Can the AI Industry Regulate Itself? Stripe Wants PayPal, China Catches Up, NY Bans Datacenters

All right, everybody, welcome back to the World's Greatest Podcast, the number one podcast, your favorite podcast, the all-in podcast. I'm Jason Calacanis, the World's Greatest Moderator. With me, of course, Chamath Paliha Petit. The great, great, great, great, great, great, great, great grandchild, Jason, was of a hooker and a prisoner. And a purse snatcher. This comes from like a history of France, some history. said they let you out of this was this was the deal in 1719 sacks if you're a prisoner in a in paris you were offered your freedom on the condition that you marry a prostitute and move to the great state of louisiana what are you saying sacks you're taking the deal it explains a certain of your proclivities jaco i thought you were asking me to see if they would extend the rule for you No, I'm saying that your great, great, great, great, great, great grandmother is a hooker. I'm Greek. That's what I'm saying very explicitly. We never spent time in a prison. Also, of course, David Freeberg is here. How are you doing, brother? Living the dream. Good to be back. Missed you guys last week. How was Brad? How did he fill in? That was great. Yeah. Yeah, he was great. Trump account victory lap? He had a little victory lap. We played Chariots of Fire. And how was your special time at blank? And your time next week at Blake. Thanks for having me on your show, J.G.L. All right. We got a full docket today. Lots of stories. Let's start with DeepMind's Demis Hassabis just dropped an AI regulation proposal, and it's pretty popular with the boys. In an X article, Demis called for a U.S.-led international AI standards body. proposal is modeled after FINRA, the Financial Industry Regulatory Authority. That's a self-regulatory body, and this would be federally overseen, but industry-funded and run by independent technological experts. Frontier Labs would submit their models 30 days before release, and it would be voluntary initially, then mandatory at some point. The models would be assessed on risk to cyber security national security biological threats and other high-risk domains benchmarks would be updated quarterly and the body can coordinate a slowdown in development if the situation demands it i guess that would be if there was a cyber risk etc looks like uh on the positive side we have elon who said it was thoughtful sam and open ai jack clark at anthropic Sundar, Satya, Jack Dorsey from Block, the Carlson brothers. So, Freberg, your thoughts on – Oh, wow. Way to really put in the effort today. Go ahead, Jason. Just pass it to me. I'll take care of it. Go ahead. What do you want me to do? Oh, my God. What an incredible topic. Give me the mic. All right. Here. Let me do it. You want me to do it right? Three, two. Some of us actually care about this topic. Let's go. Okay. Yeah, you care about it. Okay, here we go. Three, two. Here's a clip of me calling it on the All In Podcast first. The whole industry is going to need to be regulated, and I think the industry needs to regulate themselves. That's the key to this. We need to have a set of tests that Google, Microsoft, Amazon all agree to, Elon. Hey, these are the things we should test, and they should self-certify each model before asking the government, which doesn't understand the models, to certify them. The industry should have an industry certification like they do for countless other things. I've talked about the MPAA and the video game industry. We should just self-certify. It's the simplest thing in the world to do. And then we could release the models ourselves without the government getting involved. Freebreak, would you like to congratulate me on nailing it again? Well, first of all, first of all, I thought that Demis' proposal was really smart and thoughtful. Now that I know that you may have shared the same thought, I think we should just do something totally different. I can't win sacks. Even when I nail it, I hit a half court shot. Shemar's like, move the net. Move the net. I think it's worth putting a little definition around this proposal, which is to form an SRO, self-regulatory organization, because they're not purely independent. SROs like FINRA and the National Futures Association, they exist in the financial markets, and they were created to allow the financial institutions to set their regulatory rules, how they check each other, how they make sure that everyone is being safe, because they're obviously all trading risk with one another. So the industry doesn't want to have exposure, and they certainly don't want to have things get slowed down, because that would make the markets inefficient. So the analogy with AI is pretty appropriate here, which is that there are many players in the industry, they are all trying to progress AI technology, and no one wants to have a single regulatory body that comes in from the government or outside that says, here are the tests you guys have to pass with your models in order for them to be appropriate. As we saw in California, when California tried to pass AI legislation, I think it was about a year, year and a half ago, none of what they wrote even made sense at the time. But fast forward a year, none of those kind of rules and requirements actually map to the technology of the day. So the purpose of an SRO like FINRA and NFA is they can adjust how tests are being run, who is actually running the test, and make sure the right experts are involved in doing this, independent experts, that is, to do the testing with federal government oversight, but not control. So in the case of FINRA, NFA, they report up ultimately to Senate committee and House committee that gives those committees oversight of those governing bodies that are supposed to be doing the work to make sure that they're doing their frigging jobs. So the SRO concept would be that experts could be brought in from industry that know how to assess models for things like cyber risk, for things like bio risk, for things like weapons risk, social manipulation, etc, etc. That independent body can get voted on, can get changed over time. And because they actually have expertise in running software valves and running tests like this, they can operate at a faster pace than setting up a new government agency. So it's kind of a very elegant solution. And I think it's why everyone, to your point, Jay Cal, and I'll say this is right, the industry recognizes that there needs to be some degree of oversight and checkpoints here. And I think that this could actually solve that problem. So that's why I think everyone's kind of climbing on board with it, because it doesn't actually hand stuff over to the government. It says, hey, we're going to get the right people to take a look at these things. And the government is going to have oversight, ultimately. Did Anthropic and OpenAI have a point of view? They both signed up to it. I don't think Dario directly, but Dario's president gave his thumbs up. And then I think Sam gave his thumbs up. Which means they're on board. Saks, is this the best of the possibilities in your mind? Is the industry regulating itself after they have now provoked governments around the world to be so concerned about this issue? Yeah, and I talked to Demis about this, and this may surprise people, but I told him that I could potentially get on board with this, speaking just for myself, not on behalf of anyone in the government, because I thought that an SRO, again, a self-regulatory approach would be infinitely better than creating a new government agency that I think would rapidly become a DMV for AI. Dario calls it an FAA for AI. The government does not have the expertise to evaluate AI models. The criteria are changing too rapidly. You're going to very rapidly end up with a queue where all the models would be waiting to get tested. And it would start with a month-long delay. It would end up being many months. And we would just lose the AI race. So I think an SRO approach would be infinitely better than that if it was done right. And I outlined for Demis five criteria or conditions that I thought were really important in order to make this work. And if I could, I'll just run through them. Please. All right. So number one, I think the SRO has to have broad representation from within the industry, the AI industry. It has to include startups and open source. It can't just be the three biggest labs. You know, it can't just be Google. The fix can't be in. Right. Yeah, exactly. And that's precisely to avoid the problem of regulatory capture, right? If you have a diverse enough group of interests being represented, it's much harder for this to turn into red capture. So, for example, I think if you had Jensen, Elon, Zuck, and maybe Mira, because she just launched a very interesting platform that's based on open source. Thinking machines, yeah. Yes, exactly. Then that, I think, would address the red capture problem to a large degree. So that's number one. Number two is I think that this body should only be reviewing frontier models, meaning the true frontier, the models that really represent an advance in the state of the art of artificial intelligence. And models below this level should not be held up from getting to market. And I do think that is a big risk under regulations is that the leaders of the market use this as a way to tie up lesser models. And there's no reason if a model is not at the frontier, why hold it up? OK, so they have to be in maybe the top 10 performers, top 20 performers on the benchmark. I think I think when they benchmark on key dimensions of intelligence, they have to represent an increase above where the current state of the art is. If it's not a step change, then how are you dealing with some new incremental risk? Right. I mean, this is all about dealing with some sort of incremental catastrophic risk that could be introduced by some new step change in intelligence. And that brings me to number three, which is I think this body should be dealing with catastrophic risks only. And to my knowledge, those right now are cyber and CBRN, meaning it's chemical, biological, radiological, nuclear. So it should not be things, for example, like disinformation or microaggressions. This should not become a speech regulator or just things that seem kind of trivial. The only reason to have this is for truly catastrophic risks. So that's number three. Number four, and Devis mentioned this in his post, is that I think it should be voluntary first. This new organization should prove it works before it gets legally enshrined and becomes mandatory. And then number five is this should be a substitute for a new regulatory agency. If it's just additive, then it defeats the purpose and there's no real reason to support it. So again, I think this has to be a substitute, not an addition to a bunch of new regulatory structures. So I think if you did those five things, I think this becomes much more palatable. And Demis said, I mean, he didn't put all these points in his blog post, but he did say to me that he thought those were good ideas. So I think if those notes were adopted, this is something that we could potentially get on board with. That doesn't mean I don't still have concerns. I'm quite concerned, for example, that, you know, I think Dario has expressed support for this. However, I think this is just an opening bid for Anthropic, meaning they'll take this. Thank you very much. This is more regulation than we have today. But that won't be the end of it, right? This will just be the stepping stone to get what Dario has now called for many times, which is the FAA for AI. And if I could, let me just, as a final point, I just want to explain what the FAA does because people need to understand, you know, FAA for AI sounds really nice, but actually it's a really extreme proposal. What the FAA does, among other things, is approve new airplane designs. Specifically, it requires what's called a type certification for any new aircraft design or major changes. For an entirely new aircraft design, it takes five to nine years to get the certification. If you merely want to amend a certificate, I guess, for major changes, or I'm not even sure how major the changes need to be. It takes three to five years. So the Boeing 737 MAX, for example, took about five years. So this is permission-based regulation. There's no approval, no flying commercially. It's safety first. Look, that might make sense in the case of preventing plane crashes. But when you're talking about AI models, you're talking about replacing a system that is releasing new versions every couple of months with one that is potentially fully under the control of government, fully government approved. Everything has to be certified and you could expect the timeline to go from months to years. Again, I think we'll just simply lose the AI race if that happens because China's not going to abide by those rules. So just to sum up, if my choices are between FAA for AI or what I would call the DMV for AI, I would much rather go for Demis' SRO for AI, the self-regulatory approach. But we really have to keep it honest and pure because, again, otherwise it'll just be the opening bid in a coming new wave of regulation. And it will be the vehicle for massive regulatory capture. And to your point, it can't restrict open source. Yeah. Can't restrict open source. I think that's so important because all of these other efforts require money that you have to spend, which is always where regulatory capture happens. And you have to enable startups and open source to compete effectively. Chamath, any thoughts on this new self-governing body? I think it's really important and I hope it happens quickly. The thing we have to keep in mind is there's going to be a torrent of money that's going to try to influence both sides of the political aisle to regulate this in a way that creates some form of regulatory capture. We just don't know what. And so the faster we avoid that off ramp by actually establishing a set of rules and superseding the need for federal oversight is a really important thing. Now, at the end of the day, you still have federal oversight in some ways because you still have commerce that plays a huge role in these standards. You still have the DOJ. So it's not as if it's going to be a Wild West. but what it prevents is a handful of actors using their balance sheets and their capital to essentially pull the ladder up and i think if that happens we're in a really bad place so i think demis's proposal makes a ton of sense and we should just get on with it all right yes but provided i mean again just provided that i think we we make sure that i mean look in my view there there are five conditions but i think we do have to make sure it's pure. Even in the FINRA example, that's the analogy that Demis used, was that we should set this up in the same way that FINRA is set up. FINRA does report in ultimately to the government, it reports into the SEC. And so, you know, if we are going to set this new SRO, where is it going to report to in the government? There's going to be a huge food fight over that. And it will then be subject to political pressure. The software industry has never been regulated in that way. we do not have a dedicated regulator for software. I think you're right. But those issues are important. But my point is, Hacks, I'm just saying these things are never ideal. But if the choices are we kill open source and we ladder pull the entire market so there's a duopoly, or there's this, I'd say this. For sure. And that's the crux of my argument is it's definitely the lesser of two evils. I'm not sure those are the only two choices. But increasingly, there's no question that the pressure is coming to regulate AI more and more. And frankly, this all goes back to Anthropics, government relations effort. They poke the tiger. Yeah. Well, it's more than that. They're funding the meat for the tiger. Yeah. I want to give an update on that, actually. I would say poking the tiger of like the American public getting really freaked out and then the government stepping in. Yeah. Totally. And there's a couple of data points on that, actually. I just want to give a quick update. So in October of last year, I tweeted that Anthropic is running a sophisticated regulatory capture strategy based on fear-mongering. And everyone kind of went crazy over this. This was, again, like a very hot take or spicy take at the time. Back then, people thought that I was beating up on a little startup. Now I think everyone can kind of see the truth, which is, look, this is not a little startup. They already have a trillion-dollar market cap valuation. Gavin Baker thinks it'll be at $3 trillion after the IPO. this is actually one of the biggest of the big tech companies and they are i think by pretty much every criteria including revenue the leading ai company so i think people can see now that they have enormous resources and they're putting those resources behind an effort to like jimath you said pull up the ladder and it's classic regulatory capture and there was an article in politico just the other day it's called inside anthropic state-by-state plan to ratchet up ai rules and And what it says is, quote, AI ginthropic is pursuing a strategy of one-upmanship that encourages states to impose increasingly tougher AI guardrails rather than a line around a single set of regulations. So the basic idea is that they get a set of regulations passed in one state, like California's SB 53. And that was then supposed to be the model, at least for all the blue states. But then with each new state, they actually make the regulations more and more strict, more and more all-encompassing. So there's not actually a stable equilibrium. What they're trying to do is drive each incremental state to more and more regulations. And so this is actually an article explaining that they're doing the opposite of trying to create what we wanted, which was a single national framework. They actually want the patchwork because they're using, again, the pressure they're creating at the state level to impose more and more regulations. And again, what I said last year was that Anthropic was principally responsible for the state regulatory frenzy that is damaging the startup ecosystem. Again, everyone went crazy at the time. I think now there's plenty of evidence showing this is their agenda. and um by the way they're going to win that because states have great sovereignty rights and like we're seeing what's self-driving the states are going to decide it's not going to be a federal mandate the states get to decide just the nature of the u.s the reason why they're going to win on that in a couple of states right sex just realistically they've won in a bunch of states they already won in california and illinois and new york and i mean they're winning in all the blue states and maybe even some red states but look ultimately the reason why anthropics arguments or finding purchase is because when you go to the government and say, please regulate me, you know, you should have more power. There is hardly anyone in government will ever say, oh, no, no, no, we're not qualified. Like we don't want the government. Yeah. There are very few people who are principled that way. And most people in the government will say, thank you very much. What else can we take? And this is the mistake that I think a lot of people in the tech industry are making is they think that they can just buy off politicians or the political system by making concessions. No, that will just lead to a ratcheting up of the pressure. The government will be happy to take this and then come back for more and more and more until it's fully under government control. So at some point, I think these companies are going to have to grow a spine and fight and decide where they're willing to draw a line. And if Demis' SRO is the line, if they're saying, okay, we think this is the right solution and we're going to fight here and this has to be it. And in exchange for this, we need preemption and we need other things written into law that make sure this is where the line is. Then I think it can work. But I think if you're just kind of offering it up for free and all these companies are just going to say, oh, yeah, Regulus, give us the SRO, that will not be the end of it. That will just be the opening bid and the government will come back to take more and more and more. Yeah. All right. Let's keep moving to the docket here. Stripe, which is still a private company, much to the chagrin of many of shareholders i think uh now as they go into the second day yes i mean i'm gonna i'm in a couple of funds that have large positions like go public boys they are bidding bidding 53 billion for your alma mater david sacks paypal which is a public company stripe and the private equity fund advent are jointly offering to acquire paypal for about 60 bucks a share which is a small premium most people they go go for more like 70 a share paypal stock jumping on the news obviously and were you able to get to the bottom of this that was it just stripe and advent because then somebody else reported that it was also block yes block is coming in as well it's so confusing every other media source is like they're all over the place on this yeah no it's i think it's because there's a breaking story and maybe they were trying to keep it quiet it's a huge deal though if block is a part of it versus if they're not, I think. Yes, and Block, formerly known as Square, is Jack Dorsey's payment company, one of the few entrepreneurs to ever create two Decacorns in our industry. And they're contributing $17 billion in equity in the combined offer. How they chop up what's inside of PayPal would be the big question. Obviously, they own a number of different brands, including Venmo, in addition to PayPal. That might go really well with the, I'm just taking a guess here, with the block assets. Stripe owns Bridge. That's their stablecoin infrastructure company they acquired for a billion dollars in 2025. PayPal has PsyUSD, which is already in circulation. That's their stablecoin. So stablecoins are part of this. But the biggest thing is PayPal is still a juggernaut, Sachs. 439 million consumer accounts. you did something right there 25 years ago it's still tough it's the time amazing it really isn't amazing that it's still that strong yeah it's weird when brands keep going for that long but the problem is that the product is getting very long in the tooth i think it's only growing seven percent a year which is a lot on the base that you know it's grown to it's a big base but the product has become somewhat obsolete and in a way it a legacy product i be curious to hear from the stripe guys how they would fix that because i think that a very hard problem to fix Maybe they wouldn Maybe they would just run it more efficiently and kind of milk it for all it worth I think there a different question Kind of do a private equity play. The different question, I think that the interesting question to ask is, what is the only kind of baby that Advent and Stripe and Block could have together? And I think there's one, which is you are creating a competitor to Visa and MasterCard. Because you now have upwards of 600 or 700 million accounts. You have massive stablecoin infrastructure. You have all of the risk management infrastructure that Stripe has built over the last 15 or 20 years. The big critique of Stripe's business model early on was they had to build so many value-added services because everybody always thought the take that they could make as a middleman sitting on top of the traditional rails would effectively get competed away. Now, to their credit, they've done such a good job that that hasn't happened. But I think what it means now is you can vertically integrate and go soup to nuts. That is probably the most obvious thing to make out of it so that now Stripe gets access to an ultra low cost set of payment rails, literally like to zero, brings it everywhere all over the world. So does Block. Advent can pour money into it. So it's quite powerful if it comes together. What does this say about private market companies at scale and Stripe potentially never going public? I mean, how does a private equity firm get their return on this investment in two, three, four years? Do they wind up selling more of it to Stripe? What are your thoughts here on the structure and capital market implications here? I think there's going to be more of these kinds of deals. If you look at Ryan Cohen's bid for eBay, I think it's probably a second dot on a line that I think is emerging, which is folks that are, call it AI native, are looking at, call it first generation digital native businesses that have become mature and old and stale and aren't run by the founders anymore and have not yet realized the opportunities with AI, have not yet realized their potential or overspending in a lot of ways. And when you take a look at those businesses as a modern day AI operator, you're like, what the hell? This thing is so underutilized. They're not using their network well. They're not operating well. They're overspending. They're not using AI well. And there's a set of opportunities that become quite obvious. And I think the capital markets, as we've seen with like Josh Kushner's rollup of accounting firms and General Catalyst has a project like this where you can kind of use capital to go buy, you know, in those cases, traditional services businesses and AI-ify them. I think this is part of a line of maybe looking at traditional digital businesses and AI-ifying them. And there's a long list of these. There's a couple dozen of them. So I think if you looked at the public markets and you said, hey, where are all these kind of software companies, network businesses that emerged in the early part of the internet, or even in the more recent part of the internet aren't run by their founders anymore, have stalled out, there's a massive opportunity. Now, the question as a capital provider is who do you partner with to go and execute that operational revival of that business? You're not going to go hire some McKinsey consultant to do that work for you. It's got to be the best of the best. It's got to be the right players in the business. So I think Ryan Cohen has proved his mettle, obviously, with some of the things that he's done with Chewy and GameStop. And that's obviously debatable. I spent some time interviewing him to understand his processes. This was on the all-in interview program. You can go to our channel and find it. There's last month. Thanks for the plug. And obviously, when it comes to payments, who better than Stripe? And maybe Jack Dorsey plays a role here. And by the way, I think because capital, I mean, if you think about that $17 billion equity contribution, what that technically means is Stripe is selling and Block is selling $17 billion of equity to the cash investors. that cash is then going to buy a paypal therefore stripe and block end up owning a piece of paypal the private equity investors own a piece of block and stripe and what is not clear in the deal docs that were published because i don't think it's relevant to the public markets is who's actually going to operate paypal post-close and my bet would be that they're going to hand it over to the strike guys and say you guys i think that's clear yeah because they're the most qualified and they will have the biggest stake in it uh you're so i think i so i will make a prediction i think that ebay and paypal are probably the beginning of a wave of mega deals of call it flaccid you know digital businesses you have some attention that can be revived okay with the blue chew of capital and the right operator again i think that there's probably a big a big wave of this to come the other thing is this is probably not the final clearing price i think the price is probably another 10 to 15 percent higher from here and and i will say that there's a certain individual that must look very closely at putting in a competitive bid oh a certain individual who may may have his fingerprints on the original paypal who might also have four or five trillion in market cap to play with, who also made a $60 billion acquisition recently. We don't have inside information here. To your point, Freeberg, this is becoming a playbook. There's a company called Bending Spoons that just went public. They bought a bunch of non-founder-led assets, AOL for $1.4 billion, Vimeo for $1.4 billion, WeTransfer Eventbrite, BriteCode, Evernote. Have you spent time with him? I was just DMing with him. He's awesome. I've hung out with this guy. this guy is an absolute friggin operational killer he you know he bought evernote yeah in milan yeah he runs the whole thing from milan he bought evernote and he just goes in and he diagnoses these businesses he's like how are they being over where are you overspending where are you underspending what are you doing wrong with the product and what are you doing wrong with marketing and he just friggin fixes it and he's just a killer and he's taken all of these what were called web 2.0 businesses and he's revitalized them rolled them up and printing cash out of them And lowers the cost to run them. And that's the other big thing. He's putting young AI. He's using young AI first executives from what I'm totally. It's a great call out, J. Cal, like bending spoons is the roll up of this sort of strategy. But for these mega deals, I think there's more of them to come. I will say, you know, the the higher order bit here, which we talked about for a couple of years, was venture capital was on the ropes for a couple of years under the wrath of Lena Khan. And then once Trump got elected, all the executives working in corporate development said, hey, looks like M&A is back on the menu. And now we're seeing deal after deal after deal get consummated. People are no longer scared of doing deals. Uber just bought delivery hero today. That's going to like jump their revenue by 20. Yeah. And that's going to jump their revenue by like they're getting diluted 10 percent. It's going to jump their revenue 24 percent or something crazy like that. and this is going to be i think the big story the next couple of years and all this liquidity talking to lps and family offices which i do on a regular basis they're all like hey when's your next fund hey when's the next deal because now people are believing in venture because of the spacex distributions and all this m&a and we have four or five companies that got bought since donald trump was elected president thank you my president donald j trump putting m&a back on the menu, Sax. M&A, back on the menu. Why didn't you make a bid Sax for PayPal? Been there, done that. Been there, done it. Okay. No, but look, you have to have synergies. There was a moment, this was like 15 years ago, where they asked Sax to go back and be the CEO. That was right. I remember that at the poker game. He and I immediately flew to Vegas and spent the weekend there to think about it. They're like, you know what? I wasn't... No, they didn't ask you to... You considered it, though. Well, no, I never got the offer, but it was down to like final two or something. And it was between me and someone else. And actually, they ended up going with some, you know, like traditional like credit card executive. And to be honest, that's why PayPal has stagnated is that as soon as it was acquired back in 2002, they basically blew out like all the founders, all the founding DNA. And it was just kind of run by, you know, consulting types. You got to remember at that time, it was acquired by eBay. Meg Whitman had worked at Procter & Gamble and Disney, and she spent like eight years at Bain. And it was like a very corporate mindset. I mean, among all the internet companies of that era, it was definitely the most corporatist. And they saw the founders, the founding generation at PayPal as just a problem. Just a bunch of like cowboys they couldn't control. They made no effort to retain them, and I think they were kind of relieved when they all left. And then that's what created the PayPal mafia. was that normally in an acquisition, you'd lock up all the talent. But in this case... They locked them out. They're like, these guys are hard to manage. Change the keys. I said for a long time, it's a misnomer to call it the PayPal mafia. It's really the PayPal diaspora. Totally. Our homeland was taken over and they burned our temple and then kicked everybody out. And that's why the whole PayPal mafia got started with all those companies. But as a result of that, for decades, I'm not saying it was a victim. No, I'm joking. Look, when you acquire a company, you get to decide what to do with that asset. Totally. So, I mean, that was just the reality. But it's not like, you know, I don't think anyone was bitter about it. They're all like, okay, this gives us the capital to go all do the next thing we want to do. Well, the new CEO, by the way, Enrique, is really aces. I've met him before, and they're doing a great job, apparently, which is why they probably got these offers, because they've been tightening that business up for the last couple of years. Well, no, the reason they got these offers is the market cap is down to, you know, it was down in the, what, like 30 something billion. I mean, this is a company that was worth 200 billion, wasn't it roughly? 322, I think was the peak. And before this offer, it was down to what, 30 to 40 billion. So the reason why it's attracting offers is it's so beaten up. And so now the question is, can anyone else do something with it? Saks, to your comment about you've got to have synergies, Doesn't it seem to be the case that in this era, the core synergy that any great operator can bring to the table in this sort of a scenario is AI? Like you can leverage, whether it be in this business or others, you can leverage tools that drive automation, that drive product development, that drive improvements and efficiencies across the organization that make the product actually better for the user, etc., etc. That simply isn't obviously being well implemented. Well, look, I think you have to have a product vision of how you would use AI to make the whole user experience better. And yes, you're right that you could just use AI to drive efficiencies and that will improve your profitability and earnings. And so on a financial level, you could make the acquisition work. But it seems to me that the existential issue for PayPal is that you're dealing with a product that's 25 years old. I mean, it's the same thing that we created back, you know, like 27 years ago. I mean, it's changed a little bit, but not that much. And the problem is that that interaction model is legacy. And so unless you've got a vision of how to resuscitate it and rejuvenate that product, I think, yeah, it could be a good financial play. I think they're buying the accounts. Yeah. Yeah. I mean, what you're saying is interesting because with Stripe, I mean, this is the advantage that Stripe has is that they have a ton of merchants, right? So they've become the preferred mechanism for merchants to basically accept payments via APIs. And I think they're doing about $2 trillion a year of annual transaction volume. I think PayPal is doing 1.7. So actually Stripe is a little bigger than PayPal now. But the thing that PayPal has that Stripe doesn't really have is the consumer relationship. So over 400 million active consumer accounts. So you're right, Shamath, that if somehow you could combine the merchant relationships with all those consumer accounts and then bypass the credit card networks, because in theory, there could be a lot more on-us transactions. Exactly. That's where the value is. PayPal already owns Braintree. So now you have Stripe and Braintree that effectively were competitors that won't be. and then what Block gives you is an entire point-of-sale infrastructure and you get the cash out. So you put it all together and I think it's a shot across the bow for Visa and MasterCard. Raintree is the other one that I think you just mentioned there, Chamath, that's important because that is a very strong business that you don't even know that PayPal owns. Venmo is also, that speaks to a lot of young people. So you're kind of getting two generations. You're getting Gen X and millennials, a lot of bang for your buck there. yeah it's what sat said is true they have enough of these things to go end to end on their own rails that is a very yeah the question is whether you can package it all together in a way that the consumer will actually choose because it's one thing to say well we take the merchant relationships of stripe and the consumer relationships of paypal no you don't do that you go to places i want that no you don't do that i think what you do is you go to places like all of the merchants that you stripe and say we'll give you a three or four or five percent discount and they'll be like, okay. And so you'll see these prices that just fall everywhere. Imagine if Shopify was like, to all their merchants, okay, you have two choices, the old way or the new way. The new way, you put another 2% or 3% or 4% in your pocket. Of course, they're going to pick the new way. Well, and this is the paradox of modern M&A. If you look at protecting the consumer, this will ultimately be great for the consumers. This is going to lower the prices on it. They're not buying this. Okay, you're saying something really interesting. It is so good for consumers if this were to happen. This is the exact reason why if this had happened two years ago, this would have been the antitrust equivalent of a colorectal exam. I mean, you would not even get one step close to doing this deal two years ago. Well, that's really interesting, actually. I mean, the key question with antitrust is how do you define the market? And so if you define the market as APIs for merchants, then Jcal, it would be Stripe versus Braintree. And then the government would say, well, you can't consult on your share. However, if the real market is Visa and MasterCard, that's the ultimate duopoly. And if PayPal can add competition to that market, which is infinitely larger than APIs, then it's actually pro-competitive. So how you define the market determines whether it's anti-competitive or pro-competitive. And those guys are smart enough, and they've read enough books where they won't f*** this one up. All right, let's get to the next topic. Somebody else is suing OpenAI. This time it's Apple. On July 10th, Apple filed a 41-page lawsuit against OpenAI over alleged stolen trade secrets. Apple says OpenAI stole their IP to develop their consumer hardware device. Remember, we had Sarah Fryer at Liquidity, and I probed her on this new device, and she said it was very human and lovable. She gave us a little bit of the goods. Well, it turns out Apple is alleging that maybe this is partially their IP. Tang Tan, Apple's former VP of iPhone design, is OpenAI's chief hardware officer. He allegedly directed Apple job candidates interviewing at OpenAI to bring, quote, actual parts to interviews, to, quote, show and tell in the interviews. Chang Liu, former Apple senior technical engineer, sent this text message to a still employed Apple colleague, quote, LOL. Well, I found out I can access the network storage. So funny. During all of this, OpenAI has poached over 400 Apple employees over the last year or two. Big numbers of poaching. Apple and Tim Cook have seen enough. Tim Cook greenlit this. As insane as this is, Sam Waltman has found a way to screw yet another party. Screwed Elon, his first benefactor. where, Chamath, if you remember correctly, the default for iPhone AI was supposed to be chat GPT. So they took this relationship. Sam took this relationship where he got to be the default on the most important platform for AI, the iPhone. And now it's wound up in a massive lawsuit. What are your thoughts on this? i haven't really seen apple act very litigiously in 25 years in silicon valley so that's obviously a concerning data point for open ai they're very reactive more than they are proactive on these things so there must have been something that really really upset them egregious yeah so i don't know it's going to take a court to sort this out i don't really want to gossip because like who knows what's actually going on and who said what and blah, blah, blah. But nobody should be stealing things from their former employer. Nobody. Obvious. You're just not allowed. It's just obvious. These people are very, very smart and they're very successful. And that's why OpenAI probably wanted them. And that's why they wanted them. And you come to them with the collective wisdom of what you've accumulated. And I think that's sufficient you don't need to especially as a senior person do this so i just hope that this stuff isn't true because i think i don't think that sam or sarah anybody else there are trying to induce this to happen i don't think yeah i doubt they induced it but i do believe that it's true or apple wouldn't have brought it sax when we look at this maybe you could open the um aperture here if you want or you can just go very detailed but the nature of we have a free market we don't have non-competes in California, generally speaking. You can just employment at will, go where you want. But we have had instances, Waymo famously brought some IP to Uber when they did. Travis and the team said, leave the building. Your job is rescinded. You don't get to bring that information here. In this case, it seems maybe they didn't induce it, but it occurred for some period of time. So take us through big picture what you think is going on here and what it means for the industry. Well, like Jamal said, I have no idea what's going on here. I mean, this is a lawsuit. The facts are all alleged. We don't know. It's going to be adjudicated. So I really don't want to opine on what happened here. But if people want to know a very simple rule of thumb for how to avoid these types of disputes, it's just when an employee leaves their previous company and joins the new company, just don't take anything with you. the only thing you can bring to your new job is what's in your head your memories your memories that's fine whatever's in your head you're allowed to take but never leave with anything else no drives no cd rides no documents no nothing just what's in your head is okay that's it free break any thoughts here on just the number of lawsuits that seem to be piling up over at open ai bad luck a couple dots make a line i guess okay there you go very well said a couple of dots make a line okay spacex had a data leak this week they launched grok build in public beta at the end of may the newest coding model grok 4.5 powers grok build i've been playing with it it's extraordinary It's a coding tool that works inside of Kershaw. SpaceX previously told users, Shamath, nothing from your code base is transmitted to XAI servers during a session. But what actually was happening is every time a developer, according to reports, used GrokBuild, the tool was sending their entire code base to SpaceX cloud servers without alerting the users. Not just the files that were needed to do that specific coding test, just everything. passwords, API keys could have got pulled up there, all the change logs, etc. The privacy setting was supposed to stop this, but it didn't work. SpaceX quietly disabled the upload on July 13th by flipping a switch on their servers. Elon Musk, friend of the pod, promised on X that all previously uploaded data has been deleted, I guess. And in response, SpaceX open source rock build, that's their harness. So that's another open source win or win for the open source community and AI sovereignty. Got any kind of thoughts on this? Obviously, this was not intentional, but trust is important with these models, as we've been talking about for the last couple of months here on the All In Podcast. I would actually connect this to my comments on CNBC earlier this week, which built on top of Alex Karp's comments the week before. Privacy in AI is very fragile, and it's very brittle. And this is despite the best efforts of great businesses. Like, you know, you may not like Elon for personality quirks, but he is incredibly trustworthy. He's overly transparent. And so to their credit, they shut it off immediately. But my takeaway is that there are all kinds of non-obvious data leak vectors lurking in AI. And so if you think that you going to flip a ZDR switch zero data retention which is the magic term that the industry uses to tell you that everything going to be okay I think the answer and the message should be it not going to be okay because you can guarantee any of it So the model companies, when they give you these zero data retention policies, are probably trying their best. But I think the reality is you are leaking information where you don't know it. And they, despite their best efforts, may still have trap doors that they don't even know about until it's figured out by somebody else, like in this example. So all of this speaks to you have to have a stratified ecosystem. You have to have third parties. Now, look, that's very biased for me, because it's in part what we do for large enterprises is at 8090 when we implement our software factory. But the reason why it's working so well is this exact reason. You need an independent third-party layer to interface to these models to manage this exposure because there are trap doors everywhere. And that's what Sachi just said in a really interesting blog post. Did you guys see that? Yeah, I thought that was excellent. The reverse information paradox. Yeah. That's exactly the takeaway that he left with. He was building on Alex Karp's supposed crash out, You know, the point that Karp made about how enterprises who have technical ability want control over their compute, models, weights, data, and alpha. But he went further with that idea. I mean, he started with Karp's idea, but then he kind of provided a recipe or roadmap for how enterprises should operationalize that. and what he says is that enterprises have to establish a real trust boundary with private evals, proprietary learning loops inside the tenant, decoupled orchestration, and the explicit right to fine-tune their own outputs. So he kind of goes through a litany of fairly technical things that enterprises should do in order to achieve the operational control that CARP was saying that enterprises really want over their AI compute models and data, their alpha. So it's really interesting. I think now there's a virtual, almost like college dorm session going on between the leaders of these companies who are brainstorming some of these concepts and now extending them, right? And what's happening is you're starting to see the formation of not really an alliance, but like an ecosystem that is trying to create alternatives to a monolithic closed model stack, which is where Anthropic and to some extent OpenAI want to go, is they want you to be locked into their stack, right? Their models, their harness, they control the data, all of that. And now you're starting to see all these different companies. And you pay a huge premium for the privilege for them to do it, which is even more insane. So I saw this data. And Nick, maybe you can find this companion clip. the companion clip I'd like you to find is Eric Glyman, who's the CEO of Ramp, was on Squawk Box, I think, today talking about a new feature where you can manage the token maxing of your employees through your Ramp card. But the data that I saw was that a million tokens on Fable is about SACS 56 bucks. A million from Sol is about 26 bucks, which is the same as Cloud4Eight. a million input tokens from on grok is about a dollar fifty okay zux is about a dollar fifty elon's about a dollar and the chinese models are 50 cents wow so on top of the whole data sovereignty bleeding your alpha away can you imagine that you're paying 56 bucks as well per million input for that risk that is insanity i'm using perplexity computer and they started supporting grok and they already support GLM 5.2. So when you're like using Claude or OpenAI, you can only use their models. So I started effing with the different models and I gave it all the same, basically PRD. And I said, I want to make a podcast player that deep links. So like if we were talking about, I don't know, Mythos, it would play me all the Mythos clips across all the different tech and business podcasts, but make it into one stream. And I was like, this would be like really helpful for me for prepping for the show and just be interesting. I did it. It took a couple of hours. It cost $11 on the new Grok. It was hilarious how cheap it was. And then adding to this, I don't know if you saw. Did you try to do it on Fable to see how much more expensive it would have been? I didn't. I didn't because I was out of Fable credits on my $200 account. So, you know, look at this clip here, Nick. Play the clip from Eric Glenn. That's kind of interesting. We're thrilled to be launching Token Spend Management today. It's available to RAMP and non-RAMP customers. And he's exactly right. Over the last year, I looked at the stats this morning. Token spend among Ramp customers has grown by 21 times. 21 times. 21 times. Not 21 percent. We're talking about 21 times. That's exactly right. So being off by a few pennies as a CFO actually might be quite nice. At the rate it's going, it might be several dollars. And look, I think that for many CFOs, they're often very surprised by the bill Because what the AI companies have functionally set up is you have a tab, you can spend as much as you want. It's very hard for CFOs to see proactively what people are spending on. And every time they're introducing new models, the rates often go up. And so there's very misaligned incentives. So part of what we're trying to do is make it easy for CFOs to see the spend, understand the spend, and control it. Thanks, Nick. He's saying something so important there because if your engineers are going off randomly in an unguided system and then just ripping through a million tokens at 56 bucks, what he's talking about is the eventual downstream impact to earnings. And that eventually a bunch of these public market CFOs are going to show up to Wall Street and they will have missed earnings because they're upx. At some point, if things are 21xing every few months, somebody's going to miss a quarter. I don't know who, but somebody. And it's not just going to be, you know, I was speculating it'll be a few pennies here or there, which they'll have to say is because of token spend. He's saying it could be as much as dollars at this rate, which also could be the case. I think the point that we're all trying to make is unless you get a control of this and you can directly say how much money you're making, this is a bridge to nowhere. It is a money burning furnace. the good news is this is all creating a massive market opportunity sacks bit tensor subnets glm52 hosting grok 4.5 now inkling inkling mirror marati's new model inkling everybody's now saying hey wait a second i can give you a better deal you're paying two bucks i can get you one buck this is no no people are paying between 26 and 56 bucks they should be paying 50 cents exactly well you know and the inkling announcement was kind of interesting because i think the value prop there is she's explicitly saying that look we're not frontier intelligence we're just under that but we're a platform for fine-tuning these open models which are much much cheaper and then you can achieve the result you want based on fine-tuning and so that's really interesting yeah and but you know these open models won't be around for very long if Anthropic has its way. There's a reason they want to stop it. It's just they have such a monopoly. Of course, you're selling most of the product for 50 cents per million tokens when they're selling theirs for 56 bucks. Of course, you don't want that to happen. Of course, you want to try to stop it. But that being said, they're still growing like crazy, just to be clear. I mean, you are seeing this explosion of interesting things happening with open models. Like you said, the latest Glock build is open, Thinking Machines open, and so forth and so on. But still, they're growing. They're still the industry leader in terms of revenue growth. So these things are happening side by side. Yeah, I think that the interesting thing is Eric would not have released this ramp product unless CFOs were like, I can't control the spend. Yes. And then he's like, well, here, let me build it for you. and then if enough cfos essentially turn that feature on and start to rate limit how it's spent because maybe they're not getting the roi and the engineer doesn't care about roi the engineer's like i want to use the latest greatest model yeah and maybe you don't need it maybe mirror is right and for 95 of the tasks you should be at one level lower especially when it costs one one hundredth of the cost but the engineer will never make that trade-off because they'll never want to think about And also, they're not tied to the money. The CFO is tied to the money, and the engineer wants to go on an exploration on using the latest, greatest thing. And until those two things have a reckoning. If you're booking your travel, you don't even see the price. You're like, yeah, just put me in business class. Put me in a nice hotel. And the travel department handles that. You're saying something really interesting. What percentage, if you had to guess, of Fable 5 prompts are just average machigana that should be running on? 98%. Yeah. 98%. I was using it for stupid stuff that I could be using Quinn for. I think this is my micro prediction here. Mark Gurman, who's like the most in the know guy when it comes to Apple, he says, and we've got this new CEO coming in for Apple. John Furniss. Yeah. And he is a hardware engineer. M7 Ultra, because we're on M5 chips now. You can get like, you know, 256, 512 gigs of RAM. He says M7 Ultra is going to support as much as 1.5 terabytes. That's double what they're already supporting. So if you think about Frontier models, like the last generation, this is like an Opus level model running on your Mac Studio. You guys all use Mac Studios, you're rich venture capitalists, whatever. You're like, yeah, I'll take a $4,000 or $5,000 computer. This is going to change everything. You're going to have employers go, oh, I can just run 90% of my workloads, 99% of the workloads on the local Mac studio. I think Apple is a screaming buy right now, and it's not financial advice, but my lord, that company could just run the table on AI if they get this right. All right. Apple? Yes, because they're going to make such a fortune. You've got to just let them move on. Let me explain. It's just like the iPhone. Everybody laughed at the iPhone. People overpaid. They did not. When the first iPhone came out, many people. Not true. Steve Ballmer. That was it. That's true. Steve Ballmer was the big one. I can still hear him laughing. No, if you think about how they make money off of hardware, off of their devices, they will put so much downward pressure on Claude and OpenAI by just putting local models and supporting them with this memory architecture. architecture it's going to be wild when people have unlimited tokens on their desk i don't know i don't know if you guys uh saw this but um there's a very large solar company called sunrun they just announced this week that they're making distributed data center blocks that you can put in your house another company that did it is a company called span that partnered with nvidia So to your point, Jason, you're seeing this fragmentation and distribution of edge compute, which I think is a theme, definitely a theme. Well, it's also chasing energy, right, Chamath? Like if you've got some solar, if you've got excess battery power, hey, we power up your batteries at night cheaply. I think I told you this last week. We are so massively short electrons. By 2050, the United States of America will be two and a half California's worth of energy in deficit. 2.5 California's, the fourth largest economy in the world. we will be short 2.5x of all of the energy consumed by California by 2050. This week, there was an auction by this huge utility called PGM, which serves Pennsylvania, New Jersey, Maryland, 13 states. And that auction is where they publish a forward curve and say, hey, listen, guys, here's my forecasted load. And here's how much energy I need. and people signed up to essentially get paid a guaranteed rate every day so that they have to fork over the energy in the future kind of like a forward option they needed like seven or eight gigawatts they had 156 megawatts or something show up we are in such a bad place right now on electrons and electricity prices did you see what our boy did this week we need we need so this is behind the meter which is different and he elon needed to do this by the way just so you know because there's an issue in memphis where he was very clever about how he was able to get colossus off the ground that regulatory explain this it's not well when you try to power a data center typically you have what's called grid power so you go to the utility in the area and you say hey please run me a line off of that main transmission line and that's how you power your data center when that runs out or is so backlogged you have to do what's called behind the meter which means on your own property that you own you build something for yourself now there's a problem with that you would think well that's smart yes but like in everything in america there's regulation on top of regulation on top of regulation and one of the most complicated regulatory schemes that you have to overcome is clean air permitting so even if you say you're going to do behind the meter then you're like well what can i do solar you can do but it takes too much space for most places batteries you can do but you need to generate the electricity in the first place so people use that gas so elon cleverly bought a ton of 18 wheeler like engines basically he bought The company that made sure of this and provided them. Mobile turbines. And then just, you know, pin them to the ground and ran it. And, you know, those are personal use, essentially. And so they came under the clean air permitting requirements. But then when you act as a block, you could make the claim that it doesn't. Now, there are new solutions like Bloom Energy, which allows you to have huge installations and still fall under the personal use clean air permit. And so for all of Elon's future capacity, he needed to have this in place so that he gets the clean air permits and he's able to have a clean run of sight to continue to build domestic data centers. Anyway, there's your little TED talk on energy. But we are in a bad place, guys, and it's only getting worse. Speaking of data center sacks, everybody's favorite socialist governor, Kathy Hochul in the great state of New York, my hometown. Powered by fossil fuels, they drive up our carbon footprint. They occupy massive amounts of land, potentially displacing agricultural space and open spaces. The bottom line is progress shouldn't arrive on a higher utility bill, deleted water supply or noise pollution. So we have no choice but to address these challenges created by these massive facilities. That is why today I'll be signing the nation's first ever statewide moratorium on hyperscale data centers. Everything she's saying there is a false accusation on the data center. So let's just go one by one. So she's saying that they eat up all of the power. Well, yeah, I mean, look, if you connect to the grid without producing more power and you force data centers to compete with residential rate payers, then, yeah, you could drive up utility prices. However, if you do what Chamas said and let them build behind the meter, then they bring their own power. And that's what the president has advocated for since the beginning of his administration is to let the AI companies become power companies. So that is the way to solve the energy problem or the utility problem. Then she's talking about eating up land. The reality is these data centers are a model of land use efficiency. We have a ton of land in this country, obviously. You can find places where there is enough open land to build a data center. The economic impact and value of a data center relative to the land use, again, is one of the best ROIs there is. The supposed noise pollution, that's largely made up. That can be dealt with. You obviously don't want to put these things right next to a residential area, but create a little bit of distance and it's fine the whole water consumption thing is largely a hoax the the modern data centers recirculate the water flows loop systems yeah and i think there was a study that showed that a typical data center uses the same amount of water as two and a half in and out burgers so in a burger chains i mean just go after the almonds if you're concerned about water people there's yeah or golf courses i mean there's many you know there's many uses of water that are way more wasteful. So when you compare economic impact to all these different things, data centers are like honestly one of the best things we could be building as a nation. And Sachs, there's all these taxes and incremental revenues. Did you see the article where, I think it was in North Dakota or something, where teachers were getting like $30,000 and $40,000 bonuses from all the tax revenue that was coming in? There's all these upsides. That's right. They generate a lot of tax revenue. They've created a blue-collar construction boom. It's not true that there's no jobs once they're built, that you do have ongoing jobs there. And then, oh, one final thing, just on the point that Hochul is making, she said it created a lot of pollution. Natural gas, which is how most of these data centers are powered, is one of the most clean burning sources of power that we have. 100%. These data centers have become the scapegoat for all the angst that people have about AI. And it's kind of become this very clumsy way of trying to throw a wrench in the gears of innovation and just kind of slow the whole thing down. All I have to say is welcome to Texas. We got plenty of land here. And for now, so stupid about her proposal and her talk, aside from the thing she got completely factually incorrect, is New York State is like 80 percent underdeveloped. Drive upstate, folks. You're thinking of New York City. Yes, New York City is packed. You go upstate, it's literally 70% to 80% of the land in New York State is undeveloped. There's so much land. It's ridiculous. New York is giant. It's giant. On this topic, this week, I just want to give a shout out to Senator Dave McCormick. He had a defense and innovation summit in Carlisle, Pennsylvania at the Army War College, which a bunch of us went to potus came gave a speech had a ceo roundtable a lot of defense companies ceos etc but chris wright was there sacks and my guy he's great and chris mentioned this insane story he said you know there is a lot of common funding because dina powell asked this question on stage and he said there's a lot of common funding patterns of these people that are protesting the data centers. And he said, you could actually trace it back to the same people that in a different era were protesting fracking. And so he was saying, these are all just hobby horses that they use to raise money, have a job. They're professionally paid protesters. They kind of just show up out of nowhere. I didn't realize that there was such a commonality, but they're the same people. The thing that I just can't understand for the life of me is why Anthropic is still funding these groups that want to put the kibosh on new data center construction. There's one called Public First, where Dario just gave his first seven-figure contribution, and then a bunch of other employees at Anthropic gave it. And all these groups are trying to slow down AI development with new regulations and making it harder to build new data centers. And at a certain point, you just have to wonder, I mean, is this regulatory capture, or have they just kind of lost the plot? Because the number one thing slowing down the growth of Anthropics revenue, it's not demand. I think it's the availability of compute and data centers. And so you're just kind of wondering, what is the point of all of this? It's so true. I was talking to someone in politics about this, and the theory that they had is, well, the Democrats aren't going to pause the data centers forever. They're going to pause them until they feel like they're in enough control that they can dictate all of the rules. And so in other words, they're calling this a moratorium. and I think it does mean that the data centers are going to stop, but eventually they're going to be in a position to say, okay, here are our terms if you want to turn these things back on, right? You want to lift the moratorium. And then that's when we get this, you know, big government Democrat defined AI regime. And you know that it's going to consist of a new regulatory agency and new speech controls, the whole trust and safety agenda from social media will be ported over. However, this was this one person I was talking to. This is what he was speculating is a real agenda is that eventually once Trump is no longer president or in some future Democratic administration, they will eventually lift the moratorium, but on their terms. Now, I think that's a really dangerous thing to do because, you know, Trump is president for another two years and then no one knows what's going to happen after that. And even if you lift the moratorium in, say, two and a half or three years, it's going to take a couple of years for those projects to even ramp back up. So when you start talking about a moratorium on data centers, it's not like a few-month pause. It's probably a good five years at least before you can get another data center switched on in the state of New York. Just so you know how bad it's gotten, there's a curve that you can use to price data center assets. And I think you guys know this but I have this portfolio of these assets that myself and my partner Nita have accumulated And what so interesting is when we talk to all of the hyperscalers about giving us a price because we trying to figure out whether we should keep it or build it or just sell it. The most incredible thing is how extreme the price is at the front end of the curve when you have verifiable, energizable power today. And the reason is exactly everything that you're saying, Saks, which is that when you look out into the future, you know, we've said this before, but it's about 40% of all these projects are getting mothballed and stopped. And so it's creating this massive deficit of available energy to actually drive the use of AI. So to the extent that you actually want, you know, drug discovery, or you want cancer diagnoses, or you want better health care, better legal advice, we may actually not be able to service it based on all of the demand that exists because the power isn't there, the energy isn't there. And the reason why that's not there is because folks are just kind of reflexively protesting something that they don't completely understand clearly. So I think it's a really big problem. I mean, we're going to have GPUs chasing energy. Like, where is their energy? And just drive the GPUs there is what's going to happen, right? Let me add one layer to it, which is they're not only trying to stop data centers from being built in the U.S. They're trying to stop data centers from being built internationally in our friends, allies, and partner countries. And the way they're doing that is the same political forces that are stopping data centers are also behind all these new export controls on chips. So they want to make it harder and harder to export chips to more and more countries, including our friends and allies. And so there's not going to be data centers here. There's not going to be data centers in our allies. I mean, where are we going to put these things? Yeah, and some of those allies have unlimited energy, Middle East. Like, if you want some data centers. Well, what's funny, Jason, is, you know, we did a bunch of Middle East data center stuff, and then it's kind of stopped. Meaning, like, there wasn't this growth that I thought would happen because it's a very conveniently placed geography. It's the Middle East for a reason. And so, you know, you can serve 4 billion people very quickly in under 200 milliseconds from there. But instead, what happened was there was this explosion in Asia and specifically in Australia, which kind of surprised me because I would have thought that those folks are a little bit even further out on the DSA, you know, far left. I thought these things would not have happened, but they were able to get big deals done. So in this weird way, you have all of these other countries kind of running to try to embrace this stuff quickly. They've done a decent job. They're doing stuff to sort of like displace some of the energy that is needed in the US. But the problem is we need to have enough surplus here because this is where most of the commerce is going to get created that I think should power. These are luxury regulations. You can afford, if you're New York State or California, to be like, you know what? We don't need this. It's a luxury for us to have an extra year. If you're in Australia, you might really need the money. If you're Texas, you might really want the money. Nebraska might want it. Like virtue signaling only goes so far until your debt to GDP is high enough and or your productivity is low enough and or your foreign direct investment is low enough where you're like, all right, you know what, screw all that. We're just going to build a data center. But the other thing is, if you saw what happened this week, the UAE now is able to import the best in class leading chips. And so to your point, Jason, I think it restarts the cycle where you have to look very carefully at the Middle East because it's a very attractive place to build these things. And by the way, I don't know if you saw the – even if you think about fiber and the milliseconds that you're talking about, yes, you can get to the 4 billion people. But I don't know if you saw the giant Starlink versions now. They make like a really big version. I think it's actually got like one of the enterprise versions, but there's like an even bigger enterprise version, and they can bundle them together, and you're starting to get to like 10 gig, 20 gig setups. So that means you can start putting these things almost anywhere, which gets also – Can we see your clip, the thing that you were mentioning before? This is not, to your point, as prevalent in the Middle East, where you have monarchies and governments that aren't ruled by democracy. But in democracies, we see this anti-data center movement taking hold. This chart is something that, for me, always kind of played a role in my understanding of where the incredible anti-GMO sentiment came about in the United States. This is great. Russia Today, this Russian media outlet launched in the U.S. in 2010. They were kicked out of the U.S. by Biden in 2022. And you can see that prior to Russia Today existing in the U.S., there was no anti-GMO sentiment. GMOs were around since 1996. That's when they first had their big commercial launch in the U.S. and were pretty prevalent for 14 plus years before everyone started to think GMOs are bad. We got to get rid of GMOs. And you could ask people 100 different ways, very pointedly and specifically about the facts on the matter and the science of GMOs and all this sort of stuff. But everyone always had a reason why they didn't want them, similar to what we're hearing now with AI and data centers. And it turns out that if you track back all of the media that had all this anti-GMO sentiment that ultimately got picked up by the mom bloggers, that ultimately got put into social media feeds, that ultimately everyone just accepted as truth. a lot of it originated in this Russian media push that happened around this era. And you can actually see this on the Google trend data that shows GMO and it's kind of right up. And then as Russia today started to get cut by different media outlets and people stopped retweeting them and stopped reflecting them and stopped writing articles that followed Russia today, the anti-GMO sentiment declined in the US. And I think you can see this going back decades. You know, there's this effort that the KGB kind of designed during the Cold War called Directed Measures, which was really meant to try and create an influence campaign through affecting media. So putting this kind of propaganda out through foreign media, particularly targeted Western democracies. And, you know, you could argue that maybe you could trace back what happened in Germany with nuclear energy as being kind of similarly originated. But there have been a series of these pushes that seem nonsensical if you're fairly rational and can have an actually objective debate about the scientific merit, the economic merit, the benefits of these technologies. But for some reason, what we call the activist community become heightened to them, say that we've got to get rid of them. And everyone's got these different unfounded, scientifically unfounded reasons why they want to get rid of them. And you're like, wait a second, how did we end up in this place that we're literally handicapping ourselves? And I think we're seeing something similar happening with data centers in the US today. The funding of the NGOs, as they're being called, the media that's supporting this, the retweeting of the media, and then you ask people, there was a poll that came out today, something north of 50% of Americans believe that data centers increase the cost of water and electricity. Even if the data center is fully recycling the water, and they're producing their own electricity, there's still this kind of repugnant reaction to the data center. And so there has been this deeply sewn psychological shift that's happened in the United States. And, you know, people have these, well, I hate the rich. I hate tech. I hate AI. I don't want any of this stuff. I don't want any of this stuff. But where does it all come from? I do worry that there's some degree of kind of call it foreign, you know, influence. I don't love the word influence because everyone kind of everyone captures it up. But there is some degree of this. I would say there's this foreign interest. Let's let's call it that. No, I think it's more than that. Just one month ago, OpenAI published a blog post called PRC-linked influence operations are targeting AI debates in the U.S. And Politico covered this and a lot of other sites covered this. Basically, what they are saying, and in fact many people are saying, is that China is behind a lot of these influence campaigns to shape U.S. attitudes on AI data centers. It makes sense. It makes a lot of sense. And there's going to be a congressional investigation of this. It does make sense because it is in their interest, right? If they can stop us from building this necessary infrastructure, then that's a way for China to win the AI race. If they can convolute the market, if they can incentivize Anthropic to pull the ladder up, if they can kill open source in the United States and constrain demand or the optionality and choice of lower, cheaper models. Think about that for a second. at $56 per million input tokens, I mean, versus 50 cents for the rest of the world, all of a sudden, it doesn't take a company that's much, much worse than you to beat you when your cost is 50 to 100x more. That's just the math. The math ain't mapping. You know, Sasha made the point that these enterprises are not just paying for AI with money. they're paying again by feeding those frontier models or proprietary knowledge right and all their their alpha so it's like a double whammy it's like a more expensive and you're potentially mortgaging your future look let's be honest it is obvious where foreign governments have an enormous incentive to try to manipulate and influence the comings and goings in america i think we should just acknowledge that the idea that that doesn't happen is very naive Now the question is we have to be able to call it out and put our finger on it because otherwise what is clearly happening is that there's a lot of Americans that will just fall for this. And they will not think from first principles. We have a huge moral panic going on with respect to AI. Look, when you talk about catastrophes that could result from AI, what are we talking about? We're talking about things that might happen in the future. Nothing resembling this has happened yet. Even the cyber risks that everyone's been talking about. Job loss. Or job loss. Job loss. It's like none of it's turned out to be true. We haven't seen any of it so far. But we're on the threshold, I think, of destroying the crown jewel of our economy, which is the system of free market innovation that we have, this culture of rapid iteration of anyone with a good idea can go raise risk capital and start their idea, start their company. And we're on the verge. you know now we're talking i think about how far the overton window has moved where we're actually saying that creating a finra for our industry might be better than all the alternatives finra is a bunch of stockbrokers writing rules and when's the last time there was ever any innovation in that sector i mean i guess robin hood made trading free that was it that was a big one yeah okay but that's not real innovation okay that's like an innovation with respect to a pricing model and we're actually saying that that might be the least bad alternative is having the equivalent of a bunch of stockbrokers creating new rules that all these ai companies are not gonna have to abide by it's crazy we are gonna we are gonna throw away the lead that we have in this and by the way kimi k3 just came out and people are saying it's it's now right up there it's very very close to the frontier we may have months on china if that and we're gonna create all these crazy rules and new regulatory bodies for risks that have not manifested yet. It's worth monitoring the situation, but it's not worth panicking. Like you should monitor the situation with self-driving cars and job loss. China's certainly doing that. They just stopped giving out permits for self-driving cars as an example, because it's going so well and they're losing jobs. And there are people who are getting there's a little civil unrest. So they just said we're going to make self-driving cars licensed. And so they're not giving out any more license moratorium on license for now. It's worth watching Mythos and if it could hack your system, Palo Alto Network's checking it out, other people checking it out. It's all worth monitoring. But yes, there's no disaster here today because of AI. Nothing's jumping out of your chat GPT window. The worst case scenario is you blow out some tokens. Okay, great. That's the biggest. There's only a handful of companies that are even at the frontier, and they all have safety testing and red teaming and all the rest of it. They're doing a good job. Yeah. I'm not saying stop that. I'm just questioning whether we need some vast regulatory apparatus now to start doing all this rulemaking. And we did this because of science fiction and Dario saying all jobs are going away. I mean that was the most ridiculous thing. When he said it's like he's panicked that it's going to be 80 or 90 percent jobs in 2026, what was his claim? Nick, get the exact claim. I think he said 50 percent of jobs. He said 50 percent of entry-level knowledge worker jobs are going away within one to five years. That was one year ago. so it's a little ridiculous yeah i mean it's but he's been in a state of panic since gpt2 yes yes i remember they wanted they wanted to have uh regulatory approval for models that use 10 to the 25th flops right and every single ai model is like well past that threshold now yeah And we haven't seen any of the harm. Look, they thought that 10 to the 25th flops would be enough compute to create, you know, the Terminator, to create Skynet. No offense, Freeberg, but one guy's panic attacks, one guy's anxiety condition might have shaped the whole course of history here. Like does Dario have like – I'm not making light of it, but does he have an anxiety issue where he's like overly concerned about this stuff? Or is it just delusions of grandeur? Come on the pod, Dario. Invite's open. Come hang out. I'm sure he'd love to come on the pod after you just accused him of having a panic attack. I mean, it seems like he's a perpetual one. No. Am I wrong? Listen, it could be psychological, but I actually think that there's a strategy that makes a lot of sense, and it's a very simple, straightforward strategy. Number one, brand yourself as a safe AI company. Number two, ban unsafe AI. Three, profit. Yeah, there you go. That's the strategy. Kind of brilliant. All right, everybody. Go to allin.com slash events and sign up for the All In Summit in September. Scholarships are open. Let's do a quick, amazing, deep, robust science corner with our boy, David Freeper. Before we get into the science corner, I'm going to give a shout out to Ronnie, Dog for Adoption. I love Family Dog Rescue in Sonoma. Check out his Instagram link. God, here he goes again. In the description. This dog needs a home. He was fostered and he lost the foster home. Someone come and grab him. He's awesome. All right, let's get into science. This is what we're doing. This is what we're doing. He's trying to get more cue points. That dog looks delicious. Gross. Dog carpaccia. You don't live in Sri Lanka anymore, Shamrock. Seriously. Oh, Sri Lanka taking his prey. How do you marinate that dog in Sri Lanka? Do what you got to do in Sri Lanka. Is it just salt and pepper, Freeburg, or do you like something else? You know, just a little salt and pepper? Wild Bauer marinade. Do you use Beaujolais? Nouveau? What is it? Do you like a little yogurt and garam masala? Maybe do a little tikka dos? Okay, spicy. Do you guys want to talk about reversing aging? Yes, I want to talk about it, but I've got to drop. All right, guys. I've got to go to the Apple Tower. I'll cover it. The audience will stick around. Science Corner. All right, so, Jamath, you can drop, too, if you want. I'll cover Science Corner solo. So in the past, we've talked about Yamanaka factors, which are these proteins that can go into cells and reverse the aging of the cell and the cell starts to act young again. Pretty amazing. And there's a lot of advancement happening on that front. But this paper that came out just this week that everyone's kind of going crazy about was put out jointly by Calico, which is Google's kind of age reversal startup that's super secretive that they're not allowed to talk about in partnership with a group called Revel Pharma. And what they focused on was what's called the extracellular matrix, the parts outside of the cell that age. And what does aging actually look like outside of the cell? Well, over time, sugars and fats bind to proteins in the area between our cells, and they accumulate, and they don't get cleaned off. And as they accumulate and they don't get cleaned off, they make it harder for your body to clean out that area, to maintain that area. It causes stickiness. It causes binding. And that reduces mobility and ultimately leads to things like wrinkles in our skin. Is that visceral fat? Is that what visceral fat is? No, it's called glycation. And so it's the binding of sugar and fat to the proteins that sit in that extracellular in between the cells. Exactly. And so it's that whole gunky area in between the cells that when you're young, works well, everything's smooth. The proteins get replaced if they break down. And as you get older, sugars and fats kind of stick to these proteins, block them up. And as they get blocked up, your body can't repair them. It can't clean them. And more importantly, it changes the structure and the shape of those proteins. So things like collagen that are far apart stick together. And that causes things like wrinkles. And that causes immobility. And it also causes inflammation because then those proteins kind of look different than they're supposed to. And your body starts to attack them. And that activates inflammation. And that's one of the reasons why we get more and more inflammation as we get older. And so one of the key, what are called advanced glycation end products, that's the term for these things, is called CML. CML is kind of the predominant molecule that gets formed in this extracellular matrix that's driving aging. And nothing breaks it down. So these scientists set out to try and create an enzyme. An enzyme is a protein that breaks something down that can break down CML. And remember, a protein is just a series of amino acids, and those amino acids are programmed by DNA. So you can put three letters of DNA to make an amino acid. So you can literally just print DNA and then put it in a bacteria to print proteins and then test those proteins to see what they do. That's the modern kind of era of kind of protein synthesis and protein testing. And so these guys kind of went out and they took the target, which is CML, and tried to figure out, okay, how do we actually degrade CML, clear that extracellular matrix and reverse aging? And they started with AlphaFold. And they used AlphaFold to find a protein that could bind to CML and activate an enzymatic or process that would break it down. And then they took that protein from AlphaFold that comes out of a bacteria, they produced it, they started to test it. And then they started to find some of the binders or the parts of that protein that they could make better and they use, you know, DNA programming to change it. And they made hundreds and then thousands of variants of it to measure activity, which is how good is it at breaking down the CML. And they did this recursively, five different cycles. And then eventually they tested it. Once they'd kind of gotten it breaking down the CML really well in a test tube, they started to test it on the proteins that we would find in our body, casein collagen retinal proteins which are in your eye hemoglobin and they were able to get rid of 52 to 97 percent of the cml just degraded away and then they um they found several sites where they were able to degrade over 90 percent and then they took actual human skin from elderly patients that had donated their skin and they put this enzyme onto that skin and they were able to eliminate 55% of the CML on the skin, which basically reversed the skin's age down to the age of a 31-year-old. This is from greater than 70-year-old patients, just by putting this enzyme on the skin. And so it's kind of a groundbreaking demonstration of combination of alpha-fold, what's called directed evolution, where you change the order of the DNA that changes the structure of the protein to test different proteins, do high throughput screening, and ultimately make a novel protein that doesn't exist in nature today that can do something pretty profound for human health. And now the next set of questions is, okay, well, great. This enzyme is awesome. How are we going to get it into our bodies? How are we going to get it into that extracellular matrix? Is it going to be a cream? Is it going to be a shot, a supplement? Could we eventually take an RNA shot that makes the protein inside of our body and starts to do the degradation from within? A lot of questions kind of still to be answered, but it really, I think, lights a great path forward for these novel therapies that we're developing it's fucking awesome i mean dude like amazing you know all my i got all these joint pains in my hip and my shoulder now like everything you can feel yourself getting older that's how i will tell you this right now that will not be the first market the first market will be cosmetic and cosmetic skin yeah it will be a trillion dollar market you can create a queen if you could put this enzyme literally on your skin and on your face as a cream yeah game over it's it's it's that that alone is two trillion dollars but i mean dude AI, let's just talk about applications of AI, why it's actually awesome, that everyone should be able to agree on and you can't be convinced by some foreign psyop. This is fucking awesome. I mean, this was AlphaFold used to discover this thing and evolve it and drive this outcome. Everyone can benefit from it. It's just so profound that we have this pool at our disposal in this day and age. I think it's pretty awesome. Anyway, thanks for sticking around for Science Corner. All right, bro. Love you too. Rain Man David Sacks I'm going all in And instead we open source it to the fans And they've just gone crazy with it Love you Wes I'm the queen of Q1 I'm going all in What? What? What? What? What? What? What? What? What? What? What? Besties are gone Let's play a dog thing Can I notice your driveway? Oh man We should all just get a room and just have one big huge orgy because they're all just useless. It's like this sexual tension that they just need to release somehow. Wet your feet. Wet your feet. Wet your feet. We need to get merch. I'm doing all in. What? I'm doing all in.