We went to an amazing restaurant Friday

night. She So is the name of this

restaurant. Wonderful food. The owner of

this restaurant. Shimoth is a is a super

fan as well of the all-in podcast. Is

that a French restaurant? Jason, she

said it was um more like an Asian fusion

restaurant. Like great sushi. We had

this incredible hotel. Del just just

aces all the way. The guy comes and uh

we go to pay. He says, "Oh my god,

Phipe, listen to this story.

This is the most money is no good here.

Your money is no good here. Oie, he

refuses to let us pay after we ran up a

hell of a bill. And now you see

Freeberg's running. Freeberg just ran

off the show. Why did he run off the

show, Jim? Okay,

so Jason says to me, Jamal, this is

absolute this is an absolute

You guys, you guys, you guys make this

up to try and make entertainment

out of me. I'll tell you the truth.

Okay, I'll just tell you the truth. I'll

tell

you. Okay, ready? I'm gonna tell the

truth. So Jason says, "Guys,

I'll see you guys later." If

they're

care's gonna talk for more than three

minutes anyway. Go ahead. You said if

they're if they're going to comp all the

food, just make sure you give a great

tip. Huge tip. Huge tip. Huge and Jal

level tip. To T totally makes sense.

Freeberg's like, "Yeah, got it. No

problem." We had like $19,000 of food.

And he goes, "Is is $175 appropriate?"

Literally Freeberg calculates it. And so

Jason says, Jason says, "No." And then

Freeberg says, "Hold on. Oh, fine. Fine.

I'll double it to 350." Now, he was

around. He was joking. I gave the guy

a,000 bucks. It was gave a,000 bucks.

And I said, "Actually, I think we should

give two 3,000." So then we tipped the

woman an extra 2K. So we gave her 3K for

a 10erson dinner, which I think is

appropriate. She was ecstatic. The food

was phenomenal. It was great. Go to

Shiso if you're in Miami. Dave, are you

adjusting the tips for the no tax on

tips? So, you're like making the middle

smaller tips.

[Music]

We'll let your winners ride.

[Music]

We open sourced it to the fans and

they've just gone crazy with it.

Hey everybody. Hey everybody. Welcome

back to the number one podcast in the

world. We're going to have an amazing

episode today. The besties are riding

high. Why are we riding high? Because we

went to Miami. Oh my goodness. We had so

much fun at F1 thanks to I mean it was

fun. I mean, so many great stories. Uh

so much good times. We were laughing the

whole time. We did a little stage show

and uh Tony Robbins came up. We had Nico

Rossberg. He's a Formula F1 champion.

our guy Antonio Gracias who's working on

Doge, Valor Capital, front of the pod,

and Mayor Francis Suarez joined us. And

uh then at the end of the show, surprise

guest, none other than Sergey Brin, who

is punching a clock. He's working like

70 hours a week over at uh Alphabet. And

we'll talk about that today a bit. Did

you have a favorite speaker, Mr. Sultan

of Science, the one and only David

Freeber? Do you have a favorite speaker

or a moment? Sergey Sergey. Sergey did a

great job. He was very casual, very

chill. We had a great conversation. I

think we should probably publish that as

a standalone. I thought it was really

good to drop him like a little midweek

drop or something. But I will say

Antonio, I I gave him a shout out just

because I think the work Antonio is

doing is so important. I am super

impressed and I was really appreciative

of him taking time to come hang out with

us, but obviously he's working with Elon

on Doge, but he's also uncovering a lot

of stuff in the government that it's

really powerful to see someone actually

go in, do the digging, and present it

the way they are with the transparency

he is. And he's not doing it for any

angle. There's no money. There's no

benefit to him individually. He's just

doing it's probably net negative on the

margins for him. Really hard for him.

And yeah, and it's just amazing. Based

on Elon's experience, it's definitely

net negative. People uh maybe don't like

having their grift cancelled. Shimoth

Polyhapatia, our chairman dictator. Do

you have a favorite moment with the

speakers or a favorite speaker, you

know, a highlight from the programming

specifically? I thought all five of them

were amazing. I do I did think that

Sergey did a really good job. I like

Nico Rosberg a lot. I did too, for sure.

I'm really excited to see what Francis

does next after being the mayor of

Miami. Maybe governor. We'll see what uh

love party says. I think they were all

great. Tony Robbins, I have to say, his

energy is very unique and when you're

near it,

I didn't have many interactions with

Tony up until that first time. Really,

I'd met him through Peter Goober a

couple of times when I was part of the

ownership team of the Warriors. Peter's

a co-owner. They're very good friends,

but I'd never really spent much time

with him. He's a special person. And you

can tell there's a there's a big energy

there. They're all great. Yeah. You

know, I'm interested to see how the

audience likes that interview because,

you know, he uh he is a ball of energy.

I tried to get him to open up, talk

about himself a little bit, but you

know, he was kind of on his own tip, but

the audience loved him. And we did a

great like meditation exercise that

everybody loved it. It was a lot of fun.

Joining us this week from CO2

management. Yes, we have Phipe Leafant

who is his older brother and uh Phipe

welcome to the program for the first

time. Thanks guys great to be here. Have

you heard the show before? Have you have

listened to the Allin podcast Philippe?

Let me ask you that question right off

the bat. I've been listening about it

for a week at speed of 1.8. So I think

I've gone through about like 10 or 12

episodes. Okay. Catching up and uh All

right. Are you an F1 fan? You're French,

so I don't know. Is that like popular in

France? The F1. Hey, we had a good F1

pilot, right? Alan Frost. Alan Frost. He

won a few years, you know. So, okay.

It's incredibly popular in Europe.

Jason, what did you think of Formula 1?

That was your first time, right? It was

my first time to F1. You know, there was

a lot of um pomp and circumstance. We're

very lucky that the trophy house, my

friend Ford, whose partners on the

trophy house, included us. He gave us a

level of trophy house. Trophy house.

There it is. Beautiful structure. Three

amazing floors, tons of activations uh

which means free stuff for those of you

who are not in these like uh circles

where celebrities get all kinds of free

stuff. And we had a poker game. Was

wonderful. Best way to watch the F1.

Play poker. By the way, when you're live

at the F1, it's a little bit hard to get

into the experience because like the

cars just zip by you, so you get to see

the car for like a few seconds and then

kind of like dead time. Yeah, it it was

um very exciting. I have to say it was a

very social experience and we made an

executive decision because it was

raining to pull the table and put it

inside the trophy house. And then we had

an incredible view of like the finish

line and uh there's Freedberg standing

up, me next to him. We had an incredible

lineup. Travis joined us. You can see

there Phil Helmuth heranging poor Travis

from Uber sitting next to me. I mean

this is he always has to have his hand

on a billionaire.

He's not within 5t of a billionaire. He

has a panic attack. So and there's

Helmouth. Poor Helmouth. Um my friend

Timothy

Shalamé came by to say hi to me. And of

course like tackling him. Look at those

meat hooks just going

over a giant tanda bear and Shalom's the

bamboo. I felt so bad for Timothy. You

know, he's he's

done such amazing work and you can see

how engaged he is in Phil Helmouth. He's

like, who is that person? Why is he

grabbing me? But you know, then again,

Phil Helmouth is presenting him. And now

here's a proper way. Can I say

something? Is that dealer is that dealer

Larry Summers? He sort of looks it is

Larry Summers after his appearance

actually dealt by Larry. Well, after he

was here, he he lost so much sponsorship

and and so so many uh you know so many

deals that he uh now is working on

moonlighting as a dealer. He wanted to

continue the great debate. Yeah. But but

can I just point out here the proper way

to embrace an A-list celebrity who

you're friends with is to just let them

come up to you.

Look at so Timothy comes. Timothy and I

are just me just as a background. This

is my friend. This is your good friend

Timothy Shalom. Right. I will not say

good friends. We we've met a couple of

times like a handful of times because

we're both Knicks fans and I'm friends

with Ben Stiller. Ben Stiller, myself

Timothy and my brother Josh went to the

Pistons game,

you know, versus the Knicks when we

crushed them and crushed their souls. So

Timothy came over just to say hi to me

and his friend Yeah. Frankie and his

other friend Cody Block. Frankie Bones.

He's got a great crew and you know he

came over to say hi to me and he was

thanking me for the tickets I I was able

to get cuz it was hard to get tickets

for that. Anyway, for Helm Youth, don't

tackle people at all in events. This is

why Chimant banned you. Just complete

inappropriateness. And then Helm Youth

was going around. I don't know if you

knew this. He was telling everybody that

he created Allin and that he was like

the executive producer for life.

Just so much inappropriateness from Phil

Helm Youth. It was brutal. Man, if I

may, let me also thank we had a partner,

OKX, the new money app, and they they're

a big major sponsor of the McLaren F1

team. They're the main sponsor on

McLaren. Oh, they're the main. And they

won the race. So, we were there with

Haidider, the C CMO. Very cool guy and

his team. Super guy and his wife. Nice

guy. We had dinner with them. Shout out

to those guys. And they just launched

their crypto exchange here in the US.

So, if you love AllIn, do me a favor, go

check out OKX. And uh thanks to some of

our other partners, Salana, Google

Cloud,

BVNK, Circle, shout out my guy Jeremy

Lair, and my brother in Nyx Fandom,

Shane from Poly Market, who I got to

hang out with a whole bunch. This is a

really great guy. Wonderful event. We're

going to do it again. We're going to run

it back, I think, for maybe F1 Austin,

Vegas, and we're going to and maybe

Vegas. Who knows? Uh maybe the Super

Bowl, maybe NBA Finals. We're going to

do some more of these 200 to 500 person

events. I got to say it was so fun to

hang out also with the the fans that

came in for the show, the sponsors. It

was just so great to like go to these

events and hang out with people. I need

to ask you guys a question. What was the

most fun? The Friday, the Saturday, or

the day of the race?

Saturday for me. So, you like the

content best? Okay. Saturday was I woke

up, I went straight to Jeff Gross's

house.

Me, Travis, Helm, Youth, and a couple of

others. We played poker until 4:00. I

ran to the hotel, took a shower, went on

stage at 5.

I spent four hours prepping. 5 hours out

of your pockets. It was great. Yeah. I

was in the nightclub till 5 a.m. That's

a true story. All right, start the show.

Let's get the show. I'm going to start

the show once I remind people that

September 7th, 8th, and 9th, we'll be in

Los Angeles if you want to come hang

with us like we did in F1 for the All-In

Summit, the fourth year. And my lord, I

got a preview from Freedberg of the

content. It is going to be another peak

all-in event, you know, and our goal is

to have the world's most important

conversations, yada yada yada. Our

experience at the summit this year is

what's going to be awesome. It's in

addition to the content being great.

We've got some really awesome Well, you

told me the party location, which I

won't say here, but you also told me

that you're I did 900K was the peak two

years ago. Then you spent 1.2 two

million on the party last year and now

you told me you're spending 2 million on

this year's party. Forget is that true?

The two the two million whispers. It's

going to be more than that. Oh my word.

Anyway, if you want to apply for tickets

allin.com/summit and um yeah, Chimath

and I were on Megan Kelly. Let's get

started. I love it when Jal and Megan

Kelly like have their Oh, it's the best.

It's the best. Well, she likes She

understands it's broadcaster on

broadcaster action. We like to mix it

up. We know how to do ratings. He's a

radio show. Come on. All right. The Fed

held their rates steady again this week.

Uh if you remember last year, the Fed

cut 50 bips in September, then 25 bips

in November and December. Uh but so far

in 2025, the Fed has kept rates in a

steady range, 4.25 to 4.5%. They said

they want to wait and see. They're in

wait and see mode because they don't

know what Trump's doing with these

tariffs and how that's going to impact

the economy. Here's the quote from the

Fed. Economic activity has continued to

expand at a solid pace, but they warned

about potential stagflation. Risks of

higher unemployment and higher inflation

are their concerns. And I I talked about

that last week. I'm I'm hearing a lot of

uh hand ringing about layoffs coming

soon. So, what do you think, Phipe,

about the Fed not taking any action? And

what's your general take on the markets?

you know, the the markets have seemed to

recover largely from the Trump uh

Independence Day um tariff announcement,

but it's uh feels a lot pretty shaky out

there. A lot of M&A on hold, a lot of

hiring on hold. What What are you seeing

on the streets? Yeah. Well, it hasn't

been a boring year, has it?

So, I would say on the Fed, right, a lot

of people are saying, "Oh, you know, the

Fed should cut and this and that." I

actually think that there's also the

scenario that what if the Fed is cutting

because things are not so great. Maybe

that's actually not a good message. And

what if the Fed is not cutting because

actually the economy is really strong.

And so I think that the Fed not cutting

is actually not that bad of a message.

And I'm surprised just in general at how

bad sentiment is, but how good the hard

data is. And we have this ratio at CO2

where we sort of divide hard news as a

numerator and sentiment as a

denominator. And it's the first time

where the news is so good and the

sentiment is so bad. And I don't know if

the sentiment is bad because just the

market went down a lot or for other

reasons. But I actually think the

economy is doing really well. Uh and we

also learned two really important

things. One is when the market did go

down a lot, the government did budge and

said, "Hey, we need to step in here."

And the second part is the Fed did

something that I thought was very

clever. They basically said, "We're not

going to cut just to bail out the equity

market, but if the market's liquidity is

no longer functioning, emphasis on

liquidity, then we'll step in to restore

liquidity." And I think those two things

really brought the market back up.

And I think it's more a little bit the

case of a tariff correction or a tariff

tantrum, but not a tariff crisis.

So you said there was a lot of good

fundamental news. What would you put at

the top of that list? And you said there

were things in terms of sentiment that

were making people quite negative. The

the um economy as viewed by consumers is

really shaking. So what is the sentiment

news that you are most tuned into and

what are the hard data that you're most

tuned into? So on the on the hard data,

the part that's most surprising is that

consumers have very very weak sentiment

but in the meantime consumer spending is

remarkably resilient and you can see

this in a number of ways. You can look

at the Visa and Mastercard earnings, but

I also like just to listen to like

little quotes, little tidbits that you

pick up in the transcripts of tr of of

companies reporting earnings and stuff.

And people will say like even in the

month of April, consumer spending is

very strong and even in the last week

when we adjust for the front loading,

some people are pre- buying ahead of the

tariffs. Even when we strip that out,

consumers really good. So I think the

part that to me is most surprising,

consumer is great. With respect to

sentiment, it's really bad. But one

thing that's funny is whenever the

market goes down, sentiment is bad. And

so I don't think sentiment is

necessarily good leading indicator. I

almost think it's like a lagging

indicator. I bet you that now that the

market's gone up, we look at sentiment

in a month from now and it'll be like,

oh, sentiment's getting better. So I

think that's what's going on. Chimatha

uh our friends at Poly Market are

showing in uh June 84% chance of no

change. July 51% chance of no change.

And then September 48% chance of a cut.

And then pal obviously Trump's been

mixing it up with him saying he's going

to fire him, he's not going to fire him.

What's your take on the Fed and what

they should be doing here at this moment

in time? And then maybe you could

respond to Phipe's sort of insight there

that I think was pretty good that there

is a juxaposition between what people

are saying they're going to do consumers

and how they feel about the economy than

what they're actually doing. I agree

with Philip's diagnosis that the Fed

will really be focused on liquidity. I

agree with that.

In fact, Nick, I just sent you something

on signal if you could just throw it up

here, which is a really interesting view

on

subprime. And what it shows you is the

spread between where credit acceptance

is versus capital ones. And the point in

bringing this up is that when you look

back historically around these subprime

lenders, whenever these guys start to

see price to books just start to

escalate and get to highs, it tends to

portend a liquidity crisis. It tends to

show that things are about to roll over.

And from that

perspective, I think that there are some

blinking yellow lights that the Fed

needs to take seriously. But then where

I deviate from Phip's perspective is I

think that the Fed is getting

increasingly political in how they want

to react to the conditions on the

ground. I'll give you two perspectives.

The first is if you actually read the

press

release, either the word

waiting or some synonym of that word was

littered in there 22 times. It just

seemed like an incredible amount of

verbal gymnastics to try to justify why

they weren't

cutting. And if I had to just take that

at its face

value, I would at least put some

percentage of probability that you have

to assign to this case where

Powell views that if this lever is the

only thing that he has going into the

midterms, it's almost as if he's holding

it back because I think that if you look

at some of these leading indicators,

particularly on the liquidity side, I

agree with Phipe about how important

that specific metric is. I don't believe

in the Fed put. We've talked about this,

but I think the liquidity measures are

starting to blink yellow. And I think

that if the Fed really wanted to get

ahead of it, they could cut, but the

political overlay is cutting helps

Trump. And I think there's this tension

between these two people. And I think

that the Fed is saying we're not going

to cut. So your position is or what

you're hypothesizing here is that the

Fed is saying, "Hey, we have to wait for

Trump to clean up the tariff stuff." the

trade war stuff and that that's a

political act by Powell in retaliation

for Trump saying he wanted to fire him.

Is that what you're insinuating? No, no,

no, it's not what I'm insinuating. What

I'm saying very directly is that the Fed

is acting in in a manner that is as much

politically motivated as financially

metric motivated because the financial

metrics some of the most critical

leading indicators particularly around

liquidity and the credit health of the

American consumer are blinking yellow.

So right now they are choosing to ignore

these historically useful leading

indicators. And the only reason that I

can come up with to ignore it are

political reasons. So Freeberg, do you

think there's a political beef going on

here between the two parties? And what

do you think about subprime uh and maybe

this being a lead indicator that maybe

it's time for a cut? Maybe we're going

to see people miss mortgage payments,

car loans, etc.

I was just looking at the mortgage

delinquency rates. They're pretty uh

flat right now. And that's I think

because so many people did refinance

when rates were low and there's a

tremendous amount of mortgage balance

with a with a low rate

outstanding. But remember, I think the

Fed has a whole bunch of data that

they're still going to need to wait on.

The CPI data for March was

2.4%. Their target is

2%. The next CPI report comes out, I

think next Tuesday. And so that's going

to be an important indicator. But I do

think one other data point that is now

going to be part of the calculus is what

do these trade deals look like? So this

morning it was announced that there's a

trade deal with the

UK and in that trade

deal there are lots of provisions that

relate to parody and what is expected to

provide better market access for

American businesses into the UK. But

there's also a really important piece of

data there, which is that there's a 10%

tariff rate for imports from the UK into

the US. So this is the first time we're

seeing a trade deal that actually gets

announced and finalized through this

whole tariff trade negotiation process

that's been underway now for several

weeks with all the hoopla and all the

drama attached to it. And what we're

seeing is that for one of our

friendliest allies, for one of our best

trade partners, we are keeping in place

a 10% tariff rate. So if that holds with

other trade deals and that becomes kind

of a standard across the board as they

get more of these trade deals done

perhaps with countries that are less

friendly with more ownorous with less

regulatory parody in the trade

relationship between the US and that

country maybe there's higher tariff

rates. What that means ultimately is

that there is now maybe a pretty sizable

long-term revenue stream for the federal

government that didn't exist before,

which means that there's room to cut

taxes, which means that this is all

going to be part of the calculus of the

Fed's decision on whether or not and why

they would need to cut rates because

this is going to drive inflation. It's

going to drive GDP growth. It's going to

drive employment. And so I think that

there is a pretty dynamic situation at

play right now. It's not just that

there's a static tax revenue base and a

static federal spending model and then

CPI and employment data that is going to

follow them. Do you think Powell thinks

that this Trump thing is going to work?

So he's holding bullets in the chamber

because he's worried about inflation. I

think they're going to wait for data. I

would agree with that. Yeah. Dave, in

fact, uh, a couple things I was

wondering your opinion on is

one. I was with this

retailer, gigantic retailer in the US,

and there's this sort of false narrative

that when you have tariffs, like 100% of

tariffs are going to get passed through

in pricing, and therefore tariff is like

a tax, right? That retailer told us that

they think only about 50% of the tariff

gets passed in pricing. So, I I sort of

agree with you. there is going to be a

net net positive and that retailers have

way to uh work things around and stuff

like that. I would also say today post

this announcement the market's very

strong and initially I was a little bit

surprised because um we're taxing 10%

not only the most uh friendly country

but one where we actually have a

surplus. So it's like if it's 10% when

we have a surplus, what is it when we

have a deficit? But on the other hand,

the market is speaking as we speak. And

I also think that uh there were a lot of

announcements that seem to make it like,

hey, we're going to make a deal with

China. We want China to do well, but we

need to do well, too. It seems to me

that at some point maybe there'll be a

bit more of a win-win versus such an

acrimonious and maybe that's why the

market's reacting a little bit more

positively. By the way, that trade deal

we also eliminated the

2% tax on big tech companies. And then

Howard just said today that they're

going to announce a10 billion order from

Boeing on top of that as well.

So these are going to drive GDP. They're

going to drive employment. It's really

hard to cut rates into a market where

there is not yet priced in or not yet

well understood, but an expectation of a

driver for GDP, driver for employment

and potentially an impact on inflation.

It's really hard to go into that sort of

an environment and cut. I mean, if we're

in a sustained period of four to 5%

rates, I mean, we should talk about that

at some point, but there's huge

implications to the economy if this

thing stays where it is. Huge. Philipe,

are you in the uh camp of 4D chess with

these uh tariffs and these negotiations

or, you know, throw some stuff against

the wall, react to it in real time, you

know, he's shaking the snow globe, it's

it's chaos, etc. Where where do you sit

between those two opinions we've heard

on this podcast over and over? You know,

when you ask a tech investor for like

his opinion on macro. Yeah. Uh this is

the beginning of the end, right? I think

I've like predict I think I've like

predicted like seven of the last three

recessions, you know? So my my track

record is pretty weak. Well, let me ask

a different then question. How is this

impacting the tech market? Private

companies that are thinking about going

public, M&A, we saw Door Dash buy two

companies this week. We've seen a bunch

of companies file to go public. We've

seen them

pausing. Does this kind of uncertainty

which it seems like is causing the

disconnect, right? You you explain this

disconnect how people feel about the

economy and then their behavior. Is that

disconnect caused by the sort of

communication that Chimath and I and

other folks were saying, hey, needs to

be improved here. And it seems to be

with this UK. If this had been the

process from the start where we're like,

"Hey, we're going to do one of these a

week for 50 weeks and uh you're going to

get this good news each week as as we

sort this out." That seems to me like

something that would build confidence as

opposed to, hey, everybody's going to go

back and forth. You say 50, we're going

to go to 150 tit for tat. So maybe talk

about the impact this has for founders,

startups, executive teams. I think for

tech guys by and large, you know, a lot

of the tech is in services. So that's

out of the picture for now. Uh but

there's obviously going to be a lot of

tears for semis and then for the

assembling of the motherboards into

computers. So those are the two key

areas and one of the difficulty is we

have these sort of base tariffs but we

also have these sector tariffs and we've

had sector tariffs in cars 25%. There's

rumor to be sector tariffs in pharma

that could come out next week and

there's also

been potential uh sector tariffs, you

know, in semis. So, it's been pretty

disruptive and I don't really know how

to think about it and I think nobody

knew which is why the market just took a

25% peak to trough down. And then after

that, we learned well the government is

actually smarter. They're going to one

of the things that I love to see is all

these executives that get to come to

also plead their case in Washington and

maybe that was never the case you know a

few months ago and there seems to at

least be a feed a feedback loop okay we

do something we see what breaks we

listen we readjust and stuff like that

but to be honest I don't really know how

it's going to play out and I sort of was

very conservative for a period of time

just waiting and then to me what

happened last week with uh Microsoft

saying that like AI had really picked

up. That was like a really big deal and

I almost like uh coined it in my own

mind like tokens greater greater than

tariffs and I think like one of the

reason why the market's moving up right

now. Hold on just explain that just a

little bit over tariffs. Tokens I don't

know I put the greater greater sign you

know tokens are much greater than

tariffs. Tokens you mean AI tokens? AI

tokens. Yeah. So I I sort of view

tokens, you know, I I don't really

understand the as as well as Dave for

sure, you know, all the AI models and

stuff like that, but I sort of view

tokens to an AI model is like fuel to a

car or electricity to a computer, right?

And Microsoft said that in their Q1,

they processed 100 trillion tokens, 50

trillion alone in March. And so the

tokens are really going basically

vertical which is probably because of

these reasoning engines which are much

more sophisticated and require more

compute power. And I think the market it

didn't to to it's a bit unfair for Trump

but the market did not just go down

because of tariffs. If you remember it

went down because people freaked out

we're in an AI bubble. AI is not really

working. What's the ROI on AI? That was

maybe I don't know half a third to a

half of the problem. And I think what

Microsoft said is like capex is going up

and everybody has a gigantic shortage of

chips right now. That I know for sure

from all of our private companies,

public companies. There's a shortage of

chip, a shortage of compute power. And

so I think that's also maybe why the

market's going up. And so for me it was

sort of a way emotionally I got so

drained with the tariffs and thinking

about tariffs and having to think about

something I don't really understand and

I feel now there's a chance when you

look at the next year or two at some

point tariffs goes away Trump makes this

big deal with uh deregulation the tax

breaks sort of cancel out the tariffs we

move on and what are we left with we're

left with tokens and I think the world

of tokens for me I've been doing this

for 35 years It's maybe the most

exciting trend and thing that I've seen.

And all these people that say, "Oh, this

is the end of American exceptionalism."

I almost wanted to say, "No, you guys

are wrong. This is the beginning of

American exceptionalism because we've

got Wall Street. We've got Silicon

Valley, and we still got a pretty good

government that at least tries to get

stuff done. So, I'm pretty excited by

that. I've been talking with my

management team a lot about AI first

principles and we're actually doing an

offsite in two weeks on this because

I've been following a lot of what the

other CEOs have been doing and hearing

stories. We had a great conversation

with Sergey. He gave us two anecdotes of

how he personally has used some of these

tools to make management decisions and

his observation was managers are the

first to go. And if you zoom out from

that statement and you zoom out from the

comments you're making, Phipe, there's I

would say like a once in a generational

opportunity to select companies that are

going to accelerate growth because of

the leverage they're going to create by

adoption of these tools. Not tech

companies in the traditional sense, but

across the entire economy. And some of

what we're seeing right now in the

reformation of venture capitalists and

and I know you're going to talk a little

bit about CO2 here in a bit, but so much

of the thesis is around traditional

businesses being reinvented using AI.

And as a result, it's not just the few

tech companies that are providing the

fuel, but there are these fires that are

going to take off in all these different

markets that we could sit and spend

probably hours kind of, you know,

extrapolating and theorizing on that

creates a real opportunity for

incredible market value creation. And

traditionally, it's like the market

grows and the differentiation among the

competitors is minim minimized once the

market has matured. But for the first

time ever, every mature market can be

completely disrupted. And so so if

you're smart about selecting management

teams and selecting companies, there

seems to be an incredible opportunity to

realize investment returns. Okay. Even

in a mature equity market. Well, let's

move on to our next topic, which is

obviously super related. Google was down

8% on Wednesday after some bad search

data came out because the Justice

Department, as everybody probably knows,

is doing this antitrust lawsuit with

Google. And the key part of that lawsuit

is Google paying Apple 20 billion a year

to be the default search engine on

iPhones. Obviously, we all know iPhones

have elite customers. Those are very uh

precious searches from people with a lot

of money cuz iPhones are expensive.

Anyway, Eddie Q, who's been with Apple

for 35 years. He said, quote, "For the

first time ever last month, our search

volume actually went down." Quote, "That

has never happened in 20 years. If you

ask what's happening, it's because

people are using chat GBT. They're using

perplexity. I use it at times. He

believes that AI search is going to

replace classic search like Google.

Quote, "Again, there's enough money now,

enough large players that I don't see

how it doesn't happen." Bloomberg

reported on Q's comments at 11:00 a.m.

An hour later, Google was down a hundred

billion dollars in market cap. It

bounced back a little bit today when

we're taping this uh on Thursday. Here's

the statement from Google. Responding to

Q's comments, we continue to see overall

query growth in search. That includes an

increase in total queries coming from

Apple's devices and platforms.

Freeberg, is it time for Google to

panic, Google shareholders to panic? We

talked last week about making bold

decisions about what is the default and

how might Google get out of this classic

innovators dilemma. What do you think?

We keep coming back to is search dead

conversation. Everyone knows that the

search click repeat paradigm is over and

there's a new model in what I would zoom

out a little bit and say is kind of the

difference in human computer interaction

for knowledge

information and

services. It may not be that I type

something into a search box. It may be

that I'm having a chat. That chat may

happen in a chat window. It may happen

via voice. It may happen on a screen. It

may happen in an

earpod. We don't yet know where the

consumer is going to go with this. But

there's a lot of paradigm shifts

underway. I will say Google has models

that are if not the best competitive. So

the underlying models, the underlying

technology exists. They are certainly

aware of the shift in the paradigm. And

so the transition for Google doesn't

need to happen overnight to a chat

interface that looks like chat GPT. It

may be a standalone app. They have a

standalone app. As Chimath has pointed

out in the past, they don't do a great

job promoting it. They don't do a great

job integrating the chat interface into

search or replacing search of a chat

interface because remember search ad

revenue today is $200 billion.

And the cost to serve an AI query is

order of magnitude higher than the cost

to serve a search query. So flipping the

search interface over to a chat

interface overnight doesn't make sense.

And they don't need to. They have the

users, they have the models, they

already have the product. So it's going

to be a slow kind of process of finding

the optimal course for them to make the

transition would be my guess on what

they're doing. It's a question of at

what point do you change the default on

Google? Do you make it a slow one box,

which is that answer section at the top

of the search page, and you slowly get

people used to that, and you lead them

over to the chat interface, or do you do

it all at once, or do you tell people,

"Hey, go use the app instead of the

search box." So, there's a lot that I

think they're going to discover. And if

anything, this is an organization that

is used to doing testing and then making

incremental changes and then making big

changes once they're, you know, kind of

tested and proven.

I'm pretty positive on their ability to

respond to the shift if there is one

underway. I guess two important data

points Jimoth that I'd like you to

respond to. Search is only like 56% of

Google's revenue right now. People

forget they have cloud. So they have

diversified. It's not a one revenue

stream company anymore. And then also

these Google search results at the top

of the page, they're dropping

precipitously the number of clicks below

it. So different studies 15 to 35% of

the clicks below the box are not get you

know are dropping. So this is

significant but it seems manageable.

Where do you stand on it right now? Time

to panic or as Freeberg was saying

before hey maybe it's a great

opportunity for Google to add yet

another product line yet another revenue

stream. They definitely have the best

models in many domains.

I would say that the codegen models from

anthropic are really good but in many

other domains including general

information and chat I think Gemini is

exceptional. So what is the problem? The

problem is that they were effectively at

99% share and now we were always just

waiting for that shoe to drop which is

where they started to go from 99 to

something less than 99. And the point is

now that it has happened, it is very

easy for anybody to build a model that

precisely calculates the economic value

of every single basis point of share

shift that happens. And what you saw was

an initiation of that process this week.

So what do you do? The problem is that

this is not Google's problem. This is a

consumer choice issue and they have

chosen something different. And whether

we like it or not and whether they like

it or not, the reality is that chat GPT

is running away with it. And if you look

at the growth and the share that OpenAI

is seeing, it's quite an incredible

thing. So what does one do? I think that

instead of waiting for data, I think

that you have to assume that you're

going to go from

99% share to 75% in the next two years

as an example. And you need to start

asking yourself what will go wrong.

And if you can ask yourself that

question honestly and red team that then

I think the conclusion you get to is you

need to start very aggressively

integrating Gemini as the front-facing

window to Google Inc. But again as I

sort of said last week that requires a

combination of taste and courage.

Otherwise, what'll happen is if you're

waiting for the

data, you're just going to get caught

off guard because Apple will do things

and then make a press release months

after the fact. Open AI will announce a

press release, Facebook will do

something. And what that does is it

destroys the morale of the company of

the brilliant product managers, of which

there are many, and the brilliant

engineers of which there are many inside

of Google. If you're sitting around

waiting to react to some sandwich served

up by your competitors, that is a

terrible

approach. Philipe, what are your

thoughts here on Google? You obviously

participate in public markets. Is it a

buy right now? I mean, I don't want to

give investment advice, but do you think

the company has the talent, the

temperament to make these hard decisions

and to turn this around or avoid the

iceberg? uh if the iceberg being chat

GPT and people getting answers instead

of links. Well, I think you guys have

summarized the situation pretty well. I

would just add just a couple small

things. One is the market cap of Google

is like 1.8 trillion and that of chat

GPT is let's say 300. So Google is worth

six chat GPT. And is that the correct

ratio into the future or not? The second

one is I was around sadly in uh the

times of the yellow pages and I remember

when the yellow pages the way you go

somewhere to bounce and go somewhere

else and basically these yellow links

got replaced by the blue link and the

yellow page companies went away. Now

part of the reason they went away is

they were very levered. Google has no

leverage sits on a lot of cash and

imagine what someone like Elon would do

if he had to re-engineer Google. I think

they have um you know uh it's it's a

much larger company let's say than

Twitter. So like the part that I'm

wondering about, I haven't made an

opinion on Google is like, "Hey, is this

the next IBM? You're going to stick

around for a really really long time,

but you're just not going to be like a

company growing as fast as you used to,

and maybe there'll be little growth and

you just sort of struggle ahead. Or can

they completely re-engineer their

business?" And they do have two great

businesses, Whimo and YouTube, and

really cloud and all the cloud apps. So

they have three great businesses and

then they have this one search business

like you said maybe it's 60% of the

revenue. It's probably 85% of the

profits because it's just so profitable.

No, I would say it's 110% of the

profits. 110, right? So you're right

because some of these others lose money.

That's actually a good point. So um if

you put that together, it's just a

classic innovators dilemma and imagine

that they create a Gemini app and we

start downloading the Gemini app. I

would love to be the fly on the wall

between the head of the Gemini app and

then the head of like the search box and

they're both fighting because one guy is

stealing the business from the other and

stuff like that. Personally me I found

that these stocks they're like a little

bit too complicated for me and I think

that sometimes in life you just got to

say hey this is just tricky. There's

like a lot of forces at work. But the

one thing stepping out that I would

think about is there was this concept of

the Mac 7. And for the last two or three

years, everybody is like, "Oh, you just

need to own the Mac 7. Uh, it's really

easy. I can do it on my own." And I

think what AI is showing is that at a

time of great change. And like you guys

said on the show, a couple of you, AI is

sort of precipitating so many fast

changes. To me, it's a little bit like

the end of the Mac 7. And what we should

do is almost think like, hey, what is

the next? Remember when the Mac 7 used

to be Fang and then Fang Pl+ and nobody

talks about Fang anymore. Uh, and now I

don't know like the Max 7, the sexy 6,

the Fabulous 5. There's going to be a

new index that comes up and I think we

should think about like who's going to

be on the new index, which private

companies, which public companies. And I

think Google for sure has some

struggles, but it's got a lot of

advantages and a lot of cash. You know,

to your to your point though, to just to

add one thing, which I I love this

framing. Here's another data point. If

you were going to make the case that we

need to go into harvest mode, right, and

say we don't know the rate of change of

the search business, so let's just have

as much money on hand so that we have as

much optionality. That's a very

reasonable and fair

strategy. You would probably not spend

$75 billion a year of capex on making

these models. The opposite is also true.

If you're going to drain your cash at a

rate of change that's greater than it

needs to be to the tune of an extra $75

billion a

year, there's probably a case to be

made. Well, if we've made the cake,

let's sell the cake. You know, we've

made the dog food, let's have the dogs

eat the dog food. It's the in the middle

strategy of both spending the money but

then stagegating the product that is the

worst outcome in my opinion. I think

they're right to invest. I find these

companies that decide to harvest, you

know, the cash cow and buy all their

shares back, you know, it never really

works. I think that the only chance that

Google has to create an amazing company

is you got to take some risks. At the

end of the day, the man in the arena, he

who takes the risk usually gets the

spoil and they've got to invest in the

future. It'll be interesting to see if

the shareholders, you know, agree with

that or not. What do you do, Jac? What

do you think? Great question. You guys

teed it up perfectly. I think they're

going to cut a large number of

employees, get people to return back to

office and take this a little more

seriously on a corporate level because

you got that sense from Sergey who's in

the office every day. And I use Gemini

and I have a sort of AI first company

where everybody's required to do their

work on AI two or three different

Claude, Gemini, Grock, etc. And what

I've been noticing inside these products

is they're very deeply integrated. I got

surprised just the other day. I was

asking it about a travel question and it

referenced my GCAL. I didn't know they

could do that. Then obviously you can

use chat uh you can use Gemini inside of

Google Docs. Now they have four or five

products right now that are one or two

billion users per month. Obviously

Chrome might get spun out but you have

YouTube, you have Google Docs, you have

Android. They have such a data advantage

and such a deep integration into

people's lives because they use three or

four services. I use YouTube TV. I use

YouTube and I have a subscription to

that YouTube music. They have such

integration. I think Google's going to

figure this out. And if they cut their

team size down, the earnings are going

to go massively uh up and they're

spending

75 billion dollars on infrastructure. I

think it's going to be would you

integrate these models more aggressively

into in front of the consumer or would

you is this the rate that makes the most

sense in your mind? I think you

mentioned like maybe go all in on

certain other services. I think YouTube

search is the place to go allin right

now. When you do a YouTube search, it

just gives you 10 links, right? It just

gives you that rolling bang. You should

be able to ask a question to YouTube and

you should be able to ask questions to

your calendar. You should be able to

say, "Who have I met with over the last

10 years who I'm no longer in touch with

and what are they up to?" And it should

do a Gemini search inside of Google

Calendar. It's very light right now. And

then if you did that on YouTube, hey,

tell me everybody's opinion on COU and

their strategy over the years and how

it's changed. And you asked that on

YouTube with all their transcripts, they

could make a super cut of all of that.

This would train people, you know, at

the point of pain in a very deep way

without sacrificing Google search

queries, you know, too aggressively. So

there's YouTube's such a secret weapon.

I hear you. I would just remind the

Google management team that very very

very smart people like Phipe and others

who control trillions of dollars I wish

well collectively are not making the

decisions about today but are taking the

trail of breadcrumbs of what they see

today and guesstimating what 18 to 24

months in the future looks like and all

I'm encouraging them to do is I think

that that data point from Eddie

is the beginning of a stream of such

data points and I just encourage them to

inoculate them from the morale hit that

will come if they don't have an explicit

aggressive strategy and instead if they

become reactive to external data. It's

really demoralizing. But what if what if

they're actually tracking the

data and they're seeing their own sense

of search

queries driving clicks and then driving

positive response to the AIdriven onebox

results that they show at the top. Oh, I

think that's exactly what they're

seeing. But that's and they're just

making the they're making the requisite

kind of balancing decisions, right? No,

no. What I'm saying is that's absolutely

what they're seeing that the

demonstrated strategy is emblematic of

exactly that. It's the rationalization.

My point is there's something that you

can't rationalize because you don't know

until it's presented to you, which is

what is the other company doing. They

don't have spies inside of OpenAI. They

don't know what the OpenAI product

strategy looks like. They only hear

secondhand what the OpenAI growth looks

like. And all I'm saying is it's a bit

of a sword of damicles. At some point,

the sword drops. you're not in control

of it. And once you start to see a

trend, that's the rationalization that I

think puts companies in a very difficult

and tricky strategic situation. It takes

a lot of courage to say, "Oh my god,

like it's like but Buffett said this,

like Buffett has this very famous thing

of just putting his CEOs on the spot and

saying, "Stop telling me all these

things that can go right. Let's go paint

the death case. what can absolutely go

wrong and bread team me the solution and

then justify for me why you haven't done

it and all I'm saying is if you start to

think about like for example you saw

open AI today Fiji Simo she's leaving

Instacart right she's going to go and be

the CEO of apps inside of open AI you're

seeing a level of talent concentrate

that I have not seen since I was at

Facebook there was nobody we couldn't

get when we thought we were building a

model that was totally orthogonal to

Google now it did not mean that Google

diminished in any way, but it creates a

different use case. In that example,

though, the social use case was very

much

non-cannibalistic to the blue links. And

to your point, David, if it turns out

that question asking is not

cannibalistic to search, Google will be

fine. All I'm encouraging them to do is

play the scenario where it is

cannibalistic and figure out what to do.

I think there's a chance that we're

underestimating the power of Google's ad

network right now. It's quite possible

that knowing your queries in Gemini,

knowing what you're doing in calendar,

knowing what you're watching on YouTube

could lead to a stream of more target

ads that do better and are more

valuable. And so we've been seeing a

number of companies, startups, you know,

in the early stages and year one

startups that are figuring out how to

use your queries and what you're doing

in AI to present to you search results.

So imagine you're doing a Gemini search

Jamoth and or Philippe and on the side

of it it's giving you a rolling list of

ads or offers that you might be more

interested in. That could be a better

advertising product than even search

itself. Freeberg, your thoughts? Well,

let me ask all three of you a question

which is since chat GPT's come out and

Gemini and other tools like it, do you

find that you're doing generally more

stuff or less stuff?

I find that I am

using search a lot less. I But but the

aggregate is your aggregate like usage

of the internet to do things for

yourself for work kind of are you

getting more? Yeahve yeah I've learned

how to ask things that I've always

wanted to know but didn't even know were

possible. Right. But all of that to me

goes to open AI and to X. I use that

that's fine. But I'm just saying like

like if you were to cuz I'm I'm what I'm

trying to do is paint the picture of

where the denominator of quote search

queries is going because if search

queries is no longer that's the wrong

way to think about this. No, I like your

I like your I'm doing five times as many

queries and I would say they're spread

across a number of different platforms

because instead of asking humans to do

work, I'm now doing it myself. You used

to ask a human, hey, can you do this

research for me? They would come back to

you. You would hire somebody or use a

consultant. Now I'm doing it myself. So

you're on to something that the total

volume the total pi could be

510 per person. Yeah. If if the old

paradigm is like measuring search

queries and quote market share as a

function of search queries I don't know

if I care about having 99% of that or if

I'm actually better off having 80% of

something that's now three times bigger.

Yes. Where there's so much more. Imagine

you get you lose 99% of one bucket, but

you're only getting 10 or 20% of the new

bucket. That's the bad scenario. That's

exactly right. That is the bad scenario.

That's the issue, guys. That bucket is

getting built right now, and they're in

nowhere'sville in that bucket. How are

you going to show up in 18 months and

say, "Oh, that new bucket that's so

shiny. Pick me. Pick me." This is why

it's a strategic error. Well, think

about the let's say you're running

growth at Facebook Chimop and you guys

have a new product you want to launch.

You've got a billion users. How do you

get them to use that new product?

Because Google has a a chat GPT

competitor. How do you get them to use

that product? Yeah, I walked through

this last week, but I'll do it again,

which is I think that today the part

that I agree with you is this whole view

on search is antiquated and it makes no

sense. I think instead what you need to

think about is where are the inbound

actions into the house that is Google,

right? Google Inc. And you have to have

a very simple way of deducing what is

the value of that inbound action. And if

you rank them, the inbound actions to

the Google search bar are obviously way

more valuable than the inbound actions

in all these other apps. I would start

in those places that are more bottom of

the list on the money side but high on

the list in terms of intention and

behavior and I would reddo the

experience around Gemini but that

requires taste and cannibalization that

you're that you have to be willing to

take the hit on which service you think

is number one YouTube I think your idea

Jason around YouTube is a very smart one

because it's a juggernaut business I

also think workspace we use workspace

here every day Gmail

calendar. I think workspace could be

really interesting as well. Gmail is a

great one. Yeah, inside of Gmail and it

is going to get better. Like there are

smart people thinking about this. All

I'm saying is that the market will now

start to price this decay in. I'm long.

Well, Philipe, I want to know your

bucket of what are the most important

companies that matter the most. Okay, I

I'll try, but I have to ask you guys a

question before. Do you guys think that

the two founders come back in a very

forceful way into the company? I don't

know exactly why, but one thing that I

was wondering, Chamath, is you you bring

up a very important word,

taste. Do you have to be a founder to be

able to impose this sort of new taste?

And do you need sort of founder

credibility at the junction at which

Google is at? It seems like this is a

big junction, right? This is the first

time in their 20 25 year history where I

feel like, wow, there's a real threat.

How do you do that without the founders?

Yes. And on top of that, they're alive.

You know, it's just they ask Larry. No,

Sergey is going to do it. I think he's

building up the reason we're seeing at

the all-in events, the reason he's going

to work every day is that he's building

up his knowledge base here. And I don't

want to speak for him, but I've seen him

really engaged on this stuff. And the

Gemini app is kick ass. And I've had

long conversations with him about like

little details in the Gemini app. He is

super engaged. Like I've had

conversations with him about granular

details of Google local and YouTube

searches and how they should be

presented in the results in the Gemini

app. He's into it. He's into it. You're

bringing up something which I think is

very important. when you're at a

junction this important who has the

gravitas to come in and actually make a

difficult change like this I think in

general it's the founders and you know

in fairness to Larry and Sergey these

are two brilliant brilliant guys they've

done it once and in fairness they

probably did it kind of a second time

when they created Alphabet because now

you have these other businesses that are

pretty impressive now they're just going

to have to do it a third time but

they're going to have to impose their

will and they're going to have to

develop some very specific specific

taste. This is nothing against Sundar

and the team, by the way. This is just

to say that the only people that can

come in and say, "Guys, we're going to

make a change that could have this

negative impact to a $ 1.8 trillion

company are people that are going to

feel it the most, they will feel it more

than anybody else." And so, if they say

that it should happen, they'll have the

moral credibility to make it so. I love

this question that you were just asked,

Philipe. Go through your top 10

companies. Why you What's the number?

What's it? Not top 10. What's the

number? What are the companies that

matter the most? Yeah. So, I have a I've

thought about that a lot. I'm not sure,

you know, great answers. But the first

one is I keep defaulting to the number

25. I can't explain you why, but they're

not a 100 companies. But if you think

there's only five and all these money

managers, you know, they have like five

stocks that represent 80%. I feel the

level of risk that you're taking is too

high. And that one has to be, you know,

I start with a h with the public

markets. I would say most French people

are not known to be particularly humble,

but at least if you've been in the stock

market as a French guy, you've been

beaten up so bad. I started January 1st,

2000. So imagine what my first three

years looked at. I got reduced to, you

know, ashes, just beaten up by the

market. you know, we we did reasonably

well uh uh because uh thank god being a

hedge fund, you know, you have different

tools that you can do. And so I think

you need to have a certain number of

stocks. You need to know that some stuff

you get lucky, some stuff you get

unlucky, some stuff you get right, and

some stuff you get

wrong. And then I think that there's a

second phenomenon. Once you agreed to

the 25, you say, "Wait a minute. Why are

there no IPOs? Why are these private

companies, amazing private companies,

some of the best in the world, SpaceX,

Stripe?" Answer that question. Why? Open

AI, why in your mind? I

think that the cost of being public is

too difficult. One, what? think like the

the reputation, the regulatory like you

get busted like left and right by uh

agencies and like when's the last time

that a public company I think that you

know during the last

administration something like someone

told me I don't know if it's true or not

but I love the I love the quote so much

that I'm using it without checking if

it's 100% true or not something like 35%

% of the S&P had an issue with a

government agency in the last few years,

right? When's the last time that you

guys remember a private company that has

an issue with a government agency? Like

I'm sure it happens, but like off the

top of my mind it seems like a fraction

of that, right? And then I also think

that the private markets have become so

sophisticated that in essence like our

private markets, public markets that

just trade three times a year like uh

you know these companies they do these

uh uh rounds you know once or twice

they're becoming pretty sophisticated.

They match buyers and sellers and I

think that's okay. And then the last

piece which I think that's a very bad

piece for the four of us and all of us

on this call and many of your uh

listeners is that there's such a view

that like large companies are bad and we

got to bust them and we're not going to

let them do any M&A and as a result of

that small companies no longer get

bought by big ones. And for me, it's a

disaster because if I fund small

companies, but now you take away one of

the best ways that I have to monetize my

investment, why should I invest in risky

private companies? I can just buy the

public one. And so I'm really hoping

that as part of this deregulatory move

and you guys and Sachs will have way

more influence than we, but to convince

people that in my mind the best way to

create competition is to allow these

large companies to fight against each

other. And the battle between OpenAI and

Google is the best way to do that. But

not by telling Google not to buy

something or telling Open Double Click

on that, Philipe. I think it's a super

important point. The singles, the

doubles in the industry. I've been

harping about this on this program as

well. So, we're sympotico. What about a

proposal where maybe the non-MAG7 let's

let's pick a number under a trillion

market cap under 750 billion. We let

those companies buy and sell each other

at a very vibrant pace. We saw Chat GPT

buy a $3 billion company. I think this

past week in the um kind of uh coding

space like I mentioned earlier in the

program, Door Dash bought two companies.

What if we said hey okay we understand

Google getting bigger, Apple getting

bigger, Microsoft getting bigger

competitive would be but how does size

make a difference to whether or not

someone should buy a company? Very

simple because they have such a market

dominant position.

Hold on, let me finish my sentence. They

have such a market dominant position

when a company like uh Apple has, you

know, half of the mobile phones or

Google has Chrome, Android, plus all

these things that they could shove that

product for free down the throats of

users, price dump it, which is illegal,

and create less competition in the

future. But if you said Door Dash and

Lyft or, you know, Coinbase plus a

stable coin company, this would build

the Max 7 to the max 70 and then you

would have many more larger companies.

What What do you think of this, Philipe?

I I'll respond to that because I don't

think that that makes any sense and I

think that the the comments you're

making about

size shouldn't drive these decisions.

The fact that Apple, for example, has a

minority market share in operating

systems on mobile phones. Remember,

Android is the majority. That's no

longer true in the US, by the way.

Right? Not globally, right? And Apple

comes along and says, "Hey, I want to

buy a car company or I want to buy

something else." Why should that affect

consumers in any way whatsoever? it the

the ultimate objective of antitrust

authority is to prevent monopolistic

practices that hurt consumers and hurt

the market and take away options and

choice and freedom in the market. But if

companies want to make um orthogonal

acquisitions, if companies want to

continue to grow and become a you know a

large holding company, why should we

step in and say, "Oh, you're too big

now." Ultimately, Jason, you're you

could see that threshold very quickly

becoming a slippery slope that leads to

a general like anti- capitalist concept

where people say, "Well, let's stop all

companies from getting bigger than a

billion or let's stop them all getting

bigger than 100 million now." And that

that is a very slippery slope. Scale

shouldn't matter. At the end of the day,

protecting consumers from um

monopolistic or antitrust practices

should be the objective of these

antitrust authorities. Yeah, I think my

response to that would be except in the

case where the bundling, as we've talked

about in previous episodes, makes it so

any of the large companies can hold Hold

on. Let me finish my sentence again. In

the case that a large company could kill

all the competitors instantly by price

dumping. So, you take something that

people are paying for, you know, like

say uh Robin Hood or Coinbase. You, you

know, Google buys Robin Hood or Apple

buys Coinbase and they just say

everything's free. we're going to make

our money from our main business. Yes,

it's better for consumers, but it's not

as good for a competition and in the

long term then you would kill all the

competitors and then they can do

unnatural acts. That would be the

argument. I'm not saying it's a great

argument. That's a great argument for

what you're talking about. It is not a

great argument for stopping companies

above a threshold of of market cap from

doing stuff and companies below because

a company below a threshold in market

cap could have the same effect as what

you're describing in a smaller market

and they could have you have to be

thoughtful about you're 100% correct if

they're in the same arena. So Coinbase,

Robin Hood, and Erade merging could

cause the same effect. You're right,

Philip. What are your thoughts on just

how to get the country out of this

debate? Because big companies bad. No,

we shouldn't let them do m any M&A. The

wrath of Lena Khan. Is there a is there

an offramp here? Can can Trump just

unilaterally kind of make this happen?

What are your thoughts? Or should he?

Oh, I think that to me one of the best

part being an investor of venture

capital is when you have a really big

idea and it works out, it takes care of

a lot of sins. You know, there's a

little aspect like would you like to

play the lottery? if the lottery was

capped like hey if you win the lottery

you can't win more than $30 million 30

million is insane amount of money but I

I read that there's some lottery guys

who make 1 billion and two billion and

the reason why people are willing to bet

so much and most people are willing to

lose is they all think that they're

going to have this one ticket that's

worth a billion and I think when you

reduce the incentive the financial

incentive of and I agree with Dave like

success should be rewarded as much as

possible. But if you've done something

wrong, then use these, you know, the

existing uh laws to define what success

is. I don't think you can cap because

once you start capping and then what

happens if the stock market goes down,

do you then have to just recap? So, but

I I agree with you. You bring up an

interesting point which is in these

bundles like Amazon Prime bundle, Apple

bundle, there's a Costco bundle, right?

We seem to be living in this world of

bundles where the stock market is

willing to pay 40 50 times earnings just

for the you know the membership fee as

long as whatever you do on the side you

basically make no money like Costco I

think makes 100% of its money more or

less on the membership fee and trades

for 50 60 times earnings there is a

limit to like how big the bundle is

before you start uh dumping so I don't

think I'm saying anything super

interesting I just hope that you don't

cap the upside because that's what

enables all of us to fund these new

companies. The reason why all of you

guys and me were willing to fund these

companies knowing that many of them are

going to fail is the hope that you get

open AI. Yeah, it's well said the power

law. Chimath, I think maybe a good time

to maybe talk about private markets and

liquidity in VC. Yeah, I

mean it's just so

hard. It's hard to make

money. And if you view making money as

some derogatory thing and you put a

bunch of impediments in the way, the

downstream impact is interesting ways to

make money will be out of fashion and

simple ways of making money will be the

only things that people do. The problem

is that society doesn't move forward if

all you do are simple things. You need

people who are willing to put risk

capital to buy these lottery tickets.

And if you marginalize the upside,

you're just going to have exactly that,

a stagnant society of marginal things

that doesn't move along. And unless

people fundamentally embrace that idea,

we're going to lose. We being America.

Yeah. Yeah. If you look for example in

the last 5-year period in China or

Canada where both of them two totally

different political regimes but they

both had the same thing happened which

is the the the amount of investment

capital that went into both of those

countries fell off of a cliff for two

totally separate reasons.

What is interesting is going to be what

is the downstream impact of that in 10

and 15 and 20 years and you can look

historically back and we know what this

looks like which is countries stagnate

in the absence of investment and risk

capital. So you will become a

marginalized also ran country and you

know not to slag Europe but part of what

Europe got wrong was that compact didn't

exist too many administrators too many

hall monitors not enough ability to put

risk capital to work and actually get

gigantic outcomes. So the most important

thing we can do on that dimension is to

figure out how to have less regulation,

have these companies fight it out and

create the incentives for for these

smaller businesses to be bought andor to

go public. So let's uh back this up with

some data here. Nick, pull up the chart

on exits. This is an important one for

people to see. we've had since the wrath

of Lena Kong last four years under

Biden. You know, you had this 2021 spike

of IPOs, peak zer, a lot of inventory, a

lot of risk capital have been put to

work for 10 years. And after that 2021

spike, things have been flatlined and

companies are preferring to stay

private. And now we have venture capital

constricting in terms of new funds being

done and people are making larger funds

to do later and later stage investments.

And Jason, it's constricting at the

absolute worst time because what Philipe

said before is we're in the midst in the

early phases of an entirely new economy

that's going absolutely

parabolic. But the people that are

supposed to accelerate that innovation

and make these companies come to life

are going to run out of gas because if

they don't return money to their limited

partners, where are they going to get

the incremental capital from? Yeah, it's

retail investors and sovereign wealth

funds outside the US seem to be the

answer to that question. This lead to a

normalized market, Phipe and Chimath. So

ultimately, shouldn't the exit volume

define the amount of capital that LPs

should invest in this asset class to get

an out a return that compensates them

for the ili liquidity relative to public

markets with the same kind of risk

levels. At the end of the day, it is

what it is and you're going to see a

reduction in venture dollars and that's

just the market normalizing. The econ

the economy only grows and only

innovates at a certain pace maybe is

what the data shows. I think the way

that I think about this as an LP and

maybe Philipe can talk about this as a

GP but as an LP when I think about

putting capital into different

funds I have a base return in my mind

which is I want after taxes net of

everything to generate about 10% a year

that's where my risk of ruin is

basically zero it compounds to infinity

I like the profile of my return of my

assets how do I get to 10%. Well,

sometimes when I'm holding short-term

stuff, I'm only generating four or 5% in

paper. So, then I have to go out on the

risk curve. So, I talk to a hedge fund.

They're going to give me 12 or 13% net

maybe in some cases. I try to understand

their risk, but I can only get so much

working. So, then I have to go further

out on the risk curve. Then I talk to

some private credit and private equity

guys who tell me, "Yes, I can give you

mid- teens returns." Then I do the

analysis on that and I think, "Okay,

I'll give you some money, but they are

going to lock me up for five or six

years." it's still not enough to get to

a blended rate of return of 10%. So then

I go yet further out on the risk curve.

I call my friends at SEOA and all these

other

places. And when you talk to the venture

investors, the problem is you are so

illquid for so long that the rates of

return need to be in the mid to high 20s

net to me.

But when you look at the data of what's

possible, they actually look like a

three and fouryear hedge fund. And part

of the reason is because of this

strangulation of illiquidity that's

caused artificially by administrations,

by regulations, and by agencies like the

FTC.

The question is if they didn't exist or

if the regulations were a lot smaller,

what would the upside return be? It's

probably 500 to a,000 basis points

higher. Much higher. 100%. Yeah. But I

think at current course and speed with

the lack of IPOs and with the lack of

M&A, you can't justify that asset class

on its own in my opinion unless you

think about it as like something that

you're doing almost philanthropically

unless capital comes out and then prices

come down and then m return multiples go

up. Let me put some numbers on this.

Here's the second chart. annual IPOs and

just give you some, you know, broad

strokes here of how amazing 2021 was for

a lot of firms. Rivian went out at 66

billion, a firm at 24 billions, Qualrix

25 billion, Robin Hood, which I was

involved in, one of the first investors,

30 billion, Dualingo 5 billion, Toast,

etc. Roblox 42 billion, Squarespace, and

then you had all this M&A Square app

bought Afterpay for 29 billion, Zoom

acquired 59 for 15 billion. Mailchimp,

remember that one? 12 billion. Microsoft

and Nuance the um spoken uh the

um models 20 million. Do you know what

the distribution? Do you know what the

distribution of these IPOs were by

method? Spack versus direct listing

versus traditional IPO. I don't have

that here. We'd have to do it not just

on the names but also on the amount uh

distributed. Yeah, that's a good

question. You know, when I look at that

data, what what what I look at if if you

just bring it back for one second is

ever since, you know, the 20 and 21

which were very high. Yeah. If you look

at 22, 23, 24, and now the 25, I'm like,

how is this that it's worse than 04, 05,

06 that were normal years? How is this

worse than 13 and 14 and 15? Yeah. She

scared the hell out of people. She

scared people. Correct. M&A. I've talked

to M&A people, Philipe, and they have

said it's not even worth bringing it to

the board. Worth the discussion. She

can't connect the dots. You know, she's

like, I want people to not, you know,

play the lottery anymore. I don't care

for them. She doesn't understand that

our system is based on this risk

takingaking. And so, listen, I think

it's almost I think it's this might

change. It's also worse than that. I

think that they probably look at like

Adobe Figma and they look at the cap

table and they probably just make a

judgment that, hey, I don't want these

people to be billionaires. Yuck. I hate

these people, but they don't understand,

to your point, the waterfall effect of

not returning capital to all kinds of

other investors who are in the business

of taking risk. It's this like

collateral damage. You know, one of the

things I feel none of these people

understand so well is like all the

collateral damage. You think you're

moving in one direction and all these

dominoes sort of fall around you.

Exactly. Well, the second and third

order impacts this cascade. You know,

it's Ford Foundation, it's Harvard, it's

California retirement. Those are the

people who are the going to be the

beneficiaries. And the third thing,

because I've been talking to a lot of