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

How do I sound?

You sound perfect.

You sound great.

How do I look?

Yeah, you sound great. Better than you look. Have

look. Have a face made for radio.

You don't look as tired as you have in recent weeks.

That's true.

Yeah.

Oh, yeah. Somebody was slagging me for the bags and for my eyes. I mean, this audience is brutal.

They're brutal.

They're brutal.

It's a good thing I'm rich.

Let your winners ride.

Rainman David and it said we open sourced it to the fans and they've just gone crazy with it.

Love you guys.

All right everybody, welcome back to the number one podcast in the world. It's

the Allin podcast. With us today, Chimoth Polyatia, David Saxs, and our fifth bestie, Mr. Brad Gersonner is here. I think uh David Freeberg is

here. I think uh David Freeberg is suffering from some socialist related flu. He's very sick of reading about

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 multiples.

Yeah.

Whoever that social media team is is on fire. If you get a good social media

fire. If you get a good social media team and you get a good ad production team, I think it's nextgen because 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?

Incredible. He's so funny. He's so

chill.

Yeah. Well, he's up against Karen Bass, who's the mayor, who is basically extremely leftwing. And then there's

extremely leftwing. And then there's someone who's a city council woman who's even further to the left of Karen Bass.

I mean, she's often like Fidel Castro territory. She's

an Indian Fidel Castro Ramen. So, she was basically, I guess,

Ramen. So, she was basically, I guess, criticizing the mayor for the homelessness problem. And then Pratt

homelessness problem. And then Pratt pointed out that this council woman is actually in charge of all these homeless programs already.

He eviscerated her.

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 He said, "If she went to the street, she'd get stabbed in the neck."

Yeah.

Which is pretty accurate if you've been to Skidro. I mean, you would not want to

to Skidro. I mean, you would not want to walk through there. It It was like the Spider-Man photo.

Wait, Nick's got the clip. Play the

clip Nick.

Oh god, this clip is brutal.

This is a different clip, but this went super viral. It reminded me of Trump a

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 Republicans idea of what Los Angeles looks like. This is This is really not

looks like. This is This is really not unbelievable. For those of you

unbelievable. For those of you listening, he put his hands up and wiggled his head like, "Oh my god."

Hey, hey, Sachs. You know, Steven Pratt wins mayor.

Spencer Pratt the, you know, the ballot initiative, the retirement protection and savings act, right? It's going to pass. Going to pass with big numbers.

pass. 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

wealth tax. Can you imagine if California effectively passes a constitutional amendment protecting retirement savings and personal assets and banning the wealth tax and crack

gets elected? The message that would

gets elected? The message that would send to the country. That's that's a very non-conensus 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.

in Texas. in Texas.

Yeehaw. Well, I mean, this is also in the face of I don't know, just a follow-up story here, but Mandami did like an attack video on Ken Griffin's house. We talked about it on the pot a

house. We talked about it on the pot 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 Alman's house being

targeted. This is like a really

targeted. This is like a really dangerous thing for Mandami to do. And

Ken Griffin came out today and uh or yesterday in an interview and said, "Hey, listen. I'm out. We're going to be

"Hey, listen. I'm out. We're going to be putting our efforts into um Florida. And

this is the same thing that happened to Chicago. And he basically said like I

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.

personal safety. And he called him out.

Mondami came out with like a a mealymouthed response that didn't even apologize for what he did. Just double

down on it essentially. All right, let's get to the dot. I don't know if you guys saw it or not, but who cares? New York is becoming a

who cares? New York is becoming a flyover city. It's interesting way to

flyover city. It's interesting way to put it. Uh, don't disagree. All right,

put it. Uh, don't disagree. All right,

first story. Elon just leased all of Colossus 1, his data center.

He did.

What? WHAT? YES. SHOCKING to Daario and Anthropic Chamath on last week's pod.

Uh, go ahead and give yourself a pat on the back. You said Elon and Dario should

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,

next day. It happened 5 days later. So,

you came close, Jimoth. Uh, but no cigar because of Anthropic's obvious compute constraints. Anthropic just added over

constraints. Anthropic just added over 220,000 Nvidia GPUs, over 300 megawatts of energy. The deal is already having an

of energy. The deal is already having an impact. As we've discussed here, Claude

impact. As we've discussed here, Claude users have been experiencing rate limits. Well, Claude has now doubled the

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 Chim. 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 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

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

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 nine

is negative. You have about nine 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 constraint. So, that's the setup. So,

constraint. 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 bare case or they tried to

red team the valuation, the biggest element is the onthe-c 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 derisking of it takes longer, he now has this structural core business that will effectively subsidize his ability to train Grock, which I

think is a really important and under reportported theme. So you have all this

reportported theme. So you have all this infrastructure. He somehow saw the tea

infrastructure. He somehow saw the tea leaves before most people. He built to a level of scale and secured power before most people. It has now become the

most people. It has now become the critical asset. And now he's kind of

critical asset. And now he's kind of kingmaking.

And I think that that's a really interesting valuation reinforcement as SpaceX goes through testing the waters and the and 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

story. You know, I think our friend Shawn Magcguire, 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

bets. Right? The question on the road show has been but X.AI AI doesn't isn't on the revenue trajectory of open AI 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 4 to5 billion of revenue on top of what I I've seen analysts estimates in the mid20s. That's a material amount of

mid20s. 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 Chamas's point all that he's investing to build the next generation of Groth. Remember

too that he has three facilities, Colossus, Macro hard, and Macro harder.

1.2 gawatts in Macro hard and macro harder in Blackwell. So he's given the one that's kind of less connected.

H100's 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 Chimath off X.AI delivering immediate revenue. Now he becomes uh an

immediate revenue. Now he becomes uh an immediate competitor in the hyperscaler.

I don't think this is the last announcement. I think he's going to make

announcement. I think he's going to make a lot more you know moves in this direction. I think it will be a material

direction. I think it will be a material part of their story and their revenue projections uh 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 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 dant and the kind exchange between the team of Anthropic and Elon

because we need all of this in order to produce uh American frontier models to stay at the frontier. And then finally, I just say, you know, Chimath, 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

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 fision reactors being built 30 years ago in

America. Now we have no nuclear reactors

America. Now we have no nuclear reactors being built. China's got a hundred of

being built. China's got a hundred of them. Who was funding those activists? I

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

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 think that's a

down. So, um, I'm I I think that's a boogeyman that we got to take on.

Sure. Johnson.

Well, look, the deal is highly complimentary. As Chamath and Brad

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 reasons

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 is compounded

revenue. And that problem is compounded by the fact that right now all the revenue is in enterprise, which is to say coding. We know that XAI just did

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

yet. So they're not participating in the revenue, but they're participating in all the cost. So this deal fixes that problem. Elon's now able to have a

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 philanthropic this is a really great thing because they were compute constraint. 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, Saxs, you have been on this podcast, you've been moderately critical of that company and Daario himself for being um, you

know, a little P Doomer 110. And on your ex account, you've been even a little spicier. So now that there's peace in

spicier. So now that there's peace in the Middle East of uh 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 four months of the year? First, we find out that from

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

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.

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

that compute. I think it's pretty much a foregone conclusion that they will hit that forecast of 10x this year exiting the year. Call it roughly 100 billion of

the year. Call it roughly 100 billion of ARR. And now the only question is

ARR. And now the only question is whether they hit a trillion in 2027.

And we can debate getting on board. We can 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

history. In fact, they might even be more valuable than the rest of the Mag 7 put together. Just to give people some

put together. Just to give people some basis for comparison here, you know, the biggest tech companies, Apple, Nvidia, Nvidia, Google. I think they kind of do

Nvidia, Google. I think they kind of do around 4 to 500 billion a year right now of of revenue. I guess Nvidia is in a little bit of a different category, but you look at you look at the hyperscalers, the three

hybrid scalers. Yeah. I mean, Google is

hybrid scalers. 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%. It's certainly not a thousand%.

So, the fact that anthropic could be on track. In fact, let me correct.

track. In fact, let me correct.

You see them going to the track. It'll

be a Maggie. 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.

Oh, 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.

Sachs, very interesting placement.

Chimath go ahead and then I'll move 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 Sax is

right and Anthropic you know can tack on a trillion it won't be the mag seven it'll be the mag Just to put it in perspective though, Daario on Dwarkkish said he thought the

combined AI revenue of the market leaders would be about a trillion in 29.

I love what you're saying. Sachs, 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 the, you know, trajectory that they're on, I totally agree with you, is on an exponential um 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 one 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. Doubling from a trillion to two trillion given that coding tokens basically 10xes or 100xes the value of that market and the ability to generate

code. So, I think we all agree that the

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

important constraints. First, there may not be enough comput and there's not enough energy. I'd say the second big

enough energy. I'd say the second big one is what's the competitive reaction going to be? Totally.

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

things. I mean, Anthropic was the porcupine. They believed in one thing.

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

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 appear to be kind of a waste of time. The whole market appears now to

of time. The whole market appears now to be coding and the things that will be built on coding tokens like co-work like agents. And so there is going to be a

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

were misfocused. They're going to get focused. I just don't know how much

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 Codeex now based on GPT 5.5. 5.5

is based on a new base model called Spud. I think they're very optimistic

Spud. I think they're very optimistic about continuing improvements. Their

rate of growth appears to be accelerating now because of uh 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.

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 I say somewhat

race. So this is when I say somewhat sort of faciciously 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

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

companies. And if you look at what is Elon's core competency at Tesla, it's building factories. And if you look at

building factories. And if you look at the footprint of these factories, they're huge. What are data centers?

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 Solar City often criticized acquisition he did years ago. So you put this all together.

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

Neocloud, what could he build on planet Earth? What could he build inside of

Earth? What could he build inside of Teslas 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 comput in it. And of course, the ultimate

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 uh from Anthropic and Daario 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 comput in it. It's already online, right? And Starlink also gives him the

right? And Starlink also gives him the ability to do distributed comput's homes. Again, you could be paying people

homes. Again, you could be paying people to put power walls with computing 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 PY Homes, which is a huge builder 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, Chimamoth, was they did the power panel. They made smart power panels. So, you know, when you flip your

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

app. I looked at it for my house, but I guess they pivoted to add this and I think base power, Brad, you're an investor in it. They're going to do the same thing.

Zack Dell is doing that. One of the things I just 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 five 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 has that same Tesla has that same Elon uh 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 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 I think 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

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 and Elon Corp, okay, which will happen probably by the end of the year.

Maybe it'll happen in 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

innovating. People know how to draw more blood from the stone, how to target better ads.

That does nothing for society anymore.

That's it. Literally, in fact, it does the opposite. It there is no good left.

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

hardware product. It was just spending money and making a Netflix knockoff.

There's been no other product in Hold on. Let me finish again before you

Hold on. Let me finish again before you interrupt me making my You don't like that? Oh, you like me?

Oh, no. Oh, yeah. Well, okay. Okay. Go

back to meat 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 swings for the bat. So

they are getting penalized in their valuation penalized. They're just not

valuation penalized. They're just not getting a premium. They're not getting penalized.

I think they're getting penalized.

Every metric they're trading at incredible valuations. Just look at

incredible valuations. Just look at them.

Oh no. I don't I mean if you compare the two valuations, I think they're being penalized. Anyway, let's Anybody else

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 thing the same thing.

It's not the same.

Listen, we're I think we're we're debating semantics here. I'm not letting you off the hook, Saxy Poo. When Sax is very deliberate in how he speaks, they said he's the captain of the debate club

in his 20,000word 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 anthrop Oh, Brad's book is getting attacked headwinds. You said

they're a monopoly or they're heading to monopoly tactics s is 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

or duopolies. And if you just look at the revenue right now, there's only two companies making substantial revenue on AI. It's Enthropic and Open AI. We know

AI. It's Enthropic and Open AI. We know

that OpenAI is growing at 3 to 4x, which is incredible at the level of scale they're at. Enthropic though, we said,

they're at. Enthropic though, we said, is growing at an exponential 10x 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

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

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, 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've

seen 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

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

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

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.

I love it. Shout out to David Sax's writers. Great great writers. Newman.

writers. Great great writers. Newman.

Newman wrote this.

No, I wrote it.

Emmy award for best writing in a dramatic monologue goes to Newman. Wow.

Sax writing. He landed it. Very good.

Sax, I thought after the Elon anthropic dant 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

monopoly. You know, we're talking about annual run rate revenues, David, but on a gap basis, they're doing about the same revenue as OpenAI in the month of March. Okay? So, we're way ahead of

March. Okay? So, we're way ahead of ourselves. By the way, 5 months ago,

ourselves. By the way, 5 months ago, everybody thought Open AI 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 hundred billion dollars 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

the planet. So, I just want to see these companies compete. I want to see DC stay

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 I agree.

competition. Um, I think I agree.

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 got

bets on these. So, Sachs, Washington, DC, don't [ __ ] with Brad's paper.

Saxs, uh, do 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.

First of all, nobody wants to see these companies compete vigorously more than me. That was the whole premise

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 northstar. 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

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

unprecedently powerful position. 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 I mean just like

it too. And I do think I mean just like one one last point on this. I do think that if you actually look at what a lot of the the safetiest 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 charitable view of all 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 I to

of AI. I I I I think this is a uh I to me there's only two companies with revenue.

The last 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 soap box on top of the soap box you were standing on?

Look, Brad, like I said, my northstar is competition. As long as there's

competition. As long as there's competition going on, I support it.

However, hold on, hold on. We know

that monopouists 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 OpenClaw 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. Chimoth, the girls are fighting. Let's keep moving through the

fighting. Let's keep moving through the docket. We're going to be here all day

docket. We're going to be here all day with these two. And uh 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.

Saxs will be there. Uh he's flying in and out every day for four hours. And

then 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.

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. Ah, man. Even if you get one,

things. Ah, 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,

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 wait list. There's just no more room. All right. The White House

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

safety. The thing we've been talking about not doing here, the thing David Saxs 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

working group. This group would include tech exeacts and government officials who would quote examine potential oversight procedures including quote a review process for new

AI models. Oi according to the report

AI models. Oi according to the report the catalyst was wait for it anthropics mythos 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 cyber attack were to occur. They

want a CYA, according to the New York Times." Kevin Hassid, that guy, the

Times." Kevin Hassid, that guy, the director of the National Economic Council, confirmed the report on Fox Business. Here's your 15-second clip.

Business. Here's your 15-second clip.

We're studying possibly an executive order uh to give a clear roadmap to everybody about how this is going to go and how future AIs that also potentially create vulnerabilities uh should go

through a process so that you know they're released to the wild after they've been proven safe just like an FDA drug.

Additionally, friend of the pod Scott Bessen had something to say. What we 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 a AI companies. What we are determined to

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

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 Hasset and Bessant. 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

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, uh, that believes that we're going to move to an approval regime, right? The approval regime, this

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

year. It would just it would lead to three bad things. Number one, we do not want to put the wa 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

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

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 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 get government feedback etc. But the last thing that we want is an FDA of models sitting in Washington.

Kevin understands that. Scott Besson

understands that. So I expect that we will continue down the path that we've been on. Chimoth obviously I think we

been on. Chimoth obviously I think we all agree we don't need an FDA for AI but there are things that reasonably

people would want to have guard rails around a 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 weasling their way into the White House to try to shift things when Sax was back at home or something? What What's going on here?

something? What What's going on here?

Give us the uh cuz that's what 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

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

support. And two, the idea that there's going to be, as Sach said earlier, a few winners and many, many, many potential losers, I think is really disconcerting

to everybody. And the response from the

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 at large. They're not doing that in enough of a scale that blunts this.

So what you're seeing is the buildup of antibodies. Is it avoidable? Yes. Are we

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

job. I'd give the community, the tech leaders a Dminus, 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,

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.

keys. That's why this is happening.

Exactly. Correct. And it's very easy, Sachs, to imagine all the bad things that can 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

deep fakes. They're going to think about robotics. 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, boweapons, 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

this debate? Who's leading Trump down the path of regulation and creating this AI FDA? We know you're part of the camp

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

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 Hassid as well. That's not where his head is at.

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 Wall, just put out a statement last night that I think pretty much shoots this down. So I think there's a big fake

this down. So I think there's a big fake news component. Remember it was not

news component. Remember it was not really the White House who was saying it. It was the New York Times and there

it. It was the New York Times and there and really I think actually Andrew Ross Sto 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

own. And I think Silicon Valley reacted accordingly. There's a very visceral

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

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

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 lazy fair 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, the 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. Open AI

now has a model that's just as cyber capable as mythos. And within 3 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 code bases 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.

They already have it to a certain extent. Let's be honest, they have 80%

extent. Let's be honest, they have 80% 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 cyber security 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 Crowd Strike. We

have Palo Alto Networks. We talked about that before. We have the best defense.

that before. We have the best defense.

Right. Exactly. And so what we should be doing I think is getting these tools mythos and then the open AI model and and others like it in the hands of our cyber security industry. And by the way

not just the public companies like Palo Alto Networks and Crowd Strike although certainly they're two of the most noteworthy but there's also some incredibly strong startups on the way up

there that are at the cutting edge of doing 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 cyber security or maybe they've got IT departments. They can use these companies as vendors. So I think that there is a role for

Can I ask you a question? Yeah.

Do you think that the models should have a KYC rapper going forward?

KYC for the audience is know your customer.

Yeah. So really what it would mean is that before you can use mythos 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 open AI acted responsibly here. No

one was trying to release these super powerful models. So, in a way, all the

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 regulated.

Yeah, they probably wasn't trying to release. I wasn't trying to release

release. I wasn't trying to release this. They all understood the power and

this. They all understood the power and they were all acting responsibly.

They understood the ramifications. They

would have been sued. So, they there is a self-p policing going on here, which is the ultimate way to do this.

Yes. And but to your point, Jimoth, 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,

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

tools to. And I guess my view on the mythos preview and whatever the equivalent is of what OpenAI 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

are. You need to know who they are. So

yeah, KYC is like a predicate for that, right? You got a new

right? You got a new 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 Poly Market for Trump ordering a federal review of AI models by May 31st. 21% chance I think uh to our partner at Poly Market. Man, I I got

to get in here. I don't Do I have inside information here being uh the world's greatest moderator on this podcast or I can Can I collect this money? Chimoth,

what am I going to do here?

I would not do not do not place a bet.

Jal, don't place a bet.

Don't place a bet. But anyway, Chim's point, I mean, look, I think we're kind of workshopping this in real time.

We are.

I think that I think that for the preview period, we should definitely have KYC.

Maybe.

What about 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

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 there 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

government. there's way more happening I think in terms about 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

are extracting. So I would just I would say we're already down that path but better coordination 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 is solving a problem that didn't really exist because again anthropic and open AI weren't trying to release these

models yet is that there is a substantial faction of let's say AI idologues 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 totally over the next 3 to 6 months.

That is a real issue. But that is a problem that we will solve over the next 6 months. We have to. But what they're

6 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 admin that's not the administration's intention. That's not

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 the Trump administration wants to do.

The administration understands the 1% of the 1% of Sachs 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

agenda. Look, Bernie Sanders just wants to stop the progress. I mean, he's he wants to ban data centers. He's put

out a bunch of 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 kibos on innovation.

It's enough already. Let's give let's have a go back to paper and pen. It was

a better society. Saxs

Jason, what do you think?

I think there's two really interesting things I want to build on here. The

first is your point Shamath around how do we turn around the sort of bad vibes around AI? I think we have to have two

around AI? I think we have to have two strategies here. One is giving what

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

giving. There's no reason why Nvidia SpaceX when they go public anthropic when they go public open AAI 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 IPO K, IPO for

American citizen. So IPO K, 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, 100 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 promise to give away half your money. So let's have something real.

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 whoever second in 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 half, 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

anxiety about. One of it is income and the second is healthare and on the margins, housing and their kids, you know, their kids' education, the cost of those things. We should really take a

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

myself. We should really look at the minimum wage and study what happened in New Zealand, Sweden, Switzerland, uh, Australia when they raised it. What

actually happened when they raised it, and there was a lot of hand ringing 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

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 healthcare.

We don't talk about the minimum wage, but that's what capitalists should be talking about. And if we did that, if we

talking about. And if we did that, if we increased the minimum wage, and I'm not a socialist. I'm a capitalist who think

a socialist. I'm a capitalist who think 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 healthcare, companies wouldn't have to deal with universal healthcare and we would have customers and we're a

customer-driven economy. Like 60 70 80%

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

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

minimum wage? I'm still No, because of the black eye. 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 me 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 un do universal healthcare

if there was a way to do it. You want to see every human have healthcare. Yes.

Sure. Sure. I mean the issue is not the desiraability of it. It's the cost. I

mean and so you're a great entrepreneur of our time. How would you do it? Have you

our time. How would you do it? Have you

given any cycle to it?

I just I haven't studied that issue. So

I don't know. I just know.

How about you study the country's I remember what PJ Oor once said which is if you think healthcare is expensive now just wait until you make it free.

Yeah.

So you take away all the incentives and you have an even bigger problem.

Minimum wage. Yeah. Go ahead. Well, let

me just please 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?

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

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

collar boom. We're seeing 25 to 30% wage increases for uh construction workers.

Absolutely.

And so on down the line. So,

and Brad, if you if you look at that chart, there's healthcare 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 out all data data centers. We'd have negative GDP growth

centers. We'd have negative GDP growth this year. The stock market would be

this year. The stock market would be down 15 to 20%. Unemployment would be on the rise. You know there is a

the rise. You know there is a consequence to the government controlling through command to control the economy. In 1929 we had 4%

the economy. In 1929 we had 4% unemployment. 3 years later it was

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 Chamas earlier point, we also need to deliver net benefits. Jason, thanks for the

net benefits. Jason, thanks for the shout out. Yes, every American having an

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

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 Abalene, Texas, let's make electricity in Abalene free for the households in Abalene, Texas. Right?

There are ideas that can deliver net benefits. We got to deliver those. I

benefits. We got to deliver those. I

think we're optimism will be on the march. I think we're in the trough right

march. I think we're in the trough right now.

What's your take on minimum wage and universal healthcare? Brad, how do you

universal healthcare? Brad, 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, 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

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

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

involved. I actually think if you just let the markets work entering an 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,

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.

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

"That's kryptonite. The government has poisoned the well. We can't participate in that." And that's the roadblock. And

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 EBG. Cloud

you here. Fifth best EBG. Cloud

computing on a tear. I referenced it earlier, but AWS is now on $150 billion run rate. Azure 108 billion. GCP, Google

run rate. Azure 108 billion. GCP, Google

Cloud, 80 billion. There's a little bit of fun with numbers there because 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

growth. It is incredible what the ARR numbers are. Google Cloud Edit 10, AWS

numbers are. Google Cloud Edit 10, AWS 10, Azure 9.5. So basically 30 billion collectively. Jammond Ball who works for

collectively. Jammond Ball who works for you uh I think put out some data on the Twitter. Brad markets at all times high

Twitter. Brad markets at all times high all-time highs. Mag 7 cooking

all-time highs. Mag 7 cooking Uber blowing out growth. Disney blowing

out growth. The consumer seems absurdly strong based on those two bell weathers.

Tech seems extremely strong based on the cloud computing. What's your take on the

cloud computing. What's your take on the overall market and overall economy?

Obviously, inflation up a bit, people hand ringing about the never-ending war and the cost of oil.

Let's just telescope way up. You know,

the level of criticism directed to this administration, right? Tariffs were

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

same. You know, we've heard all of the negative stories, but what's happening?

Accelerating GDP, a tenure that's sitting at 43, inflation totally under control. AI, AI, AI, comput, compute,

control. AI, AI, AI, comput, compute, compute. We're leading the world. It's

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 into bubble territory here. Meta's

trading at 17 times, fully tax gap earnings. Nvidia at 19 times, Microsoft

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

excited about. We have 25% of our portfolio in SKH Highix five times fully taxed gap earnings. Samsung six times, Micron 7 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 4 months later 80

revenue. Now combined 4 months later 80 billion in revenue. The the policies of this administration on the economy are working. They're working in in spades.

working. They're working in in spades.

Our gap on the rest of the world in AI is growing. And so from from my

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.

When did you make that switch to go all in on the market? Because you were bearish.

I would say toward the toward the end of last year. The market had run up a lot.

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 revenues show up? If the

anthropic revenues hadn't shown up and we didn't see this reaceleration out of the hyperscalers, the market would be down 10 to 15%. Because people would say

there's no ROI on all of this infrastructure. Exactly. When I saw the

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,

markets. But the question remains, Brad, how much better would the economy have been doing? you know, as much credit as

been doing? you know, as much credit as you're giving to the administration if they didn't start a hundred billion dollar 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 Jason, it's hard to it's it's hard to imagine. Okay, just to set up again

imagine. Okay, just to set up again here. It's hard to imagine a more

here. It's hard to imagine a more goldilock situation for the United States of America. We have reset the table geopolitically. The discount rate

table geopolitically. The discount rate globally is actually coming down, not going up. Evidenced by markets at

going up. Evidenced by markets at all-time high and the bond market in control. And then look at the private

control. And then look at the private markets. We have multiple trillion

markets. We have multiple trillion dollar companies that have been created in the private markets that are now coming public. SpaceX coming public is

coming public. SpaceX coming public is going to be a multi-trillion dollar, you know, open AI anthropic. Like at some point, you just have to acknowledge USA is winning. Of course, there are always

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

here. That is the story. And I give infinite credit to this administration for being businessfriendly. 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

this war. Um, and we should find a quick resolution to it, which the administration seems to be desperately doing. Sax, your take on the economy?

doing. Sax, 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 rescended the Biden policies on chips and models. And what were those

and models. And what were those policies? It was the approval regime

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

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

narrow exemptions. So the whole approach of the Biden administration that President Trump inherited was everything approved in Washington. He rescended

that. He declared that we had to win the AI race and he unleashed uh 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

energy. That's the basis for the American economy. It's also the basis

American economy. It's also the basis for AI. He also has said that he wanted

for AI. He also has said that he wanted to allow our AI companies to 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

electricity. They're generating their own power. And it's thanks to this

own power. And it's thanks to this president that we have seen this bluecollar construction boom right now powering all of this infrastructure.

What would the alternative have been? We

know I mean Bernie Sanders has said it would have been ban on data centers. So

yeah raise tax data centers. It's that

would be a much a much worse choice. Uh

Chamal, 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. Uh, Chimath, you said markets are up and then eventually they're going to come down. Those are

the two things up and we put a U here and then a D here.

He's got the I think you're doing an impression of the taking notes emoji. Is

that what you're doing?

Yes. Okay. Ups and down. Wow. Thank you

for tuning in to AllIn where you can get your great calls and market action advice. It's going to go up and then

advice. It's going to go up and then down folks act accordingly. Go Chamat in all seriousness but what what what makes you bullish you know let's say in the next uh 6 months 12 months catalyst and then what do you think the headwinds are

as well? Let's take the you know the

as well? Let's take the you know the short to midterm 6 months to two 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

demonstrate value. So who are the people making the new thing? It's the Nvidias, it's the memory makers, it's the anthropics, 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 cintilla 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 an important fork in the road. It's

probably two or three 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 or maybe it even

goes up. Those two things are very

goes up. Those two things are very important differences because in the former you're talking about shrinking workforce and shrinking opex as a percentage of operating margin and revenue. In the latter you're actually

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

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 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 Jamal 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 Schmoth 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

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 point you wouldn't be seeing

enterprise continue their month overmonth 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 are being bought It's 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 I got to I'm with you Saxs. This is

deja vu all over again. We watch this happen with the PC revolution, the internet revolution, cloud revolution, mobile revolution. We had all this hand

mobile revolution. We had all this hand ringing. Will this ever pay off? Should

ringing. Will this ever pay off? Should

I build an app? Should I build a website? Should I not? Should I move to

website? Should I not? Should I move to the cloud? Should I keep it on prem? All

the cloud? Should I keep it on prem? All

of these questions over and over and over again. And then they went from

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

making internally. They should be using SAS software. And they are shipping

SAS software. And they are shipping product day in and day out. The ROI is fate complete. Brad, it is fat or

fate complete. Brad, it is fat or complete. I think this has been decided.

complete. 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 8090. You're working with the big enterprises. I invest in 100

big enterprises. I invest in 100 startups a year. I work with the small ones. It is fate a complete with

ones. It is fate a complete with startups. They are building software.

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 8090. you would have a better picture obviously of the enterprise. Tell us what you see there.

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.

Annheiser Bush, 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

company. They have to sell more artificial hips and knees. So the point 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

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

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

S&P 500. We haven't. It doesn't mean it's not coming.

Brad, you want you want to pick up on this because yeah, I'm definitely taking the other side of it because 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 picked 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 because we have a startup that does this specifically for brands like Nike.

They've seen a massive drop. We have one that helped Door Dash with their food pictures. All those pictures used to

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. that is, you know, you

creative now. 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

quarter. We saw Google Cloud grow 63% in the quarter. Headcount growth for those

the quarter. 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 at 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? And Chimath, I think that

businesses? And Chimath, I think that that's the question where where it could donuts, it's not AI.

Yeah. So, so any amount of money. I bet

you 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

question. Are is this margin expansion durable? The forecast the consensus

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 uh, you know, uh, uh, too excessive during the period of co. 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

me. I'm hearing like Jason and David, a lot of these companies that are, you know, uh, really growing their top lines at an accelerating rate without expanding headcount nearly at the same pace. Okay, Sax, I'll give you the final

pace. Okay, Sax, I'll give you the final word while we're wrap.

Brad was talking about how we got all these operating efficiency improvements.

The unemployment rate stayed at historic 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

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

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 this is going to be a circular discussion, but yeah, there's a lot of conflicting evidence. The last piece of

conflicting evidence. The last piece of conflicting evidence obviously is the labor participation rate because if you are not even opting in to participate, then you, you know, don't get counted as

unemployed. And that's been, I think, a

unemployed. And that's been, I think, a big challenge. 61.9% in March. Labor

big challenge. 61.9% in March. Labor

participation rate back in uh before we were 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. Uh I think is probably what we all agree in. And it's

a it's a mixed bag.

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 online Wall Street Journal Nick put it on the screen. College graduates are finally catching a break in this job market.

Yeah, Jake, you should be happy about this.

I know. 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. So, we all know we should get rid of the Fed. That was

But you you get rid of the Fed because we don't like the numbers. Listen, it's

all great. Welcome to the debate club.

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 bend the knee syndrome. It's the end of the show.

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.

I want to I want to congratulate Oh, here we go.

I want to congratulate all of our innovators. And I want to congratulate

innovators. And I want to congratulate Elon and um Daario D. Rockefeller on

their recent deal.

Oh, shots fired. He's getting straight.

Come on anytime, Daario. Hey, you know Dario well, Brad. Well, get him on the program next week. I want him on the program. Have him come.

program. Have him come.

Will you ask him for me?

I um Will you ask him for me?

Well, sure. I'll ask him. And yeah, you know, the the fact of the matter is I think 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

country. And you know, I know we like to, you know, kind of poke poke fun on the edges at 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.

14 months. We need to stay the course.

We're on the winning horse. We just had the derby last week. We're on the winning horse. Stay on the horse.

winning horse. Stay on the horse.

America for the win. America for the win.

There it is. Senator Brad Gersonner. I

think if you're gonna run, you got to get rid of the red glasses. We gota get maybe to shells in there. But I think you got a you got a serious shot.

Senator Senator I like I like secretary better.

Secretary.

Secretary. Who's Yeah. Secretary of the Treasury. Brad Gersonner.

Treasury. Brad Gersonner.

Secretary.

Secretary of State David Saxs. Secretary

of Cashmere and Wine. Chamath Paul. what

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 congratulations on your dad 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 no and they are trying to derail us from from you know the the policies that have been so successful Yes, but but they did

some great inspiring coverage of micro looting. So get your microl looting on.

looting. So get your microl looting on.

Congratulations, New York Times. We'll

see you next time, everybody. Bye-bye.

Love you, boys. Love you.

We'll let your winners ride.

Rainman David and we open sourced it to the fans and they've just gone crazy with it.

Love you, queen of all. Winners,

all. Winners, besties are gone.

That is my dog taking your driveway.

Oh man, my appetiter will meet you.

We should all just get a room and just have one big huge orgy cuz they're all just useless. It's like this like sexual

just useless. It's like this like sexual tension that we just need to release somehow.

Wet your feet.

That's going to be good. waiting to get merch. I'm going

merch. I'm going all in.