All right, everybody. Welcome back to the number one podcast in the world. We are together in person. Yes, the besties are together in Vegas. It's going to be a great time. We're here for F1. This is a test. Our friends at the Venetian have been amazing, gracious hosts. They gave us their beautiful studio here. We're going to play some cards. We're going to have Phil Helmuth, all of our besties are coming.

Thank you so much to our friends at the Venetian. They're doing a ton of poker content here. So, you can look at that on their YouTube.

All right, everybody. You've wanted us to talk about the Epstein Files and we're going to talk about it today in a stunning turn of events. The House and Senate voted nearly unanimously to release the Epstein files. The vote was 427 to 1 for the Epstein files act. The person who abstained was Republican Clay Higgins from Louisiana. He said it reveals and injures thousands of innocent people, witnesses, people who provided alibis, family members. He makes a great point, but the Attorney General has addressed that already that they're not going to release any open investigations and they're going to remove names if it would harm anybody. The Senate passed it by unanimous consent which requires a sign off from every senator and Trump in a reversal signed the bill last night saying give them everything.

We did see some emails come out from the Epstein files last week. Friend of the pod Larry Summers was a main character in them and he was communicating with Epstein up until 2019 asking him for advice on dating. He's since stepped down from OpenAI and several other public facing roles and was just, I think, put on leave from Harvard. I mean, what do you guys think's going to be the fallout from this?

Let's break this down. So, I think the first question is what is the relation between the Epstein files and Donald Trump? And I think the answer is it's flimsy. And the reason is because this is the most investigated, most litigated human being on earth. And I think that if you had something that was incredibly salacious and accusatory of Trump, it would have been released during the Biden administration because it would have made a lot of sense politically to try to damage his candidacy.

So the fact that we haven't seen much of anything other than some photos means that there's nothing there related to Trump. So then the question is why didn't the Biden administration release more of the files when they had them for four years? And it's probably because there are a non-trivial number of Democratic operatives that are touched by these things.

My point is now what you're starting to see in these documents is that it seems to be tainting the Democratic establishment elite more than the Republicans. It explains why there was so few leaks in the last four years. The point is Jeffrey Epstein was a total creep, right? That island should be covered in cement and drowned. The house should be burned to the ground and replaced with something nice. And you have to make sure that these... You're the one that said this. It's a thousand women.

I mean, you have to be incredibly careful and thoughtful to protect their rights and just to respect what they've gone through. But I think now we need to just release these files in an orderly manner and put this episode behind us. Learn what we need to learn from it. Get better. Be better. treat these people with respect and move on.

I think looking back on it, I think he's a spy. I think he worked for intelligence agencies. Now I am not the conspiracy theorist of this podcast, but he could have shared intel with them. It could be any of them. We all know people in the intelligence community and there's easy ways to pass intel without it being formal work.

So then I think the question becomes was he an asset? Was he sharing information? To what extent? And the reason I think this is because why would he have an interest in the top scientists in the top universities to get close to them and then who did he want to pass that information on to? Who would want top intelligence from scientists? Russia, Israel, the CIA. And then the compromat thing does seem also likely because he had cameras everywhere and they've talked about this. So I think there is a nonzero chance that that part of the story is true.

I think that when we go back and we look at this, there's a bunch of people who have embarrassing interactions with this person who spread money everywhere. Everybody wanted his money. That's why they were lining up. All the scientists, Joey Ito, Reed Hoffman, all of these folks were trying to get his money, which is peculiar. And he was also giving tax advice to the Microsoft people, to Peter Teal. So he was always trying to integrate himself into powerful people with money and scientists. Why was it to make money or was it for some other purpose? I think it was not to make money. I think there was some other purpose here.

That's my prediction. Yes. My prediction is we're going to find out that some intelligence agency was somehow involved in this and that's why it's being covered up and that's why it's so difficult.

I had dinner last night with Paulo Arduino, CEO, founder of Tether. Amazing, amazing guy. That is an incredible business.

And here's why that business is incredible. This is what I love. You're talking about Tether, the stable coin.

Yes. There are 500 million people using US dollar-backed stable coins from Tether all around the world all over Africa, all over Central America, all over Asia. Number one. Number two, his user base is growing by 30 million users a quarter. It's the financial inclusion that then ties back to US dollar hegemony is unbelievable.

So let's look at these businesses as roughly the same. There's circle, there's tether, there's world liberty financial. They all have a stable coin. What is it? Okay. So let's just say that Jason is a cash worker in India. He gets paid a hundred rupees and he's like you know the rupee is constantly getting devalued. I'm constantly losing purchasing power. I want to swap that into a US dollar. So he would create a crypto wallet and what tether will say is great give me your hundred rupees. They immediately swap it to a US dollar. So now there's a US dollar and there's a token for that dollar. I give to Jason the token for that dollar. Now I have this dollar. What do I do with it? When I accumulate enough of these dollars, 50 billion, hundred billion, I can take that and I would invest it in treasuries so that it's completely safe.

So now Tether and Circle and World Liberty, they earn interest on that. And so now when the number gets big enough, this number gets ginormous. Then what they do in Tether's case is they then reinvest this capital into all kinds of distributed assets, Bitcoin, gold, real estate. But what they also do is they now invest in things like financial inclusion in Africa. So he walked me through kind of a bunch of things that he's doing yesterday. It is an incredible business.

As a holder of the stable coin in my wallet, I'm not earning any of that treasury yield. I just have a flat dollar denominated or dollar protected stable coin. And that is sufficient risk management and risk mitigation for half a billion people. They're not trying to get a 4% or 3% interest yield. They care more about not being in their local currency.

Nvidia had a blowout quarter. Revenue up 62% year-over-year, 22% quarter over quarter. Net income 31.9 billion. That's up 65% year-over-year. They expect 65 billion this quarter. Jensen, friend of the pod, has said that they can't keep their product on the shelves. It's sold out everywhere. And then at the same time, Michael Burry who has got the short on it, he's been mixing it up. He is posting in response, I think, to you Freeberg last week making it a defense of the reasonable life of an H100 of these new chipsets that Nvidia sells. Is it four years, five years, six years, seven years? When do they get replaced? When do they have a useful life and gap accounting? He believes, just to make it easy for the audience to understand that major tech companies, big tech are cooking the books in order to spike their earnings. That this is a house of cards and that he's going to short Palantir because it's 100 to 1 price to sales ratio, but he's going to also short Nvidia, etc. because of the depreciation. What's your thoughts? I know you've seen his comments.

Under the GAAP standards, the general accepted accounting principle standards. So, you set a useful life and you reset that useful life as you do a reassessment on when you're actually using that asset, not necessarily if there's a better asset that makes more value. You make a big investment in property, plant, equipment, PP&E, and that investment you write down over a period of time that you as an accountant estimate to be the useful life of that asset. So, if you're going to use a building for 20 years, every year you write down the cost of that building by 1/20th. You don't get to write it all down in the first year.

Burry's point is incorrect on Twitter. He said the idea of a useful life for depreciation being longer because chips from more than 3 to four years ago are fully booked confuses physical utilization with value creation. That is incorrect. There is value creation because they are generating revenue from those chips this year, 6 years later. So there is in fact a useful life for that chip that has extended into year six.

This is almost textbook GAAP, which is that if you're still using the asset after 6 years, you can depreciate it over six years.

I think this conversation lacks technical literacy. So let's assume you were Google and let's just say that the equivalent of an output token was the equivalent of a link. The first thing you would tell me is, hey, Chimath, not all links are made equal, right? So for example, if you generate a link for a pharmaceutical drug, Google charges a price per click that's way different than the link that they generate that goes to Amazon to buy toothpaste. I think the thing that he needs to understand is he's equating this to energy but the reality is that in AI models the thing that we care about is what is that output token what is the revenue that's being generated by the output token.

There's no hidden information here. Bur's implication that they are cooking the books or hiding accounting is completely false because all of the accounting is apparent in the cash flow statement and in the balance sheet. Remember companies have three financial statements. An income statement, a balance sheet, and a cash flow statement. The cash flow statement reconciles the income statement, the balance sheet, makes the linkage, and it shows you all the cash that's going in and out of the company. And many analysts and many investors that are intelligent and do their homework will look at the cash flow statement and they will see the capex. They will see all the investments going out and they will calculate a number typically called free cash flow that will allow them to estimate the true cash generation of the business in a particular period.

Google released Gemini 3, it's pretty great. They regained the lead on most of the benchmarks. Market now has Google at 89% to finish the year as the top LLM and all the speculation that Google was going to have their search franchise absolutely slaughtered by Chat GPT has turned out to not be true, at least not this year with their searches going up, revenue going up. But the big story is speculation around Gemini 3 being trained only on Google's TPUs, not Nvidia's GPUs. Your thoughts, Jamaat?

I think TPU is an incredible product. I'm biased, but I think it's an incredible architecture. This latest spin is very profound. But I also think that what we are quickly seeing is that there's going to be a highly fragmented layer of decoding chips that exist in the marketplace. Groq is one, TPU is one, Microsoft has a spin, Amazon has inferentia, Facebook I think is apparently spinning up their own silicon. So we're going to get to disagregated decode pretty quickly.

What are we seeing? We're seeing a nascent market get created. We saw an allocation of traffic that basically favored one company over everyone. And now we're starting to see a sorting function and a classifier in all of these different markets. It's like breaking apart, right? There'll be winners in science. There'll be winners in enterprise level coding. There's going to be winners on the chat side. And where are the advantages going to be? On the enterprise side, it's going to be model quality. Anthropics is excellent. On the chat side, it's probably going to pivot around your existing inherent distribution which is operating system which is your browser which is your phone which is Apple and Google and Microsoft.

I think the search franchise is going to grow and that Google's not going to lose to chat GPT. And I think the big loser in all this is going to be OpenAI because they started with 100% of the market and they're only going down and they're facing a Google firing on all cylinders. Anthropic and Grock beating them in the leaderboards pretty consistently. So, I think the short in all of this, if you were going to put on the pair trade, is short OpenAI, which I think is overvalued and is going to go down. And I think I would be long Google, Grock, and Anthropic.

I think what we will see over time is probably a differentiation of general purpose workhorses in chip architecture to more of these kind of special purpose chips that work well with certain models and certain applications. You can kind of think about inference in machine vision in robotics. You don't necessarily need an H100 to do that. you can use a purpose-built chip to do that in a way that reduces power cost, reduces ultimate kind of capital cost to deploy that in an edge environment.

The other black swan that I think is missing in the equation today and my early prediction for 2026 is Huawei. I think that there's a lithography technology that exists in China that is not publicly discussed that is going to be deployed in Huawei and all these fabs that they're building in mainland China and Huawei can create at a very low cost probably very high volume and probably in reasonably short order chips that can start to rival for certain market applications chips that might be expensive and long.

Give a timeline for that 2 years 3 years out when we start when they start to make announcements.

Okay. So announcements 2026 impact 27.

Do you feel you're a better investor when you're investing your money or do you think you're better when you have the discipline of having to report into LPs? It's actually a good question.

My returns have been better when I've been by myself. But I think that there is something really valuable about working for other people which it does keep you accountable. What's happened is my dispersion has increased massively investing on my own, which means I cut the losers off far longer than I would have if I was running a fund because I think what I signed up for when I was running a fund was never lose money ever and return the money as quickly as possible and then run the upside.

In 2011, two years before I sold Climate Corp, I started a company called Metro Mile. I was the chairman of the board of the company. I hired an outside CEO, fired him in a year, brought the promoted the CTO to be CEO for years. I worked with him as the chairman of the board. I invested close to 10 million of my own money in this company. Spent years on it. It had raised a series B, a series C, series D. Was doing great. I'm like, man, this is awesome. I can be a chairman, not a CEO, run these companies. This goes great.

And I'm like man I am so good at starting companies and being a chairman. This is what I should do. And that's what led me to start the venture studio. Both those companies ended up being net negative returners for me. And over time, many of the other projects that I was a founder of but chairman of didn't succeed financially. And over my years being on boards, I realized how frustrating it was to be on a board where you would tell a CEO a bunch of stuff. They wouldn't listen. They would do whatever they wanted to do. I was frustrated pulling my hair out, watching them do things I wouldn't do, not doing the things I would do.

So after many years of this failure after failure, I realized, you know, this was the moment where we had this amazing outcome, series of outcomes at Oho. And it was a research project for several years. We put close to $40 million into this project before these results started to come in. I'm like, holy crap this is the gamechanging business of my career. This is the power law. And that's when I made the decision, I'm going to go all in on this and I'm going to run it.

You know what changed my mind about this was I saw the movie Oppenheimer in IMAX and I left that movie and I cried and I realized I wasn't doing what I should be doing with my life by being this board member who was useless. I said I'm going to make this and I'd been thinking about this and I'm like that's it. It tipped me over and I made the decision to step in as CEO.

Alan Keating ran the high stakes game here, the elite big game for many years. Um then he started investing in companies. He was the seed investor in a little company known as Poly Market. and he's gotten into our friend group. I don't know how many years ago Chamathy brought him in and he fit right in and we started hanging out 10 years ago and we got to know him. In that time he also started to play high stakes on TV.

Kading at his core is an exceptional player not a traditional like you know you'll see the some of the other guys who are more solver oriented but Keading has incredible incredible live reads kind of like a modern younger generation of Helm youth. He can soul read people which when you're playing at the high stakes honestly that's all that matters because you can't play solver-based at these stakes in which we play. You cannot you're just going to get run over.

Yeah. I think I've I'm a navigating fear on the poker table better than most. So I think when people are, you know, afraid, they tend to give things away or get scared or act different.

How do you process losing $700,000 that way? Do you think this is so stupid? Why did I do that? Or do you are you saying what's what's the self talk? What's the internal monologue?

I guess I don't know where it came from, but I wanted to always kind of have a sense of humor around whatever happens to me. You know, the the things I can't control, the things I can control. I put myself in a spot. I've gotten to a point where I can immediately recognize how ridiculous what I just did was and kind of laugh and be okay with it.

It's about mastering the fear. Yeah. I think I just recognize that people make bad decisions when they're scared.

Mastering fear. You put in reps. How do you put in reps to master fear because that extends to many other things in life, right?

Well, I like making the bet where if it doesn't work out, I'm in a little bit of trouble, right?

You like to feel the pain. You like that it feels real.

Yeah. It's a motivator. It's something that drives and I like poker. I'll put myself in the same type of situation.