Pain, Power & The Game Nobody Wins | Chamath Palihapitiya x Nikhil Kamath | People by WTF

We spoke about pain.

I wouldn't like to say a prerequisite to success in the capitalistic world, but it helps if you have been pained. What is your story?

Where did the hunger come from?

Well, the hunger and the pain are two different things.

I've been fascinated with the idea of building a social media outfit out of India.

Give me advice from your experience of building All In, being at Facebook, and also having a personal brand, which is quite big now.

What should I look for?

Is there an opportunity to build a social media outfit that could appeal to young people in India?

This is a tough question.

When do we start recording?

Oh, it's on? Okay, perfect.

Do you monetise your pod?

-No. -No ads, no nothing?

No ads, no sponsorship, nothing.

In fact, I make my guests give money to a charity I like and I donate with them and we match it.

-[gags playfully] -So we have a grant programme.

-I'll tell you what kind of charity. -I don't care.

-It is-- -Not doing it.

[laughs] It is giving money directly to young kids in India who want to start a business but don't have startup capital.

You know there are, that initial capital, even if it's like 50 grand or 100 grand in India, it's very, very hard to come by-- How do you choose, though, who to give it to?

-That seems like a complicated problem. -We have--

Because if you just give it, you're making it harder for that person that actually shouldn't probably have it.

But nobody has it there.

I mean, you're talking a different ecosystem with no risk capital whatsoever available.

And do you do like YC, you take 7%?

No, no equity, nothing, it's just a grant.

Oh, it's just a grant, and they don't have to pay you back?

-They don't have to pay us back. -Wow.

But that's great that you do that.

How many people do you put through this programme?

A dozen kids every couple of months.

And anything interesting come out of it, like commercially successful?

Yes, a couple, like there's a pet protein company called Pawsible which is now worth maybe 40-50 million.

There have been like three, four, 50 million kind of outcomes, which is not bad.

And does it kind of pay itself back, so that you can kind of make it, or no, it's just you funding it?

Yeah.

Me and then whenever my friends want to join, -they come along. -Does it give you a sense of fulfilment?

[Nikhil] Uh...

Not particularly, I think it gives me access to a lot of talent that I work with in other ways in the future.

-Ah. -Yeah.

Because even when things don't work out and they shut down, -it's tough to find these people. -I agree with that.

And are they generally technical or no?

-Yeah. -They're generally technical.

-And they're all under the age of 25. -Yeah, that's the key.

-Yeah. -That's like, honestly, -probably my single biggest filter. -Yeah.

If you're young, it's great. If you're not, it's harder.

You know, another thing I've found with these young kids, are the docile, yes, subservient people never turn out to be good.

The arrogant pricks are the ones who do better.

I totally agree with that, too.

-Right? -Yeah.

I think you need to have some kind of like grit or pain in your past.

Pain is a fantastic amplifier of capability.

Some sort of like grudge, pain, anger.

But you know, the child that had a wonderful upbringing is a wonderful human being and not a great entrepreneur in many cases, at least at scale, at mega-scale.

Because it just requires a level of self-flagellation almost, you know, and pain.

And people who aren't used to pain don't want to incur pain.

People who are used to pain don't think anything of it and they just keep going through it.

People who are used to pain almost want pain?

I think it's like a weird way in which...

we feel normal.

Hmm.

And I find that when somebody's used to drama growing up, they seek out drama later in life as well.

-I can see that. I can see that. -Yeah.

Maybe we should start today with telling our audience who Chamath is...

in Chamath's words.

-Yeah, I am a... -This is a tough question.

I'm just a guy.

Um, and, uh, I like games.

I like risk.

I like learning.

And I like... growing.

Um...

And none of it matters.

None of it.

What you like is part of who you are.

Maybe what you dislike is the other half.

What do you dislike?

Honestly, not much of anything. I don't like staying still.

And...

Actually, yeah, I probably dislike that the most.

I don't think there's much value in just kind of like the status quo of anything.

-Hmm. -Now, that's not always a good thing, but I think the status quo in many cases is actually quite structurally important.

But generally, it's better to try things and change things.

We spoke about pain.

I wouldn't like to say a prerequisite to success in the capitalistic world, but it helps if you have been pained.

What is your story?

Where did the hunger come from?

Well, the hunger and the pain are two different things.

-The pain came from my parents. -Mm-hmm.

And just, I think it's just the neglect that comes from a...

home in crisis.

And I don't think that that's a particularly unique story to me.

And I think I've learnt to forgive my parents, but that's what it is, you know.

There was alcoholism, there's abuse, there's all of these things that are the by-product of just dealing with...

a life unfulfilled, at least, you know, from my dad's side.

And then there was a lot of codependency and complacency that my mom lived out. And then the by-product of that was, you know, I was a curious, loud, sometimes, and generally overachieving kid.

Not in school, but in every other realm.

And I think that it...

I think it touched a lot of my father's insecurities.

And so, the way that he dealt with it was painful for me, but also for him probably.

And then my mom just kind of didn't really do much to intervene.

So that's where it all started.

What, in the eyes of a young Chamath, would make it look like your parents had a life that was fulfilled?

Is it just the absence of conflict?

I think my father was an incredibly smart, capable man who just didn't get a chance to live out his potential.

And then he made, you know, the greatest sacrifice possible.

I can say this now as an almost 50-year-old, which is, he just gave everything up.

And could you imagine that, you know, your life isn't going the way that you thought it would?

You feel you have this potential, so you're frustrated.

And then you say, "You know what?

I'm just gonna completely give up on my life and I'm going to live it through these three kids."

-Hmm. -How do you do that?

Because you have no idea what these kids are capable of.

These kids could be idiots.

-Um... -He did that?

And so, you know, when you-- By immigrating to Canada, he did that.

You know, you give up everything.

And, so I gave him a lot of respect and obviously, appreciation.

But that's probably the memory that I hold the strongest, because it forgives all the other stuff.

All the other stuff is kind of just noise.

It all just kind of gets in the way.

Because again, I go back to it. None of it really matters.

-Hmm. -Like... Let's pick a random year.

Pick any year.

2020...

2020.

Who was the 87th richest person in the world in 2020?

-No idea. -Okay, pick another random year.

-2010. -Who was the 14th richest person then?

-No idea. -Okay, pick a different year.

2005.

Who was the ninth most followed human being then?

No idea.

Okay, this is just to point out that none of it matters. [laughs]

It's all contrived and in your own mind.

And in that moment, it feels like it's a matter of life and death.

External validation becomes this thing that is like the-- it's the crucible.

But I try to remind myself, none of it matters.

It's just a complete game.

And if you can do that, you can have a very interesting life.

It's interesting that the parameters you used to form your questions were the richest and the most influential.

Is that what matters today?

No, but I think that that's what we are conditioned to think matters.

-By society? -By society.

And I think the overwhelming majority of people will use that as the two simplest ways of determining the value of a human being, which is wrong.

I would say that the real thing is, from where you started to where you are, how have you evolved as a human being?

There's no quantity or metric that you can share.

And it's your own internal sense of whether that journey has been well-lived.

Unfortunately, most people don't appreciate that, because you can't share that in a language that's easily understood by everybody else.

So society has developed simple frameworks to say whether you've had a life that has been well-lived.

And it reduces down to these two things, some combination of fame, influence, and capital.

No proximity to power?

Fame, influence, and capital.

All of those things are sort of like by-products -of those things... -Mm-hmm.

...because it allows society to organise itself.

The problem is that it kind of misses the point.

But that's why I try to remind myself, "Well, okay, if those are the external validated measures of success, the true reality, though, is it doesn't matter."

-Hmm. -Um...

And so it takes a lot of courage to decide that it doesn't matter.

So what matters outside of change or the rate of change?

I think that that's, for me, that's probably the thing that matters the most.

And then after that...

how that manifests for me is my relationship with my wife...

[Nikhil] Mm-hmm.

...my relationship with my children, and then my relationship with my friends.

What gets cluttered along the way is all of the things that I do in business, and then all of these other ways that people try to tell me that things are going well if I don't feel that it is, or they try to tell me that things aren't going well when I think that they actually are.

And the way that they do that is, again, they go back to these externally validated but very fragile and brittle measures.

And the whole goal that I try to do for myself is to break that chain of dependency where I hear it and it just kind of dings off me.

And that's a very liberating thing.

I don't get that all the time, but when I can do it, I feel very, very grounded and happy.

Like a... Like it's not like an effusive happy, it's just like a kind of a warm, grounded sense that I'm right where I need to be.

Procreation and legacy have always mattered for centuries maybe.

Capitalism defined that winning this game helps in order to achieve that end.

The wealthier you are, more people wanna have children with you.

So, in a way, they're both the same thing, or one is a conduit to the other.

Well, I can tell you that having kids for me is a completely selfless desire to be around these little humans that I just like love.

I have five kids.

If I could have had five more, I would have had five more.

-Uh... -Do you think it could also be ego?

Like, when you see a child, you see a reflection of yourself.

No, my kids are...

Well, my boys are pretty stupid.

-So no. -[laughs]

[Chamath] Uh...

My girls are just superb. Oh, my God.

No, I'm just kidding. I mean, they're all great.

-And I love them equally... -Right.

...mostly.

But, yeah, kids, they're just amazing.

They're uh...

They're a really great way of reminding me that these external measures are these traps that society lays for you.

They don't have a perception of how many followers you have or how much money you have, whether you won or you lost, whether you had a good deal or a bad deal.

Maybe not yet, but soon they will, 'cause they live in the same world that we do.

But then they're not children any more.

-When does that change? -Then they're adults.

You know, I can see my oldest child getting into that transitionary phase.

Then it's less about me being a parent and them being a child.

It's us about being peers.

And there's a good chance that, you know, like with all things, I don't know what the relationship will be like in the future, you know.

It's not the case that all siblings are really close.

You don't choose those people, right?

It's not the case that you're close to your parents.

You don't choose that relationship.

It's given to you, and then it's your choice how you deal with it.

Um so...

And I would hope that they are less reductive than everybody else, but you're right. There is that risk.

And then I think our relationship may suffer, but hopefully it doesn't.

Why would it suffer?

I mean, I think I've tried to...

I've tried to surround myself with the kind of influence that makes me feel like I'm on a good path.

And so if my children, it would have...

-If my children-- -Can you elaborate on that?

When you say you've surrounded yourself with influence that makes you think you're on a good path.

The good path to change, the good path to capitalistic success, the good path to influence?

The good path to...

a structural sense of being an evolved human being.

-It's independent of-- -You mean emotionally?

Yeah.

Being reliable, being thoughtful, being self-aware.

I think maybe that's the key word, being very self-aware.

Like, "Where am I in my evolution? Where am I in this moment?

Am I grounded?

Am I insecure? Am I egotistical?"

-Are you able to catch that? -Yeah, a lot more than I used to.

Not all the time, but a lot more than I used to.

Why?

Because of the influence of my wife predominantly, but then the reaction of my children and my friends.

And I've been able to-- So this is what I mean.

They don't treat me better or worse because of something that happens in the traditional way in which society tells you, "You had a good day."

Mm-hmm.

They treat me better or worse based on how I'm treating them and how I am treating myself.

And that's very powerful if you listen to that signal.

And it takes a lot of time to sort that out.

But then if you can do that and you can foster that, it's a superpower. It's a huge unlock.

I'm trying to learn how to do this myself.

Can you give me an example of how you've caught yourself changing in, say, the last five years?

-Well, I was still, you know... -What did you believe in five years ago that you think now was a stupid thing to believe in?

Don't say socialism or the Democrats because I think that's too binary.

Something more evolved than that.

[sighing] I don't know. I don't want to give you some trite answer.

What do I-- What have I changed my mind about?

I'm just much... I think I'm much more circumspect about the games that I play and that they are games.

Meaning I thought that business success was a matter of life and death.

And so the whole goal was you run up the score and you get the highest score and you have the most chips.

And now I see it just as a game.

It's like playing poker.

There's like hands you win, there's hands you lose.

Sometimes you're on a heater and you're just like everything works.

And sometimes, no matter flawless execution, nothing works.

And I can step away from it now -and be normal. -Mm-hmm.

I can also be around my friends and not be...

It doesn't like... I'm not a different person based on that.

Not all the time, but most of the time.

That's been a huge change in the last five years.

Five years ago, I was still so much part of like...

I was just grist for the mill.

I was like everybody else, just kind of walking around, you know, trying to get the attaboys, trying to get this tap on the shoulder saying, "You did a great job."

And the problem is, again, other people are telling you superficial stuff when they tell you that.

Nobody sits you down and says, "You know what, Nikhil, you just seem so self-aware.

I really... And it's really changed over the last years."

Who's ever told you that?

Whoever that person is has ever told you that?

Don't ever lose that person.

Everybody else is like, "Wow, dude, great investment.

Oh, my gosh, you're so great.

Wow, look at how many views you got for this video.

Wow, you must feel so awesome."

And I'm like, "No, I feel nothing."

Nothing, nothing. Do you understand like what it means?

I told you this story the last time.

I did a deal at the end of 2025.

-Mm-hmm. -Helped start this business ten years ago.

Chip company, AI chip company. We sold it to NVIDIA for $20 billion.

-Huge win for me. -Mm-hmm.

And, you know, woke up on a Tuesday, and I remember getting a screenshot and NVIDIA had wired the first big payment, 13 billion in the account.

In the company's account, not my account.

I was just like, "Okay..."

And I thought to myself, this has like zero impact.

Like I almost feel like a little depressed.

'Cause I was like, now I'm gonna have to spend the next three weeks with all these people giving you these attaboys.

-Mm-hmm. -And I haven't thought about this in years 'cause it's been a ten-year journey.

And I've already moved on to other problems that I'm working on that captivate my energy that people probably think is a stupid waste of time now.

And so now I'm gonna have to fight all these people telling me, "Oh, why are you doing it?

What's the point? You've already done it.

Just take a break, relax."

And they don't get it.

And so I was like, "Ugh, these next two months are just gonna be a pain."

All prophecies are self-fulfilling in a way.

So because you said what you said now, people will say you're self-aware a lot more than they did up until now.

'Cause you put it out there.

-Yeah, I mean, I hope so. -[laughs]

I launched a product-- I started a company 18 months ago and we launched a product these last couple of days that I've been here in Dubai.

And so I'm with the team and we're like, just working on it.

-And... -What is this?

Andy was telling me about this last night that you're busy in the product launch before you came for dinner.

What was it?

I think the best way to describe it is...

In the industrial revolution, what was the key unit of change?

-It was a factory. -Mm-hmm.

-Assembly line. -Assembly line.

What did Henry Ford really bring to the world?

-Assembly line. -Not a car, but the assembly line.

It's the machine that makes the machine.

I've been obsessed with that idea.

Nine years ago or ten years ago, Elon sent an email to a bunch of us and said, "Hey, I'm opening the Gigafactory, let's have a party."

-Hmm. -So we all go to Nevada, like somewhere outside of Reno, Nevada.

And... it's an incredible-- I just remembered, I still have the video on my phone.

You start to drive and you turn the corner, and it's the beginning of the Gigafactory and you just keep driving and driving and driving and driving and this building is there.

And it just keeps going and going and going forever.

And then you pull in, and literally, raw material was coming in the front and, like, the Model 3 was coming out the back.

Mm-hmm.

And he said, "Chamath, I wanna show you something."

And he shows me this, like, schematic.

-Mm-hmm. -And I'm like, "Wow, what is this? Is this like your next chip or something?"

He's like, "No, dummy.

This is the machine that makes the machine."

And it just seared in my mind.

The machine that makes the machine.

Hmm.

So when this AI thing started, and I had been kind of more toiling around in the silicon layer.

This is in mid-2024, I was like, "Okay, well, if all of this stuff is real and we have silicon and we have models, what is the machine that makes the machines?

What is that?"

Well, it's a software factory.

It's a factory, but that can make the software because software is what runs the world.

It runs everything.

And so we made one.

Not sure it's the right one, not sure it'll be the ultimate one, not sure if it's a good one, but we made one.

And so what does a software factory do?

It gives and imparts control to humans to be able to be a part of whatever this productivity loop is that we're about to embark on.

So it allows people to collaborate in an assembly line to make software.

Whatever software you want.

You want it to run a plane? Great.

You want it to operate a hospital? Fantastic.

You want it to use it for accounting? Sure.

-Hmm. -But you don't need to care about the intent.

We can build tooling that allows all of that intent to manifest.

I think it's a very potentially big idea.

So we built it, we launched it, we're using it.

We've been deploying it with a lot of customers, so I know that it works.

But I launch it, and the first comment is, "Hey, goofball, why are you wasting your time?"

The guy said it in a really condescending way, too.

"Honest question, but as a billionaire, why would you be doing this?"

And I'm like, "First of all, that's a stupid label.

Second of all, you know, this is not how I measure myself.

And third of all, I'm there to make things."

Mm-hmm. Why do you care?

-'Cause I was annoyed. -Why?

Because it makes me feel like I have to justify myself.

-Now, the reason is that-- -Even if you care.

The reason is that I have this duality in my personality.

The thing that drives me to work 20 hours a day sometimes is this deep sense of something is unaccomplished.

And then the other part of my life is to try to put that at rest, so that I can be aware enough and enjoy this moment and say, "Wow, what a fun game, and this is great, and this is awesome.

My wife's awesome, my kids are awesome, my friends are awesome."

But for me, it is a challenge.

It is the structural challenge of my personality, is to balance that duality.

This gives me an enormous well of creativity and energy to work.

This gives me enjoyment and fulfilment.

But I vacillate between the two.

And so when I read it, my instinctual reaction is "I am worthless and I'm wasting my time.

I need to justify to this random person why it's not a waste of time."

Then I try to catch myself, and I compose myself, and I go back to work because I actually believe in the work.

-Hmm. -But it is a challenge for me.

[Nikhil] Hmm.

-I'm self-aware about it. -[laughs]

It doesn't mean I've solved it.

But that's the back and forth.

It's a big contradiction to kind of live with, no?

-Huge. -Hmm.

Probably makes you less productive than you could be.

-Probably. -If you didn't care at all.

Oh, yeah. I mean, if I had a little touch of Autism or Asperger's, -I'd be ten times more successful. -Like some friends of yours.

I mean, my friends have the tism in just the right quantity to be unstoppable.

Are you talking about the older friend or the younger friend?

I have a few friends with tism, and they're all off-the-charts productive.

-Yeah. -We planned to play poker last night.

-Yeah. -And... we didn't,

and we had dinner, but, you know, game theory.

Yeah.

There's something called prisoner's dilemma.

It teaches you through a lot of backtesting -what is a good way to negotiate. -Right.

It talks about tit for tat works as long as you're willing to reprimand the person quickly enough in a clear, concise, nice manner.

Okay.

The direction in which the politics of the country where you reside is moving...

don't you think you as a country are allowing or fostering a lot of tats for the tits of today?

It's a little too abstract for me to answer that question.

Love tits, love tats. Don't exactly know.

Here's what I'll say.

I think that COVID was a real wake-up call for me and a lot of others in America.

Mm-hmm.

What was that wake-up call?

I think there are two dimensions of it.

At a conceptual level, I think it exposed that there is an externally validated way of organising the world based on this notion of expertise and credential that was a lot more brittle and fragile than we gave it credit for.

In the end, what do we know about COVID?

None of us knew what was going on.

Everything was a guess.

Most of the guesses were shoddy, even by the quote-unquote experts.

But the downstream implications to those are severe and have been severe.

So that's number one.

We exposed the fragility of these externally validated systems. And the second is that we demonstrated our economic and national sovereignty fragility.

Mm-hmm.

There was nothing that we could do to take control of our own destiny.

We needed almost the charity of others.

I think from that, what I would say is we needed somebody, a vessel, that allowed us to make the structural change, which is hard.

I think it can be very bursty, but necessary.

And I've said this before. I think the best way to think about our current political climate in the United States is we are led by a transcendent political athlete.

Transcendent how?

Donald Trump is...

the most effective and capable political athlete we have ever seen.

Why?

He understands how to connect at the one-on-one level.

He understands retail politics better than, frankly, anybody.

And you can just see this if you go to a rally, the way that he can connect with individual people.

He has an affability that's very disarming.

And yet, because of his business acumen, he has a way of negotiating that I think is just very hard for the learnt...

non-business person to compete with.

You know, there's a very famous Mike Tyson quote, "Everybody's got a plan until they get punched in the face."

Mm-hmm.

I think the president has an incredible ability to negotiate.

Howard Lutnick has an incredible ability to negotiate.

Scott Bessent, has an ability to negotiate because of their grounding in business.

And when you apply it to the realm of politics, I think it has some very consequential outcomes.

And in this specific case, what they are doing is they are allowing us to question these two sets of beliefs.

What should the organisational model of the world be?

-Is it a bunch of-- -Of the world or America?

Well, it's of the world because the consequences of America are for the world.

Hmm.

-Is it a bunch of-- -What if the world doesn't believe that America has that right to decide?

I think America only has the right to decide for itself.

Yeah.

And I think that that is what it does, but the ripple effects of that are very clear.

And I think that that's a very important decision that other countries can make.

Like AI is actually a perfect and emblematic example of this decision.

And I think in the microcosm of AI, you can see this kind of duality.

There's open source, -mostly Chinese... -Mm-hmm.

-mostly Chinese... -Mm-hmm.

...some American alternatives, NVIDIA being the biggest one.

And then there's closed-source, which is like, you know, these large foundational models.

If you believe that AI is the cornerstone of productivity and GDP, there is an argument to be made that every country has a sovereign responsibility to determine what they should do.

There is no path dependency where the only path is America.

And I think that that's true militarily.

I think that that's true in every which way.

So I think what America has done has said, "Here are the boundary conditions that we are going to now change in order to partner with us."

Historic trade deficits are no more.

The sovereignty of our supply chain is now a critical dependency.

We will make sure American resilience is the number one focus of the administration.

Those are huge changes and it has broad ramifications, but we needed somebody who was willing to break the norms in order to say that.

And I personally believe that America needed that wake-up call.

Because we were all subsuming ourselves to a monocultural global elite that wasn't necessarily making decisions from first principles any more.

And I think it's important to have an opportunity to re-underwrite those decisions every few decades.

I hear you.

I don't know how far I can debate this line of... [clears throat] ...politics

without getting into trouble, but sure, the deficit numbers are down. The debt is not going to go down.

It's only gonna increase with time.

Sure, maybe you depreciate the currency to a point where it becomes more feasible or you grow your way out of it or you have an alternate...

currency of exchange which helps you pay for it.

All of that could happen.

But when I look from the outside...

Like I was telling you last night at Davos, I was seeing how the Europeans were reacting to what the Americans were saying.

It feels like you are, in a way, creating a block. The world had many blocks.

I wouldn't be...

It wouldn't be too far-fetched today to extrapolate that there might be one block which is America and another block which is the rest of the world, which I don't think would be a good thing for America.

I don't think it's going to be like that.

[Nikhil] Hmm.

And the reason is that, at the end of the day, America is still the heartbeat of so many really important innovative technologies, medicines, capabilities, culture, and I don't think any of that changes.

Will there be other forms of it over time?

Yeah, and I think that that's okay.

So I don't think that this is something where, you know, look, should the-- what should have the Europeans done?

I suspect if I was a European leader and I was sitting there in Davos, I would be really upset with some of the decisions that I have made.

I would think to myself, "Hmm, was it smart of me to have turned off all my nuclear generation because a 16-year-old girl told me to?"

Probably not.

Was it smart of me to have a single source supply of an overwhelming supply of energy from two pipelines that don't have redundancy?

Probably not.

Should I have maybe reconsidered how I think about migration and immigration, and how do I balance asylum versus relocation versus productivity-based immigration?

And I think that if I was in Europe, I would be like, "Man, I think I made a couple of these decisions really wrong."

But again, if you're being really intellectually honest, then why don't we go back and ask why were those decisions made?

No, I agree with you 100%.

-I don't think the Europeans-- -So I think it's hard to litigate the fact that they may not be self-aware enough to actually be honest.

I agree. They might not have been, but them not having been might have been beneficial to another state because they weren't, but now they seem to be coming together.

Again...

I think the Europeans are brilliant people.

They're smart, they're thoughtful, they're capable.

If from here in first principles, one cannot underwrite who to be long-term partners with, I think that we should hold out some small amount of percentage that they could just be emotionally overreacting.

Yeah, you know what they were telling me?

[laughs] And again, so that's them repeating the same mistakes over again.

Yeah. As soon as we walked out of the room after I can't remember which speech, I was talking to a bunch of the politicians from Europe and they were like, "America is 27 trillion GDP, 350 million people.

Europe together is 500 million people, but 22, 23 trillion GDP.

The distance is not very far."

I have not heard Europeans speak like that as one country or one nation, but not individualistic for their own regions in a long, long time.

Okay, let's just be really honest.

Like, Europe is gonna come to a crossroads.

Mm-hmm.

Italy is doing incredibly well.

Yeah. Because of taxation, you think?

Because the economy works and they have a stable government.

[Nikhil] Mm-hmm.

They have sensible laws on a bunch of things that have allowed them to retain a sense of national identity and maintain reasonable growth.

What do we think happens when the Italians wake up one day and say, "You know, should I secure all of that gold that I have that's in Brussels?

Maybe I should send some of that back and keep it in vaults in Rome."

Which is-- Dollars to doughnuts, when that question really comes up and we start to think about, you know, -real assets, devaluation of currencies... -Mm-hmm.

...this is gonna create some really, really interesting conversations.

That is happening in the U.S. now.

People are bringing gold back from the Federal Reserve into individualistic countries.

In a big proportion, actually.

So, Chamath, to my audience, which are largely entrepreneurs and people who want to start a business in India, I think something that you have accomplished, along the many things that you've done in life, from starting at Facebook, which is now Meta, to running funds, managing money.

The thing I find most interesting, because I'm in that profession, is the investing bit.

You seem to have gotten so many calls right over the tenure of your career.

Give us some lessons from that which are non-obvious.

To be a very successful investor...

you have to be extremely, extremely single-minded.

You need to come to your own conclusions.

You cannot have others help you.

It is not a team sport.

That is probably the single most important thing.

Whenever I see teams of investors, I think, "These idiots are gonna lose money."

Or they're going to make a lot of noise and spend a lot of time and waste a bunch of people's money just returning the market beta.

I don't find that interesting. That's not being a good investor.

You have to be really, really, really curious.

And people say that a lot.

The sensation that I can put my finger on is when I feel like I'm embarrassed to tell somebody that I'm in this new thing.

I remember when I invested in an NBA team in 2011.

The people around me were up in arms. My family office was up in arms. My best friends were up in arms. My wife at the time, up in arms. "Why are you doing this? This makes no sense."

And I said, "Here's why..."

And it's almost as if what I've learnt, actually, in my career, is when people around you have that reaction, it's almost the best signal.

I agree with you 100%.

And I had been reading a lot.

And I'd been reading about how to actually be a tech investor.

-Mm-hmm. -And the conclusion that I came to was, "Wow, the approach that I wanna do is so unconventional."

The risk of ruin was very high.

So then I was like, "Well, let me just find the most totally uncorrelated asset and park..."

I can't remember, it was like 25 or 40 million bucks or something.

So that if I lose everything, I still have this little thing and I can take care of myself.

And that ended up being the investment in the Warriors, which ended up doing financially quite well.

But it repeated itself with Bitcoin in 2012.

I did the same thing.

People got... They were just so upset.

And I remember, you know, I would appear every now and then on, like, CNBC, and just the vitriol and the hatred...

And I was like...

So, if you can wither the negative reactions of others, where is that coming from?

-It has nothing to do with you, right? -Mm-hmm.

People are living their own journey.

But what is happening in that moment?

What is happening is, something you are saying is attacking a core foundational belief that they have, and it is touching such a nerve that they are just reflexively reacting.

-That is an incredible signal. -Mm-hmm.

Because what it tells you is you're onto something.

It could still be a huge zero, but you now can bucket it into: There is the potential for a massive asymmetric outcome.

So when I'm investing...

initially what I was thinking about was, "How do I put myself in a position..."

Once I... So I spend still two, three hours reading a day.

-Mm-hmm. -Okay?

I would develop views, I would write notes, I would think about it.

And then I would come up with these ideas, -and then I would just test them out. -Mm-hmm.

And, man, people would just...

When people reacted like ho-hum, I was like, "Okay, this is a nothing burger, not interesting."

But when people had this visceral reaction, I was like, "I'm onto something."

Doesn't mean I'm right, but it's something that triggers people.

And I would use that as a way to amplify and spend more time.

Since then, I've added one more thing to this, which is, now I have a different way of investing for large quantums of money.

Like super-large quantums. Hundreds of millions, plus, plus.

-There, I actually want consensus. -Mm-hmm.

Because this should not be about any sort of existential risk or product risk of any kind.

So when you're investing tens of millions of dollars, who cares?

You can lose the money, it's not a big deal.

When you're investing hundreds of millions or billions, you cannot afford to lose it.

Risk of ruin goes up.

So now, I try to context switch.

Here, I want you to just be... I want you to just hate it.

I want you to just be, "Ugh, it's so gross, it's rat poison."

"Oh, really? Okay, great. Now, I'm gonna spend more time."

Over here...

Oh, that makes... Yeah, okay, I understand.

Which portfolio did better?

Gross tonnage of dollars, this one.

Sheer alpha, this one.

Now, it's hard to say an individual position.

Did you get out of your crypto?

-I don't talk about my crypto. -Okay.

But crypto transitioned.

Bitcoin transitioned from being this bucket to being this bucket.

-You think? -Yeah.

Volatility would suggest otherwise, no?

Yeah, but I think the reality is that Bitcoin, for the most part at this point is...

There's a structural failing in Bitcoin that I think people will need to come and wrap their heads around.

The structural failing is that it is not...

So if you think about what is the value maximising function right now for a crypto asset to be broadly adopted, it needs to have the features that allow a central bank to adopt it.

And there are two things that it lacks.

One is fungibility and two is privacy.

And so Bitcoin fails on those two dimensions.

So it can never be a structural holding of a central bank.

And that simple thing will keep it in the realm of ETFs and humans and-- -Does gold satisfy those conditions? -Yeah.

Fungibility, but not easily.

Both. You have no idea how much the Bank of China owns.

You don't know how many ounces they own. You don't know how many ounces I own.

When there's a public ledger that says this address has this much, and you can't really trade it, because you know the history and the provenance of that exact token.

It's been used to buy this.

It was transacted over here, went to this wallet.

That lack of fungibility and privacy...

is a huge deterrent for broad structural adoption.

That's what you need to then add another 10X of market cap.

[Nikhil] Mm-hmm.

So is there room for a different crypto asset that solves for the privacy and fungibility?

Yeah. And are there projects right now?

Yes, but they're very small scale, there's huge issues with them, those are even more volatile.

So Bitcoin's interesting.

I think of it each time I think of Bitcoin exchanges and stable coins.

I'm like, why have the use case of moving away from central bank and then have Tether or USDT, something which is backed by the U.S. dollar, or for an exchange?

Why decentralise if you have to centralise again on a crypto exchange?

Inherently, fundamentally, I don't get that argument.

Yeah, I'm not sure I understand the argument either, to be honest, but I believe in stable coins.

I think those are like a structural innovation that makes a lot of sense.

It decreases friction and it allows transaction rails to kind of proliferate.

-I love that. -With you. With you.

If you're trying to bring efficiency into bank transfers and SWIFT is failing and all of that, with you 100%.

But why it should be backed by a currency which is regulated by a central bank, I don't know.

Well, I think that that's gonna just be a philosophical decision at some point.

You'll have gold-backed stable coins.

You'll have all these other real world asset-backed stable coins.

Anyways, my point of view, just getting back to the original framing is, so the non-obvious thing is, it's a you thing.

-Investing is all about you and you only. -Mm-hmm.

All this nonsense of, like, teams is nonsense.

Teams win-- How big is your investment team, your family office?

It is one person that makes the investment decisions, which is me, and then there's a very trusted team of people that help me with all of the infrastructure of that, the complexity of that.

Okay. So you think, number one. Then?

-So you-- Yeah. -I'm just summarising.

-You. Nobody else, no team. -Mm-hmm.

-Nobody in the front office. -Mm-hmm.

Two, have a very thoughtful understanding of what you're looking for when you're constructing a portfolio.

How do I arrive at that?

I think you can start by just having a very coarse definition of there's small and then there's medium and large.

Small should be about massive alpha.

Massive alpha is generated typically in controversy.

How do you arrive at controversy?

By testing out these ideas and getting...

and just getting a sense of people's reactions to it.

[Nikhil] Mm-hmm.

So for example, like, going back to this crypto example.

There are crypto projects right now that are completely fungible, totally private.

And if you ask people, they will have wildly divergent views.

That is a great setup for some of those crypto projects.

Again, could go to zero, but could go to infinity.

So this bucket is always about just swinging for the fences.

-This bucket-- -The medium?

Medium and large is you can never be wrong.

'Cause I would rather take a billion dollars and generate a 2X...

than go to... than risk... than have a chance at a 5X, but there's also a chance of a zero.

This is your data centre energy and all of that.

Well, so this is about portfolio construction.

Then you have to have a view of like, what do you like and what do you want to see in the world?

Because the dollars that you have are really an amplification method to the point of view.

So in my point of view, I have a very specific view on AI.

I've been at it now for a decade.

I have a decent sense of it.

-And I want to-- -What is your view on AI?

Overall, if you had to summarise.

I think it's a massive accelerant on productivity.

I think it will create levels of progress that are unimaginable.

And I think we now need to build the tooling that allows people to participate in all of those gains.

-And if-- -UBI?

No. Like, you know, be able to actually like work in it and be productive and allocate one's time to pursuits that these things enable.

But how can billions of people, when the productivity goes up in that manner, what will be the use case for billions of people in the world?

Well, I think that was the same argument -at the Agrarian Revolution. -Yeah.

And we found things.

And again, I just think that the odds are, if you look at the last two or three meaningful evolutions of humanity through technology, every single time, if you dropped yourself in that moment, you would have not had a precise way to answer that question.

Yet, if you took the pessimistic view, you would've been wrong.

[Nikhil] Mm-hmm.

I think that this is still one of those moments.

And so I suspect that-- Again, today, we don't have a good language to talk about how we will all participate.

But I suspect that if you take a pessimistic view of the answer to this question, you will turn out to be wrong.

So...

So, anyway, my point is that in all of this, I have specific views on energy and energy policy and national security.

And so that's where I choose to allocate the smalls and the mediums and larges.

-Right. -But for somebody else, it could be biotech, it could be cancer research, it could be enterprise SaaS.

-It doesn't matter at that point. -Right.

How would you play AI now?

So here's the framework that I use.

If you go back to the first generation of the Internet, we had a conceptual framework called the OSI stack.

And the OSI stack was very powerful, because it allowed companies to demarcate what the boundaries were.

Where did they start and where did they end, and then where did the next company start?

And when you got those boundaries right, you had great companies get built.

From Intel to Cisco to Broadcom to Oracle to all of these things, right?

The question is, what is the conceptual stack for AI?

-Mm-hmm. -Why?

Well, if it maps back to history, again, it's not gonna be exact, but it's gonna rhyme.

There will be a conceptual stack that we will look back on and say, "Oh, had we seen these boundaries, it would have explained all of the company formation and what needed to get built."

So we already know what some of these boundaries look like.

There's a silicon layer.

Now inside of silicon, there's a huge panoply of different things that one can do.

Then above it are the foundational models, quite obvious.

Open source, closed source, world models.

You know?

And then above it, I think it forks.

And this is where I diverge from a lot of people.

So these two layers of the stack are the same.

Then when it diverges, it diverges into software AI and then physical AI.

And in physical AI, I think the two things that I believe is that it's all about being able to store energy and then actuation and locomotion.

Because you could have the greatest robot in the world, but if the robot runs out of batteries and it just kind of hangs on, you're dead.

And, similarly, if you can't actually pass the num-match test, which is what we call in robotics, it's pointless.

So there's all kinds of really interesting things that then pulled you into the physical world.

Batteries, rare earths, speciality chemicals, processing.

And I've gotten very interested in it.

I find it very fascinating.

And again, why?

It allows me to make medium and large-size investments.

Risk of capital loss is relatively low.

These aren't like gargantuan returns, but they're fulcrum assets.

Right? Fulcrum assets meaning, like, these are things that if they exist, will be pivotal.

And with that will come the ability to find other next new things.

And on the software side, my big bet is this idea that I don't know what the machine is, but I would like to make the machine that makes the machines.

If you had three binary dollars to invest today and you had to make the decision right now in this ecosystem, where would one dollar go?

One dollar would go to silicon.

One dollar would go to making the machine that makes the machines.

And one dollar would go to actuation and energy storage.

Do you wanna name companies?

I mean, these are all businesses that I've started.

-Right. If not yours, then another's? -So...

I don't... Well, let's see.

I mean, I think in energy storage-- Would you play physical through Tesla?

Yeah. I mean, I was a very large early supporter of Tesla.

It was kind of one of the first moments where I had a real breakthrough... picking public market stocks.

You know, I was always kind of a private investor.

And then I said, "You know, we can translate this into the public markets."

And, you know, I have this three-year run where it was, like, Tesla, Amazon.

I mean, I just bagged and tagged, like, elephants.

And it was incredible.

And then at one point, you know, I had a financial downturn.

I had a big drawdown.

The SPAC phase.

Right before the SPAC phase.

The SPAC phase, I torched like four or five billion.

That was brutal. But before that, I had another drawdown.

And I had to sell my Tesla then, because I had to cover a bunch of liquidity.

I mean, I've gone through this twice.

You'd think I would have learnt my lesson.

I did not learn my lesson well.

What was the lesson you learnt?

Now what I learnt?

This risk model is sort of refined for this.

Before, I didn't have small, medium and large.

I didn't believe that I was...

I believed that I should be shooting, I should be swinging for the fences with everything, even medium and large.

And so then what happened was I just misallocated.

So I would be making multi-hundred million dollar investments into things that had a risk of ruin.

And guess what? They did. They went to zero.

And then, you know, I levered up.

So I took some money, I had a big loan with Credit Suisse at the time, you know.

And so then I was like, "Okay, I'm gonna press."

And it just created an illiquidity cycle.

And it was very difficult to navigate that.

So I've learnt to have a little bit more disciplined and, you know, be a lot more methodical and sober about this.

But it only comes from feeling it on your skin, or at least in my case, I needed to touch the stove and get burnt.

I didn't learn the first time.

-And then I really learnt the second time. -[chuckles]

Now, hopefully, I won't learn a third time.

Don't you think the AI thing is...

I mean, I can't call it AI thing any more, considering the impact of it.

But I was recently watching Demis and Dario.

Actually, I'm interviewing Dario next week.

I was watching them have a debate about how they need to come together to make sure the world survives.

It seemed really far-fetched. Every time--

I find it far-fetched, too.

Every time I've heard this in the past-- I think the catastrophising typically tends to be tied to fundraising.

-Yeah. -I think you could take...

Anybody who catastrophises in AI is probably at the moment where they're telling an investor, "My gosh, this could be the end of the world."

It's getting harder though, right?

I think people are coming to terms with the fact that the revenues are not keeping up with valuations in the AI world, and the catastrophising might be synonymous with how it has gotten harder to raise money.

Well, there's been something that's been very structural that's changed in venture capital, which I think is not...

I think, we are gonna grapple with the implications of.

Which is that this investment cycle has nothing to do with scaling IP.

This investment cycle is about capital investments.

It's about buying powered shells of data centres.

It's installing liquid cooling.

It's buying GPUs at scale.

It's about doing behind-the-meter power.

It's by buying massive ESS racks of energy storage.

I mean, that's infrastructure investing.

But the money for the-- The problem is the capital is coming from venture investors that are supposed to generate 30% IRRs.

But even the money for the infra is getting funnelled down by these hyperscalers who are raising that capital initially for something else.

And that money is trickling down to the data centre.

So if the funnel tightens there, it will also tighten here.

I'll give you an example in India.

When our private equity fund... When I look at companies, data centres have gotten to such a point that most old-school real estate companies in India today have begun to claim they're data centre companies and not real estate companies.

Again, a sign of worrying times ahead, in my opinion.

-I agree with you. -Yeah.

I agree with you.

Yeah, because there's no innovation or IP there.

It's replication.

It's trying to arbitrage people's desire to be in a market.

-Yeah. -That's never a good sign.

Yeah yeah.

So AI will be an interesting story to watch.

But from that same vein, if AI were to increase productivity, forget valuations, forget energy, forget where the money comes from, I think it's fair to say productivity will go up.

To what factor, none of us can determine.

If the productivity really goes up and what happened with the agrarian or the industrial revolution were not to happen here, and as many people don't have jobs or things to contribute or means to do things...

where does the world go?

We were speaking about this last night, but to me, some form of socialism or pseudo-socialist thinking seems inevitable.

I am a capitalist and a beneficiary of capitalism, so I will fight it, as might you.

But do you see a world where, in 50 years from now, you don't see some version of pseudo-socialist thinking?

I think there'll always be veins of it.

Yeah. And I think that we have a responsibility to make sure that the boundary conditions don't allow it to be anything more than a fringe belief.

The thing is our generation has maybe not experienced socialism, but we've heard the stories from our parents.

India had 90% taxation at one point.

The Russian story is not too old.

What happened to China under Mao is not particularly too long ago.

We've heard these stories, but your kids, the ones who are ten years old...

who won't read history will not know that socialism did not work in the past or why it did not work.

-It's a significant-- -I think it's even more simple than that.

They'll be like, "Oh, that was the past. Don't worry, I know better."

Yeah. And that's the world that's gonna determine where the world goes in 20 years from now.

I think that we have a responsibility to acknowledge that there's a set of boundary conditions that we have created for young people that make them much more prone to believe that that system is a solution.

We have... At least in the United States.

We have created an enormous student debt industrial complex.

We've saddled these young people with just so much debt that there is just absolutely no path out.

We don't allow them to have these externally validated demarcations of success.

Look, it's one thing for me to sit here and talk about being self-aware, but that's kind of smug.

The more practical thing is, I also was chasing a better car and being able to buy a home in my 20s and 30s.

That's a very reasonable path before you get into your 50s and care about self-awareness. Fair?

And so I was also able to pay off my student debt, because I only had $20,000 or $30,000 of it, not $200,000 or $300,000 of it.

My first home cost $400,000, not four million.

-So what are we gonna do? -Mm-hmm.

I've become quite sympathetic to this idea of doing something in student loans, potentially even some form of forgiveness.

[Nikhil] Yeah.

Because it's become completely, completely broken.

It is a noose on the necks of these young people.

And then also just the structural NIMBYism that exists in most North American cities is tragic.

It is creating such a dearth of housing that then the housing costs are just... they're just unaffordable.

I suspect that at the core root of socialism are those two very specific things.

And if we fix those two things, I suspect most of the people would say, "You know what? The system works for me."

And then what's left over are the fringe people that will always wanna believe in something, 'cause it's different than the majority or the plurality.

And that's fine. That's always been there.

But I think we are losing ground to people who would otherwise vote for capitalism, but for these two things that have really worked against them.

So I just think we should fix these two things.

And, you know, we need to be very courageous in doing it.

But if we did it, I think that most of this socialism nonsense would stop.

This morning, I woke up and I saw that Mamdani has cancelled gifted education in New York.

And I said, "Prove to me you're an adversary of America without saying you're an adversary of America."

In what world does that make any sense?

Explain what is gifted education?

If you are an outlier, a right tail outlier intellectually, in America you have the ability to take what's called the gifted classes.

-Mm. Right, right. -It's for the smart-- I wasn't a gifted kid, but I went to school with gifted kids.

They're really smart kids.

We should have a world that embraces those kids.

Instead, cancelled all that off, you're just gonna let them sit and stew in the same classes as the rest of us.

We know how that goes.

They get frustrated, they misbehave, they don't really achieve anything.

And that's not what we should be doing.

We should be unlocking these kids to achieve their potential.

You know, you don't take an extremely good athlete and say, "You know what? I'm gonna make you play with the two grades beneath you."

-Right. -It's the opposite.

You take the best athlete, you say, "Why don't you play two grades above and test yourself?

Go to the limit." Right?

You don't take an incredible musician and say, "You know what? Only play these four notes in this composition."

None of it makes any sense, yet we're doing that with core structural intellectual development now.

In what world does that make sense?

So I think we just gotta fix the boundary condition, so that when people see these things, they're shocked, and then they say, "This is not right."

And right now, a lot of it isn't happening.

The last question.

I have been... This is personal advice to me.

I've been fascinated with the idea of building a social media outfit out of India.

A Indian teenager today spends, like somebody I heard say earlier today, six hours on their cell phone, 'cause data is cheap, and five out of six of those hours are spent on American companies.

Apps owned by American companies.

Give me advice from your experience of building All In, being at Facebook, and also having a personal brand, which is quite big now.

What should I look for?

Is there an opportunity to build a social media outfit that could appeal to young people in India?

It won't have the network effect of having Caucasians and Asians and people outside-- In the absence of governmental support and intervention, the answer is no.

With that?

The natural momentum is for monocultural consolidation.

And the reason is because we've assumed and we've given the responsibility to an algorithmic arbiter that only values one thing and one thing only, which is engagement.

And that reduces itself to a set of human conditions that's easily understood and exploitable.

So if you think about, in a lot of countries of the world, they have their own television stations with their own endemic content.

And you would say, "Well, why?

Why don't you just carry NBC News and the same shows that we would watch in the United States?"

And the reason is because there is a decision by that government that the sovereignty and that their cultural nuances are important enough that they need to support a local endemic media economy.

If that were to happen, then what you say is possible.

If that doesn't happen, then things devolve to an algorithm that is just about clicks.

Let's say with government support. Let's say the Indian Government-- Then I think that there's something that is very possible.

I think that what's missing when you think about AI in the next four or five years is the understanding by governments that they have a responsibility to build their own set of evals that are very specifically tuned to understand their history on their terms. We can debate whether that's the truth or not the truth

and how do we arbitrate that, but there needs to be that intervention.

Otherwise, governments will be releasing...

the cultural perspectives that their population has to a third party that's effectively a for-profit corporation in some other jurisdiction.

I think that that's very dangerous.

So I suspect what they will do is they will realise that they have to have some set of expectations.

And I think when that happens, there is the ability to build these next-generation brands.

Again, going back to where we started.

The pendulum was swinging firmly into monocultural slop.

And now we are going to have a diversity of entities that do all kinds of things in many, many countries.

Now, think about the implications of that.

The fervent, fever-driven approach to have the absolute last basis point of profitability goes away.

There will be structural economic inefficiency in diversity.

Fifteen companies versus one, right?

The economies of scale decay and degrade at that point.

[Nikhil] Mm-hmm.

But what do you get for that economic inefficiency?

What you get is sovereignty.

What you get is a different capability, nuances at a local level.

So I think that that's a really important thing.

The pendulum is swinging back in that direction.

I agree.

I'm just trying to figure out...

I'm trying to build a framework of how it will look, and I'm struggling with it.

Maybe I'll come see you in March and maybe we can set an idea together.

I think that you need to first have the government set their conceptual framework up.

-Hmm. -What do they think?

Meaning, like, the parameters of it.

Meaning, they have very specific, detailed media laws around radio and television.

Those have been well-defined in every country for decades.

But the Internet is not.

They've allowed it to become this monolithic borg.

Some countries are now imposing certain conditions.

AI is the first chance to reset those expectations, because you can basically say that anything that is used by my population needs to pass these evals.

-Do you think that's a good thing? -That is a very-- Well, I don't know if it's good or bad, but it's a very powerful idea.

There is no version of that that exists for social media writ large today.

No country can say that.

But they can actually say that technically for what an AI model answers.

It's just a thing.

Do I think it's right or wrong?

I have no opinion, except that...

the conceptual framework that a government comes to on this is going to be crucial.

And then how they implement it is also crucial, because it is technically possible.

That is then the infrastructure stack on which you would build something that's endemically Indian for Indians.

And I think that the likelihood-- If you had asked me five years ago, I would have said, "Don't do it.

You're gonna burn money. It's not possible.

Five or six monolithic large global companies are just gonna dominate all of media consumption."

I actually don't think that's what's gonna happen any more.

And that's a really interesting idea.

Again, it's not about making one huge cyborg company that rules them all.

But it's about making the right company.

And I think that that's possible now.

Okay. We're gonna take this up offline.

There's something I'm really keen to do.

-Okay. -But thank you, Chamath.

This was fun.

I think it was good. How was it?

[Nikhil] You're wearing these thick jackets.

[Chamath] Exactly.

Any fleeting words? You wanna say something before we wind up?

Thank you for including me.

Thank you.

And thanks for all these really probing questions.

-[chuckles] -Yeah.

Thanks. Super.

Thanks, guys. Cheers.