All right, everybody. Welcome back to

the world's greatest podcast. The number

one podcast, your favorite podcast, the

All-In podcast. I'm Jason Calakanis, the

world's greatest moderator. With me, of

course, Chimath Polyhapitive,

>> the great great great great great

grandchild, Jason was of a hooker and

>> you saw that from France

>> and a purse snatcher. [laughter]

>> This this comes from like a history of

uh France. some history

>> uh said [laughter] they let you out of

this was this was the deal in 1719 Sachs

if you're a prisoner in a in Paris you

were offered your freedom on the

condition that you marry a prostitute

and move to the great state of Louisiana

what are you saying taking the deal

>> it explains a a certain of your

proclivities Jake I I

>> I thought you were asking me to see if

they would extend the rule for you

>> no I'm saying that your great great

great great great Grandma, I'm not a

hooker. I'm Greek.

>> That's what I'm saying very explicitly.

She was

>> We never We never spent time in a

prison. Also, of course, David Freeberg

is here. How you doing, brother?

>> Living the dream.

>> Good to be back. Missed you guys last

week. How was Brad? How did he fill in?

>> It was great. Yeah. Yeah, he was.

>> Trump account victory lap.

>> He had a little victory lap. We played

Chariots of Fire. And uh how was your

special time at blank and your time next

week at blank? [laughter]

>> Thanks for h Thanks for having me on

your show, Jel.

>> All right, we got a full docket today.

Uh lots of stories. Let's start with uh

Deep Mind's Deis Habis just dropped an

AI regulation proposal and it's um it's

pretty popular with the boys. In an ex

article, Demis called for a US-led

international AI standards body proposal

is modeled after FINRA, the Financial

Industry Regulatory Authority.

That's a self-regulatory body. And this

would be federally overseen, but

industry funded and run by independent

technological experts. Frontier Labs

would submit their models 30 days before

release. Uh, and it would be voluntary

initially, then mandatory. At some

point, the models would be assessed on

risk to cyber security,

national security, biological threats,

and other high-risisk domains.

Benchmarks would be updated quarterly,

and the body can coordinate a slowdown

in development if the situation demands

it. I guess that would be if uh there

was a cyber risk, etc. Looks like uh on

the positive side we have Elon who said

it was thoughtful, Sam at OpenAI,

Jack Clark at Anthropic, Sundar,

Satia, Jack Dorsey from Block, the

Carlson brothers. So Freeberg um

uh Freeberg, your thoughts on

>> Oh, wow. Way to really way to really uh

put in the effort today. Go ahead,

Jason. Good.

>> Just pass it to me. I'll take care of

it. Let me let me

>> What do you want me to do? Oh my god,

what an incredible topic.

>> All right, here. Let me do it. You want

me to do it, right? Three, two,

>> some of us actually care about this

topic. Let's go.

>> Okay. Yeah, you care about it. Okay,

here we go. Three, two. Here's a clip of

me calling it on the All-In podcast

first. The whole industry is going to

need to be regulated and I think the

industry needs to regulate themselves.

That's the key to this. We need to have

a set of tests that Google, Microsoft,

Amazon all agree to. Elon, hey, these

are the things we should test and they

should self-certify each model before

asking the government which doesn't

understand the models to certify them.

The industry should have an industry

certification like they do for countless

other things. I've talked about the MPAA

and the video game industry. We should

just self-certify. It's the simplest

thing in the world to do. And then we

could release the models ourselves

without the government getting involved.

>> Brie, would you like to congratulate me

on nailing it again? Well, first of all,

first of all, I thought that Demis'

proposal was really smart and

thoughtful. Now that I know that you may

have shared the same thought, I think we

should just do something different.

>> I can't win, Zach. Even when I nail it,

I hit a halfcourt shot. Truman's like,

"Move the net. Move the net." [laughter]

>> I think it's worth putting a little

definition around this proposal, which

is to form an SRO, self-regulatory

organization, because they're not purely

independent. SRO's like FINRA and the

National Futures Association, they exist

in the financial markets and they were

created to allow the financial

institutions to set their regulatory

rules, how they check each other, how

they make sure that everyone is being

safe because they're obviously all

trading risk with one another. So the

industry doesn't want to have exposure

and they certainly don't want to have

things get slowed down because that

would make the markets inefficient. So

the analogy with AI is pretty

appropriate here which is that there are

many players in the industry. They are

all trying to progress AI technology and

no one wants to have a single regulatory

body that comes in from the government

or outside that says here are the tests

you guys have to pass with your models

in order for them to be appropriate. As

we saw in California when California

tried to pass AI legislation, I think it

was about a year a year and a half ago,

none of what they wrote even made sense

at the time. But fast forward a year,

none of those kind of rules and

requirements actually map to the

technology of the day. So the purpose of

an SRO like FINR run NFA is they can

adjust how tests are being run, who is

actually running the test and make sure

the right experts are involved in doing

this, independent experts that is to do

the testing with federal government

oversight but not control. So in the

case of FINRA NFA, they report up

ultimately to Senate committee and House

committee that gives those committees

oversight of those governing bodies that

are supposed to be doing the work to

make sure that they're doing their

frigin jobs. So the SRO concept would be

that experts could be brought in from

industry that know how to assess models

for things like cyber risk, for things

like biorisk, for things like weapons

risk, social manipulation, etc., etc.

that independent body can get voted on,

can get changed over time, and because

they actually have expertise in running

software valves and running tests like

this, they can operate at a faster pace

than setting up a new government agency.

So, it's it's kind of a very elegant

solution. And I think it's why everyone,

to your point, Jal, and I I'll say this

is right, the industry recognizes that

there needs to be some degree of

oversight and checkpoints here. And I

think that this could actually solve

that problem. So that's why I think

everyone's kind of climbing on board

with it because it doesn't actually hand

stuff over to the government. It says,

"Hey, we're going to get the right

people to to take a look at these things

and the government is going to have

oversight ultimately."

>> Did Anthropic and OpenAI have a point of

view?

>> They both signed up to it. I don't think

Daario directly, but Dario's president

gave his thumbs up and then I think Sam

gave his thumbs up

>> which means they're on board. Saxs, is

this the best of the uh possibilities in

your mind? uh is the industry regulating

itself after they have now provoked

governments around the world to be so

concerned about this issue.

>> Yeah. And I, you know, I talked to

Dennis about this and this may surprise

people, but I told him that I could

potentially get on board with this,

speaking just for myself, not on behalf

of anyone in the government because I

thought that an SRO, again, a

self-regulatory approach would be

infinitely better than creating a new

government agency that I think would

rapidly become a DMV for AI. Dario calls

it an FAA for AI. The government does

not have the expertise to evaluate AI

models. The criteria are changing too

rapidly. you're going to very rapidly

end up with a queue where all the models

would be waiting to get tested and it

would start with a month-long delay. It

would end up being many months and we

would just lose the AI race. So, I think

an SRO approach would be infinitely

better than that if it was done right.

And I outlined for Demis

criteria or conditions that I thought

were really important to in order to

make this work. And if I could, I'll

just run through them

>> please.

>> All right. So number one, I think the

SRO has to have broad representation

from within the industry, the AI

industry. It has to include startups and

open source. It can't just be the three

biggest labs, you know, can't just be

>> the fix, right?

>> Yeah. Exactly. And that's precisely to

avoid the problem of regulatory capture,

right? If you have a diverse enough

group of interests being represented,

it's much harder for this to turn into

red capture. So for example, I think if

you had Jensen, Elon, Zuck, and maybe

Mera because she just launched a very

interesting

>> open

>> platform that's based on open mach

capture problem to a large degree. So

that's number one. Number two is I think

that this body should only be reviewing

frontier models, meaning the true

frontier. The models that really

represent an advance in the

state-of-the-art of artificial

intelligence and models below this level

should not be held up from getting to

market. And I do think that is a big

risk under regulations is that the

leaders of the market use this as a way

to tie up lesser models. And there's no

reason if a model is not at the

frontier, why hold it up? Okay, so

that's

>> so they have to be in maybe the top 10

performers, top 20 performers on the

benchmark test.

>> No, I think I think when they benchmark

on key dimensions of intelligence, they

have to represent an increase above

where the current state-of-the-art is if

it's not a step change, then how are you

dealing with some new incremental risk,

right? I mean, this is all about dealing

with some sort of incremental

catastrophic risk that could be

introduced by some new step change in

intelligence. And that brings me to

number three, which is I think this body

should be dealing with catastrophic risk

only. And to my knowledge, those right

now are cyber and CBRN, meaning it's,

you know, chemical, biological,

radiological, nuclear. So it should not

be things, for example, like

disinformation or microaggressions. This

should not become a speech regulator,

you know, or just, you know, things that

seem kind of trivial. The only reason to

have this is for truly catastrophic

risk. So that's number three. Number

four, and Deus mentioned this in his

post, is that I think it should be

voluntary first. This new organization

should prove it works before it gets

legally enshrined and becomes mandatory.

And then number five is this should be a

substitute for a new regulatory agency.

If it's just additive, then it defeats

the purpose and there's no real reason

to support it. So again, I think this

has to be a substitute, not an addition

to a bunch of new regulatory structures.

So I think if you did those five things,

I think this becomes much more

palatable. And Demis said, I mean, he

didn't put all these points in his blog

post, but he did say to me that he was

bas.

So I think if those notes were adopted,

this is something that we could

potentially get on board with. That

doesn't mean I don't still have

concerns. I'm quite concerned for

example that you know I think Daario has

expressed support for this however I

think this is just an opening bid for

anthropic meaning they'll take this

thank you very much this is more

regulation than we have today but that

won't be the end of it right this will

just be the stepping stone to get what

Dario has now called for many times

which is the FAA for AI and if I could

let me just as as a final point I just

want to explain what the FAA does

because people need to understand you

know FAA for AI sounds really nice, but

actually it's a really extreme proposal.

What the FAA does, among other things,

is approve new airplane designs. Okay?

And specifically, it requires what's

called a type certification for any new

aircraft design or major changes. And

for an entirely new aircraft design, it

takes 5 to 9 years

>> to get the certification. And if you

merely want to amend a certificate, I

guess for you know major changes or I'm

not even sure how major the changes need

to be, it takes three to five years. So

the Boeing 737 Max, for example, took

about 5 years. So this is

permissionbased regulation. There's no

approval, no flying commercially. It's

safety first. Look, that might make

sense in the case of preventing plane

crashes, but when you're talking about

AI models, you're talking about

replacing a system that is releasing new

versions every couple of months with one

that is potentially fully under the

control of government, fully government

approved. Everything has to be

certified, and you could expect the

timeline to go from months to years.

Again, I think we'll just simply lose AI

race if that happens because China is

not going to abide by those rules. So

just to sum up, if my choices are

between FAA for AI or what I would call

the DMV for AI, I would much rather go

for Demis' SRO for AI, the

self-regulatory approach. But we really

have to keep it honest and pure because

again otherwise it'll just be the

opening bid in a coming new wave of

regulation and it will be the vehicle

for massive regulatory capture.

>> To your point, it can't restrict.

>> Yeah.

>> Can't restrict open source. I think

that's so important because all of these

other efforts require money that you

have to spend which is always where

regulatory capture happens and you have

to enable startups and open source to

compete effectively.

>> Shimoth, any thoughts on this new

self-governing body?

>> I think it's really important and I hope

it happens quickly. The thing we have to

keep in mind is there's going to be a

torrent of money that's going to try to

influence both sides of the political

aisle to

regulate this in a way that creates some

form of regulatory capture. We just

don't know what. And so the faster we

avoid that off-ramp by actually

establishing a set of rules and

superseding the need for federal

oversight is a really important thing.

Now, at the end of the day, you still

have federal oversight in some ways

because you still have commerce that

plays a huge role in these standards.

You still have the DOJ. So, it's not as

if it's going to be a wild west. But

what it prevents is a handful of actors

using their balance sheets and their

capital to essentially pull the ladder

up. And I think if that happens, we're

in a really bad place. So I think Demis'

proposal makes a ton of sense and we

should just get on with it.

>> All right.

>> Well, yes. But provided I mean again

just provided that I think we we make

sure that I mean look in my view there

there are five conditions but I think we

do have to make sure it's pure. Even in

the FINRA example, that's the analogy

that Demis used was that we should set

this up in the same way that that FINRA

is set up. FINRA does report in

ultimately to the government. It reports

into the SEC. And so, you know, if we

are going to set this new SRO, where is

it going to report to in the government?

There's going to be a huge food fight

over that and it will then be subject to

political pressure. The software

industry has never been regulated in

that way. We do not have a dedicated

regulator for software. We're right, but

those issues are important. But my point

is, h I'm just saying these things are

never ideal. But if the choices are we

kill open source and we lad pull the

entire market, so there's a duopoly or

there's this, I'd say this

>> for sure. And and that's and that's

that's the crux of my argument is it's

definitely the lesser of two evils. I'm

not sure those are the only two choices,

but increasingly there's no question

that the pressure is coming to regulate

AI more and more. And frankly, this all

goes back to anthropics government.

>> They poke the tiger. They poked the

tiger.

>> Yeah. Well, it's it's more than that.

>> They're funding the meat the tiger.

>> Yeah. I want to give an update on that

actually cuz

>> I would say poking the tiger of like the

American public getting really freaked

out and then the government stepping in.

Yeah,

>> totally. And there's a couple of data

points on that actually. I just want to

give a quick update. So in October of

last year, I tweeted that Anthropic is

running a sophisticated regulatory

capture strategy based on fear-mongering

and everyone kind of went crazy over

this. This was again like a very hot

take or spicy take at the time. Back

then people thought that I was beating

up on a little startup. Now I think

everyone can kind of see the truth which

is look this is not a little startup.

They already have a trillion dollar

market cap valuation. Gavin Baker thinks

it'll be at three trillion after they

IPO.

This is actually one of the biggest of

the big tech companies and they are I

think by pretty much every criteria

including revenue the leading AI

company. So I think people can see now

that they have enormous resources and

they're putting those resources behind

an effort to like Jimoth you said pull

up the ladder and it's classic regatory

capture and there was an article in

Politico just the other day. is called

inside Anthropic state-by-state plan to

ratchet up AI rules. And what it says is

quote AI giant Anthropic is pursuing a

strategy of oneupmanship that encourages

states to impose increasingly tougher AI

guard rails rather than a line around a

single set of regulations. So the basic

idea is that they get a set of

regulations passed in one state like

California's SB53

and that was then supposed to be the

model at least for all the blue states.

But then with each new state, they

actually make the regulations more and

more strict, more and more

all-encompassing. So there's not

actually a stable equilibrium. What

they're trying to do is drive each

incremental state to more and more

regulations. And so this is actually an

article explaining that they're doing

the opposite of trying to create what we

wanted, which was a single national

framework. they actually want the

patchwork because they're using again

the pressure they're creating at the

state level to impose more and more

regulations. And again, what I said last

year was that Anthropic was principally

responsible for the state regulatory

frenzy that is damaging the startup

ecosystem. Again, everyone went crazy at

the time. I think now there's plenty of

evidence showing this is their agenda.

And um

>> and by the way, they're going to win

that because states have great

sovereignty rights and like we're seeing

with self-driving the states are going

to decide. It's not going to be a

federal mandate. The states get to

decide just the nature of the US.

>> The reason why

>> they're going to they're going to win on

that in a couple of states, right, Zach?

Just realistically,

>> they've won in a bunch of states. They

already won in California and Illinois

and New York and I mean they're winning

in all the blue states and maybe even

some red states. But look ultimately the

reason why anthropics arguments are

finding purchase is because when you go

to the government and say please

regulate me you know you should have

more power there there's hardly anyone

in government who will ever say oh no no

no we're not qualified like we don't

want government [laughter]

>> yeah there are very few people who are

principled that way and most people in

the government will say thank you very

much what else can we take and this is

the mistake that I think a lot of people

in the tech industry are making is they

think that they can just buy off

politicians or the political system by

making concessions. No, that will just

lead to a ratcheting up of the pressure.

The government will be happy to take

this and then come back for more and

more and more until it's fully under

government control. So, at some point, I

think these companies are going to have

to grow a spine and fight and decide

where they're willing to draw a line.

And if Demis' SRO is the line, if

they're saying, "Okay, we think this is

the right solution and we're going to

fight here and this has to be it and in

exchange for this we need preeemption

and we need, you know, other things

written into law that make sure this is

where the line is, then I think it can

work. But I think if you're just kind of

offering it up for free and all these

companies are just going to say, "Oh

yeah, regulates, give us the SRO." That

will not be the end of it. That will

just be the opening bid and the

government will come back to take more

and more and more. Yeah. All right,

let's keep moving through the docket

here. Stripe, which is still a private

company, much to the chagrin of many of

the shareholders, I think. Uh, now as

they go into the second day [laughter]

on this, yes,

I mean, I'm in I'm in a couple of funds

that have large positions like go

public, boys. They are bidding bidding

53 billion for your alma mada, David

Sachs, PayPal, which is a public

company. Stripe and the private equity

fund Advent

are jointly offering to acquire PayPal

for about 60 bucks a share, which is a

small premium. Most people think it'll

go for more like $70 a share. PayPal

stock jumped on the news obviously. And

>> were you able to get to the bottom of

this that was it just Stripe and Advent?

Because then somebody else reported that

it was also Block.

>> Yes, Block is coming in as well.

>> It's so confusing. every other media

source is like they're all over the

place on this.

>> Yeah. No, it's I think it's because it

was a breaking story and maybe they were

trying to keep it quiet.

>> It's a huge deal though if if Block is a

part of it versus if they're not. I

think

>> Yes. And Block, formerly known as

Square, is Jack Dorsey's uh payment

company, one of the few entrepreneurs to

ever create uh two decacorns in our

industry. And uh they're contributing 17

billion in equity in the combined offer.

how they um chop up what's inside of

PayPal would be the big question.

Obviously, they own,

you know, a number of different brands

including Venmo in addition to PayPal.

That might go really well with the I'm

just taking a guess here with the block

assets. Stripe owns Bridge. That's their

stable coin infrastructure company they

acquired for a billion dollars in 2025.

PayPal has SIUSD which is already in

circulation. That's their stable coin.

So, stable coins are part of this. But

the biggest thing is PayPal is still a

juggernaut. Sachs 439

million consumer accounts. You did

something right there 25 years ago. It

still the test of time.

>> It's kind of amazing. It really is.

>> Isn't it amazing that it's still that

strong? Yeah. It's weird when brands

keep going for that long.

>> But the problem is that the product is

getting very long in the tooth. I think

it's only growing 7% a year which is a

lot on the base that you know it's it's

grown to it's a big base but the product

has become somewhat obsolete and in a

way it's a legacy product. I'd be

curious to hear from the Stripe guys how

they would fix that cuz I think that's a

very hard problem to fix. Maybe they

wouldn't maybe they would just run it

more efficiently and kind of milk it

>> kind of do a private equity play. The

different question

>> the interesting question to ask is

what is the only kind of baby that

advent and stripe and block could have

together and I think there's one which

is you are creating a competitor to Visa

and Mastercard

>> because you now have upwards of 6 or 700

million accounts. You have massive

stable coin infrastructure.

You have all of the riskmanagement

infrastructure that Stripe has built

over the last 15 or 20 years. The big

critique of Stripe's business model

early on was they had to build so many

value added services because everybody

always thought the take that they could

make as a middleman sitting on top of

the traditional rails would effectively

get competed away. Now to their credit,

they've done such a good job that that

hasn't happened. But I think what it

means now is you can vertically

integrate and go soup to nuts. That is

probably the most obvious

thing to make out of it. So that now

Stripe gets access to an ultra- lowcost

set of payment rails literally like to

zero brings it everywhere all over the

world. So does block advent can pour

money into it. So it's quite powerful if

it comes together. Rbert, what does this

say about private market companies at

scale and Stripe potentially never going

public? I mean, how does a private

equity firm get their return on this

investment in 2, three, four years? Do

they wind up selling more of it to

Stripe? What are your thoughts here on

the structure and capital market

implications here?

>> I think there's going to be more of

these kinds of deals. If you look at

Ryan Cohen's bid for eBay, I think it's

probably a second dot on a line that I

think is emerging,

which is folks

that are call it AI native are looking

at call it first generation digital

native businesses that have become

mature and old and stale and aren't run

by the founders anymore and have not yet

realized the opportunities with AI, have

not yet realized their potential. or

overspending in a lot of ways. And when

you take a look at those businesses as a

modernday AI operator, you're like,

"What the hell? This thing is so under

uh utilized. They're not using their

network well. They're not operating

well. They're overspending. They're not

using AI well." And there's a set of

opportunities that become quite obvious.

And I think the capital markets as we've

seen with like Josh Kushner's roll up of

accounting firms and General Catalyst

has a project like this where you can

kind of use capital to go buy you know

in those cases traditional services

businesses and AIify them. I think this

is part of a line of maybe looking at

traditional digital businesses and

AIifying them. And there's a long list

of these. There's a couple dozen of

them. So I think if you looked at the

public markets and you said, "Hey, where

are all these kind of software

companies, network businesses that

emerged in the early part of the

internet or even in the more recent part

of the internet, aren't run by their

founders anymore, have stalled out,

there's a massive opportunity. Now the

question as a capital provider is who do

you partner with to go and execute that

operational revival of that business?"

You're not going to go hire some

Mckenzie consultant to do that work for

you. It's got to be the best of the

best. It's got to be the right players

in the business. So, I think Ryan Cohen

has proved his metal obviously with some

of the things that he's done with Chewy

and GameStop and that's obviously

debatable. I spent some time

interviewing him to understand his

>> This was on the Allin interview program.

You can go to our channel and find it

there. It's last month.

>> Thanks for the plug. And obviously, when

it comes to payments, who better than

Stripe and maybe Jack Dorsey plays a

role here. And and by the way, I think

because capital I mean, if you think

about that $17 billion equity

contribution, what that technically

means is Stripe is selling and Block is

selling $17 billion of equity to the

cash investors. That cash is then going

to buy a PayPal. Therefore, Stripe and

Block end up owning a piece of PayPal.

The private equity investors own a piece

of Block and Stripe. And what is not

clear in the deal docs that were

published cuz I don't think it's

relevant to the public markets is who's

actually going to operate PayPal post

close. And my bet would be that they're

going to hand it over to the Stripe guys

and say you guys

>> I think that's clear. Yeah. Because

they're the most qualified and they will

have the biggest stake in it. Uh you're

>> so I think I so I I will make a

prediction. I think that eBay and PayPal

are probably the beginning of a wave of

mega deals of call it flaccid, you know,

digital businesses

that can be revived, okay,

>> with the blue chew of capital and the

right operator and I think that there's

probably a big

>> a big wave of this to come.

>> The other thing is this is probably not

the final clearing price. I think the

price is probably another 10 to 15%

higher from here. And and I will say

that there is a certain individual that

must look very closely at putting in a

competitive bid. Oh, a certain

individual who may may have his

fingerprints on the original PayPal who

might also have $4 or5 trillion in

market cap to play with who also made a

$60 billion acquisition recently. We

don't have inside information here.

>> To your point, Freeberg,

>> correct?

>> This is becoming a playbook. There's a

company called Bending Spoons that just

went public. They bought a bunch of

non-founderled assets. AOL for 1.4

billion, Vimeo for 1.4 billion, We

Transfer, Eventbrite, Bright Code with

him.

>> I was just DMing with him.

>> He's He's awesome. I've hung out with

this guy. This guy is an absolute

freaking operational killer. He he

bought Evernote.

>> Yeah. In Milan.

>> And yeah, he runs the whole thing from

Milan.

>> He bought Evernote and he just goes in

and he diagnoses these businesses. He's

like, "How are they being over where are

you overspending? Where are you

underpending? what are you doing wrong

with the product and what are you doing

wrong with marketing and he just faking

fixes it and he's just a killer and he's

taken all of these what were called web

2.0 I know businesses and he's

revitalized them, rolled them up and

printing cash out of them and leverage

the cost to run them lower.

>> He's using young AI first executives

from what I'm talking

>> totally. It's a great call out JL like

bending spoons is the roll up of this

sort of strategy but for these mega

deals I think there's more of them to

come. I will say uh you know the the

high order bit here uh which we talked

about for a couple years was venture

capital was on the ropes for a couple of

years under the wrath of Lena Khan and

then once Trump got elected all the

executives working in corporate

development said hey looks like M&A's

back on the menu and now we're seeing

deal after deal after deal get

consummated people are no longer scared

of doing deals Uber just bought delivery

hero today uh That's going to like jump

their revenue by 20. Yeah. And that's

going to jump their revenue by like

they're getting diluted 10%. It's going

to jump their revenue 24% or something

crazy like that.

>> And this is going to be I think the big

story the next couple of years and all

this liquidity. Talking to LPs and

family offices, which I do on a regular

basis, they're all like, "Hey, when's

your next fund? Hey, when's the next

deal?" Because now people are believing

in venture because of the SpaceX

distributions and all this M&A. And we

have four or five companies that got

bought since Donald Trump was elected

president. Thank you my President Donald

J. Trump for putting M&A back on the

menu. Sachs M&A back on the menu. Why

didn't you make a bid saxs for PayPal?

>> Been there, done that.

>> Been there, done it. Okay.

>> No, but look, you have to have

synergies.

>> There was a moment, this was like 15

years ago where they asked Sachs to go

back and be the CEO.

>> That was right. I remember that at the

poker game. Yeah. He and I immediately

flew to Vegas and spent the weekend

there to think about it. [laughter]

>> Like, you know what?

>> I wasn't No, they didn't ask me to uh

but I was

>> Well, no, I I never got the offer, but

it was down to like final two or

something and it was between me and

someone else. And actually, they ended

up going with some, you know, like

traditional like credit card executive.

And to be honest, that's why PayPal has

stagnated is that as soon as it was

acquired back in 2002, they basically

blew out like all the founders, all the

founding DNA and it was just kind of run

by, you know, consulting types. You got

to remember at that time it was acquired

by eBay and Meg Whitman had worked at

Proctor and Gamble and Disney and she

spent like eight years at Bane and it

was like a very corporate mindset. I

mean among all the internet companies of

that era it was definitely the most

corporatist and they saw the founders

the founding generation at PayPal is

just a problem just a bunch of like

cowboys they couldn't control they made

no effort to retain them and I think

they were kind of relieved when they all

left and then that's what created the

PayPal mafia was that you know normally

in an acquisition you'd lock up all the

talent but in this case

>> they locked them out they're like these

guys hard to manage change the keys

>> I've said for a long time it's a

misnomer to call it the PayPal mafia.

It's really the PayPal diaspora.

>> Totally.

>> Our homeland was taken over and they

burned our temple and then kicked

everybody out.

>> Yeah.

>> And that's why the whole PayPal mafia

got started with all those companies.

>> But as a result of that,

>> for for decades, I don't say anyone's a

victim. That's

>> Look, when you when you acquire a

company, you get to decide what to do

with that asset.

>> Totally.

>> So, I mean, that was just the reality.

But it's not like, you know, I don't

think anyone was bitter about it.

They're all like, "Okay, this give us

the capital to go. I'll do the next

thing we want to do."

>> Well, the new CEO, by the way, Enrique,

is really aces. Uh, I've met him before

and they're doing a great job. Um,

apparently, which is why they probably

got these offers because they've been

tightening that business up for the last

couple years.

>> Well, no, the reason they got these

offers is the market cap is down to, you

know, was down in the what, like 30

something billion. I mean, this is a

company that was worth 200 billion,

wasn't it? Roughly

>> 322, I think, was the peak.

>> Mhm. And before this offer, it was down

to what 30 to 40 billion. Yeah.

>> So the reason why it's attracting offers

is it's so beaten up. And so now the

question is, can anyone else do

something with it?

>> To your comment about you've got to have

synergies. Doesn't it seem to be the

case that in this era the the core

synergy that any great operator can

bring to the table in this sort of a

scenario is AI? Like you can leverage

whether it be in this business or others

you can leverage tools that drive

automation that drive product

development that drive improvements and

efficiencies across the organization

that make the product actually better

for the user etc etc that simply

>> potentially obviously being well

implemented. Well, look, I think you

have to have a product vision of how you

would use AI to make the whole user

experience better. And yes, you're right

that you could just use AI to drive

efficiencies and that'll improve your

profitability and earnings. And so on a

financial level, you could make the

acquisition work. But it seems to me

that the existential issue for PayPal is

that you're dealing with a product

that's 25 years old. I mean, it's the

same thing that we created back, you

know, like 27 years ago. I mean, it's

changed a little bit, but not that much.

And the problem is that that that

interaction model is legacy. And so,

unless you've got a a vision of how to

resuscitate it and rejuvenate that that

product, I think, yeah, it could be a

good financial play. Maybe

>> I think they're buying the accounts.

>> Yeah. I mean, what you're saying,

Jamoth, is Yeah. what you're saying is

interesting because with Stripe, I mean,

this is the advantage that Stripe has is

that they have a ton of merchants,

right? So, they've they've become the

preferred mechanism for merchants to

basically accept payments via APIs. And

I think they're doing about two trillion

a year of annual transaction volume. I

think PayPal is doing 1.7. So, actually,

Stripe is a little bigger than PayPal

now. But the thing that PayPal has that

Stripe doesn't really have is the

consumer relationship. So, you know,

over 400 million active consumer

accounts. So, you're right, Jimoth, that

if if somehow you could combine the

merchant relationships with all those

consumer accounts and then bypass the

credit card networks cuz there'd be a

lot in theory there could be a lot more

on us transactions.

>> Exactly. And

>> that's where the value is.

>> PayPal already owns Brainree. So, now

you have Stripe and Brainree that

effectively were competitors that won't

be. And then what block gives you is an

entire point of sale infrastructure and

you get the cash app. So you put it all

together and I think it's a it's a shot

across the bow for Visa and Mastercard.

>> Brainree is the other one that I think

you just mentioned there Chimath that's

important because that is a very strong

business that you don't even know that

PayPal owns. Venmo is also that speaks

to a lot of young people. So you're kind

of getting two generations. You're

getting Gen X and millennials. Uh a lot

of bang for your buck there. Yeah,

>> what Zach said is true. They have enough

of the things to go end to end on their

own rails.

>> That is a very

>> Yeah, the question is whether you can

package it all together in a way that

the consumer will actually choose

because it's one thing to say, well, we

take the merchant relationships of

Stripe and the consumer relationships of

PayPal, we don't do that. But what if

the consumer doesn't want that?

>> No, you don't do that. I think what you

do is you go to places like all of the

merchants that use Stripe and say,

"We'll give you a 3 or four or 5%

discount and they'll be like, "Okay."

And so you'll see these prices that

just, you know, fall everywhere. Like

imagine if Shopify was like to all their

merchants, okay, you have two choices,

the old way or the new way. The new way,

you put another two or three or 4% in

your pocket. Of course, they're going to

pick the new way.

>> Well, and this is the paradox of like

modern M&A. You know, if you look at

protecting the consumer, this will

ultimately be great for the consumers.

This is going to lower the prices on it.

They're not buying this to

>> Okay, you're saying something really

interesting. It is so good for consumers

if this were to happen. This is the

exact reason why if this had happened

two years ago,

>> yeah,

>> this would have been the antitrust

equivalent of a coloctyl exam. I mean,

>> oh god,

>> you would not even get one step close to

doing this deal two years ago.

>> Well, that's that's really interesting

actually. I mean, the key question with

antitrust is how do you define the

market? And so, if you define the market

as, you know, APIs for merchants, then

JCAL, it would be Stripe versus

Brainree. And then the government would

say, well, that's you can't consolidate

share.

>> However, if the real market is Visa and

Mastercard, that's the ultimate duopoly.

And if PayPal can add competition to

that market, which is infinitely larger

than APIs. Exactly. Then

>> it's actually pro competitive. So how

you define the market determines whether

it's anti-competitive or prompetitive.

>> And those guys are smart enough and

they've read enough books where they

won't [ __ ] this one up.

>> All right, let's get to the next topic.

>> Somebody else is suing Open AI. This

time it's Apple. On July 10th, Apple

filed a 41page lawsuit against OpenAI

over alleged alleged stolen trade

secrets. Apple says Open AI stole their

IP to develop their consumer hardware

device. Remember, we had um

Sarah Frier at Liquidity and I uh probed

her on this new device and she said it

was very human and lovable. She gave us

a little bit of the goods. Well, it

turns out Apple is alleging that maybe

this is partially their IP. Tang Tan,

Apple's former VP of iPhone design, is

OpenAI's chief hardware officer. He

allegedly directed Apple job candidates

interviewing at OpenAI to bring quote

actual parts to interviews to quote show

and tell [laughter] in the interviews.

Changu, former Apple senior technical

engineer, sent this text message to a

still employed Apple colleague. Quote,

"lol, I found out I can access the

network storage. So funny." During all

of this, OpenAI has poached over 400

Apple employees over the last year or

two. Big numbers of poaching. Apple and

Tim Cook have seen enough chimoth. Tim

Cook green lit this. As insane as this

is, Sam Waltman has found a way found a

way to screw yet another party. Screwed

Elon, his first benefactor.

Chimati, if you remember correctly, the

default for iPhone AI was supposed to be

chat GPT. So they took this

relationship, Sam took this relationship

where he got to be the default on the

most important platform for AI, the

iPhone, and now it's wound up in a

massive lawsuit. What are your thoughts

on this?

I haven't really seen Apple

very latigiously in 25 years in Silicon

Valley.

So that's obviously a concerning data

point for OpenAI. They're very reactive

more than they are

proactive on these things. So, there

must have been something that really

really upset them.

>> Egregious. Yeah.

>> So, I don't know. It's going to take a

court to sort this out. I don't really

want to gossip because like who knows

what's actually going on and who said

what and blah blah blah, but nobody

should be stealing

things from their former employer.

Nobody.

>> Obvious.

>> You're just not allowed. It's just

obvious. These people are very, very

smart and they're very successful. And

you know that's why OpenAI probably

wanted them and that's why they wanted

them you know and you come to them with

the collective wisdom of what you've

accumulated and I think that's

sufficient. You don't need to especially

as a senior person do this. So I just

hope that this stuff isn't true because

I think I don't think that Sam or Sarah

or anybody else there are trying to

induce this to happen. I don't think so.

>> Yeah, I doubt they induced it but I do

believe that it's true or Apple wouldn't

have brought it. Sachs when we look at

this maybe you could open the um

aperture here if you want or you can

just go very detailed but the nature of

we have a free market we don't have

non-competes in California generally

speaking you can just employment at will

go where you want but we have had

instances you know whimo famously uh you

know brought some

IP to Uber when they did Travis and the

team said leave the building your job is

rescended you don't get to bring that

information here. In this case, it seems

maybe they didn't induce it, but it

occurred for some period of time. So,

take us through big picture

what you think is going on here and what

it means for the industry.

>> Well, like Jamas said, I have no idea

what's going on here. I mean, these this

is a lawsuit. The facts are all alleged.

We don't know. It's going to be

adjudicated. So, I really don't want to

opine on what happened here. But if

people want to know a very simple rule

of thumb for how to avoid these types of

disputes is just when an employee leaves

their previous company and joins the new

company, just don't take anything with

you.

>> The only thing you can bring to your new

job is what's in your head.

>> Your memories.

>> Your memories. That's fine. Whatever is

in your head, you're allowed to take.

But never leave with anything else.

>> No thumb drives, no CD, no documents, no

nothing.

>> Justip what's in your is okay.

Fraberg, any thoughts here on

just the

number of lawsuits that seem to be

piling up over at Open AI? Bad luck.

>> Couple dots make a line, I guess.

>> Okay, there you go. Very well said.

Couple of dots make a line. Okay, SpaceX

had a data leak this week. They launched

Grock Build in public beta at the end of

May. The newest coding model, Grock 4.5,

powers Grock build. I've been playing

with it. It's extraordinary. It's a

coding tool that works inside of Kurser.

Uh, SpaceX previously told users,

Shimoth, nothing from your codebase is

transmitted to XAI servers during a

session. But what actually was happening

is every time a developer or according

to reports used Grock build the tool was

sending their entire codebase to SpaceX

cloud servers out without alerting the

users not just the files that were

needed to do that specific coding task

just everything passwords API keys could

have got pulled up there all the uh

change logs etc. Uh the privacy setting

was supposed to stop this but it didn't

work. SpaceX quietly disabled the upload

on July 13th by flipping a switch on

their servers. Elon Musk, friend of the

pod, promised on X that all previously

uploaded data has been deleted, I guess.

Uh, and in response, SpaceX open- source

rock build. That's their harness. So,

that's another opensource win or win for

the open-source community and AI

sovereignty.

You got any kind of thoughts on this?

Obviously, this was not intentional, but

trust is important uh with these models

as we've been talking about for the last

couple of months here on the All-In

podcast.

>> I would actually connect this to my

comments on CNBC earlier this week,

which built on top of Alex Karp's

comments the week before.

Privacy in AI is very fragile and it's

very brittle. And this is despite the

best efforts of great businesses. Like,

you know, you may not like Elon for

personality quirks, but he is incredibly

trustworthy. He's overly

transparent. And so, to their credit,

they shut it off immediately. But my

takeaway is that there are all kinds of

non-obvious data leak vectors lurking in

AI. And so if you think that you're

going to flip a ZDR switch, zero data

retention, which is the magic term that

the industry uses to tell you that

everything's going to be okay.

I think the answer and the message

should be it's not going to be okay

because you can't guarantee any of it.

So the model companies when they give

you these zero data retention policies

are probably trying their best. But I

think the reality is you are leaking

information where you don't know it. and

they despite their best efforts may

still have trap doors that they don't

even know about until it's figured out

by somebody else like in this example.

So all of this speaks to you have to

have a stratified ecosystem. You have to

have third parties. Now look that's very

biased for me because it's in part what

we do for large enterprises at 8090 when

we implement our software factory. But

the reason why it's working so well is

this exact reason. You need an

independent third party layer to

interface to these models to manage this

exposure because there are trap doors

everywhere.

>> And that's what Sachi just said in a

really interesting blog post. Did you

guys see that?

>> Yeah,

>> I thought that was excellent.

>> The reverse information paradox.

>> Yeah,

>> that's exactly the the takeaway that he

left with. He was building on Alex

Karp's supposed crash out. You know the

point that Kart made about how

enterprises who have technical ability

want control over their compute models,

weights, data and alpha. But he he went

further with that idea. I mean he

started with Karp's idea but then he

kind of provided a recipe a road map for

how enterprises should operationalize

that. And what he says is that

enterprises they have to establish a

real trust boundary with private eval

proprietary learning loops inside the

tenant decoupled orchestration

and the explicit right to fine-tune

their own outputs. So he kind of goes

through a litany of fairly technical

things that enterprises should do in

order to achieve the operational control

that Karp was saying that enterprises

really want over their AI compute models

and data their alpha. So it's really

interesting. I think now there's you

know a virtual almost like college dorm

session going on between the leaders of

these companies who are brainstorming

some of these concepts and now extending

them. Right.

>> And what's happening is you're starting

to see the formation of not really an

alliance but like an ecosystem

that is trying to create alternatives to

you know a monolithic closed model stack

which is where anthropic and to some

extent open AAI want to go is they want

you to be locked in to their to their

stack right their models their harness

they control the data all you know all

of that and now you're starting to see

all these different companies

>> and you pay a huge premium for the

privilege for them to do it, which is

even more insane. So, I I saw this data

and Nick, maybe you can find this

companion clip. The companion clip I'd

like you to find is Eric Glyman, who's

the CEO of RAMP, was on Squawkbox, I

think today, talking about a new feature

where you can manage the token maxing of

your employees through your ramp card.

But the data that I saw was that a

million tokens on Fable is about sachs

56 bucks. A million from soul is about

26 bucks which is the same as quad 48. A

million input tokens from on Gro is

about $1.50.

>> Okay.

>> Z is about a $150. Elon's about a dollar

and the Chinese models are 50.

>> Wow. So on top of the whole data

sovereignty

bleeding your alpha away, can you

imagine that you're paying 56 bucks as

well per million input tokens for that

risk? That is insanity.

>> I'm using perplexity computer and they

started supporting Grock and they

already support GLM52. So when you're

like you're using Claude or OpenAI, you

can only use their model. So I started

effing with the different models and I

gave it all the same basically PRD and I

said I want to make a podcast player

that deep link. So, like if we were

talking about, I don't know, Mythos, it

would play me all the miso methos clips

across all the different tech and

business podcasts, but make it into one

stream. And I was like, this would be

like really helpful for me for prepping

for the show and just be interesting. I

did it. It took a couple of hours. It

cost $11 on the new Grock. It was

hilarious how cheap it was. And then

adding to this, I don't know if you saw

>> Sorry. Did you try to do it on Fable to

see how much more expensive it was?

>> I didn't. I didn't because I was out

[laughter] of Fable credits on my $200

account. So, you know,

>> look at this clip here. Nick, play the

clip from Eric Glenn. That's kind of

interesting.

>> We're thrilled to be launching token

spend management today. It's available

to RAMP and non-RAMP customers.

>> And he's exactly right. Over the last

year, I looked at the stats this

morning, token spend among RAMP

customers has grown by 21 times.

>> 21 times.

>> 21 times.

>> Not 21%, we're talking about 21 times.

>> That's exactly right. So being off by a

few pennies as a CFO uh actually might

be quite nice. At the rate it's going,

it might be several dollars. And and

look, like I I think that for uh many

CFOs, they're often very surprised by

the bill because what the AI companies

have functionally set up is you have a

tab. you can spend as much as you want.

It's very hard for CFOs to see

proactively what people are spending on

and every time they're introducing new

models, the rates often go up and so

there's very misaligned incentives. So

part of what we're trying to do is make

it easy for CFOs to see the spend,

understand the spend, and control it.

>> Thanks, Nick. He's saying something so

important there because if your

engineers are going off randomly in an

unguided system and then just ripping

through million tokens at 56 bucks, what

he's talking about is the eventual

downstream impact to earnings. And that

eventually a bunch of these public

market CFOs are going to show up to Wall

Street and they will have missed

earnings because they're upex at some

point. If things are 21xing every few

months, somebody's going to miss a

quarter. I don't know who, but somebody.

And it's not just going to be, you know,

I was speculating it'll be a few pennies

here or there, which they'll have to say

is because of token spend. He's saying

it could be as much as dollars at this

rate, which also could be the case. I

think the point that we're all trying to

make is unless you get a control of this

and you can directly say how much money

you're making, this is a bridge to

nowhere. It is a money burning furnace.

>> The good news is this is all creating a

massive market opportunity. Sachs, Bit

Tensor, Subnets, GLM52 hosting Grock

4.5. Now

>> in Inkling, Inklink mirror Marott's new

model in everybody's now saying, "Hey,

wait a second. I can give you a better

deal. You're paying two bucks. I can get

you one buck. This is

>> No. No. People are paying between 26 and

56 bucks. They should be paying 50

cents." Exactly. [laughter]

>> Well, you know, and

>> the Inkling announcement was kind of

interesting because I think the value

prop there is she's explicitly saying

that look, we're not frontier

intelligence. We're just under that, but

we're a platform for fine-tuning these

open models which are much much cheaper

and then you can achieve the result you

want based on fine-tuning. And so that's

really interesting.

>> Yeah. And uh but you know these open

models won't be around for very long if

Anthropic has its way.

>> There's a reason they want to stop it.

It's just they have such a monopoly.

>> Of course you're you're selling most of

the product for 50 cents per million

>> tokens when they're selling theirs for

56 bucks. Of course you don't want that

to happen. Of course you want them you

want to try to stop it.

>> But that being said, they're still

growing like crazy. Just to be clear, I

mean, yes, you know, you are seeing this

explosion of interesting things

happening with open models like you

said, you know, the latest rock build is

open, thinking machines open and so

forth and so on, but still

>> I mean, they're growing. They're still

the industry leader in terms of revenue

growth. So, these things are happening

side by side. And

>> yeah, I would I think that the

interesting thing is Eric would not have

released this ramp product unless CFOs

were like, I can't control the spend.

>> Yes. And then he's like, "Well, here,

let me build it for you." And then if

enough CFOs essentially turn that

feature on and start to rate limit how

it's spent because maybe they're not

getting the ROI and the engineer doesn't

care about ROI. The engineer is like, I

want to use the latest greatest model.

>> Yeah. And maybe you don't need it. Maybe

Mirror's right. And for 95% of the

tasks, you should be at one level lower,

especially when it costs 1/100th of the

cost. But the engineer will never make

that trade-off because they'll never

want to think about it. You're right.

>> And also they're not tied to the money.

The CFO is tied to the money and the

engineer wants to go on an exploration

on using the latest greatest thing.

>> Yeah. If you're booking your Yeah. If

you're booking your travel, you're like,

you don't even see the price. You're

like, "Yeah, just put me in business

class. Put me in a nice hotel." And like

the travel department handles that.

>> You're saying something really

interesting. What percentage, if you had

to guess, of fable five prompts are just

average Michigan that should be running.

>> 98%.

98%. I I I was using it for stupid stuff

that I could be using Quen for. Um I

think this is my like micro prediction

here. Mark German, who's like the most

in then guy when it comes to Apple, he

says, and you know, we got this new CEO

coming in for um uh John Furnus.

>> Yeah. And he is a hardware engineer. M7

Ultra uh because M we're on M5 chips

now. you can get like, you know, 456,

512 gigs of RAM. He says M7 Ultra is

going to support as much as 1.5

terabytes.

That's double what they're already

supporting. So, if you think about uh

Frontier models, like the last

generation, this is like an Opus level

model running on your Mac Studio. You

guys all use Mac Studios, you're rich

venture capitalists, whatever. You're

like, "Yeah, I'll take a four or $5,000

computer." This is going to change

everything. you're gonna have employers

go, "Oh, I can just run, you know, 90%

of my workloads, 99% of the workloads on

the local uh Mac Studio." I think Apple

is a screaming buy right now. Uh and I

this not financial advice, but my lord,

that company could just run the table on

AI if they get this right.

>> All right.

>> Apple.

>> Yes. Because I they're going to make

such a fortune.

>> You got Let me explain. It's just like

the iPhone. Everybody laughed at the

iPhone. People overpaid.

They did not. When the first iPhone came

out, many people

that was it.

>> That's true. Steve was the big

[laughter] one. You can I can still hear

him laughing.

>> No, if you think about how they make

money off of hardware, off of their

devices, they will put so much downward

pressure on Claude and Open AAI by just

putting local models and supporting them

with this memory architecture. It's

going to be wild when people have

unlimited tokens on their desktop. I'm

telling you,

>> I don't know if you guys uh saw this,

but um there's a very large solar

company called Sunun. They just

announced this week that they're making

distributed data center blocks that you

can put in your house.

Another company that did it is company

called SPAN that partnered with Nvidia.

So to your point Jason, you're seeing

this fragmentation and distribution of

edge compute which I think is a theme.

Definitely a theme.

>> Well, it's also chasing energy, right?

Like if you've got some solar, if you've

got excess battery power, hey, we power

up your batteries at night cheaply.

>> I think I told you this last week, we

are so massively short electrons. By

2050, the United States of America will

be 2 and 12 California's worth of energy

in deficit. 2.5 Californians, the fourth

largest economy in the world. we will be

short 2.5x

of all of the energy consumed by

California by 2050.

This week there was an auction by this

huge utility called PGM which serves

Pennsylvania, New Jersey, Maryland, you

know, 13 states. And that auction is

where they publish a forward curve and

say, "Hey, listen guys, here's my

forecasted load and here's how much

energy I need." And people signed up to

essentially get paid a a guaranteed rate

every day so that they have to fork over

the energy in the future. Kind of like a

forward option. They needed like seven

or eight gawatt.

They had 156 megawatts or something show

up. Well, we are in such a bad place

right now on electrons and electricity

prices.

>> Did you see what our boy did this week?

>> We need we need So this is behind the

meter, which is different. And he he

Elon needed to do this by the way just

so you know because there's an issue in

Memphis where he was very clever about

how he was able to get Colossus off the

ground that regulatory it's not

>> explain this

>> when you try to power a data center

typically you have what's called grid

power. So you go to the utility in the

area and you say, "Hey, please run me a

line off of that main transmission

line." And that's how you power your

data center. When that runs out or is so

backlogged, you have to do what's called

behind the meter, which means on your

own property that you own, you build

something for yourself. Now, there's a

problem with that. You would think,

well, that's smart. Yes, but like in

everything in America, there's

regulation on top of regulation on top

of regulation. And one of the most

complicated regulatory schemes that you

have to overcome is clean air

permitting.

So even if you say you're going to do

behind the meter, then you're like,

well, what can I do? Solar you can do,

but it takes too much space for most

places. Batteries you can do, but you

need to generate the electricity in the

first place. So people use that gas. So

Elon cleverly bought a ton of 18-wheeler

like engines basically.

>> He bought the company that makes all

this and provides mobile and then just

and then just you know pin them to the

ground and then ran it and you know

those are personal use essentially and

so they came under the clean air

permitting requirements but then when

you act as a block you could make the

claim that it doesn't. Now, there are

new solutions like Bloom Energy, which

allows you to have huge installations

and still fall under the the the

personal use clean air permit. Um, and

so for all of Elon's future capacity, he

needed to have this in place so that he

gets the the clean air permits and he's

able to have a clean run of sight to

continue to build domestic data centers.

Anyway,

>> speaking there's your little TED talk on

energy, but uh we are in a bad place,

guys, and it's only getting worse.

Speaking of um data center sachs,

everybody's favorite socialist governor

Kathy Hochel in uh the great state of

New York, my hometown,

>> powered by fossil fuels, they drive up

our carbon footprint. They occupy

massive amounts of land, potentially

displacing agricultural space and open

spaces. The bottom line is progress

shouldn't arise with a higher utility

bill, deleted water supply, or noise

pollution. So we have no choice but to

address these challenges created by

these massive facilities.

That is why today I'll be signing the

nation's first ever statewide moratorum

on hyperscale data centers.

>> Everything she's saying there is a false

accusation uh on the data center. So

let's just go one by one. So she's

saying

>> that they eat up all of the power. Well,

yeah. I mean, look, if you connect to

the grid without producing more power

and you force data centers to compete

with, you know, residential rateayers,

then yeah, you could drive up utility

prices. However, if you do what Chamas

said and let them build behind the

meter, then they bring their own power.

And that's what the president has

advocated for since the beginning of his

administration is let the AI companies

become power companies. So, that is the

way to solve the energy problem or the

utility problem. Then she's talking

about, you know, eating up land. The

reality is these data centers are a

model of land use efficiency. We have a

ton of land in this country. Obviously,

you can find places where there is

enough open land to build a data center.

The economic impact and value of a data

center relative to the land use again is

one of the best ROIs there is. The

supposed noise pollution that's largely

made up that can be dealt with. You

obviously don't want to put these things

right next to a residential area, but

create a little bit of distance and it's

fine. The whole water consumption thing

is largely a hoax.

>> The the modern data centers uh

recirculate the water,

>> closed loop systems.

>> Yeah. And I think there there was a

study that showed that a typical data

center uses the same amount of water as

two and a half in-n-out burgers. So,

in-n-out [laughter] burger chains.

>> I mean, just go after the almonds if

you're concerned about water, people,

please.

>> There's there Yeah. Or golf courses. I

mean there's many, you know, there's

many uses of water that are way more

wasteful. So when you compare economic

impact to all these different things,

data centers are like honestly one of

the best things we could be building as

a nation. But

>> and s there's all these taxes and

incremental revenues. Did you see the

article where I think it was in North

Dakota or something where like teachers

were getting like 30 and $40,000 bonuses

from all the tax revenue that was coming

in? There's all these upsides.

>> That's right. They generate um a lot of

tax revenue. They've created a

bluecollar construction boom. It's not

true that there's no jobs once they're

built. That you do have ongoing jobs

there. And then oh, one final thing just

on the the point that Hokll was making.

She said it created a lot of pollution.

Natural gas, which is how most of these

data centers are are powered, is one of

the most clean burning sources of power

that we have.

>> 100%.

>> These data centers have become the

scapegoat for all the angst that people

have about AI and it's kind of become

this very clumsy way of trying to throw

a wrench in the gears of innovation and

just kind of slow the whole thing down.

>> All I have to say is welcome to Texas.

We got plenty of land here. And what's

so stupid about her proposal and her

talk, aside from the thing she got

completely factually incorrect, is New

York State is like 80% underdeveloped.

Drive upstate, folks. You're thinking of

New York City. Yes, New York City is

packed. You go upstate, it's literally

70 to 80% of the land in New York State

is undeveloped. There's so much land.

It's ridiculous. New York is giant. It's

giant.

>> On this topic this week, I just want to

give a shout out to Senator Dave

McCormack.

He had

a defense and innovation summit in uh

Carile, Pennsylvania at the Army War

College

which a bunch of us went to pus came

gave a speech had a CEO round table a

lot of defense company CEOs etc. But

Chris Wright was there at Sachs and

>> my guy

>> he's great and Chris mentioned this in

insane story. He said you know there is

a lot of common funding because Dina

Powell asked this question on stage and

he said there's a lot of common funding

patterns of these people that are

protesting um the data centers and he

said you could actually trace it back to

the same people that in a different era

were protesting fracking. And so he was

saying like it's these are all just

hobby horses that they use to raise

money, have a job. They're like

professionally paid protesters. They

kind of just show up out of nowhere. I

didn't realize that there was such a

commonality, but they're the same

people.

>> The thing that I just can't understand

for the life of me is why Anthropic is

still funding these groups that want to

put the kibos on new data center

construction. There's one called public

first where Daario just gave his first

seven figure contribution and then a

bunch of other employees at anthropic

gave it and you know all these groups

are trying to slow down AI development

with new regulations and making it

harder to build new data centers and at

a certain point you just have to wonder

I mean is this regulatory capture or

they just kind of lost the plot because

the number one thing slowing down the

growth of anthropics revenue it's not

demand I think it's the availability of

compute in data centers. And so you're

just kind of wondering like what is the

point of all of this?

>> It's so true.

>> I was talking to someone in politics

about this and the theory that they had

is well the Democrats aren't going to

pause the data centers forever. They're

going to pause them until they feel like

they're in enough control that they can

dictate all the rules. And so in other

words, they're calling this a moratorum.

And I think it does mean that the data

centers are going to stop but eventually

they're going to be in a position to say

okay here are our terms if you want to

turn these things back on right you want

to lift the moratorum and then that's

when we get this you know big government

democrat defined AI regime and you know

that it's going to consist of a new

regulatory agency and new speech

controls the whole trust and safety

agenda from social media will be ported

over that's this was this One person I

was talking to, this is what he was

speculating is the real agenda is that

eventually once Trump is no longer

president or in some future Democratic

administration, they will eventually

lift the moratorum but on their terms.

Now I think that's a really dangerous

thing to do because you know Trump is

president for another two years and then

no one knows what's going to happen

after that. And even if you lift the

moratorum in say 2 and 1/2 or 3 years,

it's going to take a couple of years for

those projects to even ramp back up. So

when you start talking about a

moratorium on data centers, it's not

like a a few month pause. It's probably

a good 5 years at least before you know

you can get another data center switched

on in the state of New York. Just so you

know how bad it's gotten,

there's a curve that you can use to

price data center assets. And I think

you guys know this, but I have this

portfolio of these assets that myself

and my partner Nita have accumulated.

And what's so interesting is when we

talk to all of the hyperscalers about

giving us a price because we're trying

to figure out whether we should keep it

or build it or just sell it, the most

incredible thing is how extreme the

price is at the front end of the curve.

When you have

verifiable energizable power today.

And the reason is exactly everything

that you're saying, Saxs, which is that

when you look out into the future,

you know, we've said this before, but

it's about 40% of all these projects are

getting mothballled and stopped. And so

it's creating this massive deficit of

available energy to actually drive

the use of AI. So to the extent that you

actually want, you know, drug discovery

or you want cancer diagnosis or you want

better healthcare or better legal

advice, we may actually not be able to

service it based on all of the demand

that exists because the power isn't

there. The energy isn't there. And the

reason why that's not there is because

folks are just kind of reflexively

protesting something that they don't

completely understand clearly. So I

think it's a really it's a really big

problem.

>> I mean, we're going to have GPUs chasing

energy. like where's their energy and

just drive the GPUs there is what's

going to happen right

>> let me add one layer to it which is

they're not only trying to stop data

centers from being built in the US

they're trying to stop data centers from

being built internationally in our

friends allies and partner countries and

the way they're doing that is the same

political forces that are stopping data

centers are also behind all these new

export controls on chips so they want to

make it harder and harder to export

chips to more and more countries

including our friends and allies and so

there's not going to data centers here.

There's not going to be data centers in

our allies. I mean, where are we going

to put these things?

>> I mean, those allies have unlimited

energy, Middle East. Like, if you want

some data centers,

>> well, what's funny, Jason, is, you know,

we did a bunch of Middle East data

center stuff and then it's kind of

stopped.

Meaning, like there wasn't this growth

that I thought would happen because it's

a very

conveniently placed geography. It's the

Middle East for a reason. And so, you

know, you can serve 4 billion people

very quickly in under 200 milliseconds

from there.

>> Instead, what happened was there was

this explosion in Asia and specifically

in Australia, which kind of surprised me

because I would have thought that those

folks are a little bit even further out

on the DSA, you know, far left. I

thought these things would not have

happened, but they they were able to get

big deals done. So, in this weird way,

you have all of these other countries

kind of running to try to embrace this

stuff quickly. They've done a decent

job. They're doing stuff to sort of like

displace some of the energy that that is

needed in the US. But the problem is we

need to have enough surplus here because

this is where most of the commerce is

going to get created. That really that I

think should

>> these are these are luxury regulations.

Like you can afford if you're New York

State or California to be like, you know

what, we don't need this. This is a

luxury for us to have an extra data

center. If you're Australia, you might