Daniel Gross and Nat Friedman: Acquired by Meta | Microsoft Layoff 9000 People | OpenAI's Bombshell

Jason Calacanis

It will be the biggest issue of 2026, I think, in B2B AI: the inability to recruit talent. No one ever said to Winston Churchill, “Did you bring World War II in on budget?” They just said, “Did you win World War II?” The truth is this: when it becomes existential, you do what you have to do to win.

The run in the early AI markets has been very much: attention begets more attention, begets more attention. So, if you start to pull ahead, provided you continue to execute, it’s very hard to catch up.

Guys, I am so glad to be doing this at a normal time. What everyone didn’t see was me at 6:00 a.m., being slightly slow to start in the last show. Doing this at a normal time: great success, guys. It’s so good to have you back. Great success. It’s a big week.

Jason Calacanis

Things just keep accelerating, Harry. Dude, things keep accelerating.

1. Daniel Gross & Nat Friedman: Why Two Legendary VCs Walked Away From $1B to Join Meta

I’m going to start with one that you tweeted brilliantly, Jason, by the way. You said about Daniel Gross and Nat Friedman joining Meta, “The wild story of NFDG: 2 Silicon Valley legends built a $1.1 billion fund, 4x-ed it in 2 years, and then abandoned it all for Meta this week,” which is bluntly what we saw with them moving. Why don’t we start with you, Jason? How did you analyze this? Because it’s pretty big and shocking news.

Jason Calacanis

Well, listen, I want Rory to help me with the math here, because they’re 4x-ed on a $1.1 billion fund. The Wall Street Journal said it’s about 50% deployed, and they’re already closing another fund, right? 2 partners and a few other guys. For 99% of the venture world, this is beyond a dream outcome—beyond a dream outcome.

It’s not that I don’t like it; there’s a lot to the story. Obviously, it’s a moment in time, including the ex-CEO of GitHub—not the founder—who’s had a run and wants to go work for a dude. See, here’s the problem: I get the excitement. I just flew back into Palo Alto today, the Bay Area. I was in Southern California for a week, and I already feel the vibe. I want to do the same.

But I also worry this is going to be like the Trump administration, where everyone’s going to quit, too. They’re not going to last. The Elons and the Davids and all the techies aren’t going to be there for 4 years. Do I really want to go work for Meta for 4 years? That’s the only weird part in it.

But I get it. It’s a moment in time, right? I don’t want to be meeting founders and writing checks. I want to be—this is a moment in time, and there’s only—this is a once-in-every-20-year moment in time. This is like 1999, except it’s not going to implode on us in 12 months.

It was a lot riskier then because there wasn’t a whole bunch of large incumbents willing to take your quitting and monetize it for $100 million. In many respects, it’s more zany by far than what went on from 1995 to 1999, when I was actually around in the business.

This is something we’ve never seen before, because there have never been incumbents just willing to plop down this kind of cash to hire people, for God’s sake, just to go do something. It gets back to what we’ve discussed a couple of times, which is that small number of high priests of AI who are deemed to have the answer just have huge market value. This is the market working through.

Rory O’Driscoll

Sorry, I didn’t mean to interrupt, Harry, but let’s just do the math for a moment for folks that might read or watch. I have a $1.1 billion fund. It’s 4x-ed. Let’s be generous on the math, but true, right? Half of it’s deployed, so $500 million times 4x. That’s $2 billion. That’s $1.5 billion profit on paper, which we can talk through. That’s $300 million in gains already.

We’re ignoring some subtleties, right? But we’re already $300 million up—the 3 of us. Correct: the 2 of them plus a few guys that probably have 2% carry. They’re already up $300 million in 2 years.

This is why the offer is so good, because what you’re getting is—you had a billion-dollar fund, you put out half a billion, you’re 4x up, a $1.5 billion gain. Remember, it’s worth pointing out: you’re not getting that money now, right? At least to my knowledge, as a GP, it’s the LPs.

They’re basically—and I’ll give them huge credit—taking care of their LPs. They’re saying, “You can take half your money off the table,” which effectively means even if the whole thing goes to zero, you got a 2x, right? The LPs are getting the money off the table.

What they’re giving up—and there is a real give-up here—is the right, as investors, to use the other $500 million and the other billion that they were clearly going to raise in 2 weeks flat, because they’re those guys. Basically, what this does is say to the offer, “You should think about the offer as being in 3 components.”

“Mr. Nat and Mr. Daniel, we will, first, take care of your existing LPs in a way that will make you feel good because you’re reputable people. Secondly, you’re walking away from $1.5 billion of investable capital, and the worth of that depends on what you think you could turn it into.”

Let’s just say you could do another 4x, which means 3x of gains, which means $4.5 billion. At 20% profit, there’s a credible argument that’s $800 million of value to you, Mr. Nat and Mr. Daniel. Obviously, whatever other offer they got for that had to be better than that, right?

Effectively, they gave up $800 million—plus, they had premium carry in the fund. So, let’s call it an even billion. They gave up $800 million to a billion, in theory, to join Meta.

Personally, I think, forget the “What do you want to do with your life?” questions. I agree there are all sorts of those questions, but I think cashing—I mean, not having to put that money out in today’s frenzied market and instead getting, if they got anything like a comparable equivalent in terms of capital return, that’s a pretty damn good deal.

It’s also an excellent deal for the LPs, who are effectively getting—I mean, they are losing the stewardship of those 2 guys on their investments, which is why there are no new investments. But on their existing money in the ground, if they put in $1, they’re getting $2 back and they still own their other $2. So, if SSI goes great, hooray. If it doesn’t go great, they at least got a 2x.

For the LPs, it’s an interesting one. There’s a subtle nuance: I believe the terms are that Meta will buy 49% of the fund, but each individual LP can opt to sell as much or as little as they like, and then it just aggregates. There are a lot of LPs going, “Do I take my 49%? Do I hold tough and sell nothing? Or do I ask to take it all if it’s available?”

Yeah, this is a chance for liquidity in a stellar fund early. It’s an interesting question we could talk about.

Jason Calacanis

Great. I remember, a couple of months ago, I was having lunch with one of my LPs that I share with Harry. After lunch, the LP was going to meet with them for Fund 2, to put it all in, and I’m like, “You’re doing what?” He’s like, “Jason, it’s not even the same game you’re playing.” He’s like, “Don’t worry about those guys. They’re not—you’re not in the same box. You’re not in the same bucket.”

I do not think LPs are happy about this outcome, by the way. I think many LPs—don’t get me wrong—are happy to get cash back and good economics back, but I think there was such excitement and fervor around them as a partnership and what they were building that they will be sad to lose the stewardship and the future funds, personally. That’s how I read the LP sentiment.

Rory O’Driscoll

I think at that level, that’s probably true, but there are a lot of people looking at it. Getting jilted is one thing, but getting jilted with a 2x is a lot less painful, right?

2. Meta’s AI Talent Magnet: Will It Actually Work?

Jason Calacanis

Yeah, sure. You want it all. When funds end, most of the time it ends in weirdness. It ends in pain in the butt for the LPs. I’m giving Nat and Daniel very great credit: this is a very clean ending.

They’re looking everything in the eye and saying, “Yes, I mean, simply put, you, Mr. LP, would like us to do venture capital for the next 4 or 5 years. It would appear, in the market system that we all live in, that our highest and best use is building AI for Meta. So, the market has spoken, and that’s what we’re going to do.”

I’m genuinely not surprised, and I can say that with some credibility because I competed for a deal with those guys back then, and we lost to them, right? It all worked out in the end. Look, they’re wired—Rory, they beat every single person in the market. I ended up getting to work with them, and I think they’re wonderfully talented guys.

But I remember saying to the CEO, “They won’t be doing this in 4 years,” because it was obvious to me why. Why would you do venture? It’s a perfectly good gig, but it’s not like they have so much more talent.

If I was someone who, when you meet 2 people, one of whom has been the CEO of a talented entrepreneur early on—we looked at that round at Xamplify—the CEO of GitHub built the first, most compelling product, and then his colleague has been involved in that kind of early AI stuff, capable of being a founder of SSI, your highest and best use is not being the 50th venture guy, even if you’re the best venture guy. There are other things you can do.

I’ve never felt so unspecial. I felt this way going into venture myself. I felt like I was walking into quicksand, into a world with fungible sources of capital, where clearly some GPs are better than others in terms of adding value.

No question. Some funds are modestly better than others. But are you really saying that the only value you can add in venture is discovering talent that would otherwise not get funded? That's the mitzvah in it, isn't it? You find the young Rory. No one would fund him, and he builds Cursor. You've done a good thing for the world of venture. No one else is really adding significant value to the world of venture.

Dude, that's why I did Project Europe. We just funded this kid in Athens through Project Europe who's doing humanoid robotics from his grandmother's garage. He never, ever would have been found.

Yeah, there is a unique value you could add, right? Just one question for you: if I'm an investor in SSI and I've just put in a big check, and Daniel led that fundraise, I am a bit pissed off now.

Jason Calacanis

It's interesting, because—well, why? It's going to sound zany, but why are you pissed off this week rather than a couple of weeks back, when he stepped away from SSI?

No, I'm saying it because he led the round as an operator. He was in charge of the fundraising, committed to it as an operator, and I think that creates a responsibility there—that you don't piss people off a couple of weeks later.

Jason Calacanis

I think it's an interesting point, Harry. When I wrote it up, the other thing I said was that it was an interesting parallel to Garry Tan, because Garry Tan left Initialize to run YC 2 years ago. I instantly got it right. I don't know Garry very well, but I've had a chance to watch him a little bit over the years, and we have a lot of LPs in common. People thought it was crazy, but their Fund 2 is going to be a 10x fund, I think, with Flock Safety, Rippling, and others.

So he left them with a 10x fund, right? A great position. A lot of them are involved in YC today as LPs and otherwise. But some people were upset. They were like, "We love Garry, and we wanted him to go another couple of rounds." The LPs we had in common were—don't get me wrong, they're all happy for him—but they were upset briefly because they thought he was going to do this for another 20 years. I'm like, this guy's a builder, right?

Totally. I don't think—I agree. The same thing exactly applies here. People with those talents are going to be drawn to the thing that most allows them to instantiate those talents. You shouldn't make decisions based on someone else, quote unquote, doing the right thing. All you can do is evaluate their incentives and motivations. Are they aligned with you? If they are, most of the time it'll be fine.

But even then, kind of back to what you said last week, Jason, we're seeing a lot of founders tap out. We're seeing more people say either they're walking away from something or, in this case, walking towards something. It's just going to happen in this market. You can be pissed for a day, but I go back to what I said: if getting screwed over means getting 2x in cash and a ticket to ride on the other half in 2 years, we should all be so lucky.

Jason Calacanis

I'll just end it with 2 things. One, I really don't think this is about money. Both of them are worth half a billion—another half billion. I don't think they give a shit about that.

The final thing I'll leave it on is: do we think this talent-accumulation machine that Alexandr Wang is building is going to work? I think it will work. I think it already worked at X. I think they're running a little bit of the Elon-X playbook of just being insane, cracked, creating this mega-mecca for talent.

I think you almost have to do this playbook. You have to create a mega-mecca for talent somehow, and I think it will probably work. The best want to work for the best. It's always been true our whole careers. The best, and the very best, only want to work for the very best. They won't tolerate anything else.

That's why so many struggling unicorns are in an existential death spiral: they can't attract anyone great. Not a single great person is going to join an X unless the founders are great. Some folks don't care that the growth has fallen to 10%, but the best only want to work for the best. The tough thing is that they want to work for the prominent best in many cases.

In the 2x2, the best and super-prominent—I would say 80% of people want to go there. The best people want to go there, and you need soldiers, not just captains and generals. You have to attract them broadly.

I broadly agree with that. One of the things that's funny is that I'm just reading one of the many open books about OpenAI. I think it's called Empire of AI or something, and they talk a little bit about how they deliberately and ostentatiously wanted to raise their profile for exactly that reason, Jason: to be able to hire the very best people.

This dynamic has been there, you know. Literally, one of the first emails—I think it was Ilya—sent to Elon was basically some version of, "If you would lend your name to this project, it would be cool, because we would hire more engineers quicker, because you're cool." End of email, right? Back in 2015 or 2016. So I totally agree with that.

At that level, I think, Harry, the answer to the question is yes, it will work. These wildly smart people—they are members of, as I say, the mythic inner circle of people who know the magic spell. They will make the product right.

3. Cursor Is Breaking the Market: Can Anyone Compete?

I think the interesting question, as a business decision, is whether being the 4th or 5th broadly capable LLM will be a compelling business for Facebook, for Meta. Will that pan out? To me, that's a much more interesting and difficult, let-we-go-unclear question. But I don't think they're agonizing about that now. They just feel the existential need to play.

I was with a founder this morning of a multibillion-dollar company. It's a very good company, and they said, "My single biggest challenge today is Cursor. Cursor is just paying insane amounts of money for everyone." No disrespect to Cursor, but the question for me was just, wow, if this is a tidal wave of incredibly well-funded AI companies just paying through the nose—and it's not just Meta, but suddenly 10 others have to compete—where does this end, with people losing money?

Jason Calacanis

I mean, obviously, the talent war is under-discussed. How the hell, if you're not at a top vibe-coding company, are you going to compete for talent? You better find somewhere where being very good is enough, because you cannot take these teams head-on. There is just no way.

You also can't pay them $800,000 a year plus RSUs plus guarantees. You just can't do it, right? It will be the biggest issue of 2026, I think, in B2B AI: just the inability to recruit talent.

I don't think firing up Lovable or Replit is going to solve this problem. I love both tools, don't get me wrong, and I see too many startups saying, "I'm going to hire an AI guy," or, "I'm going to hire my first one." If a startup says, "I want to hire a VP of AI," I'd like to sell all my shares on any secondary market that exists.

If you think your answer is to go hire a VP of AI who wears a tie and is studying things, just shut the startup down. Sell it for anything. Sell it. Go sell it to Grammarly if you can while there's time.

Jason Calacanis

God, you're just piling on. Look, I think that's true. Obviously, at the application level, I won't say the caliber, but the kind—if you're a user of the models, you don't need to have the same caliber of people it takes to build the models, provided you have people who can deploy them and use them.

I see Jason making his "I disagree" face, right? I don't think the problem is—it's true, but the problem is that a lot of these categories, sure, you have exposure to the same models, but your ability to do more with them requires an S-tier team. Otherwise, you're just lost in a sea of sameness.

And that's the point I was trying to make, Jason. You're exactly right. Look, yeah, they're not doing it by paying $800,000 or $1 million in cold, hard cash to the 50 people in Silicon Valley who can do that. You build a center of excellence somewhere else. You have to be very, very good, but you don't have to be quite as on it as if you're building Cursor.

I was actually talking this last week with the CEO of a SaaS company. It's adjacent, but it's a really good B2B company coming up on $200 million in ARR and doing well. He's like, "Yeah, I basically have to give 0.5% or 1% of my company to each AI engineer now."

Jason Calacanis

Wow.

To get who I need. You can't do that for 50 engineers, can you? How does that math work out at the Series D dilution stage?

Jason Calacanis

Pretty badly. Pretty rough on everybody.

He's forgetting about the cash. He's like, "I have to give 0.5% or more to get the people I need today," and he's like, "I have no choice." Coming up on $200 million, that's the time when engineers start to get 0.001% of the company.

4. OpenAI’s SBC Bombshell: More Stock Comp Than Revenue

Jason Calacanis

But that's partly why this wave, I think, will be highly damaging to venture returns, because employee stock-based compensation dilution is going to be so significant, and so much more significant than in prior generations of venture. If you're Anthropic or OpenAI, you're just continuously having to top people up every year.

Well, The Information said OpenAI has more SBC this year than revenue.

Jason Calacanis

They came out with a piece this year: more SBC than revenue.

Intellectually, you're correct. I'm not going to lead the "SBC doesn't matter" comment, because it's more than revenue. It might matter, but it's more than revenue only—

Jason Calacanis

Can I make a comment and say: no, revenue only because there's this spurious way of accounting for it that's cash-based, which is quite misleading? It's obviously not cash. It's dilution. When you're private, the way you've got to think about it—it's clearer to think about it at least partly as a dilution percentage versus cash.

I understand there's an element of both, but when you're sitting there allocating the money, the more it's freely tradable stock, the more you should think of it as cash and a direct replacement for cold, hard cash.

In which case, if it was a 100% replacement for cold, hard cash, you could argue the loss is approximately double what it’s stated to be. But my mind is this: if you end up building a big-ass company and you look back and go, “This is horrific. You had 20% to 30% more dilution than you expected,” you still got a pretty good, big company, right?

So if it works, I’m not advocating mass dilution, but the truth is, it’s not going to be the fatal error. Not getting there is the fatal error. It’s like a line I often use: no one ever said to Winston Churchill, “Did you bring World War II in on budget?” They just said, “Did you win World War II?” Right?

When it really matters, the truth is this: when it becomes existential, you do what you have to do to win. This is where, again, we said it before, you give Sam Altman huge credit. I don’t know if they’re right in making the assumption that this is existential, but once you’ve decided it’s existential, you just do what you have to do, right?

But hold on, listen to this statistic. It’s pretty funny. Last year, according to The Information, OpenAI had $4.4 billion in stock compensation. That was 119% of its GAAP revenue.

Jason Calacanis

Okay, yeah.

Now, that’s a lot, but it projected it would fall to 45% this year. It’s not going to happen. It’s going to still be in the triple digits.

Jason Calacanis

That’s to Harry’s point, right? There’s the directional. I would assume if your SBC exceeds your revenue at scale, it’s pretty dilutive, right? But the fact that it’s 119% instead of 45%, that’s a lot of dilution, isn’t it?

Oddly, it might be. I’m not trying to really get down in the weeds here. I’d like to know the percentage dilution, because one of the weird things about SBC compensation is that it’s priced when you issue it, and it’s basically based on the 49A valuation of the stock, which has been motoring up enormously.

They may well be recording a large, very large, quote-unquote GAAP SBC number, but the dilution, while still big, may not be nearly as catastrophic as—

Jason Calacanis

For sure. I’m being too simplistic. If they’re worth $300 billion and they’re issuing $10 billion of stock, it’s 3%, right?

That’s exactly right, and they have to run it through.

Jason Calacanis

That’s exactly right. I couldn’t articulate it because I’m a bit jet-lagged, but that’s exactly it. You see this a lot where you have a company that has an enormously high mark from the VCs or from the public market. They issue stock, and then you see this a lot in the public market: 2 years later, the stock has returned to a much lower level, but the SBC still rolls through the books as if it was all priced against the $300 billion value.

You have those absurd public companies where, oh my God, the SBC is 3x the revenue, right? It’s all about this nominal accounting charge, which is meaningless. Now, in this case, it is interesting because, to the extent that the $300 billion is a money-good valuation, if you give someone 3% of the company, they are in fact getting $9 billion or $10 billion in cash value. If they can realize it via a series of tenders, then good on them.

5. CoreWeave’s Power Play: Buying Their Landlords

I mean, if the stock—the market cap of that company—stays at $300 billion or greater for the next 4 years, the people who got $10 billion today will have $10 billion of cash value. Good for them.

Speaking of capitalizing on appreciation of stock price and using it strategically, I’m jumping around the schedule that we have, but there was one that I thought was really interesting: CoreWeave bought Core Scientific for $9 billion. This is after they bought Weights & Biases for $1 billion.

I’m intrigued. Is this just an incredibly strategic use of an appreciating stock price? How did you think about this?

Jason Calacanis

I thought it was a great deal. Quick and simple. I remember, early on in the hosting business in ’98 and ’99, I looked at Exodus way back at the dawn and couldn’t get my head around it. It was, like, a tiny number. It goes public. It’s basically offering the first-ever hosting facilities, goes public, has a huge valuation, and then, in the dot-com bust, it went bust—absolutely bankrupt—because it had leases and debt, and it killed it, right?

These guys have a mark. They have a currency. CoreWeave apparently leases a lot of data centers from Core Scientific. It effectively deleverages them somewhat, uses equity to take out rent expense, and it means that over the next 5 or 6 years, if the demand for data centers doesn’t continue to grow to the sky and they have to have a more robust balance sheet, they will look back on this and say, “Great move. We took a bunch of fixed costs out of our P&L in return for a small amount of dilution.”

I’m sorry, who would take the bet that the demand for data centers would go down?

I might consider it, Harry. I can see the pained look on your face. I would consider it. I would put that bet at least on the table as being plausible at some point in the next 3 or 4 years, that people find they’re ahead of their investment schedules and just want to slow down.

If I was the CFO of a company like CoreWeave, where effectively what they did was take themselves from 100% leveraged on the upside of infinite data center demand to 80% leveraged on the upside of infinite data center demand, that’s a smart, slight de-risking.

Wow.

Jason Calacanis

It’s not like they’re shorting Nvidia stock here, dude, which is the bet you’re taking if you really believe. There’s a whole series of bets you can take depending on how much you think the hyperscalers are going to spend to build these models in the next 4 or 5 years.

It can go all the way from, “I’m so leveraged to the upside that I’m going to buy Nvidia out-of-the-money calls”—that’s if you really believe—and you can just go in a descending order of risk reduction from there. These guys are very much leaning in on data center demand. They’re not walking away from that.

What they’re doing is replacing fixed charges—debt and leases—with equity. It’s a good move.

Yeah. It would help us all if there were, like, 10 CoreWeaves. If you have a public company trading at a crazy high multiple—20x revenue—that has existential losses, you’ve got to use your stock as your currency ASAP. You’ve got to buy everything you can that can address the bottom line or other challenges you have, right?

These are fun times. If you’re a target, you can get bought in an hour because the CoreWeave corp dev team is going to be looking for 20 assets that they can buy that can fix some of the structural challenges in their models. We haven’t had an IPO like this in a while. We haven’t had someone searching with high-priced equity, and it’s a great deal for everyone to turn high-priced equity into cash.

Jason Calacanis

I don’t know if they even see the challenges in the model as much. It’s not the negative in the model; it’s just the nature of the model. The nature of the business is you buy things, fix that. They have long-term contracts against them, so they’re a lot less exposed than some of these guys that are doing short-term contracts.

6. Is Circle Next to Go Shopping with Meme Equity?

But it’s just a fixed-cost business. You own this great big freaking data center and all these machines, and as long as there’s money coming in the top, it’s fine. If not, it’s brutal. So it makes sense.

All I was thinking was, well, Jesus, look at the other meme stock being Circle. Why are they not leveraging their stock appreciation to do the same?

Jason Calacanis

Probably because they’re still not out of the first 90-day period, where it’s a pain in the ass to do it. Believe me, I am willing to bet that, because CoreWeave—remember—has been out there a couple of months longer, at least. I can’t remember. I should know.

Generally, there’s a period of time where you want to put 1 or 2—at least 1—earnings releases on the board as the asset that you sold to your investors before you start doing crazy deals. I’m sure that stock is burning a hole in their pockets too. They’ll do something.

Yeah, they’ll do something. But Circle had net income of $156 million last year. CoreWeave—they both have inflated stocks. They both should use it to enhance their business models, and they will.

But it is different if you’re profitable, right? If you’re net positive, you think about these deals differently. If you’re burning cash, no one sweats the dilution from an existential deal. You just do it. It’s like, “Let’s get going, guys,” right?

When you’re profitable, it confuses a lot of things. It impacts your earnings. It impacts—you care more about dilution. There are a lot of things going on when you’re profitable.

Jason Calacanis

Yeah. I think if Circle does something, it will be about buying distribution because, obviously, their biggest cost is the money they have with Coinbase. Finding other ways to get their coin in the hands of users will be their thing, whereas, obviously, for CoreWeave, it’s just addressing their cost structure over time.

It’s a weird thing. It’s like SBC. If you’re losing money as a public company, for real, you don’t care so much about dilution. It’s just more dilution to achieve your goals. You only really start to care when you cross the curve to profitability, right?

You’re exactly right. I would just note: it’s not that you don’t care. It’s the Maslow hierarchy of caring, right? If you don’t make profits, then it doesn’t matter because you’re screwed, right?

That’s why VC, and that’s why early on VCs are right to keep an eye on dilution but not get all antsy about the economics of it.

Jason Calacanis

Just keep an eye on dilution because the way I think of it is, we're all in this together. If we create something of value, everyone gets a share.

You're exactly right, Jason. Once you've created something of value, then a decision to allocate some of that is a much more meaningful economic term. I could not agree more. It's why the way to think about SBC as a venture firm or a pre-profit company, and the way to think about any kind of dilution, is just very different from when you have a cash-flow-positive asset. It's a different thing.

7. PE Is Back: The Olo Take-Private Explained

Speaking of different things, a different kind of asset, but one that I found very encouraging was actually Thoma Bravo going shopping with Olo. $320 million of ARR, GAAP-profitable business, looks decent, and it's bought for $2 billion by Thoma Bravo. Is this PE coming in to save the day, as we've heard time and time again? Remember, it was public as well, so they're taking it private.

Jason Calacanis

Listen, Rory may have more thoughts. I have talked about how, personally, I've been concerned—I haven't seen the PE deals I'd hoped with these funds raised. It's a good sign, right? It's a vertical SaaS player. If you want to compare it to Toast—I know, a tough comp—but it's $2 billion versus $25 billion, but you could see the upside. There are positives and negatives in that, right?

Defensible.

Jason Calacanis

It is defensible, right? Sticky. If you squint, maybe there'll be more of these vertical SaaS deals. Six times ARR, though, for us as investors, this doesn't buy the biggest house in Atherton. This is not going to buy a fourth house, right? This is like, at Yellowstone Club, we're just going to get a condo. We're not even going to get something on the hill at 6x ARR.

You're right. It's a meat-and-potatoes deal. That was my aha. It's a 20% grower, profitable, 6.5x; all's right with the world. Sensible kind of deal, right? It's exactly the kind of deal they should do. I think it went for $10 a share. I think the damn thing went public for $25. So, just as a reminder, what happened here: it went public in 2021. Hopefully, the VCs made money. I can't remember who did the deal.

It trades back way down, and obviously it gets to a point where, after 3 or 4 years, people are willing to transact and the buyer's willing to pay 6.5 times. So, total solid meat-and-potatoes deal. If you've got any more 20% growers that are profitable and have, as Jason said, good defensible vertical niches, I'm sure they'll be glad to give you 6.5 times for that too. It's a start, but it's not going to save 500 to 700 unicorns single-handedly, right?

Yeah, it is. I think that 20% number—we talk about it a lot in venture at scale, right?—but it's an example of how important it is. You've got to be above that number to be of interest, probably, right? And profitable.

Jason Calacanis

And profitable, right? Yeah, it's still probably Rule of 25. We should look it up, right? But you've got to be above 20 and profitable. There are too many unicorns that are profitable but not above 20 or 25, right? But, yeah, that's your 6x outcome.

What are they underwriting this to? Is this like a 3x?

Jason Calacanis

Probably only because, yeah, I think that business is inherently a 2x-to-5x kind of business most of the time. So I'm sure Thoma Bravo is looking at this going, you know, there's 5 other pieces of technology you can bolt on here, sell to the same customers, do the kind of thing that, frankly, PE does well—to some extent, I would say better than us—which is just figure out what your top customers want, go buy the other little things, bundle it all through, get more share of wallet from the top 500 restaurant chains, and just build a business here.

I assume that's the playbook, guys. When I listen to this—and I'm a founder, okay?—I hear crazy payments being made for venture funds. I hear PE coming in. I hear massive meme-stock price rises. And then I look at Carta's data: VC deals at an 8-year low. It's hard to raise money for a lot of founders. What world are we living in? How do you think about these 2 paradoxical statements—everything we've discussed combined with VC deals at an 8-year low?

Jason Calacanis

I think they go together, and it's tough. I think what's happened is there's a whole bunch of things all pushing, I think, to use a really nice phrase, a flight to consensus or a flight to quality. The truth is, there's a small number of things that are working really well, and everything else looks dull in comparison, right? It's struggling to get attention. It's become a very consensus bet, and there's a whole bunch of reasons for that. We've talked about this before. The whole staying private for longer means a much smaller number of companies are going to get all the way, and they tend to get all the attention.

Second, entirely separate comment: I think the early AI market—the run in the early AI markets—has been very much attention begets more attention, gets more attention. So if you start to pull ahead, provided you continue to execute, it's very hard to catch up. I mean, take coding, for example. Cursor pulled ahead. It is better, but there were 20 people trying to do it. You get that early lead and it builds on itself, right? Then the other people are just left in the dust, and it doesn't matter that they're nearly as good, because the sad truth is no one wants nearly as good, right?

8. Why Triple, Triple, Double, Double Is No Longer Sexy

So it's a very steep fall away from the small number of things that everyone wants to a much wider number of things that might just be okay, but they're not amazing. And that's a very hard time, frankly. It's a very hard time as an investor. If you're not in one of the amazing ones, you kind of have your sad face on. You're working hard, you're doing your job, but nothing's exploding, right? That's when you've got to keep your head, keep the companies moving forward, converging on acceptable growth, acceptable profitability. But it's a weird time, because you're reading about all this amazing stuff and then you're going back to your day-to-day job, which most of the time is a grind.

Is it really a sad face, though? Because before I've said it's the end of triple-triple-double-double, and I remember you said to me, “Oh, I'd take triple-triple-double-double all day long.” But triple-triple-double-double, bluntly, is boring today. That's not 0 to $100 million in a year. That's not Lovable, Bolt, Replit, or likely Mercor, any of them.

Jason Calacanis

But you know what? It was funny this weekend. I was talking with an entrepreneur that was on the triple-triple-double-double path in a space I know well, part of GTM that I know well, and there was nothing to criticize, right? Frankly, with the little data I had, the deal size was right. The construct—if this was even early 2023, I would have done this deal probably, right? But today, there's so much competition, the differentiation's less clear.

The founder is generational—I hate this term. I mean, I put that in quotes, Harry; you use it a lot.

It's a fair criticism, but are they really a generational founder? What was the criticism?

Jason Calacanis

I just passed. I hate this term. I said to the founder, “I've got nothing to criticize. You have the numbers. You have a great approach. It's interesting.” It's just, in 2025, my brain—I just, this isn't—I only have so many shots on goal. I don't want to take this shot today, right? And that ties to the Carta data, right? People want to swing more for the fences. Either it's there—it's off to the races, right? Or they've got to believe it, and people have just got to swing harder. Nothing negative to say about this triple-triple-double-double dude. Nothing. Nothing.

Rory.

Jason Calacanis

Yeah, no, I agree. Nobody stays down on the farm when you can play in the gold rush. The attraction of that kind of upside, the truth is, it draws everyone's head. If there are 2 games, let me put it this way: if there are 2 games and 1 of them has that embedded 10% chance of amazing, like $20 billion, a Cursor outcome, and 1 of them just doesn't, it's actually a very interesting math question to say how much cheaper does that other, non-Cursor-embedded-upside deal have to be to cover for the fact that it doesn't have that kind of outsize tail outcome on it.

And I fear the answer is either it has to be a lot cheaper or, even worse, there's no price at which you'll do it. But the triple-triple-double-double, less AI-centric, are not realizing that they will have a discounted price because they are not this new wave of company. And it's hard, and I'm sorry for them, but it's just the truth.

Agreed. And I think that there's a price at which you can make your target return. I remember looking at a deal that had a strong founder, good economics, good growth, and a midsize market—nothing amazing. There's a price at which you'd say, “You want your base-case return to work there,” right? But it's quite a big disconnect.

It's interesting, though, Rory, if you and I were partners at Scale—and I hope I'm not overstepping here—I would be 1,000% in favor of sticking with triple triple, double double because we have a much higher certainty of winning there versus going for the AI halo moonshots, competing against Thrive, Founders, and Andre, where the Scale enterprise brand doesn't carry the same weight that their glossy brands do. You have a tiny chance of winning versus a massive chance of winning in the triple triple, double double, where most people have left.

Jason Calacanis

I will absolutely look at deals where you have that profile, but it has to have that profile, that valuation, that upside, and that kind of pricing such that you can pencil out the return, right? And, you know, it's there.

More than anything, I would say—and I've been thinking and processing on this one—the problem with the private-for-longer dynamic is that you can do those deals when they're already at scale. If they're at $50 million or $60 million and they're on that trajectory, right? The problem is when you go super early and you're predicated on follow-on rounds. Some of your destiny is outside your control, and if people aren't willing to fund it, you're taking that risk there.

So you either have to have existing small scale, you have to have sufficient traction, or you have to have confidence in profitability, right? It's not just enough that you have to like it. Enough people have to like it along the way to be able to raise the money and get there.

I'm more intimidated by the deceleration at scale of folks I did not expect to decelerate. So I want to know earlier that you are clearly differentiated in a way that can win, right? That's what we gave up on in 2020, 2021, and 2022. We didn't care what the difference was between a lot of B2B players.

I'll do the triple triple, double double, but it's got to be durable for real. You have to dominate some segment of your market for real, for a real reason that is enduring.

Everyone who's been in the business for 5 or 7 years did a whole bunch of deals that were growing like crazy, man, in 2017, 2018, 2019, 2020, and 2021. They've all decelerated at scale, and they now have a bunch of deals at $100 million to $200 million with 10%, 20%, or 30% growth rates. Most of their waking hours are spent figuring out, “What the freak should they do with those deals?” It's human nature that the one thing you don't say to yourself is, “This is so much fun. Let me add to that collection.”

The other comment I'll make is this: The industry as a whole is probably making the same mistake with AI deals that it made in 2021 with a range of other SaaS fields, which is extrapolating the current growth rate to the sky. You have to have some theory of the case and how it all shapes out.

Now, across the Lovables, across the Cursors—and that's why I deliberately mentioned data center spend slowing down—you at least have to contemplate that and say to yourself, “In the 20% chance that happens, the scar tissue from those 2021 deals may be a small part of this slowdown.”

Speaking of riding momentum, we saw Vanguard adding PE exposure. To Jason's point here, is this the top?

Jason Calacanis

I think it's terrible. I mean, look, we discussed this before. The industry keeps looking for new sources of capital, in part because some of its standard sources of capital have issues to deal with, most obviously endowments. So that's probably not as true for PE; they're just bigger. But pension funds—people continue looking for stuff.

It's high-fee-bearing, which breaks your heart as a Vanguard ETF and mutual fund investor, but so what?

So what does it actually mean for venture? For me, sitting in my venture seat, Vanguard adding PE exposure—how much more money is going to come into the industry?

A bunch. All the PE shops have been doing some version of this. We talked about Coatue doing it in that crossover. All the Blackstones and all those guys have been doing this. This is a category. This is a trend that's going to happen.

I don't think it's going to be the same wall of money as sovereigns or pension funds. It's just another source of capital. Another—pick a number—20% more. What the heck?

I think structuring it for venture will be harder because you have to make all these partial-liquidity assumptions, which will get tricky for venture. I don't know if you saw it, but likely Elise Stefanik, who continues her crusade to make Harvard's life miserable, is indirectly going to make PE's life a misery because she's been saying, “Hey, Harvard, your accounting is incorrect because half your assets are PE and other private assets, and they're not marked correctly.” So that process is ongoing.

The whole process of private marks is challenging, and the less sophisticated the investor, the less able that investor is to take the long view, the more challenging it becomes. My guess is the retail investor is least in a position to do that.

So, listen, here's a bad sign: They're partnering with Blackstone on this, right? And they want to offer PE access in target-date funds. I mean, listen, we can talk about the pros and cons of target-date funds. They have their place in a nontaxable account.

What's a target-date fund?

Jason Calacanis

Target-date is—Harry, you don't even need to know anything about investing. When do you want to retire, Harry? What year would you like to retire?

80 years old.

Jason Calacanis

So, 2075. Well, we have a 2075 fund for you, and it will start off today at 95% equity and 5% bonds, and each year it evolves.

And when you hit 78, you'll be—I mean, Rory, you can correct me if I'm wrong—but you'll be 95% bonds and liquid and 5% equity, right?

Clearly, you're not spending any time thinking about retirement, Harry, which is entirely sensible at your age. But yes, Jason's exactly right. These are structured products for the mainstream market.

If it wasn't for the fees, they're a broadly good idea. You don't know, Mr. or Mrs. Whatever, how to think about equity versus other things, so we'll just make one big decision and land the plane for you. Sometimes part of the issue is that the fees are high relative to what you get, but it totally makes sense.

But, Jason, to your point, you're putting these in there, and one thing we know about venture is you can't target your return date, right? If you could, it would be easier. It's a hard asset to fit into a liquid individual portfolio, and I think they'll try. I think it'll be hard.

To your point, if Vanguard has $10 trillion, putting 10% of that into venture would move the needle. But I just don't think ordinary investors should be doing this stuff. It's just part of greed. Too much greed.

The hunt for alpha continues. The hunt for alpha always continues because that's what we're all paid to do. I think the 3 of us should create a target-date fund that actually does better than average. A target-date fund is a fund for folks who don't even know how to spell alpha. They don't care. They don't know, and they don't even want to learn what a stock or a bond is. You're going to put private equity in it, but we can maybe make a better version of this product.

9. QSBS Hack: The Billionaire’s Tax Loophole You’re Missing

You mentioned Harvard there and life being hard for them. There was a $1 billion funding gap, and Stanford are doing layoffs. They weren't huge layoffs, but layoffs all the same. How do we feel about the health of where they're at? How concerned should one be for them, and how should we think about it?

Jason Calacanis

There are 3 levels to that question. If you're asking about the impact on venture investing, as venture as a source of capital, that's an easy question to answer. They're obviously going to be a lot less active.

Are you asking about the impact on the institution and the wider societal things? It looks tough. It's a terribly unfortunate way of making policy because a whole bunch of humanities kids yelled in the quad about political issues, and you're firing the poor guy who's been in his lab for 10 years trying to cure cancer. It's a very awkward way to make public policy and punish the wrong people—to punish the institution.

I don't envy anyone running one of those institutions, and I hope they can figure it out because a lot of what they do is really good. Not all of it, and not some of the most visible things. Those are quite annoying.

But when you look at the things that have been cut, as distinct from the things where you kind of go, “Oh, that's a waste of money,” the administrators aren't getting whacked at scale. These programs are getting whacked—programs that are cutting science and small grants to graduate students to do amazing freaking things, just when they're most productive and useful. So I think it kind of sucks as an outcome.

I just thought it was interesting—not in a good way—but Stanford blamed its $140 million budget cuts on federal research funding, which is the issue that you're talking about. But they also said there could be a potential increase in endowment taxes. There is a cost to these endowment taxes, right? Taxing venture, in a sense, by taxing endowments.

Jason Calacanis

It isn’t free. It will lead to a decline in investment and a decline in human capital.

We did get a QSBS break in the new tax bill, and I do like that. Everyone got a little something. The deficits may ruin us. As Elon said, we all have to move to Mars, but I got my piece. I got my QSBS to $15 million, and I’m excited for it. I got my piece. I got bribed in the tax deal.

What I’d really love to know, and I just don’t, is—I have this vision of this crazy sausage-making machine, and there’s a whole bunch of agendas: to pound it to the solar guys, to pound it to the universities. This is an administration that has its hate list and works down through it pretty methodically. Then somewhere, someone crops up in a meeting—I can see it—“Despite all this, guys, let’s cut a deal for the QSBS guys.”

Whoever that person is, next time he’s running through San Francisco, all he has to do is email me, and I’ll get him dinner, right? Whoever was in the room and said, “Let’s go backwards $15 billion to give it to these QSBS guys”—whoever had the juice to push that through, maybe it’s Peter Thiel and the Bilderberg, whatever conspiracy—I love it. I’m in.

How much QSBS benefit do you get in the end at the GP and LP level? Some of it isn’t going to qualify, right? Some of it is, some of it isn’t.

Jason Calacanis

It’s not as big a thing—if that, less than that.

For folks who don’t know—and Harry, you might not even know—in the U.S., my taxes in California are 50%. I know all you Brits are complaining about taxes. I think Rory and I pay more than you. But we get 1 weird, quirky tax break: if you invest in startups or small companies below $50 million in assets—now I think it’s $75 million—you don’t pay any federal taxes on the first $10 million in gains. Now it’s $15 million.

Every LP, to the extent they’re individuals and to the extent they’re taxable, gets $15 million on their distribution too—no federal taxes. California taxes it, which is pretty annoying, but most states—a lot of states—don’t tax it at all. So you could have no taxes at all on startup gains.

For whatever goofy reason, it got increased 50% in this tax bill. So we all got our little taste.

That was mega. So basically, you have no capital gains on angel investing?

Jason Calacanis

No—on angel investing, yeah, up to $10 million, now $15 million. And, frankly, you can stack it with trusts. For me, it’s probably $40 million to $50 million per exit because I have 5 trusts on this. That means for each exit I get $50 million that has no taxes. It’s possible to do it to $50 million, but it’s really complicated. Now $75 million, but it’s complicated.

Rory, he clearly has a big condo in Yellowstone with his trusts.

10. Microsoft’s AI Layoffs: Salespeople Are Dead, Long Live Engineers

Jason Calacanis

Yeah, I have 5. That’s the only tax break. I mean, Rory makes the point: you’ll take the nickels, and you might as well pay 50% tax in California because it’s the best place. But for me, this is my quiet motivator to do early-stage investing. At least I can avoid $15 million of taxes per deal.

Okay, we’re going to do a final one, which is Microsoft. Microsoft laid off 9,000. I know, in the grand scheme of their workforce, it’s not huge. It’s still 9,000 people, replacing generalist salespeople with solutions engineers. I was walking with a Clay founder the other day. They don’t have salespeople either; they have pretty much the same. Is this the future for everyone? This bothers a lot of generalist sales folks.

Jason Calacanis

We could have a longer discussion about how much of sales will be replaced with AI. My rough sense is 30% to 40% of 1- to 2-call sales reps are going to be replaced by AI. It won’t be the same as with support, but it’ll approach it. It’ll be relatively small in the enterprise.

Everyone’s like, “Oh, well, you can’t go to Pepsi, and AI is not going to show up.” But you know what’s going to happen? It’s what Clay talked about: forward-deployed engineers, or what Microsoft is doing. We’re not going to have a guy who doesn’t know our product, in the age of AI, show up to big deals. I would rather have a solution engineer who knows this cold, who partners with somebody and is less good in sales.

So I think you better be worried if you’re a generalist sales guy who thinks being a relationship guy wins today. That’s Microsoft’s point. We don’t need relationship people. We need folks who know the product, because AI has raised the bar for customer expectations.

Here’s the important point: it has raised the bar. Microsoft’s doing what everybody wants to do—replace folks who don’t know my product with folks who do. What’s interesting is it wasn’t couched as a replace-with-AI story. It was couched as a replace-with-better-people story. It’s hard to argue with that.

It’s always impressive to me that these companies with 40% operating margins are still willing to grind another point out of it. It’s just so capitalistic. It’s great to see.

Just related to it—I thought I could tie it back, but I thought it was super interesting. I didn’t see many folks talk about it, but Canva is doing an AI Discovery Week this week, where all 5,000 people are released from their normal jobs to learn about AI because a lot of employees were saying they’re too busy to learn AI. They’re too busy at their daily work at Canva to learn AI.

There are classes and teachings, and the CPO was very clear: “Come on, you’ve had free ChatGPT for a year. You’ve had free Claude. You’ve had access. You can pick from a bevy of tools for a year, but you’re still too busy to learn AI. So here’s your week, guys. We’re going to have classes, teach-ins, sit-ins, and a hackathon.” It sounded great.

11. “If You Need a Week to Learn AI, You Should Be Fired”

Jason Calacanis

This is the angst I hear from folks who’ve been around Rory for a while in B2B, and you see it on LinkedIn and in person: “Rory, I need to be reskilled. I’m frustrated. I need to be reskilled.” I think reskilling doesn’t work, and I think Canva is basically saying, “Get off the can, guys. Here’s your week.”

It’s 2-fold. I think, 1, if you need an AI Discovery Week, you have people who aren’t curious enough to want to progress in learning that job. And I mean this—it’s a kind way, it’s a kind way to say a lot. I’m really sorry.

I’m on the board of a public company, and I got asked the other day, “Harry, what do we do with employees who are not embracing it because they are fearful of it and don’t want it?” I said, “You fire them.” Yeah, I’m sorry. It’s super unfortunate. I do not say that happily, but if you don’t want to embrace it, you are going to make this ship sink.

If you need a week for an AI Discovery Week, I promise you, you’re not going to work. You’re going to go and take the kids to the playground and go eat chocolate in the cinema. You’ve got to be curious yourself. This is not the way to do it.

Well, it might be, in that I think a lot of leaders are trying to do gentle messaging, right, and stage it. I think this may work for Canva, or it may just be their warmer way of doing it, right? Here’s your week. It’s also notice, right? It’s notice to those folks too, isn’t it?

Jason Calacanis

Yeah, I agree. In many respects, you’re both correct. To me, this was performative: we’re letting you all know the expectations. That way, 2 months from now, to Harry’s point, when you’re deciding as managers that some people are surplus to requirements—we’re all humans—you can sit down with them in HR and say, “Look, you had your opportunity. You didn’t take advantage of it. We’re moving in a different direction, and here’s your package.”

Big-picture zoom, it doesn’t matter. There are lots of different ways to do it. If you’re managing—let’s just say we’re not talking about the new crop of startups where it’s all you people who are AI-native, but all these large tech companies that have 10 or 20 years of employees, and you’ve got to get on the AI journey—one of my big theses is it doesn’t matter how you do it. Don’t overanalyze it.

Some people might just fire people out of the gate. Some people might do a training week. Some people might do a training month. We know the direction of travel. 2, 3, 4 years from now, you’re not going to have people who say, “I’m too busy to use AI.” They’re going to be long since gone, right? You’re going to have people who’ve been automated away, and then you’re going to have people who are using the products and are doing the automation.

How you do it—maybe Harry’s just meaner than the nice people at Canva, who seem to have done very well, by the way, by being nice. So let’s not have any complaints about that. By the way, Cliff Obrecht is amazing. He’s the co-founder and COO. He’s super nice, lovely dude. Always been great to me. So that wasn’t a knock on him. It was a knock on, say, how much time do we all get to get with the program, right?

Totally. One thing that we did here at 20VC is every Friday, everyone has an hour from 4 to 5 where they get to try new tools. It’s much nicer to do it in a continuous way, where it becomes a habit and it kind of becomes fun, which you also do in the office together.

And then we do a show-and-tell from 5 to 6 on what we've learned and what's cool. It's a really cool way to do it.

12. Kalshi Quick-Fire Round

Jason Calacanis

Agreed. That's nice. It doesn't matter how, as long as you just keep moving forward.

Okay, so we're going to do a Kalshi quickfire. As you know, this is a speculative marketplace. There are bets. You always want me to say the exact odds, Rory, quite rightly, so I will, exactly for you this time.

Number 1, this one's a good one. I love Shaun, and so I'm going to get in the firing line here. Shaun Maguire tweeted some controversial things recently, again, about your New York mayor thing. Sorry about that. Everyone's really quite upset about it. The question is: will Shaun Maguire leave Sequoia this year? Yes, $348; no, $115. In other words, highly unlikely—the market is saying highly unlikely.

Jason Calacanis

Not exactly. “Highly unlikely” doesn't mean that he's not going to leave, right?

Yeah, I'll take the bet, then, that he will, and I'll take this actual bet with you. Whatever the money is, I'll do the bet for real. I'll 1,000% do that. Am I understanding this? There's almost no chance he's going to leave based on this bet, right?

Jason Calacanis

Pretty much.

Yeah, yeah. I can tell you why. I'll take the bet that he leaves this year. I don't know him—I don't know him, right? I'll take the bet.

Do you know? I see you know his investments. If you knew his investments, you would never take that bet.

I know, I know that, and there are different ways to leave. You could transition.

Jason Calacanis

I just don't think—listen, we're in the age of X. One great thing about X is we see the grouchy billionaires. We see just how unhappy so many billionaires and mid-centimillionaires are. The happy ones go off and leave their venture, a multibillion-dollar venture fund, and join Meta, right? The unhappy ones just use this as an endless megaphone, right?

I get his points, and they're just so amplified. You could leave as an investing partner, you could become a venture partner, you could transition. I'm giving myself credit for all of this bet, Harry, that the answer's nuance. It's most favorable to me that I'm not saying he's expunged from the website. I'm just saying if this keeps going week after week after week, I just think it's a sign his head is not into the investing.

I think a lot of his returns have come from working with Elon, and Elon loves this. So he's actually giving his client what he wants, right? He might get promoted for this, right? Congratulations: you pissed off 2 million people, and the owner of X, SpaceX, and Tesla loves you. You're in.

So, on the merits, quote-unquote, of whether or not what he said is going to result in anything, I don't see it. I'm on the no side.

I mean, the only argument for taking the yes, Jason, is more—look, statistically, X% of people seem to leave every year. So at some point, the bet's not priced in. That's what I'm saying. I think this is a tell. There's a higher-than-otherwise chance he leaves this year. That's all I'm saying. I'm not saying anything more clever than that. I'm just looking for the tells.

As we've learned, we know a lot of folks in B2B that have quietly retired over the last year or 2, and it's not clear on Twitter that they have. We know folks that have, right?

State of the economy at the end of 2025: soft landing, 76%; high unemployment, 16%. There's no actual dollars tied to this one for some reason. This is easy, right?

Jason Calacanis

Roughly 1 in 7 years, the economy is in recession. So you should say, if someone asks you, “Is there going to be a recession?” the default probability is about 16% to 20%. What this is saying is that the economy is no more likely than it normally is to be in recession, and I'd say that's about priced right.

My perspective on that is it's a roughly correctly priced bet. You should wake up every day and say, with no new information, the Bayesian prior is there's a 1 in 6 or 1 in 7 chance that 12 months from now things will go badly. When you start seeing the VIX climb—and that's why you saw it when the tariffs came in—when the VIX starts to climb, that 1 in 7 chance goes to 1 in 4 or 1 in 3. Then, when things come down, it goes back to normal.

What this bet is saying is we think things are roughly normal now, and that's probably a fair description.

Do you think, at the end of 2025, it's a soft landing or high unemployment?

Jason Calacanis

I think it's probably about right. I'm actually indifferent on the bet. I think it's priced right.

So, do I take it or not?

Jason Calacanis

No. I would pass on putting money in that bet because I think it's priced right. I don't have differential information. Maybe a better way to say it is: forget the bet. Just tell me which one you think it's going to be.

Which one?

Jason Calacanis

I'm not going to tell you, because the whole point—actually, that's why you're asking a dumb question, Harry.

Kalshi is worth $2 billion. There are no dumb questions. There are no dumb questions on Kalshi.

Jason Calacanis

There's no evidence anyone can call it. Actually, I think Kalshi, by the way, is the real insight here. Kalshi is calling it correctly, and I agree with Kalshi. Kalshi is saying that there's no more information about the probability of a recession at the end of next year than there is in a normal year, and I'm with them on that.

But how do you—if it is 1 in 7, right, and we haven't been in a recession for multiple years, how does that factor into the bet? The odds have to increase because you haven't been in a recession for multiple years.

That's a very interesting question. I'm going to answer that because he gets an interesting question and I get a stupid question.

Jason Calacanis

No, no, no. Why? Okay, well, you said it, Harry. It's like flipping coins. It doesn't make it more likely that heads are due, but this is the opposite of a flipping coin. There's an expression: booms don't die of old age. In other words, what you're saying is just because it's been great for 6 or 7 years doesn't mean that it has to die in the 8th. Australia had this run of 17 years without a recession, right?

Logically, my mind says it should, and I think unless what really happens is you do dumb things—because we're human, we invariably do dumb things—it could go on for a while.

Yeah, that was a smart question, Jason. Thanks for that one, dude. That was smart, dude. You're good.

Jason Calacanis

I can see why. There's no chance we have a recession at the end of the year. There's just no chance.

No chance? The 1 in 6 chance, the 1 in 7 chance—I'll take that. I'll take that. I'll put a grand in on that bet.

Jason Calacanis

He's putting bets down all day long.

I'll tell you why I would do it. I would probably do $50,000 instead of $1,000 if you want to do it, Rory. The technical definition of a recession is pretty tough to meet.

Jason Calacanis

True, that's right.

So I'll put $50,000 on this one if you want to do it, because I don't think there's any chance we'll be in a recession by the end of the year. Even if we are, I don't think it's going to be called a recession yet, right? It's already July, so I'm thinking maybe $75,000. I'm going in on this bet.

Jason Calacanis

No, I'll pass. Thanks. But that's a good point. You're right. Besides, even if it's not ripping, we won't know.

You know, it's always the highlight of my day. I have the most fun on these calls. Honestly, I love doing this with you both, even if it's incredibly humbling being informed that after 10 years of asking questions, I still ask questions.

Jason Calacanis

I think you're pretty good.

Thanks, Jason. I love you too, dude. I miss you.

Okay, what else? Come on. Okay, final one: Linda Yaccarino. Does she leave X this year?

Look, this is a tough one, right? As an outsider, I don't see any merits in her. I just don't, not from day 1, right? It's hard to see. There's just no way he wants to run this thing, right? Especially the core X. She's not working on AI and Grok. She's managing advertisers and the P&L.

So I think if it's not broken, he's not going to make a change, right? This is a murky one, but I say she's here through the end of 2026.

Jason Calacanis

Wow, through the end of 2026. Even higher. He just fired his head of Europe; now he's head of European sales for Tesla, too. You can't—it sounds fun to fire everybody on the team. There are moments in time when you need to, but, man, you have to keep a few pieces going on the board. Even if you're on Adderall or whatever he's on, there are only 24 hours in the day. I think he's going to keep this soldier in place.

Yeah. I think the interesting one, obviously, this week was the market response to the new party and, correctly, the Tesla response to the new party, which was shareholder barf. I was just reading Dan Ives straight away.

You guys both said no to that, by the way.

Jason Calacanis

I think I was still right. The definition of a good kind of forecaster—and we've talked about superforecasting, I think, before, in Philip Tetlock—is that you update your priors with new information. The fact that he went on to form it does just go down that route.

Yeah, I would update your priors on whether he should still be CEO at the end of next year. You kind of say to yourself increasingly, “Are you the right person to be running that company?”

I don't think he formed a real political party the way the bet was.

That’s why, not to spend too much time on it, I don’t think he’s going to run candidates in all 50 states. He’s not. This is a tactical move that, if it happens, is at the edge of what a political party is.

So, as much as I love Cal, you’ve got to give me a little credit for definitions here, like recession or political party, right?

But Cal was a lawyer, right? Jesus, come on.

Jason Calacanis

No, what he’s apparently doing is cleverer than I thought. You’re just going to contest a few elections where money matters, right? And that’s it.

If that’s what he does, it’s very different. But I want to put down that I think it’s not clever at all.

Jason Calacanis, you’ve said very clearly yes, you think she will. Rory, are you quite as blunt as saying she serves no purpose?

Jason Calacanis

I don’t know enough to comment, so I’ll pass on that. As I say, I’m more willing to be opinionated on the wider CEO issue, but I’m not opinionated on that. I don’t have a clue.

I mean, if she has a tough job, if you run a social media platform, how can you not be out there? It’s just weird, isn’t it?

I agree. I agree. Is she coming on 20 anytime soon? Let’s get her on.

Jason Calacanis

Harry, I want to see you and her. Just tell her it’s a friendly environment. I want this question answered.

Yeah. I’m going to ask my final, final, final one. It’s not a bad one—just stupid quick thoughts. Do CoreWeave and Circle sustain the super-high stock prices? Does the memeification of their stock deflate?

Jason Calacanis

Yeah, I mean, if it is a meme, then it does, of course, deflate. The real question is: Did the investors at the time of the IPO significantly underprice the asset, and have people now realized that, in fact, the correct price is the much higher one?

That’s—I can’t speak to that. When we looked at the Circle numbers at the price they’re trading at, it felt very lofty relative to fundamentals. Traditionally, most of these companies, most of these post-IPO or pre-lockup stocks, drift down significantly if the valuations are way above any kind of near-term fundamentals. So you’ve got to believe the downward pressure is there.

Right, boys, time to wrap. This has been so much fun. I love doing this and, again, Rory, thank you for coaching me on questions. I’m getting better.

Jason Calacanis

One day, one day.

Rude. I know. I’m going to pause. It wasn’t that bad a question. I actually thought Jason’s was a really interesting one.

Seriously, does the probability of a recession increase every year that goes by without one? Because it’s the classic in statistics: Are they independent or correlated events, or is there some kind of buildup?

Jason Calacanis

There’s no reason that there should be a buildup. But, in fact, there is because of humans. The reason there is a buildup—the reason Jason is more right than me, actually, upon reflection—is because when times are good, people pile on dumb, aggressive bets to make money, and the minute something goes wrong, it blows up in their face.

So, at the margin, I would actually revise my opinion and say Jason is right: The longer it goes on, the more likely it is eventually to blow, because it actually ties to your CoreWeave comment. Stocks get high, things get expensive, people take on debt, they do aggressive things, and then you wake up one day—the Charles Kindleberger thing, “Manias, Panics, and Crashes”—and you’re done.

And just to Harry, one thing I will say, in all seriousness: I don’t know anyone in tech media that can cross as many domains as successfully as you can. A lot of respect to you.

I mean, you can get really good at a narrow thing, right? But your ability, especially over the last 2 years, to jump across the types of guests and the domains—I can’t think of anyone else that can go that deep and be thoughtful. So, kudos to you for that one.

It’s easy to go deep on 1 thing or just be a student, but you’re pretty much S-tier.

Well, I super appreciate that. I leverage wise friends like you both, so I appreciate you both. Still a bastard.