David Friedberg: It's inevitable that socialism will happen in America, but I don't want to lose my agency, my liberty, my freedom.

Host: Do you think the US as an empire is in decline?

David Friedberg: The answer is yes. I was appointed to President Trump's Council of Advisers in Science and Technology. And one of the great lies is that the government will save you. But the more government has tried to create services for people and help bring them up the ladder, the more expensive those things get. 63% of Americans live paycheck to paycheck. People can't afford to pay their bills and it needs to be fixed. What will ultimately happen? So, all my politician friends are about to chop my head off about this, but...

Host: David Freeberg, what is the most important subject of our time?

David Friedberg: AI. We're entering this golden age, and people don't realize we're in it. And I don't buy into the narrative that Dario, Elon, and Sam end up having all the value in AI because in the next 10 years, there will be a billionaire that will emerge that has zero net worth today, downloaded open sourced AI, and built a company that made them a billionaire. And they're going to be someone that's going to come from nowhere. And there's going to be a lot of these sorts of stories.

Host: But this narrative that AI will take jobs away, you don't believe it.

David Friedberg: So from data, from evidence over all periods of technological revolution like this, we've never seen jobs decline. And the average person doesn't see it. But oh my god, the stuff we can do is unbelievable. Right now we have a billion people in the world that are starving. We have hundreds of millions dying from curable disease. These are the sorts of things that are going to get resolved because AI unleashes this capacity for human advancement and it's transforming every aspect of biology and our understanding of life sciences.

Host: So I wanted to ask you, do you think we're going to be able to live forever soon?

Host: The truth is this is super interesting to me. My team gave me this report to show me how many of you that watch this show subscribe. And some of you have told us according to this that you are unsubscribed from the channel randomly. So favor to ask all of you. Please could you check right now if you've hit the subscribe button if you are a regular viewer of the show and you like what we do here. We're approaching quite a significant landmark on this show in terms of a subscriber number. So, if there was one simple free thing that you could do to help us, my team, everyone here, to keep this show free, to keep it improving year over year and week over week, it is just to hit that subscribe button and to double check if you've hit it. Only thing I'll ever ask of you. Do we have a deal? If you do it, I'll tell you what I'll do. I'll make sure every single week, every single month, we fight harder and harder and harder and harder to bring you the guests and conversations that you want to hear. I've stayed true to that promise since the very beginning of the D of Sio, and I will not let you down. Please help us. Really appreciate it. Let's get on with the show.

Host: David Freeberg, you're someone that graces lots of different subjects. If you were to sort of self-define who you are and what you do, now this is difficult because you've got to kind of put yourself in a label here. What would that label be? How would you self-categorize yourself?

David Friedberg: I would say I'm deeply curious about the world and the universe and how it works and why it works the way it does. And I'm a big believer in human agency to affect the universe around us. And that's kind of my core kind of driving motivation. A lot of the other stuff ancillary is about how do you enable that?

Host: And I think that that's sort of probably where I also spend some time is in the enablement of those things.

Host: Got a nice cute photo here of that kid that wanted to be Einstein.

David Friedberg: Yeah.

Host: And then as it relates to how that manifested into like a professional journey, what's your professional journey been for anyone that might not know?

David Friedberg: I started in college majoring in math and physics and then I changed my major to astrophysics and it was during the time I was in college is when the .com boom happened in the heart of Silicon Valley. There was a kid in my dorm room who started a website selling DVDs online and he sold it for a million dollars in our junior year of college. That was like an unbelievable unfathomable amount of money. And so there was this change that was happening in the world. And I got enamored with this idea of businesses and how do you use businesses to change the world, not just use scientific discovery as a method to change the world.

So I decided to go work in Silicon Valley. I interviewed for jobs. I didn't get a lot of offers, but I played a lot of poker during my college days. It's how I was able to make money. I read all the strategy books on playing poker. I actually spent a year working in a pool hall and the manager of the pool hall and the bookie invited me to their home poker game. Took all my money that I made at the pool hall. I was making four bucks an hour, 4.25 an hour. And so I was like, I'm going to learn poker. So I learned it. That's how I made money.

And I put that on my resume when I applied for jobs after college. And I got interviews with investment banks. And the investment banks were like, oh, we want to talk to a kid that knows how to play poker. Cuz this was before internet poker, before ESPN poker. So it was like an interesting thing. And so I ended up getting a job working in investment banking and then worked on tech companies. So then I got to learn business, finance, accounting, mergers and acquisitions, all this sort of stuff. And then I ended up working at Google. I worked at Google when it was started when it was just under a thousand employees and I left a couple years later, started a business called The Climate Corporation and so I've been in Silicon Valley my whole career.

Host: And that company you end up starting does pretty well.

David Friedberg: The Climate Corporation.

Host: The Climate Corporation.

David Friedberg: That one we sold in 2013 so we sold it for a little over a billion dollars which was a great outcome for investors and shareholders and today you know it's software for farmers.

Host: And today that software is now owned by Bayer which is the big kind of pharma/ag company. It's used across 200 million acres every year. That's a pretty sizable amount of farmland that uses that software still. So yeah, it's done fairly well.

Host: So I'm 33 now. You were 33 when you sold that?

David Friedberg: I was 33.

Host: 33. A lot of money, 1.1 billion. And you've done lots of other things since then, which we can go into. But you've also, I think from March this year, you were appointed as an adviser to Donald Trump.

David Friedberg: Yeah, I was appointed to President Trump's Council of Advisers in Science and Technology.

Host: What does that mean in reality?

David Friedberg: So, if you look back in the last couple administrations, there have been different themes over time on who is appointed to PCAST. In historical context, like Bill Clinton had a PCAST that was set up just for the internet.

Host: PCAST,

David Friedberg: President's Council of Advisers in Science and Technology.

David Friedberg: And so, he set one up focused on the internet. And this current PCAST under this administration is heavy in AI. So it's like Mark Zuckerberg, Marc Andreessen, Sergey Brin, that that's kind of the cohort that's on this advisory council, but it's always included folks that are involved in things like biotechnology, sciences, and to help guide science policy for the administration. So it involves having conversations with people in the administration on things that are happening in industry, things that are happening on the frontiers of science and technology to help guide some of the policy decisions that the administration is trying to create or enforce. And what is the most important subject of our time? AI. And right now the big question in the United States from a policy perspective seems to be the regulation of AI. What role should the government play in determining where AI goes, how it gets built, how it gets deployed, who gets to use it, who owns it, where the value lies.

Speaker A: ...lot of these factions that emerge inside a government even today on the same political party on whether or not for example to allow Chinese open-source models to be used by American businesses. You know these Chinese models are as good as or in many cases better than private American models and because they're open weights you can download them and run them on any computer you want that works. A lot of companies want to use those because they're cheap. There you can pay effectively 50 cents for a million tokens of output which is a measure of how productive the model is. You know, a token is kind of like a word versus $50 from Anthropic which is a private model. So the question is do we allow these Chinese models to kind of become ubiquitous in industry and if so what does that do to American AI? What does that do to our capacity to compete? Is there security risk? So there's a lot of this kind of debate underway. And that I think is probably the hot topic du jour. I don't know if it's the hot topic tomorrow, but today that's kind of the big thing. But all of this, this administration I think from a science and technology policy perspective will probably be viewed as on the one hand what's the enablement acceleration regulation of AI and on the other hand you know there's this question still on what is science today in an era of AI science is also changing and so there's this kind of I think big shift underway.

Speaker B: We'll go into those subjects specifically the subjects on AI and everything that it interfaces with but I think it's important also to get kind of like a backdrop of the economic state and like the social state of the nation because all of these things feed into these big questions on AI and they also inform everyone's biases on this subject because if you're at a different sort of socioeconomic position or if you're feeling a different thing your perspective on AI is going to be radically different. So if we started then first on like if we just focus on the United States which mean in some respects is a little bit of a proxy for the rest of the western world. Where is the United States at at this moment in time in terms of is it on the rise inequality? What are the what are the sort of pertinent factors here that help us understand the backdrop of this nation?

Speaker A: The biggest drivers for this nation at the moment in terms of what public policy and private markets will do is number one the unaffordability crisis.

Speaker B: What does that mean?

Speaker A: 63% of Americans live paycheck to paycheck. They don't have enough savings to pay for a fiscal emergency in their household. 63% of Americans and the cost of things is rising faster than wages are increasing. So things feel less affordable to most Americans. And then there's this wealth inequality concern which I would say is both kind of a perception issue. There's definitely policy issues that has allowed it to happen and we can talk about those. But I think America is in this kind of crisis of classism, this crisis of us versus them. And it manifests in a lot of different ways. So, you know, you had Ray Dalio on, and if you think about Ray Dalio's kind of like cycle of empires, you know, this is this idea that there's been six empires in the last 500 years and the United States is on the decline and China's on the rise. And it can be measured across a number of different dimensions. One of which is this crisis of internal struggle which manifests often with external struggle, the Iran war. Like why can't we stop having external wars? Well, you know, a nation that's happy with itself generally doesn't go to war. A nation that's not happy generally does go to war. And so, um, a lot of this stuff gets tied up, I think, in this economic distress that the United States is feeling. My contention which may not be very popular is that the more government has tried to create services for people and help bring them up the ladder the more expensive those things get.

Speaker B: i.e. socialism.

Speaker A: ...policy in the United States and this is one of the great lies and I think there's a series of great lies in US policy over the last half century but one of the great lies is that the government will save you the government will help you by giving you these essential services that you want more of education healthcare housing and as the government has entered into those markets because remember there are people making those things offering those services and there's someone paying for it so as the government enables more money to flow into those markets, the cost of those things has just gone up. And you can see how this plays out, for example, in education. So higher education, if you want to go to college in the United States, and I'll just give you a statistic. 30 years ago, administrative staff were like 10% of colleges. Today, they're like 60%. In just 30 years, give me a rational reason why we should have 6x the administrative staffing at colleges and universities. There isn't a good reason why. The real reason is that because the federal student loan program doesn't discriminate against a university on how well they do with their graduating students or the degree or the individual that's taking out the loan. The federal student loan program has just allowed more money to flow in to universities. Now, if you're a university administrator, there's no constraint on how much you can charge for tuition. So, hey, we'll raise tuition 5% this year. We'll raise it 8%. We'll raise it 10%. And we'll hire more people. And if people hire more people, they get a higher salary. If you think about the individual, I don't get to make more salary until I'm a manager. Now I want to be a director. Now I want to be a senior director and the organization grows. That's very natural for any organization whether it's a nonprofit, a university or a private company. You want to grow and people want to make more money year after year. So they because they can collect more money can charge more for tuition. There isn't a natural market force that says your tuition is too high now because the government has provided unlimited funding to higher education through the federal student loan program. So, as a result, education has gotten so vastly expensive that everyone now looks at it and says, "We got to do something about this." And both parties seem to say, "Well, here's what the government's going to do to do more." And it's like putting fuel on the fire. So, the challenge right now is people are feeling left behind. There's massive wealth inequality. Things are extremely unaffordable. And the solution that's being embraced is for the government to do more, which de facto leads to socialism. What is wrong with socialism? I would argue that the key measure of a country's success is how many people are transitioning from labor to capital each year.

Speaker B: What does that mean?

Speaker A: That means every year I'm working paycheck to paycheck. I'm collecting check. I graduated college. I had $19,000 in debt. I went and worked. I got paid. I saved up. I paid down my debt. I was able to get out of it. Then I worked at Google. We had an IPO. Suddenly I had assets. I had stuff. I had money in the bank account. And it was like an incredible moment for me. And I said, I could live off that money. I don't need to live off a paycheck every month. I now have savings. I have assets. That is capital. And everyone talks about capital versus labor. But the real advantage of America is enabling people to go from labor to capital. Every individual that works, saves, invests, does whatever they need to do to accumulate enough capital ends up in the capital bucket. And then you're no longer stuck needing to go paycheck to paycheck to pay your bills. That's the dream. That's the real American dream. It's not just about owning a house. If you own a house and you have a bunch of debt and you got insurance payments to make and you still got to work every month to make those payments, you're not necessarily living the American dream yet. The American dream is being freed of that burden...

Speaker B: ...because you can live off the interest of your assets.

Speaker A: That's right. And so you're earning income. You like, let's say you have $100,000, you know,

Speaker A: ...saved and you can make 10% a year on that. That's 10,000 bucks. Suddenly, if you get to a million dollars saved, you can make $100,000 a year and you can live on that. That's economic security. That's financial security.

Speaker A: That's what we should give to every American is the ability to own assets that give them freedom to choose what they want to do in their life rather than be stuck in work. And the problem with socialism is it takes away that transition moment. It eliminates it because it says everyone has to be labor all the time for the rest of their lives. And then no one has freedom.

Speaker A: And that's what America was founded on was this ability to find through freedom of choice, through agency, the ability to transition from labor to capital. And I think our goal as a country should be get 2% of Americans across that line every year, then I think we'll be successful going forward. But if everything's all about like give people more stuff and have the government do it, we're just going to keep raising the debt, making things more expensive, inflating the cost away, and it's inevitable that socialism will happen in America. It's absolutely inevitable.

Speaker B: Do you think the US as an empire is in decline in terms of the power of the dollar, in terms of prosperity of Americans?

Speaker A: The average American or majority of Americans, the answer is yes. But the potential hasn't been deleted, meaning decline is not inevitable, to be very clear. Like we are not yet at a point where it's a runaway train. In the history of democracies, there's never been a place like America where an individual like myself, you know, moving here from South Africa, going to public college, graduating with debt, and then being able to work my way out of the debt and find myself in the position I'm in today with no nepotism, with no handouts.

Speaker A: With I mean, you could argue about privilege and all these other sorts of things that I was vested over my life. But like, it's an amazing place that that sort of story can be told a million times over, that there's not just one or two people that this has happened to, but there's millions of people. The problem is it's all the other hundreds of millions that didn't get to live that opportunity. And if we can fix that, America is not in decline. America is a prosperous nation and has centuries ahead of it.

Speaker B: When you look at this, you're talking about runaway trains. When you look at the national debt, though, it does look very much like a runaway.

Speaker A: Want to know where inflation comes from? That's where inflation comes from. By printing more dollars to pay for that debt, which is what happens, the Federal Reserve buys the debt and they issue dollars to the bank system to to buy the debt from the government. Remember, the Federal Reserve is separate from the government. So, the Federal Reserve can print dollars. They can send dollars to banks and now the banks can loan money out and it makes its way into the economy.

Speaker A: Now, there's more dollars in the economy and that money was, you know, owed back to the government at some point, but the Federal Reserve may never get paid back. They may just keep adding and adding and adding and adding and they're just printing more and more dollars.

Speaker B: Is that sustainable?

Speaker A: No.

Speaker B: So, so I I don't understand the force that's going to intervene to stop this sort of compounding debt.

Speaker A: The outcome of this is socialism. That's the moment we're in right now. That's why we're seeing this wave of socialism. I've been saying for five years, we're going to face a wave of socialism. And after Donald Trump was elected, my prediction for the next year was that the next wave in politics in America will be socialism. And people thought I was crazy. And I'm like, it is absolutely inevitable. If you look at this, this is where we're headed.

Speaker A: It it is de facto socialism when the government employs roughly 1/ half of the people of the United States. Right now, if you look at all the federal, state, local agencies, so the people that are employed, the people that are contractors of those agencies, and then um the people that live off of uh some sort of government pension or social security system, the total amount is close to 50% of Americans. So, we're getting to a point where people are like, the only place I can go is more money from the government. And then eventually the government becomes the whole economy.

Speaker B: If the outcome of socialism was the cause, capitalism?

Speaker A: It's a great question. I think it was capitalism plus policies. Let's say you have a million dollars.

Speaker B: Yeah.

Speaker A: You're making, say, 10% a year. Next year you have $1.1 million. The next year you have $1.21 million or whatever. And you keep adding it up. That's called compounding. After a couple of years, your million dollars turns into $10 million.

Speaker B: And you never have to sell shares along the way. You can just own the shares and whatever's going up. Your value just keeps going up. You've never paid taxes along the way. Boom, boom, boom, boom, boom. And suddenly, fast forward a couple years, instead of having a million, you've now got 10. That's capital compounding over time.

Speaker A: Meanwhile, if you're working, every paycheck, taxes are taken out. Every time you get a check, every time you get more money, more capital, taxes are taken out. So, if you don't get capital, if you don't get enough savings to allow you to compound, you are never going to get there. So, from a tax policy perspective, labor working for your money should have never been taxed higher than earning returns on your capital.

Speaker B: So you're saying tax the rich?

Speaker A: I'm saying tax capital at a rate that's equivalent to labor.

Speaker B: Wealth taxes.

Speaker A: Wealth taxes are asset seizures. Definitely no. So one of the principles of the United States and the principle of what this country was founded on is private property rights. If you go back to England, right, like 500 years or like let's just do let's just talk Europe broadly. There were very few places where you as an individual citizen had rights to own private property. There were very few places where you could say I have this thing and it doesn't belong to the king or it doesn't belong to whatever the local lord is.

Speaker A: Like everything was the property of the lords of the higher class of the upper class. It was endowed to them as vested to them by birthright for centuries. Same in Asia, same in the Middle East, same in Africa. I mean like every nation started out with this system where people didn't have rights to private property. Those who had kind of these systems above could decide who got what. So the United States was founded on one of the principles of private property for an individual...

Speaker A: ...that you you know I think when they were drafting the Declaration of Independence it was about life, liberty and the pursuit of property and they later changed it to pursuit of happiness and the pursuit of property was really the measure of what you've accumulated as an individual. You now have a right to accumulate things. You now have a right to build value to build wealth to build a house and and have your family in your house and have all these things. That was a principle of the United States.

Speaker A: I'm all for taxes when people transact. When they turn their stock that they've held for a couple years into cash and buy something with it, boom, tax. You get taxed on that. If that's the right model, that's when you should get taxed, right? Then when you're able to turn that asset that you own into another asset. So that's what we do today. That's an income tax or a capital gains tax, like when you realize that gain.

Speaker A: But if I go into your shares and I'm like, "Hey, I'm going to take 5% of your shares." What are you losing? Well, you can't use those shares to buy anything because if as soon as you try and buy something, you owe tax on those shares. So, by taking away your shares before you've actually transacted with them, before you've actually sold them, or taking away your private property, your home, or giving the government the right to come in your garage and audit everything you own, and say, "Hey, this year we're doing a 2% tax" that is antithetical to what the United States was founded on, which was a founding principle of private property. Now, if your property goes up in value, and then...

Speaker A: you eventually turn it into some other property, that's a transaction. And that's when you get taxed. That's how the system's set up. So if we have an issue with people having too much wealth, that's the moment to increase the tax rate. That's capital gains tax, income tax on high earners. Those two things can get you 97% of the way there. And you're not really going to gain much. You know, separately, we can kind kind of talk about the numbers on this, but like tax the rich, all for it, but tax the rich when they transact, when they sell, when they when they have a capital gain, if they borrow against their assets. This is another thing that's that's wrong about our system today. If I'm very wealthy, I own a bunch of stock and I've never sold any of the stock. If I borrow against my stock to go buy a yacht, I don't pay taxes. That should be a taxable event. We should fix that. That's an easy fix in the tax system. I'm not taking away your private property, but as soon as you borrow against that, it's effectively like transacting on that property. So, that's a moment to pay a tax. And if we think that the rich aren't paying enough taxes, you can raise income tax or capital gains taxes to get them to pay more.

Speaker B: This is what I was going to say, but you you arrived at it was most people that own stock in big companies will just borrow against their stock and they never pay a tax.

Speaker B: >> I didn't know this until I was I'm going to say 26. And my company had gone public and the this bank in Europe approached me and said, "By the way, we'll give you 20% of whatever your your the value of the stock you have in my company called Ocean AG

Speaker A: >> is a tax-free loan."

Speaker B: I was like, "Explain this to me." So, you'll just send me millions of pounds and I don't have to pay tax.

Speaker A: >> You don't have to sell your shares.

Speaker B: >> You don't have to sell anything. I said, "Well, look at the rest of my portfolio." And I had some Facebook stock at the time. They're like, "We'll give you 50% to 60% loan to value on that. I.e., if you have a million dollars of Facebook stock, we will transfer you today 700 grand tax-free and I can do without whatever I want." I thought, "Fucking hell, this is what the rich do."

Speaker A: >> That's exactly right. And the truth is that no one talks about behind closed doors. Everyone knows that it needs to change,

Speaker B: >> but no one wants to say it because

Speaker A: >> I'm saying it.

Speaker B: >> Yeah, it's

Speaker A: >> got to change.

Speaker B: >> What's interesting about that is say that I have 10 million of Facebook stock and I I take a loan and they give me 5 million in cash. What a rich person then does is they take that 5 million and they go and buy other assets.

Speaker A: >> Exactly. Right.

Speaker B: >> And then they start acquiring more and more assets. That's what's unfair about the system because then when you have capital, you're accumulating more capital while labor, if you haven't made that cross that chasm from labor to capital, you're still here grinding every month, grinding every week, trying to pay your freaking bills, and then these guys have all these shenanigans that are going on.

Speaker A: Yeah, >> it is wrong and it needs to be fixed. The answer though is not taking private property. As soon as you start taking private property, those gates are open. By the way, it's not even going to be constitutional in the United States. The fifth amendment has this taker clause. you know, it's not it's legally like not going to win in federal court. It could work in some states. Some states there's seven states that actually have a constitutional ban on private property tax like this. There's uh you know 43 states where it's game on and we'll see how they play out in the courts as they try to pass these wealth taxes as well. But these are asset seizure taxes there. You you can have a wealth tax by raising capital gains, make high income or high asset people pay more taxes or whatever when they sell stuff or when they buy stuff. There's a lot of ways to tax wealth. But taking assets from people after they've paid their taxes or before they've paid their taxes is not the right way to do it.

Speaker B: >> What will ultimately happen?

Speaker A: >> So the ultimate outcome will be that 51% of people will say, "Hey, give me all the stuff that the 49% have." What would stop them from doing that? Because ultimately you can take as much as you want from a minority of people and distribute it to the majority. And that minority starts out with a few billionaires, then a couple more 50 millionaires, then a couple more 10 millionaires, then millionaires, then 100,000. And there's no limit to where this thing goes. And that is socialism.

Speaker B: >> And what what does that do in terms of how talent moves

Speaker A: >> and how people, you know, move to different places.

Speaker A: >> I know billionaires.

Speaker B: >> Yeah.

Speaker A: >> Many of them have moved or are planning to move out of California. Yeah.

Speaker B: >> Just on the threat of this.

Speaker A: >> And [clears throat] people say, "F them. Good riddance. Get rid of them. You know, the top 1% of taxpayers in California pay the majority of taxes in the state. I think it's probably it's definitely north of 40%, but it's probably the majority.

Speaker B: >> The top 1% of earners pay 40 to 50% of California's total personal income tax depending on stock market capital gains performance.

Speaker A: >> There you go. So, that 1% are the people I'm talking about that are leaving the state because they see where this is headed. I don't think California wants that. [laughter] Those are very productive people for the state. They're people that create companies that hire people that pay well, go to fancy restaurants, pay for cars. I mean, they support the economy. It's not just the taxes, but they're a big part of capital flowing through the economy. We saw this happen in France. You know, France had this wealth tax and then their total tax revenue declined by more than they were making on the wealth tax because everyone left France. Then they stopped doing the wealth tax and everyone came back and the income came back. So, this is a wellstudied kind of case. So, I don't think that a wealth tax or an asset seizure tax is the solution. I think we've got to fix all the other stuff that we've talked about and we've got to fix the government spending problem. And if we can do those two things, then I think we can bring inflation down. We can bring the wealth inequality down and give more people the ability to make that transition. But I do think every politician should be talking about the focus on what percent of people in the United States every year are moving from labor to capital.

Speaker A: How many people can say, "Hey, I've got enough cash to retire if I wanted to." That's what we want to try and get everyone towards. Not just convincing people, and this is one of the great lies, convincing everyone that the great American dream is to own a house. When owning a house for a lot of Americans ends up putting all your capital in one asset, and you've got to basically get the price of housing to go up every year to keep everyone moving up the ladder. So now, fast forward 30, 40, 50 years, young people can't afford to buy a house anymore because we've pushed the asset value up so much to try and make sure that everyone's got good good household wealth. We are told that I mean that's the sort of central idea once you leave university is to figure out how quickly you can get a mortgage or buy a house.

Speaker B: >> Great lie. It's one of the great lies.

Speaker A: And there's a lot of countries where people have been able to accumulate capital and jump that that ravine from labor to capital much more quickly when they don't buy a house because they can invest in stuff. They can buy, you know, the the S&P 500 which you can just buy on an Etrade or Robin Hood account and you can just own it on average will make you 10 11% a year. You just put your money in that you're making 10 11% a year and it can go up every year and you don't have to pay taxes. You don't have to pay property tax. You don't have to pay insurance. You don't have to deal with repairs and maintenance. All that sort of stuff. So, a lot of people would have been better off, depending on the markets that they're in. There's some markets that that ballooned, but a lot of people would have been better off over the last 30 years, actually

Speaker A: ...owning the S&P 500 than owning their home and paying for the rent on a home.

Speaker B: One of the things I see in the comment section whenever someone makes that point is you'll have someone who bought a house 20 years ago saying, "Well, listen, I bought a house 20 years ago for this amount, and now it's worth this." And this is every single time that I see this argument being made from financial advisors or investors, that is always the top comment is, "Well, I bought one and I did good."

Speaker A: Yep. It actually indicates a problem, which is if your house went up in price so much, that house is much less affordable to a young person that's going to buy it next. And that's what we fundamentally done with this asset class, residential real estate. We've created a system whereby residential real estate prices go up so much and there's a whole bunch of policies around making this happen.

Speaker B: Got a graph here showing all the things that have gone up and you can see housing is one of them.

Speaker A: Yeah. The stuff on the bottom the government doesn't touch. The stuff on the top the government touches. And so the more the government's involved, the more expensive these things get. But all of the policy around residential real estate has allowed the middle class in America, which has the majority of wealth, and I'll give you the statistics in a minute, to grow their asset base, to accumulate more assets, to become wealthier. All the boomers, they're so wealthy because they owned all these houses. And now young people graduating college can't afford a house. It is a bad fact that a lot of people got very wealthy by owning a home because it means that the next generation is going to say, "I want socialism cuz I can't afford a home." That's the moment we're in. 40 million Americans graduated from colleges in the United States in the last 10 years. 45 million. So if you do the math on this, that's a large number of people that are now on average encumbered with some amount of student debt, facing a challenging job market. And then the only way to buy a home is you got to come up with a million bucks. And you know, it leads to this problem where everyone's like, "Man, I need mom Donnie."

Speaker B: So what would you say then to people that are in that 62% was it

Speaker A: 63

Speaker B: 63% of people

Speaker A: and that statistic changes year to year but that's roughly the number 63% of Americans you know less than $500 of savings and working paycheck to paycheck and can't pay for a fiscal emergency.

Speaker B: So for those people the the 63% who you're telling them that buying a house is now like unaffordable it's and also it's potentially not a good investment if they're trying to sort of cross that cousin and get over to the side where they have assets. What would what would your prescription be for them? What should they do?

Speaker A: Man, that's a great question. People will challenge it, but I would have never thought that podcasting would be such a massive business. I would have never thought that being an Instagram influencer would be such a massive business or a Tik Tok influencer. I would have never thought that individual artists could publish online and make money without getting a record deal. I would have never thought that individual artists would be able to sell their work and make a living on eBay and Etsy. I would have never thought that crafts people would be able to find jobs through the internet. I I think the internet has been this incredible enabler of millions of new ways to work, of new ways to earn an income. And a lot of people will roll their eyes and say, "But that's not what the system was supposed to have set me up for. The system failed us." Maybe the system did fail you. And maybe the government's solution wasn't the right solution, but human agency is what got all these people there. They all got to this place. Did the government give you your job as a podcaster? Did the government teach you how to podcast and build this incredible media empire that you've built? I don't know if the government played much of a role in it. I think you played the role in it. I don't know. You tell me if I'm wrong. But I think that this is really important for a lot of people to observe firstly, which is the government isn't going to save individuals.

Speaker A: The government's going to make things harder for individuals to find their path. If I have to go and start a barber shop, I got to go get all these cosmetology licenses. I got to go figure out a way to go to school, pay thousands of dollars, get health inspections done. There's a lot of government layers that stop me from doing that work. There's a lot of ways that the government actually inhibits people's agency and makes it harder for them to do the things that they want to do and progress. I think that's just fundamental for me, one of the observable truths. But I think the second thing is I never discount human agency. There was this great um podcast done years ago by those guys at the Hoover Institute where they talked about the success of China and a lot of people, you know, where China grew GDP per capita from like 3,000 to 30,000 or whatever it was and they're like, "Man, Chinese central planning is brilliant. They're so good at this." And these guys made the argument which I discounted at the time but I often think about nowadays that it was actually the agency of the individual choice, the entrepreneurship, the drive, the motivation of the population of the individuals in China, not central planning, but basically the government enabled free markets. They allowed people to work. They allowed people to trade. They allowed people to create value for each other to do something that someone else might want. They looked around and they said, "I think you want this." and they started making it and when the government loosened the shackles on individuals that population grew the economy and the government still has a big role in central planning in China but it was a really important point if you think about all the success that's come from the United States it's not a central message that the government said let's do this and then we're going to do this and we're going to do this it's individuals making their own choices you've seen what people want to learn what people want to watch what they're interested in and you give it to them you create value for them you deliver that value and you've you've earned something from that people are willing to pay for that. And I think that that's core to kind of where we can go from here. And I don't think we teach it in schools. I don't think we teach it as a value. We've lost that value of agency. The importance of the individual taking their own action. Every conversation we have in every frigin context is all about the freaking government. Government this, do this, do this, do this, do this. For me, what individuals can do is limitless. And that's where I think we fall short. Every day someone should ask themselves, I tell my kids this, but what did you do today that someone else valued? And if you focus on figuring out something that you can do that someone else can value, then you do that over and over again, rinse and repeat. I think there's paths for people.

Speaker B: So, couple of counter-arguments here. Yeah. So, we can stress test this thinking. Um, you pointed at me and said I was, you know, I started podcasts, I started businesses, those businesses grew. Um, and it was, you know, you were very generous in giving me probably more credit than I deserve there. But if I was to, if I was to rebuttal that, I would say, I was born in Africa. Would that have been possible in Africa? Would that have been possible in like Nigeria, where my mother's from, or would it been possible in Botswana where I was born? Is it the fact that I moved to the UK where I had this sort of foundation of stability because of the government where school was free for us? Healthcare is taken care of. So I never had to think about those things which allowed me at 18 years old to like not go to university, take a risk, drop out, be in that room. No. When I was sat in that room in Manchester, I actually at one point printed off the jobsekers allowance forms, which are basically the government will give me free money if I

Speaker A: ...if I get to the point where my shoplifting of pizzas is no longer a reliable way to feed myself.

Speaker B: Yeah.

Speaker A: But I had that form on my desk and it was there. And there's maybe something psychological about knowing that I had this sort of like underlying safety net where I could rush back a 300 mile round trip to my parents in Plymouth and I could like live in the house or I could fill out this form, this job seekers allowance form and they would like pay me money that allowed me maybe at some deeper level to go and take that risk.

And I never even realized the privilege of like, oh, there's like healthcare and there's laws and there's roads and there's like this Wi-Fi thing that allows me with this laptop in my room to like build this website that I built. Um, so that's the government's involvement in my success. They gave me this great foundation of stability and infrastructure.

Speaker B: Great. Great role for government to play.

Speaker A: But the problem is that's a slippery slope, right?

Speaker B: That's right.

Speaker A: And so there's balance here. There's nuance of like personal agency, but then also the government, do you need to give me a good foundation?

Speaker B: That's right. And the government shouldn't employ you. And that's the slippery slope that we end up on. And that's where I worry about our ability to come back from that because if you do end up with 40 50% of Americans getting paid some check from the government, it becomes very hard to get off of that check. And then people vote for that check to get bigger and bigger.

Speaker A: The other point I wanted to point out of maybe a counterpoint is just like, and you know this cuz I've heard you say this before, but like there is a privilege that we both have in terms of our just...

Speaker B: Nature. Yeah. Nature, nurture, whatever it might be. Yeah. And I I said nature because yeah upbringing implies that our parents were great to us and that's what made us whatever. But also the opposite can be true if you think about someone like Elon Musk. You go his dad wasn't that nice to him. So not necessarily a lovely upbringing but the circumstances...

Speaker A: He was never without a meal and neither was I. And I mean you know those are important facts of privilege. The circumstances of the of our upbringing and maybe our nature, maybe our biology, maybe set us up to be the certain type of person where agency, however that's defined. And again, I I pause there because...

Speaker B: I think you're exactly right and I think that that's what education should be teaching that value that that's that's where I think this role of like what's the role of a public school? What's the role of this infrastructure that government's building around us? If it's teaching you that your next job is to come and work for the city or come and work for the state, it's not teaching you that you have agency. It's not telling you if you if it's telling you that the only path you're going to have coming out of this rural school is to go work in the military, it's not teaching you about your agency. And I'm not saying it's wrong to do civil service or to do military service. I think those are very important parts of what all of us should strive to do is to support the government that makes our society possible. But I think that this idea that we should all be proposed as like the government role, the government path, the government work is what we should all be stuck doing for the rest of our lives is the wrong setup.

Speaker A: The opposite is though also probably the wrong setup which is that we should all start a business or become a creator.

Speaker B: I think that's a mistake too. But I think that this idea that you can find a path where you can provide value to someone as part of an organization as as an individual as a leader you can choose your path. But the idea that you should be accessing your capacity that you can create value for someone else should be the objective.

Speaker A: Do you think there's always going to be inequality?

Speaker B: Yes. I mean it's either inequality or it's lack of progress. I think those are the...

Speaker A: That's the dance.

Speaker B: That's the dance. So China's very good at this. If you watch their their policy, they just recently shifted to a free market policy. They literally just have like a throttle. Uh, I always vision AI has this lever in his big room where he goes like free market, not free market. Like he's just kind of like rolling it back and forth. When you have a free market, people push the frontier. They discover new things. They make new things that have never been done before. They create new value and the economy grows. The problem is it doesn't grow evenly initially. So like let's say that you came up with a goose that lays golden eggs and AI...

Speaker A: AI and you've got this technology...

Speaker B: And this technology is making golden eggs. And you're getting very wealthy with these golden eggs. And then that goose makes two geese and three geese and four. It starts breeding and you start selling the goose. And it takes a number of years before everyone has a golden goose. During that time, you've raced ahead cuz you've got now dozens of geese making lots of golden eggs for you. And a lot of people are like, I want a golden goose. By the time they get a golden goose, you've now got a million golden geese. And it feels like inequality. But the truth is now everyone here has a golden goose. And if you told them 30 years ago you would have a golden goose, they'd be like, "No way. That'd be amazing." So every day they're making the golden goose, they're printing the money, they're buying stuff with it.

That's the problem with progress, whether it's medicine. You know, a lot of medicines today are million dollars a dose for like CARTT therapies, for example. These can save you from cancer. Only 50,000 people in the US can get them every year. And there's hundreds of thousands of people that die because they don't have access to these therapies. So it's limited in terms of its availability. There's technology like AI. Not everyone has access to it. Not everyone owns a piece of a model, etc. Not everyone's using it, and the people that are using it are getting ahead faster than the people behind.

Speaker A: In your golden goose analogy, by the time that the golden geese get down to the sort of lower end of the socioeconomic ladder...

Speaker B: Or def I would I would use the word diffuse. Yeah.

Speaker A: Those those golden eggs or whatever, buy less...

Speaker B: Because something happens along the way.

Speaker A: That's right. So along the way, the government says, "Let's give everyone that. Let's give everyone access to more stuff to make up for that difference." And then things get more expensive.

Speaker B: Is this in part because when the nation becomes prosperous because the GDP is high, when you have four-year election cycles, politicians get in by offering you lots of free stuff. And that is the nature of the four-year election cycle.

Speaker A: I always said the the kid that got elected president in middle school was the kid who said he's going to make the vending machines free. That's always going to be true in any election. And at the end of the day, that's how the system grows. We don't talk about this four-year election thing enough as maybe as being a bit of a causal factor that's causing short termism amongst these leaders where they're all just spending more money to...

Speaker B: I cannot tell you how much it drives me nuts when I go to Washington DC and I go to Washington DC every couple weeks or whatever and I meet with Congress people, senators and representatives, literally all of them just talk about getting stuff for their constituents. Yeah, that's all that they're there to do: just get stuff for their people. That's their job and that's how they get elected. And the incentive is "I'm going to get you something. Vote for me."

Now, the founding fathers kind of had this idea that they would rotate into public service and rotate out and go back to private life. There's a lot of writings about this, you know, in the early days of the formation of this republic. And it was like, we should all go do our tour of duty. We should go in. There was never this belief that America would evolve to a world where you have career politicians. People that are just constantly trying to get elected and their job is...

Speaker A: ... to be a politician. It's just such a mind-numbingly crazy idea to think about. And all my politician friends are about to chop my head off about this, but I think it's nuts. I don't think a person should be a politician. I don't think that job title should exist. And I'm sorry to all the politicians out there. I think the people that represent the people should have the best long-term interests of the people in mind because they should be constrained to serving for a limited period of time and then they go back to private life.

That means that we should have term limits. So you should never be able to be elected more than two terms as a senator or you know four terms as a representative or whatever it is. And it should be the case that if you're in one public office, maybe you shouldn't go transition to other public offices under those same limits because at the end of the day, you have created a system whereby you've proven that you can get stuff for people and your job is to go get stuff for people and that causes the government to inflate, be mismanaged, you know, and then there's all the waste, fraud, and abuse stuff that happens along the way.

Speaker B: Everything is a trade-off, right? Even in that example, if some people did 8 years in government and they know they're going back to private life, they could be dealing their friends. I'm going to do eight years in government. I'm going to run the transportation division. I'm going to serve some nice benefits to my friend who runs Boeing and then when I step back in, I'm going to step in as the chair.

Speaker A: That's a law to make sure that doesn't happen. And he goes to jail if that happens. That's a pretty easy fix. You can't buy stocks. You can't own stuff. You can't trade. I mean, there just so many obvious things. If you're going to go serve in government, you can't do stuff that you can do as a private citizen and you shouldn't be able to enrich yourself as a private citizen. If you do, you should go to jail. But we should also make sure that the incentive structure is set up right so that good people come and work in government and that we have good rotation between public and private life.

Speaker B: It's a hard problem though, this problem of how you fix this incentive structure so that you don't just get I mean this stuff inevitably happens cuz we hand out lots of free things and we don't think about the long-term consequences. Has anyone fixed it globally? Is there any nation you look at as a model for a better

Speaker A: you know a lot of people will point to Denmark they'll point to places like that and say hey these guys do a great job and you know there's a lot of public services and people pay high taxes but you know there's not a lot of great progress there's no entrepreneurial success coming out of those places what happens in America the freedoms that were afforded the individual agency and liberty and rights to private property creates an incentive structure that says go try and do crazy stuff that could work And if it works, there's tremendous return. So it's worth taking the risk. And that level of risk is what pushes the boundaries. It's what discovered CAR-T therapy, what discovered gene editing that can lead to curing human diseases. It's what's discovered new advances in agriculture, new physics, new engineering, AI. All of these things came from this risk-taking system that we've set up in the United States that's built around these individual incentives. And it works. So you can have great comfort for a great many people in Denmark and people will be very happy living there and they will have a good life, but you will not have progress like you have in the United States. And we push the frontier because we create this incentive structure and that's where progress comes from.

Speaker B: Would you say the vast majority would choose to live in a place like Denmark if it, you know, I'm looking at some of the stats here. They have higher societal trust in government, police institutions, and strangers. They have standard 37hour work weeks, 5 to six weeks of paid vacation and cultural emphasis on balance. They have lower ceiling of extreme wealth but a higher floor so less poverty and financial ruin. And according to global happiness metrics, Denmark consistently ranks significantly higher than the United States. Most people would choose that, right?

Speaker A: Absolutely.

Speaker B: So central planning, it might stop a few, you know, very high agency ambitious people, but the vast majority would theoretically be happier with a Denmark model. the vast majority maybe.

Speaker B: And do you think the vast majority of this country actually would if there was two buttons and they had to press they'd press Denmark.

Speaker A: One of the things that I think makes American culture different from Denmark is this idea of individual progress. So I think if you ask the majority of people, you can have that, but you don't get to progress. Meaning you don't get to earn more next year and you don't get to earn more next year. You don't have a shot at becoming a millionaire. You don't have a shot at building something great. You don't have a shot at buying a second home. You're limited. But you get that over here. You don't get anything guaranteed to you or you get some stuff guaranteed to you, but you don't get much more guaranteed to you. But you could have the world. You could make a million dollars. You could own a second home. You could buy a second car. You could pay off your kid's college tuition debt if you earn well. There's more options here. There's more guaranteed here.

Speaker B: You think the 63% would pick? I think even within the 63% there would be some percent that would say this. But I do think this is why we're headed the way we're headed in the United States. People want more of a guarantee. The question is, do you want to maximize the number of people that are happy or do you want to maximize the number of people that are truly free? And by being truly free increases the rate of progress across the whole population. And that rate of progress may be asymmetric. It may be diffuse. Starts with some makes its way to others over time. I think that that's what America's chosen to be for the last 250 years. I'm not sure we're choosing to be that for the next 250 based on what's going on across the country right now.

Speaker B: Maybe because people aren't happy and actually maybe that was always the more important thing versus progress.

Speaker A: Important in an aggregate way. Again, I'll come back to the individual. We choose to live in a society because it gives us that foundation that you described, that ability to have the safety, the security to take risk, to make our own decisions, and potentially build a media empire as you have done. And maybe you would have been happy in the other context where you didn't have that, but would you have reached your potential as a human?

Speaker B: I'll be honest, I'm not sure I would have been happy because again, that goes back to my own nature. It's just the way that I am. If you put me in a room, I'll try and create something and build something. But I I've come to learn with time that not everybody has that bias or those desires. Not everybody has that loerty trauma from their childhood of being the only black kid in all white area and thinking money was really important and it was freedom and it was selfish. Like not everybody has has that. So I I realized that when I design solutions, they shouldn't probably be designed for me. Yeah. You know, it's taken me a long time to get to that place cuz I kind of I was very much

Speaker A: the challenge with America in this moment is can you give what you're describing the Denmark answer to enough Americans without taking away the liberty that the Americans that want to have that liberty have today. And I'm not sure the answer is yes. As soon as you start taking private property from these people, the ones that are successful in this bucket,

Speaker B: then you're sort of taking away the incentive for them to be in this bucket in America.

Speaker A: And I'm seeing that.

Speaker B: Yeah. I see people want to leave and so you're not going to solve for everyone, but if you solve for this Denmark solution, I think you lose a lot of this.

Speaker A: Well, the UK is quite an interesting example here for this very

Speaker A: reason. I mean, one of the big subjects of conversation in the UK is that the millionaires are all leaving or at least in high volume and they're coming to other places. If you look at the millionaire access maps that they publish often, they're going to Dubai or they're coming to America. A lot of my friends that are building technical companies in particular have come over to America.

Speaker B: Yeah. for this reason.

Speaker A: Yeah.

Speaker B: And I do think we might have a little bit of a spending problem, it seems, but also I think we might have a bit of a productivity problem

Speaker A: in the UK.

Speaker B: In the UK.

Speaker A: Yeah.

Speaker B: Well, do you think the productivity problem is related to the spending problem?

Speaker A: Oh, yes, of course.

Speaker B: Right. If you're collecting checks or getting services provided to you, the incentive to be more productive as an individual goes away. But also as a system, it becomes a lot harder to create economic incentives for productivity gains when tax rates are very high and you don't actually get to reap the benefits of the risk you take and so on. That's the economic argument.

Speaker B: Listen, I've been catfished by furniture my whole life where something has looked fantastic in the picture, whether it's a sofa or whatever it might be, and I order it and I get so excited and then it comes and it's something entirely different. the quality was significantly different to what it said or looked like online or the the texture was different or or it didn't hold up in the same way. And so one of the things that I love about our sponsor Wayfair who have helped us fit out our green room which is in the room behind me is they have this system called Wayfair Verified. Wayfair Verified takes away all of that second guessing. Products are handetted by Wayfair specialists for quality so you can feel more confident when you found the thing that you love. So, if you're looking for furniture for your house, whatever it might be, any room of your house, go to wayfair.com to start your home refresh today, and make sure you use Wayfair Verified. It is amazing.

Hello, I wasn't able to make that finance meeting. Can you tell me what I missed?

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Speaker B: I mean, this kind of does tie into the subject of artificial intelligence and where it all fits in part because the narrative of artificial intelligence is that it's about to take our jobs. And you think about the that's why I wanted to start with the backdrop. Think about that backdrop of I'm already struggling. I'm in the 63% and now you're telling me I'm going to lose this job that's paying me and I'm already living hand-to-mouth. And what's the offer? We might get UBI. We might be sent checks in the post at some point. Well, actually, I like my job. It's a community, a sense of purpose. It gives me something to do. And that's the narrative.

Speaker A: Yes, that is the narrative.

Speaker B: You don't believe the narrative.

Speaker A: I believe what everyone's feeling.

Speaker B: But this narrative that AI will take jobs away, you don't believe it.

Speaker A: I recently pulled up and you you guys can go to archive.org. There's a Newsweek article about computers will take all the jobs from 1963. So the main frames are what got put in the basement in the '60s and everyone like had to walk past the scary mainframe on the right. It's like blinking lights and buzzing and making sounds. And it's like the main frame is going to destroy all the accountant jobs, all the typing jobs, all these things that we all do that we get paid to do. And I like working in my office. I like my colleagues. I like coming in every day having lunch. That's a good life. This mainframe is going to ruin my life. And so there was this effort to legislate against these things at the time that didn't get through in Congress.

And then in the 80s there was another wave on computing where it was like, hey, now we're all getting desktop computers. it's going to replace the workers and it's going to be a desktop computer and a worker and like 50 people disappear out of the workforce.

So empirically, meaning from data, from evidence over all periods of technological revolution like this, we've never seen jobs decline. We've always seen jobs go up and we've seen demand go up and therefore incomes rise when new technology enters the workforce. That's because the new technology makes an individual more productive so they can do more per hour with their time and as a result they can get paid more for doing that work.

So imagine instead of having a painter painting a wall, what if he was in charge of the five robots that are painting the wall? Okay, great. Now he's going to get paid more because you can, you know, get so many more homes painted in a day. He's going to get paid more to do that work. People are going to be like, well, there's only so many homes. That's always the argument is you always think about the fixed pie argument that the pie doesn't grow. But what always happens is that the pi grows, the economy grows is the way to think about it. And so as automation or technology is used to give individuals more leverage to do more things with their time, then more things get done. People come up with these new product ideas with hey, we've got excess capital. Let's build new homes. Let's build a building.

Speaker B: But who gets who benefits from the expansion of that pie?

Speaker A: In all cases, it's been there's been deep economic value created for the entire workforce all the way down to the lowest level. It doesn't happen overnight. And that's where during that period of time when you see the new technology, oh the main frame's in the basement or the desktop computers on my colleague's desk and you're like, "Oh my god, I'm going to lose my job." To the time that your company is growing considerably their revenue and giving everyone raises and everyone bonuses and adding more product lines and doing more stuff, you're like, "Oh man, okay, I feel better."

And and I think that would be the argument from the 60s and 80s and even back in the industrial revolution. The question today is how does work change? Cuz remember in the industrial revolution, people moved from farms, 60% of labor was in farming. Today it's like 2%. Into factories and they got paid a lot more and they lived a better life. They actually were able to afford healthcare, yada yada yada. And the transition in any sort of like technological revolution is net beneficial for all parties involved. But there is a transition.

So what's it going to look like? Are we all going to lose our jobs? AI is definitely different, but I don't think that AI is this world where humans are going to look around and be like, none of us have anything to do anymore. [laughter] Like, I don't believe in that narrative. And the reason is I already see extraordinary creative things being done with AI that were not possible years ago. People are creating TV shows, one person, that they would have needed a staff of 20 people to do. and they can use AI to create AI generated content and put these

Speaker A: ...shows out on YouTube or TikTok or Instagram. I mean, look, you may not like how it looks today. There may be a lot of AI slop out there, but as this stuff gets better and better, the creative output of people using AI on creative channels where we're all consuming media is only going to go up, and people are going to make money that they weren't able to make before from that output as other people consume it. My ability to do work, I don't have to, you know, think about my, you know, four hours a day that I'm writing documents today. I can get all that work done in 10 minutes or 15 minutes, and then I can spend the other three and a half hours doing other things that create new value for my company.

Speaker B: If we go back to the top of this, the robot painter analogy.

Speaker A: Yes.

Speaker B: You said a guy might have had five people painting, now they can have five robots painting.

Speaker A: No, I was saying the guy instead of painting on his own, he can now have five robots painting.

Speaker B: Yeah.

Speaker A: And then he can now produce five times as much with his time. Think about what we saw with the desktop computer revolution, right? Adobe Photoshop came around and everyone was like, "Oh my god, like photographers are out of work because a big part of being a photographer was all the post editing and cleaning up and airbrushing and all this sort of stuff." And they're like, "That whole industry is destroyed with Photoshop." What ended up happening is a ton more media was created and print media was created because Photoshop created leverage to create many more beautiful images and then all these magazines took off. If you look at magazine circulation, they grew considerably as Photoshop came out because it allowed much more production on, you know, high-value photography.

Speaker B: I think the reason why it feels different is because that's—I mean the industrial revolution example is kind of like physical work moving to cognitive work, that was cognitive work creating a new type of cognitive work, the Adobe analogy. If AI takes the cognitive work and from what you said about robotics, robotics takes a lot of the physical work, what is this third type of work?

Speaker A: I think it's cognitive and physical. It's no different than what we've seen in the past. But it doesn't mean that there isn't an individual who's going to program the robot on what rooms to paint, how to paint them, how to do the detailing correct. The homeowner doesn't have the level of skill that the painter does, right? So the painter...

Speaker B: ...and I couldn't do that.

Speaker A: Maybe at some point, I mean, you could make this argument on a continuum where eventually everything nothing exists, but along the way there are new things that are emerging. Think about going back 50 years. There was no yoga instructor. There was no dog walker. There was no Instagram influencer. There was no podcaster. I mean there's a million versions of new work that emerged along the way as the internet took hold and people could start to spend their time or market themselves or market their capabilities in other ways. So I think it's a pessimistic view to assume that robots replace all humans and then humans have no logic, no agency, no capacity for creative work anymore. I have an optimistic view on this which is that AI and robotics enables individuals to do far more things than they ever could have contemplated and that's going to give everyone much more ability to realize their potential with their agency.

Speaker B: I mean, even the podcast, I think a game is going to be significantly disrupted in some part. We ran a test a couple years ago to figure out if a synthesized voice of me could have the same average view duration as me, and it was just me reading out the stories of founders through history. So I did like a Steve Jobs episode where it was my voice, AI had written the script, AI had synthesized my voice, so I had no involvement. And the amount of people that got to the end was 40 to 50% of an hour. And they knew it was AI because it said at the top this is an AI podcast. And so I thought, okay, there is a lot of informational part of what we—me and you—do where we're sharing just pure-play information that will be taken away. However, what I hear through listening to your answer about creators and art, you're saying that there will be this human sort of irreplaceably human component. Yoga teachers—yoga teachers aren't just selling you yoga, it's also community and gathering in real life and being there amongst other people.

Speaker A: I think the IRL job is going to explode and I think it's going to be extremely valuable. I always had this view like, oh, coffee shops will be automated. But I actually think the opposite is probably true. I think there will be a premium on coffee shops. I'll pay $40 for a latte because that human is making the latte and I get to go be with other humans. I get to go to a workout class with humans. I get to go spend time at a concert. I get to go spend time at dinners. I think this like event live space experiential part of our world that we kind of think about as luxury today, maybe it becomes more core. Like maybe it becomes more of how we spend our time. Maybe we spend 30 40% of our time, you know, in these sorts of spaces and automation is generating income for us and supporting us in, you know, whatever pursuit we're interested in in work and we spend far less time doing work and far more time paying a premium in the economy in the live space economy.

Speaker B: It's hard, isn't it? Because we don't know what these jobs are.

Speaker A: We just don't. And that's...

Speaker B: I mean imagine telling someone that worked in a factory in 1923 that fast forward a hundred years there's going to be people making X dollars as personal trainers or there's someone that has a job dog walking in their neighborhood. I don't know if that would have been fully grokked.

Speaker B: But the pace of disruption here seems to be different than like the industrial revolution. It's targeting cognitive work. It's built on this platform called the internet which has this...

Speaker A: I'm telling you I just don't see it. Like at my work everyone's using AI and everyone's just doing more and then they ask for more employees. You can kind of think about a business having two sides, revenue and costs. Revenue is I'm making stuff and people are paying me for the things I'm making or doing. Cost is how am I operating the business? Like what am I spending? And the argument has always been like, okay, you're going to lose customer service reps. You're going to lose all the cost side of the equation. No one ever says you're going to lose the revenue side. The truth is on the revenue side, what ends up happening is you create new products that you couldn't create before because of AI. The technology enables so much advancement in your business. Let's say you're a material science company. This is totally esoteric, but like let's say your job as a company is to discover new materials, new plastics, new synthetics that can be used to make microchips or be used for computing or be used for travel or for airplanes. The material science world has been challenged by its experimental cycle. You got to create an experiment, make a product, test it, do it all manually. It's all creative ideas. It's all human potential. AI can now screen through millions of material science ideas in a computer, print them out, test them, and you can automate that throughput. Therefore, that materials company can now have more revenue. They can make more products.

Speaker B: Do you not think that maybe there's a possibility that people like me and you exist in this particular band where because we're both founders and we have capital and we're thinking about how to really push intelligence to create new things that maybe we—because what you're saying I can relate to. I can relate to the fact that AI has made me actually quite—has probably made me more ambitious about hiring especially in the near term. I would caveat it by saying that there's a certain type of role that I'm now hiring much less, and especially when you think about entry-level roles, I have to pause a lot more now because a lot of the agents and some tooling can do some of those things that I would have otherwise...

Speaker A: ...hired for. But generally, I feel like I'm hiring as fast as I possibly can. But would you not say that for like the 21-year-old that's graduated from university or the DoorDash driver or those types of individuals where the leap from where they currently are on a factory floor assembling a part or flipping packages, the leap from where they are to this new world is so great that there's going to be this messy middle.

Speaker B: Yeah. But what I'm saying is as new products are created, new revenue comes in, you don't cut costs, you grow costs and you hire more people and you uplevel and you train people. That is what I'm seeing on the ground. You know, we just published I think one of the lowest unemployment rates in the US. And I think that this idea that your current job is going to get disrupted and you're going to lose your job, I don't think is how the enterprise transitions. The enterprise transitions, meaning companies, by doing more things and bringing people up the ladder, hiring more people. And that's just what I'm seeing on the ground. I think that there's a media narrative on like, oh my god, there was a layoff at so-and-so company because it underlines what they've been promoting to everyone, which is AI is going to cause job loss.

Speaker A: The interesting thing is it didn't come from the media.

Speaker B: It came from the AI guys.

Speaker A: Yeah.

Speaker B: Yeah.

Speaker A: This is the biggest—I listen to All-In podcasts, by the way. It's one of my favorite podcasts. I don't think I've ever missed an episode. So, I very much understand your perspective in all of your...

Speaker B: I had no idea you were a fan.

Speaker A: No, no, I've listened to...

Speaker B: I've gone on people's shows where they're like, "I don't know who you are," and I'm like, [laughter] "It's good to meet you."

Speaker A: No, no, no. I don't think I've ever missed an episode since the beginning. So, I understand.

Speaker B: You've been through—you've heard all this.

Speaker A: I've heard all of this. I've heard like Jason's opinion. Weirdly, I tend to side a little bit more with Jason on this because I think Jason—I don't know why—his arguments seem to present the most nuance, and also I would say when we think about different people's incentives. Yeah, you're right, often on that show that it's framed as a media narrative, whereas it's actually all your friends.

Speaker B: Yeah. No. So, first of all, none of them are my friends. But, um...

Speaker A: He loves your friend.

Speaker B: Okay. So, what I will say, look, I've said this on the show, I'll say it again. I think there is a deep arrogance in making these sorts of proclamations.

Speaker A: Which proclamations?

Speaker B: That we're not going to work anymore.

Speaker A: Mhm. [clears throat]

Speaker B: It effectively discounts the human. It's like what you do today is your limit. But I think that this idea that like these jobs will go away is sourced by people that are seeing the crazy stuff that they're doing and they're like, "Oh my god, this is amazing. I'm responsible for this. We are going to change the world. We are going to take all jobs and they're all going to sit in my computer." I don't think that that's what happens because I think that humans have a profound capacity for doing things that, you know, these technologists don't necessarily see. The great technologists see technology. They don't see people.

Speaker A: Mhm.

Speaker B: I think you have to see people, meaning the potential of people, of individuals, and you have to believe in that. They believe in technology. They engineer technology. But I am not going to be pessimistic about people. Like I think that people have capacity in any environment. I mean, the amazing thing about humans is our adaptability. We can live in any climate. We can eat any kind of food. I mean, we can work all these different jobs. Humans are amazing. And arguably many humans have been limited in their potential. And I think that AI enables more capacity for those individuals to realize more of their potential.

Speaker A: Much of the conversation we've had about the US economy has centered around incentive structures leading to inevitable outcomes.

Speaker B: You know, the older I've gotten, the more I just try and look at incentives.

Speaker A: Yeah.

Speaker B: To figure out behavior and also to figure out who to trust.

Speaker A: So when I look at the incentives of the people that are building the AI companies: Andy Jassy has said that there's going to be fewer people doing some of the jobs that are being done today. Then they cut, you know, tens of thousands of jobs. Marc Benioff, who I know has been on your show, cut 4,000 jobs and said, "I need less heads because of AI." And I'm like, okay, maybe they're saying that because they want their share price to go up, because "we're going to reduce cost" is a good narrative.

But then I look at the AI CEOs—Dario, Elon, Sam Altman—and I go, their incentives, I'd say other than the exception of Elon, have just kind of changed with whatever's good for them at that moment often times. I actually think Dario might be the exception a little bit because he seems to be a bit more nuanced. If I go back through the quotes of these individuals: You have Sam Altman in February 2015 saying, "Development of supermachine intelligence is probably the greatest threat to the continued existence of humanity." You have Elon in 2014 saying, "With artificial intelligence, we are summoning the demon. It's far more dangerous than nukes. Mitigating the risk of extinction from AI should be a global priority alongside societal scale risks such as pandemics and nuclear wars." And that was signed by Sam Altman, Demis, Dario, Bill Gates, amongst many hundreds of others. Sam Altman in the Senate in 2023: "I think if this technology goes wrong, it can go very wrong." OpenAI superintelligence letter—they wrote "the disempowerment of humanity or even human extinction could be caused by superintelligence." Again, Altman: "Jobs are definitely going to go away. Full stop." Dario Amodei, May 2025, he predicted a "white-collar bloodbath, half of entry-level white-collar jobs gone, unemployment at 10 to 20% within one to five years." 10 to 20% unemployment in 1 to 5 years, it's pretty high. And Altman at the Federal Reserve in July 2025 said whole job categories will disappear, customer support first, that one is quote "totally gone." And then suddenly the message changed before his sort of Pre-IPO discussions. He said things could go pretty wrong, and then he says that he now has changed his mind and he's delighted that he feels like he was wrong, and suddenly he's talking about how OpenAI and ChatGPT will benefit all of humanity...

Speaker B: ...and that's their goal. Should we trust the same people that told us to be scared when they say don't be scared?

Speaker A: First of all, I think there was a bunch of companies that said early on that they were like cutting all their customer service reps, which was the big company starts with a K.

Speaker B: Klarna, but I did call the founder.

Speaker A: And what did you find out?

Speaker B: He said that he's been misinterpreted in the press. So, I heard you guys talk about this on the All-In podcast, but I've actually called him live on this show.

Speaker A: And did he rehire or like what did he do?

Speaker B: He said that the media just completely miscon...

Speaker A: He said he had 7,000 employees by the end of last summer. He said he had 3,000, but the media framed it as "I had 7,000 employees and then I tried to cut some, I realized I couldn't and I went back." That's not what happened. And it's just I see it on all these podcasts and I'm just repeating it. I heard it repeated on your show like...

Speaker B: ...but he said we are cutting because of AI.

Speaker A: Yeah.

Speaker B: And he's confirmed that he's doing that. He's DM'd me on X. I've got the DM, and live on this show he confirmed it to all of our listeners.

Speaker A: Is his business still growing?

Speaker B: The business is growing. What he did say, and this is a point of nuance, is with the cost savings, he's able to offer better white-glove services to his highest ticket clients...

Speaker A: ...which it makes a lot of sense.

Speaker B: Yes.

Speaker A: And you could think about that analogy being in like another business where they would take that capital, invest in offering new products, new services, but then you need...

Speaker A: ...employees to offer those new products and new services. And so you do actually hire up and I think that is what I am actually seeing on the ground. And while he may have this acute restructuring he's doing, on the ground I just see people hiring more because they can do more with AI.

It's counterintuitive, but if you're a business manager you can invest $10 and make one product a year or you can invest $20 and make five products a year. You're going to invest the $20 to make five products a year. You're going to spend more. And I think that's what AI does.

As soon as you have the ability to get leverage on how much more productive people are, you'll put more capital towards hiring more people and scale up. That's just what I'm seeing. And look, I could be wrong and all jobs go away in 5 years and we have 20% unemployment. I don't think that that's the case.

I think that, again, like we can go back to this like where are people going to be spending their time? I do think that there's going to be a big growth in media. I think there's going to be a big growth in, and media encompassing everything, digital content creation, etc. I think there's going to be a big growth in entrepreneurship and I think there's going to be a big growth in IRL stuff.

Speaker B: I'll play this interviews and Klarna has always mentioned because I think the media has said that you like double down on AI then you reversed because it didn't work out. So I know I spoke to you a while ago and we exchanged a couple of DMs about it, but that was more than a—it was almost a year ago now. So I just wanted to get an update on Klarna's business AI agents and all of that if possible.

Speaker C: This was 5 months ago. First and foremost, we were early on released AI to support our customer service which had that initial benefit of more calls being dealt with by AI which customers liked because those calls or chat messages were much, much faster and more qualitative. Then since then that has actually expanded slightly.

What we did however try to communicate as well is that we believed in a world of where AI is cheap and available the value of human interaction will be regarded as higher. So the future of customer service VIP is a human. We have then hence doubled down on providing more of that, but at the same time the efficiency gains within the company has continued.

I mean we used to be about 6,000 people and now we are less than 3,000 which is 2, 3 years since we stopped recruiting and at same point of time our revenue has doubled, right? So...

Speaker A: No, this is a startup just to be clear. I don't know if we can—and again I'm not going to like sit here and concede or argue jobs aren't going to change, but a startup that grew very quickly and then to cut heads is a pretty common phenomenon. So I don't know how much restructuring he was doing in his AIification of his business. That's totally fine and totally fair.

But the question is what are the people that were doing customer service calls and sitting, you know, how many of them were actually fully occupied on the phone? I don't know.

Speaker B: Like were they on the phone for 4 hours a day, 2 hours a day, or 8 hours a day? Were they actually fully employed? Really? Were they truly fully employed? I don't know.

Speaker A: And what are they doing now? And is whatever they doing now, is that defensible again from this spread of intelligence? Yeah.

Speaker B: They could be DoorDash. I know. They could be lawyers, but they could also be doing DoorDash. And Dara sat here and said that the 9,000 people that are riders won't have jobs.

Speaker A: The ones that are driving food around. Yeah. And drivers.

Speaker B: Yeah.

Speaker A: That's obviously all their big investments. I was with him the other day and he was talking about their autonomous vehicle investments.

Speaker B: Yeah.

Speaker A: And how—I mean that's the big—

Speaker B: What does he think?

Speaker A: He thinks that those drivers will have to go—will do something else.

Speaker B: What does he think that something else is?

Speaker A: He loosely hypothesized [laughter] what it might be. It could be data labeling.

Now, let me just go back because your whole point about like AI is going to destroy us all and these guys were making all these claims and then they all kind of backtracked. I think there's an important question to ask which is like should we stop AI development and can we, meaning can we really affect what China does? Can we really affect what Europe does? Can we really affect what some lab in Indonesia does if they get a group of people together?

There are moments in human history when technology advances and it's not like you can just put the catapult away and be like, "No one can develop the catapult anymore." Like once the catapult's out there, the catapult's out there. We're just there.

Speaker A: So the question is what is going to enable the most kind of productive path forward for, you know, US policy for US citizens? And China's asking themselves the same question: What's the most productive path forward, China policy for China citizens?

China's answer, I think, is to make models free and ubiquitous, which by the way benefits a large part of the global economy, but it doesn't do very well with Sam Altman, Dario, Google, or others that have invested billions or hundreds of billions of dollars in model development. And now those investments that they've made have been reduced to rubble because China's got a model that's as good or cheaper.

So, I think the more important question is what does the US do to navigate? If we stop data centers, those data centers are going to be built somewhere else.

Speaker B: Mhm.

Speaker A: They'll be built in Iceland. They'll be built in China. They'll be built in Indonesia. They'll be built in places where you can get access to energy and plug them into the internet. Now they're on the internet.

So, do we want those data centers to exist in the US because they're going to create jobs and create economic value or do we want them to be built offshore? Do we want to have the AI models built in the US or do we want to have them built by China? Those are the—I think the important policy decisions.

The idea that you can slow or stop AI development, I unfortunately think at this moment it's far too late. Like the AI is out there, the framing on is it bad or is it good I think requires a observation on what's going on on the ground.

And I do think there's a ton of stories. I mean look at the number of companies that are doing stuff that you could never do before because of AI. I mean just to get into your point about delivery. I mean, there are delivery companies delivering robots on the ground, robotic cars, drones. Those companies aren't employee lists. There's now 15,000 new jobs being created at the factory that's making the robots, or 15,000 jobs to service the robots cuz they're breaking down all the time, or 15,000 jobs to get the food made that goes into the robots, or maybe that gets automated.

But like, as you kind of think about the impact, the economy doesn't just shrink in terms of jobs. We're just not seeing it in the data. It's not happening. And when it does happen, I think that's a good time to have a conversation about AI taxes and all this sort of stuff.

Speaker B: Let's ask that question. And what would have to happen? What sort of metric or piece of evidence would be?

Speaker A: Job loss.

Speaker B: Job loss.

Speaker A: Yeah. And wage growth, right? So, if wages are declining and unemployment is climbing, that's a red flag. I mean, that's an alert moment and that's when we have to address this from policy.

But it's very speculative right now. And if you get in the way and you stop it and you stop advancement or like the ability to create higher paying jobs, the ability to create new jobs and you turn all of that off, it's going to happen in China, it's going to happen in Europe, it's going to happen in South America and the US gets left behind.

Maybe that's the decision that, you know, we decide to make. But I would argue that this kind of tracking of what's the consequence that we're worried about is the most important thing to be doing at the moment. You might have heard about the study...

Interviewer: That I think it was Stanford that did it, and they showed that there was a 13% relative decline in employment for workers aged 22 to 25 in roles most exposed to generative AI. Could it be that by the time we start seeing significant job loss, it's a little bit too late to be having the conversation because it could be quite a rapid decline, if you think about the nature of this technology and the adoption of it?

Guest: No, no. I think what you're describing is exactly the right time when we see the first sign.

Guest: Yeah. So what are those changes that are happening? Now the question is if you dig into that, and I do understand this: like in software engineering, what's happening right now is young people are not getting hired. You can use AI to write a lot of code, but in order to be really good at using AI to write a lot of code, you got to have experience writing code.

Guest: Yeah. And so there's a fight for senior experienced software engineers, and there's disinterest in junior software engineers, because you're not just putting a junior software engineer in a seat to have them write their first line of code, which is what you used to do. With AI, you can turn one engineer into a hundred, but the junior guy is not going to do that. The senior person is. So you want to hire more senior people, and that's what's happening in software across the board right now.

Interviewer: But more of the operational functions that used to be done by people are also just being done by software. So, if I think about... you might have had a PA whose job was to respond to your emails and check your emails and organize them and put them in your Monday board. Now, with agents, I have an agent that goes across all of my inboxes every single day, pulls everything into this central system. And I used to have someone doing that kind of work. Now, it's a software job. Now, it's Claude doing it.

Guest: So, now the PA can use Claude to do it.

Interviewer: I don't need the PA. I can just do it myself.

Guest: Okay. What else could you use that PA for in your life that you couldn't even contemplate using that PA for in the past?

Interviewer: At the moment, it's real world stuff. I probably would have continued to hire more in that team, but now I don't need to because I've got, you know, this agent that does my scheduling, can help me with my scheduling.

Guest: What are you gonna do with the money you have? The extra money you have that you're not spending?

Interviewer: This is a good point.

Guest: And then that money you're investing. You're not going to just put that money in the bank and leave it as cash. You're going to invest it in something.

Interviewer: I could invest it in assets.

Guest: What's an asset? It's either productive or non-productive asset. If it's productive, it's employing someone. It's doing stuff.

Guest: I could theoretically go buy the S&P 500. And when you buy the S&P 500, that money goes to individuals that are now going to be able to employ more people. That capital finds a way to get spent. It goes into the economy. And that's my point. This is why economies grow when technology shows up.

Guest: The leverage you got gave you more capital. You could either build a new product and hire more people to do it here, or you could choose to go buy the S&P. But when you buy the S&P, that money ends up in other people's coffers, and they're using that money to hire people and do new stuff there. At some point, the whole point of the economy is that money flows, and that money is going to ultimately flow into individuals that are productive.

Interviewer: Do you not think a lot of it's going to flow disproportionately into the billionaires and the most wealthy that are building the robots and that are...

Guest: I am a huge advocate for open source for this reason.

Interviewer: Open source. What does that mean for Janet and Dave who might not know what that term means?

Guest: So open source just means that the software is free for anyone to use. If you go back to the early days of the internet, Netscape made server software and Netscape made a browser. So in order to produce a website, you needed to pay for Netscape software, and you installed it on a server, and you pay Netscape a fee for that software, and then you could create a website. Okay? And then if you want to browse the internet, you got to pay for Netscape Navigator, and then you use that navigator to browse the internet.

Guest: So charge, charge, gatekeeper, gatekeeper. And guess what came along? The Mozilla Foundation made an open-source browser called Firefox. And the Apache Foundation came along and made an open-source web server. And now anyone could download Apache and make their own website and plug it into the internet and it would be available to everyone in the world for free. And anyone could download Firefox, go on their computer and browse the internet for free.

Guest: Open source then enabled all the entrepreneurs that built websites that made money to proliferate. They weren't gatekept. In the idea of AI, open-weight models, open-source models are free. So now you don't have to go pay Anthropic or Claude or Gemini or ChatGPT for AI. You can actually use this AI model for free and no one's making money off of you using it. There's no one getting paid.

Guest: The only cost is the cost of finding a computer to run that model. So you could have your own computer, you could rent one, but that cost is coming down like crazy now, too. So this is the benefit of... like this is why technology without government intervention is so amazing. It always gets cheaper and then everyone benefits.

Interviewer: There could be a risk. Is that one of the key arguments of the open source idea, which is if anybody can download these AIs onto their computer, they can jailbreak them. They can use them as...

Guest: So there's two things that people are fighting about. Number one, government people are saying, "Hey, that's coming from China. We don't know if there's back doors." That's not how open-weight models work by the way. So people that are technically deficient don't fully grok what the open-weight model really is. It's not like some backdoor program that you're running. It's literally just a list of numbers in a docu... It's just, you know, trillions of numbers. That's all it is.

Guest: And then some people are arguing like, okay, so now that AI is everywhere, everyone has access to it. You can use it to design a cyber weapon. You can use it to design a bioweapon. You can use it to design a physical weapon. There's all these things that you can now do. You know, the same is true with DNA printing and DNA sequencing. Everyone can buy a DNA sequencer and a DNA printer and they could theoretically make a virus. That exists today. We haven't stopped DNA sequencing. We haven't stopped DNA printing. We don't have like constraints around it.

Guest: Similarly, we haven't stopped people from buying guns. We haven't stopped people, you know, in the US. I mean, we can roll our eyes at this one. [laughter]

Interviewer: That's a good one.

Guest: Right? Yeah. But I mean look, there's a very good argument to be made that you could say that any sort of technology that theoretically could be used to cause harm should be banned and/or the government should control it and decide who gets access to it. And the flip side is that if it's allowed to proliferate, there's far more benefit than risk, and the risk side needs to be mitigated, and that's where you build good defense systems and so on. So we've got all these technologies for monitoring, for cyber defense, for bio defense and all these sorts of things that are critical for, you know, especially in a post-AI era, like what are the big attack vectors. So I think that's probably the way to think about this.

Interviewer: And that might help the sort of inevitable inequality, golden gooses all collecting into insight.

Guest: I will bet you anything that in the next 10 years there will be a billionaire that will emerge that has absolutely zero net worth today, downloaded open-sourced AI, and built a company that made them a billionaire 5 years from now, 7 years from now. And they're going to be someone that's going to come from nowhere, and everyone's going to be like, "Wow, look at that." And there's going to be a lot of these sorts of stories, and that's what we saw with the...

Host: This is something that I've made for you. I realized that the DOAC audience are strivers, whether it's in business or health. We all have big goals that we want to accomplish. And one of the things I've learned is that when you aim at the big, big, big goal, it can feel incredibly psychologically uncomfortable because it's kind of like being stood at the foot of Mount Everest and looking upwards. The way to accomplish your goals is by breaking them down into tiny small steps. And we call this in our team the 1%. And actually this philosophy is highly responsible for much of our success here. So, what we've done so that you at home can accomplish any big goal that you have is we've made these 1% diaries and we released these last year and they all sold out. So, I asked my team over and over again to bring the diaries back, but also to introduce some new colors and to make some minor tweaks to the diary. So, now we have a better range for you. So, if you have a big goal in mind and you need a framework and a process and some motivation, then I highly recommend you get one of these diaries before they all sell out once again. And you can get yours at thediary.com. And if you want the link, the link is in the description below. There should be a button just down below here. And if it says subscribed, you're already subscribed. If it says subscribe, that means you're not yet. And if you're not subscribed, please could you do us a favor and hit that button? It helps the show more than you know. And according to the algorithm, you're someone that watches our show, but you haven't yet hit that button. Thank you so much. So, when Elon says that working will be a choice, you think he's wrong.

Guest: He's selling robots, but uh [laughter] like um, I do think he's right in a sense. And what I mean by that is like think about how many hours a week you work. Do you have a sense?

Host: Just I work all the time when my fiance is not around, cuz she's not around at the moment.

Guest: You and I are similar in the sense. So like every moment I can I work. But like we're more entrepreneurial. I would say that like um you know look at Denmark for example, 37 hours a week. What was the average number of hours worked 50 years ago, 60 years ago, 100 years ago in the US when you did farm labor and you were managing your own farm and that was your whole business or you worked in a factory? I mean there was 12-hour shifts. There was a lot more work per week being done. Going from 100 hours a week to 80 to 60 to 40. I mean, that is part of the progress of humanity is that we're no longer encumbered by this labor category, being told what to do and how to do it and when to do it in order to get money to pay our bills. But we get to this world where we have more capital. That capital is also time. And I've now accumulated the ability to make a choice on what do I do with 40 hours of my week.

Host: You know, we all have a hypothesis about how AI is going to play out. And I've heard many different hypotheses here. Which is the part of your hypothesis—like the principle within it—that could quite easily be a miscalculation and how could you be wrong?

Guest: Mass unemployment.

Host: But where in your current hypothesis do you think is the weakest part of your sort of first principles that could result in that?

Guest: The choice that people will make to go to higher paying jobs, to different jobs that they see an opportunity and they make a choice to change cuz I think that that's the key to this whole thing. Like if you were a taxi driver in New York and you were paying rent on a medallion—

Host: What's a medallion?

Guest: So medallion is a right to drive a cab in New York.

Host: Okay.

Guest: So there was a limited number of them and so the medallions were restricted. The New York City said we'll only allow so many cabs on the streets. So the price of medallions went up and up and up. So then New York cab drivers would trade the medallions and the price on medallions got up to 500 grand. And Citigroup was a big lender on medallions. So they would loan you 500 grand to go buy a medallion. Then Uber came along and this was one of the big battles around Uber at the time. You could get paid more and there's more rides with Uber. Uber grew the number of people taking car transportation around New York considerably. And when Uber demand shot up, a lot of these guys said, "I'm not going to be a cab driver anymore. I'm going to be an Uber driver. I can make more money as an Uber driver." And the number of Uber drivers grew. And look, there's a lot of regulation that's happened in New York since then with respect to Uber and whatnot. But everyone made the choice. They moved. They found—the market found its way. Individuals said, "Oh my god, I can make more money doing that. I could pick my own hours. I don't have to rent the medallion."

Host: It's a very similar sidestep.

Guest: Yes.

Host: And going from being a taxi driver to a taxi driver for a different firm using an app is quite a—

Guest: So I could sit here and pontificate all day with you on this and we'd both be wrong, I'm sure, cuz I don't know what the leap is going to be for an individual. I think we have to start to pull these stories out of the economy. What's going on? Palantir put out this promotional video which I thought was quite good where they interviewed like a hospital administrator—and she's like, "Well, I've got the AI doing all my paperwork so I get to spend more time with patients now." Sorry, it was a nurse, not an administrator. She was a nurse. So, she's like, "I normally spend like most of my time filling out paperwork on the computer, but Palantir, the software takes care of all that for me. So, now I can spend more time doing rounds face to face with patients. It's a better job—"

Host: —and it's better for her.

Guest: And so she, you know, I think it was a very poignant story about kind of what AI actually does on the ground. So, you know, look, I mean, I think there's a lot of these sorts of examples. We could counterargue back and forth about them all day long and probably both be wrong, but this is what I would kind of observe on the ground and what's actually happening.

Host: I think we agree on the fact that jobs are going to get more human in every sense of the word. That was your yoga teacher example. That was the nurse that can spend more time with her patients and actually that will become even more valuable. It'll become more scarce. I think my concerns still or the gap that I have in my head is like that how that transition looks especially at speed retraining you know you talked about the human agency point and do should we be preparing for such a transition cuz I do also believe that we'll we'll get to a providing there's no existential issues I do think we'll net out in a better place but the journey to that better place I still is just this big question mark.

Guest: I think that's right and I'm not trying to defend it and say it's going to be a clean smooth line. I'm just trying to say like we are going to get to a better place. You know, we could argue all day long about displacement or dysfunction along the way. [gasps] Or maybe a lot of people are smiling as they jump to new jobs and try new stuff out and they're like, "Oh my god, my life's better." I'm optimistic in that sense. I think you're right. We have to track it. And if people are out of work and can't find work and they're challenged in paying their bills, we have a freaking problem.

Host: And what's the solution to that problem? Is it UBI?

Guest: Well, it's going to be socialism.

Host: So, in that in that messy middle, you think we'll adopt socialism if that messy middle does occur?

Guest: Yeah.

Host: And what does that look like in reality? Is it just giving money and free food? And I saw the Mundan grocery stores.

Guest: Well, that's not going to work, but that'll take time to not work. But in the meantime, it'll look great. But yeah, it'll be more more checks, more government employ. It's like the government creates jobs to pay people. They're not productive jobs. Meaning, if you get paid $100, do—

Guest: ...you create $120 of value? No, you're getting paid $100, maybe you're creating $60 or $80 of value. But you know that's just there's going to be more government payments whether it takes the form of UBI, government jobs grow, or some other sort of financial support.

Host: I mean that's the direction of travel at the moment.

Guest: Yeah.

Host: All directions point to more socialistic—

Guest: Yeah.

Host: —America. How do you feel about that?

Guest: I'm actually... I don't want to lose my agency. I don't want to lose my capacity, my liberty, my freedom. And I feel sad for people that embrace it because I think that they don't realize that they're losing their freedom in that process too. I think they're losing their agency. But it's offering them a solution where there is—

Host: —there's no other solution being offered for them.

Guest: But they feel there's no other solution being offered. That's right.

Host: But is it also logical to say if we talk about incentives that billionaires want to stay billionaires, and billionaires aren't actually that philanthropic as they claim to be? And actually what billionaires are protecting are their interests. They want to remain free.

Guest: I had a call with Ro Khanna about this.

Host: Can you give context on who he is for a moment?

Guest: Ro is a congressman from California who used to be a moderate Democrat and he's kind of pivoted to becoming a hard-left true socialist. Silicon Valley is his district, California 17. He was asking me why are people so outraged at my support for a wealth tax.

Host: He means billionaires being outraged.

Guest: No, it's not billionaires. It's anyone that has built something and created value.

Host: Yeah.

Guest: And it's just entrepreneurs, people that have had success. And he's like, "I don't get it. It's just 5% or 2% a year or 1% a year. Like, why do people care?" And I'm like, "Ro, it's the first time in American history that you're talking about taking something from someone after they've paid their taxes and it's now their private property, and the government gets to decide how much of their private property they get to keep. It doesn't matter that it's 1% or 5% or they'll be fine and Bernie Sanders, like, 'the billionaires will be fine.' It's fundamental to private property rights."

It makes me feel like—and everyone can think about this. It's not just rich people. Anyone can think about what does it mean to list out everything you own and send it to the government every year and they decide what you get to keep. That's what it feels like to everyone.

Guest: Also, financially, it doesn't solve a problem. And I'll just give you the statistics. Total net worth of people in the US is 183 trillion. Billionaires' total net worth is 8 trillion. And even if you take it from billionaire down to 50 millionaire, so people that have 50 million or more, the total assets, the total net worth is 23 trillion. 160 trillion is everyone else. The problem is that the bottom 50% of Americans only have 6 trillion. And the middle, that kind of 50% up to the 50 millionaire, you know, they've got 160 trillion. That's where the net worth is in the United States. It's in that kind of population that people call boomers or Gen X or whatever, the bottom 50% have nothing.

And so if you taxed a 100% of the billionaire's net worth, that's $8 trillion. That's one year of the government spending. One year. It doesn't stop fundamentally a wealth tax. Doesn't actually solve a fiscal problem. It creates a system where you're like, everyone feels better about taking money from the billionaires. Are the billionaires paying their fair share of taxes? This is the politician's trick. The politician's trick is they say, "How much tax did you pay as a percent of your assets versus how much tax did you pay as a percent of your income?" Your income is when you sell stocks or when you make money for services you provide. And every year, if you're wealthy in the United States, in California, I pay 53% tax. I pay like 14% in California plus 39% federal.

Host: But you must try and avoid that.

Guest: No, I just pay it.

Host: But I mean, in terms of when I say avoid that, I mean you would rather take it like a capital gains tax, which is lower.

Guest: California, there's no difference.

Host: Oh, there's no difference.

Guest: Yeah. In California, capital gains or income is the same, which by the way should be the case at the federal level if you want to solve this compounding problem. So, can we lower income tax in the United States and raise capital gains tax? Absolutely. Can we make income tax lower for people that are working for their money versus people that are earning gains on their capital assets? Absolutely. And we can solve the problem that way. But by taking their assets, even if you took a 100% of the billionaire's assets, that's one year of spending. It doesn't actually solve a fiscal problem. The tax rate is the fiscal problem.

Host: So for these people, the 63% that are, you know, potentially championing socialism because they need a solution and it sounds like a solution. "Make my bills cheaper." What they don't hear from, you know, other politicians is a better solution. And this one sounds great.

Guest: This is what's crazy to me. I don't get why all the politicians are fighting against a wealth tax or for a wealth tax when there's like literally 15 other things you could do to make this better. Like this is crazy. Make the capital gains and income tax the same, cut stupid spending at the federal level, and all of a sudden things become more affordable. People have more take-home pay, they can afford more stuff.

Host: But let's be honest, you're not going to be able to cut the spending at the federal level. We—they've tried that. And because of this whole thing we just talked about, the four-year election cycles, Elon went in, he tried to cut it, he bounced straight back out.

Guest: Yeah. And I think that that to me was the most depressing piece cuz I was like, "Oh my god, Elon's going to go in, he's going to blow up spending. We're finally going to cut all the nonsense out of the spending. And if Elon can't, no human can." Yeah.

And then I went and visited DC and I went to all these Congress meetings and sat with senators and I was like, oh my god, none of them want to cut it. Like they're all on board with it. This isn't even a party thing. This is [laughter] just like everyone's doing it. And I'm like, this is the system. This is how it's set up. Holy—

Host: We've slightly changed direction, but linked to AI. I know you work in the life sciences. So I wanted to ask you, do you think we're going to be able to live forever soon or at least extend life significantly within the next couple of decades?

Guest: I do and I think the reason is we've discovered the mechanism of aging which is the most fundamental of human diseases. We have 10 trillion cells in our body. Every one of those cells has a copy of our DNA in the nucleus of the cell. That DNA segments of it are called a gene. A, C and G make up the little nucleotides and you put a bunch of them together and that's a gene. What is a gene? Well, a copy of that comes over to a protein printer in the cell called the ribosome. And the act is the programming for which of 20 amino acids, three letters is one amino acid. That ribosome takes a segment of the DNA copied as RNA and it prints out amino acids and a sequence of amino acids from that gene which is defined by that gene makes a protein. So all a protein is is a chain of amino acids. As soon as it's done printing, those amino acids collapse into a three-dimensional machine called a protein.

Host: So proteins are three-dimensional machines and they do crazy—

Guest: Like there is a protein in your mitochondria that spins 6,000 times a second as hydrogen protons go through it and that's what makes energy in your cells. That's what makes ATP. It's literally like a propeller, like a turbine in your mitochondria in your cell. It's an incredible machine. There's machines that carry oxygen from your lungs into your cells in your body to give them oxygen that they need to work. I mean, there are proteins that do all sorts of crazy stuff. So, all that genes are are the programming for making proteins in your cell. Now, your DNA is not a strand like—

Chamath Palihapitiya: ...this. It's actually kind of a small clustered thing. And there are little molecules that sit on top of the DNA that turn a gene on or off. So if the molecule is sitting on top of a certain gene, that gene is off.

Jason Calacanis: Like a little switch.

Chamath Palihapitiya: Like a switch.

Jason Calacanis: What's it called? Someone used the name before.

David Sacks: Histones.

Jason Calacanis: Histones. Okay.

Chamath Palihapitiya: Or acetyl markers. And—

Jason Calacanis: I thought it's epigenetics. But maybe.

Chamath Palihapitiya: So this is all epigenetics. Okay. So for a given cell there are genes that are on or off. The genes that are on, those proteins are being made in that cell. And the genes that are off, those proteins are not being made in that cell. And that's what makes all of our cells in our body different. Every one of our cells has the same DNA, but our eye cell and our brain cell and our heart cell and our skin cell just have different genes that are on or off.

Okay? So, those markers that sit on the genes, those little switches, every time you drink a glass of alcohol or you go in the sun and get hit by the sunlight or smoke a cigarette or eat some bad food that's burnt, all of these things can cut DNA.

Chamath Palihapitiya: And when DNA gets cut, your cell is really good at fixing it. Puts it right back together. Happening millions of times a second in your body, literally all over your body and your DNA is breaking and your cell's fixing it. But every time your cell fixes it, there's a chance that that switch moves a little bit. And if the switch moves to the wrong place, suddenly that cell starts making the wrong protein or stops making the right protein.

So statistically over time when you're a baby, everything is tuned great, working right, all the right proteins are being made in every cell. You're young. Your skin is not wrinkly. You can run. You can breathe. You can see perfectly. As you're a young person, suddenly you turn 30 and you're like, "Wait, my vision's kind of fading a little bit. I can't run as fast. I can't breathe as deep. Oh my god, I'm getting wrinkles around my eyes." 40, 50. What happens as we get older is those switches kind of move around to the wrong places. And as those switches move around, that cell stops making the right protein and starts making the wrong protein and it becomes dysfunctional.

And if that happens in enough cells, then that tissue starts to misbehave. You get wrinkles. Your heart can't beat quite right. Your retina doesn't pick up light as well and transmit the signal of the light and things get blurry. Your hearing starts to lose. You can't think as quickly. You can't respond as quickly. That's what aging is. Aging is the core human disease. And as epigenetics, which is where the switches are on a cell, start to get moved around to the wrong place and that tissue starts to misbehave, we get all these diseases that could be one of the core drivers of cancer.

Jason Calacanis: Why is aging so even across my body? Then

Chamath Palihapitiya: Because all these cells are suffering the same statistical effect of time as DNA breaks happen in every cell in your body. And as those DNA breaks happen, those switches are moving around the same rate in all parts of your body. And that's why parts of your body start to suffer kind of a it's like, "Oh my god, my hip hurts, my eye, my brain." Your young viewers may not appreciate this, but being 46, I'm starting to appreciate it. And it's becoming more of an issue now.

Chamath Palihapitiya: In 2006, a guy named Shinya Yamanaka discovered four proteins that you could put into a cell or apply to a cell and it would basically take all the switches in that cell and move them to the place that a stem cell has, which is basically an embryo in a human. And now that cell operates like an embryonic cell. And you can take that embryo cell and you can put other proteins on to move the switches around even more to turn that stem cell into an eye cell, into a skin cell, into a heart cell, into a lung cell, into a brain cell. So we suddenly developed this technology in the mid 2000s to take any cell and turn it into a stem cell, redifferiated, it's called differentiation from one cell type to another.

But then years later, another guy said, "Well, what if instead of putting a lot of that protein on the cell, we just put a little bit?" So they took the Yamanaka factors, which are just four proteins, and they put a micro dose of them on a couple cells, and the switches started to move around, but they didn't move back to being a stem cell. What happened is they moved back to being a young version of that cell type. So the eye cell basically became a young eye cell. The skin cell became a young skin cell. The heart cell became a young heart cell by putting a small dose of these proteins.

So it turns out that these proteins kind of move the switches around. And if you put just a small amount of them on, you can move the switches just back to their right position. That's now called epigenetic reprogramming. That's this new area of science that seems to indicate and they've now done it in mice where the mice can live to the equivalent of 100 plus years old. They've put it on the tissue of monkeys and gotten rid of the wrinkles. We now have just David Sinclair just his one of his companies did the dosing in the retina to reverse blindness in people uh with a retinopathy.

So this epigenetic reprogramming is an entirely new lane of medicine that says not just can we address all of the downstream effects of aging but can we go to the core? Can we reset aging in all these cells in the body? And the answer so far is yes. The risk is if you reset it too much it becomes an embryo and it turns into cancer. So that's what everyone's been working against in the last couple years is how do you put the right dose of the right proteins in the right cells to get them to reverse their age and become young again.

And the path it's really just an engineering exercise at this point as opposed to a biological proof of concept. The science is there, the foundation is there. We're just doing the engineering. So I am extremely excited and optimistic about this work. It seems very likely that in the next couple of years, we're going to have more human therapy trials that are going to not just address the core of aging, but they'll start to put in like, you know, like they did with the eye cell, maybe reverse wrinkles, maybe improve cardiammyio, improve the heart tissue. So, I think there'll be a lot more of this sort of thing coming to market over the next few years.

Jason Calacanis: And AI is going to play a role, I assume, in accelerating this because you can perform I mean, you can theoretically make new discoveries, but you can run the tests faster, right?

Chamath Palihapitiya: You know, just to help provide some context on like what goes on in a cell. You can kind of think about a cell has about 10 billion proteins interacting with each other, building things, breaking things, creating new molecules, creating new proteins, interacting, interacting. So the proteins are these machines, 10 billion of them in a cell.

So if you assume each protein is the size of a human, the cell would be the size of Manhattan. So now imagine a city the size of Manhattan with 500-story tall skyscrapers in the Manhattan skyline and 10 billion people living in these buildings going back and forth building stuff together talking making babies and assume they just do this for 80 years. All these humans interacting 10 billion humans in Manhattan for 80 years non-stop, they don't sleep and they just keep working. That entire set of interactions is 1 second in one cell. That's how complicated biology is and we have 10 trillion cells in our body and those cells are all shooting out proteins and messages to each other all the time.

To answer the question, AI allows us to build models to better understand what the heck is going on and to make predictions about proteins we could put into the cells that can affect the outcome of changing the epigenome on that DNA without us having a deterministic understanding of what's going on. So with AI, I can come up with a million different ideas for a new protein. I can test it in silico, how it would interact with other stuff, meaning on computers. I could see what happens. I could see if it actually has the same sort of effect as the other...

Speaker A: ...protein. Would it be more efficacious? And then I reduce my candidate list down. And I take that candidate list and I put it in a lab. And now the labs are being automated. And I can test it on cells and see if it's actually reversing aging. I can test it in models. And then I take that candidate and now I've got a probability of success in 10 years that instead of being 1% is now like 75%.

Speaker A: And so [clears throat] that's the way AI plays a role in life sciences discovery and it's transforming not just epigenetic reprogramming which is this whole big avenue of medicine now but it's transforming every aspect of biology and our understanding of life sciences where we can use AI to make these simulations and have a better understanding of what these complicated incredibly immense interaction sets look like or drive at the end state versus me needing to kind of be a scientist being like oh I got a good idea let's try that okay 5 weeks later okay another good idea let's try that and that all gets reduced to silicon.

Speaker B: And are you using your own model? Are you training your own AI or are you using some of the publicly available frontier models?

Speaker A: In my world we use both. So we take our own data and then we build our own predictive models from it and then separately we use offtheshelf life sciences models and then we also use some of the general models. So it's a great combination. And to your questions and talking about AI earlier, oh my god, the stuff we can do is unbelievable and it's mind-blowing and we're hiring more people because of it. So like it's not like AI got me to get rid of jobs. It's like the frontier has gotten so much wider. That's why I'm so optimistic about AI not destroying jobs because all I see is opportunity with new companies, new ideas, new pathways, new things, new breakthroughs in sciences, in materials, in engineering, things that we could have never ever tackled, we can now tackle with AI.

Speaker B: It is a persuasive argument. Okay. So, what are the great lies in America in your view?

Speaker A: If you go to any college with any degree, you're going to have a great job waiting for you at the end.

Speaker B: Okay? Number one,

Speaker A: if you buy a home, you've achieved the American dream, and all of your assets should be in that home.

Speaker B: Okay? [clears throat]

Speaker A: Social security will take care of you when you get old and it's a fair system. Everyone should have ownership in stocks is the truth about that lie. Because all the money that went into social security went out to the government to pay bills and it wasn't actually kept in the trust and so as a result social security is going to go bankrupt. So social security was one of the great lies on you know you'll be safe and protected when you retire.

Speaker B: Mhm. Those are three great lies. Is there any more that come to mind?

Speaker A: I don't know about public pensions and the it's the same as the social security lie. When you put money into a pension plan and you're that's called a defined benefit plan, when you retire, you're going to get $1,000 a week or whatever it is and every every paycheck some money is taken out. And the idea is that the accountants and the investors will do a good job investing that money for you and you'll get your benefit at the end. If they don't do a good job, then the pension plan is bankrupt and you don't get your retirement check. And if they do too good a job or you put too much money in, then the pension plan is overfunded and you should be getting more money out than you're actually getting.

Speaker A: M. So what companies realized was that pension plans are unfair. They either go bankrupt or they're overfunded. So that's when everyone moved to 401ks. And that middle class that we talked about earlier, those people that have $160 trillion of assets, the reason they have $160 trillion of assets, it's because a lot of them had 401ks. Meanwhile, the bottom 50% of people that are just relying on social security, they were making less than 3 and a half% a year on their money. So that's the great lie is that these defi these public retirement funds would take care of their people.

Speaker B: Is there a fifth great lie that comes to mind?

Speaker A: I actually don't have a great answer for you on healthcare. I think that there's a moral obligation on healthcare.

Speaker B: Mhm.

Speaker A: So I do buy into this in a in a civil society. I could make the libertarian argument but I won't because I do think it's probably the right thing to say in a civil society no one should be without healthcare. How do you make that work where the government's paying bills and the costs don't just go through the roof? That's a long probably six-hour conversation and it's very technical, I think, on what you have to do to make healthcare accessible. And it's definitely got to be a multi-tiered system.

Speaker B: Mhm. I guess one of the things that I was curious to get your take on because I've not really heard you talk about this a lot on the All-In podcast is your view on everything that's going on with this bloody war and the situation there. I'm not sure if this is within your area of expertise, but it appears that the US is now stuck. It's a quandry. I read that Ray Dalio's piece a few weeks ago, which I thought was exactly right. The Chinese make their influence known in the same way that you would kind of read about it in Sunsu's Art of War. If you have to go to war, you've already lost. And that's a big difference between how the US behaves and how China behaves. If you look back on the track record of president's decisions as it relates to foreign policy in the United States over the last couple decades, there have not been a lot of good actions that have ended up in a good place.

Speaker A: I think China has this capacity for influence without action, which is a really interesting model to observe. And the US has this kind of I don't want to say incentive, but when you go to a general and say, "Hey, should we go attack these guys?" the general spends the whole time training to attack the guys. So, you know, and then you have a national security council and you have advisers and all this sort of stuff, but there's a there's a priming in the US that I think maybe plays out in a way that maybe we take action when we shouldn't always be taking action.

Speaker B: China's position there only possible because there is a dominant force that is running around trying to police everything. So, they can kind of chill and let the US go police all the problems and wars. Their military capacity is pretty impressive, but it's untested at scale, I guess, is one argument you can make against that point. I mean, China's got a lot of economic gamesmanship that they do. You know, we'll give you cheap stuff. If we can get these things from you, you know, we'll keep an eye on you if you need help. I mean, there's like a lot of stuff that doesn't require direct kinetic action that they can kind of get things done. In terms of the US's position in Iran right now, there is an a threat to oil in terms of like the price at the pump and the I think it's the US oil reserve is down to a couple of weeks.

Speaker A: I want to say this on the order of 24 million barrels in the SPR.

Speaker B: So at the G7 summit in France, President Donald Trump addressed the precocious state of global oil inventories following supply disruption. He said, "We run out of reserves at about four weeks. You know, there are reserves all over the world and we would really run out and there'll be a time when you wouldn't be able to get it. It would be bedelum."

Speaker A: Mhm. And this was just as I think this was the explanation as to why he signed that with Iran.

Speaker B: Uhhuh. So I mean if this is true then something needs to happen. But again it doesn't appear that Iran have much of an incentive now you've decapitated the leader for to do really anything. They can kind of wait out. Game theory is Iran knows that the US can't do much more.

Speaker A: Yeah, we going to do drum roll bombs,

Speaker B: right? And well, I mean, Iran's now threatened Arab neighbors with retaliation against their energy infrastructure, which would be devastating to Saudi, Qatar, UAE. So, at this point, it seems like a bit of a stalemate that the US can't act for fear

Speaker B: ...of the retaliation and the impact it would have on America's actual allies in the region.

Speaker A: What do you think happens here? Trump straight up news, Iran now have this sort of choke hold on the world it seems.

Speaker B: I mean the biggest driver also is the election cycle we're in.

Speaker A: The midterms.

Speaker B: The midterms. So going into November this war is deeply unpopular both sides.

Speaker A: And so trying to get rid of the war is the incentive at the moment. It's tough situation.

Speaker A: You seem um hesitant. Yeah.

Speaker B: No, I just I'm not a I'm not a great guy to opine on this. I just I don't know what to do. But just when you look at it from the outside, you see a president that says he's going to bomb, he's not going to bomb, he's calling it off, he's bombing, he's not bombing, he's calling it off, we've got a deal, there's no deal.

Speaker A: And you're you're flopping around. And I think even that as a behavior to observe from the outside, you go, "Oh, okay."

Speaker A: Um, well, let me ask you one question. It kind of makes him unpredictable, right?

Speaker B: And that unpredictability can can in some cases be an advantage. I do think people have made this case that the president's unpredictability makes it hard for people to have a clear path on how to attack. Like my poker player buddies, their whole poker strategy, the guys who are the best in the world, who I'm friends with, their whole strategy is like create randomness in your gamesmanship. So that it's very hard for someone to exploit your gameplay. And um you know, I just don't know if you know what you're going to get with President Trump. You can meet with him and hear him say one thing and then he'll do something different later.

Speaker A: I understand the merit of that argument. I in this situation, what I'm observing now is he's become predictable.

Speaker B: Yeah. In terms of...

Speaker A: In terms of not being able to do any like not not...

Speaker B: Not taking action.

Speaker A: Not taking action threat post it biggest strike coming since World War II call it off.

Speaker A: What would you do if you were him? [laughter]

Speaker B: What would I do uh there's only bad outcomes so it's which bad out honestly I think which bad outcome am I willing to accept the most.

Speaker B: And I guess for someone like Trump I don't know him but I I guess he's probably thinking which one would save the most face.

Speaker A: That's probably the right kind of you know objective function for him.

Speaker B: I think the worst thing is all outcomes in my view lead to the straight of hormones being now basically a a tool of Iranian negotiation and it wasn't before.

Speaker A: New point of leverage.

Speaker B: Yeah. New point of leverage in that region which is a powerful point of leverage.

Speaker A: Yeah. Yeah. But it may create um alternatives. There's conversation about creating other pipelines out to Israel. Oh yeah.

Speaker B: And so on. So maybe at the end of the day it creates incentive for other channels to be opened. uh TBD. I do think the um it's not just about the Iranian program, but it's like where's all the enriched uranium? That's probably if you're kind of asking a military adviser, I would say that's probably what they're thinking about as the the core because it takes a long time to enrich uranium to use for nuclear fuel like this. So getting the enriched uranium is probably a key objective.

Speaker A: The next election 2028 for the president presidential office. Do you think a Republican's going to win on in the course of how things are going?

Speaker B: For 28?

Speaker A: Yeah.

Speaker B: No, I think it's going to be AOC.

Speaker A: You think it's going to be ARC?

Speaker B: Yeah.

Speaker A: Really?

Speaker B: At this point.

Speaker A: Why?

Speaker B: It's all the stuff we've talked about. I just think that that's the the state of the nation. I think that's where people are at. They they want help. People feel desperate and they want a candidate that can promise to help make their life better. I think they're less concerned about, you know, freedom of movement, the kind of stuff we talked about. I think they're much more concerned about paying their bills and getting healthcare and getting child care. And...

Speaker A: You think she's going to run?

Speaker B: I think she'll run. I think she'll beat Buddhajed and uh...

Speaker A: Kamla.

Speaker B: Kamla.

Speaker A: Newsome.

Speaker B: Newsome I don't think Nuome's gonna have like a great presence on a national stage. I think he he he he he looks and acts the part but it's going to be hard for him to sell the rest of America. And I think Kamla is just like it it's just no one wants to take the risk. AOC is just like mom Donnie in the sense that she brings a very different voice, you know, and I think this DSA movement has real legs to it because I don't see a lot of young people speaking out against the DSA movement. I see a lot of old Democrats speaking out against the DSA movement.

Speaker A: You see Kla Harris being perceived as more of a risk than AOC.

Speaker B: Yeah.

Speaker A: Because she's lost before and they've se...

Speaker B: Oh, okay. Yeah. Because she's lost before.

Speaker A: Yeah. But look, what do I know? It's interesting to I've heard you I think I've heard you guys on the Allin podcast say before that you think in 2028 it will be a Democrat or a socialist that wins. So...

Speaker B: I mean there's a lot of runway between here and there.

Speaker B: And look I mean I want to talk about the the profound frontiers in front of us because I think that there really is this idea and you know there's a lot of my friends who have this idea of this golden age hypothesis that we're entering this golden age and people don't realize we're in it. that AI unleashes this capacity for human advancement. So the the the age reversal stuff. Right now we have a billion people in the world that are starving. We have hundreds of millions of people dying from curable disease. I think these are the sorts of things that are going to get resolved more quickly than we realize. I think that the productivity gains that are going to arise from AI are not just going to kind of, you know, be a battle on does the painter have a robot or not, but I think it's going to be about all this new stuff that's starting to be realized. Material science, it's going to have a profound revolution right now. Traveling to the moon, which might seem like a billionaire's fantasy, but ends up becoming kind of a real true industrial frontier that everyone's going to participate in. There's just extraordinary abundance that arises from the stuff. Not in the sense that, oh, we're just making everything that we've had in the past cheaper, but the stuff that's in front of us, the frontiers that all of the entrepreneurs want to pursue, that all of the dreamers see as the opportunity and the hope for tomorrow, that all of the pragmatists are kind of acknowledging is like legit for the first time in our history. That's where I think there's a light kind of rising off this horizon. And I feel very good about that. Maybe AOC gets elected. That's just my view on timing where we sit today sociopolitically. But I do think that the light is rising in a way that like everyone's going to have a profound change to their lives in the next couple of years. So I am profoundly optimistic. We kind of talked a lot about socialism and government spending and all this today, but my experience on the ground is just like holy And there's no stopping it. Like this this amaz these amazing breakthroughs are here. One of the things you learn when you hire lots of people is that um in every change or every announcement you make in your company or we've raised money or whatever it might be, there's an there's a second question which is what everyone all of your team members are actually asking. What does it mean for me?

Speaker A: What does it mean for me?

Speaker B: Mhm.

Speaker A: And actually on the ground talking about being on the ground, it's the 63%. They can't they look up and they see a trillionaire, world's first trillionaire. They see AI...

Speaker A: Katy Perry with the flower out the window. They see a job displacement coming and then they go well listen can't can't pay the bills. So what's the mechanism for doing that right now for helping the people on the ground to benefit from the advances in this technology? What would the mechanism be?

Speaker B: 401ks to own this stuff would would be what we need to change from a public policy perspective so that they all have direct ownership in these things...

Speaker A: and they can look on...

David Friedberg: their phone and see how they're benefiting from

David Friedberg: I'll tell you everyone thinks that AI is going to accumulate to two or three companies. I don't think that's how it's going to play out. Everyone's using AI and everyone's using open source AI now. Meaning every company's going to benefit from AI, which means every company is going to have more money to pay their employees, hire more people, train them up, do other things with them. So I'm like I I don't buy into the narrative that Dario, Elon, and Sam end up having all the value in AI. I think the Chinese blew that up. I think the open source stuff is the best thing to happen.

Host: Doesn't that mean there's going to be a bit of an economic collapse here?

Host: Those data centers still need to exist to run the models. Are we in an AI bubble in that regard?

David Friedberg: If this this capex on AI, if the cost to uh run a Chinese model comes down by some number of fold over the cost to run a proprietary model, I'm going to run more models. I'm going to do it more. And as I do it more, I'm going to need more compute. I need more data centers. I need more thing to do that. So that's where she go. By the way, on the data center argument, I totally buy into people's concerns about data centers driving up the cost of energy. I the water thing is I think BS, but um the cost of energy thing, every data center should be on its own grid and every data center should make enough power not just to be on their own grid, but to pump energy back into the grid.

David Friedberg: If you set that as a standard for every data center project in the US going forward, you've solved the data center problem because now you're dropping the price of electricity for everyone in America and these data centers are all off the grid and then everyone can own those. They can all be in REITs and people can buy stock and and many of those are publicly traded so they should be in your 401k and everyone can own a piece.

Host: David, we have a closing tradition on this podcast where the last guest leaves a question for the next guest not knowing who they're leaving it for. And the question left for you is, what is one idea you have that is uncomfortable for people to hear that you don't typically say out loud?

David Friedberg: Um, I think we should end the federal student loan program in the United States and I think education cost will come way down and the private market will still provide all the student loans that people need.

David Friedberg: I think if the federal student loan program because it doesn't discern colleges, degrees, individual performance, I think that by ending that federal student loan program, the quality of education in the US will improve dramatically and the price will drop dramatically and more people will have access to higher quality education. I know it's counterintuitive, but that's what'll happen. It's sort of like, you know, Malay removed rent control in Argentina and rents declined. [laughter] like the the we've propped up the price of education in the US with the federal student loan program.

David Friedberg: And so the federal student loan program was replaced by a program that is accountable, meaning the person that's underwriting the loan knows that that loan has to perform, meaning that that school has to be good or that individual has to be doing a good degree, the market will correct itself and people will end up getting a loan if they go to one get one degree versus another. So if you get another if you get a bad degree, you know, pick your basket weaving, you know, major, there's no loan available. But if you get a degree in something that might be useful and you're likely to get a job, there's a loan available.

Host: But for those people that can't get a loan because they want to do basket weaving, they're going to have to go find something

David Friedberg: else to do

David Friedberg: else to do. So they might have to go work somewhere else.

Host: So the alternative was we put them in $200,000 of debt and then they didn't have a job afterwards. Is the counterargument also that the most privileged will get the best education and that privilege can be intellectual privilege or it can be financial privilege but there's there'll be a divide between okay you guys are all going to Harvard

David Friedberg: you still have a scholarship system scholarship system doesn't change you still have scholarships and solve for that

Host: and education is with AI is changing as well

David Friedberg: but you know I'll just say like there's a lot of these universities that get accredited and they provide terrible education

Host: yeah it's true then just give you debt

David Friedberg: and then they give you debt and so you graduate with a degree from, you know, whatever crappy university or college, but you assumed that because the government gave you the loan, you were going to have a job at the end.

Host: Yeah. It's a scam.

David Friedberg: It's a scam. It's one of the great lies. Imagine if it was all privately funded. There's plenty of lenders. I mean, the amount of money that's going into student loans is actually a small percentage of what's going into home loans. So, there's plenty of bank capital out there to fund student loans. So the student loan debt would suddenly become, hey, if you go to this crappy university, we're not giving you $200,000 of debt.

Host: True. I see what you're saying. It would also force people to pick things that were linked to the employment market versus say like basket weaving used as an example. But maybe if you know, maybe I'd be forced more into things that had a higher guarantee of return because of the private markets.

David Friedberg: And it doesn't mean

Host: it's a retraining mechanism in that regard.

David Friedberg: It is. And I think this is a great reset that's needed if we got rid of the federal student because I don't think you can reform federal student loans. It's just too complicated. But if you shut it down the and you know or you transition it over time and let the private market underwrite it, you'd have a better path.

Host: David, thank you. Thank you. Thank you to you and all your co-hosts on the All-In podcast. It's one of my favorite podcasts. So, I highly recommend everybody goes and listens to that. I I listen to it all the time and it really helps me develop my own perspective on the world. So, I really appreciate the fact that you guys take the time to do that amongst your very busy schedules.

David Friedberg: Well, thank you for having me

Host: and uh yeah, appreciate you coming here today and hopefully we can continue this conversation once uh we get more of these answers and the fog clears a little bit.

David Friedberg: Absolutely.

Host: Thank you so much. And I'll link all of your links below for people to go read your stuff. Is there anywhere else in particular people can get more of your content?

David Friedberg: All ends really where I'm at.

Host: Okay.

David Friedberg: Yeah.

Host: Anywhere else follow you on social media.

David Friedberg: Follow me on uh Twitter at Freedberg. I don't post very much, but that's it. I [laughter] mean, um that's where I'm at.

Host: Great. We'll see you then. Thank you.

Host: Thank you, David. YouTube have this new crazy algorithm where they know exactly what video you would like to watch next based on AI and all of your viewing behavior. And the algorithm says that this video is the perfect video for you. It's different for everybody looking right now.