Tariffs, Trump's Economic Endgame, Market Chaos, Bitcoin Reserve, CoreWeave IPO

Brian Johnson that's so funny I I uh who knows I am the king of nighttime erections I go to bed thinking about myself and I wake up thinking myself big correction in between let your winners [Music] ride we open sources to the fans and they've just gone crazy with it queen of all right everybody welcome back to the number one podcast in the world man we're starting off with three of the four original band members shamal poopaa he's your chairman dictator the Sultan of science David freeberg and of course I'm your host Jason calanis and

David saaks from the original band will be on the second half of the show we're going to do some of the classics yes you get some of the classics including Ukraine Ukraine Ukraine coming up on the second half of the show in our greatest hits Revival tour but with us again sitting in The Red Throne is the one the only Joe lale is back he is if you can imagine further right than Keith R boy and saaks they tell him to pump the brakes welcome back to the program Joe Londale how you doing brother hey

Jason doing great here in Texas today ah yes I I see you right over the hill on the ranch our ranches are within 20 minutes of each other Joe Lonzo and I are shooting guns at our ranches are you on a ranch Joe uh well I bought a bunch of the homes and connected them so it's kind of like a ranch but it's actually a suburb yeah it's more like a compound he has a compound subb suburb that creaking sound you hear are the libs Rolling In The Guillotines yes he bought the small town he

lives in Joe lale's here of course he is a venture capitalist the founder of 8vc they've got six Billy in AUM co-founded paler open gov in adapar 3 billion Billion Dollar Plus companies he co-founded and an early investor in andrel I'm in the market for secondary shares you know how to reach me folks if you're selling your secondary and Andel and building a position for obvious reasons and Oculus wish Oscar Health amongst his other Investments hey what was the feedback Joe on your first appearance here on the all-in pod people loved it you know you

guys gave me no warning so I was like on a mobile phone sideways but it worked out it was great everyone saw it I gu looks like people actually watch your show Jason it was surprising apparently people tune in from time to time and that's why we call it the number one podcast in the world how are you doing shth poopaa how you doing brother I'm doing really well okay once again giving me a ton to work with there and Fred would you wait what would you like to know why don't you ask me a

question oh well I asked you how you're doing maybe you say oh I had a great time with my kids I took them to Disneyland or I don't know Chef made an amazing aruga you used to give me some some color to work with here so Nat was in Rome all last week great what was she doing in Rome she had to go see her Factory she also had to go and renew her visa at the US Embassy there okay so she's renewing her visa hopefully she'll be able to get back in the country I

know we've tightened up the borders well she's on an eb2 Visa she's already but she should switch to this eb5 as soon as it's announced oh yes you can get the golden visa and I think you already put a down payment on freberg how was your week what how's everything going at ohal you're having a productive week as one of my management team members told me today it's a very complex business that's usually not a good sign when the conversation starts with that is that a way of saying everything's no no we we we were

good I was on the road this week I just got back I mean it's hard running a business is hard you hire the smartest people you know and what happens they bring you all the problems they can't solve so it's it's never easy we've got an incredible docket today let's just start with I'll give you a quick recap boys of the week since we last taped to say the uh Zone was flooded in the words of Steve Bannon would be an understatement here's your Trump tsunami for the week Thursday when we tape the Epstein file

dump Fiasco you remember that Joe right big zero big nothing burger then Friday zalinski was dressed down and kicked out of the White House by the Vice President presidents markets collapsed they rebounded on Saturday we got a beautiful day off video of trump dancing down a catwalk to YMCA maybe he played played some golf he was at the White House South Mar Lago Sunday 9:24 a.m. eastern the president pumps three specific crypto salana Cardona xrp to be in the first government strategic crypto Reserve Joe ondale starts tweeting I start tweeting everybody's tweeting he quickly retweeted

himself included ethereum and Bitcoin some decentralized coins reaction was wow crazy you had a little bit of a spicy take Joe we'll get into that later and I'm sure our friend David saaks will have much to say in second half of the program but it was pretty negative Cardona ripped 70% xrp 32% salana 25% and then there was this crazy trade one whale went 50 times long on BTC and eth $200 million position on just a $4 million investment everybody trying to figure out who that was I'll leave it to you to speculate then we

start the week Monday Trump says significant TR tariffs with Canada and Mexico the market collaps he walks back tariffs couple of hours later and the market starts to rebound then at 2:38 p.m. Trump announces a hundred billion investment from tsmc in American Fabs huz off for that and our boy David saaks Gets dragged out to the podium for a quick 15-second Cameo very nicely done to our boy David saxs and then Tuesday we have the most chaotic State of the Union I've ever seen highlights include an angry man shaking a cane and getting kicked out

there were some auction paddles from the libs I don't know what they were bidding on there were 13 Biden mentions and one Pocahontas Wednesday we have news that the Doge Blitz might slow down Supreme Court chimed in with a 54 decision backing the federal judge who ordered the Trump admin to pay out two billion for USA contractors then there was a closo meeting with the Senate with Elon maybe they discussed an approval process maybe some voting type things and then here we are today Thursday when we're taping Market's down 2% on more tariff news breaking

news drops at 11:30 Trump announced are off for Mexico markets aren't rebounding we might be leaving NATO hold on almost almost there yeah breaking we might be leaving NATO breaking we're shutting down the Department of Education psych we just found out we're not okay gentlemen that's the week that was no there's there's three things that are also kind of interwoven in all of this open AI dropped GPT 45 and I think it was not really that well received I didn't even know nobody's talking about that quen which is the open source Alibaba dropped to rev

which seems actually really best in class so that was really interesting okay then there was a story that said llama is going sideways Facebook's open source llm yeah and then the markets have just been going I think the craziest I've actually seen in 20 years of following the markets and specifically you're seeing the mag 7 compressed towards the rest of the S&P 500 and then you're seeing this insane trade away from Europe so there's a ton that happened this week I mean I don't remember a more eventful week Joe is this a little too much

maybe you guys missed the Shalom Hamas tweet by Trump too which for a lot of us is a big deal he said I don't know if this is hello or goodbye but he's threatening them really strongly so for people who care about that part of the world it's interesting to watch what's going to happen so that also happened yeah oh my lord well and Shalom is hello and goodbye right just to clarify as a word you would say it both right Shalom yeah and peace ambiguous word and peace well maybe he's leaving it into interpretation

maybe they get to pick maybe it's hello no that's what that's what he wrote in the Tweet oh he did yeah it's your choice okay it's should Choose Your Own Adventure Hamas from the president United States but I think we should probably get into tariffs this is confounding to most people maybe since I just did the whole rundown I won't go into all the details about tffs again but just looking at it from first principles Joe I asked a couple of group chats you're in one one of them in fact and I have about I

say about 400 people total in these four group chats what's the strategy here what do you think Trump is trying to accomplish and man I got a range of answers let me ask you what is Trump in your estimation trying to accomplish with the tariffs on the tariffs off the Tariff on the tariffs offs as Shou said here this is creating more chaos than any of us have ever seen in the markets listen Trump's negotiating right so I I actually ran into David saaks each Senator gets one guest we are both guests in the Senate

dining hall hanging out with a bunch of these guys multiple of the guests some of them were spouses of the Senators multiple of the guests were people who' lost kids def fentanyl right and so this actually is a very serious issue it's a big thing on the populist right as it should be for all Americans we've lost you know tens of thousands of young people recently to Fentanyl and and and Canada has done nothing about their border and so you know you just reported breaking news I had even heard yet that Mexico might be off

can is still on he's using this to negotiate so I talk to the Senators and I asked him what's going on because obviously I import things all over the place I'd like to know what the hell the rules are but he wants people to actually crack down on this stuff and save American lives and I think it's a reasonable thing to use to negotiate and force them to do that okay so you believe it's negotiation because of the fental issue Cham let me go to you because many people are saying this has more to do

with some great reset and maybe the tenure do you think this is about fentol at the border or something else I think that this is the first week where I've seen the first real Schism in how people are interpreting what's actually happening I think that Trump and Elon were very much in a honeymoon period until this week and I think there was the benefit of the doubt but what I saw on X was a real Divergence where on the one hand there were people that were basically saying doge is deranged Elon is crazy Trump is

lighting the world on fire in one camp and the other Camp saying he's sticking to the plan and when I thought about this a little bit if you went back to November the 5th I do think it's important to remember that we were at this moment where you had this fork in the road and you had all these important issues where I think the best way to generalize it was that the Democrats believed that the lines should continue to be blurred so whether that was on gender or race or Merit versus some other immutable trait

or fiscal and M monetary policy things were just getting more and more blurred and then Trump and Elon basically showed up and said actually we want to refocus and we want to make the lines very visible and clear on all those Dimensions h and a majority of Americans voted that in but I think what you're starting to see now is the difficulty in actually implementing that plan and what I mean specifically is tariffs are very nuanced and complicated on the one hand there's these short-term wins there's these impacts you could deem them positive or negative

to the dollar there's impacts to us bonds there's impacts to us Bond markets there's impacts to how countries deal with foreign reserves and then there's this impact that happens when the markets react to a tariff and then Trump takes that off the table and then they snap back so you have this weird set of boundary conditions right now so I think right now we're in the very difficult part of sorting through what the long-term implications are and I can get to some of them later but I think that's where we are I think that's really

interesting the goal of tariffs in your mind for Trump is fenol finance related no give me your definitive what you think this is about I think what tariffs allow us to do is rebase the long-term Reliance on the US dollar it allows us to rebase our ability to fund our own deficits and it allows us to rebase the long-term ability for American companies to be economically vibrant okay so freeberg we got one person with fent all the Border negotiating we got one person on trade some portion of this I hear and I when I asked

in these four group chats I got he's throwing stuff at the wall the Border he's trolling the 10year note and he doesn't care about stocks and then I got onshoring and Manufacturing as a possibility we're going to make it more expensive to bring things in so why don't you consider making stuff here do you think that third possibility is what's going on here just David freeberg pick one of these three choices or another what's going on here with tus specifically I don't sit inside of Trump's head and I don't have any direct line of communication

to folks that are constructing the theory and the policy if I were to say what's the most masterful plan in an optimistic way of what could be going on here what's the master plan I would kind of craft it as follows tariffs aren't being done in isolation they're being done along with a coordinated policy effort to reduce income taxes and another policy effort to reduce government spend so those are three actions three legs on a stool so tariffs M reduced income taxes reduced government spending and they are related to each other they're related to each

other because if we increase tariffs one element of that is that to import products is more expensive for example I buy LED lights in my greenhouse and the price of the LED lights just went up by 25% this week I actually spoke with the CEO of an LED company and I was like why don't you guys make the LED here and there starts to become a crossover point where it actually makes economic sense for the company to make the LEDs here instead of sourcing them from Asia and there's a 100,000 examples of this when the

industrial supply chain goes to the lowest part of production it's going to end up offshoring when there's no tariffs and if there are tariffs then you start to do production here so you're increasing both kind of security for the US supply chain but also increasing demand and creation of a Workforce Now I think that the income tax piece is critical here because in order to make the capital available to build that industry here we need to have unleash capital and reducing of income taxes the economic theory would be that Capital will now flow into these

entrepreneurial activity these opportunities that have emerged where suddenly it makes sense for me to make textiles to make metals to make materials to make cars to make all this stuff here in the United States that I otherwise wouldn't be making so both the corporate and the personal income tax by reducing it unleashes capital that instead of going into the government it now goes into the private sector into building businesses okay I think that there's another theory about this which is as you drop the income tax one of the kind of key theories that I've heard

spoken about a lot lately and I think we're going to hear about it a lot more this year is trying to get the United States to move away from an income taxation model to a consumption taxation model so effectively what the tariffs do is there's a tax for you buying certain things so now instead of getting taxed when when you earn money as an individual you get taxed when you spend money and some people think that that's both a more fair system and a more kind of economically vibrant system because that will drive investment in

the things that people want to to produce because the money's going into production so you that do you think that free Breg I'm curious I I don't know it's a really interesting economic theory I mean I am not opposed to seeing some sort of an experiment play out where we look at a shift from income taxation to consumption Taxation and see if it actually does have an effect on economic growth and productivity it has not been done in 150 years there's a lot of economic theorists on both sides of the equation saying this does work

or it doesn't work okay and let me just say one last thing by reducing government spending we are moving workers from the government into the private Workforce so as those new Industries pop up as those Investments start to get made in building new industry onshore where are the workers going to come from remember the government's 30% of the US GDP today so if that's not a great way to invest money maybe the Private Industry is better at investing money in employing people that will unleash the workforce and it will counterbalance the inflation that we're experiencing

so there's a lot of inflation because of tariffs and by reducing government spending that's the offset to inflation so those three actions I think are three legs of a stool and they actually are all interrelated to one another so that would be my grandmas theory of what might be going on this is an interesting triangulation theory that people have been speculating about and there are a couple of caveo here Joe number one we do have lowering income tax and lowering Services experiment it's called Florida Texas and a couple of the states where they have lower

income tax and and more consumption tax we pay a lot more in real estate taxes here something we consume putting that aside the really interesting issue is we're at the lowest unemployment of our lifetime 4% where are all these workers going to come from what do you think Joe now that you've heard the two other panelists here discuss it what are we trying to get to where is the destination at the end of this term Trump's lame duck he can go wild here he's not running for election and you know what what do you think

he wants to see do you think he just wants to sement some sort of legacy and if so what's that Legacy and how do these actions equal his goals and Legacy no listen I agree with what David with what David was saying Jason and it's it's a really important point also that we should mention is that the last four years the economy's looked okay but part of that is because government's been hiring like mad and so the point he made is that actually you know having twice as many people you know harassing me I just

got back yesterday no action on an audit that been harassing me on for three years they found nothing having twice as many people doing things like that and and or like you know running TSA or pushing papers around in the Department of Labor doesn't actually add output to the economy and so you know it it does seem like it makes a lot of sense let's take a million workers out of the Consulting class around e DC out of the you know paper pusher classro on DC and let's actually deploy them to the actual productive economy

Elon and Trump have both been saying that I think David is 100% right and it is true a lot of my companies thinks that the Tariff stuff are looking to build stuff here so I'm not a huge fan of tariffs personally but they definitely make sense for things in defense they definitely make sense for negotiating with countries and it is true it is pushing certain people to including me to build some more things in America here's where tariffs make a lot of sense if you have markets where there are domestic alternatives Andor where things are

fundamentally commodity there's no reason why tariffs can't work to create the incentives to redomicile economic productivity inside of the United States that's a that's a slam dunk I think and and shamat there's another Twist on that too which I think we should all acknowledge is America does have some really tough environmental laws despite what Jason may think of me I actually don't want my daughters growing up with you messy air messy water you know screwed up country oh I don't think that of you I I know that you're a nature guy you're like a classic

bush guy but but here's here's the thing in China and Indonesia and all these other countries they are just shoting over the environment as they make things I think tariffs are very reasonable on that case like it's not fair to make it more expensive for us because we're doing it well and then we Outsource it for them to destroy things right so so there are some things there where it does make sense and what I would say is the other the other side of the of the Tariff knife is that if there are markets though

where you're making something that's fundamentally Innovative where you are but one maker the problematic part of where tariffs really affect the US consumer is then the price of that product of which there are no competitive Alternatives can go very very high and that's inflationary and I think that that slows down consumption and then if if that consumption is not just of something that's a nice to have but a must have then it becomes problematic and so you could see where tariffs could impact certain industries for example if there are Innovative drugs I think that that's

problematic if there are Innovative Technologies of which there's only one vendor that's problematic so all of those need to get sorted out but on balance in commodity markets like look at Autos Autos is a perfect example there are so many purveyors and providers of Autos there is oems all around the world and so to have a compensatory system doesn't seem like an unreasonable thing where it's a tit fortat tariff but in markets where if you need for example a specific piece of equipment from asml to build a chip and now all of a sudden that

that machine is 25% more expensive or 30% more expensive and they pass that cost Downstream it becomes very speculative and it becomes a little bit more fragile I think this is dangerous though right jth because I agree with you in theory but then there's something where you know if everyone's lobbing for their thing to be an exception you end up getting this very crony system that's that you don't necessarily want right so you have to be very careful how you define these things exactly so this is why the I think like sector by sector it's

probably you can probably go and pass the smell test and say if there are multiple providers and or if it's somehow commodity I think it's easier to absorb the Tariff in the short term maybe that's the right way to say it which is if you believe if Trump believes everything should be tariffed then instead of debating if to your point maybe the right thing to debate is when and you have to put things on a much longer Glide path so that you don't just create inflation out of nowhere and or you don't hold back American

business or American consumers well this is a key point because you do need to have predictability to make investment and reciprocity so really two important points Shaman's making here one on reciprocity these things haven't been looked at for a while I'm not sure how they got so out of whack but just putting some facts to this uh chat's exactly correct we get placed uh when we send cars to the EU they they get a 10% tariff but when we get their cars it's a 2 and a half% tariff who let it get out of whack

I'm not sure but why not make the reciprocity perfect and just hey you say 10 we say 10 you say two and a half we say two and a half and that would make I think a lot more sense just to put some numbers here on government employees it's not as bad as people make it out to be a lot of our spending is nonemployee related but it is if you look over the last two administrations we have added million 2 million three employees across all I disagree and that hold on let me just finish

the sentence so you have the facts and then you can disagree with the facts one point3 million additional employees added this does not include contractors and so we don't know what USA was doing with Nos and contractors and I think that's where we do need to get some clarity and to chat's point this has all got to become predictable you cannot put tariffs on off every week or else how does your friend Dave who wants to do the LED lighting or your encouraging to do LED lighting know if they should build a factory and invest

10 million in that you disagree with the number of employees you want to address that yeah look the government accounts for 30% of GDP in the United States that's an extraordinary sum so just I was talking just about the employees that's a much smaller percentage but that doesn't matter the direct employees of federal agencies is a fraction of people that are employed indirectly by government spending this is super important as we all know many government agencies write checks to large contractors subcontractors and third party service providers that do the work for them so the money

gets transferred they then employ the people and they do the work so it doesn't technically show up on federal government payroll registers but these are people that are indirectly employed by federal spending that's super important to to acknowledge that a large percentage of the US Workforce is indirectly supported by federal dollars yeah it's gone up it's gone up massively with the NGS too so you've had about four million people employed by contractors in DC 1.6 million more at the states actually by federal by federal spending and then you have the NOS no one knows the

noos Biden Administration took down the data I used to see things in 2020 so we don't even know how much money but we know it was hundreds of billions so it's pretty crazy the number one thing about how doge is not being done fully is that Elon is doing an amazing job you know whether or not he cuts 500 billion or trillion or a lot more but the Senators and the congressmen are not willing to take it out of their bill the reconciliation bill right now talking about cutting one to two trillion so rather than

like this is over 10 years it's ridiculous it's ridiculous if it was equal to Elon was doing it'd be at least five trillion dollar and I've pushed a bunch of them they say oh the Congressional budget office and all these things I'm sure there's some tough things there but like this is crazy we need to see what these Cuts need to be on Doge and we need to cut five trillion and none of these people have the balls to do that is there's not the political will to do it is my interpretation and just no

coones let me just show you one chart to back that up I have my new disg graciados look at this chamama you want to talk about software and waste 35,8 55 according to Doge breaking news service now licenses on three products only being used by 84 people oh my God you kidding me 11,000 acrobat licenses with 0.0 users disad absolutely abhorrent and I'm saying it right now I want an investigation into procurement who sold this who bought it this could be a crime this could be fraud that could be Kickbacks I'm saying there could be

I don't think it's that but I do think you have to look at the earnings of these companies in question where's totally correct number two totally correct if service now ever wants to work with the government again Mr President Mr President our president I want them to pay us back for the unused licensees is and I want a full order for the last 10 years if they don't pay us back that money and give us a credit hold on list banned forever hold on it's not thank you Mr President this may not be service now's

fault this may be the inaptitude of the people that bought the LI course but they should still give us a credit I want the money back for the American people I do think Adobe has the worst have you guys ever done Adobe subscriptions they're impossible to cancel I think Adobe 11,000 Z us only the only thing harder than cancelling an adobe license is trying to cancel Wall Street Journal I was about to say Wall Street Journal Hall of Fame let me just say something about the the budget because Joe brings up something important unbelievable I'll

just say it again at the sake of being redundant we're getting to the phase where the details are complicated and they now matter so we've talked about repealing the IRA in its totality right so that was a statement and there's there's theoretically a lot of money there but the details now all of a sudden become complicated FK published a report just this past week and what do you think it said was the percentage of incremental electricity that was generated from Renewables versus non-renewables I I'll tell you the answer it was almost 91% in December so

if you now tie two huge initiatives together which is how do we find a budget that saves money and how do we continue to win an AI maybe you would have thought those weren't related well guess what we know that AI needs a tremendous amount of power and whatever you thought you knew actually you had to reer right because what Elon has shown is actually you need to now create these Mega clusters 100,000 gpus going to a million gpus all of the Power forecasting that we have is miscast it doesn't even account for this number

one number two there are 35,000 applications into FK to get approved to generate electricity 35,000 that's going to meander through some administrative rigu there is a 5year delay to get a gas turbine into America and online okay if you ordered one today the fastest that you can get it turned on is 2030 the fastest that you can get a nuclear turned on is 2035 so we don't have the ability to generate incremental electricity very quickly but for Renewables but then if you rip out the IRA there's many parts of the IRA by the way that

are just trash Nick I don't know if you can find it but Barry Weiss found this insane thing that made me so angry which I'm happy to talk about which was like a 30-day Grant process that resulted in A7 billion Grant to some shell oh this was throwing the gold bars off the castle but but the other part of the IRA this narrow part is what it did to reinforce tax incentives and tax equity which is a 200 billion Market that incentivizes that 90% of energy generation so my point is that when you start to

get into the details when the house Ways and Means Community has to figure out what part to put back this is going to be hard because it's like hold on if you got the whole thing now all of a sudden you take 90% of the incremental energy generation incentives out of the market you don't have enough electrons there isn't enough electricity so then you lose the AI Ray so you start to lose it I think the point is that we're now in the hard part where the details really matter listen you got to start with

the chainsaw we saw that at Twitter and by the way maybe you do like when we started this he just tweeted this out he said guys now it's time to get surgical he and he said this per yes that was the metaphor I was about to use is like you know you start with you cut out the goddamn service now in Adobe subscriptions and then you work on something you know more DEA and maybe that's where we are IR just for the audience inflation reduction can I just do a rant on this on this pop-up

NGO thing to me this is like the worst of America and it makes me so angry and I'll tell you my lived experience so I'm on the other side of this I started a company with these guys from Tesla to make battery materials in the United States in 2019 we grind we grind we put in tens I put in tens of millions of dollars we get a deal with a big OEM and then you see these doe grants we spent millions of dollars we file a very detailed plan to build battery medals and battery capacity

in America we got rejected okay it was an entire yearlong process we got rejected we put it past us we kept working we found more deals we found a way to survive raise a little bit more money and then we applied again on some success and we got a $100 million Grant okay that was that's what just happened this year but then yesterday I read and Nick maybe you can throw this tweet up this Barry Weiss investigation somebody in 30 days who was connected to the Democratic infrastructure had some shell organization that got a grant

that was 70 times bigger than us like we've made stuff we have deals with oems we had to validate every step of the way we were rejected once so our process to get a $100 million doe program was two years these people showed up in 30 days and got seven billion that's just wrong why didn't you put why didn't you lead with Dei or something you would have gotten a billion you just LED with the wrong thing you were actually providing a product or service people need this is this this is why you don't have

any equity in there for the minerals this is why it's so frustrating to build for the government guys this is what paler and SpaceX had to deal with that's why they both sued the government is that all the friends who used to be the CIO used to be the general made the right donations had the right kid on the board it's all corrupt and then the actual substantive people you have to work like how do they give $7 billion in 30 days we're gonna find out you got a bunch of democra operatives on the board

let well let me challenge you guys on one point there are now claims being made by reporters and by Third parties that are saying it is a new form of kleptocracy with all the friends of Silicon Valley installing their friends and agency heads as under secretaries and so on that's going to benefit Silicon Valley investors Silicon Valley companies Joe jamath Jal I mean how do you guys react the claims that there's now you know this new kind of kleptocratic movement it's the old guard is gone new guard you have paler you have andreil so go

ahead you you answer let's let's talk about this I mean when we go to DC when I go to DC what I am asking is I want there to be a Fair competition and if I win I want my company to actually be able to win the contract because the way it's worked for 20 years like like epis you just raised $250 million this week it's a great company we you know we had a big contest four years ago L3 rathon northr these guys you know in and out of government for decades they've they've gotten

tens of billions of dollars to the same technology area when we went head-to-head with them we we didn't just like beat them by a little bit we shot down the hardened drones nine and a half times farther away same size same power nine and a half times completely wiped the floor what was the cost difference between the bids like are you saving us massive money massive money I invested only 30 40 in the whole thing at that point and they spent billions and we have much cheaper much better not even a question and and you

talk to the and you talk to like at the time the the chief of staff of the Air Force the guy run the four star and and he says well Joe this was written three years ago it looks like rathon probably did help write it and they required all these things and your way you're doing it I'm like I I'm like yeah I'm using a chip instead of a cathod ray tube that's why it's working so much better like yeah but it was written for the way they're doing it and I could overrule it but

it break a lot of glass so you probably wouldn't get in three years because everyone knows you're the best but it's too it's too frust you know it's too stressful to give it to you right now like that is that so so so what I'm doing is I'm not going and saying give my company's money I'm saying I'm saying make this actually a functional logical process and give me a chance to win it from the best and that that is a hundred times better for our country to push how do you but how do you

make that transparent and how do you avoid there has to be massive transparency how do you avoid the the perception of conflict and the perception of kleptocracy well it's acquisition it's acquisition reform right so like this this a really important story you guys probably know we were in the Philippine jungles in the early 1910s needed new pistols our pistols were terrible they had like a one-page thing what they needed there's six arm manufacturers competed that's how we got the Colt 1911 in like three months it won by the by by a large amount it's an

awesome gun uh 12 years ago we had a 700 something page document that the bureaucrats spent years on outling what they needed for a new pistol or probably needed to do Dei stuff I have no idea it's like this long comical document they still don't have a new pistol today and so the way the way we do it is we have a very clear process where it's very specific on the outcomes not on the inputs and you have a contest and and then and then you make sure that you know it's not it's obvious who

wins guys it's not like we're like slightly better it's like we're shaming them so the only way they can stop us is by playing these games so much better I think that if you're in the administration or if you join some part of the administration whether you're a full-time employee or a gsse or just a volunteer there's going to be that perception of impropriety or influence pedaling that's comes with the territory so how do you avoid it and I think that Joe is exactly right when the administration was getting formed one of the things that

happened I had an opportunity to work with some of the folks to write some proposals for what theoretically could happen in some of these bigger government organizations where there's just huge pockets of spend and where I spent most of my time is what Joe talked about how do you create Open Standards so that it's very clear what the competition is so that the rules on the ground can't get manipulated by people who are rolling out of government into private industry or somebody has a very deep relationship because of lobbying those are the things that pervert

the clarity of what should happen because then what happens can be far a field to that so number one is I think knowing that this time around a different class of people are going to be seen on the quote unquote popular side it's really critical that all of us that are involved in this promote extremely transparent Open Standards publish every RFP publish every spec publish every evaluation criteria make these things as mean itic as possible so for example if you're going to go and field a drone there's an incredibly detailed set of data that you

should be publishing in it's not dissimilar to how an FAA asks for flight test data and you should be able to review that so that then it can be escalated so that if somebody then gets a deal because of preference and you think you're structurally better on the data there needs to be an escalation and a release valve that says hold on this is just being manipulated and I think that's you fight back yeah on not just this version of a potential Winning Side versus losing side but forever in the future the government should be

open the government should be transparent and every single point at which they're making a decision and giving money should be measurable and known you guys got exactly right there's transparency there's oversight obviously but there's whistleblowers as well and there's the role of the press in all of this to sort of fact check it and to check in on it as a safeguard with the public getting engaged and that's one of the great things that Doge has done by having a Twitter handle I can pull up hey here's what's going on with these licenses and make

an example so that kind of transparency helps and then finally we have to look at campaign finance that is where a lot of the appearance of proprietary exists go back to this other thing because that's a super important Point like it just occurred to me that if what you said happens then look the incentive today in America is to try to position oneself to have one of these roles and the reason is because David of what you said there is the chance to then preferentially nudge an opportunity your way right yes why do people sit

on committees why do people volunteer at least at that level and if you introduce Open Standards then the real incentive to want to go do this should be because you actually are patriotic and want to just help so chth I think I think you're right about the standards but I want push back on the incentive today like I know a lot of the people who are getting into this and I really do think they're there to fight for the country I don't just say this like as like you know naively or something like these people

really are there for the right reasons for the most part no I know I'm just saying generally over like the last 50 years if you look at people there is this implied sense like for example like Goldman Sachs had a direct line to become treasury secretary if you were the CEO of Goldman You' you were the treasury secretary now don't you think that that was discussed amongst Partners at Goldman and and do we not think on the margins that that beneficially helped Goldman of course it did we'd be we'd be naive to think otherwise my

my point is not that my point is just that going forward the best thing all of our friends could do is just make it all open source and Open Standards that would be an incredible artifact I think for America Joe I think you telling us hey I trust these people they're our friends you know that works with all of us because yes we know them we know they're going to do the standup right thing and if you already have a ton of money like some incremental amount of money is not going to move the needle

for you it's it's farsal for us to think that David Sachs is going to give up four years of income producing have to sell all his positions and that is in some way good for his balance sheet it is not he's going to miss out on four years of AI and the massive runup of our lifetime in order to serve the country but I can tell you people don't believe that just like you know you talked about the kleptocracy and the revolving door to raon or whoever that people have talked about forever what you need

is whistleblower protections journalists going after this like Barry Weiss is doing old school journalism investigative The Whistleblower laws are great in our country we need to keep reinforcing those but I'm going to go back to we need to limit campaign contributions we have to get rid of super packs because these create the appearance of impropriety and the appearance of impropriety with Trump's mean coin and that announcement on Sunday for the crypto Reserve was you know it doesn't help the mission here that Trump is trying to get done so so maybe you could speak to that

because that's where the appearance of impropriety is great you got people like Sor who's doing his Bitcoin thing he's going on Friday and you know sax will do a do a little bit here and announce some stuff on the program hopefully but maybe you could talk about what you objected to with the coins the meme coin Endor the the announcement of the crypto Reserve should our government and after all this donations from massive people like I saw at the crypto ball all the people who were tweeted by Trump that looks terrible you tell me what

you think I agree with you on the Tweet you're sneaking two things together here though so I want to be really precise Jason because let's be precise that's what we do here there are a lot of different possible ways that people can help politicians and so one of them is if you're a celebrity like even all your guys show at this point you can you can affect what people think that's powerful more there's there's other ways that if you're part of a big Union if you're part of a government Union that's very powerful you know

in our society if you're part of the American Medical Association Healthcare System that the doctors and health systems are very powerful even without super packs in our society and what a Super PAC is it's a former free speech and it's true wealthy people have the ability to influence things through that speech but it's like one of many and so if you're cutting that you're basically saying okay I don't want Elon and Joe to have as much say there but I do want to have even more say for the celebrities and for the doctors and for

the union members and government so you have to realize you're dealing with a complicated situation with lots of forms of power I do agree with you as I said listen I saw David and gave each other a hug I think we're all good but I was very frustrated with the posts of trump mentioning specific coins I don't know who was trading them before it just looks bad like we're fighting all this grift doing all these things where we have the moral High Ground I agree I don't want to give up the moral High ground with

these with these silly schemes that that that's 100% the case are you saying with like there's many forms of influence that you think Super packs and rich people should be able to I think speech is important $50 million $2 million donations you actually think that's fair for democracy I actually I actually think speech is very important I think the ability for me to send out something is say guys I'm studying this it's corrupt it's been corrupt for 50 years we have to all get together and stand against these Health Systems these crazy defense companies that

have captured and broken everything like I I think my ability to speak and do that and to convince people is really valuable and I and I've you know I passed dozens of laws each year into these different states by convincing people nothing to do with making me money that these incentives and accountability are wrong I think that's a good thing that I'm allowed to do that should be so when you say speech you write a check you mean write very large checks you have to be careful that the reason the Supreme Court ruled for super

packs is not just about giving you're not you're not giving them the money you're actually speaking yourself so when Elon spends $300 million he's actually spending it many times putting out his own speech or he's putting out what about you Jamal do you think that Soros Elon let's take the names out of it do you think there should be a cap on what you're able to donate to Super Pacs because this does create the massive appearance of impropriety whether it's in Crypt whether it's on the you know Soros on the Democrat side this seems to

be I mean I I'm in favor of there being more hard caps whether it's 510 or 25 million I think there needs to be caps and I think we should put a fund together for the last two or three people and let them get that money from the government to run their campaigns like other countries do I think it's important to note that this pendulum has swung pretty wildly out of wax in citizens united yeah and it's not this is not a republic thing meaning there's a whole buch of factions there's the George Soros faction

that's true there's the liberal Democrat faction L we forget I think Zuck spent 350 million in 2020 oh yeah then there's the kooch brothers faction and then there's what showed up this year with Elon so my point is there's all kinds of pockets of spending in all manner of ways I think the question is should citizens united have allowed this kind of spending and are we better off as a democracy for it and I think what does shamat think the reason why I would be in favor of going back to the way it was is

that I think the biggest problem is the redistricting and the jury mandering that happens and the amount of influence that happens Downstream inside of state and local elections and there are just places that are just so sclerotic stuck if you look at the federal despite all the spending you still see at the presidential level like pretty reasonable and healthy competition between two people it's much more difficult to see dynamism lower and lower down ballot and so the reason to get rid of citizens united from my perspective is that you'd have much more vibrant local state

mayoral elections those things have huge impacts I think to to Quality okay so you and I are in that camp Joe's in the other freeberg your thoughts you're the desire vote here it's two to one in terms of the panel well you just said to me you you just said to me you think we should go back the Supreme Court's on my side so you guys are in trouble no no yeah I mean but the point of this program sometimes is not just to is to take ownership of your opinion and defend it so I

we have I want to see people own it here in the discourse or freeberg you can say pass but you don't get to say nothing okay what does it mean to spend money on on a political point of view exactly what does it mean it it means you can put a book I mean the other side wanted to censor books because like like if I want if I want to pay someone to make a book for me if I want to pay someone if I want to pay 50 people to go and engage the community

so I can get some leverage on my time if I want to pay someone to make a website to promote my point of view on something I should be able to do that and if my point of view is related to a vote that Congress might be taking or is related to a candidate that's running for election or is related to taxes or is related to some other social issue I don't know how you can kind of very clearly delineate the difference between some kind of political party or some political candidate versus my having a

point of view on an issue if I care very deeply about animal Weare which I do and if I had enough money that I felt like I could spend that money to influence people's point of view you to improve Animal Welfare through laws and through candidates I would spend that money and I should have a right to do so and I shouldn't feel restricted that I can't go publicly express my voice make websites put up Billboards put up posters buy ads and papers telling people how wrong it is the way we treat animals and slaughter

them and keep them living for their very short lives in Terrorist conditions I want to be able to express that point of view and so I kind of Veer to this idea can I ask you a question would you do you think that your money spending if the balance of power to get your view was to redistrict certain places so that then you could get a majority of people that were ideologically aligned to you elected would you do that as well forget there's no ads running this is about a different form of electoral influence would

you do that so not spending money you're saying like I'm not spending money to you you'd spend money but it's not for ads it's not for how does that work how do you spend money to redistrict you get certain people elected by Trucking people out to vote and then you get that person to join a coalition that then redistricts I mean maybe Trucking people out to vote as an action should be illegal that seems pretty reasonable to me well yeah I mean to your point freeberg you asked like how do you define it what I'm

trying to point out to you is for every dollar that goes into politics I think it's I would ask you guys to just suspend belief that 100% of that goes to ads no no what I'm trying to say is I would say a very small not a very small 10 10 10 to 20 cents goes to ads 80% goes to all kinds of shady stuff and this also canvas by the way you call it Shady but I would argue like what if I want to make a bunch of websites what if I want to make

like you know have people go out and express the point of view in the Town Square you know like there are other aspects of what you might what I'm saying that's fine that's in the 10 cent bucket the 80 cents what I'm trying to tell you explicitly is how it's spent today is not in the ways that you think I think that the fact that someone calls it Shady might be because they disagree with my point of view and if they agree with my point of view they might not call I think I think the

tactics today look I play with the conditions on the field but if you look at them meaning like using dollar incentives to incentivize people that's allowed today you can pay people to vote today before we had pay them to join a super pack or something like that but let hold on let me let me just get Joe involved here so Joe you heard freeberg you're kind of in alignment I think broadly yeah but we can Define some very specific things that are obviously political like the window of when you spend the money like telling people

well because you could say say in the six in I'm not tarting a specific vote I get it I get it if you're not if you're targeting an issue that's one thing but when you tell people she's for they them he's for you that's clearly a political ad now you could take those ads you could take canvasing you could Define a subset of behaviors and you could say you can raise up to this amount of money per person in that way that's me those things are explicitly political when you tell people this is about candidate

a versus candidate B if you were say this we're not going to mention any candidates but we're going to talk about your puppies and you trying to increase your Q score here on the goddamn pod by Saving puppies don't be Animal Welfare is a [ __ ] up issue and something you to be agreement with you I just don't like how many points you're scoring with the audience over did you guys see this thing on Instagram my wife show ridiculous I'm Gonna Save five puppies for my Ranch somebody save some cows did you guys see

this Instagram reel my wife showed it to me it's like of a of a calf chasing a dog and it cuts to this Asian guy and he's like what's the big deal here what are we talking about like you know you want us to not eat everything blah blah blah and then he realizes that they're talking about the dog versus the the cat don't trigger freeberg don't do that leave freeberg freeberg I got 33 ACR of paradise don't laugh I got 33 Acres patus I'm going to save every animal in in Central Texas I'm gonna

eat them and I and I would give you money to do that got a deal actually I I actually I agree with what jamath was saying about Jerry mandering I think we could use AI for that's a separate conversation it's it's discussing how it works right now however Jason the problem at the end of the day with defining what's political or not is the boundary cases are really tough and you do end up needing effectively effectively a censorship word example is I write I write a book about the dangers of Communism and it explains how

it's linked to things going on today and I like give it out at like all these people are gonna be voting I mean there's just so many boundary cases said you can spend up to 10 million a year doing political activity 10 million a year gives you a cap so you can only B this is not political activity it's my art this is this is an artistic piece but when you put the book in and say vote for Biden then we would say okay you put a vote for B you see what I'm saying though

it becomes it becomes really complicated I just ran it through grock and what the answer was is that 56% of all the spending happens to be on ads and 44% of all dollars in 24 25 was spent on other yeah so there you put canvasing in there I bet you it's 75% so if we just say for those two activities put a hard cap on them I would be for that but let's keep going we got a bunch of about the market Market's let's talk about cor weave all right gentlemen we can't talk about politics

all day as exciting as it is let's talk about this cor weave IPO if you don't know cor weave is part of a new type of infrastructure provider called neocloud it's a fancy way of saying using gpus to build data centers this is a really interesting company because they got on to gpus early and they had a lock in on a large number of nvidia's gpus they've uh got 32 data centers with 250,000 Nvidia gpus as an example when Elon built the largest fastest uh data center Colossus that was 100,000 so this is you know

really really a big company they're going to do an IPO analysts are estimating they're going to raise at least 3.5 billion at over $30 billion doar their secondary was 23 billion in November of 2024 so this is cooking with oil they've got incredible Revenue by the way 1.9 billion in 2024 but if you look at two years ago how much revenue they have the growth is amazing Nick put a chart in here and post because uh it's like a 10x I think each year or something crazy like that when I talked about it on the

other pod but they're very unprofitable almost a billion dollars in loss in 2024 and that's interest payments on a lot of their debt almost 8 billion in debt huge debt load to buy all these gpus and that has been the question we've been talking about here trth is are these gpus are these neoc clouds fancy way of saying I'll give you couple factoids about cor which I find super impressive so the first question is like you would say why didn't AWS gcp and azour eat these guys for breakfast lunch and dinner and as it turns

out they had one very specific technical decision that I think was extremely valuable which is that these guys did not use hypervisors explain what that is so a hypervisor is basically a middle Weare layer of software that allows you to abstract units of compute so that then you can make them available and instead they basically allowed you to write to the bare metal and this very native approach that allowed them to get a lot of traction so it's a really interesting thing to note that just that simple thing like one simple technical design decision can

allow you to build what looks like at least from the revenue perspective an incredible business right so kudos to them super awesome to see that you can still maneuver around the big giants I think that that's cool I think the big question with cor weave is what is the period of amortization and the useful life of these gpus from Nvidia and I think that that question is up in the air as you said Jason a lot of their losses are these interest payments and as long as that they have that calculated right in their models

that they Ed to borrow all this money to buy all these gpus from Nvidia this is going to be a Killer Business to the extent that they got that calculation wrong meaning we thought the useful life was 10 years but it turned out to be five this business is deeply underwater so I think that that's the bet the bet is they've built an amount of Headway they're going to continue to do this good technical engineering but the other side of it is is the useful life right is the technology curve right is Moore's law and

all these other things will they work in its favor or against it and I think that's Jo people say useful lifespan gpus three to five years before the next generation is so much more powerful especially in relation to power consumption that it's worth running it now with servers old CPUs for running Facebook it's a totally different story you can keep those running five to seven years before it's not running them you have to turn them off what do you think here bus you're right there's an economic question on the power and all these things I

actually know Brandon he lives nearby me in my house in Montana he's a really smart guy and I think the really interesting thing you know when they built this that I think is relevant going forward is these guys were Commodities Traders and they were originally buying stuff to like mine Bitcoin other stuff like that and they realized as Commodities Traders there's like a certain supply and demand in the market of GPU chips but also of all the data centers by the way and it's really it's really interesting what they did is they locked down the

full supply of tons of data centers tons of the power they needed tons of the chips and they're very very thoughtful I mean they're effectively they're Traders and they're and they're very economic and they have I think they have bottled this stuff well that explains the technical decision because they have to have very low latency throughput in order to transact efficiently as Commodities Traders I'm guessing there is one heel here for this company Friedberg they had massive Revenue growth but they have a dependency 60% of the revenue now from Microsoft and Microsoft seems to have

done this either it's unclear but maybe to service the open AI deal where they needed to give them a bunch of infrastructure or it might be for Azure it's unclear people have been asking this question for a couple of years now but what do you think of a business with one client with 60% dependency and this is how these things work Jason is they just one client tends to grow really really fast and they they're actually you know so they do this orchestration framework called sunk I know a little bit about it this like really

easy for scheduling workflows and batches and all these things that I think a lot of other people are using really well they've just bought weights and biases right which like everyone uses basically that's a great buyes they're killer for training I mean I think these guys crushing training saell said that Microsoft was doing this maybe not for a long-term usage so freeberg your thoughts on Cor weave I'm not as deep as you guys are I remember in 2003 I worked for nine months at a private Equity Firm and I would cold call like companies that

hadn't raised Venture Capital that were profitable and growing and see if they would take our money that's the business model and I spent a lot of time in the sector of businesses that were called speed doublers I don't know if you guys remember these companies 2003 was before we all had broadband internet so we were a lot of people were using dialup and you could pay $9.99 a month for a speed doubler and what it would do is it would basically on your browser set the server to be their server and they had a cache

of many of the popular sites on the internet so when you started browsing the internet on your computer everything loaded faster because they had really fast servers and you got these cashes and these companies dude they were doing like tens of millions of Revenue high margin 50% plus ebit margin and growing like 100% plus a year and I remember we we spent a bunch of time looking at these companies this is right before I joined Google and I was like this feels like a transitory business it's like an Arbitrage between where we were and where

we're going and that's what ended up happening many of them just cash flowed out the founders took money they were able to get a really smart private Equity recap done get some money out and run at some low multiple of EA or something and so I worry a little bit about a business like this where there's four or five companies that are each doing 80 billion dollar of capex this year to create infrastructure that effectively starts to replace what these guys are effectively offering out as a service that would be my biggest kind if I

was to do diligence on this business that's where I would spend a lot of my time is like guys what's the capacity going to be in a year two sort like when Broadband hit the internet you didn't need speed doublers anymore do you really need to be paying as much as you are today is there going to be as much demand how much is this going to get bundled in with gcp or AWS and so on in the future so that would be my kind of macro hesitation and caution on the diligence as I ran

my diligence on this thing you basically need an economist to map this all out it's the same question for data centers in a related way right which you just need to map everything and I I don't have those D those numbers so you're right it's a hard thing to figure out that's right that's right well the founders have control of the company I they sold few they sold a lot maybe it's 150 each or yeah but but they've kept most of their position they're smart guys so let's see yeah they still own the majority I

don't know so I don't want to speak negatively about the business and I haven't spent much time on it but I mean I think that the worst that can happen if you speak negatively about somebody's business you know you tell us you us Prof for years you tell us no idea what is it like to be on somebody's list for a decade I don't know I mean the ratings keep going up for this week and startups all in so I'll I'll take it shout out are you purposefully starting to dress up Jal by the way

because I notice every week now you're wearing a butt I had a speak I had a speaking gig but my friends at Eton reached out to me so I might be trying to do a little gri right now are you plugging right now Laura Piana hasn't reached out but Eton shirts which I'm wearing right now e n you know the famous uh shirt people are they've been reaching out and I also no no no no I got but I'm also saying Tom for's people reached out and said you know that pelvin you can take that

off if you want we'll have somebody come over so I just want to shout out my friends over there I have noal deal out the Kon k i t o n jackets I've been wearing k i o jackets on Earth I wear them all the time I love those jackets just saying let's move on way yes and Joe lale's outfits are done by the Wagers the weers in China he gets them specifically made for $17 each recently I was recently sponsored by a company this this service is incredible what they do is when you're flying

they they meet you at the FBO and they take your watch and they they set the new time for you so especially if it's a mechanical watch is a very complicated oh this is very important right I you know what I was fly you got to be kidding me that this exists and I had my watch collection and they did this for me when I was flying between Montenegro and maltas absolutely just trolling I'm just trolling this is like for spy villains telling you how to look at the world we should get rid of income

tax I'm sure everybody listening like hm really convenient no income tax for the billionaires and sent to millionaires good job guys all right let's keep going down the all right jamat you know we've been going back and forth in the group chat and you've been talking about it publicly maybe Main Street versus Wall Street and what's going on in the markets here because there's EU uh Bond issues we obviously uh it seems like in some ways maybe the Trump campaign is not thinking about the stock market as much as are thinking about the bond market

explain to us your take on markets right now yeah I think that there's three markets that are important there's the US long end of the curve so this is the 10year bond yield I think then there's the US Equity market and then the most next important Market are the European Bond and Equity markets together and I'll explain why in a second but just on the first view I I mentioned this before but I really do think we're in a secular shift where I think the Maga majority and the base of people that can be a

reliable voting Block in the future as I've said before are working in Middle Class folks that don't necessarily own a ton of stocks nor do they own homes of which there's a lot second cohort are people that are pro-innovation and Protek and the third are patriotic business owners I think that cohort is very large and I think that when the core strategist inside of Maga figure this out one of the big takeaways is that they're not going to care about the stock market in Wall Street and a lot of the policies will be viewed through

the lens of Main Street and I think that you started to see this rhetoric now one from bessent and we'll play this clip in a second and the second was just today from Trump himself but Nick do you want to play the best clip if you have it I think o over the the medium term which is what we're focused on it's a focus on Main Street wall Street's done Great Wall Street can continue to do fine uh but we have a focus on small business and the consumers so we are going to rebalance the

economy we're going to bring manufacturing jobs home that was the first one the second one was just today Nick I sent it to you do you want to just show it to these guys which I think is really interesting so it says here breaking news from I guess on usual well else Trump has just said he's not looking at the stock market okay so not sure I believe that but okay so why is this actually valuable well if we are incentivized if the government of America is incentivized to implement policies that crack the equity markets

it's actually really good in some ways number one is if you deflate asset prices you also deflate inflation okay and give an example there for the audience so we make it clear Nvidia is ripping at all-time highs you are like oh wow I'm so cashr you can go get a margin loan you take that money you reinvest it in a second home and a third home you sell some stock you start to buy cars all this other stuff it drives consumptive behavior that on the margin isn't there if the markets were much much lower than

this so if you rebase the equity values that people have what you do is you actually depress the amount of free cash flow that they have to spend on other things so it's a deflationary tactic how the bond market reacts to that is if the stock market goes down is you start to become a flight to Quality right oh my gosh there's volatility in the stock market oh my gosh I don't want to deal with the stock market going down let me just sell take some chips off the table and buy 10e bonds when you

buy the bonds the interest rate goes down why is that good for America we have1 trillion dollar we need to go out and borrow in the next 9 months and so if we can pay 3% 3.8% 4% we save us ourselves trillions of dollars versus if we had to pay four and a half five five and a half% so that's the second thing and then the third thing is that right now what we had this week because of the Ukraine and zalinsky thing is basically Trump say we are totally risk off this war and I'm

not going to debate whether that's right or wrong but that's what he said we're going to curil the aid we're not even going to share intelligence they're on their own what did that Force what happened this week was the Europeans had to basically circle the wagons and they said okay we're going to step up and what they announced was a four-year plan to borrow money to invest in defense what they also did which was really interesting is the UK specifically said we're going to borrow it in this clever little way this is their interpretation so

that it doesn't actually count in the debt to GDP calculations of my country so they're start they're starting but then so then how did the bond market react to it Nick you can show it they're like you know what guys if you want to fight this war obviously you're allowed to do whatever you want but the cost that you're going to have to pay is going to go up this has been going up every day and you're at a point now where this is severe fiscal pressure on these governments I do not know how they

sustain their deficits and raise more debt so all of this is happening all at the same time I think Trump is pro Main Street Equity markets basically do not get bid the bond markets respond positively yields go down good for America they extract themselves from spending programs like again it's more than a spending program but I'll just say it in this context narrowly Russia Ukraine is a spending program that that if you take off the table that balance of responsibility goes to Europe and then the markets are saying this is not right we want this

war to end and we're going to make it more expensive for you to litigate it if you put it all together it's a really interesting moment in the markets I haven't seen in a very long time Joe do you think this is the refinancing of our debt is the end game here there's like maybe 10% of people who seem to have fallen in that camp when I queried on these four group chats hey you know if we can depress everything we lower consumption we break inflation even more maybe people lose their jobs you know less

consumption and rates go down we have to cut rates three or four times put pressure on the FED then we can maybe refinance our debt which is coming up some percentage of it what do you think of that theory you know Jason jamaat has a lot of interesting thoughts here and I think it's I think it's a very smart analysis I'm not fully aligned it is true Bond markets hate war war is expensive or is inflationary it's very clear Europe is going through okay you know war is more likely for us to spend money that

and that hurts them you know in the US I think the number one thing that Scott Besson and Trump would want around this is is to fight for Main Street like they said that that really is you know the kind of populace energy we have right now and so I think they are focused on lower interest rates lower interest rates you know I have some someone who works with me uh their spouse you know as a real estate agent and that they're having a really tough couple years because indust R spiked up if you get

IND rates down again there's so many different places in America where people start making money again with with the title companies with the Brokers with there's so many things that happen right with that trickle down yeah it's it's well it's not just trickle down it's like this is the part of the economy that that just really does start to turn on and certain transactions can happen again and and you're right it it is cheaper debt that is that is Advantage as well so I think disinflation is very important and I think we have to find

some way to get there chth may be right that it's worth hitting assets to get to this inflation that's something that the Scott could be working on because of all the debt but it is it is true the easiest it's the easiest it's the easiest and we do and we do need it for sure so and I hopefully I think there's some other more clever ways to get there but but but I do like that you said there's some more clever ways to get there obviously we don't want to see 8 n 10% unemployment that's

another way to get there and we don't want that because you know Main Street equals jobs so what do what is your other ways to get there well the other ways to get there is there's two there's really two right now in our society that are very positive one of them is a higher productivity through AI I'm working on a ton of things as are sure everyone else doing that like we're doing construction for much cheaper right now government can't do that though right government can't be involved in that that's up to us not to

SC I mean David's doing good work we can make sure not to screw it up there's a lot of people trying to screw it up so I think David's job is very important there to get Sam's not here please we and then the and then the second thing is actually cutting spend like just giving out hundreds of billions willy-nilly to Stacy Abrams at all is very inflationary and so so so I think I think cutting spend actually is a very positive thing we could do a lot more of that freeberg you heard the two gentlemen

what are your thoughts on the refinancing of Interest as I've done before I'm going to give you incredible leadership credit for 3 years ago on this pod pushing all of us to really think about what would happen if the debt increased another 8 trillion which it did and I think that influenced a lot of people in our circles and obviously that's something that the president took on when none of us thought he would any president would ever take on that issue how much pain do you think Trump is willing to take with the stock market

going down in order to refin the debt the debt is he willing to be incredibly unpopular is he willing to deal with the criticism from Wall Street and from Equity holders over some sustained period and how much would he be if it goes down the market goes down 10 20% do you think he's going to cry uncle or you think he's willing to take that kind of pain freeberg like I said I I don't know about Trump there's a you know I would say 6040 I'd be right 40% I'd be wrong so I I don't

know people are here for that that's actually a pretty good ratio in poker if you can win that many hint yeah I mean I'd say 60% he's probably different than Trump 1.0 and he's probably less influenced by the short-term Rumblings about the market okay and he's probably listening to bessent on this one although you know I I I think it's it's got to be a complicated relationship between the two of them at the moment I I do think that he is aware and I would imagine the administration generally with bessent and others in in um

kind of key leadership positions are trying to make the case that if we can get rates down we have an opportunity to kind of refinance this1 trillion that's coming due in the next 12 months and get ourselves into a kind of more sustainable financing position there's still the fiscal position which is how are we spending money and how are we spending money over time that needs to be addressed this is this is the central question you're totally right let's address that specifically with Ukraine you're a bit of uh a hawk an American except jist Joe

and um we are looking at a situation where we spent 175 billion there were some other numbers that Trump was floating around that were Incorrect and they got fact checked 175 billion is what we're actually in for according to all accounts this was done as I said many times on this very program and got laughed at and joked about done on a lease loan Trump because these things were done on a lease loan now has the upper hand with zinsky and he's a great negotiator and he said we want 500 billion back don't need to

make this about dollars and cents here because obviously this is life and death and people's democracy we're talking about their sovereignty but that 175 billion if he gets that 500 billion back that's a 42% irr in three years on this even if we just got our money back that would be fine for the American people how do you look at the war in Ukraine both financially and in terms of containing Putin and finally in terms of our participation in NATO is it time for us to leave NATO Joe lale wow well you know Jason Putin's

a bad guy that's number one he's shouldn't have inv thank you for saying that it's refreshing to hear it on this podcast you know I I do think the last Administration mismanaged it I don't think he would have invaded with Trump as president he certainly would have invaded with competent person threaten him so but you know but now we have to have peace and I do want peace I don't want to have the war continuing but to get peace you got to get both sides to come to the table I prefer peace through strength prefer

being really strong on Putin and showing why he has to have peace but then you need zilinski to be a partner for it too and I do think listen I do think zilinski had the wrong idea on the White House last week he should have been thanking them he should have come more humbly he should have actually been directed towards really wanting peace and listen I I I agree that Ukraine's a very corrupt country we may find out that he and his cronies have been taking a bunch of money I don't know if they are

or not either way he has not really been signaling the right way to be open to peace and a piece that does I think have to give up a little bit of Ukraine in order to get there I think that's the option on the table right now and that's the direction I want about the NATO question what's the you know and thank you for being so candid here what's the the NATO outcome here is it time for maybe Europe to just go it alone because they don't seem to like what happened last Friday at the

White House they yeah and and maybe do you think it's time maybe that we we bow out and let them arm up this is really tough for me because some of the people I care about most in the world uh live in places like Germany and and around there and I want them to be safe I also think that the historic relationship between the UK and the US is this very very valuable thing that we have they shouldn't just be tossed aside these are these are critical very longtime allies and cousins you know I think

Europe's in a very very bad place it's very dysfunctional man it's it's it's I do not see European civilization going the right way the next 20 or 30 years I think JD's right to criticize them on on anti-free speech on like you know arresting people who criticize the Islamic threat like more than the people actually doing the rapes and stuff it's crazy these places have lost their minds you know it's bonkers so yeah do do I want to to totally give it up no but do I want to demand fiercely that the certain things get

fixed and to use our foreign policy apparatus to make sure we fix those things if we're going to stay in the relationship 100% what do you think chamat this NATO question seems like Europe is kind of signaling that they're willing to go at alone and should the United States just say okay go for it we're we're out because that's literally what sax retweeted recently just said hey we're out it's your problem um and I think the administration has given him free reign to to discuss the topic he T discussed it here for many years what

are your thoughts should we be out on NATO well I think the question is when do these transnational organizations outlive their utility that's the question on the table and it's not just a question for NATO but it's a question for a bunch of these other things the who NATO the United Nations there's many of these organizations what you've seen is that there are competitive organizations now that are just as important if not more so if you didn't like OPEC well then there was this OPEC Plus+ thing if you didn't like how the Europeans and the

Americans did intelligence gathering then all of a sudden five eyes came out of nowhere if you didn't like the G7 there's the bricks right so there's this tendency for the world to create these startups to try to challenge incumbent as the conditions on the ground change I think the most important thing right now the Europeans need to do is acknowledge this one critical fact the individual governments of Europe are vibrant and Powerful the European Union itself was created almost without any real teeth and so what happened is the folks there started to pass inordinate numbers

of laws yeah and that has made it really complicated to be a European company a European Citizen and that has to get sorted out what is the real decision there is it about being Italian is it about being European what is the separation and I don't think that that's clear and I think once they figure that out all this other stuff is much easier to figure out well you also have yeah other organizations interpo right we have that you have the UN I mean it is maybe time to just reerrr BG what do you think

I think that there is a viable case for a peaceful trans I to kind of a multi-polar power Dynamic and if you're a techn pessimist you're going to have a point of view that there are more limited resources available to humans on Earth and therefore we have to have influence to access those resources if you're a techno Optimist you will believe that through Ai and Automation and all these other Technologies that we could spend quite a bit of time around that we are going to have abundant housing abundant fuel abundant materials and generally an abundance

of everything that one particular group might demand or need and you don't need to go be an Empire to access the resources that your people are demanding and what I mean is the mining industry is a good example there was this discovery which I think we put on the docket for the science Corner today of a giant thorium Reserve in inner Mongolia which can be used to make a thorium molten salt reactor and there's enough Thorium in this Reserve in China to produce enough energy for 60,000 years of consumption based on current consumption rates I

saw a fantastic presentation this week by a startup that's uh using Ai and other sensing Technologies to identify new Rare Earth deposits in the crust of the earth that we have absolutely no visibility into today and many of our assumptions about how much availability there is of certain rare earth metals is wrong and that there actually may be many many many orders of magnitude more material available to us to mine and the technology for mining is getting better the technology for discovering these deposits is improving and so on so in that world where suddenly I

can make all the food I want everyone can be fed there's plenty of land there's plenty of housing there's plenty of water there's automation that and robots that are serving me and all this sort of amazing that's coming cury do I really need to be having aing conflict with Russia and China over access to some jungle or some plot of land on the other side of the planet or can I live sustainably on in my country and everyone's going to be generally happy so I think that this idea that maybe the US exits NATO and

the US dials down its level of conflict and opposition to Russia and or China is a pretty reasonable and I would argue maybe even a techno optimistic point of view and you know we may find that in the next couple of years we start to really believe it and if we start to believe it all the things that we're fighting over today you don't really need to fight over anymore except for the expansionist intentions of individuals which is a sociological phenomenon which may still continue but I'm not sure that you need to be investing as

much resources as we have historically so I would argue maybe nato in a mult poar world of abundance isn't as necessary as it has been in the past Century which was a world that was limited in resources fighting for Access and a growing global population particularly in the developed world in the west that's made it a necessity to maintain us Primacy and US policing of the world and I know others might have a point of view that's a little bit different on that but I just think we this is I think actually what you're talking

about is a Star Trek beautiful version of abundance in the world if these Rare Earth minerals create unlimited energy and your energy independent you look at the world differently and and Joe we certainly in America look at the world differently as we're all gen xers here basically we look at the world much differently now since we have energy Independence than we did under Bush and and these uh F Wars you know in the Middle East yeah I mean listen yeah and I I'm I'm one of the most optimistic people I call myself the American Optimist

Jason as you know have greatone of us have been on yet app of get you on the we live together I mean had sacks on have you had sacks on at least American Optimist people people are too busy to come on I'll try to get you so for four with best's got it okay all right I gotta work on it listen I I would love AI to get to the point I think it will where it starts to accelerate growth where this energy stuff could be mind more easily but until I'd say until we're at

at least five six% growth because we are going to the postcar city world we don't know what it's coming I do still think global trade really matters I do think Global Security for ourselves like we don't want random people with nuclear proliferation so there there are issues that are going to affect all of us but I think Dave makes a really great point that it is becoming less important over time it's true let's talk about this chat GPT I guess they came out with 4.5 it was such a dud I didn't even realize that they

launched it chiman you monitor this or freeberg did you try it because I've been using grock as my default now then Gemini then chat GPT that's my order right now because I wanted to see how good grock is and man grock is really caught up and I don't have an interest here in uh you know I don't have equity in any of these comp well I own Google in the public markets but I don't own the other two but pretty amazing yeah what what do you think of this 4.5 dud and what what it means

chamal well I use them in in the companyb building context and specifically at 8090 because of what we're building and what I would tell you is that I think anthropic just continues to do an incredible job I think Claud 37 is it just kicks ass oh you're you're on Claud for you're using on the back end yeah we use it for a lot of automated code generation got it and its models on code generation I think are just exceptional it they're they are the best in market then what I would say is as a consumer

I've mostly flipped my usage to Gro 3 yeah and the reason is that it's in line with where I consume most of my information it's elegantly integrated inside of X it's point this out to explain it to people when you're in Twitter now X on the top right hand of a tweet there's an xai button when you click it it just gives you the full context of the Tweet so I was reading one of dar's from Uber's tweets about autonomy I guess they added two more Partners when I clicked it it gave me more than

I ever could want it was almost like a deep research of the context of a very short retweet he did and I didn't have to cut and paste and form a question so owning a social network equals instant and here we're going to show with Joe lonsdale's where he says Hey listen the you know the the crypto tax feels like taxation to me and look it goes and finds four web pages you can see there it tells you which ones Wikipedia and um CNBC amongst them and then it gives Joe's position this is like very

elegant this is super elegant and I think there's a small tweak to this okay that Elon and I were talking about actually onx which is then just the nature of being able to analyze it post for its veracity becomes really valuable that extra little thing when it's available I think will have a really big impact on how people use it in this context so I use gr for the consumer applications for all of our code generation we're using Sonet 37 it's exceptional which is anthropics which is doing a major round of funding got it okay

yeah and and I think like the the thing with the GPT 45 is that it's kind of like good now here's here's a tangent let me just do a small little rant which is we're at the bleeding edge of where these benchmarks are useful meaning part of why Jason maybe you weren't necessarily watching this as closely and I think where the media and the sensemaking organizations get confused is they don't know now what to say because they'll say hey look at how I did on sbench look at how I did on IMO look at how

I did on Amy and the problem the Dirty Little Secret of these model makers is that these guys are so trained on the evals that they're overfitting yeah and all this overfitting basically makes it pretty unreliable what this means to translate into plain English for humans listening is they basically are optimizing for the test that are The Benchmark which is kind of like a person in high school or you know optimizing for the SATs it doesn't mean they're going to be a great student but it may mean that they just spent a lot of time

taking sat tests yeah so we have we have one problem which is that I think it would be very valuable for the industry that it be solved which is that we need to have extremely difficult and always changing third party independent verifiable benchmarks oh that's a great idea like the safety test for cars is that's not run by the companies got it less about safety though more about capability sure and I think if we're reporting on that then these leaps will mean something more than what they are today right so got it when Alibaba pushes

Gwen this week it was an exceptional model it's probably one of the better open source if not the best open source model out there deep seeks I think is also quite good it doesn't get any pressing anymore so I think we're starting to get to this place where there's such abundance that actually people are just kind of like overwhelmed with all the choice and they don't know how to differentiate this is like a 100 Michelin star restaurants opening up in your city you just don't have enough meals to eat it we we're we're basically drowning

in abundance to free Berg's point we I don't think we understand exactly how golden how golden this golden age is in terms distribtion distribution becomes really important I think that's why absolutely inside valuable but also think Google just that they're going to drop an button into the front search page I don't know if you guys saw that but no Google's doing it when you're logged in you will get the snippet at the top inside of YouTube they're doing summaries of the chat and the comments and then you think about what meta could do you know

they already put the AI box up there but you know they'll they'll knock some of that off Google front door like google.com does anyone use that anymore well I mean Google searches are still going and Facebook is about to launch a competitor to chat and gr yeah well they're going to do a straight up a standalone app and the thing that they are so good at is whenever they launch an app it doesn't matter when they launch it they'll just get it to a billion people yeah I mean that that is uh super TR all

this I think leads to so much abundance what I'm I'm seeing in startups I was the first investor in a company called superum very elegant software luxury software for email productivity give it a shot what he did was I didn't mean that's a super plug here but anyway I I'm so in love with the company and the founder I I just had them on this weekend startups he's like one of the best product Minds I've ever met extraordinary and superum now because it's gotten so cheap to do AI that they are composing in this beta

I in all of the replies to your email in real time on the back end and you can see potential drafts they summarize everything even if you never read the summary that would be cost prohibitive six to 12 months ago but now it's a no-brainer and because they're paid software it's like so this is going to get very interesting very quick Joe your thoughts on this uh abundance yeah I'm actually building something on email like you said that let works with your team to automatically kind of like you know create reports on everything that comes

in and rout it for you because a lot of our friends when you're a CEO you basically become a traffic cop it's actually the email is gonna do it for you it's gonna be that'd be really nice but listen I'm invested in grock 3 and I'm biased towards Elon but you know a lot of our companies will build on top of multiple of them as well and you I think you're talking about Coen I'm you know in cognition I a lot of my companies using Devon it's actually just like crushing it this stuff's getting like

10 15% better every month it's uh it's really amazing and it's good for companies like that I'm mostly that level where I'm like using all of them or using a bunch of them that so I love the fact there's all this competition because just makes it cheaper and better for me for all my companies I'm building and and it's it's not slowing down is the other piece of this no it's getting better it's scary actually I thought it would I thought it would ASM toote and it hasn't so amazing no that's that's the part that's

so fascinating to me and then there's a really interesting Ripple that I don't know if you guys are aware of yet but journalists who have been losing their jobs at a tremendous Pace are now being hired by data aggregators to come in look at queries let's say you had an expertise in agriculture free birg they'll pay you and I actually saw one of these job descriptions 40 bucks an hour to sit there and answer questions about agriculture look at answers and refine them and do reinforcement learning we're going to have a new job class which

is people who train AIS and people who fact check AIS and refine AIS and this could be a 50 to $150,000 a year job because every time you make the AI a little better everybody on the planet gets to benefit from it this is an extraordinary new job career I don't know what it's going to be called reinforcement learner I don't know freeberg you get the last take here great job on the abundance angle which just pushed a really great discussion here wrap us up with your thoughts on these llms and the pace of AI

I just agree with chamat I think it's like you got a lot of great stuff here it's changing every week I'm not paying attention to the details anymore new models come out every week this is like when the internet launched new websites you know like this is this is carrying us forward it's impossible to dissect and predict what's going to win when and why right now what are you um obsessed with in the AI front is there are there things out I use I use chat GPT research a lot the Deep research Arch right where

fires off a bunch of web pages okay and you're paying that means the 200 bucks a month or you I pay 200 a month yeah I find I find it very good yeah and then um we build everything at oh Hollow on gcp and we run a bunch of different models that's Google's Cloud for people who don't know thatr name got it and then we run models they're incredible yeah yeah lots of different tools but it's awesome hey as we wrap here we're following our Muse here at Allin whatever the besties are most interested in

we are going to bring you the audience along with us so freeberg and I have been obsessed with content creation and media so we're doing a little media Summit at South by Southwest apologies that it's sold out and then chth you know he likes this F1 he's a big F1 fan I've never been I'm really excited that we're going to be throwing the best party at F1 Saturday May 4th I'm cominging the bag you're not there's only room for as long as I get the bag I'll be outside you know what I'll just go to

11 give me my bag I'll go play a tournament I'll go to 11 and have a steak and that's it's a it's a it's a club I'll get I'll pop some bottles at 11 while you guys are at F1 you can Photoshop me in but the fans can come and our community can come allin.com events for all the details and if you party on Saturday night big party it's gonna be fun we're throwing a big party in Miami around F1 and we're gonna do a little stage show beforehand because be awesome and we're gonna we're

gonna celebrate my birthday because I'm not going to be able to make it in June can I wear my app Apple watch can somebody loan me a nice watch for F1 I can't show up with an Apple Watch anybody got a you're not allowed to wear an Apple Watch to F1 okay I'm going to put my Apple watch in my in my draw never watch I want a watch that cost 25 to 75k what's a good starter watch for J Cal that's like an appetizer that's what my watch has as a watch your watch is

watch Joe you got you into this watch thing what should I buy for 100 dimes what do you got there you can get a decent PCH for 100 now it's like they've gone down yeah it's yeah I mean everything's collapsed like shouldn't I be able to snipe something here it's it's deflation thanks to Trump and AI right you can grab whatever somebody give me a suggestion for get a good mechanical watch not an automatic a mechanical anybody wants to sponsor me for watches and get a mention here on the show I will gri the hell

out of that Jason cicis.com for life I just got a text from Swatch and tutor oh Swatch was I used to wear actually in the 80s I don't know if freeberg definitely had a T of those Casio watches right did you have the Casio where you would uh do your your C is a great watch that's I'm talking about him with the calculator watch I had that it was I remember it was $50 it was a really big deal to it $50 and it was worth it you play the game you start and stop it

as fast as you could that was that was exactly remember that I had one on each I was doubling down I recently bought a G-Shock on Amazon as kind of like a momento to and my freaking daughter stole the g a free we can all bet on this what calculator do you have on your desk right now how many how many calculators are on your desk now how many Can You Reach how many casos are within reach there's only one calculator that matters only one for me yeah okay HP 17b there's only one what are

you talking about I got my T9 still 89 for me oh now you just told me how how you're younger than me Joe now I know you're like four years younger than me true point of it was the 8182 transition that was like a big deal yeah you know what I was doing when you guys were on your calculator I can't even imagine I was in McKinley Park in Bay Ridge getting to second base all right enough allin.com events did the guy consent absolutely absolutely he's a really hot dude please we we have two genders

folks there's an executive order I read it all right all right my trump grade for the week is c for chaos a for effort with uh a for effort with those let's try to get back to a b president Trump we'll see you all next time on the Allin P love you boys thanks Jo thanks guys that's fun byebye all right everybody we're suited up we're suited up because the Zar The Wolf of the White House is here my brother David Sachs we were trying to get you on the program you were going to make

a drop in to talk about all this great crypto news coming out of the White House and uh let's face it this was a um some people saying chaotic some people say intense this is a pretty amazing intense week for the administration so we'll get into a little bit of that but you're here specifically to talk about the crypto Reserve so welcome back to your program the Allin podcast David sax good to be back I see that you suited up here yeah I mean I figured for people who uh weren't here for the pre-show I

get on saak is wearing a white shirt and a tie I'm wearing a Blazer and a white shirt so I'm like ah I got to go put a tie on he's like ah J C wear a blazer I got to go get a blazer so then we came back and here we are and uh right well look I I just have to correct one thing I think it's been a very smooth week at the White House the president has lived up to one of his campaign promises this is not something new remember you go all

the way back to his National speech during the campaign and he re reiterated this many times that he wanted to create a strategic Bitcoin Reserve sometimes he called it a digital asset stockpile what we've ultimately done here is both he also in his week one EO on crypto you guys remember I came on the show to talk about that he asked our president's working group on digital asset to evaluate the idea of a reserve or stockpile and we made a recommendation and this Administration is moving at Tech speed it's really great to work for an

Administration where you can actually get things done and things move quickly we made our recommendation and then we work with the lawyers to implement it and President signed it last night but this is fully consistent with everything he's he's always said agree on that the uh I guess the one criticism that you're going to get when you go face the media so I might want to put it here is the order in which you're doing things sometimes Mr Trump is very uh expressive on the social medias which is better than let's say the previous administration

which just wasn't available and and incognitive decline so I guess the the the question of he announces something and then you guys explain it deeper is that the optimal way to do this should we not worry about it should you come out with like more official stuff I guess that's the move fast break things that we are used to in Silicon Valley but that people you know know whether it's in business or maybe a little concerned about that things are maybe different now in the White House and and in how we're running our government maybe

you could expand on that have you ever considered that maybe you just had an overreaction to a tweet well okay so if we're going to place the blame on me I wasn't the only one the original crypto ogs were like wait a second why is he picking these three and not these three you know so that made a lot of people putting myself out of it like whoa what's going on here is he picking favorites and that's I guess everybody's big concern so maybe you could a sage we're not yeah we're not picking favorites obviously

except I will say this we do think Bitcoin is special and I can get it to to the reasons why expl why that's a great thing yeah well I mean bitcoin's the original cryptocurrency it's the first one it's the only one that doesn't have an issuer right it's it's very decentralized it's you know in crypto they call this the Immaculate Conception we don't really know how it got here we don't know who Satoshi is it's almost mystical you would say yes it's the most valuable it has a $2 trillion market cap and it's the most

secure it's ever been hacked right so we're now you know over 15 years into this journey and there's been a lot of people who've been skeptical along the way and there's been a lot of ups and downs but here it is I mean I remember back in 2011 I think it's the first time I bought a Bitcoin I think it was at $120 now it's at $90,000 again there have been all sorts of wild swings along the way but this thing just keeps keeps chugging along and you can think of that $2 trillion Market market

cap is like a $2 trillion bug Bounty if there was a way to hack this there's every incentive in the world and by hack I mean like to double spend create basically a counterfeit Bitcoin I guess would be the way for people to think about it and so the miracle it hasn't been compromised I think we can all say that well I don't know if it's a miracle I think it's exceptional design sure you know and so I think I think what you could say is that it's been tested in a very robust way and

there's been every incentive to basically break the encryption and it continues to chug along and so I think think the price has gone up as the protocol has gotten more acceptance and this is another point is that bitcoin's most widely accepted as a store of value throughout the world yeah so we do believe it should be treated special now that being said we're also creating the digital asset stockpile so all the other explain the difference between these two so there's a digital asset stockpile that's the Picker and then on the other side there's a strategic

reserve for Bitcoin because we do acquire Bitcoin we the United States of America when we seize from terrorists you know criminals Etc we do seize these and then we often make the mistake of liquidating them when maybe we should be holding them yeah so explain that architecture so we have the reserve and we have the stockpile so the reserve is just Bitcoin the goal is long-term preservation think of it as like a digital Fort Knox for digital gold we want to put the digital gold in there we want to keep it secure we never want

to sell it that's the goal of the reserve and you're right that we've made the mistake in the past of selling this stuff at one point in time we had about 400,000 Bitcoin on the federal balance sheet we sold roughly half of that for something like $360 million total if we had held all of that it would be worth just that the portion we sold would be worth over 17 billion so we made this mistake of prematurely selling Bitcoin when we should have held it we don't want to make that mistake with regard to the

rest of it we think there's around 200,000 coins left on the federal balance sheet but the truth is that nobody knows because we've never done a proper audit so part of what this executive order provides is that we're going to going to do for the first time a government wide accounting of the digital assets that we actually have so and if digital assets emerge in some Department I don't know the FBI sees a some the CIA sees a some I don't know which organization winds up having them they're going to be legally required to report

that and then put in the reserve well they'll they'll be legally required to report it and then they'll go in the reserve if there's a final adjudication so you know obviously if those coins could go back as restitution to victims or if the person who they were seized from wins their court case and gets them back they're not going to go into the Federal Reserve but if there's been a final adjudication and a final forfeiture yes those will go into the reserve anyway that's Bitcoin okay so then you got the stockpile let me just talk

about that so first of all like I said we don't know exactly what digital assets the federal government has I've seen reports that it might have for example 50,000 eth which is ethereum but again we need to get to the bottom of that we figure out exactly what the assets are we're going to move them into the digital stockpile the purpose of the stockpile is responsible stewardship it's a place for safekeeping it's a centralized you could say account under the direction of the Secretary of the Treasury and the Secretary of the Treasury will figure out

how to maximize the values of these Holdings now there's a couple of important differences between stockpile and Reserve so one is the reserve the executive order actually provides that the Secretary of the Treasury will not sell the Bitcoin okay we're we're prohibited from selling the Bitcoin there's no such prohibition with respect to the stock pilot if the secet treasury decides that's in the long-term interest of the US to rebalance the portfolio or change the portfolio the secretary has the discretion to do that okay which makes sense because there's a longtail of crypto we might see

something that we don't have the ability to predict the predict the future and we don't have the staff to sit there and look at these assets every day like a fund manager would and say huh what do we do with these what percentage should it be of the overall stock pot of the overall Holdings so maybe the decision with ethereum is hey this thing's waning we just put it into Bitcoin because we know that's the more solid one yeah that's what I'm reading into it yeah I mean I think that that's that's largely fair I

mean look I think that the stockpile should be subject to good portfolio management right unfortunately we have a Secretary of the Treasury who is an extremely successful former hedge fund manager so he's going to figure out the best way to manage these assets and we give him the flexibility to do portfolio management whereas live and die with what he does he has to make those decisions and and that's going to be you know um part of how he's evaluated by the president so hopefully he's going to be sharp about that right but the reserve is

different right the reserve is just digital for KNX now there's one other important difference between stockpile and Reserve so with respect to to reserve the the EO provides that the secretaries and I'm talking about Treasury and commerce they're allowed to figure out strategies to accumulate more Bitcoin for the reserve if those strategies are budget neutral and don't cost the taxpayer anything okay so it's possible that we could I'm not saying that we will but it gives them it authorizes them to acquire more Bitcoin if they can figure out a way to do it that doesn't

impact the federal budget or the deficit or taxpayers right okay well I had a very simple suggestion for this which I'll uh float up the flag poll here and see what you think you probably we've talked about it on previous allins before you on it how about a simple crypto tax you know crypto wants to be legal you're the crypto are crypto wants to be regulated they want the rules they want the rails simple suggestion from your bestie why don't we charge every transaction in the United States 0.01% just about one bit in that native

currency so you want to trade some salana for ethereum for xrp whatever you know put in whatever names you want there the government says hey you want to have a a great vibrant system here we're going to need to take just the most modest of taxes di Minimus in fact in the native crypto and put it in the stockpile this seems to me like a very that's always how tax's start is that they're very they're described as being very modest you know when the income tax started it only applied to like a thousand Americans and

the legislators swore up and down that it would never be applied to middle class people so I don't particularly like the idea of new taxes even if it's it's promised that they just won't affect people very much that sounds burdensome to me but look we have very successful this would and just so you know this is would be like more like a sales tax that would be handled by coinbase base would be handled by Robin Hood by would be handled by those platforms they would administer it it would be a transactional tax not an income

tax so if you have a bunch it's not a wealth tax it's not a seasoning tax but I'll let you on it if you can convince if you can convince the secretary of the Commerce or the Secretary of Treasury to run with your idea then it could potentially happen I mean they have the flexibility to figure out budget neutral ways to accumulate Bitcoin I don't know what those ways are going to be but they're creative they're very successful businessmen and if they figure out a way to do this then it can be considered that's the

point okay well I'll be in the commissary later having lunch with you you can introduce me um so let you let me just give you a fastball here well we'll see if it if it gets in the strike zone the appearance of impropriety is what people are concerned with the picking of winners and losers president Trump was the crypto president he went and he gave that famous speech I'm G to get rid of Gary gansler we're going to make it legal and to his credit he has fulfilled that promise which means hey the donor class

on that side said we're going to back the crypto president not the anti- crypto team which means a lot of people who are on the Twitter and the socials have donated a lot they have a lot of holding so this appearance which you've now I would give you credit have cleaned up here hey there's two different things going on here and we're not using taxpayer money we get all that but the appearance here is hey maybe somebody's going to benefit of course that they came after you first for that without the facts you were very

clear you cleared all your positions you sold everything you divested so let's make that clear to the dumb Dums who are just trying to say that you're personally address that yeah please cuz this is ridiculous yeah well people came out right away and were saying that somehow I was engaged in a scheme to pump my bags or to basically create exit liquidity for myself and and billionaire stuff like that you have to understand that those accusations I mean they're accusing me of a crime and serious crime and they're doing it with no evidence whatsoever so

these things are basically it's moral slander slander yeah I would say so in any event what they didn't know and what I then proceeded to put out there is that I sold all my cryptocurrency prior to day one of the administration because I didn't want to even have the appearance of a conflict and by the way I could have waited I didn't have to do it like that but I decided to do it and take it upon myself to do that because you just know that when it comes to crypto there's going to be a

lot of fluctuations in the market you never want someone to be able to point at one of those fluctuations and say somehow that the cryptos are benefited from that and created a conspiracy theory which is exactly what basically happened so first of all I got rid of all my cryptocurrency prior to day one craft also sold all craft is the Venture firm that you funded that's done a lot of great work uh supporting Founders here in Valley so we we basically sold I think it was around $200 million of crypto of which around $85 million

was personally attributable to myself and we cleared that before day one paid taxes on it and basically so there wouldn't be a conflict so then the the smear shifted in another Direction was okay well maybe he doesn't own crypto okay but he's in crypto funds okay and so they pointed to you know bitwise and multi-coin capital and I was also in blockchain capital and so then the fund managers came out and one by one all said actually David called us over two months ago and said he's going to need to divest from our funds and

so we also did that so yeah you know I think basically they've kind of given up on this but look it's very easy for why let the facts get in the way of a good ER seriously you full disclosure you know you when you saw me doing the sea Scouts program said hey why don't you do a fund I'll be the anchor I'll be your first LP and I mean one of the most generous things you've done in our relationship and I had to have a call with you you know weeks ago and say hey

okay you're going to divest okay fine no problem no it's not not a problem for me you sell the assets to somebody else so the way people understand how this mechanically works when you're in a fund you have no sax cannot tell me what to do in the fund he just put money in it like I put money in other people's funds they go and invest and 10 years later you get a return and hopefully that return in a venture firm or private firm beats the markets public markets or whatever but then you can also

sell that interest to somebody else so mechanically takes time you have to sell it at 50% 25% off and it's painful you will lose I estimate you're going to lose you know I don't want to be gratuitous here but eight nine figures by serving the country for a couple years and not only that the great irony of this is the one thing holding back the industry is regulation overregulation of AI and no clear regulation in crypto you're going to fix the two things that were number one and two on all of our agendas in Silicon

Valley in terms of getting Returns the next four years so the sacrifice you're making is extraordinary and you're making it a better environment a regulated environment for the rest of us to do Commerce so I just want to point out that you're losing like double here right well let me let me just underscore something you said for your service and I don't know how much they're pay how much they paying for this job what do you get paid like 50 Grand 100 Grand I'm an unpaid consultant to the government really is that actually accurate you

get no money no I don't want I don't want any costing you money no of course it is but it's it's it's an honor to serve and it's a honor to be asked to serve and in particular it's an honor to serve this President because he really wants to make the country great again so that's why I'm doing it but yeah look I think it's a it's a lazy and stupid narrative to say that the reason why someone who's already successful in business goes into government is to make more money I was making money before

this involves a substantial disruption of my business interest and I have to devest a lot of those business interest and in divesting I have to be either a taxpayer or I have to take a significant discount and it costs you money so you know it's just a lazy narrative that people create but it's there's no truth to it and just to underscore a point that that you made a second ago you were one of the funds I invested from not because you're a crypto fund but because you might have a crypto position we went through

I think the launch funds Holdings and I think there was something crypto related in there we have one or two that pivoted into crypto yes right so I just didn't want to have any problem there so listen it's this is the nature of the politics we have people are you know gets very personal you know that better than anybody and so you know that's why you're here and hopefully we can clean this all up and uh let people know that hey the intent here is good so just to go back to one other point you

said about not picking winners and losers I I think that's a very important comment that you made that I see as fundamental to my job I mean look I think we do think that Bitcoin is special for the reasons I said beyond that we do not want to be in the business of picking and choosing winners in in the space and again if some other digital asset could prove that it's as decentralized and as secure and as widely accepted as a store of value as Bitcoin then maybe it could be elevated in the same way

that Bitcoin has I mean I'm laying out the criteria for you but look beyond that we don't want to be picking winners and losers in the space and that's not my job I mean my job is not to to be a regulator or to anoint which ones are good or bad it's to basically be a policy adviser for Innovation and I'll just tell you the way that I see the you know all the digital Assets in the space is that what's fundamental is disclosure if you're an issuer of a digital asset you need to disclose

you know all the material facts about what you're doing and those facts have to be accurate you can't lie my view is that if you if you the issuer lie about something the government should come down on you like a ton of bricks because that's fraud okay but as long as you do this in an honest way people should be able to trade these things I understand that you think a lot of them are garbage you might be right you could express that view in a trade but as long as everyone has been above board

in terms of disclosure people should have the right to trade these things and some are going to make money some are going to lose money it's about the freedom to basically to trade to hold these assets the government doesn't want to get in the way of that it's just wants to make sure that the information is out there that it's honest and if people lie in order to profit I'm all in favor of going after them well and you know we already have a regulated market as an analogy and when you tell a lie and

you sell a share in a company whether it's a private or a public company the SEC has a term for that it's called Securities fraud and we you know have this new type of device it's very Innovative it could be an nft it could be a trading card it could be an actual utility token where you burn it in use of a service or it could be anything it could be whatever the person describes it as but what's important is there's an entity with a group of people I think you would agree who have said

we have ownership of this we're Incorporated here in the United States not in Panama not in the BVI not in some you know other place where maybe they're a little faster or looser with regulations you got to be here in the US maybe you have to be insured in some way maybe there has to be a board like there does in Delaware or in an LLC there has to be some person where the buck stops and if you lie while committing a transaction or taking money for an asset it would be Securities fraud and yes

people will come down on you like a ton of bricks and if you promote things and you don't disclose it well we have rules about that as well we saw many celebrities get pinched last time uh for tweeting about cryptocurrencies and this is the stuff that I think has to stop I think it should feel more like what we do in Angel Investing the private companies and in public companies so that's your job when are we going to see you know that framework emerge because here you're only like 40 50 days into this I think

when we see the actual bones of a framework so if I want to do jco and I want to make an Angel Investing coin or I want to do something fun an nft collection for Allin or something when will we have the actual rules of the road and that and that's going to be multiple agencies right yeah what you're describing is is known in Washington or that the the um the area of policy that you're describing is known as Market structure and Market structure is about providing a clear framework for Market participants it would Define

what is the security what's a commodity what's simply a collectible you know it's property but it's not a security and then what are the rules for each category that's know as Market structure there is a bill that passed the last Congress in the house but Biden basically he didn't veto it but he basically he and the Democrats stopped he stopped in the Senate the Democrats did it was called fit21 and it was authored by french hill who's now the chairman of the house Financial Services committee so we expect that he will be introducing a new

version of his bill probably in the next few weeks I don't think I'm breaking any news by saying this I think people expect it and that's going to provide the framework for Market structure and it's going to provide a lot of the definitions that that you're talking about now I I agree with your sentiment okay but I will say that I might have a different view than you of what is the security what's not I mean to me collectible are not Securities but if it's a collectible you got to disclaim that look this has no

intrinsic value right that's a collectible think about a baseball card a baseball card is a piece of cardboard it has no intrinsic value but the value comes from basically other collectors being willing to buy it from you and you could just say that that's irrational whatever but so look I think as long as people disclaim that this coin has no intrinsic value they should be able to issue meme coins it's a separate question why people would want to buy them but look that's very in my view that's very different than someone who goes out as

an issuer and says I'm issuing a token or a coin that has lots of functionality and has lots of value and you'll hear some of these guys even say that hey our token is more valuable than Bitcoin you should value it more highly well if you're promising that and you're saying that it's going to have certain functionality you better be telling the truth about it then we start getting into the how we test and people can go look that up if they if they want what I will say is there's an educational process that has

to come in here which we've gone through as the United States when people would buy interest in mines people would buy interest in gold claims oil fields and that's when a lot of these regulations came out in the 20s around accreditation we've spoke about this before it's a pet peeve of mind but I think there should be an educational framework here and I think there should also be some Nuance that you could work on specifically with this group of being clear that when you have a ticker symbol associated with something or you do charts associated

with something you know it starts to smell like a duck it looks like a duck it's quacking like a duck but then in the terms of services say hey this is a collectible I think there needs to be some ground rules which maybe it says hey these need to be presented in a certain way at the top level so the Nuance of disclosure is so important when I tweet something if it was an Advertiser or a sponsor of Allin or this week in startups or any influencer or you did would to do this and you

said I love you know this brand you and I both were well you were an investor in ATM if we were to tweet about that as investors we don't have to disclose but if we were paid for that the FTC has rules you have to put this is a paid partnership you cannot confuse consumers and I think that's where you're going to have to do a little bit of cleanup work and structure as well is the disclosure and how this appears and then also maybe the educational system so you know if you want to own

a firearm if you want to drive a car if you want to be you know a beautician and listen we can talk about overregulation you got to take tests man it would just be so much better if consumers could take you know like a 50 question test just to say hey they understand what we're talking about here in in terms of diversification so they don't yo YOLO their entire mortgage and house into one crypto so what are your thoughts on those two issues disclosures how it's presented and then accreditation and maybe a path to accreditation

sophisticated investor tells us how I refer to it for all Americans because 90% of people can't participate in private companies your thoughts well disclosure is the key like I said I mean these projects should have to disclose certain things I think for example the token cap table should be disclosed who are the who are the Insiders how much do they have when are they selling you know that's that's information the market should always know in my opinion easily done with the technology lotted by the crypto Community the blockchain this could just be on the blockchain

this was always the problem we had as Venture capitalists with hey this is a token project who owns the tokens where are they when can when can I sell when can you sell insiders yes yeah I don't think you have to disclose everyone who owns a token that could be hard to comply with but I think you should have to dis you should have to disclose the Insiders and their their sales plans and their lockups and and and I would also say how new tokens get created I mean if this is a fully centralized token

where they can dism more people need to know that because there's no scarcity right but if there's somehow an enforcement mechanism and there's enforced scarcity then that's a different story so yeah these things have to be disclosed and by the way I think the market structure bills will do that there's a version of this in fit 21 last Congress I think it'll be the next one and moreover the SEC is looking right now at these rules and they're going to create their own Frameworks they're doing an exent J SEC Chief I I was doing some

research on him he's a really Pro actually more Americans being able to invest in privates private Equity Etc and he's given speeches on it in the past so the person who's been nominated for the new chair of the SEC his named Paul Atkins and he he has not been confirmed yet the confirmation hearing still need to happen separately Hester Pur who's a commissioner at the SEC is in charge of I know Hester I've had her on uh this week in startups a couple times she's great she's excellent she's very well informed and she's T very

sharp taking the lead on all the crypto related stuff so I trust her and I trust the SEC to produce those detailed Frameworks that you're talking about yeah I think that my role as call it Innovation policy adviser is just to kind of make sure that we have the big picture right and I'm I'm very confident that the SEC the cftc and the legis they're going to figure out the balance here sex you got to go really proud of the work here uh congratulations on cleaning this all up and presenting a really thoughtful plan that

we can all ask you hard questions on appreciate you taking the hard questions here on uh the all podcast um and good luck when you do the rest of the media circus uh I wonder if I'm going to be the hardest questioner of you I I hope so and uh for people asking yes I'm wearing a suit because I am now joining the administration big announcement I'm the official podcast the official moderator of the uh Trump White House I'm just kidding I'm just K people actually believe you all right man listen I got I got

jokes good all right love you brother we'll see you soon cheers all right bye all right everybody I'm obviously super conflicted sax is my friend of 20 years plus we're Partners here on the allom podcast and of course I'm rooting for the administration but you know I got that journalist blood in me I always want to call balls and Strikes I'm going to as you just heard ask hard questions so if you're wondering where I'm coming from I'm going to ask hard questions to my friends because they're doing important work for the American people and

for the rest of the people on the planet candid these are important decisions that saak is going to have to make about crypto AI that elon's making with Doge I'm G to ask hard questions that's the way it's going to be and so I'm really excited that they're coming on here they're going to take the hard questions for me but they're done in a certain Spirit which is yes they're my friends but they got important jobs so they do have to ask answer the hard questions for the American people and I'm also curious and we're

all curious where they're coming from so I feel so privileged that they're they're choosing to come on all in to face those hard questions we'll see you all next time on the all in podcast let your winners ride Rainman David and instead we open source it to the fans and they've just gone crazy with it love you queen of [Music] besties are my dog taking your driveway oh man myit will meet me we should all just get a room and just have one big huge orgy cuz they're all useless it's like this like sexual tension

that they just need to release [Music] someh we need to get merch our [Music] all I'm doing [Music]