Jason: All right, we have a massive show for you today, besties, but it's not going to be our prediction show. We thought we were doing predictions end of the year, but we had so many amazing stories to cover in the news that we're going to do predictions next week. The first story is we have investigative journalist Nick Shirley on. He has uncovered in a breaking 42-minute video that went viral $110 million in potential fraud in Minnesota. It's part of $9 billion in overall fraud. and we've got him on the show here exclusively. This video apparently perhaps prompted responses from Cash Patel and DHS Secretary Christy Noem who have sent agents in to inspect these facilities. Here's some sort of important context. These entitlement frauds in Minnesota have been going on for over 10 years. It's a 13 14 year old story. It started by an investigative reporter named Jeff Baillon. launched his first investigation into this in February of 2013 at Fox 9 News, local investigative journalist. Uh, and after that expose, charges were brought in 2014 against a Somali woman and her husband. They skip bow. They never faced trial.

Jason: Since 2018, Minnesota has seen 9 billion around 9 billion in entitlement frauds according to federal prosecutors. Just to give you guys a concept of what that means, that's half of the total amount spent on 14 entitlement programs in the state. So, here's the direct quote from the federal prosecutor on the Minnesota fraud. The magnitude cannot be overstated. It's staggering. Industrial-scale fraud. There have been over 90 convictions for more than $800 million in fraud since 2022. In 2022, 47 defendants were charged in a $250 million fraud scheme called Feeding Our Future that was supposed to feed hungry kids. Then up to 220 million was stolen in funds for kids with autism. Then 300 million was stolen in Medicaid funds meant to help people with disabilities avoid homelessness. So starting with that feeding our futures fraud in 2022, 82 of 92 people charged have been Somalian. Joining us right now, 23-year-old investigative journalist Nick Shirley. Welcome to the program.

Nick Shirley: Thank you. It's been a crazy past few days out here in Minnesota.

Jason: So I guess a good place to start is you could tell the audience a little bit about your background. when you got into investigative journalism. Obviously, you've got a YouTube channel. I watched some of your early videos when you were 16, 17 years old. I would say along the Mr. Beast vibes and then suddenly making a turn into politics specifically around immigration and some Vox pop kind of man on the street stuff. But maybe you could tell us a little bit of how you got into all this and how you got into this specific story.

Nick Shirley: Yeah. So, I've been doing YouTube as far as I can pretty much remember since I was as a sophomore in high school. It was just something I thought I could would be good at. So, I'd do YouTube videos and all I could do in high school was to do prank videos, sneaking into places, just kind of a fun stuff you can do on the weekend. And then as I've grown older and I've had other experiences, um I've matured and I've wanted to get more into more serious topics. And so, uh, as I've been able to go places and kind of see the world for what it is in different countries and whatnot and have different experiences, um, it kind of led me to get into this more investigative journalism content. And also, back in around 2020, you couldn't even make political content on YouTube without being demonetized. For instance, if you were to put Trump in a YouTube title or thumbnail on my channel, you would get demonetized cuz I was a smaller channel. So, it was impossible to make that sort of content and I was younger. I was about 17, 18 years old at that time.

Jason: And now YouTube allows you to monetize. I noticed you had ads baked into the program like many podcasters. And you're not affiliated with any news source. And I to the best of my knowledge, you're not backed by any special interest groups. You're not backed by some rich billionaire. Where's the money coming to do this reporting from? and and just to confirm that with the audience.

Nick Shirley: Yeah. Everything I do, I'm 100% independent and so I make my money off of YouTube, off of brand deals inside of YouTube videos. And if people want to donate money, they can do that. However, everything I do is straight from my own hands and I don't have any other people really working for me other than me, myself, my mom, and a few other editors.

Jason: So, tell us about the origin of this story, and then I'll hand it off to the rest of the besties to do some follow-up questions.

Nick Shirley: Yeah. So, I've been looking into this fraud for a long time. Since last June, I came to Minnesota to kind of do a video on what was happening with the Somali population as far as like how much it was increasing and and how certain towns have been uh the demographics have changed um and how churches are turning into mosque and how mosques are growing inside of Minnesota. I thought it'd be an interesting topic for people to see. And when I was there, a lot of people were starting to tell me about the fraud that was taking place. And I was like, well, how do I I just can't come and label everyone saying there's fraud happening. I need evidence. I need actual proof. And so I I've been doing my own investigation. And then a man by the name of David who's inside my YouTube video, he's been doing his own investigation for years as he's as he works next to some of these childcare centers and he's driven by and he's never seen a single child at any of these daycarees. And so he started looking into the funding and he was able to get the numbers of how much money these people were receiving from CCAP funding which is tax exempt and it was in the millions of dollars. And so I was I told him, "All right, I'm coming to Minnesota. Let's go see what's happening on these daycarees." And when I got there, I was shocked to see when the first daycare we went to, all the windows were blacked out and you didn't even have the option to open the door. Everything was locked.

Jason: So explain the the mechanics of the fraud just so the audience if they haven't seen this understand how these frauds are being played out.

Nick Shirley: Yeah. So massive welfare frauds being committed. People are opening up these daycarees, home healthcare clinics, you name it. anything that has anything to do with like health welfare or even just like helping people in general like with daycare or with uh healthcare, they're opening up these companies and then they're able to receive millions of dollars. And the state, for instance, I don't know if they're doing any checkups on these places because these places literally had signs that said learing instead of learning on their on their doors on outside. And what business is operating in a way where you can't even go inside or the windows are all blocked out? Very strange.

Chamath: Nick, let me ask you a question that I think a lot of people have, which is when your video, first of all, let me just say, took a lot of courage and it was well produced and you communicated some very complicated information in a very simple way, which I think is a tremendous skill. But the question that everybody asks is how do we know that you are right? And in traditional investigative journalism, there's a process that people follow and there's insurance that you have to get and then there's errors and omissions and you typically have to deal with lawyers. Did you go through that process when you made this? And do you think that it's an important part of what needs to be done for your credibility and for this piece to stand on its own?

Nick Shirley: Yeah, I think everyone knows that fraud's been going on for years now. Like Jason was just saying, everyone knows that the fraud's being committed, but nobody's actually went to go see it firsthand. They know this fraud's been happening, right? And that's why it's been so hard for people to say, "Well, this is happening." Or this is why mainstream media's had such a hard time to actually get exposure on the fraud because they've actually never gone and seen it firsthand or they've had the opportunity to have a platform where they can share on their own.

Chamath: Right. But did you check all the traditional boxes that the New York Times or other people? Because what I'm trying to get to is how do we make sure that then you're not attacked and that you're not discredited and that people say this process is faulty and he's mudslinging and how do we make sure that you're not sued into oblivion?

Jason: Yeah. And to specific to build on that Shimoth the allegation has come out. Oh, you went on a Saturday. Oh, you went during Christmas. And I guess you could address that because now people are obviously vetting your journalism.

Nick Shirley: Yeah. Well, it's on I went on December 16th is a weekday before Christmas break. So, there's that. And then, um, sorry, the question as far as like did I do the vetting and whatnot. The man who helped me like lead the investigation himself, David, he had all the paperwork from the capital. He had somebody from inside the capital leaking him the information. So, there was my like fact check, per se, was he had a source from inside the capital. That's how we were able to get the number specifically.

Sacks: Well, I think it's an indictment of the press. They haven't covered this and they still haven't covered Nick's video, which is now, like you said, a viral video with hundreds of millions of views and everyone can see what's happening. You basically have this huge multi-billion dollar fraud taking place. Yes, there were stories going back a decade like you said Jason, but they were isolated stories where they could be portrayed that way. And I think what Nick has done is show that the fraud is massive and in plain sight and no one bothered, no one cared enough to expose it. And you know, Nick, you did this by just going around to all these supposed daycare centers which are receiving vouchers from the government anywhere from what one and a half to $4 million per daycare center per year based on fictional enrollments of children. And these centers aren't even operating and they're collecting millions from the government. All told, I guess it's adds up to 8 to 10 billion. So this is taxpayer money that's being stolen from Minnesota that's being stolen by this Somali community basically.

Sacks: And I think the story's gone viral because it includes so many aspects of dysfunction. I mean, you've got the issue of illegal immigrants. Some of the people in the Somali community got here illegally. Some of them didn't. You then have these progressive judges who foolishly voided convictions of some of the fraudsters who were doing this. I mean it's just um classic example of suicidal empathy or something like that. So you have that aspect of the story and then you've got the political corruption. Again these are not isolated incidents. This is a a case where I think we have to see this as a system at work not just an example of like a few isolated fraudsters. There's some round-tripping here where some of the funds that are going into the pockets of the Somali community through this fraud end up back in the hands of politicians. And the really extreme example of this is that Tim Walz even changed the flag of Minnesota to resemble the Somali flag. I mean, he lowered the old flag and raised this new flag to that resembles the Somali flag, which shows the political clout of this community, which is why I think a lot of politicians turned a blind eye to what was going on.

Nick Shirley: Yeah. No, I love everything you said because it's so true, especially like for instance, they found a man here with $7 million he had committed in fraud and then the judge overturned it, right? And then Tim Waltz is calling people like me a white sup white supremacy. He says we're acting on white supremacy. No, Tim, it's millions and billions of dollars in fraud of hardworking motan people that's being sent who knows where. And so it's not like and then today I'm just looking at the media and people are it was the craziest thing. I get on there and people are starting to say all these like crazy allegations about me. I'm like whoa where are you guys? People have even came out say said I'm like a a pedto. It's like what? Like I literally just went and did the job that everyone's been wanting to see done for years, right? And I just brought limelight to everything, tried to make it as uh just a simple issue about fraud happening.

Jason: Okay, but we have to get on to this next story because I don't want to run out of time for it, which is California wants to do an act called BTA. This act stands for Besties to Austin. Anyway, we brought this up back in October. This tax for billionaires is going to target residents with over a billion in net worth. Freeberg, why don't you walk the all-in audience through how this came to be?

Freeberg: So, California has a direct democratic ballot process. So anyone can file for something to go on the ballot. When they make a filing, it costs $2,000. Anyone can file for a ballot measure and then you have to go collect signatures and you have to collect roughly 900,000 signatures. Once you've collected those signatures, it makes it on the next ballot. So in this particular case, the billionaire tax act as it's titled is a 5% tax on the assets of anyone that's got a net worth over a billion dollars. It was proposed by a guy named Dave Regan who runs SEIU which is one of the unions in order to make up for the healthcare shortfall that his members are going to be experiencing. So, this was not a broad coalition that filed this. This is not filed by the state. This is not filed by anyone in the Assembly or the Senate. This is one individual at one union that's put it forward and is now trying to collect signatures to get it put on the ball.

Freeberg: I want to be really clear on this. Forget the term billionaire. Forget the term wealth. What we are talking about is for the first time a tax on individual people's private property not on your income. So the way taxes work today is when you earn income either via labor so you collect a paycheck or via the sale of an asset. You are earning income and you pay a tax on that income. So for the first time ever we are talking about placing a tax on people's private property that hasn't turned into cash. For example, you own some real estate. After you pay your taxes, the government comes and says, "Hey, how much money do you have in your bank account? What's the value of your car? What's the value of the thing that your grandma gave you? Give me the value of everything you have in your house. Add it all up and give me a percentage of it." That's what this is. It's a private property seizure. It is a seizure of your assets to pay a tax based on all the things you own, even if you've already paid your taxes on all those things.

Jason: I always like to think why or how did we get to this billionaire's tax? And I think the fundamental issue is that people really don't feel safe in this country when it comes to healthcare and housing. We heard that come up with our guest earlier. He said, "None of my friends have a home." But just looking at healthare, the fact that the United States does not have universal healthcare is complete disgrace. There are 80 countries in the world that have it. We are the second biggest economy in the world. We are the leader of the free world still to this day. The fact that we are so polarized as a country and we have so much fraud as a country that we can't solve something as simple and basic as universal healthcare that is the root of this evil.

Sacks: The problem is the more the government gets involved in healthcare the more expensive it gets. And the same thing for college tuition and every other category. Well I mean look you got to have market forces. That's what that chart shows is that where you have the most market forces, which is technology, that's where you have continual quality improvements and price decreases. And while that's happening, the people who create the red lines, basically the people who create this out of control fraud and corruption and cost problem, they're the ones attacking the people who create the blue lines.

Jason: Anyway, we have one thing we need to get to here on the docket, which is a victory lap for our bestie, Chamath Palihapitiya. This week, Nvidia entered into a licensing agreement to uh license Groq's technology for inference chips. Chamath was the backer of this company for close to a decade and um had to come rescue it a couple of times. It was a brutal non-consensus bet. Uh you invested in Groq essentially formed the company with your partners 5 years, 6 years before chat GPT even debuted. So this was a visionary thing to do and it was a hard bet and so congratulations from one Bessie to another on uh this incredible non-consensus bet you made Chamath but maybe take us through a little bit of the backstory.

Chamath: We started the business 10 years ago. And so in a world of kind of these LLMs, there's two terms that I think you're going to hear a ton about over these next few years. The first term is prefill and the next is decode. What prefill and decode are is two very distinct ways of how models think and how a model goes through the process of answering a question that you ask it. And so when you send a prompt to AI, what happens is that the model processes it. This is called the reading phase or prefill. It reads your entire prompt all at once and then it does a bunch of math. The problem is that this is really compute bound. So it requires massive brute force and NVIDIA GPUs crush you and their architecture is designed for massive parallel processing. But the next phase though, this critical phase, the decode phase is the writing phase, right? So the model starts to generate a response. You ask it a question and its response one token at a time and then to pick the next token to pick the next word it has to look back at everything it has already said so that it doesn't hallucinate.

Chamath: The problem is that this is incredibly memory bandwidth constrained. And in our architecture a long time ago, we made these design decisions from day one. We used a lot of what's called SRAM, so memory on the chip so that we could do this decode thing as well or better than everybody else. And then about a month ago, he and I had a call on a Saturday and he's like, "I think this thing is really real." He is operating at a level of insight about what's happening in this industry that I've really never seen with other folks in other industries other than Elon in his industries. It's a level of mastery and a level of skill that is really impressive. I think what will happen here is if successful we will be a foundational layer that Nvidia can use to again make AI much more accessible, much cheaper, much more beneficial to everybody.

Jason: All right, everybody. This has been another amazing episode of the All-In podcast. We'll see you next week for our prediction show. Love you besties.