Trump Rally or Bessent Put? Elon Back at Tesla, Google's Gemini Problem, China's Thorium Discovery

okay welcome back to the All-In podcast jcal is not here this week he is off in Detroit at the Knicks game congrats to the Knicks here's a photo of our boy JCAL hanging out with Who's that ben Stiller man what happened to Ben Stiller that looks like Shalamé right next to him timothy Shalam is that Shalom you know Ben Stiller was once referred to as the Jewish Tom Cruz but he he has not held up like Tom Cruz i gotta say that he should have joined theology keep it up you got to represent for us

a little better let your winners ride rainman said "We open sourced it to the fans and they've just gone crazy with it." Love you we can all sitting in this week is our boy Andrew Ross Sorcin journalist author extraordininaire andrew welcome to the show long time listener first time caller thank you for having me andrew I'm going to do just a couple of quick plugs and I'm going to give it over to the pro to do his work take us through the docket today i think this is going to be really fun the world's greatest

moderator the world's greatest moderator is here today that's fighting words shots fired we'll see we'll see hold your tongue you can tell me when it's over before we kick it off I just want to give a quick plug the All-In Summit if you haven't seen the video check it out on YouTube and Twitter going into our fourth year the 2024 recap we'll kind of give you a high set of highlights from last year it's September 7th through 9th in LA trying to have the world's most important conversations andrew I know it probably competes with one

or two of your conferences but let me just tell you this one's way better we're going to be blowing it out this year with parties allin.com/summit to apply to join us at the summit this year awesome andrew thanks for being here we're excited to have you okay boys here we go i'm curious i want to get your take on all this stuff because I'm fascinated by what's going on in these markets this week let's start on the markets because we got a rally the question I think behind the rally is is this a Bessant put

is this a J Pal's in the job he's got a put on this thing i don't know what you think is going on we're uh up three to 7% for the week there's been a she loves me she loves me not situation with what Trump's been saying about China and whether there's a deal or not a deal china's saying nobody's talking he says everybody's talking what do you guys think is really happening and then we got to get into Alphabet we got Tesla got a lot of earnings here that's also moving this around i think

that the most important piece of financial logic that we have to break is this idea that there is always a put the put is this weird thing just for the folks that don't understand it is that when the market goes down somebody can belly ache and cry and somebody in the government will say "Okay we'll buy your shitty securities at your bad prices." So that's what the put is so typically what's happened is you can cry to the White House and they'll call the Federal Reserve and they will buy it that's the Fed put and

in some very rare cases when things get really calamitous like in 2008 Treasury will set up a program and start to buy things that's what was called TARP back in the GFC so the question is is there a put here i mean my honest answer is no and the simple reason is if you look at where we are the stock market's back to where we were in like May or August of last year and if you had said that we would have upended 50 years of economic policy and the markets would only be off five

or six hundred basis points I would have been shocked so there's no reason for a put maybe the more interesting question is who's asking for the put the ones that have suffered from the volatility and a lot of those are the active market traders so if you trace the feedback who has been the most negative aman's been negative ken Griffin recently turned negative and that's probably comes from the fact that they're not monetizing the V the way that they used to monetize the V more than the market has speared down to such a degree that

the world is coming to an end because it isn't okay Zach can I build on that so there was a tweet two weeks ago when all this started by Nick Carter that I retweeted cuz I thought it was really interesting which was if you think a market selloff delegitimizes Trump's presidency you're going to give him unconditional credit when it rallies right cuz those are the rules now and that's exactly what's happened is that the market has rallied like you said it's up 7% this week but the media doesn't want to give Trump any credit for

it so it's kind of created this narrative of a Bess and put in other words Besson is entirely responsible for it look Scott is a very smart man he understands markets he understands the bond markets and he is a sure reassuring voice to those markets and I think he's doing a great job but I think part of what's going on with this bestinput narrative is that no one ever wants to give Trump or his administration as a whole credit so what they do on any particular week is valorize a particular member of the administration that

they can then say "Well this is the person who's really responsible for this not Trump because they don't want to give Trump that credit." Next week they'll be tearing Scott down and there'll be some other member of the administration they'll be trying to valorize to basically prevent the administration as a whole from getting credit for doing something good so again I think Scott's doing a great job i think he's doing a great job making these deals and he's saying a lot of correct and reassuring things to the markets but I think if the media is

going to tear Trump down every time the market goes down you have to give him credit when the market goes back up and I think there's just a general reluctance to do that where do you land Dave i think that there's is he crazy enough to let it all fall apart signal that kind of got wiped out this week that's really what it was it was the fact that everyone realized that Bessant Trump are not going to let trade come to a standstill they're not going to let the whole global economy grind to a halt

that they're going to have to do something and I think that the read is that they're making the indications that they're going to get deals done which means that their intention is to make sure that the market doesn't tank that the most roughly three weeks ago when we started talking about this I think I made the point Shimoth made the point that part of the art of the deal here so to speak is an opening salvo right which is bold and some people would say maybe it's too extreme but it's it's basically an opening bid

to shift the conversation completely and that that would create tremendous leverage to get deals done and isn't that exactly what's happened isn't that the way it's played out yeah i remember there was a guy from Harvard who used to teach a class in negotiation he put out all these videos and what he always said is like set your anchor point as far away as you possibly can if you want to get maximum leverage in a negotiation i don't know what's farther away than 145% tariff so it's clearly you know a point for as Sach said

for negotiating to a deal that seems like one that would have been impossible or implausible if you started from a 0% tariff beginning point in negotiating and there was some percentage of the market or some probability that people were assigning to the fact that this administration could be crazy enough to tank the global economy by leaving tariffs really high and letting this kind of run and I think that that's kind of being taken out of the market right but now that it's out of the market that means that the leverage there's less leverage there's less

leverage in the conversation and if the goal is to No that's not true that you're saying a critical thing and that is not true well hold on i if if if the goal is to effectively pressure China which I think is the ultimate goal I think as the bond market has spoken and as Trump and Besson administration has said okay we understand where the where the floor is here and what we got to what we got to do i assume if you're Mark Carney if you're the EU name your place India Japan you say I'll

make a deal with you but you know if you thought you were if you thought I was giving you the world before no no no no no you need me as much as I need you and you sat you seemingly need me even more now so the part where I agree with you is that last part like I think too many times you look at the stock market and think that that's reflective of what's actually happening and it's not the stock market I think the best way to think about it is it's an estimation of

what the future would look like at a rate of return you're superimposing a view on reality so what is actual reality right now is if the United States was running negative2 billion dollar a day of trade deficits right if our current account balance was minus2 billion on March 31st the day before liberation day the real question is what is that number mathematically after April 1st right because you're ratcheting it up tariffs okay and you're implementing a scheme that should take that negative2 billion that's going out the door out of America shores it would have flipped

it positive how positive we don't know but I'm sure that the government knows and I'm sure the White House knows what that number is that's that's important fact number one and then separately the country that matters the most on the other side of that who was very positive right let's say China was plus three or four billion a day where did they go to and I suspect that it's probably break even or possibly even negative so if you think about what the new reality is today April 25th as we tape the show we've gone from

minus2 to maybe plus one and China's gone from plus4 billion a day to maybe zero or minus one and I think that's what instills the leverage that is required to get the deal done then then we can all debate whether the forward PE of the S&P should be 16 times or 22 times i don't think that that matters but the actual cash flows have materially changed by the way I I think long term the America's got leverage here everybody wants to in is ultimately going to want to invest in America including China there's no question

that we we have the advantage on a long-term basis the question is do we have the patience well if you go from -2 to plus given our democracy given our bond market given everything that goes on we're such an add society okay then you're then what I would say Andrew I think that that's a very good point what I would say to that is then we need to communicate better it needs to be a single point that's repeated by everybody in the cabinet and what they should probably focus on is hey guys we just flipped

cash flow we went from negative cash flow to positive cash flow here are the actual numbers and don't deviate from that because then I think Americans would say "Hey this thing is working let's let it play out." To your point hey Sax here's my question for you so we hear you know the president say he's talking to President Xi we hear Scott Besson say that he's in talks with China or that talks are going to begin and then you hear China say "No no no we're not talking there's no talks happening we don't know what

you're talking about stop saying these things." What are we all supposed to believe well look first of all let me just say that when I'm on this show and I'm not talking about AI or crypto I'm just a civilian right so I'm not a spokesman for the administration on anything but the two issues that I work on so I don't want to come across as someone who has special knowledge cuz I'm just I'm not part of the trade conversation so I can't answer your question directly but what I would say is that with respect to

the China relationship I think what's happened over the past few weeks has been a very important stress test and it's basically flagged some serious weaknesses or dependencies that have evolved in this relationship over the past few decades you know I flagged this in a previous episode that we did with Larry Summers where I said that 25 years ago was a huge mistake to walk China into the WTO and I think that just to build on on that thought one of the problems with walking them into the WTO is that they got what's called developing nation

status so you know you can either be a developing nation or a developed nation in the framework of the WTO and maybe there was something legitimate to that in 1978 you know when Deng Xiaoping began his reforms the average Chinese person was making $2 a day by the year 2000 it was much more questionable and it certainly makes no sense in the year 2025 and still to this day China gets developing nation status now what is the benefit to China of that well they have a whole different set of rules they're allowed to have tariffs

they're allowed to subsidize their industries they have all sorts of different timets for doing things they're allowed to do things that the US simply can't do now how have they leveraged that they have identified strategically certain industries that are choke points in the global supply chain and they have taken them over and the best example of this is rare earth so there was some good stories in the New York Times about this over the past couple of weeks which I think were largely accurate china identified this as an as a critical industry and the rare

earth the ore itself is distributed all over the world i mean China has some advantages there but they're not huge it's the processing of the rare earth that's very expensive very complicated and they decide to dominate that industry and they're responsible today for over 90% of the processing of rare earths and then the next step in the supply chain is that those rare earths get cast into rare earth magnets which are a critical component in pretty much every electric motor and so they're a critical component of the automotive industry but not just cars lots of

different products and I think China makes something like over 90% of the cast rare earth magnets well by the way this issue still has not been resolved china has now cut off the United States and so as part of this trade negotiation we're going to have to you know resolve that issue and I trust that it will be i mean what you've heard from the president and the Treasury sector over the past week is that they're they've indicated a desire to engage in bilateral negotiations with China and to essentially deescalate this trade war but I

think it's been very useful again as a stress test to reveal our critical dependencies on China that we've exposed we never should have let this happen just from a national security standpoint we worshiped at the altar of this like free trade god to the point where we became dependent on China for these critical components in our supply chain i think that was a catastrophic mistake and I think that it's exposed these dependencies we've created on a nation that is not our ally and that we can't count on them it's a country of concern so I

ultimately think that we're going to need to learn from this experience and very rapidly make some major corrections here andrew let me just highlight what I think is one of not talked about point about the discussions that are underway there's a lot of conversations about tariffs and about trade deficits but very little about regulatory par and I think that this is really critical for these trade negotiations to actually resolve to a positive outcome for American businesses and American enterprises because there is not par and how American businesses can do their work overseas relative to how

foreign companies can do work in the US so if you're a Indian company and you want to sell something in the US you set up an LLC you set up a bank account you set up a store you take a lease and you sell your product there is not a lot of hoops and challenges to that business operating in the United States i'll tell you a story in uh 2005 2006 Monsanto which was a seed company that doesn't exist anymore launched in India cotton seed seed for cotton farmers that basically had a trait in it

that would prevent worms from eating the cotton and so Indian farmers were paying 450 rupees an acre for cotton seed before Monsanto basically put this cotton seed the yields went through the roof the farmers made 5,000 rupees per acre of incremental profit and they charged 1,500 00 or400 rupees per acre for this seed so it was more expensive seed but it had a 5,000 profit improvement and it took off took the whole market 90% of farmers bought the seed not because they had to but because it was better and what ended up happening was the

Indian government stepped in and said "You got to lower prices you got to go back to the price of 450 because that's what's fair for farmers." And the farmers were like "We we're doing great we don't need to have this kind of price control." But the government put it price control in and ultimately sued the company went to court and stole their IP and they left the country and this was a company that had invested you know well over a billion dollars in developing and launching this product the same is true by the way in

pharmaceutical companies in software companies in hardware companies if you want to go do business in China today you have to set up a 51% JV where some local company owns 51% of your equity and your IP the stories around the world I think start to paint a picture of why American businesses find it so hard to develop international markets and sell into those countries when in the US we make it so easy for companies based in foreign countries to come and sell in America and that's a big part of where the trade imbalances arise from

it's not just because Vietnamese people can't afford expensive American goods it's because it's so much more regulatory difficult to do work in these countries they can come in and take your IP and so I think that this is like a really important part of the trade discussions and negotiations that a lot of people miss that American businesses will see massive revenue growth and massive market adoption if we can get regulatory par in some of these uh key key trade okay let me ask you a different question chimath raised uh the issue of Ken Griffin who

made some comments this week about the brand that is America and effectively said there was sort of a sell America situation going on and my question about the brand that is America is whether you think after these tariffs whatever deals get done that you can put the toothpaste back in the tube that you can get the trust back that there's not going to still be some kind of toothpaste on the rim of the tube that you that you can't stick back it gets all nasty and crusty right that to me is a fundamental question i

want to read to you what Ken had to say i think Ken was probably a bit of a reluctant uh Trumper the second term but nonetheless he's been outspoken on a couple things he says "If you think of your behavior as a consumer how many times do you buy a product with a brand on it because you trust that brand?" In the financial markets no brand compares to the brand of US treasuries the strength of the US dollar the strength of creditworthiness of US treasuries no brand comes close we put that brand at risk what

say you well look I I think there's a fundamental question here about whether you think there's a problem with the status quo or not ken Griffin is one of the biggest winners in our economy under the current status quo and I don't think he sees a big problem that needs to get fixed but I think like we just talked about I think there are some big problems i mean Freeberg just laid out the way in which trade with China is non-rescrocal like our companies cannot participate in their markets the same way that they can participate

in ours but it's worse than that like I talked about these WTO rules gave China the opportunity to strategically annihilate our core industries that are critical in the supply chain and there's one other piece of this which I think is really important which is the race to the bottom i mean if you're an American company and you are still producing in America and your competitor is able to go to China and undercut you obviously you have to do the same thing because I mean those are just the rules of the game and so we've had

this race to the bottom where if you're an American company operating under these rules you have no choice it's worse but to export your manufacturing your supply chains so you know we've had these rules that again under the status quo I I would say they're not free trade it's unfair trade it has all these perverse consequences it's bad for middle America and this manufacturing belt of the country and it's created massive strategic dependencies on an American adversary i'll say I'll say three things let me just say three things quickly number one I think Ken is

massively long Pax America i mean he's built a $42 billion empire he owns a billion dollars of American real estate so I don't see him investing in Ecuador anytime soon relative to the opportunity set in the United States and I think that's what speaks to the second point which is investing is always a relative exercise on Wednesday I had a meeting with a Brazilian multi-deioner very very very successful guy and we were talking about the tariffs and the investing posture and he's like there's still no other country other than America that I can really put

my money to work in that makes any sense and I kind of pushed him what about China what about India and in all of these markets there are as Freeberg mentioned vagaries in China there's different problems in India there's different problems in these other markets europe is roughly uninvestable so the more generalized answer is is on a relative basis the United States is still the shining beacon on a hill there is no investable alternative for scaled capital except the US the the last thing I want to say is just to build on what Sax said

Andrew the the thing that we keep forgetting is when economic leverage spills over to political leverage what happens to the United States and specifically what happened this week was on the rare earth side not only did China constrain rare earths into the supply chain what they then did was tell South Korea what they could do with the rare earths that they gave them and now all of a sudden you have this geopolitical spillover where it's not just a country constraining supply it's a country now dictating the political and trade practices of another country so let

me ask you a question how do you think America is in the best position to make its own decisions for example let's say that there's a China Taiwan situation and we need to decide one way or the other and I'm not saying which way is right or wrong but for the purposes of this the thought exercise is China and Taiwan get into some spat we have to take a side and China says "We're going to constrain all the pharmaceutical APIs into the supply chain we're going to constrain all the battery cathode into the supply chain

and we're going to constrain all of the rare earths to anyone who doesn't take our side." Now how is America in a position to actually decide for ourselves what is in our best interests if that's looming over us and I think that this is the big problem that this has exposed this rush to globalism the race to the bottom has actually created a level of dependence that doesn't allow you to do what's in your best interest so real quick I agree with you in so many ways i think the question that I have is not

in what the ultimate goal is it's how you get there and is there a way to do this with a a velvet glove if you will and maybe there's no way to do it in a in a in a better way what is to say no but what is to say this isn't the velvet glove this could be it's that the stock market is down 6% like it's not down 60% but this this what I think is so interesting Andrew is is the way that Trump has already shifted the conversation because the truth of the

matter is that before Liberation Day on April 2nd which is 3 weeks ago no one was talking about the unfair trade practices no one was talking about the dependencies on rare earth no one was talking about the race to the bottom and Trump has shifted the conversation 100% when Jared Kushner was on the show he talked about how the Trumpian approach is controversy elevates message and we said at the beginning that by having this liberation day by planting this flag in the ground Trump was creating leverage to then have these negotiations and he completely shifted

the conversation now where I will agree with you is that the administration has to stick the landing here right besson and it's not just Besson also Lutnik these are all smart talented people they do have to then negotiate these deals and we have to basically stick the landing but I think the fact that you're saying that you don't disagree with where Trump is trying to get to but it's mostly just tactical is a huge shift in the conversation it may it may raise the issue the way you're describing but at some level it's also undermining

a semblance of trust i just want to relay two stories one is you know I've been talking to a whole number of of multinational CEOs who do business in China i'm talking about the McDonald's of the world the Starbucks of the world the Nikes of the world and so many of them now talk about not just how consumers aren't going necessarily in their stores the way they used to but are really about the American dream the American brand and they talk about the idea that you know if you were a young kid and you got

a job at Starbucks you used to go home to your family in China and say and your family go "Wow that's amazing." They're not doing that right now so many of these companies are even trying to reestablish how they market and advertise their companies almost as if they're a local business not an American brand and I don't know what that ultimately means but I also was talking to a a Chinese CEO who made a I thought just a fascinating comment to me which was you know we're cool with the US being the leader we were

always cool with that we're okay with that we don't love it but we're okay with it it gets a lot more complicated when you have to be the winner and I think that's an interesting sort of construct this idea that we're first and we have to win and I know we're telling it's you know Trump is telling you know citizens in the US that we're going to win but he's also telling the world that and I think that's a I think that Chinese CEO should have written that memo to Xiinping and seeing if he agreed

because I think he would say "No we are the winner." Look you got to remember in 2003 three years after China was admitted to the WTO Huin Tao became premier he had this incredible speech and in it what he said is there are these 10 boxes and I've written inside these 10 boxes all the critical industries that in 25 to 30 years from now will dictate supremacy in the world we are going to create national champions he said in those 10 areas and what's interesting about Xi despite the ideological differences to who he followed through

with it this is a group of people so we can say what the CEOs are going to say but at the end of the day the CEO of China Inc is one man and he and his seauite have been pretty resolute which is even when he inherited a political ideology that he didn't completely agree with he followed through with it which is these guys in these 10 areas now own the critical inputs that make the world go around and I think it's pretty reasonable to do a risk assessment to say well how do you stand

up to that and actually have your own point of you if you don't have your own method of having access to those things i think that is the most important question everything else about you know brand and all of this other stuff I think comes after this question this is the critical question because if they can tell you what to think that is not winning yeah i would just add to that that you hear this criticism of Trump a lot which is that okay he's right on the issue or his instincts are correct but there

should be a nicer way of doing it and I guess I would give that story more credence if the people making that criticism had actually been advocating for a change in the status quo prior to Trump and they weren't i mean we had this bipartisan globalist consensus that pretty much all trade practices with China no matter how unfair they got was basically good for the United States and no one was really doing anything about it until President Trump made it this issue and made the unfair trade practice conspicuous so if somebody else had been willing

to take that on then I maybe would give credence to this idea that there's some non-Trumpian way of doing this but I just don't think that's the way our political system works i think that the way our political system works is that you have to completely shift the conversation first to create a new consensus and then you work out the deals and that process can be a little bit disruptive okay one tiny follow-up so I don't know if you guys saw the news this morning a report out that Apple is going to move its manufacturing

of iPhones that are exported to the US or imported here in the US but they're going to manufacture all that stuff in India not in China anymore so they're going to move all the manufacturing to India see you in 20 See you in 2035 they say they can do it supposedly in 18 months by the end of 26 bet you say no way bet well I think if this is geopolitically smart yeah they should do it but I'm just saying that's a it's very smart it's not going to get done in 18 months i don't

know how long it's going to take but look I think one of the big lessons here over the past 25 years is that you have security first security has to be worked out first then you have trade if you build your whole um supply chain and all your trading relationships with countries that are fundamentally adversarial to your interests and we can get into that part of the the USChina relationship but I think most people would say that we're in some version of a new cold war with with China obviously you're going to have to revise

your trade relationships because again we can't be dependent on an adversary for core components that then go into our military for example so security always has to come first then you work out trade and I think that India is fundamentally extremely aligned with us on security because they view their biggest potential threat and adversary as being China and that is basically that the way that the US sees the world as well and so I do think that the US India relationship is just very aligned and I think therefore the investments that get made and the

trade relationships that get forged will be very stable over the next couple of decades whereas you know if you make a big investment in a country that could be your adversary you should expect that that relationship could get disrupted i don't think the Apple deal is from a standstill my understanding is Foxcon and others have been working with Apple to actually stand up manufacturing capacity in India for some time now and I do believe that they probably have one or two model runs already active in the country so I don't think that this is necessarily

from a standstill let's go recruit the people figure out the processes find the builders stand up the facilities that there's probably a model system already running that's now about replication and scale up which is why they have confidence in the state stated goal it's not often that Tim Ko will stand up and say I'm going to do something in 18 months and then be delayed by yours he's not Elon he's going to come out he's going to be very clear he's he's always been very clear so and my understanding is this has been thought about

for some time andrew I think you've been to a lot of conferences where for three years now you've been hearing people banging the table saying "Get everything out of China as quickly as you can." Yeah tim Cooks heard that message he's been thoughtful about it he's been planning for this day i don't think he wanted to be declarative about this until the day came well the day is here and how do we feel that it's gone to India it's not coming to America i think we knew it wasn't coming to America well India has one

massive advantage over China which is that it has 1/5if the labor cost of China which has 1/5if the labor cost of America so India is a natural place for a lot of this next generation labor to end up plus they have a very educated workforce plus they have a young workforce in many ways you could say that it's it's China circa 2003 i mean you have to remember right like China from 2006 I think to like 2012 their GDP grew at like 10% a year i mean can you imagine what that must have been like

when a country that big is growing that fast so India is going to have that moment over the next 20 or 30 years i I the only reason I scoffed at what you said you invest in in in India would you i have a large rare earth mine in India yeah it's one of the largest supplies of rare earths outside the United States we negotiated that deal with the PMO and they gave us a great deal to compete with the Chinese a specialty chemicals processing is on the ground there and then the idea is then

to import all of that specialty chemical into the United States and then do all the I like the macro i just there's something about China where there's a lot of accounting fraud still and you can't really trust a lot of the numbers but if that all gets cleaned up the macro is all right it's exactly where it should be for You mean India india yeah yeah i mean I I just think the structure the the structural realities just make it a good place to invest because I just think that India and the US are going

to be very aligned for for a long time agreed again their main security threat is China and our main security threat is China and that's just not going to change for probably the entire 21st century a couple weeks ago Sax and I sat down with the Indian ambassador and it's very clear they're fundamentally aligned with the United States and I think exactly what Sax said is true everybody knows who needs to cooperate in order to have a reset of global trade policy and political leverage so I don't know I'm pretty pro- India it's a very

difficult place to invest i agree with you Sorcin i've never made money there i tried my hand at tech investing over a decade i maybe have returned 50 cents on the dollar why so then so then what went wrong like what's the macro reason the market was far too immature my mental model was about how American success looked like and when I tried to impose that on the Indian market it all just blew up so a lot of the Indian entrepreneurs how they raised money was not from Indian VCs it was from American VCs and

you can't tell an American VC an idea that just makes no sense to you because your frame of reference is the United States so what turned out to work was a couple of very large bets that were copies of American businesses so like the Indian Amazon worked the Indian PayPal kind of worked the Indian Door Dash kind of worked but everything else didn't work so then why because is it the consumer market's not there or the No because markets aren't there no because we have these mental biases that that will never allow us to believe

the way that they would construct the business would work so for example they're like "Hey here's a business where we're going to buy food from the local farmer then we're going to put it in a warehouse then we're going to drive it around on rick shaws and deliver it to people." And you think well this business can never work well actually that business turned out to be a ginormous success nobody in the United States would have ever funded that now what happened four years ago though was after a bunch of meetings I pivoted to these

other areas because when you talk to the Amanis and when you talk to the Adanis they're like dude stop beating your head against this wall like build infrastructure it just works and uh it was true they've been right okay one geopolitical question how do you feel about India buying as much oil as they do from Russia I know we'll get into the whole Ukraine thing later Smart smart look India is a country that has two great powers in its neighborhood china and Russia it has a contested border with China they've had border skirmishes when you

have a country that is much more powerful that's actually a security threat to you you then seek good relations even possibly an alliance with the other great power in the neighborhood that has been India's philosophy they've had good relations with Russia for a long time even going back to the Cold War that is what makes sense for their security standpoint by the way the exact same thing is true of the United States we just haven't realized the strategic reality china is the pure competitor i mean Mir Sh made this point at our all-in summit china

is the pure competitor it's the only country in the world that is a peer of the United States it's the only country that's really capable of threatening our security russia is a distant number three in terms of the great power rankings what you want to do if you're in a sort of heads up competition where there's two superpowers is you want to make an alliance with that number three and what we've done is we've pushed Russia into the arms of China what we ought to have been doing is a reverse Kissinger we did this during

the Cold War by the way we had the Soviet Union and we had China and in that case the Soviet Union was the big threat to American security so what did we do we had Nixon and Kissinger go to China and make a deal with Mao china was just as communist as the Soviet Union mao had blood on his hands to a degree that is much greater than someone like Putin has and yet we were willing to shake hands with him and make an alliance because that was real politique and I think in a similar

way this is what our strategy should have been with Russia for the last two decades and instead we've been foolishly pushing them into the arms of China well Sorcin what's your read i mean what's your opinion on the I think India is a tough look India's India is a tough place to invest every everybody I know who's been talking India for the last I don't know 15 20 years has been talking it up as the next great utopia and it may very well be it probably will be it's just a question of when i think

you have to and you have to be specific about the end market you know like there are people that have made a ton of money there but it's not the way classical western economics has played out by any means andrew I mean what do you think about this sort of what I would call balance of of powers logic 101 i get I get the idea that you you go to your you know least uh I don't know uh your least enemies your friend's friend your enemy's enemy is your friend no the enemy of your enemy

is your friend or whatever it is yeah no the power logic i I get I get where you're going with this i just think that Russia given all that they have done I'm not it's hard it's hard to look at Russia and China and maybe Russia on the margins on a relative basis in life is better than China in certain ways but in other ways it's not and so it's very complicated to sort of for me to look at it and go okay um it's actually interesting who I mean there's a I was going to

use a real loaded word who's more evil right is China more evil or is Russia more evil I mean I think I think there'd be a big debate about that in the world well I think it's it's unnecessarily judgmental yeah right i think it's dangerous to look at foreign policy from a position of extreme moralism because ultimately the purpose of our foreign policy is to ensure American security and we can't rectify every injustice in the world and over the past 25 years we've become hyperinterventionist you know in an attempt so we've claimed to do that

right we keep saying that we we've gotten involved in all these places because we want to promote our values and spread democracy and by the way we did the opposite i mean you look at the forever wars in the Middle East we had interventions and occupations in Iraq Afghanistan Libya Syria how did all those things work out they did not promote our values or spread democracy so my point is just I don't think we should look at foreign policy from an a position of extreme moralism i prefer to think of neither of those countries as

as quote unquote evil and I would prefer to think of them as countries which have their own interests i think that with respect to China the real issue is that it is a revisionist great power it has made clear that it wants to basically annex Taiwan it wants to turn the South China Sea into effectively a Chinese lake it does not respect international waters it has territorial disputes with Japan and if we don't play a role in containing China then China will revise the balance of power in East Asia in a major way and I

think that would have I think profound consequence for the United States i just don't throw you off a roof and one day and you won't even know it i mean that's the difference and I don't know if that's a moral argument i'm not worried about the United States is not going to be thrown off a roof by by Russia and that's the level at which we should think about these things if you look at Russia's behavior Russia actually is not a revisionist great power what it wants is just security on its borders the revisionist power

actually in Europe over the past 25 years was the United States because we pushed NATO right up to Russia's borders despite the promises that were made to Gorbachoff in the '90s so we're the ones who've revised the balance of power in a way that was profoundly threatening to the Russians and I think it would be far better from the American standpoint to just work out a security architecture for Europe with Russia that gives the Russians the security they crave on the Western border and gives Europe the security it craves and I think if we had

had that mentality as opposed to this highly moralistic mentality where we basically want to spread American style democracy everywhere you don't think that American style democracy though has helped the world in some way i'm not saying we did it right everywhere i think we've lost a lot of lot of wars that we should not have attempted but if it could be done you're right but the problem is Andrew the failure rate is too high look at what happened in Afghanistan in Syria in Iraq as we've gone in to make you know regime change we actually

put those people in a worse condition than they were before they don't end up with American democracy after a trillion dollars in Afghanistan the Taliban is back in charge doing awful brutal things right two trillion and and I would be I would be a proponent of and by the way this was also part of the promise of the open internet and I think from a fundamental point of view the regulatory regime we had in the United States with the internet was driven by this notion that the freedom of information would actually allow democratic proliferation you

know we were talking about the Arab Spring as you'll you know recall like that was going to be this big moment but at the end of the day it turned out that didn't work either that there's something much more complex in the history of a people in a geography the deep ties that those people have that this idea that turning on a screen or showing up with a tank is going to flip the switch to democracy turns out not to be true and look just to be clear I mean I think my lucky star is

that I'm an American and we do have the type of government we have here and my parents immigrated to the United States in 1977 for political reasons because we have the type of government we have here so look I'm a strong believer in American style democracy the problem is our efforts to promote it or impose that style of government through regime change operations simply has not worked i mean this is should be one of the big learnings of American foreign policy over the past 30 years it's better to model it right it's better to Yeah

so how do you model it i think you model it by being the shining city on the hill by setting a good example by focusing on our own country and making America the best it can be so that people all over the world look to us and say oh we want to do that and I actually think that what I'm describing is an American soft power if you go back to the 1980s we had that soft power i mean the people of places like in Russia they love buying American blue jeans and American music and

we had that soft power we were inspiring to the world but it all changed say starting in the '90s but then really in the 2000s when we started going into these countries with our militaries and occupying all these countries we soured them on America we made them hate us and this is the problem with this hyperinterventionism is what we should be doing is setting an example not trying to occupy these countries let me read something to you this is this week this is Trump condemning the strikes going on in Kiev this is I'm not happy

with the Russian strikes in Kiev not necessary very bad timing vladimir stop 5,000 soldiers a week are dying let's get the peace deal done how is this deal going to get done i should also say Secretary of State Marco Rubio reportedly skipping a meeting on a ceasefire talk on Wednesday after Ukraine refused to recognize Russia's annexation of Crimea well the reason why Rubio canceled that meeting is because the Americans put forward a peace proposal and Zalinsky dismissed out of hand before the Russians could do anything Zilinsky dismissed it and recognizing Russian ownership of Crimea if

you will should be the easiest point for Zillinsky to concede and he dismissed it out of hand now why do I say that the Russians annex Crimea in 2014 so this was not something that happened in 2022 it happened over 10 years ago and if you look at what the people of Crimea want and there's been a lot of Western polling on this there's been man on the street interviews by NBC the people of Crimea by something like over 80% say they want to be part of Russia they're ethnic Russians and I'd say the the

final point on this is that Zalinsky and Ukraine tried to get Crimea back in the summer of 2023 with a summer counteroffensive remember the whole point of that summer counter offensive was to sever the land bridge to Crimea destroy the Kirch Bridge isolate Crimea and essentially lay siege to it this was the whole point of that and they got nowhere with that they didn't even break through the first Servican line so my point is that it's militarily impossible to retake Crimea the people of Crimea don't want Ukraine to retake it they want to be part

of Russia and yet Zalinsky cannot give this up okay so how do we get to yes how do we get to yes this was supposed to be done on day one and here we are the basic problem is that Zalinski doesn't want to make a deal i mean he he has rebuffed the Americans on Crimea which should be the easiest point to give on he's been completely unrealistic about their prospects on the battlefield he was insulting to the White House when he visited the White House in his t-shirt or whatever he was dressed inappropriately and

then one of the wor tests for America I think that meeting was well I mean he was insulting to the president and especially to the vice president he he murmured under his breath a curse word to the vice president you remember that i mean it was really quite something and remember he's biting the hand that feeds them i mean he has an obligation I think to be respectful to his patrons in a way that his patrons may not in a way that they we may not to him and he has demonstrated I think that he's

unrealistic in every possible way he's unrealistic about Ukrainian prospects on the battlefield about retaking Crimea and about who the the hand is that feeds him so my view on this is quite simple which is if Zalinsky won't see reality let him go find new patrons let Starmer and Mcronone support him they say they will they say they have the ability to do this but they can't and you know they can't enough well they appear to my point is Zillinsky has made his bed let him sleep in it this is my point of view on it

he refuses to listen to the Americans he refuses to recognize that this administration even has leverage over him and you don't think that ultimately if Putin takes Crimea plus whatever that he's going after Poland next or I mean that's it's the domino theory that becomes the complicated part no I don't think so i don't think there's any evidence that he wants Poland i don't even think he wants the part of Ukraine that is chalk full of Ukrainian ultraists because you would have a massive insurgency there he doesn't want a Gaza type situation and by the

way just another point on Crimea where is the insurgency if Crimea really wanted to go with Ukraine as opposed to Russia why has there been no uprising there over the past 10 years so in any event my point is there's no evidence that that Putin wants Poland poland's part of NATO that would start World War II i I think Putin has shown that he's a calm rational decision maker and I don't think he wants World War II now the Russians have said what their terms are they said it last year they said they basically in

in this root cause speech they gave in I think June of last year and basically what it comes down to is they want Istanbul plus there was a deal to end this war in the in the first month the Istanbul deal and it required Ukraine to basically sever its security relationship with the west and to recognize that it would not become part of NATO and they had to give up Crimea basically that was the deal back then what Russia has said is that's still the deal plus realities on the ground so in other The Russians

have lost I don't know 100 thousand plus hundreds of thousands of soldiers now taking this territory in the east and obviously they're not going to give it up so I think that the Ukrainians could have had a better deal in the first month of the war the Biden administration rejected that now there's a different deal it's Istanbul plus and I I think that the American proposal is pretty close to that so I think this administration recognizes the wisdom and just reality of that deal but the Ukrainians aren't so look my view is simple if the

Ukrainians are unwilling to take the deal that's on the table and they want to find new backers with the Europeans let them but why should we continue to support this okay let's pivot let's talk markets and let's specifically talk a couple stocks because there's Andrew you disagree cuz I want to hear your disagree no no I I I could but we're going to I think we're going to run out of time okay i want to talk Alphabet so everybody thought the Blue Link economy was dead open AI Perplexity all of it was you know going

to take the search market they come out with earnings sundar uh does way better than everybody expected revenue up $90.2 billion is up 12% net income was up up almost 50% year-over-year you got the cloud still ripping you got a big buyback program he starts talking about Whimo on the call for the first time in a long time if ever uh stocks up about 5% on the news what do we think what an incredible business my gosh there's there's a lot of resiliency in Alphabet that I don't think people have given the company credit for

first of all I'll just highlight with the dividends they're paying plus the share buyback you're basically getting a four five% yield on the stock so the dividends are like 10 billion a year and they're announcing 70 billion back on two trillion in market cap so you're making 4% a year just by owning the stock in the dividends and the buybacks then if you look at the revenue 90 billion 77 in services 12 in cloud so the 90 billion about half of it was ads on search and a lot of people have been talking about the

decline in search due to AI that's the end of of Alphabet here you can kind of see the breakdown what this shows is that there's such significant growth 9 billion in YouTube 7.5 billion in non- Googlele ads 10 billion in subscriptions with 270 million subscribers across subscription businesses 12 billion in cloud revenue which is growing 30% year-over-year there's a lot of resiliency even if you take out search and so the question is what's the downside what's the upside well the downside is what's the worst that could happen to search what they lose half of the

market to uh to chat GPT if they lost half the market to chat GPT and the rest of the business keeps growing the way it is you get back to parody pretty quick what's the upside well the upside is they're able to use AI to actually reinvent search retain the audience and create an entirely new search experience that's chatbased or has some chat integration into search so it seems to me trading at 18 times free cash flow which is where this thing's at right now plus the 4% yield on dividends and buybacks plus the kind

of seemingly pretty significant gap between the downside and the upside here it's just such a powerful business it just seems like it highlighted that this is not a business that's in decline and is about to die as everyone's been kind of proclaiming there's enough growth engines here and there's enough resilience and the price is so good i don't I feel quite good about the I think there's hundred billion dollars of hidden value called Whimo in this business $250,000 rides a week now growing like crazy and they're only like four cities it's crazy and I think

I think the market's giving them zero for that right now zero i think the most interesting stat that I saw and they own% of SpaceX by the way which is crazy the most interesting stat in the earnings was that I think they said that they had 270 million total paid subscriptions across YouTube and Google one and my initial thought was well when are you just going to stick Gemini as the most obvious interface in front of it like I think that these companies now need to confront that this open AI behemoth is growing at a

rate that was probably a hindrance before and now is a real strategic risk and so if you have 270 million paid subs come on guys stuff Gemini right in front of these guys that's that's that was my first takeaway but it's again they're doing it from a position of strength but they need to get going because they're they're probably himing and hying and there's probably all kinds of people all kinds of cooks in that kitchen but I've heard a lot of stories about this question i think Sundar Larry and Sergey just need to take the

equity and the political capital they have as a CEO and the two largest shareholders and just stuff the decision down people's throats so that's that that's number one the other thing that I think about actually relates to what I spoke about last week about Nvidia so just to give you guys a little bit of a cleanup you know after we spoke about Nvidia the Nvidia team reached out to me and they were like "Hey Hmoth here's a bunch of stuff that will help you unpack what you spoke about in a little bit more detail so

let me tell you what Nvidia told me and then I think it relates to GCP so what they told me when you look at the SEC filings for Nvidia and you add up all the revenue it says that about 47% of the revenue goes to China Singapore Taiwan I think it was and what these guys educated me on is that they've been trying to refine how this is described but it's not what it seems meaning they report revenue on what's called the billing or the invoicing address so meaning you are an entity you'll buy a

huge amount of chips or compute power and you issue the invoice out of Taiwan or Singapore or China that's what represents 47% of Nvidia's reported revenue so it turns out that that's actually not where the silicon gets shipped so there's a Singaporean office that handles the invoicing so then I said well who are these companies that are using these these places and it turns out that it's a bunch of major US companies including US OEMs and clouds that use Singapore for invoicing their suppliers but that the you know what industry sources have told us is

that all of these products are almost always shipped elsewhere including US Mexico Taiwan etc all over the place so why is this interesting there was a study by artificial analysis Nick I will send you the link but basically what it showed was that the clouds were not doing any real form of KYC on who is using their stuff so now I think we get to this next place which is like I think the Google business is profoundly amazing i think they need to do something with the subscriptions that they have and put Gemini right in

front and really do a head-on attack against Chat GPT those are the pluses the minuses or the risks that I think now will get uncovered is are the clouds doing enough to make sure that China and other folks aren't getting access to compute that they should not get access to and that could have an impact on some of their revenue so that's a GCP problem i think it's an Azure problem it's a AWS problem and that's going to need to get sorted out in the next couple of quarters because if western governments basically say to

the clouds hey you need to KYC your customers so that it's not somebody distilling the best of our models into a place we don't agree with i think there could be some blowback all these numbers obviously backward looking do we think and I would be talking too much about tariffs but do we think that the tariff story is going to impact a Google next quarter do we think it's going to impact a meta next quarter and to the extent that Google is saying look we're going to keep our big infrastructure spend $75 billion you know

full steam ahead which is great for the ecosystem great for Nvidia great for great for everybody in that world do we think that holds up if we think there's a hiccup between now and whenever all this tariff stuff gets sorted if it does I think it's going to hold up i mean look I just think that this investment in in capex and the data center buildouts is so strategic right now i mean I think that the hyperscalers it's only good for their their businesses but I think they see it as so strategic to their survival

that they just have to do it no matter what in other words I think they're totally inelastic on this but let me just go back to Google nick can you throw up this chart i mean I think the problem that Google has with respect to chat GPT is that Gemini is just not getting the usage and chat GPT is just growing like crazy if you look at how these models perform according to the benchmarks Gemini is actually really good i mean Gemini has made substantial progress catching up to chat GPT but they have not caught

up on the usage side now to Jamal's point you could just make Gemini the default interface in Google search but that is true innovator's dilemma because if you do that you could be giving up more than half the search revenue so I do think Google is is in a really tough spot and the longer they wait to make Gemini front and center the worse this usage problem gets i mean what's basically happening right now is users are learning a new habit i mean they they're learning to go to chat GBT to get their questions answered

or just their searches answered in a completely different way and let's be honest they make using Gemini impossible and they can do just a much better job at a minimum give the best leading edge Gemini model to the 270 million people that are already paying you for a subscription just do that do something so that you can start to blunt the growth of of Open AI otherwise you're going to look back in four years and regret him and hying today so Chimoth you're the CEO of Google you've got a $200 billion run rate ad search

ad business what's the right kind of integration of Gemini such that you don't massively disrupt the search ad business overnight or do you not care and you're just going to do it i think that's the conundrum they're dealing with that's not a conundrum if you don't understand how to value a dollar today versus a dollar tomorrow and a discount rate to disambiguate the emotionalness of that decision it's not a hard decision to make i think the the the more difficult question is what is the integration look like and if you are already paying for a

YouTube subscription or a Google one subscription what should your experience be that's a key question the second question is today they're already inserting Gemini in all kinds of uncomfortable ways so for example if you use Gmail or if you use Google Workspace what happens today is all these random Gemini pop-ups come up all over the place that is an implementation that happened at way too junior a level by people that have no product taste so if you just stop that it's not hard but right now you have a bunch of you know honestly people that

don't have taste and are a little too junior creating a very cluttered experience and if you use the products every day it would be hard for you to disagree with me they have infinite capital and infinite access to talent capital doesn't buy taste right so what do you think's wrong i agree that the Google interface trying to incorporate Gemini into the 20 blue links or whatever is very cluji but I don't know how you fix that without just getting rid of the blue links i mean I guess you can do a hybrid experience but it

doesn't compare to chat GPT which is all in on the AI experience so I think it's a real innovator's dilemma for them and look the truth is the market was killing them already because people thought that that first little AI summary thing was actually going to kill the blue link economy right like that was that was their worry and so it's this ter I mean I it is a terrible conundrum if if if you're Sundar how how do you how do you do how do you do both things at the same time jim I think

you're right there's a design way to do it but they're not doing it this comes down to taste and I think you can't have group think drive creativity and taste you either have it or you don't and you need to find the one or two people and then you need to use the strength of your leverage as a CEO and the ownership that Larry and Sergey have to impose one person's taste on the decision well let me ask you a question when the Google homepage where they just have the search bar and the you know

you can basically submit your search or I feel lucky or whatever would you replace that with that search bar with an AI chatbot no here's what I would do i would first go to the critical other points that are around that today do not cannibalize the blue links so the obvious insight should be if you look at the traffic patterns almost as a Sanki diagram right yeah we just show we just had one up show a Sanki okay who cares about revenue what the real thing you should be looking at here is where are the

entry points into Google that then result in a clickable link and what you would have is a very different sanki and what it would show you is that there are certain places that are highly deoptimized today for revenue generating events they happen as a byproduct but they don't happen as the use case so in that example you would put Gmail as a critical place the YouTube one the Google one subscription and there's like five or six other places that's where I would put Gemini as the front door and start to habituate 300 to 500 million

people a week in using that i think then you can figure out over time how much money you can make from all of that or how it directs derivative revenue and figure out what to do with google.com last but my point is the experience in Gmail should be done today the experience in YouTube should be done today the experience in Google one should be done today would you Okay Nick can you put up this here's their homepage right this is the famous shot i just checked in hasn't changed in 25 years or whatever i would

leave I would leave it alone because I think it's too disruptive and it's it's too politically fraught i mean you could do something what if they replaced I'm feeling lucky which is kind of antiquated now with AI i mean Gemini basically i I mean you you I would need to look at the Sanki to understand how many people are actually generating monetizable events or behavior from I'm feeling lucky in 2025 i'm not sure the novelty it was in you know it is the novelty i don't I think it's there as like a whimsical thing i

don't know if it drives revenue for them or not if it takes the user off site I don't see how it drives revenue for them here's a I'll tell you a great Facebook story just to explain this and why I get so animated about this i was telling this to my 8090 team yesterday because we're dealing with this one product implementation issue and engineers always end up fighting about whether things should be optin or opt out okay and it's it's almost like this religion where people feel like oh you cannot force people to do something

you you should always make things optional and I remember at Facebook we bought this little company for a few million dollars that made contact importers which essentially means if you're using any other email service to sign up for Facebook other than like Hotmail back in the you know early 2000s we could import your address book anyways long story short I remember getting into a huge fight about whether that thing should be opt-in or opt out and I remember telling the guy and I'm not going to say who it is because you guys all know him

and and I was literally like honestly just shut up and enjoy the success that will come from keeping this as an opt out and it just reminds me that at some point somebody needs to impose their will to make very difficult product decisions and if you leave it to a team you'll end up with by the way go to Gmail today with 95 Gemini pop-ups it's not what will allow them to win with what they have which is a better product which I will agree it is a meaningfully better model on multiple dimensions than anything

else okay I know Sax has to go before you go David I just want to hit Tesla for half a second tesla's out with earnings this week stock is up 8% on the back of that back of that news 23% up in the last 5 days in large part because Elon basically said "I'm getting out of Doge and I'm going back into Tesla." So the question is what can he actually do to fix Tesla at this point what does he have to do and is he really out of Doge no I don't I don't think

he's out of Doge he didn't say he was out of Doge it was just a matter of how much time he could allocate to each thing i mean look I saw this before when I was part of the Twitter transition is that for the first 3 months or so he was basically full-time at Twitter HQ learning the business down to the database level i mean every nook and cranny of that business he learned about once he felt like he had a mental model and he had the people in place that he trusted he can move

to more of a maintenance mode and I think that's the only way he can manage five companies is that he has these intense bursts where he focuses on something gets the right people and structure in place feels like he understands it and then he can delegate more and I think that he has reached that point with Doge but he was also clear that he's going to keep doing it because if he doesn't there's going to be a huge backsliding where you know all the corrupt interests will basically put back all this corrupt spending so he's

going to stay involved but as an SGE he's limited to 130 days a year anyway and so it makes sense for him to kind of now ration his days a little more closely but he's got the people in place remember Doge it wasn't just him it was also the US digital service which is basically the IT branch of the executive branch which got put under Doge so my sense is that Doge is going to continue it's just that Elon is shifting to a mode where he can manage it one day a week or two days

a week as opposed to being there 5 days a week steve Bannon says he wants the receipts he says there are no receipts we don't have the receipts he says we need itemized receipts to see what has actually happened what do you think why wouldn't we want to cut as much of this corruption as possible well I think we have to we have to the question is should the public get to see exactly what's been cut and what hasn't why wouldn't they of course and what we really need is for Congress to now embrace all

the corruption that Elon has found and eliminate it from the budget because at the end of the day in order to capture the savings here we do need those appropriations eliminated from the budget and my biggest concern is not something that that Doge is going to do or not it's not up to Doge to do that it's up to frankly these old bulls in Congress who control the appropriations process are they going to basically backslide and just put the spending back in because it's easier to just do that to engage in this log rolling or

do we take advantage of this I think incredible sacrifice that Elon has made i mean look this has cost him enormously one of the reasons why Tesla is down is because you've had crazy leftists engaging in terrorism firebombing Tesla dealerships in any event he's made this enormous sacrifice in order to expose the corruption and look at what we've learned we've basically learned that this whole NGO thing is a giant scam where you know the people in government give enormous amounts of money to their friends probably with the expectation that when they leave government they're going

to be next in line at the trough and I think Elon's done an enormous service exposing this but you know it's not entirely up to him in order for us to realize the benefit we need Congress now to act on that and I'm just afraid that's not going to happen what kind of total number you think we get i always say a dollar saved is a dollar made and we should we should say amen to that the question is what do you think the total number is ultimately going to be well he says they're at

160 billion right now i think that's by the way that's an annual number as far as I understand it so you know what I always hear with spending is they always multiply everything by 10 because they assume it's going to be 10 years so if it is 160 billion a year that would be 1.6 trillion over 10 years probably more because the spending always grows and look that's 160 billion that we weren't planning on saving before Elon got involved in the government so if that's all it is that would be great i think there could

be more and it really comes down to whether Doge continues to be supported by the political process and um look Elon can't he can't force that right i mean ultimately it's up to legislators to take advantage of the work that he did and ultimately it's up to the people to put pressure on those legislators to embrace what he did he's done an enormous amount you know but there's an old saying that you can bring a horse to water but you can't make it drink if the entrenched political interests at the end of the day aren't

you know if they're not going to embrace the the savings that Elon has found I you know I don't know what we can do about that i mean there's there's the administrative and discretionary aspect but you know I've said for a while it's going to be necessary to have statutory resolve to actually fix the deficit problem in the United States and that means getting Congress to act and Congress has not shown a willingness to act and every time I go to DC I come back more disappointed i share the stories on this show and I

talk about the fact that there are very few members of Congress that are staying up and saying at the end of the day the first thing we need to solve is how do we reduce the deficit then we can address all of the policy issues that we want to talk about but if we don't solve the deficit problem there is no policy there is nothing we're going to be able to do because the Treasury rates are going to spike there's going to be no capital there's going to be no funding we're going to go through

a debt death spiral so at the end of the day we really do need Congress to stand up and lead here it is not on one man's shoulders there's only so much Elon can do without statutory authority from Congress and I think that's really important in this in this budget reconciliation process and it's really important for the president to also help lead Congress to where we need to go on this members of Congress are elected because they get stuff for their constituents the more they get the more likely they are to get elected and next

cycle they got to get their constituents more stuff so it creates an escalating spiral staircase it's a problem in how democracy operates it creates a tragedy of the commons there's a collective action problem because like you said each individual congressman or senator primarily wants to get stuff for their district or their state for their special interests and there's no one really looking out for the public interest the overall common good and these appropriators are basically engaged in log rolling where they're willing to give you know their their colleagues their pork if they get their pork

and this is why we have a $2 trillion deficit it's a really hard thing to fix i mean it's really hard this is the problem i mean people realize you realize you can vote yourself all the money and that's what you do i I think you know this has been something that I remember uh Bush 41 in his State of the Union called for a line item veto this was like 30 years ago and we still need that you know because I do think that if the president had more authority over this process it'd be

less of a tragedy of the commons in my naive youth I was very against that and I felt like it was giving too much power to the president and I never really understood the wisdom of it until we find ourselves at the end of the cycle which is where we are here that's Yeah and unfortunately Congress will never I think change its ways until they're forced to by some sort of crisis which Freeberg I think is your point about eventually we'll be in a debt crisis and then Congress will finally see the wisdom and they'll

finally appreciate what Elon did you know there's all these entrenched political interests complaining about Elon i mean again he undertook an enormous sacrifice to try and fix our fiscal situation which is unsustainable before there's a crisis one day there'll be a crisis everyone will see that he's right but to answer your question Andrew Nick you want to pull up this poly market so this is the poly market on how much spending will unfort yeah we'll see you later bye love you Dave that was great thank you yeah thank you poly market showing an 84% chance

of less than 50 billion being cut in 2025 and only 10% chance isn't the number on doge.gov right now like 160 that's what they're saying they've cut in contracts so that means the annualized run rate of savings from cutting contracts but what Poly Market's showing is what's the actual savings in 2025 from Doge action oh because these are multi-year contracts multi-year contracts but then there's also reporting that like $92 billion of it I think isn't actually itemized so it's hard to understand what's actually you know on the list and they haven't they haven't done anything

yet in defense right so that's a big honeypot I guess if you want to use that word potentially that system do you think he's going to go there well I mean there are people there are people at at DoD and at HHS but I don't think we've had a readout from any of those people yet right i mean all of this other stuff has HHS is huge it's the number If you look at their list on the go the Doge tracker on the website HHS is the number one department of savings right now and they've

got the contracts yeah defense is on okay okay so they are so they are finding remember what they're doing is they're just cutting wasteful contracts so they're cutting stupid stuff that aren't used all the discretionary stuff all the [ __ ] that's not used or not needed no no but my point is like all of these things are still these are not line item appropriations right because you can't cut those well here you can see the Department of the Interior had a $3 billion contract for refugee resettlement with a company called Family Endeavors Inc and

so they put that as the number one contract they cut on the website saves 2.9 billion total treasury they cut a deal with a company called Centennial Technologies which it is an enterprise software company saves $1.9 billion what is the Department of Defense technologies mike I mean that's the thing go into this stuff you can in that are all like small you can click on it it shows you the contract here it is well no i'm going to go and try to find the Centennial Technologies who are these guys you're going to invest yeah okay

should we talk you want to still talk a little Tesla or you think we should move to the science corner what I would say quickly on Tesla is I would encourage all of you guys to try FSD it's a new thing you've discovered this is the reason I bought my Tesla i've been using it for the quality the quality of FSD is just so good yeah but you never turn it on you just set it in the pre-thinking no I use it all the time it is just an incredible thing i I don't I think

like there was like a rev of it probably in like the last month or two that I think took it from like a 908 to like 99.5 or something it's just like there's just very few disengagements okay so are you a believer that we that Tesla's doing real robo taxis in two years oh I Yeah yeah i mean like right now my car is effectively a robo taxi the shittiest part about my Tesla experience is I have to hold the freaking steering wheel and look ahead because this camera is always looking at me my wife

it's so funny she'll come home and she'll be like angry because she like got suspended because she was like looking away and looking on her phone and they turn it off they punish you tesla punishes you if you look away too often they put you in like you know timeout for like I don't know how many days or whatever it's that's the worst part about the experience cuz it is so good you're just like "Gh can I just take my hands off the wheel and just do something else?" Well there's a lot of videos getting

posted on Twitter of FSD being on and then the car drives into the sunlight and at a certain angle when the sun hits the cameras the car goes into an emergency disconnect on FSD and I've had that happen so I know it's true i know it's real so it is a bit of a risk with the camera only mode on how Tesla operates FSD if they can actually run a full you know never to disengage robo taxi service like Whimo does still pushing LAR on them is that what you're doing i don't That's the That's

the word on Twitter which is watch out because without lidar you're going to have a lot of disengagement el Elon Elon's never doing LAR never doing LAR here's an interesting factoid i've been working with somebody here on trying to figure out what does next generation AI data centers look like and do you build like inference pops all over the all over the country and I talked to some folks at Whimo i talked to Teedra and what's interesting is the Whimo approach is they don't need POPs anywhere because all of the models are on board so

these things go fully autonomous units out into the wild they can make every decision themselves they have the liar and then they come back to the fleet and then they can reync the models whereas everything else particularly if you have human intervention well if you have human intervention so all of the food delivery folks that have like central knocks of people that can engage and intervene they need all these all this real time ability so that things are multi-milly maximum awesome should we should we go to the science corner my friend yeah if you're ready

for it i'm ready today's science corner is on a discovery of a massive thorium reserve in China and a disclosed molten salt reactor in China that's been running for some time so at a private before you let me do the tea for this Freeberg tell us about these thorium reactors i think the the most important thing that everybody should know before I tee this up for Freeberg is that what he's going to talk about is a material called thorium which doesn't split it doesn't release energy unless it absorbs a neutron and then it transmutes to

uranium 233 and by this what I mean is this is a trans that everybody should be able to get behind over to you hey he got it he got it you get it Andrew i got it it's a beautiful thing i don't think we brought it up in Science Corner before but apparently there was a giant thorium deposit discovered in Inner Mongolia that has enough thorium to effectively power the entirety of China for 60,000 years it was made by the Bayion Obo mining complex it's a million ton reserve in Inner Mongolia and so thorium is

much more abundant in the Earth's crust than uranium which is what we've historically used for fision reactors and what we use today for all of the even new generation nuclear fision reactors and for a long time folks have talked about building a thorium reactor there's a lot of challenges with building a thorium reactor it's a new set of systems but if you build a molten salt thorium reactor you can ultimately produce energy in a way that doesn't actually have the risk of a meltdown it can passively shut itself down it's not high pressure so it

can't explode so it's technically a much safer much more reliable way of producing power with a much more abundant fuel source and people in the US have been talking about building these thorium molten salt reactors for decades in fact in 2009 the US Geological Survey in the United States went out and did a study to identify how much thorium existed just in the continental North American region turns out the US has about 64,000 tons canada has 172,000 tons of thorium reserves and China just discovered a million tons in this in this one region but the

amount of thorium that we have in the United States is enough to power our country for centuries so in China turns out they built a molten salt reactor this was another secret they've been operating it now for some time last June while the reactor was running they replaced the fuel so it basically showed continuous use of the reactor without needing to do a shutdown and refueling cycle it's a 2 megawatt experimental unit and they're actually building and planning to take live a 10 megawatt unit by 2030 so this was all shared in a private meeting

it got out the discovery in Inner Mongolia was also kept confidential for I think nearly two years and then it got reported out and after it got reported out it was confirmed ultimately in a government meeting and that that's how we know about it now but I think this just is this another kind of critical point about this once China gets this 2 and 10 megawatt system running this allows for very small very modular nuclear reactors using a very abundant fuel source that can be quickly built stood up and safely operated in a distributed way

you don't need to have one gigawatt which is a thousand megawatt station running centrally and then you've got to have a big you know construction project invested in to build and operate this thing you can have many small reactors split around neighborhoods split around cities and so on this is not built into China's energy projection so they actually have an electricity forecast that over the next 15 years gets them from 3 terowatts of electricity production to eight and that's through a combination of solar hydroelect electric and then the Gen 3 and Gen 4 traditional uranium

nuclear reactors that they're building out so if you add this in it provides even more or perhaps lower cost or more distributed energy production capacity than is even provided in the forecasts today again this is I think one of the base drivers that is part of the compounding effect of China's economic advantage for this century is energy energy production the cost of building new energy production systems and the cost to operate those energy production systems can I say something about the huena conversation about picking national champions and getting focused this was an area that China

chose and now you know the US finds itself years behind on a technology that we invented right so this was research that happened at Oakidge National Lab that's right we pioneered this decades ago and then we sheld it and then the person in China that led it gave credit to the United States and basically said you know Americans let the research wait for the right successor we were that successor that's what he said in quotes so you know here we are we invent this cutting edge technology it's a huge leap in innovation but they put

a regulatory fence around it and we blocked it from getting organiz and they're like you know what we can we can just do this and we'll figure this out yeah it's really it's really self goal here they have infinite thorium reserve they don't need to refine it one of the key advantages of thorium is you don't need to go through a refining process in uranium you have a very expensive very difficult kind of refinement process where you end up I think getting less than 1% of that uranium that you pull out can actually be used

as file and you and you have to enrich down to the uranium to find the file material with thorium 100% of it can be used as fuel so it's a very lowcost very easy kind of fuel source that can be very quickly kind of put into production if we actually build out the supply chain and build out the energy systems to utilize it so it's a real kind of reinvention of nuclear energy technology and this will take off i mean once this experimental reactor is working quad reactor going boom imagine how much fundamental leaps in

science that we have funded that are just basically gathering dust or falling through the cracks that other countries are using right now and probably a little bit snickering behind our backs about the fact that you know we did all of this work and then they were able to take advantage of it well here I'll show you here's another um let me put this in the group chat real quick but how much of this stuff do we this I mean what what's our ability to actually do this we have invented it we invented we invented it

well the big problem has been the regulatory uh fencing we put around it andrew so there's a bunch of administr there's forms there's pronouns there's all kinds of stuff and just speaking to this point so we've talked in the past about nuclear fusion so Andrew this is I don't know how familiar you are but fusion is different than fision fision is where you take a heavy element like uranium or thorium and it breaks and you release energy fusion is where you take a light element like you know hydrogen you accelerate it you make it really

dense and you jam the protons together and when you jam those protons together they fuse so hydrogen turns into helium this is what goes on in the sun and energy is released in a different form through you know accelerated neutrons we capture that energy we make electricity so fusion is this nextgen technology where we could theoretically just use water from the ocean to create all the electricity we need on planet earth 10 m by 10 meter by 10 meter of water makes all the power the entire planet uses every year that's what you could ultimately

do with fusion technology so it turns out this is a satellite photo that discovered a very large scale fusion research center in Myyang China which we did not know about that was just kind of stumbled upon and it turns out it's the largest fusion reactor experimental facility in the world now 50% larger than the national ignition facility run in the United States not only is China getting this new energy infrastructure built with all of the stuff that was discovered last century but they are now getting ahead of us on the new discoveries to be made

in the next gen of energy systems which is fusion which at some point this century will work and we'll end up having this ability to unlock effectively unlimited free energy and these are compounding value creators china ultimately if they can make new energy systems cheaper than the United States scale them faster they will ultimately have much cheaper much higher volumes of electricity which gives them the advantage of manufacturing and production and transportation and everything and that's where the economic advantage will will ultimately acrue to them so this is I think key to the strategic puzzle

on what's going to happen in the great race with China this century is the buildout of electricity and the cost of that buildout so the regulatory constraints need to be addressed first and foremost that's in my opinion the number one mission critical strategic imperative for the United States right now awesome yeah anyway that's just a red flag on China science corner for the day thorium is real dorian Man so how was it Andrew how do you like hanging out with the best I loved it i you know I I still getting used to it i'm

still getting used to the whole flow trying to figure out how you guys all roll but it's good it's good it was a lot of fun do the Do the outro you got to do your out you got to do the outro oh yeah i got to do the outro you guys do the outro come on it's your show do the outro coming at you kgb what is Well okay i'll do I'll do I've never done an outro on you do the outro on behalf of our cryptozar David Saxs um our prince of panic attacks

and sultan of science David Freeberg our new bestie guesty Andrew Ross Sorcin thank you I am your chairman dictator Pauly Hatia thank you for listening to the all-in podcast we'll see you next time love you thanks guys that was a lot of fun awesome let your winners Rainman David and it said we open sourced it to the fans and they've just gone crazy with it besties are my dog taking your driveway oh man my habitasher will meet up we should all just get a room and just have one big huge orgy cuz they're all just

useless it's like this like sexual tension that we just need to release somehow your feet we need to get Mercury's going all in i'm going all in