Elon’s Anthropic Deal, The Next AI Monopoly?, “FDA for AI” Panic, Trading the AI Boom

How do I sound? >> You sound perfect. >> great. >> I look? >> Yeah, you sound great. Better than you. look. >> You got that face made for radio. >> You [laughter] don't look as tired as. you have in recent weeks. >> That's true. Yeah. >> Yeah. >> Somebody was slagging me for the bags. under my eyes. I mean, this audience is. brutal. [music]. >> They're brutal. They're brutal. >> It's a good thing I'm rich. >> [laughter]. [music]. >> You let your winners ride. Rain Man David Sacks.

>> [music]. >> We open sourced it to the fans and. they've just gone crazy [music] with it. >> All right, everybody. Welcome back to. the number one podcast in the world. It's the All-In podcast. With us today. Chamath Palihapitiya, David Sacks, and. our fifth bestie, Mr. Brad Gerstner is. here. I think David Friedberg is. suffering from some. socialist-related flu. >> He's very sick of reading about.

>> socialists, but he'll be back next week. with two incredible, incredible. interviews. >> You guys see those Spencer Pratt ads? >> Wow. >> It's one of the best political ads I've. ever ever seen. >> Oh, there's like three or four of them. >> There are multiples. >> Yeah. >> Whoever that social media team is is on. fire. >> If you get a good social media team and. you get a good ad production team, I. think it's next gen cuz these things go. crazy. And Spencer Pratt, if he wins. this election, which I think he's going. to in Los Angeles, the reason is what. Brad said. Those ads are incredible.

>> Well, he's also quite a good debater. Did you see clips from this debate? >> Absolutely. He's so funny. He's so. chill. >> Yeah, well, he's up against Karen Bass, who's the mayor, who is basically. extremely left-wing. And then there's. someone who's a city councilwoman, who's. even further to the left of Karen Bass. I mean, she's. >> Yeah, yeah. >> often like Fidel Castro territory. >> She's an Indian Fidel Castro. >> Raman. So, she was basically, I guess, criticizing the mayor for the. homelessness problem.

And then Pratt pointed out that this. councilwoman is actually in charge of. all these homeless programs already. >> [laughter]. >> He eviscerated her. >> He eviscerated her. And he basically. made the key point, which is, "Look, the. problem here is not lack of housing, it's an addiction issue, and it's a. mental illness issue." And he said, "Look, if you. >> said. he said if she went to the street, she'd. get stabbed in the neck. >> Yeah. >> [laughter]. >> Which is pretty accurate if you've been. to Skid Row. I mean, you would not want. to walk through there. It was like the Spider-Man photo.

>> got the clip. Play the clip, Nick. >> Oh, god. >> This clip is brutal. >> a different clip, but this one super. viral. It reminded me of Trump a little. bit. >> Let's see. >> I'm not sure how to respond to that. vision of Los Angeles. This is a MAGA. Republican's idea of what Los Angeles. looks like. This is This is really not. >> [laughter]. >> Unbelievable. >> For those of you listening, he put his. hands up and wiggled his head like, "Oh. my god.". >> [laughter]. >> Hey, hey, Sachs. You know, Stephen Pratt. wins mayor, >> Spencer Pratt. >> Spencer.

>> the you know, the ballot initiative, the. retirement protection and savings act, right? It's going to pass. It's going to. pass with big numbers. This is the, you. know, referendum that effectively is. going to knock out the wealth tax. Can. you imagine if California effectively. passes a constitutional amendment. protecting retirement savings and. personal assets and banning the wealth. tax and Pratt gets elected, the message. that would send to the country? That's. That's a very non-consensus view that. I'm becoming increasingly optimistic. about. >> Well, from your lips to God's ears.

But until that message actually is sent, I think I'm going to be uh. >> in Texas. >> In Texas. >> [laughter]. >> Well, I mean, this is also in the face. of I don't know, just a follow-up story. here, but Mondami did like an attack. video on Ken Griffin's house. We talked. about it on the pod a couple weeks ago. And like, literally stood in front of. his house, pointed at it. and this is in. the face of like a CEO getting shot for. ideological reasons, Sam Altman's house. being targeted. This is like a really. dangerous thing for Mondami to do.

And Ken Griffin came out today in or. yesterday in an interview and said, "Hey, listen, I'm out. We're going to be. putting our efforts into. Florida." And this is the same thing. that happened to Chicago, and he. basically said like I really felt. offended, and I was, you know, nervous. about this. because of my personal safety. And he. called him out. Mondami came out with. like. a mealy-mouthed response that didn't. even apologize for what he did, just doubled down on it essentially. All. right, let's get to the I don't know if.

you guys saw it or not, but who cares? And New York is becoming a flyover city. >> It's an interesting way to put it. Don't. disagree. >> All right, first story. Elon just leased. all of Colossus 1. >> New data center? >> He did? >> Nostro What? What? >> Yes, shocking to Dario and Anthropic. Chamath on this week's pod. Go ahead and. give yourself a pat on the back. You. said Elon and Dario should do a deal. tomorrow. It didn't happen. The next day. it happened 5 days later, so you came. close, Chamath, but no cigar because of.

Anthropic's obvious compute constraints. Anthropic just added over 220,000 Nvidia. GPUs, over 300 megawatts of energy. The deal is already having an impact as. we've discussed here. Claude users have. been experiencing rate limits. Well, Claude has now doubled the Claude code. rate limits, removed peak usage caps for. paid users, and increased API volumes. for Opus models. XAI is now trading. their models at Colossus 2. So, they. have more than enough compute. Elon made.

a great bet. on compute and built up those data. centers really fast, and that is now. paying off. We had the cursor deal we. talked about last week. Let's talk about. the emergence of Elon Web Services, EWS, Chamath. He is now in the hyperscaler. competing against Google Cloud, Amazon. Web Services, and Azure. And uh I don't. know if you had inside information or. just a brilliant uh epiphany, but uh. take us behind the call and what do you. think about the deal itself?

>> I think the deal is fantastic. I'll say. maybe three quick things. The first is, as I mentioned a couple. weeks ago, Anthropic. and OpenAI's revenue performance has. nothing to do with demand. Zero. It is entirely to do with the supply. constraints that exist in data centers. and specifically in power. If they had infinite power, I think that. their revenues would probably be even.

more parabolic. And so all the breathlessness about. either exceeding or underperforming a. forecast, in my opinion, mean nothing. I think the five-year view. for those two companies. is quite robust. The thing that they really need is more. compute and more power. That's the first. thing. The second thing is, while they need. that, we have a very big problem, which is we unfortunately have very poor.

leadership. at the head. of most of these AI firms. I think they are coming off as. untrustworthy or too self-interested. The political reaction now. is starting to turn negative. The community reaction is negative. You have about 9 gigawatts that are. supposed to come online this year. Almost 50% of it now is being protested. More than likely, if if history holds,

most of that will get turned off. So. they will get even more supply. constrained. So that's the setup. So what's the opportunity? I think for. Elon, if you look inside of how people. try to nitpick the SpaceX valuation. case, or let's not even let's give them. sorry, let's be more generous. When people try to paint the bear case, or they try to red team the valuation, the biggest element is the on the come. value around the orbital data centers.

And by actually landing a bunch of. terrestrial capacity, I think you start to blunt that. Because. you can now start to say that even if. the orbital data centers get delayed by. a few months or a few quarters, even if. the technological. de-risking of it takes longer, he now has a structural core business. that will effectively subsidize. his ability to train Grok, which I think. is a really important and underreported. theme. So, you have all this infrastructure,

he somehow saw the tea leaves. before most people, he built to a level. of scale and secured power. before most people. It is now become the. critical asset. Now, he's. kind of king-making. And I think that that's a really. interesting valuation. reinforcement as SpaceX goes through. testing the waters in the in the road. show. Brad, your take. >> Yeah, no, I think it's well said. I. mean, first we we know that there's. nobody better on planet Earth than Elon. at converting electrons to tokens. It's.

a critically important evolution to the. story. You know, I think our friend. Shawn Maguire, he he he sent out a tweet. that summed it up well, and he said. SpaceX has this five-layer cake, launch, connectivity, compute hyperscaler, space. data centers, and then applications and. models, and then other bets, right? The. question on the road show has been, "But. x.ai doesn't on the revenue trajectory. of OpenAI and and Anthropic, and yet. there are huge commitments. And now we.

see the ace card that Elon's playing.". He said he was building AWS all along or. EWS all along. And so I estimate that. this is going to generate in this year. an incremental 45 billion dollars of. revenue on top of what I have seen. analyst estimates in the mid-20s. That's. a material amount of incremental revenue. to offset the cost of the investments. that he's made here. And that will. subsidize to Chamath's point all that. he's investing to build the next.

generation of growth. Remember too that. he has three facilities. Colossus, macro. hard and macro harder. 1.2 gigawatts in. macro hard and macro harder in. Blackwell. So he's given the one that's. kind of less connected H100s great for. inference to Anthropic. He's monetizing. it in a big way. It's terrific for. Anthropic. And it solves what I think. was the biggest question in the. valuation story, which is what if he. spends ahead of x.ai's revenue. It takes.

the pressure Chamath off x.ai delivering. immediate revenue. Now he becomes. an immediate competitor in the. hyperscale. I don't think this is the. last announcement. I think he's going to. make a lot more, you know, moves in this direction. I. think it will be a material part of. their story and their revenue. projections. as they come together. And I would just. say finally, you know, again, everybody. has talked about how we don't have. enough power, how we don't have enough. compute, how the revenues would not show.

up in this year. You know, but the chaos. that is American capitalism somehow. finds a way, okay? And there's. tremendous demand for Anthropic and we. find a way. I was so happy to see kind. of the detente and the kind exchange. between the team at Anthropic and Elon. because we need all of this in order to. produce American frontier models to stay. at the frontier. And then finally I just say, you know, Chamath, you referenced these activists.

that are protesting delaying these data. centers. in in these localities. One thing I want. to dispel this myth. These This is not. like organic hyper local protests by. people in a community that aren't being. spurred on. This is highly organized activists that. are moving across the country to stir up. trouble in the exact same way they did. to stop all fission reactors being built. 30 years ago in America. Now we have no. nuclear reactors being built. China's. got a hundred of them. Who was funding.

those activists? I think we need to. really look into who's funding the. activists now. I'm not saying that there. aren't any concerns, but the. misinformation about water, the. misinformation about electricity bills. electricity bills are going up in the. places that are not building data. centers. New York and California because. they haven't built any supply on the. grid. In Texas, where you're building. the most data centers in the country, electricity costs are going down. So, um. I'm I I I think that's a boogeyman that. we got to take on.

>> Sacks, sure that's. >> Well, look, the deal is highly. complimentary as Chamath and Brad. pointed out. SpaceX has a profitable, I. think very profitable, space and telecommunications Starlink. business, the satellite business, but. the xAI business had huge losses. The. reason's pretty straightforward. You. need these super large training. clusters, but they cost a lot of money. And until you have a model that's. capable of competing at the frontier, you're not making any revenue. And that. problem was compounded by the fact that.

right now all the revenue is in. enterprise, which is to say coding. We. know that xAI just did that deal with. Cursor to try and catch up, but they. don't have a coding product yet. So, they're not participating in the. revenue, but they're participating in. all of the cost. So, this deal fixes. that problem. Elon's now able to have a frontier model. company, but he's able to now not have. these massive unpaid for CapEx. commitments, right? Because he's able to. kind of lease that capacity. So, I think.

it solves a major problem for them and. their balance sheet. And then you have. to say that for Anthropic, this is a. really great thing because they were. compute constrained. And just to build on that point, I mean, I guess let me be the first to. congratulate Dario on winning the AI. race. >> And you've been Let's be honest, Sachs. You have been. on this podcast, you've been moderately. critical of that company and Dario. himself for being um you know, a little. P-doomer 110. And on your X account,

you've been even a little spicier. So, now that there's peace in the Middle. East of. of the AI business, what's your take. here? >> My take is, look, let's just honestly. and accurately assess where the state of. this AI market is at right now and. Anthropic's place within it. So, for the. last 3 years, Anthropic has been growing. at a rate of 10x a year. I think going into this year, probably the conventional wisdom was. that there'd be no way to sustain that. kind of rate of growth at this level of.

scale. And what happened in the first 4. months of the year? First, we find out. that from January 1st to March 31st, they grew from roughly 10 billion of ARR. to 30 billion. So, it tripled. And then. in April, if anything, the rate of. increase seemed to accelerate. They went. from 30 to 44 billion of ARR. Nobody in. Silicon Valley has ever seen anything. like it. Forget about the rest of the. country. I mean, all we do in Silicon. Valley is deal with exponentials, and. still people have never seen that kind. of growth at that level of scale.

The only thing holding them back in the. future was compute. Now they've made. this deal. They've made other deals as. well to get that compute. I think it's. pretty much a foregone conclusion that. they will hit that forecast of 10x this. year, exiting the year at call it. roughly 100 billion of ARR. And now the. only question is whether they hit a. trillion. in 2027. And we can debate whether that's. >> on board. >> No, we can't we can debate whether. that's true or not. But look, if they do. that, I think they'll easily be the most.

valuable tech company in history. In. fact, they might even be more valuable. than the rest of the Mag 7 put together. Just to give people some basis for. comparison here. You know, the biggest. tech companies Apple, >> Nvidia, >> Nvidia, Google. I think they they kind. of do around 4 to 500 billion a year. right now. of of revenue. I mean, I guess Nvidia's. a little bit of a different category, but you look at you look at Google. >> the three. >> The hyperscalers, yeah. I mean, Google. is doing what? Like 120 billion a. quarter? Something like that. 100. billion a quarter.

>> Correct. >> But growing at what? 20% year over year? Not 100% and certainly not 1,000%. So, the fact that Anthropic could be on. track, in fact, let me correct that. >> them going to the Mag 8? It'll be a Mag. 8. >> I'm saying something else, which is that. unless something about their current. trajectory. changes, Anthropic will be the most powerful. monopoly ever created in human history. >> Go. >> Again, it will be, you know, a trillion.

dollars of ARR growing at some. exponential. >> Interesting. >> Dario calls it AGI. I call it the. biggest monopoly in human history. >> Interesting to hear that word monopoly, Sacks. Very interesting placement. Chamath, go ahead and then I'll move on. >> Apple in 2025 was 420 billion. Microsoft was 300 billion. Alphabet was. 390 billion. Amazon 700 billion. Nvidia. 190 billion. Meta 185 billion. Tesla 110. billion. Total.

about 2.3 to 2.35 trillion. So, if Sacks. is right. and Anthropic, you know, can tack on a trillion, it. won't be the Mag 7, it'll be the Mag 1. >> Just to put it in perspective though, Dario and Dwarkesh said he thought the. combined AI revenue. of the market leaders would be about a. trillion in 2029. I love what you're. saying, Zach. I think there is unlimited. TAM. We may be over our skis a little. bit in terms of, you know, the forecast. If you back your way from compute,

right? They're They expect to have 5. gigs by the end of this year, 10 gigs by. the end of next year. It's kind of hard. to get to those numbers for a single. company, but I do believe that you know, the trajectory that they're on, I. totally agree with you, is on an. exponential that not many people. believed in 4 months ago. >> Right. So then the question is, okay, I. think we all agree they're on an. exponential curve and that the TAM is. big enough to support that. Just one. data point on TAM. My understanding of. the total market size just on coding.

is 1 trillion, meaning that a trillion. dollars a year roughly is spent on. software developers and all things. related to the creation of software. Now, I'm not saying that they eat that. entire market, but I can easily see the. market for software doubling. >> Well, hold on. It's doubling from a. trillion to 2 trillion given that. coding tokens basically 10 X's or 100. X's the value of that market and the. ability to generate code. So, I think we. all agree that the TAM here is large. enough to support a trillion dollars of.

revenue. Brad, I think you bring up a. couple of really important constraints. First, there may not be enough compute. and there's not enough energy. I'd say. the second big one is, what's the. competitive reaction going to be? Because I would say at the beginning of. this year all these frontier labs were. playing around with a lot of different. things. I mean, Anthropic was the porcupine. They. believed in one thing. All these other. companies were kind of acting like the. fox who thinks they're good at a lot of. different things. They were doing nano. banana, they were doing Sora, they were. doing, you know, they were doing image.

generation, they were doing fantasy. character chatbots. In hindsight, they. were doing a lot of things that appeared. to be kind of a waste of time. The whole. market appears now to be coding and the. things that we built on coding tokens. like co-work, like agents. And so there. is going to be a competitive response. here where all the other guys realize, "Oh, wait a second. We were misfocused.". They're going to get focused. I just. don't know how much share they're going. to be able to take. It does look like. OpenAI has already made the pivot. We. hear very good things about Codex now.

based on GPT 5.5. 5.5 is based on a new. base model called Spud. I think they're. very optimistic about continuing. improvements. Their rate of growth. appears to be accelerating now because. of 5.5. So, look, there's reason to believe that. OpenAI can take some share here. I'm. sure that Google won't be asleep at the. wheel. They're very, very good at. coding. They've got a really good team. And Elon just tied up with Cursor. So, there is going to be more competition. But still, what you have to say,

and I think all of us know this from. Silicon Valley, is you always want to be. the company in the lead that's on that. trajectory where all you have to do is. maintain inertia, whereas the other. people have to change something in order. to put themselves back in the race. So, this is when when I say somewhat sort of. facetiously, "Congratulations, Dario, on. winning the AI race." I don't mean that. he's won it, but he is winning it right. now. >> Well, here's the the brilliance of what. Elon's doing. If you look at the. existing business, which is Starlink and.

basically the launch services at SpaceX, incredible business, obviously. 20 billion this year, I think is the. estimate. But if you look at the. footprint of Amazon Web Services, Azure, and GCP, you're looking at, you know, 300 billion dollars in revenue. and a market cap of combined 5 trillion, 4 trillion if these were independent. companies. And if you look at what is. Elon's core competency at Tesla, it's.

building factories. And if you look at. the footprint of these factories, they're huge. What are data centers? They're basically big giant factories. And then if you look at energy, what. else is Elon extremely good at? This is. the battery deployment and he's also got. solar deployment from the SolarCity. often criticized acquisition he did. years ago. So you put this all together, if this is 5 billion as I think you. referenced Brad, if it's $5 billion in. incremental. Elon web services business and he's a. neo cloud,

what could he build on planet Earth? What could he build inside of Tesla's in. terms of extra compute? What could he. build inside the power wall? What if the. power walls had his new fabs in them and. you built a distributed system from home. to home? The power wall has compute in. it, the cars have compute in it and of. course. the ultimate manifestation of this where. nobody can complain is you go right out. into space. And that's what he's going. to do and the the sneaky small part of. this announcement from Elon and from.

Anthropic and Dario was they're also. interested in space. So look for the. race to go from factories and data. centers to homes, the power wall with. compute in it. It's already online, right? And Starlink also gives him the. ability to do distributed compute to. people's homes. Again, you could be. paying people to put power walls with. computer in it. That's going to be the. next shoe to drop, I believe. >> Did you guys see the deal that was. announced. yesterday.

between Pulte Homes, which is a huge. builder, >> Yes. They're doing it as well. >> and Span? >> Yes. >> Nick, just throw this up here. It's. super cool. What's happening is that. these guys. are putting. many data centers with Nvidia GPU. clusters. beside every home and then allowing. people to actually run those things and. that's just incredible. I thought that. was so cool. >> It's a great pivot. What this company. did originally Chamath was they did the. power panel. They made smart power. panels. So you know when you flip your. breakers, all those breakers are in an app. I. looked at it for my house, but I guess.

they pivoted to add this and I think. Base Power Brad urine industrial unit. they're going to do the same thing. >> Yep, Zach Dell's doing that. One of the. things I just would say in response. Jason to what you just said about Elon, right? This is why the SpaceX IPO is. going to trade at 40 to 50 times. revenue. Okay, so next year if they do. 40 to 50 billion, and this thing goes. out at 2 trillion, right? That they're. going to trade at a really high revenue. multiple compared to the Mag 5 that are. trading at like 25 times earnings. And.

there's only one person on the planet. who has a future pipeline of innovation. and the largest TAM in the world because. he's playing in all these different. spaces that can command that multiple, and it's Elon, and it's deserved, and. it's great for the country. >> same Tesla's has that same Elon. variable in it as well, which is people. value his companies at I would say two. times market, three times market, four. times market because of the future. pipeline. You guys And they devalue. Apple because they don't have somebody.

like Elon or Steve Jobs there who is. giving them the future. >> I don't think it's devalued. I think. >> Or properly valued if you don't have an. Elon and you have somebody like I think. that's exactly what it is. We talked. about this last week, but explain why. you think it's different. >> all of these companies are actually very. fairly valued, and then. Elon world gets a premium. >> Totally. >> And that premium is because of what you. guys said. That I agree with. The big. message that I take away from this, which the markets. and retail are telling you is. you guys have stopped innovating.

There's a lot of incrementalism, and we as a society aren't benefiting. broadly the way that you told us we. would be. And so maybe this is the best way for. them to get this message, which is to. whack their valuation. And by the way, I'll just say it again, when Tesla and. SpaceX merge and we have all things Elon. in Elon Corp, okay, which will happen. probably by at end of the year, maybe. it'll happen the middle of next year. It's going to then break everybody's.

brains again because you'll have this. one asset, as you guys said, that will. trade at a valuation premium. And some. people will say it's unexplainable. And. I think it's logically explainable, which is everybody else has stopped. innovating. People know how to draw more. blood from the stone, how to target. better ads. That does nothing for society anymore. >> Yeah. That's it. Literally. >> In fact, it does the opposite. It There. is no good left. >> That was literally the exact point I was. making when you cut me off. If you look,

Tim Cook's greatest innovation. Tim Cook's greatest innovation, before. you cut me off, was Apple TV. Not even. the hardware product. It was just. spending money and making a Netflix. knockoff. There's been no other product. >> Hold on. Let me finish again before you. interrupt me making my point. >> that? You don't like being interrupted? >> Oh, no. Oh, yeah. Well, okay. Okay. >> Interesting. >> Pot meet kettle. If you look at their track record, and I. think this is why we had a change there. is they have not done anything. innovative. And in fact, the things they.

were doing that were innovating in AI or. self-driving cars, they shut down. They. won't take any swing for the bat. So, they are getting penalized in their. valuation. >> They're just not getting a premium. They're not getting penalized. >> I think they're getting penalized. >> metric, they're trading at incredible. valuations. Just look at them. >> Oh, no. I don't I I mean, if you compare. the two valuations, I think they're. being penalized. Anyway, let's Anybody. else want to get in on this before we. move on to the next one? Yeah. >> There is no world in which Google and. Meta and Apple and Amazon could be.

viewed as being penalized in valuation. There is very clearly a world where Elon. gets a massive premium because he's. innovating. >> You're saying the same things. You're. saying the same things. >> we're saying the same thing. It's not. the same thing. >> We're I think we're we're debating. semantics here. I'm not letting you off. the hook, Saxby poo. When Sax is very deliberate in how he. speaks, they said he's the captain of. the debate club in his 20,000 word. article this week and that he's a master. debater. He's a masturbator. And.

you slipped in you slipped it in. Are you saying that the FTC or whoever. should be going in and looking at. Anthropic? Oh, Brad's book is getting. attacked headwinds. You said they're a. monopoly or they're heading to monopoly. tactics Sacks is are that what you're. saying? >> Well, look, I mean we know that tech. markets have a history of consolidating. down and turning into either monopolies. or duopolies. And if you just look at. the revenue right now, there's only two.

companies making substantial revenue on. AI. It's Anthropic and Open AI. We know. that Open AI is growing at three to four. X, which is incredible at the level of. scale they're at. Anthropic though we. said is growing at an exponential 10 X a. year. And if they just do that for 18. more months, they'll be by far the most. valuable company in human history and. they'll have unprecedented control over. the most important technology of our. time. So, I don't know what you call. that,

but it is something to think about. And. I guess I do have a thought experiment. for you guys, which is. I just want you to think for a second. about the case of of John D. Rockefeller, who I think is known as. probably. the most successful greatest most. ruthless monopolist in in American. history. But he wasn't very good at PR. He was terrible at PR. Everyone sort of. recognized how ruthless he is. We see. movies like There Will Be Blood, which. is basically about him. In any event,

imagine if John D. Rockefeller was way. better at public relations. And instead. of calling his company Standard Oil, he. called it Safe Oil. Okay, let's just. let's just play this thought experiment. >> Clean beautiful coal. Yes. >> Safe oil. He called it safe oil because. as we know kerosene is dangerous. Their. first big product was kerosene. And. kerosene can light your house or it can. burn it down. And in the wrong hands, it can torch a. city or you can use it to make a bomb. So, John D.

let's say should have called for the. creation of a new government agency to. regulate the safety of his product. And. they could have done rigorous testing, licensing, common sense regulation. There would have been a very intense. debate over safety standards. You know, what should the proper wick. thickness be? And should we allow all. those. dangerous independent refiners, right? And I think people would have gotten so. wrapped up in this debate over what. constituted safe oil or safe kerosene.

that they would have missed what was. really going on, which is that. Rockefeller was building the richest, most powerful monopoly of all time. In. fact, people might even have called. Rockefeller an effective altruist. because of course he was so concerned. about the safety. of his product. >> it. Shout out to David Sacks and. writers. Great, great, great [laughter]. writers. >> Newman? Newman wrote this? >> No, I wrote it. >> Well, Emmy award for best writing in a. dramatic monologue goes to Newman. Wow, Sacks. >> No, that's my writing. >> You landed it. Very good, Sacks.

>> I thought after the Elon Anthropic. detente where Elon said, you know, complimented Anthropic that and David. started off with a bit of a compliment, I thought we maybe were past this. First, it's ridiculous to think of this. as a monopoly. You know, we're talking. about annual run rate revenues, David, but on a GAAP basis, they're doing about. the same revenue as OpenAI in the month. of March. Okay? So, we're way ahead of. ourselves. By the way, 5 months ago, everybody thought OpenAI was going to. run away with this. Google's revenues. are very substantial in AI. And by the.

way, Google, Amazon, etc., these. companies are producing $100 of free. cash flow to justify their incremental. investment. At the same time, you have. these two startups that are still. fledgling, that are still fragile in the. scheme of things, you of all people should know we've got. the best competition in AI on the. planet, which is why we're at the. frontier and kicking the tail of. everybody else on the planet. So, I just. want to see these companies compete. I. want to see DC stay out of the way. The. last thing I want to be doing is is is,

you know, seeing people talk about this. and throwing roadblocks into the way of. the competition. >> Um I think Anthropic is. >> Well, let me let me hold on. Let me. >> Translate Brad for you. Don't with. my paper is what he's saying. He's. [laughter] got bets on these. So, Sax, Washington, D.C., don't with Brad's. paper. Sax, uh you want to get into the. uh regulation stuff right now as a segue. or. >> Let me respond to Brad and also. translate what I'm saying satirically, okay? >> Satirically. >> First of all, nobody wants to see these.

companies compete vigorously more than. me. That was the whole premise. of the action plan that we worked on. last year is we want to bring out the. best in everyone. This is how America's. going to win the AI race. We have five. major labs vigorously competing. And as long as that competition is. taking place, that I think that's a good. thing. Doesn't mean we can't have. guardrails and the rest of it, but. basically, competition should be our. North Star. All of that being said, okay, what I am. pointing out and I I think it's.

historically true. that people in Washington have woken up. to monopolies. on the late side, not early, right? Because I mean, once a company has won. 80% of the market, that's when they wake. up and say, "Oh, we have a monopoly. here.". And I'm not saying that they have a. monopoly yet, but if the trajectory. continues for just 18 more months, then I think it will be in this. unpresently powerful position. >> I mean I mean. >> And and hold on. And I don't think.

people should be distracted from that. fact. by this rhetoric around safety because. someone like Rockefeller could have used. it, too. And I do think let me just like one one. last point on this. I do think that if. you actually look. at what a lot of the the safetyist. policies are calling for, they're basically calling for a form of. regulatory capture and they're calling. for things that would create a stronger. moat around this monopoly or duopoly. that's in the process of being created.

and it would get in the way of. competition. So again, I think that. people. might not have such a terrible view. of all of this safety rhetoric if they. understood. that what was being created here is the. biggest monopoly in human history. And I think we should just be a little. bit more skeptical about some of these. altruistic claims. I can't believe that. David is like you know, talking. monopolies when we haven't even left the. starting gate. of AI. I I I I think this is a uh.

to me. >> There's only two companies with revenue. >> thing I want is DC trying to. preemptively preemptively, which would. be like a disastrous consequence, get in. the game of picking winners and losers. at the starting line of AI. That would. be a disaster. >> Brad, did you just put another soapbox. on top of the soapbox you were standing. on? >> [laughter]. >> Look Brad, like I said, my North Star is. competition. As long as there's. competition going on, I support it.

Hold on. Hold on. We know that. monopolists want to stop competition and. they use regulatory capture to do it. And furthermore, they do things like ban. their competitors from using their. product. What conceivable reason. did Anthropic have for banning open claw. using its models? That is. anti-competitive. Is it not? >> I I I would double click on it. I would. double click on it. I might not, you. know, file, but I would double click. Okay, listen. Chamath, the girls are. fighting. Let's keep moving through the. docket. We're going to be here all day.

with these two and one thing that you're. going to need to act on very quickly is. the All-In Summit. It's selling out. fast. Don't miss it. Speakers are top. tier again. Freeberg busy working on. some amazing speakers. Sachs will be. there. He's flying in and out every day. for 4 hours and then. >> [laughter]. >> we're. we're going to have a lot of networking. stuff going down. We're building some. networking software. So, when you come. to our events, you get to meet people. That's what we always say. My playbook. for events, if you learn something from. the speakers every day, one or two. things, if you meet somebody new and you.

eat some great food and have some fun, you get two or three of those things, man, even if you get one, you're going. to come back to the event. You're going. to get all three all day long. allin.com/events Los Angeles September. 13th, 14th, and 15th. Apologies to. everybody asking, but liquidity is sold. out and we've shut down the waitlist. There's just no more room. All right, the White House allegedly possibly is. considering, according to reports, an FDA for AI. That would vet You heard.

that correct, folks. That would vet new. models for safety. The thing we've been. talking about not doing here. The thing. David Sacks has spent the last year on. The White House is considering. New York. Times reported Trump is considering an. executive order to create an quote AI. working group. This group would include. tech execs and government officials who. would quote examine potential oversight. procedures. including quote a review process for new. AI models. Oy. According to the report,

the catalyst was wait for it, Anthropic's model, which reportedly scared, spooked, made. people really nervous at the White. House. Quote, the White House wants to. avoid any political repercussions if a. devastating AI-enabled cyberattack were. to occur. They want to see why A, according to the New York Times. Kevin. Hassett, that guy, the director of the. National Economic Council confirmed the. report on Fox Business. Here's your. 15-second clip. >> We're studying possibly an executive.

order to give a clear roadmap to. everybody about how this is going to go. and how future AIs that also potentially. create vulnerabilities should go through. a process so that, you know, they're. released into the wild after they've. been proven safe, just like an FDA drug. >> Additionally, friend of the pod, Scott Bessent, had something to say. >> had in the past month was a step change. in the power of one large language. model, but we're going to see it from. the other. AI companies. What we are determined to.

do is work with our AI companies to. allow them to continue innovate, but our. charge of the US government is. maintaining safety, and there there is a. very important calculus here between. innovation and safety, and at the the US. government, we're going to make sure. that things stay safe. >> There you go. Kevin Hassett and. Bessent. Slightly different positions here, Brad. What do you think? >> Actually, I don't think they're slightly. different positions, but I I I would.

agree that Kevin bringing up the FDA. kind of muddied the waters. I talked to. Kevin last night after that clip ran. You know, and I asked him. I I just. said, "Do you think FDA is the right. analog here?" And he said, "You know, I. was I was only bringing it up to say. that they we want them to show us the. models so that we can coordinate them. Obviously, our job is to make sure that. the government is prepared, that we. harden our systems, that our. intelligence agencies are up to speed, but he does not think and I can't find. anybody. on the right.

you know, that believes that we're going. to move to an approval regime, right? The approval regime, this idea that. you're going to have to share every. model with an FDA in Washington, and. they're going to have to pre-approve the. model is a disaster. Sachs has been. effectively fighting against this. correctly over the course of the last. year. It would just it would lead to. three bad things. Number one, we do not. want to put the Washington in in the. position of picking winners and losers. when it comes to these models. We're. winning. We're on the winning horse in. America. We're out in front of the rest.

of the world. There's no reason to. change horses and regimes at this point. And we don't want to burden this with. more democracy. But at the same time, obviously, I call these pre-AGI or AGI. models, Mistral, Spud, etc. I see a lot. of coordination going on between the. industry and government. I think we can. do an even better job of a evolving that. framework so that everybody in. government is on the same page. We need. to build more capacity in government to. quickly be able to do the cyber review. on these models. Right now, it takes too.

long when the coordination does occur. So, we need to have a finite amount of. time that they give government feedback, etc. But the last thing that we want is an. FDA of models sitting in Washington. Kevin understands that. Scott Bessent. understands that. So, I expect that we. will continue down the path that we've. been on. Chamath, obviously, I think we. all agree we don't need an FDA for AI, but. there are things that a reasonably. people would want to have guardrails.

around AI. I'm sure you would agree. It. shouldn't be a total free-for-all. So, what's your take on this? Is it just. somebody gave a bad analogy here? Or. maybe some people were weaseling their. way into the White House to try to shift. things when Sachs was back at home or. something? What what's going on here? Give us the uh Cuz that's what I That's. what people say. They say the last. person to talk to Trump kind of has his. ear and that things can bend a certain. way. >> I don't think it's that. I think that. there's a pretty profound vibe shift. with respect to tech tech oligarchs,

Silicon Valley, and particularly the AI. That vibe shift has already happened on. Main Street. And I think that that's starting to seep. into Washington. I think that. regulations are coming. I think they'll be worse under a. democratic regime, but I think that some form of oversight. is going to exist under a Republican. regime. The question that I think is worth. asking is why. And if you listen to everybody's tone,

it's all around the negatives of AI. So, I think we suffer from two things. Number one is we have horrible. messaging. Nobody spends the time. and the money to articulate the positive. upside case. so that there's broad-based support. And. two, the idea that there's going to be a. Sachs said earlier, a few winners and many, many, many. potential losers, I think is really disconcerting to.

everybody. And the response from the tech. community, again, should be the leadership of the. tech world. coming together. and actually reinvesting in America writ. large. They're not doing that in enough. of a scale that blunts this. So, what. you're seeing is the build-up of. antibodies. Is it avoidable? Yes. Are we doing a good job of avoiding it? Absolutely not. We're doing a horrible. job. I'd give the community, the tech. leaders, a D- minus.

trending to an F. The response is what we're seeing. So, I. think the question, Jason, isn't. regulation, no regulation, it's why did. we get here? And I think we got here because the. other version, the glass half full. version, the demonstrated investment, the broad-based uplifting of American. society hasn't happened. And if it has, it's been very poorly communicated. And. so, the response is, "Hey, hold on. We're going to give three. guys trillion-dollar net worths, and.

we're going to allow them to control the. keys?". That's why this is happening. >> Exactly correct. And it's very easy, Sachs, to imagine all the bad things. that That happen. Our minds are. constructed to do that. We're vigilant. We look out for the tiger or, you know, the tornado to keep ourselves safe. Humans have a bias towards safety and. they're going to think about, you know, deep fakes. They're going to think about. robotics. They're going to think about. self-driving cars taking people's jobs. They're going to think about, you know, all the dark things that could happen,

bio weapons, etc. And we don't have. anybody out there really talking about. all the positives that could happen. What's your take on. the palace intrigue we all have here? What's going on in the palace, in the. 47th administration, around this debate? Who's leading Trump down the path of. regulation and creating this AI FDA? We. know you're part of the camp that wants. to keep this train moving and not. overregulated, not have regulatory.

capture. Who are the people trying to. slow this down? >> Well, look, I I think there's several. things going on here. The first one is. there's a lot of fake news. This whole. idea of an FDA for AI, I don't think any. senior official supports it, just like. Brad was saying. I spoke to Hassabis well. That's not. where his head is at. So, I don't think. anybody in the administration is saying. they want an FDA for AI. Certainly, I. don't think that's the way the president. thinks about these issues. He's the most. pro-innovation president we've ever had. And the White House Chief of Staff,

Susie Wiles, just put out a statement. last night that I think pretty much. shoots this down. So, I think there's a. big fake news component. Remember, it. was not really the White House who was. saying it was the New York Times. >> Mhm. >> And really, I think actually Andrew Ross. Sorkin, now I'm not criticizing him, but he's a. commentator and he's the one who said. this first and then somehow that spin or. that gloss. somehow took on a life of its own. And I. think. Silicon Valley reacted accordingly. There's a very visceral negative. reaction here because we know how.

damaging that would be to innovation. But, look, I think the good news is that. that was fake news. Second, I think that there's another thing going. on, which is a straw manning of what. the Trump administration did on AI in. its first year. And in the same way that they want to. spin this FDA for AI, they're also. trying to spin what we did as this. completely laissez-faire attitude where. there'd be no regulations whatsoever, no. guardrails. It's a way of criticizing. what we did. They're trying to portray.

it as unsafe. In fact, if you look on. March 20th, White House released. a national AI regulatory framework that. I worked on, in which we put out a four-page bulleted. list of legislation that we would. support if Congress wants to pass it. So, we have not been against every. conceivable regulation or every. conceivable law. We just believe that. there should be specific solutions to. specific problems, as opposed to a giant.

power grab by Washington that would. squash innovation. So, I think that's. point number two. Point number three is, there is a. legitimate thing happening here with. let's call it Mythos or cyber. Okay, we. know that it's not just Mythos, OpenAI now has a model that's just as. cyber capable as Mythos, and within. three to six months all the major. frontier labs, and including Chinese. models, will have cyber capabilities. In response to that, we do need there to.

be a hardening of systems, and we do. need there to be a scanning of codebases. to find these vulnerabilities and patch. them before the hackers do it, because. the hackers will have these capabilities. in a matter of months. That's a. certainty. Because the same capabilities. you use for cyber defense can also be. used for cyber offense. It's the same. tool set. And the open source models. will have these capabilities anyway. >> have it to a certain extent, let's be. honest. They have 80% of it, 90% of it.

>> it's simply the case that AI will be. good at cyber. And so, we do need a. response to that. Now, my view on what. should that response be should be first. of all, we should want the government. and the private sector to work. cooperatively, and I think they are. We. have a giant cybersecurity industry in. the United States whose sole job it is. to protect systems and protect against. breaches. >> We have the best companies in the world. at doing that. We have CrowdStrike, we.

have Palo Alto Networks, we talked about. that before. We have the best defense. >> Right, exactly. And so, what we should. be doing, I think, is getting these. tools, Methos and then the OpenAI model. and and others like it in the hands of. our cybersecurity industry. And by the. way, not just the public companies like. Palo Alto Networks and CrowdStrike, all. those certainly. They're two of the most. noteworthy, but there's also some. incredibly strong startups on the way. out. >> a long tail of hundreds of companies. that are doing Yes. >> AI-powered pen testing and all the rest.

of it. We need to get these tools into. their hands as quickly as possible. because they're a force multiplier. For. all the companies out there that aren't. that good at cybersecurity or maybe. they've got IT departments, they can use. these companies as vendors. So, I think. that there is a role for us to play. >> Yeah. Do you think that the models. should. have a KYC wrapper going forward? >> KYC for the audience is know your. customer. >> Yeah. >> Yeah, so what really what it would mean. is that before you can use. Methos, you have to identify yourself so.

that we can try to know that you're not. a. state-sponsored actor or, you know, a. bad guy. >> I think that's the type of thing that we. should be thinking about. So, first of. all, I want to say that both Anthropic. and OpenAI acted responsibly here. No. one was trying to release these super. powerful models. So, in a way, all the. people who are saying that we need. pre-release approvals for models, they're trying to solve a problem that. didn't exist. Anthropic wasn't. >> which. is the ideal situation. >> trying to release this. They all.

understood the power and they were all. acting responsibly. >> They understood the ramifications, because they would have been sued. So, there is a self-policing going on here, which is the ultimate way to do this. >> Yes. And but to your point, Chamath, yeah, look, I think that before giving. your API for a super powerful model, you. should not give that to a company or an. actor you don't know who they are. So, yeah, some basic KYC makes sense. They. should know who they're giving these. tools to. And I guess my view on the. Mythos preview and whatever the. equivalent is of what Open AI is doing.

is that we very rapidly need to get. these tools into the hands of more good. guys. You need to know who those good. guys are. You need to know who they are. So, yeah, KYC is like a predicate for. that, right? You got to know who they. are. >> Just to be clear, we'd all agree that if. you did have identity for those frontier. models, which they're probably doing. anyway right now, and you logged what. people were doing with them to look for. security breaches, that wouldn't. necessarily happen when you released it. to the public because of privacy issues. Here's your Polymarket.

for Trump ordering a federal review of. AI models by May 31st, 21% chance. I. think. to our partner at Polymarket, man, I I. got to get in here. I don't Do I have. inside information here being. the world's greatest moderator on this. podcast or I can Can I collect this. money, Chamath? What am I going to do. here? >> I would not Do not Do not place a bet, J. Cal. >> Don't place a bet. >> Don't place a bet. But. to Chamath's point, I mean, look, I. think we're kind of work shopping this. in real time. >> We are. We should say. >> I think that I think that for the. preview period, we should definitely. have KYC.

Maybe. >> logging? What about logging? >> Well, look, once you're past the preview. period and it's in general release, I'm not sure if the KYC matters as much. because so many people are going to have. it. But during the preview period, there. should be KYC. >> Let me Let me just say one thing. All. the labs are already tracking API use, okay? And anything suspicious, because. they they're they're there are major. anti-distillation efforts going on by. all the labs. There's a ton of. coordination going on with the. government. There's way more happening, I think, in terms of our API and API.

use. Um and anything suspicious is being. flagged. and being shared with the government. So, the idea that we have no idea who's. doing it, I think, is not the case. And. in fact, in some cases, we may want to. allow people to use it so that we can. see exactly the types of things that. they are extracting. So, I would just I. would say we're already down that path, but better coordination. may may may, in fact, be called for. >> Yeah. And just one last point in this. whole thing is I just want to build on.

my point that pre-release approvals are. solving a problem that didn't really. exist because, again, Anthropic and. OpenAI weren't trying to release these. models yet is that there is a. substantial faction of, let's say, AI. ideologues or doomers who. are basically employing the classic. never let a crisis go to waste strategy, right? That, yes, we do have this cyber. issue that is real. You know, everyone. needs to harden their systems now over. the next three to six months. That is a. real issue.

But that is a problem that we will solve. over the next six months. We have to. But what they're trying to do is use. that issue to try and create a permanent. new infrastructure in Washington. Again, I don't think the That's not the. administration's intention. That's not. the administration's agenda. But you saw. a lot of people. on social media, a lot of the think. tanks, and even Bernie Sanders weighed. in. And he said, "For the first time, I. like something that. >> This is great. The administration understands the 1% of. the 1% tax, and everybody understand.

that this is out of control. The AI is. going to take the jobs. They're going to. take my summer home. It's going to be. terrible.". >> So, there are people who have this. agenda. Look, Bernie Sanders just wants. to stop the progress. I mean, he's. >> Of course, I do. >> He wants to ban data centers. He's put. out a bunch of things. >> He He basically has bought into the. whole doomer narrative. So, look, that's. why he likes the FDA. idea is because it would put the kibosh. on innovation. >> already. Let's give Let's have a go back. to paper and pen. It was a better. society, Sachs.

>> Jason, what do you think? >> I think there's two really interesting. things I want to build on here. The. first is your point, Chamath, around how do we turn around the sort of. bad vibes around AI? I think we have to. have two strategies here. One is giving. what you've been working on, Brad, with. your project. We should see more people. giving. There's no reason why Nvidia, SpaceX when they go public, Anthropic when they go public, OpenAI if. and when they go public or if they. become stay as nonprofit, there's no.

reason those folks in an IPO couldn't. give a portion of the IPO to every. American citizen. So, IPOK, IPO for. kids, they all take, you know, whatever. it is, 5%, 1%, whatever they choose, and. they put it into the Invest America. accounts. And we should see some major. giving from the people who are becoming. trillionaires, hundred billionaires, whatever it happens to be. There's no. reason not to. But those people haven't. been doing that. We had this giving. pledge, which was a little bit of virtue. signaling, and it wasn't real. It was.

just, you know, at the end of your life. you promised to give away half your. money. So, let's have something real. Let's have something where, you know, people say I'm going to give away 1% of. my stock over the next 20 years of my. life. Every year 1% will go into Invest. America, whatever it is. It won't cost. anybody anything. You can't spend this. money, whether it's Bezos or whatever. Second, and that same thing in terms of giving. back, we have not talked about how. massive this could be for health and. extending people's life and reducing. suffering. We need to work on that. That's where contributions to basic. science could come in, and obviously.

education and lowering the cost of. education. And if you look at what. Americans on the bottom have, you were. talking about the, you know, cup half. empty. There's really two or three. things they really feel anxiety about. One of it is income, and the second is. health care. And on the margins, housing and their. kids, you know, their kids' education. and the cost of those things. We should really take a look deeply at, and I know this is very unpopular. amongst capitalists, including myself. We should really look at the minimum. wage and study what happened in New.

Zealand, Sweden, Switzerland, Australia when they raised it. What. actually happened when they raised it. and there was a lot of hand-wringing. about it. But when they slowly raised it. what they found was those consumers. don't save money, they spend it. They're. always behind the eight ball in terms of. their spending. We should opt in to. trying to raise the minimum wage company. by company by company and just give. people who are at the end of the. spectrum that understanding that, "Hey, year over year, whether it's Amazon or. Target, etc., restaurants, we're all.

collectively going to add a little bit. to that minimum wage and try to lift the. bottom third of society." That's the. stuff we're not talking about. We don't. talk about it here on this podcast, we. don't talk about universal health care, we don't talk about the minimum wage, but that's what capitalists should be. talking about. And if we did that, if we. increased the minimum wage, and I'm not. a socialist, I'm a capitalist who thinks. this is good for capitalism. If we. increased the minimum wage just modestly. each year. and we opted into doing that and we. figured out a way to give universal. health care, companies wouldn't have to.

deal with universal health care and we. would have customers, and we're a. customer driven economy. Like 60, 70, 80% of what happens in this country is. driven by the consumer. We need consumer. spending. It's great for companies if we. had more people being able to buy. Netflix or order on Amazon. Anyway, that's my that's my TED Talk. Thanks for. coming. How do we get from AI to the. minimum wage? I'm still a little bit. confused. I don't know. No, the black. eye we have in this country with. polarization of wealth and people scared. of losing their jobs. We We should look.

at why are they scared, David? And I've. talked to you privately and you said to. to privately, you can strike this if you. want, But, you said to me privately, you. wouldn't be against necessarily figuring. out a way to you do universal health. care if there was a way to do it. You. want to see every human have health. care, yes? >> Sure. I mean, the issue is not the. desirability of it, it's the cost. I. mean. >> So, you're the real entrepreneur of our. time. How would you do it? Have you. given any cycle to it? >> I haven't studied that issue, so I don't.

know. I just know that. countries. I remember what P.J. O'Rourke once said, which is if you think health care is. expensive now, just wait until you make. it free. >> [laughter]. >> And. uh so, you take away all the incentives, and you have a even bigger problem. >> Well, what do you think of minimum wage? Yeah, go ahead. >> Well, let me just Can we just get back. to AI? Listen, you guys are right about. the unpopularity of AI. We've all seen. those polls, but I want to just put up. this additional poll that came out about. the salience of this issue, which is how. important do people think it is.

And AI ranked 29 out of 39. So, although. AI is not very popular, it is certainly. not top of mind for voters. It's not in. the top 10 issues. It's not in the top. 20 issues. What is top of mind for. voters? Number one, cost of living. Number two, the economy. And we know. that AI is deflationary. It helps with. the cost of living, and it's creating an. economic boom right now, okay? It's 75%. of GDP growth in Q1. By the way, that. that economic growth is not just limited.

to startups in Silicon Valley. We're. seeing a construction boom. We're seeing. a blue collar boom. We're seeing 25 to. 30% wage increases for uh construction. workers. >> And so on down the line. So, >> And Brad, if you if you look at that. chart, there's health care in there, too. >> So, look, my point is that AI may not be. popular, but the effects of it actually. are popular if the media would honestly. report what was happening, which is AI. is creating an economic boom right now. >> It couldn't be better said, David. You. know, Bernie Sanders calling for a.

moratorium, shutting down all data data. centers. We'd have negative GDP growth. this year. The stock market would be. down 15 to 20%. Unemployment would be on. the rise. You know, there is a. consequence to the government. controlling through command and control. the economy. In 1929, we had 4%. unemployment. 3 years later, it was. unemployment was 23%. because government got involved in. regulating everything and shutting down, you know, what was working. That is the. greatest threat we have here. AI is.

delivering huge net benefits today in. terms of unemployment rate, in terms of. economic growth and productivity growth. We need to tell the story. But, to. Chamath's earlier point, we also need to. deliver net benefits. Jason, thanks for. the shout-out. Yes, every American. having an investment account that. compounds with the upside of AI, we're. going to do that. Going to deliver that, and that's going to be massive. But, I. also think ideas like, if we're going to. put a data center in Abilene, Texas, let's make electricity in Abilene free. for the households in Abilene, Texas, right? There are ideas that can deliver.

net benefits. We got to deliver those. I. think we're Optimism will be on the. march. I think we're in the trough right. now. >> What's your take on minimum wage and, you know, how do you think about it as a. capitalist, as an innovator, and in the. face of AI, which could have a dramatic. impact on these issues? You know, like. Zach's, I I you know, to me I haven't. spent a ton of time thinking about those. except that as a society, we're $38. trillion in debt. We haven't been able. to afford to deliver those things. I. generally think the market works out. those. You know, like Zach's, I I you know, to. me I haven't spent a ton of time. thinking about those except that as a. society, we're $38 trillion in debt. We. haven't been able to afford to deliver. those things. I generally think the. market works out those.

issues better than the government. top-down trying to, you know, the. government gets more and more involved. in healthcare, and the only thing that. happens it gets more expensive. So, we've all seen the charts of the most. expensive categories where we've had. inflation, education, healthcare, etc. It's where the government's involved. I. actually think if you just let the. markets work, we're entering into an age. of abundance. A lot of these problems. are going to be solved. People are going. to have a lot of AI coaches in. healthcare and education, etc. Let the. market work. Government stay at bay, keep things safe. We're on a good march.

>> I think this. proves my point perfectly. If you talk. to any founder, they're not thinking. about housing, they're not thinking. about higher education costs, they're. not thinking about minimum wage, you. know, and they're not thinking about. healthcare all that often. Some Some do. though, there's some innovation there. And it's because it's so regulated that. entrepreneurs and VCs are just like. that's Kryptonite, the government has. poisoned the well, we can't participate. in that. And that's the roadblock and. that's where Americans are suffering and. that's where it would be great if. founders actually put their minds to it. and the government's got to get rid of.

all that regulation and let us cook in. those specific verticals. All right, the. market is in hyperdrive. Hyperscaler. revenue has made the markets move up. We. hit on this briefly, but we didn't have. you here. Fifth best EB G cloud. computing on a tear. I referenced it. earlier, but AWS is now on a $150. billion run rate. Azure 108 billion, GCP. Google Cloud 80 billion. There's a. little bit of fun with numbers there, Chris. Azure and Microsoft include some.

of their software products in there and. Google Cloud includes things like Google. Office or Google Suite in there. But the growth numbers are tremendous. AWS, which is the more pure play of the. three, 28% growth on a very big number. Azure 39%, Google Cloud stunning. everybody with 63%. growth. It is incredible what the ARR. numbers are. Google Cloud added 10, AWS. 10, Azure 9.5. So basically 30 billion. collectively. Jamin Ball, who works for. you, I think put out some data on the.

Twitter. Brad, markets at all times high all time. highs. Mag 7 cooking. Uber blowing out growth, Disney blowing. out growth. The consumer seems absurdly. strong based on those two bellwethers. Tech seems extremely strong based on the. cloud computing. What's your take on the. overall market and overall economy? Obviously, inflation up a bit, people. hand-wringing about the never-ending war.

and the cost of oil. >> Let's just telescope way out. You know, the level of criticism directed to this. administration, right? Tariffs were. going to cause hyperinflation, we're. going to destroy GDP, uh conflicts in Venezuela and Iran were. going to do the same. You know, we've. heard all of the negative stories, but. what's happening? Accelerating GDP. A 10-year that's sitting at 4.3, inflation totally under control. AI, AI, AI, compute, compute, compute. We're.

leading the world. It's contributing. massively, right, to GDP growth in the. country. We see the S&P only up 8% this. year, right? So, we're not in the bubble. territory here. Meta's trading at 17. times fully taxed GAAP earnings, Nvidia. at 19 times, Microsoft at 20 times, Google at 24 times. And then the memory. stocks that everybody's excited about, we have 25% of our portfolio in SK. Hynix, five times fully taxed GAAP. earnings, Samsung six times, Micron.

seven times, right? This is not the. stuff that bubbles are made of. You. know, David referenced it earlier, we. started the year Open AI and Anthropic. were doing combined about 30 billion in. revenue, now combined four months later, 80 billion in revenue. The the policies. of this administration on the economy. are working, they're working in in. spades. Our gap on the rest of the world. in AI is growing. And so from from my. perspective, you know, uh you know,

we've been all in on the market. I. talked about it earlier in the year, we're heavily tilted. >> you make that switch to go all in on the. market? Cuz you were bearish. >> Uh I'd say toward the toward the end of. last year, the market had run up a lot. We had a lot of these questions. Listen, entering this year, there was a huge. question hanging over the market. Would. the AI revenue show up? If the Anthropic revenues hadn't shown. up and we didn't see this. re-acceleration out of the hyperscalers, the market would be down 10 to 15%. because people would say there's no ROI.

on all of this investment in. infrastructure. Exactly. When I saw the. numbers start showing up in December and. into January, we went from medium to. large in terms of our exposures and 80%. of our exposures or more have been in. compute, AI, memory, etc. >> And this is why it's great to operate in. the private market and the public market. because you can see things in the. private markets that inform the public. markets. But, the question remains, Brad, how much better would the economy. have been doing.

you know, as much credit as you're. giving to the administration if they. didn't start a $100 billion war that we. did not need to go into, according to. all reports, and if we didn't do a bunch. of tariffs that wound up being. unconstitutional by the Supreme Court, which Trump himself put in. We would. have been further ahead. That's uh my. take on it. We would be ripping even. more if we didn't have those uh silly. diversions. >> It's It's hard to imagine, okay? Just to. set up again here. It's hard to imagine a more Goldilocks.

situation for the United States of. America. We have reset the table. geopolitically. The discount rate. globally is actually coming down, not. going up, evidenced by markets at. all-time high and the bond market in. control. And then, look at the private. markets. We have multiple. trillion-dollar companies that have been. created in the private markets that are. now coming public. SpaceX coming public. is going to be a multi-trillion dollar. you know OpenAI, Anthropic, like at some. point you just have to acknowledge USA.

is winning. Of course, there are always. things that we could be doing better, but there's not a country on the world. that wouldn't trade all of its fortune. for the United States fortune today. >> 100% in agreement. American. exceptionalism as embodied by the great. companies in America, SpaceX, Google, etc. All the ones we've been talking. here. That is the story and I give. infinite credit to this administration. for being business-friendly. I do think. they've made two critical mistakes. I. think the tariffs were poorly executed. and I think we shouldn't have gone to.

this war. um and we should find a quick resolution. to it which the administration seems to. be desperately doing. Sachs, your take. on the economy. >> Well, look, we have an AI boom going on. right now and I think that's thanks to. President Trump's policies. Remember, the first week he was in office, he. rescinded the Biden policies on chips. and models. And what were those. policies? It was the approval regime. that we're talking about. Models would. have to go to Washington to get approved. if they were trained with some number of. flops and then every sale of a GPU.

worldwide would have to be licensed from. Washington unless it fit into some. narrow exemptions. So, the whole. approach of the Biden administration. >> Exactly. >> that President Trump inherited was. everything approved in Washington. He. rescinded that. He declared that we had. to win the AI race and he unleashed our. companies to do that. Now, one other. really important thing is energy. Remember, it was this president, going. back a decade, who said, "Drill, baby, drill." He said, "We have to unleash. American energy. That's the basis for. the American economy. It's also the. basis for AI.".

He also has said that he wanted to allow. our AI companies become energy companies. so they could bring their own power to. these data centers. So, they're not. drawing off the grid. They're not. competing with consumers for. electricity. They're generating their. own power. And it's thanks to this. president that we have seen this. blue-collar construction boom right now. powering all of this infrastructure. What would the alternative been? We know. I mean, Bernie Sanders has said. it. Would have been ban on data centers.

So, >> Yeah. >> Right now, Biden has banned data. centers. It's That would be a much. a much worse choice. Chamath, I'll give. you the last word here as we wrap on the. economy generally. >> I think the markets are going to keep. going up for a while. And then at some point they're going to. go down. >> Okay, I wrote it down. Chamath, you said. markets are up and then eventually. they're going to come down. Those are the two things. Up and let me. put a U here and then a D here. >> It's got the I think you're doing a an.

impression of the taking notes emoji. Is. that what you're doing? >> Yes. Yeah, I just Okay, I'll shut down. Wow. Thank you for tuning in to All-In. where you can get your great calls and. market action advice. It's going to go. up and then down folks. Act accordingly. Good. Chamath, in all seriousness. But. what what what makes you bullish, you. know, let's say in the next 6 months, 12. months catalysts and then what do you. think the headwinds are as well? Let's. take the, you know, the short to. mid-term 6 months to 2 years. >> I think that in the short term.

the people that. makes the new thing. needs. to get valued and needs to demonstrate. value. So, who are the people making the. new thing? It's the Nvidias, it's the memory. makers, it's the Anthropic's, it's the. SpaceX's and uh it's the Open AIs. But. eventually it all comes home to roost. And. you can't just make things for a market. who then doesn't have a measurable. benefit themselves.

To be very clear and blunt, there is. literally not a scintilla of evidence. that AI has helped lift the operating. margins of the S&P 500. There's all kinds of bluster. There's. going to be a an important fork in the. road. It's probably 2 or 3 years from. now. One path will be. OpEx shrinks. hence margins increase. and the other path is revenues grow and. margins expand and OpEx stays flat but. it or maybe it even goes up.

Those two things are very important. differences, because in the former. you're talking about shrinking workforce. and shrinking off access a percentage of. operating margin and revenue. In the. latter, you're actually growing through. it. The answer to that question I think is. critical about how the markets will. respond. And how society will respond. So, I. think we have kind of call it 500 days. where. you just got to be net long. But, I think it's literally in the. hundreds of days from now.

500. You're going to have to have an. important reckoning moment. The people. that are paying for all these tokens. need to see it an actual benefit. >> Yeah, that that's reasonable. Yeah. >> That's a really interesting point. Let. me connect a couple of dots here between. something Chamath said and what Brad. said, which is. Brad said at the beginning of the year, we went into this year with this massive. CapEx, this massive investment. infrastructure, but people weren't sure. that the ROI was going to be there in. terms of model revenue. And that was. true, and then the model revenue has.

proven out. And now what Chamath is. saying is that we're going to be at. another fork in the road soon in terms. of whether there's going to be ROI. on all those tokens that are being sold. and generating the revenue for those. model companies. And I agree with you. that that is not proven out yet, but I'm. optimistic that it is going to be proven. out, and otherwise these you wouldn't be. seeing. >> Look, I. >> enterprises continue to to buy. Hold on, let me just finish my point. You wouldn't be seeing enterprise. continue their month-over-month spend.

on coding tokens if they didn't feel. like the ROI was going to be there. But, you make a good point, which is what is. the impact on the economy going to be. when all of this new software, this. bespoke software that's being created. through again all these coding tokens. that are being bought, is going to power. a wave of productivity like I think. we've never seen before. So, I think. what you're seeing is the ROI is getting. is sort of trickling down from. infrastructure to model to application. to end user. And I think it's going to.

create an economic boom. >> I got I got it. I'm with you, Sachs. It's This is déjà vu all over again. We. watched this happen with the PC. revolution, the internet revolution, cloud revolution, mobile revolution. We. had all this hand-wringing. Will this. ever pay off? Should I build an app? Should I build a website? Should I not? Should I move to the cloud? Should I. keep it on prem? All of these questions. over and over and over again. And then. they went from question marks to. exclamation points. I can tell you. inside of my firm, we have started We. were using agents then we started. building code. And I've got three people. on the team who are making all the. interfaces and products that a 22-person.

investment firm should not be making. internally. They should be using SaaS. software. And they are shipping product. day in and day out. The ROI is fait. accompli, Brad. It is fait accompli. I. think this has been decided. I think. it's been decided. >> It has not been decided at all. It has. not been decided at all. >> You have 80/90. You're working with the. big enterprises. I invest in 100. startups a year. I work with the small. ones. It is fait accompli with startups. They are building software. They're. shipping. They are getting massive value. from these tokens. And they're getting.

so much value that they don't have to. add, you know, but half the number of. employees that they would with the same. amount of capital. They're getting. further with less money. It is working. in startup land. I don't know what's. happening at 80/90. You would have a. better picture, obviously, of the. enterprise. Tell us what you see there. >> I mean, our business is doing well, but. what I'm trying to get across to you. guys is that. you can't will. profits to go up. Okay? So, ultimately what happens is I'm.

just going to take a company randomly. Anheuser-Busch. They have to eventually sell more beer. Okay? Take Nike. They ultimately have to sell more shoes. Take. a medical devices company. They have to. sell more artificial hips and knees. So, the The I'm trying to get across is. right now there's an enormous amount of. very constructive and creative. experimentation. But I think it's what is also true is a.

lot of that. has not yet proven value. I don't think. that means it's going to stop. All I'm. just trying to say is. until a company can trace very directly, I spent X and I made Y where Y is now. greater than X and it's lifted my. margins, that is the thing that causes the. flywheel to spin faster. And right now we've started the first. part of that equation. We've spent the. X. And we have not seen the Y.

You would see it in global GDP. You. haven't. You would see it in global. productivity. You haven't. You would see. it in the global profit margins of the. S&P 500. We haven't. It doesn't mean. it's not coming. >> Brad, you want to you want to pick up on. this because I yeah, I'm definitely. taking the other side of it cuz I'm. seeing with a lot of these companies. massive lowering of costs. Their ads are. getting more effective. At the same time. they've stopped hiring. They're not. adding positions in a lot of cases. And. things like just pick the Nike example, a lot of the photo shoots.

they used to do for their app, excuse. me. A lot of the imagery they used to. make, now they're able to make more of. it without having to hire photographers. and do that stuff. I know this example. cuz we have a startup that does this. specifically for brands like Nike. They've seen a massive drop. We have one. that helped DoorDash with their food. pictures. All those pictures used to. have to be taken by photographers. Now. it's all done by AI. Massive reduction. in cost and they're using ads and ad. creative now at that is, you know, you. know, double-digit percentage more. effective while costing half as much.

So, I definitely think we're seeing it. on the earnings, but is is that true? Are you seeing it in the earnings of. these companies yet? >> Yeah, so so two data points. Number one, we just saw Azure grow 39% in the. quarter. We saw Google Cloud grow 63% in. the a. Headcount growth for those companies the. last 3 years mag 5 combined is about 3%. So their operating margins are all. expanding. If you look at the S&P 500. writ large in Q1 of 24 operating margins. were about 11.8%.

that was up from 11% in 23. This year. they're 13%. So we've had a 200 basis. point improvement in the operating. margins of the S&P 500 which is massive. Do you think that's AI across those. businesses? >> I think that that's the question where. where it could dovetail with what you're. saying. It's dollars to donuts it's not. AI. >> Yeah, so. >> So but any amount of money is not AI. We. are the same financial engineering that. got these earnings to rise in the last. decade. >> Yeah, so I I I think that's the.

question. Are is this margin expansion. durable? The forecast the consensus. forecast and estimate is that margins. are going to continue to expand over the. course of the next 2 years. You and I. both know back in 22 23 we went from the. age of excess to the age of fitness, right? A lot of these companies were. able to shed people, you know, with the. excuse of AI just because they had. become you know, too excessive during the period of. COVID. So I I think it's a legitimate. question whether or not that's all from.

AI, but I will tell you anecdotally it. maps for me. I'm hearing like Jason and. David a lot of these companies that are. you know, really growing their top lines. at an accelerating rate without. expanding head count nearly at the same. pace. >> Okay. Sacks, I'll give you the final word. while we're at it. >> Brad was talking about how we got all. these operating efficiency improvements. The unemployment rate stayed at. historical lows during that time. I mean. the economists consider full employment. to be 4 to 5% and we've stayed at you.

know, the low low 4% 4.2% roughly during. this time. So you're able to get these. efficiency improvements while. unemployment is still extremely low. Moreover, there was just a big article. saying that the unemployment rate for. young college graduates has dropped. So, you know, there was this whole narrative. recently that recent college graduates. were going to have the hardest time. finding jobs because you know, there's. going to be no no work left for. entry-level jobs because of AI. And in. fact, it has gotten easier for recent.

college graduates to find work recently. Maybe that's because they're AI natives. Maybe that's because they know how to. use AI better. So, in any event, I mean, we're just not. seeing any evidence yet of these. theoretical downsides of AI around job. loss and unemployment. And we are. starting to see big productivity gains. >> Yeah. I mean, this is going to be a. circular discussion, but yeah, there's a. lot of conflicting evidence. The last. piece of conflicting evidence, obviously, is the labor participation. rate because if you are not even opting. into participate, then you.

you know, don't get counted as. unemployed. And that's been, I think, a. big challenge. 61.9% in March labor. participation rate. Back in before COVID, we're at 63.3. >> Yeah, and college graduates are hearing. different stories. Certain degrees. getting jobs, other ones not getting. jobs. It's too early to tell, I think, is. probably what we all agree in. And it's. a it's a mixed bag. >> No, no, I don't agree with that. >> No. Look, whenever whenever I have data. to refute one of your narratives, you. always say it's too soon to tell.

>> No, no, no. What I do. >> Headline, Wall Street Journal. Nick, put. it on the screen. College graduates are. finally catching a break in this job. market. >> Yeah. >> J Kyle, you should be happy about this. >> I'm Listen, I'm happy anybody gets a. job. But what you do is then you say we. don't trust the numbers and we should. get rid of the Fed and we should get rid. of the numbers. >> We should get rid of the Fed? >> No, that was Schmalz that you you chose. Schmalz. Let's get rid of the Fed cuz we. don't like the numbers. You listen, it's. all great. Welcome to the debate club. >> I say? What did I say? >> You said abolish the Fed. Abolish the Fed.

What is the Fed here for? All right, listen, enough. We're getting into Trump. Derangement Syndrome or Trump Ben the. Knee Syndrome. It's the end of the show. We had a great show, everybody. We had. some laughs. We all learned. We. workshopped some stuff. Let's leave it. where it is. Great job, President Trump. >> to I want to congratulate. >> Oh, here we go. >> I want to congratulate all of our. innovators, and I want to congratulate. Elon and um Dario D. Rockefeller on. their recent deal. >> Oh, SHOTS [laughter] FIRED. THIS IS. GETTING STRAIGHT. Come on the program. anytime, Dario. Hey, you know Dario.

well, Brad. Get him on the program. Next. week, I want him on the program. Have. him come on. >> I mean, I I I'm going to ask. >> Ask him for me. >> I. um. >> Will you ask him for me? >> Well, I I sure I'll ask him. And you you. you know, the the the the fact of the. matter is. I thank our lucky stars that we have. Elon, that we have Anthropic, that we. have OpenAI, that we have Google, that. we have Amazon all innovating in this. country. And you know, I know we like to. you know, kind of poke poke fun on the. edges of these things, but the fact of. the matter is.

you know, I see them all. showing up, sharing their models, driving as hard as they can to innovate. We have the best competitive framework. in the country. David's right, it's been. transformed over the course of the last. 14 months. We need to stay the course. We're on the winning horse. We just had. the Derby last week. >> There it is. >> the winning horse. Stay on the horse. >> America for the win. >> America for the win. >> There it is, Senator Brad Gerstner. I. think if you're going to run, you got to. get rid of the red glasses. We got to. get rid of the corduroy [laughter]. shorts in there, but I think you got to.

you got a serious shot, Senator. Senator. >> I I like I like. I like secretary better. Secretary. >> Secretary. >> Uh. >> Who's Yeah, Secretary of the Treasury, Brad Gerstner. >> Secretary of. >> Secretary of State, David Sacks. >> Secretary. >> of cashmere and wine. >> Chamath Palihapitiya. How are you doing. with your uh. >> There's so much fake news out there. because I mean, look, I totally agree. with everything Brad said. Look, I poke. fun at at some of these companies for. some of the things they do, but I am. happy that they are American companies. and that they're innovating here. So,

congratulations on your Monopoly diet. Absolutely. Yes, and look, there's so. much fake news out there. I mean, we. just covered on this podcast how. beneficial some of these economic trends. are. You never get it from the media. And they are trying to derail us from. from, you know, the the policies that. have been so successful. >> Yes. I but but they did some great. inspiring coverage of micro looting, so. get your micro looting on. >> [laughter]. >> Congratulations New York Times. We'll. see you next time everybody. Bye-bye. >> Love you boys. Love you best.

>> [music]. >> Let your winners ride. >> Rain Man David Sacks. >> And [music] I said, we open sourced it. to the fans and they've just gone crazy. with it. >> Love you Sacks. >> Ice Queen of Quinoa. >> [music]. >> Let your winners. ride. >> Besties are back. >> [music]. >> That is my dog taking a in your. driveway, Sacks.

>> Oh man. >> My hot Natasha will meet me at the. Sacks. We should all [music] just get a. room and just have a one big huge orgy. cuz they're all just useless. It's like. this like sexual tension that they just. need to release somehow. >> [music]. >> What you talking about, B? >> Let your queer feet. >> What? >> [laughter]. >> We need to get merch. >> Besties are back. >> [music]. [music].