Debt Spiral or NEW Golden Age? Super Bowl Insider Trading, Booming Token Budgets, Ferrari's New EV

Topic 1: AI acceleration. It was a big week for AI. A new study published on Monday, February 9, in HBR—Harvard Business Review—suggests that AI tools intensify work but do not reduce it. Two UC Berkeley researchers spent 8 months embedded at a 200-person tech company.

So, this is one company’s experience. What they found was that employees who used AI worked at a faster pace, took on a broader scope of tasks, and extended work into more hours of the day. Workers reported feeling more productive, but they also felt a little more stress and burnout. Sacks, your hot take here—your quick take on this study. Obviously, it’s just one company, but it does track, I think, some of my experiences.

Well, a few points here. Number 1, as you may recall from the prediction show for this year, my most contrarian belief is that AI would increase demand for knowledge workers, not put them out of business. And I think you see in this UC Berkeley study the reason why that might be the case: the employees who use these tools, like you said, worked faster, took on a broader scope of tasks, and actually ended up working more hours in the day. So, they did more work, not less, and even more effort rather than less—not because they were required to, but just because they were more motivated.

I think they were more motivated because their work was getting upleveled, right? They’re able to offload more menial tasks to AI, and it made their work more purposeful and meaningful. So, I think we’re moving from what some people—I think maybe Jensen—have called task-based jobs to purpose-based jobs. And I think a key skill for employees is going to be the ability to structure work for themselves and their AI agents. The employees who can do that are going to be far more productive than those who can’t.

That brings me to point number 2, which is that I think there’s a tremendous opportunity this year for employees who are early adopters of these tools, or so-called AI natives, to demonstrate their value to their employers. They’re going to be able to get a lot more done. They’re going to appear to have superpowers. They’re going to be the people in meetings who can take an assignment that would have taken days before and get it done in 2 hours.

Whether it’s a presentation or a spreadsheet, people are going to be shocked at how quickly they can get these things done because they’re going to be fast at working with AI. So, I think there’s a big opportunity there. And there was an article that went viral this week by Matt Shumer called “Something Big Is Happening,” where he talked about this career opportunity that’s going to be available to AI early adopters.

I think that brings me to my third point, which is that I think you’re going to see massive enterprise adoption of AI—not just chatbots, but agents—this year. But I think it’s going to be driven from the bottom up. It’s going to be driven by these early-adopter employees coming into their workplaces, bringing in these consumerized AI tools, and starting to use them at work, as opposed to top-down initiatives.

I think there are a lot of top-down company transformation initiatives happening in large enterprises where the CEO has tasked a team with figuring out how to use AI and how to transform their business with AI. Those initiatives are going to take months. They’re going to be studying what tools they should use, and they’re going to be doing RFPs. I think it’s ultimately going to be very slow.

While those things are trudging along, I think there are going to be these early-adopter employees who just make the transformation a fait accompli by bringing these tools into their workplace from the bottom up. In the same way that you saw consumerized SaaS tools spread from the bottom up in enterprises, I think you’re going to see consumerized AI tools spread from the bottom up in enterprises. I think it’ll ultimately be one of the big themes this year.

Couldn’t concur or agree more. Nick, throw up that tweet I did. I got 2 million views. Basically, I said, “Listen, if you got laid off by Amazon or Microsoft over the last 2 years, just learn OpenClaw and automate your previous job. Show you know how to use these tools. Go back to your boss and say, ‘Hey, I want to come back and automate everything.’”

Or go to startups. Every startup I know is hiring for this position: somebody who knows how to build and manage agents. There is no job requisition for this yet, or even a title. We should come up with what this person does, but it used to be called a prompt engineer. It’s no longer just prompt engineering. It’s managing, educating, and offloading work to an agent, and then making sure they’re actually doing it.

Right now, it feels like the people in my organization—I have 4 of them who are focused on this out of 20—I would say that their leverage is between 10 and 20X that of the other 16. So now I’m going down the slope of employees, from the most technical to the least, and trying to get each one of them to adopt and create an agent for themselves. It’ll probably still take 6 months, but when we do, I think our leverage versus a competing firm is going to be 10X.

As an example, in the podcasting space, we now have it going through podcasts looking for the best moments. Or you can just give it a moment, and it will clip the clip for you and put it in Google Drive. Imagine we’re all in our little group chat and you said, “Oh, from the last episode, can you get me a clip from minute 3 to minute 6?” Then it’s just on your iPhone. It’s just in the group chat. Boom. Nobody has to go find it. It just clips it.

We have it looking at our YouTube stats, our Instagram and TikTok stats, and then trying to tell us which clips are going the most viral, which ones have the most comments, and giving us strategies for how to make them go more viral. It’s really weird because it’s coming up with really great suggestions and eliminating all the reporting work that knowledge workers do.

Chamath, do you have a take on this? I know you’ve deployed the software factory, which is, I think, aligned with this revolution happening in real time. The last couple of weeks have been pretty big, with Claude Opus 4.6 coming out, ChatGPT Codex coming out, a lot of advances, and obviously the OpenClaw revolution that I’ve now done 7 podcasts on in a row. What are your thoughts, Chamath?

I think there are 2 open questions that I find really interesting right now. The first question is—and I tweeted this morning—is: Is on-prem the new cloud? It’s weird to think that that could even be possible, but we’ve spent years migrating everything to the cloud because there were these economies of scale. It created better margins and lower OpEx and lower CapEx because you could essentially share infrastructure with other companies. That’s how AWS and GCP have built such gargantuan businesses.

The counterpoint to that, though, is that in the AI revolution, companies, I suspect, will be fighting for their lives. And I think it’s very much unclear whether it makes sense for a company to allow the natural leakage of its edge and its confidential and proprietary information out into the wild, versus the control that it would get if it ran on-prem. That’s a really important question.

What do I mean by all that? Once you use these tools, it is difficult for a company to control how its data is used subsequently. If I give you, Jason, a PDF of some really important strategy document, a PowerPoint deck, or a really critical model, and you’re interrogating it with one of these models, if you’re just using ChatGPT—the mainline instance of it—you’re leaking all of that prompt and response metadata back to ChatGPT, back to Gemini, and back to Claude. There’s nothing a company can do about that.

If you’re using a set of agents to act on all that information, all those agent traces are going back to these model builders. That may or may not be a problem for some, but I suspect it is a deep problem for others, and they just haven’t uncovered it yet. When they realize that it is a problem, the enterprise will have to decide: Do I just give up and keep running all of this stuff in the cloud in the shared experience, or do I bear the incremental cost of running this stuff in a more coordinated manner that I control on-prem?

That would be a crazy shift, just to completely go back to where we were 20 or 30 years ago. That’s a not-so-obvious thing that may happen. So, that’s number 1.

Number 2: I also tweeted this. There was this really interesting ruling around what happens inside these cloud environments, which was a judge saying there is no attorney-client privilege and confirming that once you start to use those tools, all of that stuff is complete public-domain material. If you put these 2 things together, it creates a very interesting set of questions for enterprises.

You will need AI to survive. But if you use the tools as they exist today at a public endpoint, you will give up all control, all security, all confidentiality that you have today, and the ability to follow through and control what your employees do with it. The only solution is to have the pendulum swing all the way back and have private provisioned networks, which increases cost. But if you save a bunch of money because of AI, maybe it all balances out. That is the big question that I’m wrestling with right now.

Good insights there.

And I have some thoughts on on-prem, because I'm actually doing it right now. Friedberg, your thoughts on this moment in time, when we have people saying it's happening faster and it's become recursive? Recursive, obviously, is a fancy word for those in the audience who haven't heard it before: These models and agents can go out and improve their own work.

After they do some work or a job for you, you can have another agent say, “Hey, here's how to do it better,” or, “Go learn these new skills. Go use this skill over the last 30 days to find the last 7 or 30 days of best practices with this tool and make yourself better.” And do that every night at 1:00 a.m. What are your thoughts, Friedberg, on the moment in time we're in right now?

Well, I think the thinking historically was that it was going to be about recursive model development, where we were going to continuously improve the actual model. We were waiting for a context window where you could feed the model back to itself. You're effectively retraining the model continuously.

It may be the case that the output is what's recursive, and that turns out to be having the effect everyone was waiting for. So it's kind of a surprise. I saw a lot of computer scientists who have worked in AI for some time be a little surprised about this moment we're in, that we're seeing such incredible strides in model performance just by making the output recursive. So let's see how far it goes.

Are you still obsessed with OpenClaw, JCal?

I am. We have now seen that every week, 5% to 10% of the work we're doing inside our venture firm is being moved over to OpenClaw. We call them replicants. You can think of them as personas. We now have 3 or 4 of these. We give them a Notion account, a Slack account, and a Google Docs account. They have their own email.

I think all of this technology was here all along—or maybe for the last 6 months, let's say. There were really good models out there, but no company would give the keys to the kingdom to allow these agents to actually act on your behalf. Why? Because they don't want to be responsible if it ships your Bitcoin keys or your passwords to somebody else.

In order to use these, you have to trust them. If you trust them and then monitor them, the results are unbelievable. We've also, to your point, Chamath, fired up Mac Studios. We have Kimi on them, and we are moving all of the work onto these.

Then they'll use Kimi for most of their easy jobs, which is free. Then they'll use Claude Opus 4.6 to orchestrate things. Now that we have 4 of them, Friedberg, we've created OpenClaw Ultron, which is 1 meta-replicant managing the other 4. It checks their work, talks to them all day long about what they're doing, and then summarizes it.

We're building skills into each one of these. One of the skills is doing deep research. One of the skills is being able to go into our sales database, which is in Pipedrive. The gains we're getting—I was able to go through everything my Athena assistant was doing. You know, Chamath, you have an Athena assistant, too. I was able to take maybe 30% of the Athena assistant's work and give it to the replicant. That let the Athena assistant work on higher-level stuff.

For the average investment-team individual, we now have probably 20% of their work being done by agents in real time. The best part about it is they don't forget to do work. They don't make mistakes. Once you put this in, you don't need checklists. They just do it perfectly every single time.

Crazy.

And it's crazy. It's nuts, Chamath. So now I'm building, and I've been talking to Benioff a lot because he's got Slackbot. Claude's got Coda. But none of them have the keys to the kingdom.

I'm upgrading to the enterprise version of Slack, Chamath. You're, I think, probably your number 2 investment in your career. What an amazing investment that was.

It's number 4. Number 4. Okay, listen. Keep grinding. Top 5 investment for you.

I'm upgrading to the highest level and ingesting every single Slack message. Then I'm upgrading and giving the API key for every single email in our organization to Altron. They will know everything going on in the organization. It is mind-blowing how fast this is.

I'm investing in 10 startups in the OpenClaw space, $125,000 each, to come to the accelerator. If you're doing work on this OpenClaw at launch.co, email me what you're doing because we want to invest in at least 10 or 20 of these companies right now. This is the 100% focus of our firm. It is insane.

When do you guys think enterprises have a huge freakout around all of this and say, “Wow, we're leaking all of our most important information out into the wild”? But, Sachs, to your point, the industrious person trying to get ahead all of a sudden is using an open endpoint to make a deck better, and somehow all of that stuff is out in the wild. When they find out, people are going to have a freakout moment here soon.

I think there's a big opportunity to take something like OpenClaw and make it enterprise-grade and secure and all that kind of stuff. One of my partners at Craft actually created a new tool called Lobster Tank, which is a version of OpenClaw with some enterprise security wrapped around it.

On-prem is back. It's going to happen. It's going to happen. It's cost savings plus: Do I want to give all of the secrets in our organization, every piece of intellectual property, to Sam Altman, who's got to make $1 billion a year to keep up with his spend? Right? He's going to build every application. Let's not make it about Sam.

If I'm GEICO, do I want to have all of my actuaries using all of our private and confidential data on risk pricing in an open instance of an LLM? The answer is no. That's obvious. The question is, how do you adapt to that? How do you actually generate tokens in that kind of a situation? How do you reason in that kind of a situation?

That is a very expensive technical problem. It's not necessarily complicated, but it is technical. That will bloat the opex because you're going back to a place that you had said didn't make sense anymore. It felt very antiquated if you ever heard a company was on-prem. But AI may be the reason you can't afford not to be on-prem.

Yeah, and it's going to be on your desktop, too, because one of the solutions to this is giving each employee a really powerful desktop capable of running a local large language model, which right now takes a Mac Studio with 512 GB or daisy-chaining 2 of them.

I think that's what people are doing. Remember these VAX terminals? I think you could actually see a resurgence of that idea. You have a centralized computer and a bunch of dumb terminals.

Yep. You have a CLI, so you can interact with it that way.

But you could also fire up your own instance in the cloud and just run it.

Too expensive at scale. For example, 8VC is a top-20 customer of Bedrock. It's too expensive already as it is because of all this overhead, because of their margin, because of all the nonsense inside AWS that you have to pay for just to get access to bare metal.

Then you go to CoreWeave. Fine. But what does CoreWeave tell you? They're an excellent business. A, it's all training. B, you have this situation where too much of what you have has to be guaranteed into the future, because for them it makes no sense to price it on spot. If you buy on spot, you just get these surges you can't deal with. So there is no solution today that makes any sense.

It's absolutely correct, Chamath. I'll just put some numbers behind it briefly. With our agents, we hit $300 a day per agent using the cloud API almost instantly. That was doing maybe 10% or 20%. That's $100,000 a year per agent.

We're getting to a place where we have to basically say, “What is the token budget that we're willing to give our best developers?” If you aggregate it across all people, you can clearly see a trend where you're like, “Well, hold on a second. Now they need to be at least 2 times as productive as another employee.” That is actively happening inside my business because otherwise I'll run out of money.

Yeah, this is a very interesting trend that you're not going to hear anybody else talk about: When do tokens outpace the salary of the employee? You're about to hit it. I'm about to hit it. I think superstar developers are already there.

I think the rank and file is probably 10% to 20% max. More than likely, they're spending a few thousand. The average nontechnical employee is probably in the hundreds to low thousands. But to your point, the trend is what matters.

Yeah. So unless we have some gigantic leap forward in generating output tokens at 1/10 the cost of what they are today—which I suspect we will have, so bear with everybody for a while—I think Nvidia, Grok, Google, and AMD are all incentivized to massively ramp up the density and massively push down the token cost. That's going to happen.

But it doesn't change the trend, and it doesn't change the incentives around confidentiality. Let's talk about prediction markets, gentlemen. They hit critical mass this past weekend at the Super Bowl. More than $1 billion was bet on Kalshi, $700 million on Polymarket—almost $2 billion in wagering.

The media has been obsessing a bit about market manipulation, insider trading, and all these issues that are totally valid to discuss around prediction markets, which are something new in the world, at least at this scale. Two specific examples from the halftime show: A day-old anonymous Polymarket account correctly predicted 17 out of 20 halftime show bets, including the special appearances by Lady Gaga and Ricky Martin, but it only profited $17,000, a tiny amount.

And then another account, created less than 24 hours before the game, correctly bet on Bad Bunny's set list. The Wall Street Journal had an article this morning titled “Israeli soldiers accused of using Polymarket to bet on strikes.” Israel arrested several people, including army reservists, for allegedly using classified information to place bets on Israeli military operations.

The account in question raked in more than $150,000 in winnings before going dormant for 6 months. It resumed trading last month, betting on when Israel would strike Iran, Polymarket data shows. The name of the account: Rico Suave 666.

Okay, Rico Suave. Rico Suave, the name of the account: Rico Suave 666. I think that's also the alias that you were using in Vegas for a little while there at your hotel. Rico Suave 666. The platforms are regulated, of course, by the CFTC, but there are questions here about society getting used to this new platform.

Here's Kalshi's CEO talking about this on CNBC.

Joe Kernen

Let's say there's a cameraman who happens to be in the stadium during the rehearsals. You could argue that would be like somebody at a hotel who sees a rehearsal of a CEO giving a presentation beforehand. Those guys would normally probably have had to sign NDAs with the company because they would be worried about these issues. But in this context, they probably wouldn't.

Tarek Mansour

It's either one of 2 cases. Either this information can be public and that's okay, or it's information that cannot be public beforehand and that's communicated to the staff, right? The cameraman or the dancer. The reason why you don't know what song is going to be played first is you think that's not public and not everybody knows beforehand. It's a little bit of a surprise at the Super Bowl.

Yeah, but it's not material information that can't be shared. You're making it that by putting it on this betting platform, but they have no obligation to say, “We're not going to tell anybody our opening lineup because there might be money made on this other place that's now betting on this.” It's not their responsibility. The responsibility is not on them.

Friedberg, your thoughts, just broadly, on what I consider to be society getting used to these new platforms and what they represent in the marketplace of ideas.

I think the question is: Is it really insider trading if you and I were making a side bet, and I knew something about you and I had some edge or some advantage and I made a bet with you? Is that fair? Should the government have a role in regulating that?

This kind of goes back to securities regulation, where everything needs to be registered. Then there's this concept of inside information. It's a real challenge and a real question: How do you keep the open platform of opportunity for trading on anything while also trying to mitigate the risk of what people call insider information in these trades?

There's a good chart that I think we talked about in our group chat that shows the distribution of accounts. There are a few accounts that have a huge amount of money and make almost all the profits, and then a lot of accounts that have very little money and get burned through very quickly. They actually don't have an edge.

The accounts that have a lot of money generally only trade in things where they have an edge, where they make markets, where they actually have an arbitrage—yeah, sharps—and they eat up all of the capital. So if you're a marketplace like this, you probably also want to be thoughtful about the fact that, over time, you could burn and churn through all of your customers, all of the users on the platform, if they're constantly going to be making trades where they simply don't have an edge and all the capital, all the liquidity, is coming from the accounts that do have an edge and effectively trade off of inside information.

So just be aware that these things end up eating themselves up.

I don't know, Chamath. Man, we had Intrade. I'm sure you remember that, and I don't know if that was in the early 2000s. This idea's been out there, but it has clicked right now for some reason. What are your thoughts, broadly speaking, on the value of these platforms to society?

Let's define some terms first. In betting, there are 2 kinds of people. There are the sharps, who know what's actually going to happen with a better edge, and then there are the squares, which is everybody else, and they are grist for the mill.

In a traditional market, like a sports-betting market, there have been edge cases where you try to throw a game or throw a fight or shave points, and the sharps are involved in that. But it's increasingly harder and harder to do because the sports leagues analytically are studying these things so closely to make sure that never happens.

What you get are people with a smarter sense of what's going to happen and people with less of a smart sense of what's going to happen. The thing with prediction markets is it's not just that. There will be those things, but then there are going to be these fundamental markets that are purely about inside information.

The question is: What can a regulatory body or a society do about that? I think the answer is not much. The reason is that if you try to regulate this, it looks like a securities market. I think the problem there is that these things are too fluid, too dynamic, and too ephemeral for them to be legislated like a security.

So why are these things happening? It's because there are too many of these prediction markets that can be manipulated this way. Somebody knows something that somebody else doesn't know, and there's no way to arbitrate that.

This used to exist in the securities market, too. This is where now I'm going to get a lot of people really upset with me. In 2000, we introduced the law called Reg FD. What was the point of Reg FD? It was basically that if you're a CFO, you cannot talk to an individual stock manager and tell him something that you then don't tell everybody else. Essentially, inside information.

That used to be not illegal. I won't say that it was legal; I would just say that it used to be not illegal. You call your buddy, he says, “Hey, how you doing?” He goes, “Man, the quarter was a blockbuster.” You would go and buy the stock. Starting in the 2000s, it became illegal.

There used to be these networks of information arbitrage that took advantage of this. Now, this is an example of Warren Buffett's returns pre- and post-Reg FD. What do you see? His returns were double the market returns when this kind of information sharing was legal. The minute that it became illegal and you had to basically act on the same edge as everybody else, his returns went to the market return. He generated zero alpha. In fact, he probably, on the margins, lost a little bit.

So this is the single best investor in the world. This is what happens when you have information asymmetry. It's just meant to explain that markets thrive when there's asymmetry. Billions and billions of dollars will be made in asymmetry.

The prediction markets today, unless they are regulated out of existence or shut down, will look like the stock market pre-Reg FD. There's nothing we can do except choose not to bet on it. Because otherwise, what you're going to have are a ton of sharps taking advantage of a ton of squares. I think that's the end state.

Chamath, why is it good or bad for society that these exist? Do you have a take on that?

A certain percentage of these prediction markets are about the well-functioning of society, and the use of inside information gets to the truth faster. I think that has value, especially if it uncovers corruption or misdeeds.

If people make money along the way, and that's the incentive that it takes for folks to work around what would otherwise be whistleblower laws or something else to get to the truth and get it out there faster, that probably benefits society.

Now, there's a bunch of other things where some people will just set up a market that they know about and that they can control, that other people are unaware of. That's not good. Unfortunately, there's no way to discern when a prediction market gets created whether it's A or B.

You have to decide whether it's more important that you can understand these current events faster and with more accuracy or not. I think that's what this decision has to come down to, and that's what politicians and society need to decide.

All right, we're really excited that we're doing another event. Yes, a new event from your friends at All-In. The Besties are hosting a new conference, a retreat, a summit in wine country May 31st through June 3rd. It's called Liquidity. This is for capital allocators and LPs and GPs. Chamath, maybe you could talk a little bit about the vision we have here for the event.

There are a handful of conferences that happen every year where money is made. I'll give you a couple of examples. All the top market traders have been invited to this thing called Ira Sohn every year, where you go in front of a large audience, present your best long or short idea, and you can be a debt trader, a credit trader, or an equities trader. I've done it several times. Ackman has done it. David Einhorn has done it. Cliff Robbins has done it. These are incredible places, and you pay like $10,000 a ticket, and if you take those portfolios, they tend to do really well.

Separately, there are conferences that investment banks organize that are off the record, not publicly accessible, where they ask their biggest traders to come to a room, and they'll give them each a few minutes to present their best long and short ideas of public stocks. Then there are these equivalent conferences that investment banks do for private companies, where the best fast-growing private companies show up, and the CEOs get on stage, and they give presentations. All of these things have been closed. I would like to blow that wide open. So, what will we do? We will convene the best investors in public markets, the best hedge fund managers, the best private market investors, the best growth investors, the best credit investors, the largest cohort of LPs representing trillions of dollars of capital, and the CEOs of the fastest-growing and most important companies in technology. What we will do over the course of a few days is have some presentations, share best ideas, and build relationships. There may be some investments that happen as a result of that.

We're going to shut down all of Yountville. We're going to shut down the French Laundry. We're going to shut down all of it, and it'll be ours for a 2-day playground where we will build relationships, allocate capital, and maybe make some money as a result. So, you need to apply. We will make some allocations to folks who may not otherwise get in. We'll make some allocations to emerging managers who may need to raise capital and scale up but can show us good returns.

Over time, we'll find a way to increase a lot of this and make it more and more publicly accessible. What we are going to essentially do is take all of these things that I've been a part of, that have been in closed rooms, and put them together and open them up.

Yeah, well said. Well said. It's going to be a wonderful event. Friedberg, anything you're excited about in terms of the event?

No, I love Yountville. We're going to Yountville, so I'm looking forward to that. It's going to be great.

I mean, it's a beautiful location, and I think there's going to be ample time for meetings and networking. J Cal, if you're an investor, you can go to the website, allin.com/events, and submit your application. We can't have everybody there, and this is not like a general-admission-type event. It is specifically for this group of people: capital allocators. So, apply at the website, allin.com/events.

It's going to be wonderful, and Chamath is putting his focus on it. I can tell you because I brought him my first 5 ideas, and he was like, “No, no, no. Yes, but better. Yes. Yes.” So, he is engaged, and he's going to make it super tight and tight.

Judging. I'm being judgy.

Good, I like it. I like it. You know, all great events, all great art has some perspective behind it, and we're excited to have your sharp perspective behind this one. Liquidity, May 31 to June 3. allin.com/events.

Okay, let's move on to our next topic. The new CBO report is out. Friedberg, you said we are in a debt death spiral. The Congressional Budget Office released its long-term budget forecast on Wednesday, February 11. Here are the numbers: The deficit is $1.9 trillion. That's nearly 6% of GDP, much higher than the 3% GDP target we heard from Scott Bessent on this podcast.

Social Security—we were talking about that before, Friedberg—the trust fund runs out in 2032, 1 year earlier than previously expected. That's obviously going to trigger all kinds of discussions around austerity measures that folks will not like. The debt will now grow from $31 trillion today to $56 trillion in 2036. So, it is not stopping, folks. We are looking at an average of $2.5 trillion per year from 2026 to 2036.

Also, currently we're at 120% debt to GDP. House Committee on Budget expects it to be 135%, so slightly up in 2036. For comparison, Japan is at 237%, Singapore 176%, Venezuela 164%, Greece 154%, and the UK 94%. 20 years ago, our debt-to-GDP ratio was only 60%. Here's a direct quote from the report: “The fiscal trajectory is not sustainable.”

Okay, Dr. Doom. Pom-pom-pom. What do you think, Friedberg? This is your story, your chance to shine.

Well, there's no outlook for a 3% deficit-to-GDP ratio.

[Laughter.] There is.

And if you look at the assumptions, one of the key assumptions is that the short-term interest rate, which is largely how a lot of the debt is getting refinanced, is modeled to be around 3.1%. But if rates climb closer to 5%, as I mentioned in the past, just using the current debt levels, it adds another $650 billion a year of interest expense, which takes interest expense almost up to $2 trillion a year just paying the interest on the past debt.

Because we're running a deficit, that new interest expense increases the debt every year. So, the debt goes up and up and up just by adding interest on past debt. And so, this becomes the debt spiral that we've highlighted many times. There's nothing in this report that I think changes the outlook. It's pretty scary.

I'll say that the trigger point that I'm getting more and more concerned about—if the Democrats win the midterms and you end up with a Democrat in the White House in 2028—I think there's a bigger problem afoot, which is all of the state and local obligations. We've talked about Social Security. It looks like it's going to run out of money in a few years here, and so they're going to need to print a lot more money to fund Social Security obligations.

It's very unlikely they're going to make a massive cut to Social Security, because no one will get elected if they did that. No one will get elected if they promise to do that. There's a similar problem at the state and local level, which is that there are pension obligations. We've talked about this extensively. California has nearly $1 trillion of unfunded pension obligations to its public retirees, or public employees who are going to retire.

If you end up with a Democrat-controlled House and a Democratic president in 2028, you'll very likely see a federalization of that obligation, meaning that the federal government will step in to bail out or support those state and local governments. Otherwise, there's going to be a real economic crisis afoot. So, when you add that liability coming to hit in the next 5 to 10 years to this CBO report, which doesn't include any of that, I think that could be not just the straw that breaks the camel's back, but the concrete that breaks the camel's back. That's the thing I'm most worried about.

There is a deep connection between what's going on with the socialist movements at a city level, and now increasingly at the state level, and what we should expect to happen with the U.S. dollar and how it relates to federal spending, federal deficits, and federal debt. These are going to be dragging each other into a bad place in the next couple of years, one way or the other. That's what I'm more worried about at this point.

It's very hard to cut spending or get Congress to approve the budget cuts that we need to save ourselves from this debt death spiral. Imagine how much worse it's going to be in the next couple of years if we have to bail out or federalize state and local debt and state and local pension obligations. It's going to be really nasty. So, that's the thing I worry about the most.

Yeah, in my Dr. Doom hat.

Yeah, and I think that's one of the things that no one talks about at the federal level, and everyone ignores it because they assume it's a state and local problem. As we've talked about—and I'll bring it up again, and I'll ask my colleague who works in the administration to think about this idea—if we can find a way to declare bankruptcy, to restructure the fiscal obligations or the pension obligations that sit at the state and local level, we may have a way out. But short of that, that's going to pile onto this federal problem.

Sacks, your thoughts on the CBO report and this debt death spiral?

Well, we all agree about the problem of federal spending, the deficit, and the debt. We're all concerned about that. With respect to the CBO study, however, I'll just note that one of the key assumptions here is that CBO projects that real GDP will only grow by 2.2% this year, in 2026. That's a very low assumption, given that we grew by over 4% in Q3 last year, and the preliminary number for Q4 was over 5%. I think all of our predictions for GDP growth this year, when we did our predictions episode, were 5% plus.

So, 2.2% is a pretty low number, and then they predict that it's going to slow to 1.8% after 2026. Again, these are very meager, anemic growth assumptions. If you believe that all of this CapEx being invested in AI infrastructure is going to have a payoff, then growth rates could be a lot higher. Ultimately, I think that's the way to get out of the debt spiral: We need strong growth. Without that, we're not going to get out of this problem.

So, look, I think that if you believe in growth, then the situation is not quite as dire. What would I do? Well, if I could wave a magic wand, the 2 key charts you want to look at are federal net outlays as a percentage of GDP. This is from FRED, right? Then you want to look at federal receipts, which are tax receipts as a percentage of GDP, and you just don't want those lines to be more than, call it, 3% apart.

I think that's what Secretary Bessent said: Try to reduce federal deficits to 3% of GDP. Historically, tax receipts have bounced around 17%, and federal net outlays have bounced around 20%. So, if you get back to that, we'd be in pretty good shape.

Before COVID, our federal net outlays, which means spending as a percentage of GDP, were around 20%. But then with COVID, they bounced all the way up to 30% in 2020, because of both all the stimulus and the fact that the economy shrank because of COVID. We've never quite gotten back to that magic 20% number. Right now, it's trending around 23%.

So, we're doing a lot better than we did under COVID, but it's still just a few percentage points higher. If it were up to me, I would just freeze federal spending until the economy grew to the point where federal spending as a percentage of GDP is 20%. Then you could let federal spending continue to grow as the economy grows.

But look, as we know, it's very hard to get Washington to go along with that because there is a lot of spending pressure in Washington. One thing I will say, though, just to give some credit to the administration here, is that the level of federal employment is at the lowest level since 1966.

During President Trump's second term, we've gone from roughly 3 million federal employees to a little under 2.7 million. So, over 300,000 federal employees have been cut. I think that's a good start.

Ten percent is a good start for you?

Well, by the way, I think that's really important to pause on, so people understand this isn't some hurtful thing about firing people because they lose their jobs. When people move from the government workforce into the private workforce, they become productive. They're making things that grow the economy, and theoretically, they should also make more money.

So, this is positive from an economic point of view: moving the workforce from public to private. Also, to my point, historically, I think it's very important to avoid the socialist spiral. If you have too many people employed by the government, it becomes impossible not to employ people by the government. That ultimately becomes de facto socialism.

Chamath, your thoughts here? Obviously, it's a great thing that we're shrinking the size of the government. Those people are becoming more productive and going into the private sector. That's a big win; we all agree. Ten percent—great job in the first year. Maybe 5% over the next 2 or 3 years would be even better.

But the debt continues to be a problem. Are you worried? Do you think there's a solution here? What would you do if you were running the show?

I think you have to take a broader historical context on this. Does debt-to-GDP matter? It depends on many things, but mostly, I would say it doesn't matter. It's very easy for people to get agitated about that.

There are things that matter when you print too much money: the value of the dollar, the value of exports, the cost of imports, and how to actually protect your earnings and your wealth. That's a different question.

This is a historical look back at about 300 years of debt-to-GDP for the largest functioning economies in the world. Now, what do you see? What you see is a trend where, if you smooth it out for wars—which, by the way, have this weird effect of first escalating debt-to-GDP, but then severely impacting it in a positive way—the Napoleonic Wars, the Franco-Prussian War, and World War II all had positive effects on bringing debt-to-GDP down once the war was over.

The general trend from 1700 to now is up and to the right. The key observation is that it moves in unison. These things are relative problems.

So, if the entire world moves in unison like this, there's an argument to be made that you could end up at 300%, 250%, or 200% debt-to-GDP, but if everybody is there, nothing really changes that much. The real question is whether one country is able to decouple itself and have economic output that is meaningfully different from everybody else's.

My first take on this whole debt-to-GDP thing is that I think you have to look at it together as a group. Separately, is it important to contain the debt? Absolutely, but for these other reasons—for earnings, for inflation, and for all of those very practical reasons that impact your daily lived life.

What do we know there? We know that President Trump was elected on a massive mandate to secure the border on the one hand, but to look at waste, fraud, and abuse on the other. On that side, what did he do? He drafted the most important and prolific private businessman in the history of the world to be his tip of the spear.

And what happened? They identified hundreds of billions of dollars, but when it came down to it, and Congress had to act to solidify these cuts, they haven't done much of anything. If the most conservative Congress in the history of the United States has not done much to solidify these cuts that were identified by the White House and DOJ, then, as Friedberg said, it will only get worse if there's ever a Democratic House and Democratic control.

So, what do we have to do? I think we have to acknowledge that if debt-to-GDP continually moves in unison, the music isn't going to stop for a very long time. That's just an observation. I'm not saying it's right or wrong; it's just the observation.

But you've got to find ways of hedging and owning real, durable assets because the underlying currency that is used in these economies, even on a relative basis, will fluctuate wildly and just fall off a cliff. That will mean it will erode the value that you have created for yourself and your family.

That, I think, is the most important takeaway from all of this. We probably see things like gold do much, much better over time because people will be afraid about the durability of their dollar-denominated resources. But it will also be true for all these other denominated resources.

I think the debt-to-GDP ratio, quite honestly, if I had to be a betting man, will trend into the 200%, 300%, 400%, 500%, and 600% range on a relative basis for all countries because I just think the governments of these countries are addicted to spending, and there is no reason to stop save for some other planetary species invading planet Earth.

Yeah, a black swan event, yes. There's also a question of what Fed action will do to the capacity for excess deficit spending.

If Kevin Warsh really does want to tighten the Fed's balance sheet, and the Fed is effectively the first-in-line buyer of Treasuries—meaning they are printing money to fund government spending—and they slow down or actively stop doing that, then there's a real question about what action Congress and the administration will need to take.

What will happen, as you know, if the Fed stops buying Treasuries? Treasury yields will go up. If Treasury yields go up, that means the interest on the existing debt will start to go up.

If that lasts for a period of time, and you start going from 3.5% to 4% to 4.5% to 5% on the short end of the yield curve, then it starts to become way too expensive to fund this level of deficit spending because the interest expense will just start to climb and eat it all up.

So, the Kevin Warsh question is: If he really is going to reduce the balance sheet, what's that going to do to rates? What's that ultimately going to force Congress and the administration to do with spending?

Jason, what do you think?

We are in a consumer-driven economy, and the unemployment rate in this country is absolutely fantastic. So, 3 quick charts here.

This is the number of job openings we still have, even after we burned off jobs in 2022, from 12 million to 7 million. We still have a ton of jobs available.

Then, if you look at our unemployment rate, it's still at historical lows for our lifetimes. If you were born in 1970, this is as good as it gets. It's been 4.456%. It's ticking up modestly, but it's still the lowest of our lifetimes.

Finally, the labor force participation rate—the number of people in our society who are working and able to work—peaked at around 68% during the Clinton years. This is still low, at 62%. We still have people who could be participating.

All of these problems will be solved if more people were to participate and take those jobs. Why don't they take those jobs? Sometimes it's a geographic mismatch. Sometimes it's a skills mismatch. But very often, the jobs are not paying enough.

So, if you want to give Trump his flowers, by closing the border, you've reduced the number of people taking the jobs off the books. Businesses are going to have to raise their minimum wage. They're going to have to raise their offered wage, which might then get the 7% or so who are sitting on the sidelines to take those jobs.

Crazy prediction: I wouldn't be surprised if we see Trump, who is obviously a populist—and I tweeted about this the other day and got almost half a million views, or 400,000 views—decide that he's going to raise the minimum wage.

I'm not saying I endorse this or not, but it's incredibly low, at $7 an hour. Obviously, in different cities and states, it's $15 to $20. But what if Trump said, "We're going to add $1 or $2 to it each year over the next 3 years"? This would be incredibly popular, and it would get some of those people off the sidelines and maybe get them to take these jobs.

I think it's a possibility, and I think they're going to lose the midterms. As it stands right now, it looks like that's the consensus opinion. They haven't been able to do something with affordability.

Most Americans would say that if you raise the minimum wage, it would increase affordability. You can make the counterargument that it's just going to be inflationary, but I think most Americans are going to believe in that. So, I wouldn't be surprised if you see Trump take action there because he does take populist actions like this from time to time.

You actually mean the economic literature on what raising the minimum wage does?

It can raise inflation, lower the profitability of businesses, and move stuff offshore.

No, what it does is make it illegal to hire someone whose labor is worth less than the minimum wage. It's been shown to create higher unemployment in those segments of the economy. It's one of the core findings in economics.

So, if you're already worried about those people losing their jobs to automation, that's a downside. Anyway, if the minimum wage were a panacea and it just increased everyone's living standards without having downsides, why wouldn't you make the minimum wage $100 an hour? Why wouldn't you? Everyone would just keep raising it infinitely. Obviously, it doesn't work because if you raise the minimum wage too much, which is to say more than the value of someone's labor, then they just get unemployed.

Looking at what happened in the different cities, or in Australia or other countries, they have a much higher minimum wage and much more happiness. Businesses and prices go up about 10% to 20%. So, in Australia, if you go to a restaurant or to a Scandinavian country, things might cost 10% or 20% more, but you have a happier population. Yes, it could lead to more automation. We got rid of cashiers because it became too expensive in New York to pay $15 to $20 for a cashier.

Sure, but we have very low unemployment now, and businesses can clearly afford to pay an extra buck or $2 an hour. So, there's the theoretical academic argument, which you are correct on and I understand fully well, and then there's the reality on the ground, which is Seattle, San Francisco, New York, Los Angeles, Australia, and other places have a much higher minimum wage and higher happiness in the population. I don't actually think it will have any impact because I think it's artificially low. But that's just one man's opinion. I think it would change the game here in America.

I think it would actually do something to your concern, Friedberg, about socialism. I think that if people felt that there was a backstop against this low, low cost of labor, it might actually make people pretty stoked that they could get a higher-paying hourly job, and it might take some of that edge off in the same way universal health care might do that. But again, just one man's opinion.

I have to say, on all this economic data, I think we're kind of missing the lead here, which is we are at the beginning of an economic boom. Again, we saw it in the GDP growth rates in Q3 and Q4 last year: over 4% in Q3, over 5% in Q4. We just had a January jobs report where the economy added 172,000 new private-sector jobs. This blew away the expectation, which was around 70,000.

At the same time, the government shed 42,000 jobs. The net of this was to bring the unemployment rate down to 4.3%. So, I remember a few months ago, J Cal, you were wringing your hands about the fact that the unemployment rate had ticked up. Well, now it's back down. You're seeing a lot of jobs being created in construction, especially nonresidential construction. That has to do with the data centers and the AI boom that's going on. There were 33,000 new construction jobs in January.

You've seen, in President Trump's second term, 615,000 new private-sector jobs created. Meanwhile, as we talked about, over 300,000 government jobs have been cut, which increases the productivity of the economy, and it does what Secretary Bessent says, which is re-privatize the economy. So, I just think that the overall economic news is really good.

Again, we have this AI boom going on. There's a new chart showing that the expected CapEx for this year, just from the 4 leading hyperscalers, is $600 billion. Just from 4 companies. That's a roughly 2% tailwind to GDP growth right there. That is just the CapEx. That doesn't include all the ROI that you might get from that infrastructure on the software side, on the application side, or on the productivity side.

So, we have a boom going on, and I feel like everyone's kind of black-pilling about this. They're focusing on this, I agree—the CBO report that has unrealistically low growth rates.

We're going to print 6%.

Right. Or they're doom-scrolling about Epstein or what have you. I just think when we look back on this period, it could end up being a little bit like the late '90s. Remember when we look back on the late '90s, we're like, “Wow, we had phenomenal economic growth.”

Golden age. Golden age, economic boom.

Labor participation peaks. It's not happening there, too, right?

But remember what politics were like at that time period. All anyone talked about was whether Bill Clinton got a blow job from Lewinsky. So, my point is just, again, I'm not sure we're focused on the right things. I suspect we'll look back on this time period as the beginning of a new golden age.

I agree. I think you're correct. And just in terms of the hand-wringing comment, anytime a statistic is 10% or 15%, I highlight it. I wouldn't use “hand-wringing.” I would just say we generally look at that when we went from 4.1%, which is where Trump inherited it, up to 4.5%. That's about a 10% increase in 1 year. If that trend were to continue, that would be notable, but to your point, it's gone down.

And that is because the border, I believe—the southern border—is closed. As you're pointing out, we've got a lot of good news in the economy, so people are hiring still. We are in really good economic shape. I would say it's hard to deny that.

Yeah. All the job creation has been enjoyed by native-born Americans as well. All the job loss has been on non-native-born Americans, which is pretty remarkable. So, I think that's also going to accrue to the benefit of more Americans.

By the way, just on the unemployment thing, there was a slight tick up in October because of the October 1 buyouts. Remember, DOJ created the buyout program, and October 1 was the deadline for that. We had a tick up in unemployment related to that. But remember, all of those were voluntary buyouts. They all chose the DOJ option. That's what created the tick up in unemployment, but again, I think it was a good and voluntary tick up. Now the unemployment rate has ticked down. So, again, job creation right now is strong.

To just put a finer point on it, the top 2 areas where illegal aliens are working in the United States—most people don't know this—are construction, number 1, and leisure and hospitality, number 2. So, you've got 2.5 million people working in those 2 categories, which is why I said, if you want to see more Americans take jobs and you want to see wages go up, you should fine those businesses for hiring illegal aliens.

That's the easiest thing in the world to do. You just show up at a construction site and take pictures of everybody who is working illegally, which is what they used to do at ICE. They would conduct surveillance of construction sites, then they would fine the construction company, and the company would have to hire Americans or get in serious trouble. There have been multimillion-dollar fines over the last 20 years, specifically on construction sites, and that would drive more people to raise the wages of construction workers, which would lower unemployment even more and increase labor participation. That's where the big win is. Go to construction sites. Go to hotels.

So, you want ICE to randomly raid employers, construction sites, and hotels?

“Raid” is—no, I surveil.

And just check everyone's papers. You want ICE showing up everywhere checking all the papers?

Okay, number 1, they're doing this already, gentlemen. This is well within their purview. Look up the law. They have been doing this for 30 years. This is actually the technique they used before raiding cities in a chaotic way. They went and surveilled, which is their right to do. They have the right to do that. I didn't say “raid”; I said “surveil.” That is a peaceful, quiet thing to do, and then they find business owners.

The business owners are the people who are causing this problem. If there were not jobs available in construction for $20, $30, or $40 an hour off the books and without paying taxes, those immigrants who are crossing illegally would not be here. If they couldn't get a $30-an-hour, off-the-books job working at a hotel or as a dishwasher, they would not come. The businesses need to stop hiring them.

Explain surveillance. What is it? How do they figure out with a camera whether someone is illegal? What is the camera figuring out?

Okay, you guys, it's very simple, and I'll explain. I'll tell you how misinformed and biased the 3 of you are. You're all misinformed and biased.

You go to the construction site. Everybody checks in there in the morning. They have a truck. This has been done for decades, gentlemen. They take pictures of everybody. Then they go in at the end of the day after surveilling for weeks, Chamath. They have done this already. This is all factual. They have had multiple cases where they go to the construction site, take pictures, and take a video. Then they go to the business owner and say, “Show us these people's pay stubs.”

The business owner says, “I don't have pay stubs for these people.” They say, “Okay, here's a video of them working 8 hours a day. Where are their pay stubs? Show us their taxes.” The businesses are paying people off the books. That is tax evasion. Then they get multimillion-dollar fines.

Here's a very important case. This is from back in 2017. The Justice Department and ICE went after a group that was hiring illegal aliens. This is the largest payment ever in an immigration case: $95 million recovered, $80 million in criminal forfeiture, and $15 million in civil payments. That represented, according to our Justice Department in 2017, the largest-ever levy in an immigration case.

We can solve almost all of the immigration issues, with the exception of maybe criminal gangs, by doing basic surveillance and basic detective work—asking these businesses to show the pay stubs of the people working for them. ICE has been doing this. They've already been doing this.

Your suggestion is to do this for every company in America?

Again, you're being hyperbolic, and you're not debating in good faith.

Who do you choose?

I said this at the top: You pick the number-one employer of illegal aliens. There are 2.5 million people working in construction. You start with the largest construction sites, and then you work backward. Then you start with the largest restaurant and hotel chains in the world.

If Stephen Miller were doing this, you'd say he's not compassionate enough. You'd call him a fascist.

No, incorrect. Once again, incorrect. I have stated publicly here on the pod, and I have stated publicly on Twitter, that this is actually what Stephen Miller should do, because this would go after the people who are causing the immigration problem. The people causing this problem are the business owners. They are providing the incentive to come here.

Let me finish, Sacks. Stephen Miller should stop doing the crazy raids.

You don't think it's the government benefits that are incentivizing people to come?

I think that's far down the list—2, 3, 4.

Far down the list? Is it the free health care, the free food, and the free housing?

I can give you statistics on it. According to this Los Angeles Times survey, 75% of immigrants come here for better job opportunities. People coming to America illegally are coming here for economic reasons. They are not coming here to commit crimes. They are not coming here to get benefits. That is way down the list. That is a small percentage.

How is this going to deport all the gangbangers, the rapists, the murderers—the ones who aren't working on a farm?

That's a totally separate issue. They should go do that. That's a separate issue.

That's what ICE was doing. They're trying to round up the known criminals for whom they get warrants, and then they capture them and deport them. That's a separate problem. Those are 2 separate problems.

You can do gangbangers. I'm talking about, if you actually want to move big numbers, the gangbangers are a small number. The people working in construction and the people working in hotels are the big number.

Yeah, they're both equally important, Sacks. We're in agreement.

Okay.

Yeah. The thing we're not doing at scale is going after the businesses that are creating the incentive for the majority of people who come here.

Ferrari has a new car coming out. It's going to be their first all-electric vehicle, and it's very polarizing. Here's an illustration of the vehicle from Car and Driver. This is not the accurate one, because it's going to be revealed in May, but this is what they think it's going to look like.

It has 1,000-plus horsepower, 4 electric motors, 0 to 60 in under 2.5 seconds, and a 330-mile range. It's the heaviest Ferrari ever—5,100 pounds compared to the iconic F40, which was only 3,000 pounds. It's going to launch in May 2026.

We got to see the interior, and this is what everybody's buzzing about. It's gone viral on the interwebs. Former Apple design chief Jony Ive, along with his partner Marc Newson, who also designed the iconic Ford 021C concept car, were involved in this.

Wait, what is that? This was an incredibly innovative moment in design that never happened, that Ford did. It looks very similar to an Apple product. Here's the key for the new Ferrari.

It's like an animated character in Cars and things like that.

You have this beautiful square glass key, like an iPhone. You put it in, and the Ferrari yellow drains out and goes into the shifter. That was one nuance that people thought was very beautiful.

The screen looks very Mac-inspired, except unlike Tesla, which has no buttons and is removing buttons, they're adding buttons here and making the buttons very tactile. All the sports car enthusiasts love tactile, memory-based buttons that you can have fun with and flip and feel like a fighter pilot.

Finally, turning the car on is like starting up a jet. You have a launch button; you twist and press, and it makes the whole car turn Ferrari orange or red. That's the inside. Sacks, are you buying one? Do you like it?

I saw everyone just shit all over this design, and I thought it was a little bit unfair, in the sense that I actually overall like the interior. I thought it found a compromise between the all-glass cockpit of a Tesla versus a totally analog old Ferrari interior.

Like you said, it had a combination of screens, but then also buttons. They made a point of showing that the buttons were not only nicely tactile, but also made pleasing sounds and that kind of thing. It seemed very heavy-duty. I thought the interior was actually pretty good.

Again, it was a nice balance between the interior of a race car, the simplicity of that iPad screen, but also having enough buttons that you develop muscle memory around where all the controls are. You don't have to go hunting for them through a menu.

I thought the miss here wasn't on the inside. I thought it was on the outside. I hate the look of the outside of this car. It looks to me like—

That look is what people are projecting. It's not the final version.

This is terrible. To me, this looks like a Corvette, maybe, or even a Trans Am. It looks like a Model 3. I don't like the black part of the front, or even the grille. It looks terrible, as do the things going on on the sides. Then the back almost looks like a hatchback or something.

A Ferrari should look swoopier. It should look curvier, and there should be fewer different pieces to it. One hundred percent.

So, I don't know. It doesn't look right to me as a Ferrari, but I thought the inside was actually fine.

I like it. Chamath, are you a buyer?

When's the last time you actually drove yourself, Sacks? Have you actually used a steering wheel in the last decade? When's the last time you actually used a steering wheel?

Full self-driving has made me a driver again, because I just set the full self-driving.

Wow. You're driving yourself?

With FSD, yeah.

Okay, so you're now driving around Texas.

I like it—with FSD.

Okay.

Uber takes forever, so now I'm just—

You like to drive, Chamath, I think. Are you driving yourself these days, or are you—

I drive myself in a Model Y with FSD, or I take a Waymo, one of the 2.

Yeah, Waymo's in the Valley now, on the Peninsula.

I've had a Ferrari. What I would tell you is that there's something very unique about it. There's a Ferrari experience that's different from every other car.

I think the new CEO, Benedetto Vigna, is a very talented executive, and I think he's probably going to land something beautiful. The thing is that we are racing against time. I've said this before, but FSD and autonomy are going to shift the number of people who even know what it means to drive.

It will feel like when we look at somebody who really embraces thoroughbred racing. It's just going to happen in smaller and smaller places and less and less often. That's not because these cars aren't beautiful, but because the risk will not make any sense for most people under most conditions. I think that's the big thing that's going to change.

Car culture in America was a profound part of American culture. Driving from A to B on vacation, the sense of freedom, and the building of the Interstate Highway System—these were huge parts of what made America great and the rails on which all this productivity sat.

Now I think it's all going to change. I think the car will probably be beautiful. Ferraris are beautiful. There's a Ferrari dealership in Redwood City, and whenever I drive by it, I slow down and look at it. They make beautiful cars.

Piece of art, yeah.

I think in places like China and India, they're always going to have a market. But in places like the United States, it's going to become so expensive to pay for the insurance if you are driving yourself that the idea that you would buy any car is going to feel tougher and tougher, because I think the math is going to be tough.

But the experience inside of the Ferrari is second to none. So, probably there's going to be a bunch of high-end cars like Ferrari where you pay for the experience, you're in a position to pay for the car, and you'll pay for the insurance, the luxury, all of it.

Yeah.

The rest of us will be using FSD or Waymo.

One hundred percent. We have 2 Model Ys, and we have to get another car. It's like, well, what else can we buy? We have no choice. Maybe we'll buy one of the last Model Xs or Model Ys.

So, I have a real problem now, which is I have 5 kids.

The X is the only car that can manage 7 people. So, I need a new—

A 3-row Model Y, by the way, but it's a bit tight.

It's a bit tight. It's not good.

It's a bit tight. I wish Elon would have made the minivan or the 3-row SUV. Who knows? Maybe he does someday.

When I was in Abu Dhabi, I saw my dream car. It is this Lexus minivan. The doors open—

And it's like first-class airline seats.

Yes. The front is completely blacked out, so you have total privacy.

This car. Yes, this car.

Yes. This is not—it's not for sale in the U.S.

In America, why is this car—or minivan, whatever—not available in the United States? I think it's the Lexus LM, and then there's the Alphard.

It's exactly it. It's incredible. This car—where is the interior? This is the car. This has 2 captain's chairs. It's got a full screen and a divider between the 2, with the drivers in the front. And then you have this—

Those aren't the captain's chairs. Show the captain's chairs. There's the captain's chair.

Beautiful captain's chairs. They're gorgeous. It's basically like an executive van. These are like Etihad first-class airline seats. It's unbelievable. Look at these 2 seats. Unbelievable. Gorgeous. And you have a full monitor in front of you, David. You press a button, and the monitor rises and falls, so you can talk to your driver—

Or have CNBC on. I like getting in and out of SUVs or minivans. I think the height is good for me. It's so easy to get in and out. And the Alphard is the other one. None of these are available in the U.S. These are the No. 1 cars in China, Singapore, and the Middle East for chauffeur-driven cars. They're incredible.

It's called what? An Alphard? What's that?

Alphard is the Toyota version, and Lexus is obviously the higher-end brand of Toyota. They make—I think it's called the LS; that's the name for these. You cannot get them in the U.S.