've been sitting on this domain and project for like 15 years and I did it in a weekend."

其他发言人: Isn't it crazy?

Chimath: Weird. It's like very weird.

Freeberg: This makes it feel like a simulation to me that everything can just manifest itself. It's the Star Trek version of the world. Like remember the replicator sacks where you just say Earl Grey tea at this temperature? That's happening in business now. You're like CRM system, buildan annotated.com, build this new website for 8090. Boop. and it's a replicator just gives it to you. It's very strange.

主持人: I've only felt this feeling twice. Once I was on the outside looking in. I was a derivatives trader in Toronto. I was looking at the first dot wave and I was like, I got to be a part of this. How do I get to be a part of this? And I got a job in at Win Amp and kind of the rest was history. Win him the original iTunes.

其他发言人: But I missed the wave financially. It didn't do anything for me. But I was in the right place. You got to the beach with a surfboard. That's all that matters.

主持人: Then the second wave I crushed and the move to mobile and social. But this wave feels like a hundred times bigger than that.

其他发言人: It's a tsunami by comparison. I I I had three of these.

Freeberg: It's probably what it's like to be at Nazareth in Portugal. You guys ever see those clips of like that crazy place where like there's like 100 foot waves,

其他发言人: 100 foot waves or whatever and you're just towed in and you're like, "Okay, let's just

其他发言人: Here we go. This could end one of two ways.

其他发言人: Let it go. Glory

其他发言人: or goodbye."

Sachs: No, I It was like literally when I first saw a PC, when I first got on the internet, and then saw Mosaic. Like those two moments in the early 90s and then seeing the iPhone. I think that like those three moment

其他发言人: was very special.

主持人: All right, rough week for Zach. Two verdicts went against Meta in two days. They were first found liable for allowing child predators to access minors on Facebook and Instagram. New Mexico jury ordered Meta to pay 375 million in damages. The AG's office there ran an undercover investigation. They created fake child profiles. Facebook, Instagram, these accounts were contacted by predators. People showed up, yada yada yada. A whistleblower and former Meta engineer testified that his own 14-year-old daughter received sexual solicitations on Instagram. Then on Wednesday, an LA jury found Meta and YouTube negligent for designing addictive platforms that harmed a young user's mental health. Basically, the plaintiff in this case, Saxs, said they started using YouTube at age six and Instagram at age nine. and she testified that features like notifications, algorithms made the app so addictive that it caused depression and anxiety through that compulsive use. You have some thoughts on this and we we had um Jonathan hate, right? Didn't we do an interview together? Wasn't that one of the first joint interviews? Free

其他发言人: you and I did. You and I did. Yeah.

主持人: Incredible.

Sachs: Uh these things are obvious. He he had a very important point which is to try and keep kids off cell phones and social media until they're 16. and he was kind of cheerleading this this verdict. But, you know, I'll take a little bit of a contrarian to the popular kind of sentiment on this and I'll just talk broadly about this idea of tort litigation. Tort litigation, you know, costs our economy $900 billion a year in the United States. 900 billion a year. That's how much is spent on the litigation costs, the settlements, the judgments. It's 3% of GDP and it's growing roughly 10% per year. And these civil penalties decided by juries like they're, you know, going against big companies like Meta and YouTube, but it's also food companies, restaurants, everything. Anytime there's a window to sue someone and and extract uh value from them, tort firms are all over them. You know, it's called the tort tax now in America. It's not just losses paid by the companies because fundamentally when a big company pays out these tort taxes, they're going to invest less. There's less R&D, less product development. Costs stay high. there's new fewer new product launches and there's all these crazy restrictions on stuff. So, you know, look, I I agree. Social media causes immense harm, particularly causes harm for kids. Kids should not be on social media until they're 16. Absolutely agree. Maybe adults shouldn't either be on, you know, as adults. But fundamentally, I think there's an important question that we often ignore, which is who is fundamentally responsible for that harm? You know, should the sugar beat and sugarcane farmers be responsible for diabetes in America? Should the soda companies be responsible? The retailers selling the soda, the FDA for not stopping it all? And fundamentally, I think we have to ask the question, what role does individual choice play and individual responsibility play in this equation? If everything is a liability, if anything any I I think we have to take personal responsibility. I think the parents that are absent taking care of their children are responsible for harm to their kids. You shouldn't let your kid play with a gun. You shouldn't let your kid go to some sketchy neighborhood after hours by themselves. You shouldn't let your kid play video games 100 hours a week. You shouldn't let your kids eat nothing but soda and potato chips. You have responsibility as a parent. And I think parents should keep kids off screens and keep kids off social media. Once the harms are known of excess use or the harms are known of exposure to this sort of thing, I think there's responsibility that sits with the parents.

主持人: What about things like tobacco or processed food or

Sachs: Yeah, this is the key. Look, I mean the same the same is true of alcohol. I mean dude, like alcohol is terrible for you. There's nothing good about alcohol. But I think I should have a choice on whether or not I want to consume alcohol. Whether or not I consume tobacco, whether or not I consume processed goods and the recognition that it's bad for you should be publicized by the government should be publicized by the government.

主持人: Right. So if I had to summarize what you would say is product liability law makes no sense. There should be human liability and human responsibility expectations in a society.

Sachs: We never talk about responsibility. We always talk about where the government failed us and where these companies us and we never talk about what did we individually do wrong. How did I individually choose to eat a hundred [ __ ] sodas a week? How did I individually choose to get my kids addicted to social media? Where the was I as a parent? Like we don't talk about our responsibility. And by the way, this fundamentally addresses this point about human agency which I think is more critical in this era than ever because AI is going to flood us with everything all the time non-stop. What we choose to do in a world where we're already getting everything and how we choose to not take everything that's being offered to us, I think is a critical part of what's going to distinguish human success from human failure. And it's going to become more apparent in the future. And not everything is about liability and not everything is about the government failing us. It's about people making choices. And we don't talk about it.

主持人: On the counter, I I I agree. Personal choice super important. What you're probably leaving out here, uh, which you're definitely leaving out here, is when these companies know they're doing something damaging and they do it anyway. That was the key to the RJR whiskey. What about what about a a whiskey company selling whiskey to an alcoholic?

Sachs: So, what about a potato chip company selling potato chips to an obese person?

主持人: I'll put those two aside because I don't think we've seen major cases about that. But I will say the auto industry knew for a long time about seat belts. You remember that? And they didn't deploy them. RJR Nabiscoco, they knew that these were addictive and they designed the cigarettes to become more addictive and they didn't tell people about the health risks. Asbestos, same thing. Lead paint, same thing. This has happened over and over again where corporations subvert the release of information to make additional profits. So the question here with Facebook is did they know how addicted these were? Did they know kids were being assaulted sexually and and they could have done something about it or didn't they? And so agree that there's

Sachs: that's absolutely true. The kids being assaulted absolutely true. Not not releasing information about the level of addiction if they had it. That's certainly bad. Should the product be legal? Number one. And if the product is legal, who's responsible for using it?

Sachs: You know, and and where do we draw the line? And if we don't want people to make choice, then we shouldn't put it out there.

主持人: But if you as a corporation know it's dangerous and then you lean into that,

主持人: if you know, as is the case with Facebook, that this is super addicting, super damaging to young girls, and then you lean into making it more addictive and you don't put safeguards in place and you can prove that like RJR, like as like on whiskey. What's the What safeguards does a whiskey company put? What safe What safeg guards does a casino put?

Sachs: Hold on. you asked the question age is one second after age which is what we're really talking about with kids and Jonathan hate would agree that they shouldn't be using this until the 16 so I think that's a perfect analogy uh age gating and then labeling and then if they know of something that's really damaging releasing that. So there was a whole thing about alcohol in pregnancy and they covered up in the alcohol industry or didn't disclose exactly how damaging it was to drink alcohol on a on a fetus on a developing fetus and then remember all those signs went up in bars in the 70s and 80s that was directly because of that. So labeling information and agegating would be the logical things to do for social media and that's what's happened the best. So that that's the answer to your question. I don't know about age gating, but I think informing parents about the risks is fine. Like that should be a responsibility, but you know that the tort lawyers are one of the largest donors in political elections in the United States. They donate largely to Democrats in local elections and Republicans in national elections and then they are the largest donor class to elections of judges. And it's it's a business and I think we don't talk enough about the business of court law um the business of litigation in this country and we often ignore this question about choice and I don't want to live in a world JL where the government and companies are telling me what to do and what not to do to live my life etc.

主持人: Exactly. Jump in here personal freedom and personal um responsibility versus hey corporations maybe knowingly

Sachs: parental responsibility Jal responsibility in there as well. Yeah. What do you think's next?

Freeberg: Well, look, there's no question that the trial lawyers want to turn Meta into RJR and Nabiscoco and the cigarette companies and try to fit their fact pattern around that. I just think that the activity is fundamentally different than smoking. I mean, smoking is manifestally harmful to you regardless of what your age is. And the only reason we allow it is because of assumption of risk. It's a free country. I think in the case of social networking, it's much more unclear what the harms are and what the benefits are. And I think it's much more subjective and it's much more of a personal choice for adults and also for parents. Freeberg, I mean, one area where I disagree with you a little bit is you said the harms of this are immense and well known and understood. If that's the case, then let's just ban it for under 13 or under 16 or whatever it is. But I don't think that's the case. And because it's unclear, I think it's up to parents to decide what's appropriate for their families. And at the end of the day, I think the right way to deal with this is parental empowerment. You give parents the controls to set screen time limits or to decide what apps their kids install.

Freeberg: Now, the debate has now moved over to AI apps. And there's a lot of parents groups that want to ban kids or teenagers from be able to use AI chat apps because there was a couple of cases of self harm. Now, my reaction to that is, look, I've got a 10-year-old and if he starts using Chat GBT to get answers to questions, I would consider that to be a good thing. I mean, I'll keep an eye on the usage, but I want him to be an AI native. I want him to be able to do research, you know, I want him to be able to know how to use these tools. I want him to get the right skills to be successful in the 21st century. In China, they're incorporating AI into K through2 education. Are we going to ban it for our kids and teenagers? I think that'd be a terrible mistake. So, I think when it comes to AI and AI chat apps, it has to be up to the parents because there's too much manifest good that can come out of kids learning how to use these apps. Maybe social networking is in a different category. But I got to say, I do think that the harms have been exaggerated because the trial lawyers have an incentive.

Freeberg: And just to give you some facts about that LA case, so just so you understand, in this LA case, they were sued by a 20-year-old woman who claimed that she became depressed because of using social media, and she apparently suffered body image issues because of social media, and she was able to win this judgment for millions of dollars. Look, I think there's big causation problems with that case. In in the case of that pliff, the evidence showed that she came from an abusive home. Her father had abandoned her. Her own mother had body shamed her. So, it was very unclear where her body image issues were coming from. I think it's possible that social media contributes to them. Or it could just be that social media was a scapegoat. I also got to say that I do think it's it's a dangerous precedent. I mean, are we going to allow plaintiffs, lawyers to sue Spotify because you created a playlist of sad music

Freeberg: and that music contributed to your emotional distress? I mean, that's kind of what we're saying. You got to remember these are free services that people have a choice whether to use them or not. And if social media is making you feel bad, if listening to the wrong playlist is making you feel bad, then stop doing it. But what's going on here, I think, is the trial lawyers are trying to create the next big tobacco and their goal is to try and sue these companies into oblivion. And I don't think that's the right answer either.

Chimath: The consensus, Chimoth, is kids who use this two or three hours a day. this has been across many um survey uh many research studies is that it's massively correlated with depression and anxiety um and eating disorders specifically in young girls like if you get to two or three hours a day of this. So that correlation's I think pretty well established. you pretty famously said, "Hey," and you worked at Facebook, so you saw this coming, but I think at Stanford 27 2018 time frame, you actually had some comments on this. We could either play the clip or you could just describe it, I guess.

Sachs: I said what was obvious to me then. I lost a lot of friends at Facebook when I said it, unfortunately. But essentially what I said was, I don't let my kids use it, and I don't think that this is a constructive part of a developing child's diet.

Sachs: I do think that Sax is right that I view AI chat differently. There are different guard rails that are required so that if you go down some sort of you know dark corner but that's possible to understand and the product is architected in a way to create culde-sacs. So if that if you're thinking about self harm or you're thinking about these other things, social media is very different. It's an incredibly fast twitch algorithm and that's the optimization and until the incentive for that optimization changes, these outcomes will continue to compound.

Chimath: I think the interesting thing is that the LA lawsuit was an individual lawsuit. The young woman I think was awarded three or $6 million.

主持人: Yeah. The other one though that they lost this week was in New Mexico and that was for $375 million and that was more around I think child exploitation.

Chimath: Yeah.

Chimath: The thing that I'll note is that these trial lawyers which I'm not a fan of either have been trying as Sax said and as Freebrook said to make these folks a target because there's so much money on the line and they've been batted back pretty successfully. But this was the first time where they were able to navigate the section 230 protections that Facebook and Google have typically used to protect themselves because Google was a part of the LA lawsuit and they were able to go down the pathway of product liability language. Now to Freeberg's point, I think he's generally right. I think it's my responsibility as a parent to take care of myself and my children.

Chimath: But to the extent we don't change these product liability laws that are on the books, I think the door has been opened and a map has been drawn, which is this is how you navigate around section 230 and you can get a decisive lawsuit in your favor against these large companies with enormous cash flows. And so I expect that this will be a death by a thousand cuts kind of scenario where folks are just going to rally around this. I don't think it's right, but I do think that that's the rational reaction to what just happened. I mean, look, $6 million to an individual 20-year-old girl or $375 million. These are huge numbers. And the reality is that I think we've opened the floodgates. I do think there should be a better response and I do think that parents should take a lot more responsibility. But I do hope that these products allow us a kill switch for when our kids are under the ages of 16. Frankly, I would love a kill switch under the age of 18. And there has to be simpler ways to age validate. You know, we used to work around this thing called Kappa compliance. Kappa's [ __ ] It's a nothing burger. Like a six-year-old can vibe code their way around Kappa. So it doesn't do anything then. So age verification is completely broken. It's harder to get age verified for a porn site than it is to get unageverified for Facebook.

主持人: Say more Chamoth. How did you get around it?

其他发言人: Yeah. How do you know that? How do you know that?

其他发言人: That's just for uploading. You were uploading at the time. This is not your only proof of proof of a

Sachs: we actually deal with this in our new AI framework that the administration released last week because the number one issue is around online child safety which I think again is mostly about social networking but it touches on AI and so it's kind of gotten lumped together and I think we're I mean I'm referring now to the White House has said it's willing to support some form of age assurance technology and parental controls. So, look, I think there needs to be a conversation around how true it is that social networking is just a fountain of ills for young people. If that's true, then why wouldn't you just disallow it, right? But if if it's unclear, and I think it's more on the side of unclear, that's just me.

Sachs: Uh then it's up to the parents and what you want to do is again have the age assurance technology and the parental controls and let the parents decide. I don't think that social media is net badly speaking, but I will tell you that if my child uses it for two or three hours a day for multiple days in a row, they become [ __ ]

其他发言人: Yes, they act weird.

Sachs: And so I don't know what to tell you except I would love a kill switch until these kids turn 18 on all these products.

Freeberg: This has to do with dopamine, by the way. these. What I do instead is I use Apple's Family Sharing, but it's hard. And I'll tell you how why it's hard. Our schools give our kids Chromebooks and say, "Use these Chromebooks because that's the way you're going to access your LMS, your information, your content, your homework." And you know what's an integral part of that? YouTube. And then now it becomes a back door. So even when we take the devices, I take my devices, we lock them down. You can't bring them to your room. the whole thing.

Freeberg: But if they need to do homework and I catch them in a little break, I'm like, "What are you doing on YouTube?" They're looking at shorts,

其他发言人: of course.

其他发言人: That's what they do.

其他发言人: Yes.

Freeberg: And so it is a whack-a-mole problem for parents.

主持人: I think uh I'll I'll just give myself the final word here on behalf of the group. It's obviously addicting. It's obviously the industry has not policed itself, nor would they police themselves because they want to get people addicted now. Also, they're addicted when they're adults. The rest of the world has realized this. Australia now has 16 enforced. Malaysia 16. Other countries are right behind them. Spain, Germany, UK. And what should happen here in the United States is this should be done with the handset manufacturers. If Android and Apple showed leadership with Facebook and said, "We're going to by default when you buy a phone, you're going to have to age verify, you know, kids under a certain age," which you kind of do already when you create a family plan like it did. We could solve this problem. And then parents would opt in to giving their kids access to this. No good comes out of kids under 16 using social media. And Jonathan Hay in our interview said you should be putting phone lockers in and our school is doing that. Other schools are doing it. It is the greatest thing ever. Kids complain and then they love it.

Freeberg: I I don't think it's that great. I'll tell you why. Our school does the phone condoms. I don't know what they're called, but like you put them in the the bags and you whatever. The real problem is that there's enormous social pressure when you're in high school to use these products. I'll give you a specific example. Our rule is you cannot get Instagram or Tik Tok until you're 16. I would love it to be 18, but we all agreed 16 and we're able to maintain that rule. But then high school comes around and I have two kids in high school now. Oh, we need Snapchat. No, you don't. No, yes we do. No, you don't. Okay, great. We'll have no friends. Thanks a lot. We'll just sit here in our room dark and there and you know, there's an enormous amount of social pressure. So, when you talk to the other parents, it's like, hey guys, can we all agree that we don't need Snapchat? You just can't get uniform agreement across all parents because everybody views this problem differently. And so I had to change the rule. Now when you get to high school, you're allowed Snapchat but not Instagram. And you know when you're 16, you get Instagram. And that's the best we could do and Tik Tok and all that stuff. But

Freeberg: yeah, it's an impossible task for a parent.

Sachs: I find it indispensable to be able to do iMessage with my kids. And also I like the location awareness. You can track location. You compare iMessage those features to Snap. Is it really that different? I don't think it's that different.

Freeberg: Well, you really you gonna ban Snap.

Sachs: No, I can't. My point is I had to give them Snap. But you're right. I was like, "Why can't you use iMessage?" They're like, "Dad, don't be a loser."

其他发言人: Yeah.

Sachs: No, I signed for a Snap account just so I could message them where they are, where they're messaging. I prefer if they were just on iMessage, but anyway, that's the reality. So, you're talking about banning all these things, but again, I think you're on a slippery slope.

Sachs: And I gota I got

主持人: No, I'm saying me as a parent banning. No, I'm saying me as a parent.

主持人: Yeah, you're setting guidelines

主持人: in my house. This is the rules. When you become a freshman, I'll give you Snap and when you're 16, I'll give you Instagram and Tik Tok. Otherwise, shut the [ __ ] up. Put your head down.

Sachs: By the way, I also have a tip for parents. You know this issue with like kids in headphones where they want to be listening to stuff all the time and you have kids walking around like zombies with headphones. I replaced their headphones with over the these brand called shocks or something. It goes over your ear but your ears open so you can listen to an audio book or music and still be able to talk. And so since we did that it's like much less drama around the overthe-ear headphone issue.

Freeberg: Well again it sounds like you're exercising parental supervision. Does it really make sense that later when your kid turns 20, they could sue these companies for

主持人: Well, to your point for emotional distress. That doesn't make sense.

Sachs: You're right. Because to your point, that girl said she was using it from the age of like six and 10.

主持人: Yeah, one product six and the That's crazy.

其他发言人: Crazy.

主持人: I agree with you, Sax. That's crazy. Where were the parents? All right, we got time for I think one more topic. Be amazing.

主持人: President Donald Trump, the 47th president of the United States, announced his council of adviserss on science and technology. It's called Pcast Saxs. You have now, am I correct in saying moved from the zar of crypto and AI to now the leader of PCAS? Is that the correct way to frame this?

Sachs: Well, the president has appointed me to be a member of his council of adviserss on science technology and to co-chair it along with Michael Katzios who's the director of OSTP. I'm still a AI adviser, but I do it on behalf of PCAST now.

Sachs: So, you remember last year I was an SGE. We got up to 130 days. I use that time up and the president appointed me to this new role allows me to continue being a technology adviser in fact on a wider range of issues. So before it was AI and crypto. Now it's whatever PCAST wants to study or talk about or make recommendations. I think in addition to AI, other areas that are interesting are nuclear power, quantum computing, advanced semiconductors, all these different areas. And I think we've got some biotech. Thank you, Freeberg. And we have some incredible people who are now on PCAST to kind of run with this.

主持人: Yeah, I'm looking at it. Mark Andre, Sergey, Michael Dell, Larry Ellison, David Freedberg, Jensen, uh, Lisa Sue, Mark Zuckerberg, and some other folks there that, uh, maybe not as, uh, recognizable by the audience. How were they selected? Saxs, the only criticism I've seen of this is lots of business leaders, great, lots of technology, great, but maybe a little light on the scientists.

Sachs: Well, I don't know. We have people who've won a Nobel Prize for physics on there. We're talking about people who are experts in like I mentioned quantum computing, fusion, nuclear, biotech, pretty much everything across the board. I would say that one difference between this PCAST and previous ones is you have more doers, more builders, people who've actually created products or companies. We think that's a good thing. Why would it be a bad thing?

Sachs: I mean, is it a bad thing that Mark Andre invented the first internet browser or Jensen invented the GPU? If you're going to make recommendations about advanced semiconductors, don't you want to have someone who actually invented some of the key products in the space?

主持人: The big question of course, Sax, is as we've seen here with Science Corner is how do you plan on staying awake for these meetings if it's going to be like all science is usually when you take your your bio brain?

Sachs: Well, it's it's science and technology. Got it. So you'll be

Sachs: So I'm going to focus on the tech stuff.

主持人: Got it.

Sachs: And then we got Freeberg to focus on the science stuff.

主持人: Got it. So Freeberg, this is incredible. You've joined President Trump's administration. Now

Freeberg: I will say I'm honored to be invited and appointed by the president and I appreciate Saxs and Michael Katzio. You look back at PCAST, it's kind of rooted in FDR when he formed this council of advisers on science when nuclear physics and quantum mechanics was starting to kind of reinvent what was possible in the world. We're sort of at a similar era today because arguably AI is reinventing what is possible in the world. And I think there's this kind of acute moment that we find ourselves in in this extraordinary race against China. I'll give you a statistic. 10 years ago, China published 50% of the number of scientific research papers in peer-reviewed journals as the United States. Last year, they published 50% more than the United States. This is across all disciplines and domains, including physics, material science, chemistry, biochemistry, broadlife sciences. There's this moment that we're in right now where both the world is being reinvented by AI, but there's this extraordinary race with China, not just in fundamental research and discovery, but in the industrialization of new discoveries and new technologies. You could feel it in DC this week. I was at the Hill and Valley Forum, but literally everyone in Silicon Valley, everyone in DC is is like absolutely honed and focused in on what is going on in China.

Freeberg: It used to be in biotechnology for example that China was kind of a copycat and a me too or they were really good for example in manufacturing but it is now the case that in many subdomains China is becoming the scientific leader in biotechnology and in life sciences and that is a scary thought because ultimately China could end up engulfing the entire pharmaceutical industry and basically becoming the leader in things like medicine but most importantly foundational things like AI. So I just want to defend and speak for a moment about the choice about putting what I would say are like industrial science and technology leaders on this commission because this is a moment where there's an industrial race, not just a discovery race underway. That's why this moment is so critical. Anyway, I'm very appreciative to to have an opportunity to serve and thankful to David for his leadership.

其他发言人: In related news, Chim uh will be joining the president's advisory council on bomb pots and wagering will be joining that. And when I saw this sax, I saw PC and I was like, "Oh, is it podcasting? I'm in." Finally, I've been invited to the President's Council on Podcasting. So, big big news coming. I don't want to tip anybody's cards.

其他发言人: We'll let you know when that happens.

其他发言人: Yeah, absolutely. when the when the president's council on podcasting emerges, me and Lex Friedman will make our way to Washington.

Sachs: I want I want to thank the president as well and it's a great honor to be named to co-chair this. It is like Freeberg was saying, this is a fairly august body that's goes back a long time. I think the modern incarnation was created in 1990 by George Herbert Walker Bush. So, this has been around for over 30 years. in its current formulation. I think we have a slightly different take on it, which is we're going to have these these builders and doers on there. Like Freeberg said, we got some catching up to do on our industrial policy. We have named 15 people. There's still nine more slots. We can have up to 24. So, I think it's possible that at some point there'll be a second round. And if we're missing some expertise, they can be filled in. Obviously, that's up to the president. He can decide later who else might join this.

主持人: All right, everybody. That's another amazing episode. The number one podcast in the world, the Allin podcast. Bye-bye. Love you, boys. Byebye.

其他发言人: Let your winners ride.

其他发言人: Rainman David.

其他发言人: We open sourced it to the fans and they've just gone crazy with it. Love you.

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其他发言人: Oh man, myasher will meet.

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其他发言人: feet. Wet your feet.

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