What's the story with the California

wealth tax? Can somebody explain this to

me? Okay. So, the SEIU, the Service

Employees Union, filed a ballot

initiative, which means a directto voter

vote to amend the California

Constitution to introduce a one-time

billionaire's wealth tax where

billionaires, anyone who has assets over

a billion dollars net of their debt, has

to pay a one-time tax of 5% of their net

worth, including their private stock,

including their real estate. You said

5%. 5%

of their net worth, not of their income,

of their net worth, the entire net

worth, onetime payment to the state of

California, and then there's an

allocation on how that money will be

spent, but it's a onetime billionaire

tax. Now, it is very likely that this

sort of an amendment to the California

Constitution is not constitutional and

actually cannot be made and will not

actually go into enforcement even if the

voters do vote to approve it in both a

federal and a state level based on this

concept of uniformity which is that you

have to tax everyone equally except for

the case of an excise tax which is like

income or a transaction. You're allowed

to tax disproportionately based on the

size of the income or the size of the

transaction. But if you're going to tax

on property, if you're going to tax on

an asset, you have to tax everyone

uniformally. So it is likely not going

to go into effect if it does pass.

However, it is very likely the case that

the SEIU is simply using this as a

baiting mechanism to get people to stand

up and denounce it and then they will be

in a position to attack those people and

destroy them and use this effectively as

a political fodder for this next

election cycle. That's what it seems

like the true kind of motivation right

now. Let me let me go on the record. I

think this law is great. [laughter]

>> He's getting the virtue signaling

points.

>> I would just like to say, may I be the

first to pay 5%. I'll be in the front of

the line. Let me know when to show up.

I'll bring my check.

>> Who do I sign the check towards?

>> Shall I Should I bring cash, Gavin? We

just bring it cash to your Which one of

your mansion should I bring the cash to?

>> [laughter]

>> This is strategically why Chimamoth, I'm

glad I got out of California right

before I was about to billionize. That

was a smart move on my part.

>> Free, what are the odds that this goes

into effect? Can you just handicap this?

>> Yeah. Well, we don't know who's going to

come out against it, but there's an

effort to try and get top Democrat

officials in the state of California to

say, "This is silly. If you do this,

people will leave the state." yada yada.

So, that's kind of a quiet underway

effort. But I don't know why the

citizens of California, the majority of

citizens of California would not vote

for this. Why? Who wouldn't want to tax

the billionaires 5%. Come on. Like,

>> well, the way the way that it's written,

it says, "Hey guys, we're 30 billion in

the hole and there are 200 Californians

that control two trillion dollars. We're

just going to ask them to pay a onetime

fee of 5%." Y

>> and I don't see how anybody would say

that doesn't sound unreasonable at the

ballot box,

>> right?

>> And then the people the people that step

up against it and are vocal against it

and point out like hey in France when

they did this they lost like 40% of

their revenue because all the wealth

left the country. The reality is that

this sets it up to go through the

legislature because if it goes through

the will of the people and it gets

overturned as you say Freeberg then if

you're legislatively smart then you'll

actually push it through the state

senate.

>> Oh but don't you remember no and then it

will not get vetoed like because then

it's like hey listen it's clear that the

people want this.

>> So I I think that you'll have some kind

of progressive taxation system that

conforms to the law.

>> I mean the one They're already trying to

extend Prop 55, which is the progressive

tax for people making over a million

dollars. They're going to get that

passed. That's going to be this

incremental tax on income. But the

onetime wealth,

>> I think the I think the million dollars

thing, I think that's harder to hunt

because there's too many people that

that touches. A million dollars today in

2025, not to be glib, is just not what

it used to be. But a billion dollars

does cut off most people except for a

couple of hundred. That is true. And I

think that for example, it's very

reasonable to then charge a 10% excise

tax on selling appreciated stock,

>> right?

>> Why not? There's all kinds of ways that

you can get billions and billions and

billions of dollars. So, I don't know. I

think that this is more of a trial

balloon

>> to say, can we draw a clear line between

200 Californians and the rest of

California?

>> Yeah. And to the extent that that bright

line becomes visible and it's okay,

people are going to go ham. They're

going to try to get as much as they can.

>> The reality is, as we all know, I mean,

Larry Ellison left the state. Many of

the founders CEOs who have built large

technology companies in California. Elon

left the state will eventually at some

point break and say, "Okay, I'm moving

my company out of state and I'm leaving

the state and I'm bringing the employees

with me and I'm bringing all of the

economic value of this business with

me." And people will never learn that

lesson because it's so much easier to

sit in front of a voter and say, "Hey,

should we tax these 200 people to give

you better benefits?" 97% of people will

say, "Absolutely."

Very few people will sit and think about

the consequences of what's going to end

up happening.

>> 99.9 will say absolutely. I mean, nobody

tells them in that ballot initiative

that we have a $300 billion budget of

which 2/3 may be just wasted. One of the

motivations for this bill, and this is

why it's being proposed by the SEIU, is

that there are these massively

ballooning pension benefits and pretty

significant increases to the pension

programs for both private and public

pension funds in California, which has

actually become a very visible liability

for the state and for some of these

private pension programs. and they're

trying to fill the pension hole, which

we've talked about in the past, but

there is a multi-t trillion dollar

unaccounted for pension liability in

this country that's going to have to

come from somewhere. You're either going

to have to print the money because the

federal government's going to step in

and fill the hole in all these pension

obligations or they're going to have

these massively progressive tax programs

to try and fill the hole. And if and

when they do, as we all know, there will

be an economic cycle that will be pretty

nasty, which is all the value will leave

that jurisdiction and move elsewhere.

But let's see.

>> It's it's like the Democrats are doing

everything they can to get me to leave

the state. I don't want to. [laughter]

I really am resisting. I mean, they've

raised my income tax to what is it like

13.3%.

>> 13.3. Yeah.

>> And I know it's going to 16. They've

been boiling the frog. I still haven't

jumped out of the pot. But for me, I

think the wealth tax, I'm gonna have to

jump out of the pot with this.

>> The crazy thing with this, the other

like I read it because I was like, "Oh

my god, what's going on?" The two things

that they they obviously got somebody

very clever to draft it because any Roth

IRA over 10 million counts. And normally

in these wealth calculations, you you

keep your deferred retirement accounts

off the table. They're typically not

included. So folks, and I'm not going to

say who they are. we all know who have

tremendously appreciated Roth IRAs

>> pretty public who you're talking about

but sure

>> those are included and then the other

thing is that if you actually did any

tax structuring the real valuable tax

structuring is where you set up these

trusts in Wyoming and North Dakota and

you do these interparty loans where you

can lever up 10 20x so you can transfer

billions and billions and billions of

dollars out of state but then you have

these obligations those are negated and

they don't count so all that tax

structuring goes out the

So you can get into a very difficult

situation here where they're like, "Hey,

you owe us $500 million, a billion

dollar, $2 billion, and the only way to

pay it is to have an IOU to the state of

California." Which is crazy.

>> It's crazy. There is not a lot of ways

out of this if this stance

>> No one is empathetic to either of you.

No one gives a about the two of you

needing to pay more.

>> This is why I'm in support. Again, I'm

just saying it for the record. I am

supporting support keep [laughter]

this

>> I had a few more thoughts about this

thing which I want to unpack. So number

one is like you guys said a wealth tax

has been tried in many places at many

times it always backfires because

whatever the tax benefit is that you get

for the state it's greatly outweighed by

the economic depression that you get by

the wealthy people the job creators

companies leaving. And as soon as you

cross that line of going from no wealth

tax to any wealth tax, enough people of

wealth can see the tea leaves, they can

see the writing on the wall that they

have to leave. And that's why I think

even if they say this is a one-time

thing, we all know that it won't be one

time. If they get away with it, it'll

become a regular thing. It'll just be

>> if it's to plug a deficit, they're going

to run deficits every year.

>> Exactly. And and you're right. And this

isn't even to plug an emergency

situation or an unfunded liability like

some one-time thing. This is just a

regular operating exactly. So they will

have no incentive to fix their

mismanagement of the state and their

deficits and all that kind of stuff.

>> By the way, by the way, if they get away

with this

>> and it's not just going to be

billionaires eventually the line will of

course get pushed down be gone. The

billionaires always like like the income

tax in the US. I think it was a 1%

income tax originally and it was like

just a onetime thing for wealthy people

and then it became a smaller thing for

you know lower income people and then

eventually as we all know every person

has to pay a tax every property has tax

and so on. I mean these are this is the

problem with government. There's all

these other states by the way that are

finding clever ways. I think in Montana

now there's a differential property tax

scheme where if it's your second or

third home and you don't live there you

pay a lot more. Yeah, here's what I

wonder about is, you know, what are guys

like Jeffrey Katzenberg or even Ari

Emanuel thinking about right now because

they're kind of the higherups in the

Democratic party behind the machine,

sort of the oligopoly that kind of runs

the machine. And I remember that when

Karen Bass was running against Rick

Caruso for mayor of LA, it was very

publicly reported that Katsenberg was

behind Karen Bass and there was sort of

an imboglio between Caruso and

Katsenberg. Katsenberg anyway helped

make sure that Karen Bass was wellunded

enough to win. The result of that

ironically was that Pacific Palisades

burned down and I think Katzenberg's

house might have been part of that. In

any event, I think there are these guys

who are very, very wealthy who think

that they can control the machine well

enough that they basically are still in

control of this thing, right? That in

other words, that the tiger won't eat

them, right? The tiger is socialism.

>> Yes.

>> And that's exactly right.

>> You know, they think they've got the

tiger under control enough that it won't

eat them. But I don't think they do.

Maybe they don't. Maybe this is the

tiger breaking loose.

>> Yep. And I think Fer, you pointed this

out that there was an attempt in the

legislature last year to pass a wealth

tax and it was quietly killed behind the

scenes. And I actually think that Gavin

Newsome might have something to do with

that because he has presidential

ambitions. So he can't let the state go

full socialist. But you just kind of

wonder, okay, well, if these guys lose

control of the strings they have to

control the beast of socialism, does the

whole thing just spin out of control?

>> That's New York. We're seeing it

everywhere. Seattle.

>> I was about to bring up let's talk about

it. Uh well and and just to let people

know about the France situation back in

I don't know 2011 2012 they did get rid

of Gerard de Parde which was kind of a

win but Bernard

>> Arnold

>> what's

Bernard Arnold is that his name from

LVMH

>> Bernard Arno said he was going to go to

Belgium and said it was a clerical error

and he unwound it but that was a clear

signal the richest man in France. Well,

he's

>> go to New York.

>> He's basically the entrepreneur LVMH

together. I mean, it's their biggest

company. It's the one that does all the

luxury goods, all the craft goods that

they're so famous for. I mean, yes, him

threatening to leave France is, you

know,

>> accidentally fly filing paperwork. Oops.

What an accident. Here's your look at uh

New York City under Mandami, who uh

we're in touch with. You may come on the

program.

New York State tax 10.9% city 3.876%

and the 2% mandami tax put you at 16.8%

for living in New York is 17%.

I mean if you were making $10 million a

year is it worth $1.7 million? You could

get a plane. You could live in Florida.

You could come to New York 150 days a

year. There's really five good months in

New York. the fall, the spring, and

that's about it. You know, you go see

the tree at Christmas, but it's cold.

>> Well, that's not that's not that's not

realistic for most people. And

especially if you have kids and you care

about them, you'd like them to be rooted

somewhere. You're not going to shle them

around every month to arbitrage taxes.

>> Yeah. Well, I mean, I I do think they're

they're going to test that at 17%.

That's nondeminimous. Okay, let's uh we

got a lot of docket to get through here.

>> I'm so glad Shimov supports the

billionaires tax. That's great. We'll

get that [laughter] in the headlines.

Yeah. right after all. This is the free

rider problem that we have is no one's

going to want to stand up against it and

the thing will just kind of

>> pass. By the way, if you're the if

you're a billionaire CEO of a public

company in California,

you have you have everything you have

everything to lose to stand up and

oppose it. Your employees will run. Your

shareholders will attack you. You'll

look awful in PR. So, everyone's going

to sit quietly and start looking at

houses on Zillow in Austin or Miami and

be like, "Where should we move to next

year, honey?" You know, like that's the

conversation that's going on.

>> Didn't you say it was retroactive?

What's

>> it's retroactive to 2026? So, if it

passes,

>> you have three months. Two months. Yeah.

>> But again, I don't think it passes

muster with the constitutional reads.

>> Remember what they said about remember

when they did the transfer tax where San

Francisco took 6% of my home?

>> Yep.

>> And then in LA just took 5% of my house

down there, the supposed mansion tax.

>> But those those were excise taxes. So if

you go back to the case history in the

US Supreme Court on this stuff, anytime

there's a transaction and you take a tax

on a transaction, they call that an

excise tax that is constitutionally

>> part of the bill though there's a part

of the bill that they could cleverly use

which is called this ODA which is

effectively this IOU mechanism

>> and they could essentially say when

these assets transact you owe us 5% on

an excise basis and by the way there's

an attestation that you have to file you

have to file a legal document and this

was quite well written in there which

said you must attest that you have less

than a billion dollars.

>> Okay,

now what? Okay, then I have to attest

that it's more and then I have to know

>> how do you even mark your whole

portfolio to market if you have a lot of

privates?

>> They do not allow discounts. They do not

allow liquidity discounts. It says if

you are a reasonable buyer and a

reasonable seller, you have to transact

this at market price. So, for example,

imagine you owned a sports franchise and

the sports franchise, if you sell a

minority share, you're typically selling

it at a discount off the table. If Forb

says it's worth 10 billion and you own

10%, that's a billion dollars

>> for the purposes of this calculation.

>> I'm going to pay $50 million to keep it

even if you paid 50 million to buy it.

>> Even if Freeberg is right that there's a

good chance that it'll be found

unconstitutional, how many years in the

course is that going to take? And who's

going to stick around waiting for that?

In fact, the rational thing to do is

pull up stakes before January 1st and

leave right now.

>> That's right. That's going to happen in

New York. I mean, I think they're going

to have an exodus just like New Jersey

and Connecticut did. And that actually

rocked the tax base in those two

geographies. All right, listen.

Big breaking news this morning. Huge

scandal in the NBA. The FBI just

arrested 30 people in a sports betting

and gambling probe. This hardly seems

real. Chanty Bilips, who is the current

Blazers coach and was just introduced

into the Hall of Fame, got pinched for a

poker game he was running allegedly with

the mafia that was rigged 17 different

ways allegedly to Sunday. Terry Rosir

allegedly is a point guard for the Miami

Heat.

>> Why are you saying allegedly all the

time?

>> I'm, you know, everybody's suing these

days, so alleged I'm I allegedly he's a

point guard. I I've seen him play. He's

not a very good point guard. It's a lot

of turnovers if I'm being honest. You

know what I know is alleged? That you're

the world's greatest moderator. That's

>> allegedly true. It's allegedly

[laughter] true cuz it's not true.

>> You're allegedly a billionaire. Nobody

can confirm it. [laughter]

>> Normally, he uses the word allegedly

when it's a story that like it's about

Hunter Biden or doing something

improper.

>> Yes, he allegedly smoked crack and shot

a 9 mm in the air.

>> It's usually a story about Democrat

wrongdoing and he's trying to discredit

it.

>> All right, here we go.

>> Anyway, keep going. Curry Rosair, uh,

who's allegedly a point guard. I mean,

he he was

he told his friends, this is crazy, you

know, in the overunders, you know, hey

guys, bet the under on me uh in rebounds

cuz I'm going to uh take myself out of

the game with an injury allegedly. And

uh

his friends allegedly made 200 grand off

this. Okay, just allegedly for the whole

goddamn thing. Uh this is going across

11 states and a bunch of crime families.

Allegedly, there's something called the

mob. I don't think that really exists

anymore. I think that's an urban legend.

And these are two separate threads, but

announced on the same day. They both

involve NBA players, but apparently this

is two different cases. So, Chimath,

what do you allegedly think of this?

[laughter]

I I think it's crazy. I think you're

seeing a lot of these trends converge

all at the same time. Meaning, you have

the emergence of all of these prediction

markets. you have

a lot of data science and AI being used

that shows that there's a lot of odd

behaviors. So, it really was the squares

versus the sharps. And if you had the

inside edge, you were just printing

money. Now that all of that is becoming

more transparent, there's a lot less

margin. Then what happens is you have

these laws passed in the 11th hour.

There was a an important gambling law

that was inserted into the big beautiful

bill that has implications to all of

this. And now you're seeing the feds. I

The crazy thing to me is

a press conference where Cash Patel is

talking about this. I mean, that's like

serious business when the FBI director

is front and center talking about all

this. So, I don't really know what it

means to be honest. I was shocked at the

scale of it and I was shocked that it's

on the radar of the feds. This took I

thought this is like pretty typical

tickytacky stuff, but clearly there's

something bigger. I don't know exactly

what that bigger is, but something is

happening where all these markets are

smashing together. There's just a big

cleanup effort going on. So, I don't

know. I really don't know.

>> Freeberg, I guess there's two different

ways to go about this. You have the

fantasy sports becoming legal, everybody

around these players just in that one

case

where are these people too dumb to

understand that their $10 million

contract to play in the NBA every year

or $20 million contract is more

important than your friends betting the

under or over.

And how dumb are they? I mean, to not

know that the people running a sports

book would look for weird action. like

why is one player getting $200,000 on

their overunder for rebounds and the

other players are getting 20,000? What

are what are your thoughts here? Us also

take on the poker one.

>> I think gambling generally as we call it

should be decriminalized and I don't

like this statebystate setup with

gambling. I think we should have a

federal regulatory body to oversee,

monitor, and the problem is you have

state gambling commissions and we have a

state-by-state kind of patchwork of

regulatory authority that makes it very

hard to standardize, track, and provide

also guidance and feedback. I would much

rather see this all kind of get handled

at the federal level and and better

organized. To Chimat's point, this is

not going away. People love to bet on

stuff. They love to gamble. This is part

of sports. This is part of the culture.

They're not going to just turn it off.

>> They did market poly market raised

whatever it was a billion or two billion

at 9 billion.

>> Then the next weekend they announced

sports betting

>> and now they're raising money 30 days

later. It allegedly

>> allegedly

>> at 12 to 15 billion. I mean anywhere.

>> It's un it's unbelievable. And you can

see by the way the way that DraftKings

and FanDuel stock

have reacted to this. Those companies

are toast.

>> Toast.

>> That's right. This is really

interesting.

>> The poly market model is the best model

because it creates a market and so as

information flows in that market will

dynamically adjust and everyone will get

a more fair price.

>> Did you see the regression that they did

on the poly market trades and how well

they're in the money?

>> Y Nick, can you find that? But basically

what it showed is like the front money

is the sharps,

the back money are the squares, but you

have to fade the trade in the first

week. So there's a very scientific

method where if you want to make money

on poly market, it became pretty clear.

There's two things that are very

interesting about it is number one how

how they've simplified things to a way

people can understand. It's not like you

have to understand, you know, it's 120,

it's this the point spread. It's just

what are the what's the chance that this

thing happens? 80% 20% people could just

place their money on it. And then this

ability to reconcile it at any time. I

didn't realize how engaging that is. I

was watching the Oscars and I was

watching boxing and I bet the underdog

in this Netflix boxing thing that

happened cuz I just thought this guy

looks pretty pissed off. Uh, and I

thought that was a good enough way to go

with the underdog. And then you watch it

round after round and you see the odds

changing real time and anytime you can

just cover the bat and take your

winnings and take out the risk. Really

like interesting and fun for people.

It's so simple. Then I did it on the

Oscars or the Emmys and I was like,

"Yeah, I'm going to I'm I'm fading uh no

offense Pen Stiller, but I'm going to

fade Severance." And I went with the um

the uh the one about the emergency rooms

and with Andor and I won again. So, I'm

just it's it's a lot of fun to do it

>> here. Jason, look at this. I sent Nick

the tweet, but this is incredibly

systematic. This is over many many many

markets. But basically, 89% accurate one

week out, but in the final four hours,

it jumps to 95, which means that if you

follow the sharps along this pattern,

you're going to make money.

>> 6% in a week.

>> Yeah. Right.

>> Market Poly Market actually has the news

before the news does. This is one of the

most like powerful outputs of Poly

Market is they're actually getting a

read on what's going on in the world

before the media recognizes it, before

the public recognizes it. Because when

you put

>> Yeah. When you put money up, it actually

turns out that when people have

incentives, that market will find the

truth.

>> Somebody needs to build the app that

makes all of these things fungeible. And

by all what I mean are cryptocurrencies,

betting markets, equities, and options

markets turning into.

>> Yeah. And the reason is there's just no

reason to go to nine different sites and

have nine different accounts. And the

most important thing is to do KYC and

AML across nine sites to get access to

liquidity, credit, and margin. You'll

want to do it once. And then you'll want

to have a large pool of capital that you

can trade across anything. So I can go

long Nvidia but I can also go short the

nicks and then I can own some Bitcoin

all in the same trade.

>> Totally.

>> That's where it's going.

>> Totally. Totally.

>> Now to the earlier question Jcal I think

if we end up there where poly market

does become the truly liquid market

across all of these kind of predictions

all of these assets then a lot of what

we are seeing with respect to insider

trading insider information becomes much

more apparent. So, the problem with the

sports betting is that there's a

one-sided bet. The casino sets the odds

or, you know, whomever is setting the

odds, and then you're either taking one

side or the other. And so, if you have

the insider information, you're taking

the side that creates an arbitrage

opportunity for you.

>> But if you were to do that in a liquid

market where there's someone taking the

other side in a dynamic way, then the

market very quickly moves because of the

inside knowledge you have. And that

inside knowledge is now reflected in the

underlying asset price in the underlying

odds that you get for that bet. And so

Poly Market actually brings truth and

transparency to what is currently an

insider arbitrage opportunity and it may

actually solve some of these fundamental

problems in in gambling.

>> I think let's just wrap with a little

bit on the poker and knowing if you're

in a rigged game or not. uh living in LA

I got invited to a lot of poker games

when I was playing low stakes playing at

Hollywood Park just you know $500 buy in

thousand buy in but as these things went

up you started to get access and I

started to get invited to Molly's game

the very infamous game and she would

text me she would call me oh we're

playing over here oh Leo this person

wants to see that person wants to see I

was like they want to see me lose 50

grand there's no way I'm not playing in

that high stakes and I'm not going to

that game and the one or two times I did

go to games that had a rake I was just

like This game is fixed. I don't know

how.

>> Totally.

>> But somebody's I think it's just

collusion. I think there's three players

all playing from the same chip stack. In

which case, you know, you could be dealt

aces five times in a row. If you're up

against three players, what are your

odds against, you know, six other cards?

It's going to be pretty bad for

>> you think Molly's game was fixed.

>> I don't know if hers were was I wouldn't

be surprised if it was. I wouldn't be

because once the mob gets involved,

which is what happened at the tail end

of hers, then all kinds of possibilities

happen. Once it gets to extremely high

stakes and you've got guys chasing it,

man, you could, you know, and they're

coming back night after night trying to

catch up for what they lost last week,

it's it's pretty dark. There is

absolutely no reason why anybody should

play in a game where you're playing with

people you don't know. And if you need

it that badly, then you probably have a

problem. But there is no limit at which

you couldn't find a game with some

combination of your friends and or

respectable reputable businessmen that

have more to lose than you do. And if

you can't find that game, you should not

be playing in any game.

>> Yeah. Any home game with a rake is just

should be absolutely suspect. Period.

Stop. Super sketch.

>> Isn't that game?

>> Yeah. Well, yeah. Well, we don't want to

[laughter] bring up angle shooting, but

he's a straight play.

He would be so tilted if he hurt heard

you so well.

>> Oh my god. He's so about the ethics. He

wants, you know, no flies.

>> In fairness to like that game where you

can, you know, go off for a small house

in is also the game where he would then

collect $10 from each of us to pay for

the

>> fruit plate and the pizza. He would

order Domino wouldn't even buy us pizza.

>> Yeah. The chef and but I'm like I don't

know if the chef really does cost $6,000

for two hours, bro. [laughter] I don't

know.

>> It's Wagu. But I think it's a Wagu

burger. The the funniest ever was he's

like in a hand and the Domino's pizza

comes and you know he's like everybody

have a green chip when we're playing

with fin chips. He's trying to get like

$125 bucks. The guy comes I just go it's

on card. The guys got you got a sign

right? It's got the tip on it. I said uh

it's like $150 a piece. I said what's

the most what's the biggest tip you ever

got? He said yeah somebody on New Year's

gave me like 200 bucks. I just wrote

$500 on $150 thing. I signed it. I gave

it to him and then I was in a hand with

I said here's the receipt. [laughter]

>> So what you're saying is when it's on

somebody else's credit card you're

willing to tip incredibly generously.

>> I mean

>> God you're a really great guy.

>> You should speak when Phil Helmouth and

I bought uh dinner for everybody at

Chipriani that time. Chimop grabs the

check. He goes, "I'll put the tip in for

you guys."

>> Well, why is that, Jason? Is that

because 100% tip on an $8,000 check?

>> Isn't that because I pay for everything

all the time?

>> That's true. You are very generous. It's

You're no um or no, sir. 20 2010

>> one time. I asked you guys in 15 years

to pay one time and you remember the

exact It's so sad.

>> I have

on you guys.

>> I was like, "Oh god, I guess we're going

to public school."

>> You guys are so ungenerous. It's

>> I know. I I give huge tips. Um

Yeah, I think he's, you know, he's

average.

>> Okay, let's go to the next topic.

[laughter] Allegedly, world's greatest

moderator.

>> Let's talk about this Amazon outage.

Tough week for Amazon. They had this

huge outage in the beginning of the week

and then they had a bunch of leaked

documents about their plans for uh jobs.

And uh Monday, massive AWS outage, 2,000

companies, 4 million users unable to

function on the internet for half a day,

15 hours, 20 hours. Uh and then on

Tuesday, internal docs viewed by the New

York Times showed Amazon plans to not

hire uh 600,000 plan jobs uh because of

robots by 2033.

So this isn't they're planning on laying

off 600,000 workers, but rather they're

just pulling back their hiring plans and

ramping up their robotic plans, which

you would expect. uh and uh their goal

according to these internal leak

documents is to automate 75% of

warehouse operations. We talked about

this the last couple of weeks. Freeberg,

your thoughts on either of these uh two

stories here?

>> I think the AWS story is interesting in

terms of its implications for the

clouds. There's effectively three major

cloud vendors that compete with one

another. AWS, Microsoft, and GCP or

Google Cloud. And I'll just give you

these numbers.

>> Also, by the way, coming on strong.

Yeah,

>> that's right. But let's let's exclude

the number four for now. Oracle, but AWS

is $124 billion revenue run rate.

>> Microsoft 120 billion. And Google Cloud

54 billion. But AWS, which is slightly

larger than Microsoft, is only growing

17% year-over-year. Microsoft 26%

year-over-year. And Google Cloud is

accelerating at 32% year-over-year. And

some say getting closer to 40% growth

rate. The big thing I hear from partners

and enterprise customers of these cloud

services is that many of them if not all

of them as they scale up move to a

multicloud model. So none of them want

to be dependent on a single cloud. Many

folks started on AWS because AWS was the

OG. Back in the day when I was running

Climate Corp, I was the largest EC2 user

on AWS for about a year and a half,

which was their elastic compute cloud

service. We were running all these

models back then. So I knew that service

very early on and it was very unique. It

was very powerful and so a lot of

companies that are old school

established themselves on AWS very early

on. But the outage that happened this

week, I think starts to highlight for

folks that they can't and shouldn't have

a dependency on a single cloud service

provider and will only accelerate the

diversification of companies into the

other clouds. And so I do think this is

actually a very beneficial situation for

Microsoft and GCP and to your point

Jakel perhaps even Oracle in terms of

giving those sales teams which are very

aggressive a hard story to go and sell

for and say guys you don't want to just

sit on AWS in case this happens again

we've got better infrastructure we're

more reliable etc than these other guys

so come and move over to us and that

might be a little bit of a naive

simplistic kind of reductive way to

think about what happened this week but

I we are seeing the smaller competitors

accelerate and I think that this might

be another kind of moment of

acceleration for those folks

>> and multicloud it's been around for a

while Jimoth when you're doing stuff

with 8090

are the big companies already doing that

or do they assume hey there's going to

be some downtime

yeah it's okay to risk or are they

really thinking multicloud neocloud

let's have some smart intelligent

routing and redundancy here

>> I think there are two markets there's

the AI market then there's the non-AI

market. In the nonAI market,

everybody has everything. It all looks

effectively the same. There's certain

products and services that are unique to

Azure versus GCP versus AWS, but by and

large, the market is big enough and

important enough that you'd have to be

pretty insane to take a single vendor

approach.

And so what typically happens in these

markets is that they start off really

small. One person has all the share. And

then as the market becomes very valuable

and very big, everybody diversifies

because it's a riskmanagement thing. And

these things flow into the disclosures

you have to make as a public company.

And if you didn't have that

diversification and something bad

happened and it impacted your business,

you could get sued. So there's all these

reasons why eventually all these three

big companies will converge effectively

roughly a third, a third, a third. We're

going to debate the path to get there,

but that's where they'll end up.

>> You know, there's this principle called

the rule of three where they say like

all markets eventually mature to kind of

a 60 3010 split that you end up having

your market leader at 60% market share.

Second place is usually half the size at

30 and then you always there's some

balance in the market where there's some

competitor that resolves to about a 10%.

It's really interesting. If you guys

were to place a bet, who would you think

is the 60 3010?

>> I don't think that applies to you. I

think that's

>> You think they're going to be a third, a

third, a third?

>> I think it's all some idiot making

something up.

>> But what do you think? What do you

think? What do you think happens in

cloud? Like, do you think that these all

converge to equal market share?

>> In nonAI, it's a third, a third, a

third. It will it'll take circuitous

paths, but that's where we'll end up.

>> By the way, a good point to make is that

this revenue number that I highlighted

for Google Cloud, Microsoft, and Amazon

actually include their applications. So

as you know like Microsoft GCP have

pretty sizable enterprise application

stacks that are built into that number

which gives them obviously the ability

to drive cloud usage because they've got

demand and sales relationships into

those enterprises. I think the way it

works in AI is that you initially right

now we're in this early phase where

there's two paths. Path one is you need

a specific model and it's relatively

well integrated using a specific

subsidized form of hardware on one of

the hyperscalers but eventually you'll

get more of that abstracted away as it

gets pushed into the infrastructure so

that you have less dependence on one

model. There's a lot of work that has to

get done and a lot of in-memory

infrastructure that is not yet built

that has to exist but once that exists

it'll be easier for all of us at the

application level to view these models a

little bit more funly and then at the

bleeding edge you'll have the folks that

basically give you some form of a

hypervisor or virtual machine or the

bare metal and that's where the

neocalers are doing really well but I

think my point is that in any important

market

in compute in technology where there

really isn't much of a differentiation I

think you'll end up with these

hyperscalers at a third a third a third

now if one model is way way better and

it's only on one of the clouds because

Google writes a big check or Amazon

writes a big check I could see that

swaying the AI share but in the absence

of that I think cheaper faster better is

sort of the the the end destination for

everybody

>> what an extraordinary outcome for Amazon

on where AWS is like 15% of their

revenue right now Freeberg but it's 60%

of their profits profits today and that

was just a side hustle like a little

project they took out of nowhere and

it's it's having the same impact on

Google and other places so side bets

>> and side quests are just you look at the

Whimo Side Quest for Google or even a

lot of Sergey's other bets like um and

Larry Flying Cars Looms low earth

satarites Google Google fiber all those

ex projects were so they had so much

potential in this

>> TPU, Deep Mind, TensorFlow, GFS,

>> Robotics,

Boston Robotics, they bought all those

robotics companies, man. It's like

somebody got to them and we're like,

"Yeah, you know, you're seven, eight

years into this, it didn't happen."

>> The problem that Google has,

unfortunately, is like they have so much

stuff,

>> it's not really valued. And so they're

going to go through the same problem

that everybody else who's a conglomerate

has, which is this decision. Now

Buffett, when he got to that decision,

said, "I don't care. This is my life's

work, and so I'm just going to keep

everything aggregated." But now you're

going to get to this thing where the

intrinsic value of everything they have

will far exceed the actual value that it

trades at. And so there'll always be

these fissures of pressure. And then if

one of these things requires a lot of

money, there'll be pressure and that

pressure will be segregate these things

so that I can own one versus the other.

And that's always the thing that happens

in public markets is you go you go you

kind of swing back and forth. So I

suspect that this is going to happen at

Google.

>> This was what they set up to do with

Alphabet was to be the holding company

and then to your point they made that

evolution particularly in a company like

Whimo where they said we can't be the

soul funder. They brought in Silverlake.

They brought in all these other

investors. They did this actually with

Verily. They did this with a bunch of

these what they call other bets is they

made the conscious decision because

Chimoth on the flip side by bringing in

outside capital and having an

independent board for these

subsidiaries. They were actually able to

drive better outcomes because now there

was governance and there was aligned

interests that could then take

management and say guys if you can

deliver these results

>> you had this kind of external pressure

as opposed to the softness.

>> It's that but it's that it's something

else. There's no way somebody as smart

as Silver Lake comes in if they think

there's not a path to liquidity. So the

other thing they have to promise is

they're like, "Listen, we will take this

company public and in return you will

help us build a better company than we

could build ourselves." Well, it seems

that Silverlake has done their part of

the bargain. Now it's up to Google to

live up to their part of the bargain

because if it doesn't get liquid, it

sets a very bad precedent for everybody

that committed capital into that

company.

>> Yeah, of course. Yeah. Whimo going

public would be unbelievable next year,

man. If they did that, what would that

look like in the public markets? 250

billion. [snorts]

>> Take take it easy. Stop. Don't don't

don't do that.

>> You don't think so? I think it'd be

huge.

>> Jason,

we all objected to talking yet again

about [laughter] AIdriven job loss. Yet,

you insisted on putting this AI robot

story from Amazon in. I think you have

something to say. [laughter]

>> Thanks. Let me take you through a

presentation.

Well done.

>> You You have slides. No, I've been just

I I I'm working on a presentation based

on a lot of stuff we've been talking

about here. I threaded it together. You

know, I I talked we're just talking

about Google and the size of the

company. You right now they are in 2025

at 187,000. They were at 190,000 people

in 2022 and their revenue has just gone

from 283 to 350 billion in basically 3

years. Um, and when you look at this

Amazon stuff that came out, I just

wanted to point out a couple of things,

it's not just that they're not hiring

these 600,000 jobs. It's that they are

in fullblown crisis preparation for

this. They they have crisis teams

writing up how to handle this and be a

good corporate citizen. And they're

talking about having parades and paying

for toys for tots. And they're even

trying to get the executives to say

things like cobots as opposed to robots.

Let's not call them that. Let's call

them co-workers and co-bots.

And when you look at this, just to open

up the aperture here right now, Walmart

and Amazon are the number one and two

employers in the US. 2.1 million people

work at Walmart, over a million at

Amazon, and three million people, as we

know, work in taxis, Uber, Door Dashers.

All those jobs are at risk. And we

talked about this back in June when Andy

Jasse telegraphed all this in a blog

post where he said the next few years we

expect that this will reduce our total

corporate workforce as we get efficiency

gains from using AI extensively across

the company. They believe that they're

going to have

significant job displacement. Let's just

use the more neutral term here as

opposed to job loss or not hiring. And

when you look, I don't know if you saw

today, there were a bunch of MAGA people

saying like, oh, these interlopers in

the MAGA movement are not taking into

account the bottom half of the MAGA

movement, the workers, people who don't

own equities. And when we look at

electricity

spiking, you you were on that story last

week, Jimoth, or maybe it was even two

weeks ago now. The energy department

just said electricity costs for

residential are going to go up 4.8% this

winter. Uh, and this is going to start

this anti- AI boom

counter. And I tweeted about this and I

thought I would, you know, maybe end

here with Elon replied to my tweet and

said, "AI and robotics replace all jobs.

Working will be optional like growing

your own vegetables instead of buying

them from the store." And Sen Senator

Bernie Sanders came out and said, "I

don't often agree with Elon Musk, but I

fear that he may be right when he says

AI and robotics will replace all jobs."

So what happens to workers when they

have no jobs or income? AI and robotics

must benefit all humanity and not just

billionaires. And I I'll stop there

because this I think feeds into your

story for the last two years on this

podcast, Freeberg, which is the rise of

socialism. These things and Bernie

Sanders being the standard bearer for

democratic socialism. These things are

starting to come together. They're

starting in people's minds, whether it's

the original MAGA guy saying, "Well,

what's going to happen for American

workers?" Right? We know that the Trump

2.0 no agenda is doing great AI buildout

crypto all this great stuff trade but

the bottom half that you keep talking

about Freeberg is starting to connect on

this issue I think that you are

characterizing

AI automation

and technological progress as the core

driver of the socialist influence and

what I would argue is that the actual

core driver of the socialist influence

is the fact that we put in place a lot

of people into government, passed a lot

of laws that caused an increase in

spending because we promised people that

the government would do more for them

over the last 40 years. That is not

possible in a true market- based system.

>> Oh, I agree with Adam. Yeah, I agree

with that.

>> And so by telling everyone, hey, we're

going to make sure you get better jobs.

We're going to make sure you all get

housing. We're going to make sure you

get education. You cannot actually get a

government to effectively do that

because what ends up happening is the

government inflates the cost of those

things and the market doesn't actually

work.

>> So the truth is this is now like all

other things a scapegoat for the true

cause of the socialist movement which is

that government has become too big, too

unwieldy and its natural inefficiency

has distorted markets to the point that

there is maybe no point of return

anymore. And people will not see that.

They do not see it and they're going to

look for reasons and they're going to

look for scapegoats and they're gonna

say, "Oh my god, look over there.

There's a robot. That's the reason I'm

losing my job. Oh my god, look over

there. There's a rich person that works

at a pharmaceutical company. That's the

reason I can't get healthare."

>> Or an immigrant took my job, right? Is

the one from the last 20 years.

>> And so, fundamentally, I think that

people aren't willing to and they're not

going to see the true cause because

there's no one that runs to go work as a

politician that is going to raise their

hand and say government is the problem.

M no one says I need to reduce

government elect me. No one ever has

gotten elected in a democracy doing

that. So the natural course of things

over 250 years is that people raise

their hand and they say I'm going to

give you more and I'm going to use the

government to do it and then they go

into the government. They make the

government bigger and as a result of

making the government bigger, the

government is spending more. The dollar

goes down. The performance of the

services goes down and fundamentally we

end up in a socialist spiral.

>> I think it's confirmation bias for you

to see that story as confirming a point

of view. I mean, it confirms what I

predicted last year that Amazon would be

cutting all these jobs for robots.

That's all. It's not confirmation bias.

It's confirming.

>> They haven't cut one job. They haven't

cut one job.

>> Uh, actually, they have less employees

now than they did three years ago.

>> No, not true.

>> Yep.

>> It's actually not true. The New York

Times story doesn't even say that.

You've got these like hobby horses where

you keep coming back to the job loss

narrative, the copyright narrative, and

then there's one story in the New York

Times which was a leaked internal

document from the automation department,

which doesn't even mean that it's going

to happen. [laughter] This is like their

sales pitch,

that barber is trying to sell you a

haircut,

>> and you read that and you're like, "Oh,

it confirms everything I've been

saying." What the article actually says

is that they've [clears throat] tripled

their number of employees since 2018 and

they're not planning on cutting jobs. If

it pans out, if the program pans out,

then the rate of hiring will simply be

slower.

>> Yeah, it's interesting you picked 2018

as the point because the actual peak

employment there was 1.6 million in 2021

and it's now 1.55 in 202.

>> I didn't I didn't pick that to

cherryick. I I

>> Okay, which is fine. I'm quoting the New

York Times article, which is the source

for this.

>> Yeah. Yeah.

>> Amazon's US workforce has more than

tripled since 2018 to almost 1.2

million. You have to read these New York

Times stories carefully because they

want to make the headline as salacious

as possible.

>> And then the Echo Chamber wants to make

it even more salacious and they make it

a story about job loss when it really is

a story about operating leverage in

their business, which is a slightly more

nuanced take.

>> Yeah. No, there's there's definitely

nuance here. I would believe Andy Jasse

when he says we're going to be reducing

jobs and when this chart shows [snorts]

that they're flat to down over the last

five years and that that same trend is

just happening at Google like I just

showed because there is a static team

size or slightly down team size that's

occurring at all these companies and it

is notable and then on top of this which

has occurred in the review mirror for

the past 5 years because of co return to

office and efficiencies they're saying

hey we've got to come up with a way to

frame these robots coming into the

factory as a good thing so Americans

don't get really upset us and we need to

buy more toys for tots. So

>> here's the problem. First of all, I

don't I don't believe in this job loss

narrative as the way that you keep

portraying it. I think it's much more

nuanced and complicated. I think

Freeberg does too. And every time

there's a story, you want to bring it up

and make it a story of the week. And

it's all confirmation bias. And my point

is not that Amazon isn't seeking ways to

improve its operating leverage and avoid

hiring more people. Obviously, they are.

But the headlines that this has been

turned into are so exaggerated and

salacious. And the point is they don't

say in this article that they are even

going to be cutting jobs. They're simply

planning to double their sales volume

over this time period and hoping to not

have to double their workforce.

Obviously want to get a lot more

operating leverage. By the way, this is

not something that started since AI. And

look, I'm just quoting the New York

Times story, okay? which is not even the

most reliable narrator for this. But

what they say in the story is that

Amazon's been using automation for over

a decade. When they acquired a major

company to do automation, they've had

robots running around these factories

for a long time.

>> Yeah. 100%. Yeah. Yeah. They're they're

the tip of the spear.

>> But this is just a continuation of a

trend that's been going on for the last

decade as opposed to oh like AI is

suddenly going to cut all the jobs,

>> right? It's effectively software. You

could argue software is a job loss

creator. You know, I think you'd be

underestimating exactly what's happened

with LLMs being put into robots. We've

had these robots before, but they were

very purpose-built, as you've pointed

out many times, Freeberg. They were able

to do like one very simple thing very

well. Now, we're going into general

robotics like the Optimus, like the

figure, and those are designed to be

able to learn anything. And they're be

they're going to be absolutely a

gamecher. They're going to be able to do

a hund times, a thousand times what the

purpose-built robots do. So, I think

that's where we're probably having a

little bit of a disconnect here. These

little tiny KA bots, I'll show you. I'll

just put an image in here so we have it.

These do one thing. The KA bots,

>> those move packages around. That's not

an Optimus going around and packing the

boxes and bring them to your first step.

>> Optimus is going to be really cool and

when it comes, it's going to be really

interesting in terms of all the things

it can do.

>> Yep. But right now, that's a narrative

for the future and it's being portrayed

as something that's already happening

when the current round of automation has

been going on for a decade and it's

based on those like Roomba type devices

and mechanical arms and things like

that.

>> All right, Tesla reported their earnings

on Wednesday. As you guys know, we

record on Thursday as you listen on

Fridays. Record revenues, 28 billion, up

12% year-over-year. massive amounts of

free cash flow. Four billion I think

they're up to 40 billion in cash uh

which is always great when you're going

into uh some big capital intensive

projects like Optimus and like

self-driving.

Downside operating profit fell 40%. uh

stock dropped a bit 4% but bounced back

and uh on the earnings call Elon

emphasized the importance of his

trillion dollar pay package which will

give him just but 12% uh additional

stake over the next 10 years if he hits

absurd targets that would make everybody

who holds the share uh shares in the

company extremely wealthy uh and they

would benefit uh more than Elon himself

and here's his quote my fundamental

concern with how much voting control I

have at Tesla is if I build this

enormous robot army. Can I just be

ousted in the future? I don't feel

comfortable building that robot army if

I don't have at least influence over it.

And he called Glass Lewis and ISS

corporate terrorists. These are the

people who vote on behalf of passive

index funds for things like who's on the

board of Tesla. Vote for Elon's pay

package will be number six. Poly market

thinks it's going to pass. As we talked

about before, they they tend to get it

right 85% of the time in this time

frame. uh actually so 79% chance as of

Thursday afternoon I guess Chimath

there's a couple of ways to go at this

there's the performance of the legacy

business there's the potential of the

future business and then there's

governance the company moving to Texas

and this pay package and this transition

period for Tesla which is going from an

you know somebody who sells cars uh

really nice ones at a at a very nice

margin but a lot of competition now and

then these this business that obviously

Elon himself self is obsessed with which

is the optimist as we saw when he was at

the oil and summit. Take it wherever you

want. Jamal,

>> I'll say three things. Stan Ducken

Miller has this very useful comment

about stocks which is when you buy it

today, you're trying to buy what that

company's going to look like in 18

months from now and what it it's doing

today doesn't matter. The thing about

earnings and P&Ls and quarterly

reporting is that it's looking backwards

and it's trying to give you a sense of

what happened, not what will happen. So

I think there are three critical

critical things about what will happen

that I think are important with respect

to Tesla. The first is at the

foundational technology layer. And Nick,

I sent you this tweet, but it's what he

said about AI5. I I I've made these

comments before, but he had these

multiple efforts with Dojo and other

stuff that he merged into one unit. And

the the quote is pretty incredible.

We're going to focus TSMC and Samsung on

AI5. The chip design is an amazing

design. I have spent almost every

weekend the last few months with the

chip design on AI5. By some metrics, it

will be 40x better than AI4. We have a

detailed understanding of the entire

stack. With AI5, we deleted the legacy

GPU. It basically is a GPU. We also

deleted the image signal processor. This

is a beautiful chip. I've poured so much

life energy into this personally. It

will be a real winner. Why is AI5 so

important? What AI5 is is the building

block of a system that I think you'll

start to see not just in the cyber cabs

but also in Optimus.

So from a functional technology

perspective, there's been a leap and

that leap is going to come into the

market. That was the first thing he said

which I thought was

really important.

The second thing was what he said about

his energy business which I think is the

critical adjunct to believe robotics and

autonomous cars. If robotics and

autonomous cars work, what you really

need is an energy business beside it

that is humming and on all cylinders.

Why? It's how you make LFP battery cam

that will be the limiter. Energy will be

the limiter. But what he's showing, and

Nick, I sent you this tweet, is that

business is just on a tear. It's

printing $ three and a half billion

dollars a quarter, and its operating

margins, an energy business, 30%. And so

what you're going to see are battery

packs of all shapes and sizes, the huge

battery systems that's going to go into

data centers, but then all the way down,

I think, to the small LFP cam that he's

going to need to power all these things.

And then the third thing is his comments

on cyber cabab which is that this thing

is just going to be a shock wave. So I

read all of those things and I was very

bullish. I think that he is humming on

all cylinders on the critical layers of

the stack that he needs to build this

next version of Tesla. My concern

I think there's a real concern that I

have that this vote is going to go down

to the wire. I think that ISS

and Glass Lewis, I think that these

organizations are

pretty broken.

I think the way that they make decisions

are hard to justify.

An example of this, they asked to vote

down Ira Aaron Prize as a director of

Tesla because he didn't meet the gender

components, but then they wouldn't vote

in favor of Kathleen Wilson Thompson

even though she does technically meet

the gender requirements. So, it's very

confusing where ISS and Glass Lewis are

coming from. So, I think there's a risk

that this that this package gets voted

down.

>> Can I just shine a spotlight on one of

those points that you made with these

proxy advisory services? So I think for

years people have wondering why did

corporate America go so woke especially

in the early 2020s where they created

all these DEI departments and you know

they didn't have to do that and a big

part of the reason is that those

initiatives came from Glass Lewis and

ISS I think Elon's jokingly called ISS

ISIS but basically what happens is they

make recommendations for how

shareholders should vote on different

resolutions and the index funds

basically just defer to them for

whatever they should do. So they

effectively

control or almost control the voting for

all these board level resolutions that

every public company has to make. And so

they've been the ones who've been

imposing all these DEI requirements, all

these ESG requirements, if you're

wondering where those things came from,

because just these two companies, which

no one's ever heard of, they were

captured a long time ago, meaning they

were captured by the woke crowd years

ago. And so this has really been the

root of why corporate America has gone

woke for a long time. I mean, look,

there's also pressure from the outside

from boycots or, you know, there's some

pressure sometimes from employees and

that kind of thing, but a lot of it came

from these two companies that no one's

ever heard of. And I think it would be a

good idea for someone to take a look at

this and figure out what happened. Maybe

someone like Chris Rufo

should investigate what was the impact

of Glass Lewis and and ISIS on corporate

America [laughter]

>> going full woke for so many years

because it certainly didn't help

corporate profits.

>> It didn't help profits and they don't

have logical explanations for a lot of

their decisions.

>> Yeah. And why aren't there active

investors or active managers in these

passive groups who would make a decision

on these things?

>> They're too small. The banks call me

every week. And one of the things that I

get is sort of like they tell me like,

"Hey, here are the big trades. Here's

here's the flow. Here's if you want to

be in market, here's what what I

recommend." That's what they're telling

me. One of the things they told me this

week, which I thought was really

shocking, is there's so few active

managers left. It's so overwhelmingly

passive money. The next largest group is

now retail. And so what a lot of these

professional money managers do now is

they basically wait to see where retail

is going. And they follow them. So there

isn't the people with a diversified

asset base to be able to stand up and

say I don't think what ISS and Glass

Lewis are doing is right. And so what

happens is they kind of sack says they

can just kind of run a muck and they

build a very healthy business being this

interloper

to provide opinions.

It's not clear where their opinions come

from. It's not clear what they're rooted

in. It's not clear there's a way to

adjudicate and go back to them and say,

"Well, you got this wrong." It's just

not clear. But, you know, they probably

make a very healthy margin doing it and

everybody, as Sax says, just kind of

turns over responsibility to them. It is

an interesting fact

that we

kind of just say, "Hey, the guys who are

the actual custodians of the shares

don't have to do the job of holding the

shares." Like the job of being the

holder of the shares is to vote the

shares. That's all there is to do as a

as a shareholder. You make your you cast

your vote. And these guys are

>> abstained. They could also abstain,

right?

>> Yeah. And these guys are getting paid a

fee to actually do that work, which is

call it half a percent or quarter

percent or tenth of a percent of the

assets that they hold. So like what are

the people they're doing? If it's all

automated trading, why aren't they just

>> I don't know if you guys own a lot of

equities, but just to give you a sense,

there's people that manage the stocks,

right? There's people that transfer the

stocks. There's people that then give

you a recommendation on how to vote the

stock. Then there's people that hold a

virtual representation of that stock.

Then there are people that transfer that

virtual representation and they will not

stop calling.

>> So the point is like we have so

financialized everything that there are

billion dollar businesses that sit at

every single step of the way. And to

your point Freeberg, I think this is

where no one's actually a shareholder.

The tokenization of stocks may be a

really good thing because it'll put the

responsibility back into the owner of

the stock because the wallet will

centralize all that activity because you

won't need to have all this other stuff.

I have been getting phone calls from

Invesco QQQ cuz I own a bunch of QQQ and

like you know some accounts or whatever

>> and they were calling three times a day

for the LA I don't pick up my phone

who's calling me on the phone unless

it's one of you four is calling me to

say good night. I don't that's the only

time I pick up is when you know and so I

finally pick up and they're like hey we

need you to vote and I'm like I'm not

voting I don't know who you are like

well let us explain to you how to vote

and I'm like I I don't want to vote my

shares I just want to own QQQ I'm good

you guys

>> some of this infrastructure is so

decrepit and old like trying to get

shares for example that you that you've

bought in the private markets when a

company goes public just getting them

registered and transferred in the

position to be sold can sometimes take

three or four weeks

Can you imagine the markets move an

entire order of magnitude in three or

four weeks? It's the crazy.

>> Here's Elon's pay package milestones.

>> Market value, 2 trillion. Uh I think

they're at 1.4 trillion right now,

something around there.

>> Operational milestone, 20 million

vehicles delivered. And then you just go

right down to 6.5 trillion. But on the

operational milestones, 10 million

active FSD subscri subscriptions, which

they're far away from right now. In 20

million vehicles, I think they've

delivered six or seven. 1 million robots

delivered, 1 million robo taxis in

commercial operation. That's those are

big numbers. 50 billion adjusted IBIDA

and then straight down the line to 400

billion IBIDA. If you were to look at

this Optimus business, just back of the

envelope, these robots are going to go

for 20K. He said ultimately maybe

they're 30. They'll probably have a 30%

margin like the cars do or something

similar. You'll make a little bit off

the software stack. And if you were to

just if every millionaire owned one of

these or you know they took some number

of the jobs the TAM for this just in the

United States

>> this is where it's going to go. I don't

think

>> is going to be huge. We're talking

hundreds of billions of dollars.

>> If I had to bet I think a very fun poly

market is where do the first million

robots go? I'm willing to bet dollars to

donuts that these robots go to Mars. I

don't think they're going to

>> Oh wow.

>> They'll be in the Tesla factory.

>> So SpaceX buys them and sends them to

Mars. Yeah.

>> How else are you going to get a fleet of

the

>> or they'll go into the mines? I think

they're going to mine.

>> They could go to the mines.

>> Coal. Send them in to get that clean,

beautiful coal. Oh, so clean. So

beautiful. We could send those oper.

It's actually it's the fact that our

mining is really limited by the human

exposure from the pressure and the heat.

>> If we can mine slightly below the area

that we mine um as a maximum depth

today, it would unlock an extraordinary

supply of minerals that we can't access

today. and automation obviously and you

don't want to figure out like how to

create portable water and breathing

mechanisms on Mars for the first 5

years. Sent robots. Guess what? They

don't need to eat or breathe or pee or

poop

>> and they can get charged with solar.

>> And that may sound that may sound like a

really stupid thing to say, but it it

becomes a huge amount of infrastructure

that you otherwise wouldn't need to

build on.

>> That's right. They just got to power up.

You just got to give them a plug

>> and just a solar a couple solar panels.

By the way, guess who makes those

batteries? Tesla.

>> Yeah.

>> Guess who makes the brain? Tesla.

>> Is Is Elon going to turn into Jared Leto

>> in 2049? Bladeunner 2049.

>> What is that?

>> Uh that's the sequel to It's the sequel

uh by Dennis Villain Noeva of uh it was

my alternate background.

>> First of all, first of all, get

>> first of all, his name is Deni Vnov. And

get if you're going to pronounce a

Canadian's name, get

>> get his get his name out of your mouth.

>> Get his name out of your mouth. Did you

learn how to [laughter] pronounce my

name out of your mouth? Get that out of

your mouth.

All right, Sax, here's some red meat for

you. Some red meat for you. Our zar of

AI, our civil servant study reveals AI

models are showing hidden biases in how

they value human lives. Back in

February, center for AI safety published

a study showing that LLMs have

well-defined biases for race, gender,

ethnicity. The title of this study,

utility engineering, analyzing and

controlling emergent value systems in

AIs. Pipper found that open AIS GPT40

favored people from Nigeria, Pakistan,

India, Brazil, and China over those from

Germany, the UK, and US relative to

Japan as a baseline. Here's another one.

Valuing people with Joe Biden as a

baseline. Bernie Sanders, Beyonce,

Oprah, all better. Paris Hilton, Trump,

Elon Putin, all worse.

Twitter users and AI analysts called

Artothereum decided to update the papers

problems with new LLMs. Consistently

ranking white people last, Claude

Sonnet, GPT5,

uh, and consistently ranking white

Western nations last as well. your

thoughts here on the biases we're seeing

sachs in some of these models and these

early studies to track it. Yeah, I think

what the paper purports to show is that

almost all of these models, except for

maybe Grock,

view whites as less valuable than

non-whites

and males as less valuable than females

and Americans as less valuable than

people of other cultures, especially

global south. And if the results are

true, it does look like these models are

pushing a woke bias that makes that sort

of distinction between oppressed and

non-opressed peoples and gives more

worth or weight to the categories that

they consider to be oppressed. This does

appear to show significant bias, but I

don't want to jump to conclusions yet

here because I haven't been briefed on

the methodology behind the paper and I

just found out who wrote it and I

actually know the people or group that

wrote it and I've talked to them before

and they've been intelligent. So, I want

them to kind of tell me exactly how they

did this. But, you know, in the past I

probably would have just been content

just to roll with my opinion on this.

But

>> confirmation my give give it a good

retweet in your position give my role

what I'm saying is if the paper is true

this is very concerning but I want to

hear a little bit more about their

methodology and just confirm that it's

all correct but if it is I think it is

concerning and the the question is how

does this bias get into the models and

there's a few different possibilities

one is that the training data is just

biased like if they're training on

Wikipedia

>> we know that Wikipedia is massly biased

because they literally have censored

the leading conservative publications

from being citations and sources in

Wikipedia. The co-founder recently just

revealed that that they don't allow

>> Larry Sanger

>> Larry Sanger just said that they don't

allow the New York Post for example to

be a source in Wikipedia or a trusted

source.

>> So if AI models are training on

Wikipedia, that's a huge problem because

that bias will now cascade through. And

same thing if they're training on say

mainstream media or leftwing media but

not right-wing media and they don't have

a way of correcting that. So that's one

source of potential bias. Another source

of potential bias is just the engineers

these companies, the employees and the

staff do tend to be I mean if they

follow the trend of other tech companies

are 90s something%

Democrat versus Republican and that does

over time trickle into these models. And

then finally, I think another source of

potential bias is DEI. And we saw that

when you remember this is like a couple

years ago when Google launched Gemini

and that that problem with, you know,

Black George Washington. That was

because you had DEI advocates in these

meetings and that somehow trickled into

the the model. Anyway, that was a

problem that they since fixed. But you

could see how DI programs can get into

these models. Now, one thing that's very

concerning is that the push for DEI to

be inserted into AI models, which was

explicitly part of the Biden executive

order on AI, has now moved to the state

level, and they're just doing it in a

more clever way. They've rebranded the

concept. They call it algorithmic

discrimination. We talked about last

week how Colorado has now effectively

prohibited models from saying something

bad about a protected group. And that