ICE Chaos in Minneapolis, Clawdbot Takeover, Why the Dollar is Dropping

Chamath Palihapitiya in an absolutely fabulous winter sweater. January looking great. Look at the size of those buttons.

Huge buttons.

How many rhinos died to provide those buttons?

Zero rhinos. Zero rhinos.

I'm a simple man who lives by simple means.

Beautiful. And your sultan of science, David Friedberg. What's the background here? Is that a Mellon Collie and the Infinite Sadness background? I'm trying to figure it out.

J, we don't talk about my backgrounds. Thank you.

It looks like Mellon Collie and the Infinite Sadness, the double album by the amazing band Smashing Pumpkins. Am I close, or is it the original artwork for that?

Don't talk about my backgrounds.

You don't talk about your backgrounds. Talk about your background. You're giving me so much to work with here.

Luckily, I have my straight man, my brother in arms, my Davos party-crashing partner, David Sacks.

I got you your first invite to something elite and exclusive.

I mean, I got invited to go 25 years ago. They just wanted 50 dimes, but we had a fun time.

Yeah, we had a good time.

We had a good time. Any post-Davos WEF impressions?

We had a lot of interesting meetings, most of which I don't think we can talk about on air, but it was an interesting event.

We were staying in a log cabin that was about 300 years old. The ceilings were about 6 feet high, and the door frames were about 5 feet high, so we bumped our heads a couple of times.

Yeah.

It was pretty crazy.

It was brutal. I mean, it looked good on the web. The photos of the place looked amazing.

The Airbnb photos look great.

Yeah, but I think you need to be inside the circle. You need to be inside the thick of it, not driving in every day.

It was a distinctly different Davos. We've mocked Davos here for many years, but this one was a business takeover and a Trump takeover.

Correct.

Chamath, you would have loved it. It was 1.5 days of everybody hand-wringing over what Donald Trump would say when Daddy got there. Then, for the 75 minutes Daddy gave his talk, the entire city shut down. Everybody ran to a television set. For the next 1.5 days, everybody talked about what Trump said.

Basically, I think there are 2 really big differences with Davos, based on what I heard, because this is the first time I've attended. One is that it was much more business-centric. Second, there were a lot more Americans there—a much bigger American presence. I think that owes to the fact that President Trump gave a major speech there, and I think it was Larry Fink, who's chairman of the whole thing now, who sort of orchestrated that.

He wanted to get President Trump there, and I think he's pushed for them to be a little bit more business-centric. It feels like they're catering a little bit less to boutique European political issues, although that's clearly a big part of it.

In terms of memorable moments, a big one was—I’m only going to talk about this because I think it was publicly reported; otherwise, I wouldn't bring it up—there was this opening-night dinner. Larry Fink called on about 5 people to give little speeches, and the last one he called on was Howard Lutnick, our Secretary of Commerce.

Howard just goes up there and starts dropping truth bombs on them. Again, he said all this on the record in his remarks at Davos, either that day or the next day, so I'm not talking out of school. It was all stuff that he said.

Basically, he said to all the Europeans, "Look, I've been coming here for 30 years, and you guys have completely failed. You've wrecked your economies with all this net-zero stuff and climate change and energy." He started blasting them on that, and then on all the open-border stuff. He really let them have it. He was really telling the truth.

Then there was this uncomfortable rustling in the audience as he was gathering steam, and it's been reported that Al Gore started booing at the end.

Drunk on Chardonnay. Is that true?

I can't verify that it was Al Gore, but I definitely heard somebody, and I think it was Al Gore who was booing.

Just like the 2 guys from the Muppets in the balcony—Statler and whoever.

Waldorf and Statler.

This whole climate-change thing was Al Gore's big hoax going back to the '90s.

Well, did he win an Oscar? He won an Oscar.

I mean, even Bill Gates has acknowledged that this is not an existential threat. It can be dealt with. So I think the bloom is off the rose in terms of that whole agenda at Davos.

Although, to be sure, I'd say most people there still probably agree with Al Gore. I mean, they haven't changed their policies. I'm talking about the European countries, even though it's wrecking their economies.

They are beholden to this net-zero idea.

It feels like they're in transition and scrambling to figure out which direction they should go in. They don't feel they can trust America, or that we're their reliable partner. We're not going to bail them out, we're not going to protect them, and so on.

They're going to have to get together as the mid-tier economies—economies 5 through 20—and build their own voting bloc, their own trading bloc, go it alone, and spend their own money.

They have it. It's called the EU. It's just not been very successful because of their own policies—their energy policies and their open-border policies.

I'm not sure what going it alone means if you don't have best-in-class AI or best-in-class weapons.

Absolutely. I think it means they're going to have to start investing in those things, buying weapons, making weapons, if it means anything.

Yeah. I think it means Canada and the EU and all these other countries that feel like their rug is going to be pulled by the Trump administration are just going to have to band together and create commerce.

We saw China and Canada do a big deal, and I think that's them just trying to say, "Hey, we have some sovereignty here. We're going to do a partnership with Canada and bring BYD cars in here, and they'll be our big trading partner." That's the reaction, I think, on the other side.

But they don't—

They don't what?

They don't have as many degrees of freedom as they think they do, because great powers define the international system, not mid-tier powers. A bunch of 2nd- or 3rd-tier powers cannot redefine the international system, even if they band together.

At the end of the day, the Europeans understand the importance of the United States. Specifically, they want to keep the US in Europe. They're desperate to keep NATO together and to keep the US interested in and present in Europe.

Just remember European history before the Americans were there. It's hundreds of years of wars and constantly fighting each other, culminating in World War I and World War II—the total self-destruction of Europe. The most peaceful period they've ever experienced has been post-1945, when the Americans are there as the great pacifier.

They do not want us leaving. I think they're willing to make large concessions to the US to ensure that we stay there, even though they'll probably grumble about it. To that end, I think what President Trump was saying is, "Look, you guys have to share in the burden here. We've been paying for this whole thing."

Yeah, no, it makes total sense. They got their spending up to 3% for NATO, and they're going to go to 5%. Mission accomplished on that.

Yes. And on Greenland, he's like, "Look, you know, we—" This was the best part of the speech. He's like—

"Do you want me to talk about—"

"For you?"

"You've got to do something for us. This has got to be a choice."

He gets 45 minutes in, and he's like, "Do you want me to talk about Greenland? I could talk about it. Are you ready? I'm going to talk about it right now."

Then he starts talking about it, but he starts calling it Iceland. Everybody in the room is like, "Wait, he wants Iceland, too?" The whole buzz was that Trump was going to take Iceland and Greenland.

Then he sort of backed down: "We're not going to invade." There was a sigh of relief. But do you think they actually thought, Sacks, that he was going to invade Greenland and take it?

Well, I don't know. I think they obviously thought it was a possibility, but the president took the use of force off the table. I think you did feel a sigh of relief there. I think you're right.

We don't know the details—they haven't been publicly reported—but there was some sort of meeting at Davos that was convened, I think, by the NATO Secretary General, Mark Rutte, where they negotiated an acceptable compromise on the issue.

I'm sure we'll find out the details in due course, but it's safe to say that President Trump got enough of what he wanted that he was satisfied with what they worked out.

I don't know how they just—it's like Lucy with the football and Charlie Brown. He's going to pull the football. He's anchoring the negotiations at a military invasion and takeover. He obviously is just going to go for a lease.

It’s like they don’t know it by now, in year 6 of Trump being president. He just anchors things at an impossible, insane level, and then he falls back to whatever he really wanted. It’s a classic negotiating technique.

All right, we’ve got a lot on the docket. Let’s get to work. Everyone wants to hear 4 venture capitalists and investors talk about the horrific situation in Minneapolis, so here we go.

For background, last month, the DHS started an operation called Metro Surge, sending 3,000 federal agents into Minnesota to crack down on illegal aliens. Over the last 3 weeks, 2 Minnesotans were tragically killed in altercations with federal agents. On January 7, 37-year-old Renee Good was shot to death by an ICE agent. This incident involved Good accelerating her car, which was surrounded by agents at the time.

We’re still waiting for the final investigation on this one, but apparently there were 3 shots: 1 through the front windshield, perhaps 2 through the side. All these details are still being investigated. Then, tragically, on January 24, Alex Pretti, also 37, was shot and killed by 2 Border Patrol agents, not ICE. Pretti was an ICU nurse at the local VA hospital.

There are a ton of frame-by-frame breakdowns available. The New York Times and Wall Street Journal did a good job on these. I think maybe it’s best for us to focus here on the aftermath of all this and the resolution, but you guys can feel free to chime in on the frame-by-frame breakdowns if you like.

In 5 posts, Stephen Miller tweeted that Pretti was an assassin trying to murder federal agents. A source told Axios that Homan said, “Everything I’ve done, I’ve done at the direction of the president and Stephen”—Stephen being Stephen Miller. Greg Bovino has been removed from duty and had his social-media accounts turned off.

President Trump has pivoted, evolved, and put Tom Homan in charge. “Tom is tough but fair and will report directly to me,” Trump wrote. At the time of this taping, which is Thursday, there was a press conference this morning. Here is what Tom Homan said, and after 30 seconds, we’ll go to you, Sacks, for your reaction to all this.

Tom Homan

No agency or organization is perfect. President Trump and I, along with others in the administration, have recognized that certain improvements could and should be made. That’s exactly what I’m doing here. So, if we get these agreements in place, that means fewer agents on the street, more agents in the jail. As a matter of fact, I have staff from CBP and ICE working on a drawdown plan. What does that look like based on the cooperation?

Sacks, your thoughts?

Well, first, let me say the deaths of Renee Good and Alex Pretti are regrettable and tragic. So are the deaths of Laken Riley, Jocelyn Nungaray, Rachel Morin, Victoria Harwell[?], Ivory Smith[?], and too many others to mention who were murdered by criminal illegal aliens. The media won’t ever tell you their names.

But President Trump was hired by the American people to do a job, which is to seal the border and deport criminal aliens so that more of these tragedies do not occur in the future. This is a popular policy. Over 55% of the American people say they want all illegal aliens deported, and over 90% want criminal aliens removed. By criminal aliens, I’m referring to the ones who commit additional crimes after they enter the country illegally.

This policy is working. Murders were down 21% last year. It’s one of the best years on record, and in most states, the process is smooth and doesn’t make national news. The reason for that is because local authorities are cooperating with ICE. But Minneapolis has taken a different approach. They’ve engaged in a campaign of “massive resistance” to federal authorities.

Let’s talk about what’s actually happening there on the ground. I think the first thing to understand is that what’s happening is much more than just protests. Obviously, I have no problem with people peacefully protesting and making their opinions known, but that’s not what’s going on here. These are Antifa-style operations designed to thwart the enforcement of federal immigration law.

They’re highly organized. They’re communicating in encrypted chat groups. They stalk and dox ICE agents, follow them around town, surround them at their hotels, and use their cars to block roads. They use bullhorns and whistles to alert criminals who are about to be arrested. Remember, ICE is a law-enforcement agency. They have warrants to arrest known criminal aliens.

Despite this rhetoric of them being like the Gestapo, they are going after specific named individuals for whom they have warrants to arrest. These are dangerous missions, and these agitators are interfering and making these missions even more dangerous. The media has tried to portray Good and Pretti as simply innocent bystanders or people who were peacefully protesting ICE policies. They weren’t. They were foot soldiers in these Antifa-style operations, and most importantly, they brought deadly weapons to the fight.

Renee Good hit an officer with her SUV, which, under a Minnesota law signed by Tim Walz himself in 2020, justifies the use of deadly force by an officer to defend himself. Alex Pretti was even more reckless. I think we’ve probably all seen the video by now, where he sought confrontation with ICE officials. He was kicking the car and was in a rage. This wasn’t his first time doing this.

Any experienced gun owner will tell you that if you’re armed and you’re dealing with law enforcement, you have to be the world’s biggest pacifist, because you’re putting your life in danger by making them fear that their lives are in danger. I think the mainstream media didn’t tell people these facts. They just presented highly selective camera angles. They even airbrushed and Facetuned Pretti to make him appear to be a more handsome victim, which is truly sick.

In a way, I feel sorry for Good and Pretti because they were the victims of a tinderbox that was created in Minnesota by the extreme rhetoric and decisions of Tim Walz, Jacob Frey, and the political establishment. The local police in Minneapolis should have been allowed to keep conditions safe on the street by creating a perimeter and keeping protesters away from ICE officers who were executing lawful warrants of arrest.

But the police were told not to. Then the agitators stepped in and took advantage of this sort of vacuum of authority to physically intervene. I think it was almost inevitable that some sort of tragedy was going to result from this abdication of public safety.

Why would Walz and Frey want to risk such tragedies with their massive resistance? I think there are 2 reasons for this. This is the last point I want to make. First, they are desperate to change the subject from the billions of dollars of fraud that they allow to occur on their watch. Remember, we had Nick Shirley on the show just a few weeks ago talking about the $8 billion that was stolen by Somali fraudsters, and this campaign of resistance in Minneapolis has done a really good job of making everyone forget about that.

But I think there’s a second and bigger reason that applies, and I think it applies to national Democrats, which is they want to thwart mass deportations because illegal immigrants are a vital part of their power base. You can see this in the 2030 apportionment forecast, which just came out. Illegal aliens count toward the census, which occurs every decade, and the census determines the apportionment of congressional seats and electoral votes.

What you see in these maps is that citizens of blue states have been migrating to red states because those blue states are failing. As a result, blue states are expected to lose 9 House seats and electoral votes because of the changing population numbers. Illegal aliens in blue states have been propping up those numbers. For example, in the last election, President Trump would have won an additional 9 electoral votes if we had an accurate count.

Look, this is not about principle. This is bare-knuckle politics. The Democrats are playing for keeps. They don’t really care how many innocent Americans get hurt or killed in the process. This is about thwarting a popular policy of deportations and sealing the border, which the American people voted for. So don’t let the media fool you.

Friedberg, Chamath, do you want to give your opinion on these 2 tragic deaths or not? I mean, I don’t feel you’re obligated to comment on this if you don’t want to.

I’m happy to. Nick, I sent a clip into the chat.

“Deport all immigrants who are here illegally”: 55% in the New York Times poll, Marquette 64%, CBS News 57%, and ABC News, with a slightly different question, 56%.

What you’re seeing, essentially, is a very clear indication that a majority of Americans, when they’re asked this blunt question—which I believe gets at the underlying feelings—do, in fact, want to deport all immigrants who are here illegally. There’s no arguing with these different numbers, because they’re all essentially the same across 4 different pollsters.

I think Sacks is right that there’s a very, very vocal minority. But if we just put that aside, it’s important right now to stick to the facts. Democracy is supposed to be the will of the majority, but also defense and protection for the minority.

In this example, the will of the majority is pretty clear. As the CNN clip just showed, everybody wanted the southern border shut and the northern border shut, and a structured path to deal with illegal immigration. David’s right that this creates a cascade of second- and third-order effects that have huge implications with respect to the Democrats and their ability to have and curate power. I don’t know whether this is what’s motivating them or not.

I don't want to speculate on that. But the conceptual problem and the conceptual desire of Americans are undisputable. I think that's why Donald Trump won.

I think, though, we have to explore the tactics. The reality is that both of these deaths were complete and total tragedies, and they have created such an upswell that it has the potential to spin out of control. If it does that, it risks his ability to continue doing his job and delivering on the conceptual promise that everybody wants.

The other thing is that I think the president has otherwise done an incredible job up until now. The fact that Tom Homan is going there is a really good thing. He was the same person who was awarded a medal by Obama for how he managed Obama's deportation process. It's time to get control of the process and dial down the temperature, because the structural things that they're doing are correct.

There are people here who broke the law. There are criminals who are here illegally. We need to remove them because that is the will of the majority. Now we just need to find a way of doing it that creates some freedom to operate for all of law enforcement so that these tragedies stop. That's my two cents.

Okay. Friedberg, would you like to comment on this or pass?

I'll comment.

Can I just ask you to react to what Sacks said? Do you agree or disagree with his point about the Democrats needing to remove people because they do count in the census and increase the seats in the House?

Elon has talked about this a whole bunch as well: that immigration is being done to boost the voter rolls. I don't know enough about the census specifically, because that occurs X number of years later, or whether it's accurate at all. I'll leave that aside and do some research on it.

In terms of importing people for votes, this strategy does not make a lot of logical sense. So many working-class people voted Trump into office, and so many, specifically Hispanic and Mexican people, are all voting for Trump now because he's a populist and he appeals to that group. So, if Biden and the Democrats were doing that for that reason, that makes no sense.

Those people would also have to become citizens in order to vote, and that's a 20- to 30-year process. They'd be playing an incredibly long game on that front.

Unless there is cheating in the voting.

Yeah. We've talked about that as well here. For example, if there's no voter ID, you know—the Heritage Foundation, I think, David, you worked there at some point, right? Did an internship?

That organization, that think tank, has done tremendous research into this. They have a database. I think they've collected now 3,000 cases of voter fraud over a 40-year period. So, really, the whole concept of voter fraud being able to tilt a presidential election is just ridiculous and has not been proven. I think Trump filed about 50 or 60 lawsuits and lost all 50 of them. So there's no credence to that.

But I have a couple of broader thoughts on what we've seen, and I do actually agree with you, David. There should be voter ID everywhere. I don't think anybody should be able to vote without a driver's license or ID. If you can't take the time to get ID, why should you vote? It doesn't make a lot of sense.

Why do you think that's such a push on the other side, though, JCal? What's the motivation for not having IDs?

The stated—

If it's not about getting people to vote who aren't allowed to vote?

The stated reason, which I don't believe, is that it's more democratic and you want to get as many people to vote as possible. But I don't agree with that. I think everybody should have ID.

Yeah. You've got to have ID to buy a beer, right?

Yeah. I mean, to get on a plane, too. Even to ride a train, you need an ID. I don't understand.

I think the answer speaks for itself. To me, it's obvious why you prohibit it. By the way, it's not just saying you can vote without an ID. They actually prohibit the people administering the polls from checking. There's only one reason to do that: You want to allow cheating, obviously.

One of the things that DOGE found was that there were lots of illegal aliens being added to the Social Security rolls.

They weren't necessarily collecting Social Security. In a lot of cases, they were actually paying into it, so it was quite the opposite.

My point is that when you get an SSN, in a lot of states, all you have to do is check a box when you get a driver's license, which they also give to illegal aliens, in order to be added to the voter rolls. So they are finding illegal aliens on voter rolls.

But look, regardless of where you are on cheating in elections, the census just counts total population. They apportion House seats and electoral votes based on total population, including illegal aliens. There is data on this. Trump would have won the last election by an additional 9 electoral votes if these changes had been made before the last election in 2024.

It's really important to put a pin on that point, because what it means is that a future Republican would not need to somehow crack the Democrats' blue wall of Pennsylvania, Michigan, and Wisconsin. Nine electoral votes is a lot, and it does put the presidency that much further out of reach for future Democratic candidates.

It provides a powerful incentive, and again, it's not just the electoral votes. It's also these House seats. California would have lost House seats—I think it was 4—if this had been recognized, because again, there's been a huge migration. JCal, you know this better than anybody, since you're one of the people who has left. The state is so badly mismanaged that people have been fleeing blue states in droves, and the fact that you've got illegal aliens then replacing that population masks that effect and allows these blue states to maintain their level of representation in the House.

Friedberg, do you support the use of ICE agents and DHS to go into these cities? Do you think they were too violent? And do you agree with that strategy that Trump now seems to be pulling back?

I know the answer. We talked about it on private chat.

Okay. I'll be very matter-of-fact.

Yeah.

Neither of these people should be dead. It's sad that it happened. Neither of these people should have been doing what they were doing.

Federal law enforcement agents should not wear masks. They should identify themselves when asked. Ideally, they would wear body cameras, like local law enforcement does. I like body cameras. I actually like watching videos of police wearing body cameras on YouTube and TikTok. I think it's a very important way to hold law enforcement accountable for their work.

There may be reasons why federal law enforcement can't do that. If they're undercover, they shouldn't have to identify themselves, but I think those are important ground rules. I think that federal law enforcement should have a warrant or probable cause. They should not be allowed to randomly ask people for papers. I don't agree with that. If that's what they're doing—and I'm not saying that that's what ICE agents are doing—

No, no, that's what they were doing. That's all been proven.

I don't know that. I don't know if that's been proven.

Wearing masks and not identifying themselves.

That's not what I'm talking about. Hold on a second. Hold on a second. There have been a lot of claims made that they're going around, quote, rounding people up, asking for ID and papers. I don't know if that's true. I have personally not been convinced of that. You may have seen something else, but I've not been convinced of that.

But if that is what they're doing, there is no probable cause and there's no warrant attached to that. That should not be allowed. I think the mechanism for fixing that, the mechanism for addressing that, is first to go to federal courts and file injunctions, which is actively happening through the legal process.

There is a due process that would then take place to determine whether these agents are following the law and doing things by the rule of law or are not. If they're not, injunctions will be imposed and they can't do what they're doing. Short of that, no one should take it into their own hands to obstruct law enforcement, federal or local.

I think it's wrong for individuals who disagree with a law or disagree with the actions of law enforcement officers to obstruct their actions. The correct path is, number one, to protest peacefully; number two, to go to the courts and file injunctions; and number three, to change the law.

Vote for someone and change the law.

I think it's totally okay for protesters not to like the law. There are a million laws and regulations that I fundamentally disagree with, but those don't give me the right to impose myself physically in the driveway, with a car, blocking law enforcement from doing their job.

If law enforcement were arresting an illegal-immigrant murderer and someone did that, would people be up in arms? It's because people disagree with the law. And if you disagree with the law, you've got to change the law. That's okay.

Right now, it is the case that if someone came here without going through the immigration process as defined by the law, then they are technically here illegally. That is the law. That's what it is. So there is a course, or a path, or a point of view on how to enforce that law, and that is what people are having disagreements over.

Again, file injunctions if you don't like the methods, and change the law if you don't like the law.

My personal view on immigration, just so I can wrap this all up, is that I don't see how we're going to remove people from this country in a humane and just way when they have been here for a period of time, paid taxes, and been good contributors to this country. I don't know how you're going to do it without inciting a civil war. So I think the compromise has to be that there has to be a path to permanent residency and, eventually, citizenship for individuals who have been in the United States for some period of time, who have followed other laws, paid taxes, and not taken advantage of public services that they are not supposed to use.

With those conditions met, there should be some path. Otherwise, we're going to have a civil war. I think, separate from this, there's a bigger point to be made. Ray Dalio has made this point, and I will restate it—you guys can roll your eyes at this—but I think that there's a deep emotional driver to all of this.

People look at this and get incited. They get activated emotionally. Everyone I speak to is emotionally activated over this issue, and we have to ask ourselves the important question: Why are people so emotionally activated right now? What is going on? What is the fundamental root cause of this?

What is the fundamental root cause of this prediction model that Ray Dalio has talked about, saying that there's a 35% to 40% chance of a civil war in the United States based on predictions that he made in 2020? It is rooted fundamentally in the fact that everyone, to some degree, feels some amount of oppression right now. This is a manifestation of that oppressed feeling.

That oppression comes from the fact that the world is racing ahead and people are not a part of it. People feel like they're being left behind, and they see the victims of that world and want to act. I think we need to pay attention to that and be very cognizant of it, because I think fundamentally it is inevitable that there will be a civil war if we don't recognize it, address it, and find paths of compromise to solve these problems.

Okay, I'm done.

Superb. So ship it. Episode done. Let's go home.

So, yeah, I'm strongly in agreement with you. The police should not be interfered with. I said that here, and I said it on Twitter. You should stay home if you can't peacefully protest, and I also strongly agree with you that the police should be trained to de-escalate, wear body cameras, not wear masks, and be trained properly—all that stuff.

But I want to make 3 points here. The first is that President Trump has surrounded himself with a lot of really competent people, yourself included, Marco Rubio, Scott Bessent, Howard Lutnick, Jared Kushner. We had a lot of them here—my pal Chris Wright—but he's also surrounded himself with very inexperienced sycophants that he picked based on their loyalty to him, and that group needs to go because that group is sinking his second term.

I'll put Stephen Miller, Kristi Noem, Kash Patel, and Pam Bondi on that list. These folks have been a disaster for Trump. They're not qualified to be in the positions they're in, and they have caused a lot of chaos.

Back in August, I explained exactly how unpopular these ICE actions were, and I implored people: Stay home if you cannot be peaceful. If you want to record people, that's fine. But I predicted as well that somebody was going to get killed, and that these agents were acting without training. They were not de-escalating; in fact, they were provoking a lot of this, which I think was part of Stephen Miller's concept: to provoke these kinds of reactions.

Nick, you can pull up my first chart. You remember back in October, I was talking about Trump's sinking approval rating when these ICE issues were happening and the Epstein files weren't being released. Then in November, I brought this up again. Trump's net approval rating hit 13%. The same chart is coming up now, and he's at 18%.

A lot of people like to use this term TACO—“Trump Always Chickens Out.” I don't like when people use that, because I think they're trying to goad him on. I think he needs to react to these plummeting ratings here.

If you could play the Tillis quote, Nick:

“If I were in her position, I can't think of any point of pride over the last year. She's got to make her own decision, or the president does. But she has taken this administration into the ground on an issue that we should own. We should own the issue of border security and immigration. But they have destroyed that for Republicans—something that got the president elected. They have destroyed it through their incompetence.”

Stephen Miller is in the same boat. This guy, after making the stupid comments about Greenland that put the president in a difficult circumstance, is one of the people who came out publicly and said that this guy was a terrorist before he had even talked with anybody on the ground. That's clearly not the case now. Stephen Miller never fails to live up to my expectations of incompetence.

Here's Murkowski with a similar opinion, another Republican:

“Senator, do you have faith in Kristi Noem as DHS secretary?”

“I've already made a statement on that.”

“Oh, I wasn't there for it.”

“Yeah, I said that I've lost confidence in her.”

“Do you think that President Trump should remove her from the position? Do you think she should resign?”

“Obviously, that's up to the president. I think we would be better served with leadership.”

At the end of the day, Americans don't like to see this violence. They don't like cruelty. They don't like chaos. The reason Trump lost to Biden, who wasn't a very strong candidate, was the general chaos people felt with the immigrant ban the last time. People do want to see the border closed, and that has had a great effect on the country. I think that's fantastic, and he should take a victory lap for that.

But leadership starts at the top. President Trump put Stephen Miller in charge of all this. I think he's a bad actor. I think the people he hired were picked strictly to do lawfare and this kind of sadistic, violent behavior to feed a MAGA base that's not going to keep Trump in office and, in fact, is going to cause him to lose the midterms.

The easy solution, which I've brought up here over and over again, is that if you want to stop people from coming into this country, you have to look at why they're coming to this country. They're coming here because they want to have a better life. That's why they're coming, and that's why they'll pay a coyote $10,000, $20,000, or $30,000 and risk their own safety coming across that border, where many people die and are abused.

If you want to stop this, all you have to do is go to the business owners and fine them. If they keep hiring illegal aliens, you keep fining them and put them in jail. But you don't see Stephen Miller doing that. Why? Because a lot of those businesses are the voters who put Trump in office. They're Republicans.

Sure, there are Democrat-owned businesses as well, but you can solve this whole problem without sending masked agents in to beat the shit out of people, be violent, and provoke these kinds of reactions. That doesn't absolve people who drive their cars into the police. That's horrible, and it's a terrible tragedy. As I've said 3 or 4 times, these people should not go out and protest.

But you could solve this. If there are no job opportunities for illegal aliens, they will stop coming here. I finally strongly agree with your point, Friedberg, that we should be compassionate toward the people who have been here for 10 or 20 years and paid their taxes. I've said this here many times: They should be given a path. America is a country built by immigrants for immigrants, including the 3 of you—my bestie immigrants.

And we all came here illegally, or our parents did.

And we didn't sneak into the country.

Yeah, absolutely.

Now, you kind of gave this diatribe. I don't know why you've picked Stephen Miller as the vessel of your hatred. It's like you've—

No, it's not hatred. I base it on—

There's been a transference. There's been a transference of your—

Transference—just based on his TDS—

Trump Derangement Syndrome or something like that.

If his actions were kind and compassionate—

If he was compassionate toward immigrants—

If he was compassionate toward immigrants and recognized the importance of immigrants to this American story, I would be fine with it. It's just based on his behavior. David, I don't have TDS. You can name-call all you want. I'm just basing it on your behavior.

You've decided to do this ad hominem against him. And look, the big picture is this: I'm basing it on their qualifications.

You're not really presenting evidence. You're showing what other people think. You're showing polling and then what a few senators think. So basically, you're trying to build a case against him by using the opinions and declarations of other people rather than actually presenting evidence and building that case, other than just name-calling and saying that he's not compassionate.

The big picture is that I would say Stephen Miller has been more correct about immigration than you have been over the last several years. For years, you were denying that we had an open-border problem, did you not?

No. For 1 year, when the spike went up, I said, “Let's get the data on this,” because it didn't make sense that it would triple year over year. Then we found out that it was, in fact, happening, and with the new information I changed my opinion and said, “Yeah, this is obviously happening.” That was literally what happened.

Well, I don't know. During the Biden years, I remember we had a bunch of debates about this, and you were saying—

My position was, “Let's see the data,” because if you look at the data—I've played this chart on the podcast many times—we showed the last 4 years, and then there was a spike. I said, “This doesn't make any sense. How did this spike happen?” That's just my opinion.

You don’t have to agree; you can have a difference of opinion. Let me go back to the origin of the chaos in Minnesota. You don’t see this happening in other states, and I just want to point out one of the major reasons why.

In other states, take your pick: when you have an illegal alien and they get arrested, they get handed over to ICE or Border Patrol for deportation. That’s what’s happening in Minnesota. The politicians have given an instruction not to do that.

So, literally, you have criminals—people who’ve been arrested. There’s a case that was just posted today of an illegal alien in Minneapolis who killed an innocent mother and severely injured 2 others back-to-back in drunk-driving crashes. He did not have a valid driver’s license or insurance. He was arrested for vehicular homicide. ICE asked him to be turned over to them, and the authorities in Minneapolis refused to do that. They eventually released him.

That puts ICE in the position of having to go out and find these guys and arrest them. That’s how all these operations started. You make it sound like these guys are the Gestapo and they just randomly round people up. That’s not what’s happening. They have arrest warrants with the names of specific people that they’re going after.

There are arrest warrants, but Stephen Miller also told them to just round people up at specific locations.

There is that as well, and they’ve been trying to hit numbers that they just can’t possibly hit.

You have to ask yourself, Sacks, why didn’t we have this kind of violence, with unmarked people breaking people’s rights, under Obama, who did far more?

I’ll tell you why. Do you want to know why? Because Obama said that we should deport. Ultimately, our nation, like all nations, has the right and obligation to control its borders and set laws for residency and citizenship. No matter how decent they are

The 11 million who broke these laws should be held accountable.

I'm saying he was able to do it without sending masked agents in to beat the shit out of people.

No, the Democratic Party changed. That's what happened 15 years ago. The position that Obama—

I'm just talking about the policing. You asked me a question: Why wasn't the policing? Why didn't this happen under Obama?

Let me tell you the reason why the policing happened years ago. The Democratic Party was still somewhat rational on this issue, and it was basically a bipartisan position to support deportations of illegal aliens and not to have an open border. The Democratic Party changed its point of view on this issue.

That's not what I'm talking about—policing.

Let me finish my point. Tom Homan has said over and over again, we don't want to go out on the street. It's dangerous. They don't want to be put in this position. ICE has an incredibly dangerous job to do. Border Patrol has an incredibly dangerous job to do.

By the way, the reason why they wear masks is because they're getting doxxed by these groups who are organizing with each other on Signal, and they're being followed around. They're being stalked. They're being chased to their hotels, and these guys follow them around. They block their cars by interposing vehicles. They're interfering with official operations. They're interfering with arrests, and they're getting into physical altercations with them. This is very dangerous for ICE. They don't want to be in this position.

But the reason why all of this is happening is because Tim Walz and Jacob Frey and the rest of these guys—the lieutenant governor—they are saying, "Do not cooperate with ICE. Do not cooperate with the Border Patrol." They're telling local authorities in Minnesota, when you arrest an illegal alien, do not turn them over to ICE. It's better to release them.

These people are such anti-ICE zealots that they would rather release a killer onto the street than keep them in jail where they can be turned over to ICE and deported. And that's the whole reason why they don't want to keep them in jail: because that would create a central repository, if you will, for ICE to go collect all these illegal aliens.

Last year, there was something like 470 convicts—illegal aliens, criminals—who were released in Minnesota so they cannot be rounded up by ICE and deported.

These people are zealots, and that is the source of the problem. And then on top of that, you've got rhetoric by people like Tim Walz and the lieutenant governor calling ICE and Border Patrol agents who are just trying to do their jobs the Gestapo and Nazis and riling people up.

And I think that people like Alex Pretti or Renee Good, they're victims of this type of rhetoric. These are left-wing activists who are in this left-wing echo chamber, and they're marinating in all this rhetoric that's portraying law enforcement officials as Nazis and they're imbibing this constantly to the point where they're full of rage and anger.

You see that video of Alex Pretti attacking Border Patrol. This is two weeks before he gets killed. He's kicking the car. He's foaming at the mouth. He's in some sort of rage. This is someone who's emotionally disturbed, and he's got a gun on his waistband, which—look, every gun owner knows that you have to be exceedingly careful if you are carrying a weapon and then you are dealing with law enforcement. The last thing you want to do is go out looking for an altercation with them, which is what he did.

And by the way, I think it's completely tragic that the two of them were killed. I don't want to see that happen. But again, they are victims of this political environment, this chaos that's being whipped up by the elected officials in Minnesota. This would not be happening if they simply turned over the illegal aliens in their custody to ICE and Border Patrol, which is all that they're asking for.

I've said on this podcast many times, but none of you will respond to it. Why are they doing this instead of just fining the business owners? Wouldn't that be a better policy? You're in the White House, you're around these people. Why don't you tell them? Why don't we do that? Why don't we just give fines to business owners who hire illegals and stop the incentive to come here?

How do you know that they hired illegals? How would you know that? And if you know that, then you know the individual.

It's super simple. You would just do a little investigation. You go to the car wash, you videotape it like any other detective or any other federal agent or a local police officer would, and then you track those people down. You very quietly go pick one or two of them up on the way home. You ask them for their papers, or you go to the owner and say, "Hey, we have these six people. Here's their pictures. Show us their papers. Show us their Social Security number."

Here's my proposal. Okay, Jacob, you may have a point there. You may have a point, but I'm not sure that it's good enough in the case of an illegal alien who's already been in this country committing crimes. So, if you have a drunk driver who has killed people through drunk driving and they're captured, I think they should be turned over and deported immediately.

But if you want to do big numbers, like big numbers, you could just go to a farm, you could go to a car wash, you could go to a restaurant, take pictures of everybody coming in and out for their shift, and go to the business owner and say, "We have these people. Can you show us their paychecks and their pay stubs?"

All right. So, we'll agree to disagree on some of this, and we'll agree that this is a tragedy and that we need leadership to calm these things down. And we need to agree on a very reasonable immigration policy, which is not what we have right now, in my opinion.

All right. Clawdbot has gone viral overnight. I have been Claude'd. I have been one-Claude. I am all in on this. This is an open-source project created by a gentleman named Peter Steinberger. He's an Austrian developer and entrepreneur. So, what is it? It's basically an open-source personal assistant. Think like Siri or maybe Jarvis. Have any of you guys used it yet? Has anybody installed it yet?

I did. I spent 15 minutes and I saved 15% on my car insurance.

Are you joking? Sure. You installed it and then asked it to go.

You know what's so funny, Nick? I posted this. The number of people that didn't understand that that was a joke.

No, I understand it's a joke.

I know you did. Yeah. Yeah. But there were a bunch of people who were like, "Really? How did you do it? Can I do it?" And then some people were like, "Wait, only 15%?" And other people were like, "Wait, you set it up yourself? You didn't have somebody help you?"

This is literally the greatest thing ever. Have you installed it yet, Friedberg?

No, I don't want to give—

Okay.

—an open-source tool access to all my emails and messages.

Have you done it yet?

No, because I'm concerned about the security issues. But I want to do it, but I'm concerned about the security.

I've spent the last 72 hours doing this. I'm going to explain to you what we did at the company. It's mind-blowing. Okay, so it is basically, think like an open-source Siri or Jarvis, right? You get into an interface and you can talk to a virtual assistant and it does things for you just like ChatGPT or xAI might. But the way it works is you kind of load a virtual machine, if you know what that is, or you can put it on your Mac Mini. You run this like a server. Then you start authenticating it with your services. So, Gmail, Notion, Slack, WhatsApp, maybe even your password manager. Super dangerous. Nobody like Claude, xAI, or Microsoft would ever allow you to do this because it’s so dangerous, obviously. But we did this, and we put it to work. Here’s what we did.

I created a virtual podcast producer. We made this persona, and we created a new Gmail account, a new Slack account, a new Notion account, a new WhatsApp account—everything. We created basically a virtual employee. We put it together and made it the producer for my new This Week in AI podcast. There’s a little plug in there for it.

We had it start doing research on guests. We said, “Hey, research guests,” just like you can do in an LLM. Then we connected it to the existing feeds, like the podcast feeds, and the database of people we’ve had on the show and who’s booked. Then we said, “Make a CRM stack for all potential guests and suggest other guests,” and it vibe-coded a CRM for itself.

Can you show this?

I said, “Hey, do some research on this.” So then we started a thread with it and the actual producer, Oliver, who’s working on this. I said, “Do this guest research.” It did all this guest research. Now, this is as good as Nick or Lisa would do at a first pass, but it did it instantly.

I made a prompt for it, and I was using this prompt, by the way, David, when we were in Davos for our guests. This gets the company’s name, the founder information, and the competitors—all the stuff that a producer would do over a day or two. Do a timeline, give suggested questions, et cetera. So I taught it this.

Here’s Producer X, and it says, “Got it. That’s great guest research.” I said, “Okay, do the guest research on this person.” It came back with that. It gave me the person’s media appearances and all the stuff I would want to see for research.

You’re interacting with it like an agent. So how is it different from an agent?

Watch. Okay, we’re getting to it. I said, “Producer X, email Alex and let him know that I want to have him on This Week in AI. CC me and CC Oliver.” It said, “I couldn’t verify the email, but I’m going to try this one.” It wrote this email, and it sent the email.

Did he respond?

So here’s the email to the guest.

Oh my God.

“Hey, Alexis wanted me to reach out. He’d love to have you on This Week in AI to discuss ExoLabs, your work on distributed inference, and the recent thing he did. Let me know if you’d be interested.”

So then—it’s crazy. This guy says, “Sounds great. I’ll be in touch.”

Then I said, “Here’s what I want you to do.” We created a group called Replicants. So now we’ve made 5 replicants at the company. Today is Replicant Day, or Replicant Week. I told it, “Every time you do work for me in the Replicant room, say what you did and then also put it on your calendar.”

Now it’s putting on its calendar what it did, with timestamps. It said, “I did some guest research here,” and then, “Yesterday I did this booking report.” I’m doing this AI around it.

Then Producer X had it set up a ticker, because we did this email ticker, and it did all that work. The crazy thing is, you can start talking to it directly. I can have a direct conversation with Producer X, and it learns. Now it knows everything.

We started one to be an SDR, and then we’re giving it access to our CRM. But it built its own CRM, David. It’s building its own SaaS tools to solve its problems. Every time you add it to something, it gets smarter. So now we’re making a LinkedIn for this persona.

The LinkedIn is going to start adding people. People don’t know that these aren’t humans.

Yeah, it’s insane.

All right, let me give you a few thoughts. I was paying close attention to the whole Clawdbot freakout over the weekend. Again, I wanted to set it up really badly, but I was too afraid of the security issues to do it, so I was watching everyone else do it. Look, I think the takeaways for me are, number 1, that this will be the year of the rise of the personal AI assistant.

Until now, AI has mainly come in the form factor of a chatbot, and it’s been used as a research tool. Some people have—

Search. Yeah, it’s better search.

There’s kind of this niche case of fantasy chatbots where people actually like somehow talking to a chatbot, but really it’s about better web search, and it’s about research. Now we’re moving to a completely different form factor, which is, again, this AI assistant that’s an agent that can do things for you, and it’s going to get better and better at doing different tasks for you. Everyone’s going to have this amazing AI agent.

Now, who is the beneficiary of this market opportunity? There are obviously going to be some startups, like the guy who’s doing Clawdbot, which I guess he renamed—was it Moltbot?

It’s called Moltbot now because Claude got upset.

Right. So, in any event, it’s Moltbot now, but I think it’s a tremendous opportunity for Google, because the question is: Who has your data? Google has all my email, my calendar, and my documents, which is exactly the stuff that I would want to integrate with Clawdbot if I believed it was safe. Obviously, I’ve already made the determination that Google is safe because they already have all my data.

I think Google is in a tremendous position to offer a personal AI assistant that’s connected with your email and calendar for those of us who are using G Suite and so on. Obviously, there’ll be opportunities for other companies as well, but I think this is going to be such a big product that it may become the dominant form factor of AI—meaning more popular than the research-oriented chatbot.

Speaking from the policy point of view, I think it’s going to change the policy debate around AI, because so much of the policy debate over AI is about fighting the last set of battles around social media.

Question-and-answer modality.

It’s sort of treating AI as a form of social media. I hear policymakers say all the time, “What are you going to do to protect kids against predators?” It’s like, well, wait—what predators are you talking about? This is not social media, right?

I understand if you want to protect kids against, I don’t know, a fantasy chatbot that’s recommending they do bad things, but it’s very different, right? This is just a completely different modality. I think the rise of agents will make that clear—that we’re dealing with something that’s not social media.

Maybe there are some analogies to the previous set of policy battles that were fought over social media, but I think it’s quite different. So I think Clawdbot is a breakthrough. I think it’s a really interesting proof of concept, and we’ll also have to see exactly who the big winners are here.

I think what’s interesting is that if I said to you, “Hey, there’s going to be an AI personal assistant,” you would have some point of view in your mind on what that means. It’s like, “Oh, it can change my calendar, tell me about my travel, read my email for me, summarize that kind of stuff.”

But what I think people don’t realize is, it’s almost like the first time you use FSD in your Tesla or the first time you use an iPhone: you realize that it’s so much more, that it widens the aperture of what’s possible. It’s not just the assistant in the way that you might otherwise be thinking about it; it’s like this super worker.

The super worker, to Jason’s point, does scheduling, calendaring, ideation, knowledge work, creates new code, creates CRM tools, books your travel—it does everything. And then, if you start thinking about having an army of super workers, you’re like, “Oh my God, what’s possible?” Now think about what Elon’s doing. Yesterday, Elon shut down the Model S and Model X production lines in Fremont.

And by the way, a year ago, I’d never owned a Tesla. I was so blown away with FSD that, in the last week, we bought 2 more Model Xs. So now everyone in my family—we’re all on Tesla because the experience is so good.

They’re shutting down the Model S and Model X lines to make Optimus. So if you’ve got the same thing that Jason’s talking about and experiencing, but you’ve actually got it in physical form in addition to digital form, that’s the future: everyone has a super workforce. You put 2 Optimus robots in your garage, and they build and run a business for you. Then everyone becomes an entrepreneur.

What was my prediction, Jason?

Oh, that they would merge all these companies, and then this week—

It’s happening.

It’s happening, apparently. Or I shouldn’t say it’s happening. We don’t know it’s happening, but beep boop.

Between this and my copper prediction, I’m about to retire.

You know, copper’s up 26% in a month.

What is that? Is that annualized?

Check this out. We invited somebody from Craft Ventures on, and I forgot who from Craft Ventures is going to be on This Week in AI. So I said, “Can you tell me who’s doing it?” It said, “Oh, I couldn’t find it.” I said, “Oh, it’s in the Notion database.” So it went and found it: “Mike Robinson from Craft Ventures is on February 24.” And then there’s also Brian from Craft, or whatever. He was on a different liquidity roundtable.

I said, “Hey, can you email Mike? I want to do a pre-show call with him.” It guessed his email and sent it. I said, “See, I haven’t even given it access to my stuff.” And it said, “Oh, do you want to get his top 3 times?” All this stuff. It’s crazy what’s going on here, folks.

I would say that, out of the 50 hours a producer works in a week, this does 40 of them. And of what an SDR does, this does 95%. This is going to be crazy because it keeps learning. Now, your API bill is going to be nuts. The first day we did this, we hit $100. I think it’s going to be $1,000 a day in API calls. So my team’s like, “Hey, this is a lot of API calls because people are going crazy inside Slack and making all of these agents.”

Good news: Kimi K2.5.

Yeah. We’re ordering Mac Studios—the really powerful ones, with maximum memory—and we’re putting Kimi on them.

Is that the new open-source one?

Yeah, we're putting Kimi on them. We're going to have 3 or 4, and according to people online, like 95% of all these queries can be done for free with Kimi.

You’ll save 90%.

It’s crazy.

It’s really crazy.

This is independent, by the way, of whatever LLM you want to use. You can swap out LLMs. You can route it to different LLMs. You can do whatever you want with it. I tried to have it create Reddit accounts for me. I wanted a Reddit account to go do research, and it was like, “I can’t do that. It’s against the terms of service.” I don’t think people understand how important this Kimi K2.5 moment is.

Wait, what is Kimi K2?

Just to set some context, I think the last few years we’ve all kind of lived in a world of what I would call black-box AI. Meaning, you go to your favorite chatbot, you put in a prompt, and you press Enter, right? All of those things go to proprietary models, and they’re excellent. OpenAI has some, Anthropic has some, Google has some, and they all give you back an answer. Super powerful.

But the important thing that we don’t know to care about right now is that all of that stuff is gated. What does that mean? You don’t own the keys. You don’t own the blueprints. You have no idea what’s actually going on. And what Clawdbot demonstrated this week is that you’re one terms-of-service update away from everything breaking, right? Because at one point, Anthropic didn’t like what was going on, and they said, “No, this is not allowed.”

So we’ve talked about this battle between open source and closed source. All of the models that have been winning—the black-box models—are closed-source models. But open source is important because it’s transparent. It gives everybody their own sovereignty, whether you’re a company and, frankly, more importantly, whether you’re a country. It gives you control of your own speed. It gives you a lot of execution control. You can audit the weights of the models. It allows you to host it on your own hardware. And the most important thing is that the data never leaves your control.

That’s why open source was really important, but it was always kind of an underdog, and it wasn’t particularly good. So this week, you wake up, you go to the office, and Kimi K2.5 is important. This is why it’s so important: It was incredibly profound. It’s a trillion-parameter mixture-of-experts model. When you farm out work, the proprietary models keep that agentic layer kind of secret. Kimi K2.5 was like, “Okay, look, here’s this thing called Agent Swarm. It’s a technology that we built that’s also now public, and it allows you to create 100 subagents.” What that allows you to do is basically solve any complicated, multistep problem in parallel.

I think this is the moment now. If I had to make a prediction, I think this is a clear shot across the bow of closed source, and I think open source can win.

Why?

Because when Kimi K2.5 is accessible, it democratizes trillion-parameter reasoning that right now you could not otherwise get. Now you can do vision-to-code, you can do massive context windows—it’s really unbelievable—and it’s available to everybody.

To just build on it, you’re exactly correct, and I think it’s a very big deal. You can run it. This is the other thing: What have the 2 limiting factors been here?

I’m not a big fan of these locally hosted models. I think it’s all janky. It’s all kids mucking around. I think running these things locally is stupid and janky.

The whole point of open source is to take them into these huge data centers and use next-generation silicon. We talked about this last week or the week before, where, again, post-Groq, what I think will happen is that you’re going to see an explosion of decode silicon. If you take these next-generation systems and marry them to open source, you’re going to cut the cost of AI by 90%. And when you do that, Jason, your bill is going to be $10 a day.

Yeah. And you’re just not going to stop. Here’s the interesting thing for me: There are now people who figured out how to daisy-chain the Mac Studios. You can see there are 2 stacked there. People are starting to stack these. This is commodity hardware running open source.

Anyway, this feels like a very big moment. Let alone that, when do you think, Friedberg, we get it on here? When do we get it on our phones? When will we be running Kimi?

There are 2 advantages to this. We have control of all the data. We have it on our own hardware. We can run it infinitely, and these things are only getting better. The M5 chips are coming to these Mac Studios, and if you want more power, you stack it up. The open-source models are getting easier.

What’s going to happen is that 90% or 95% of our jobs are going to go to this local hardware. We’ll control it. We don’t have to worry about our information going up to Sam Altman. I canceled all of my OpenAI accounts—$25,000 gone. It’s a matter of time until the big model makers create an incremental revenue stream for guys like you, Jason, to license back all your prompt and response data. And you’ll probably make enough to pay for all the costs of hosting and running these models.

We’re not even talking about a lot of the architectural changes that are happening, which we’ve talked about in the past. There are papers that indicate we could probably go down by 70 to 100 times in terms of compute needs, in how the model actually runs. Ultimately, these things end up on the iPhone, running locally, and you don’t need to go to the cloud.

By the way, just having our nation’s AIs on the line here, I think this has a dramatic effect. If you play all of these paths out, the way a lot of these states have written their idiotic legislation, those legislative approaches strictly encompass the view of AI as a chatbot interface run by a single company, running a model in a data center.

If all of the models end up running locally on machines, in open source, across different contexts and different use cases, all of the idiotic, dumbass takes by legislators on what they think they need to regulate and how go out the window. Or they create a lot of confusion about what’s actually going on in the real world, and they put us at risk.

I strongly endorse the effort by those in the administration to pass a federal AI preemption law that avoids all of this nonsense in the states and local governments. I think this evolution of AI—from being centrally hosted in data centers by closed models through chatbot interfaces—means all of those layers break. You start to recognize very quickly why you need to have federal preemption on this stuff, because people get way too far ahead of it, and it’s going to limit innovation.

Yeah. Did you just—well, obviously I agree with that. Again, just to build on that point, you can’t underestimate how much the policy debate in Washington has indexed on a single use case.

That’s what I’m saying.

Which was a niche fantasy-chatbot application, right? Yeah, that’s all that people know. That’s all they know.

That turned into horror stories—legitimate horror stories. But again, that is just not the predominant use of AI, and it’s certainly not going to be in a year.

One way to think about it is to imagine if the internet came out and the only thing that happened on the internet for the first 3 years was pornography websites. Then people were like, “Okay, we’ve got to regulate the internet.” It’s like, “Hold on a second. This is an idiotic use case. Perhaps we should zoom out and think about what the internet could enable and all of the other use cases.”

Legislation needs to be crafted with a bigger view. Perhaps it’s a little too early to make those judgment calls.

Yeah. You’ve got to wonder what impact this is going to have on the valuations of these companies. If you can run this stuff locally on your own hardware, sandbox it or put it in a virtual machine, and open source wins, it’s going to change the economics of everything. The people I’m talking to in startups—which is where you always see the most efficient use of technology—they’re all using Kimi. And what was the other?

Let me ask you a question about that, actually, Chamath. Kimi K2.5 is a powerful model, but it is a Chinese model, or at least it originates in China. Obviously, once it’s open source, people can fork it and make their own. But does that concern you, particularly around the use case of coding? What if there was a secret prompt in the model—

A zero-day attack or something?

What if there was something built into the model that was secret, that could inject corrupted code? So much code is now being written by these models in such volume that humans, in the beginning, were checking it all. But now even the founder of Clawdbot said he doesn’t check all the code, because he can’t personally supervise all of it.

So as AI coding becomes a bigger and bigger percentage—right now it's probably 50%—as it goes to 99%, no one's even checking it. You have to really worry about prompt injections.

Exactly.

Code injections.

I think you're bringing up an important point. Right now, we overly rely on evals to tell us how good a model is, and I don't think we've developed a standard. The big model companies do it internally, but the safety teams responsible for red-teaming these models don't really work as a broad coalition. Everybody has their own version of what they do to make sure that their own models are good and performant.

I think there's an opportunity because somebody has to be able to take an open-source model. Let's just say you're France and you're like, “Wow, where am I in this whole AI race? I'm nowhere. We have a bunch of applications that we want to develop, and we need our own sovereign AI stack.” And so, okay, we'll take Kimi K2.5. What do they do, to your point, Sacks, to get complete assurance that that model is reliable and safe under all weather conditions? Honestly, the answer is I don't know what they would do right now.

But that's the opportunity, because somebody has to be able to say, “Okay, look, we're going to sandbox it in the following way. We're going to run it under all these race conditions. We're going to get to all these corner cases so that we can tell you that it's actually good to go, and then you can use it.” But how long will that take? And then, by that time, are we on Kimi K3? And then what is France supposed to do? I don't know.

So these are complicated questions. But, yeah, we do need an entire reimagining of how you red-team some of these open-source models, obviously.

And there's open-source models being made here in the U.S. too, by the way.

Exactly. No, no. Meta is doing them.

Wherever it comes from,

you're going to need AI models to look for corrupted code and to do the security eval. And there's going to have to be continuous monitoring. The good thing about open source is that when one person discovers a bug or a flaw or whatever, they share it with the community, and then it gets patched globally.

The other problem with open source, though, right now is you can't really fork it and make it your own. Why? Because there's so much investment by Moonshot AI—that's the company that makes Kimi K2, in that example—that you'll have so much drift in one version that your fork will be worthless. So why would you do it?

So again, it goes back to Sacks. We have to be able to say, “Okay, Moonshot will provide Kimi K2 and every update thereafter, but now we need to stress-test it and we need to red-team it. We need to be able to say that this thing is bulletproof.” And right now, there is no clean way of going to a third-party vendor to do that in a quick, reliable cycle. That's a business opportunity for somebody.

Just speaking of the business opportunity, I think there are a number of American

AI companies that are working on open-source models. It is a gap that we have.

So, and that is an opportunity. I mean, look, if you're running critical infrastructure, I don't think you want to be using a Chinese model, period, on that critical infrastructure.

I think if you can get it validated by an American company that's trustworthy, then it's no longer really a Chinese model. Chinese contributed some really great ideas, and now there's a branch that you can use. I think it's just hard to ignore how good this stuff is now.

It feels like this was a turning point this week. Okay, I want to get to one more important story. The dollar has dropped as gold, silver, and copper have ripped. The dollar index is down 10% in the last year, hitting its lowest level in 4 years on Tuesday.

Trump was asked if the dollar had declined too much. His quote: “No, I think it's great.” Wall Street thinks Trump wants a weaker dollar to boost U.S. manufacturing and exports. Obviously, we have a weaker dollar. That means stuff from the U.S. is cheaper, and foreign stuff becomes more expensive.

And we have a situation here, Friedberg, that you've talked about. Money printing has increased to $2.5 trillion a year. Trump wants to print an additional $500 billion more. That would bring us close to $3 trillion for the military, and money has poured into gold and silver, which have way outperformed the S&P. Shout-out, Vinny Lingham. Friedberg, your thoughts on dollar devaluation and what we're seeing?

Yeah. People talk about the market going up, but I'll use an analogy. If you live on an island and there are 2 huts on the island, and there's a bunch of shells that people are using for trade, each house is going to be worth a certain number of shells. And then, if people went and found a whole bunch more shells, the price per house would go up in number of shells. But there's just more shells in the supply. Effectively, you've inflated everything. And that's effectively what's gone on with the U.S. fiscal condition.

We've talked about this many times, but I think it's always worth a rehash. In a democracy like we have had for the past 250 years, without adequate constitutional constraints, it has always been the case that, over time, spending goes up. Government spending goes up. This is because, in a democracy, people ask for their government to do more every year. And as they ask for their government to do more every year, the government agents who are elected say, “Okay, here you go,” and they spend more.

Eventually, when the borrowing capacity gets unlocked—which is what happened in the United States when we went off the gold standard—you borrow like crazy. You print money to fund those borrowing costs, and you use that fundamentally to drive the next voting cycle, which is to give people more and more of what they want. But eventually, the bill comes to you, and in the United States, the bill is coming to you.

Let's start by looking at the money supply chart. This is the M2 money supply chart, showing the rapid rise in dollars in supply as a function of the central bank of the United States—the Federal Reserve—making loans to banks, ultimately to fund federal spending. I mean, really, an extraordinary number.

If you look at the M2 money supply chart going back to 1960, you can see that post-COVID, we were hoping that we would have resolved and sort of reduced the money supply by some amount. But COVID really created this accelerating mechanism, and we're back on track in the last couple of years to increasing the money supply. And so, over time, the U.S. dollar gets devalued as there are simply more dollars in the market, and U.S. Treasuries get challenged.

So if we take a look here, around the world, central banks have decided that they no longer want to hold U.S. Treasuries. And so this is the value of gold versus Treasuries in central banks' inventory. So we are now seeing that, for the first time in history—

No, no, hold on. That's not accurate. It's not like they're selling. This line just shows it's stable, per se, right? It's more that the incremental buying is in real assets.

Yeah, but the dollar value is also adjusted. So fundamentally, one way to think about this is the relative value of central bank holdings around the world. We now see gold eclipsing U.S. Treasuries. So now gold is a larger share of the holdings. Gold is now the largest share of the holdings of central banks.

If you look at the next chart, which is just over the past year, as JCal pointed out, this is the dollar index. So it's the dollar against a basket of foreign currencies, and it has declined from an index of about 109 down to 96 today.

This chart actually looks at what the U.S. stock market is trading at. Instead of trading it in U.S. dollars, what if you just looked at the U.S. stock market—the total value—in ounces of gold? And so if we had the gold standard still, and if we functionally converted stock market value from dollars back into gold, you can see that the stock market in the United States over the past years—this is about 7.5 years, going back to the pre-COVID era—is actually down, down pretty substantively from the pre-COVID era.

So stock markets are fundamentally down. Everyone's cheering, clapping, bouncing up and down: “Stock markets are up. Stock markets are up.” And I'm going to tell you why this is important in a minute. Everyone's jumping up and down saying, “Great, the stock market's up.” The stock market's up in dollar-denominated terms. But if you look at the stock market relative to gold, it's actually down.

And the sell-off is not just in the stock market relative to gold. You can actually look, importantly, at the metric that we all should care the most about, which is the U.S. Treasury yield. This is the 30-year.

The 30-year yield is now at 4.9%. The average U.S. government's cost to borrow today is 3.3%. So if we end up needing to roll all of the U.S. government debt—assuming we take on no new debt, which we know is not the case—there's $39 trillion of debt outstanding at the federal government level today. If it had to get refinanced at this rate, we would have an incremental annual cost to service the debt, just the interest on the existing debt, of roughly $700 billion a year—an incremental cost to service existing debt as interest rates climb from 3.3% to 5%.

Fundamentally, this is about 70% of the current defense budget. It's about 10% of the overall federal budget. It's a significant percentage of U.S. GDP, about 3% of U.S. GDP. It's a substantial number, and it creates the spiraling problem that we're in.

Now, I just want to make one final point. There's this de-dollarization moment. It's always worth having a reflection on it, but I just want to tie it back to Minnesota, Donald Trump, and socialism. And I think it's important for us to just highlight that if you own assets like we do—the 4 of us—we own stocks, we own real estate, we own other assets.

As the dollar devalues and everything inflates in value, our asset prices go up, and we get wealthier and wealthier and wealthier. The majority of Americans do not own assets. They are net-asset-negative. As a result, they live off income, and they do not benefit from the de-dollarization the way asset holders do.

This is what is ultimately fueling populism in the United States. Populism in the United States is what is driving socialism, and the response to those behaviors is what got Donald Trump elected, to some degree. The response to Donald Trump's actions is what's driving the civil unrest in Minnesota and other places.

I fundamentally believe that much of the unrest—the civil unrest, and ultimately this divide in this country—is driven by the fact that de-dollarization, because of excess government spending, ultimately leads a majority of people in this country to feel oppressed and left behind. They're seeing a few people in the country accelerate their net worth, like all of us here, and there's no way for them to catch up because they don't actually own assets.

So, I'll be honest with you guys and make a confession. I was at the gym this morning, on the treadmill.

You were at the gym?

Yeah. While I was there, I was actually thinking about the wealth-tax stuff that's going on in California. I wonder if it may be an inevitability in order to keep the United States from going into civil war. I mean that wholeheartedly. I just don't know if there's a way of solving this fiscal problem without a functional redistribution of wealth.

The question is, can you do it violently or nonviolently? If there's a nonviolent path, I think that's probably the preferable path.

Did you ever think about violently picking up some of those weights? We can leave that in or take it out.

The problem with that is, look, you know where this California wealth tax is going, right? It's not going to the quote-unquote people. It's going to these special interests who've been looting the state for decades.

Audit everything before you raise taxes. It's very simple, folks: audit everything.

If the money is going to waste, fraud, abuse, and special interests, then how do you solve the divide problem? I guess the special interests that are capable of organizing are able to extract, but that doesn't actually solve the problem. In fact, everything gets worse because those government special interests generally rig the system in their favor in a way that actually raises the cost for everybody.

So, you look at California: everything's performing worse.

Can we pour one out for David Friedberg's favorite government program?

Free beer. Free beer for 55 homeless people suffering from the shakes. They spent $6 million on it, but it's over—$6 million a year for 60 hobos to get beer. The dream is over, Friedberg. No more free beer.

By the way, I think Sacks's point is the right point, which is that the resolution to this isn't a fair and reasonable redistribution of assets. It's fundamentally a moment of extraordinary theft. When there's this massive movement of capital through a centralized system like the government, there's no free-market transition of capital. As a result, you end up seeing a large percentage of it go into theft, back into the hands of a few who are really good at capturing that money as it comes out of the government's coffers. That's a good point.

You've diagnosed this many times. Look, Texas and Florida do a better job for their populations, collecting half as much in taxes per capita as California does, and having no income tax or capital-gains tax.

That's because if you commit fraud here, we put you in a firing squad. That's how it works—right to the firing squad. We're going to go to the range. Come by, Sacks. Come by the ranch. I have a shooting range.

Matt Mahan entered the California gubernatorial race. He's running for governor of California. What does it mean? Who is he? Explain to the audience why this is important.

Well, he's the mayor of San Jose.

The chat's on fire.

Yeah, he's much more of a moderate, and he's not a union-captured candidate.

Oh, here's your Polymarket.

Matt Mahan announced this morning—a very late entry to the gubernatorial race. Katie Porter is the output of the Democratic machine. Tom Steyer is the billionaire climate-change advocate. Eric Swalwell, the congressman from the East Bay—

—hasn't met a virtue he doesn't want to signal.

He's literally like Christmas lights blinking.

Tom Steyer.

Well, look, if Mahan—is that the right way to pronounce his name?

Yeah, Matt Mahan.

Matt Mahan. California has a jungle primary, right? Everyone's running at the same time. There are no separate lanes for Democrats or Republicans. If he ends up in the top 2—let's say it's him and Swalwell—I think he'll win because all the Republicans will vote for him. They'll go for the more centrist candidate.

We had a political strategist over for dinner. There's a version where the top 2 people could both be Republicans, actually. Current course and speed, the top 2 vote-getters are trending to be both Republican.

I like the Karen. The Karen's the most entertaining. She's the one who said, “Get out of my shot.” That's the one.

Katie Porter.

The “Get out of my shot” one.

Yeah.

She's tumbling. She's not doing well. She's not likable, and I think everyone sees right through her as being effectively captured by California institutions. Mahan and Swalwell are much more independent, but I think it's going to be a battle between the 2 of them.

Just to go back to your point, Jason, what's interesting is there are 2 Republicans running for governor of California: Chad Bianco, who's a sheriff, and then Steve Hilton, who's a political commentator who used to be on Fox News. They're both at about 15%, which actually puts them in the lead or close to the lead because the field is so fragmented right now.

The problem that they have is, if the field stayed permanently fragmented, yes, they could be in the top 2. But that's not going to happen, as much as I would like it to, because the Democratic field is going to coalesce. If it doesn't coalesce, the party machine will get together and tell a bunch of people to drop out and get real, and they'll basically shift it.

The problem with the Republicans is that it would actually be better if there were 1 Republican instead of 2, because they need to be at about 30%. They're each going to get 15%. They have more of a ceiling, is what I'm trying to say.

Right.

It's only the final 2 that make it into the general. So, if the rest of the Democrats literally stay equal and there are 5 Democrats at 5% to 10% each, you could end up seeing the 2 Republicans in the top 2 spots.

I don't think that's going to happen. I don't think you're going to end up with 5 Democrats at 10%. I think what could happen, though, is that it's probably better to have 2 Republicans rather than 1, because the disaster would be, let's say you end up with Swalwell and 1 of the Republicans in the runoff. Then Swalwell definitely wins. That's what always happens, right?

The best chance for Matt Mahan is that it's him versus either a Democrat or a Republican. If he's up against a Democrat—a more liberal Democrat like Swalwell—the Republicans will support Mahan and he'll win. If he's up against a Republican, then he'll also win because all the Democrats will support him. Remember, this is a plus-20 or plus-30 blue state.

And, by the way, he is such a good guy. He's been such an effective mayor of San Jose. He cleared up homelessness. His practical work running something stands out among the rest of these folks. I think he's got a real shot at moving up real fast, Sacks, even though he's coming in late.

Well, yeah. Look, if he plays his cards right, he could win. I think there is a path here for California restoration. You get someone like Matt Mahan as governor, and maybe Rick Caruso takes another shot at running for mayor in L.A.

I think everyone recognizes that.

Get in the game.

I think everyone recognizes that Karen Bass has been a disaster. She aided and abetted the burning down of the Palisades. Then, if you defeat the wealth tax, you could have a path.

Wait, did Trump just take over the rebuild in Pacific Palisades with an executive order? Did I see that in my feed?

He did. Yeah. There's been a very small number of permits granted. How long has it been—18 months now?

Wait, so, Sacks, would you move back if there were a great restoration in California? I feel like somehow it's just not going to happen. It's like—

It's over. Not in our lifetime.

I feel like the fact that you're telling me that Mahan is this great candidate and the whole tech world is going to get behind him—I'm sure that's true. Somehow, I think that's the reason he's going to lose, and I think we'll end up with Swalwell, who I think—

You're so jaded, Sacks.

I think that somehow Swalwell is considered to be kind of a lightweight and a pretty dim bulb.

Friend of the pod, Eric Swalwell, come back anytime. Who interviewed him with me? Friedberg, was that you?

Yeah, I did.

Yeah, you did. Yeah.

Manifestly, he’s not up to the challenges that are going to beset California in the coming years. You need someone really stellar to clean things up after the fiscal insanity of the Newsom years.

Well, look, I’ll restate this on the show very clearly. California has a $1 trillion fiscal cliff coming up because of the pension obligations. I don’t know if you guys know this, but they once tried to change the pension benefits, and they lost a court case.

There’s precedent in California state court that you cannot change pension benefits from the date that someone was hired. You can never change their future benefits. It’s really important to know that all of the benefits that have been given to every California public employee up to this day, or that they’ve been promised, are promised for life. You’re not allowed to take them away, and they cannot be disposed of except through some form of bankruptcy.

There is no mechanism by which the state can declare bankruptcy. So, fundamentally and functionally, there are 2 ways that California can be saved. Number 1, you pass an amendment to the Constitution to fix this pension liability problem. Number 2, the state has the ability to declare bankruptcy. Everything else is about how long you’re keeping the state alive.

Well, I support that change to bankruptcy law. I just think it’ll be hard to get, but we could try. If you had a governor of California come to the federal government and say, “We would like this,” then there’s a much higher chance of it happening.

Actually, I think one question for you to ask in evaluating this is: What does Gavin Newsom want? Obviously, he’s running for president in 2028. Who would he like to replace him as governor? Obviously, he doesn’t want a Republican because that would be a rebuke. Does he want Swalwell? Does he want someone who will appear even weaker and stupider than him, or does he want someone like Matt Mahan, who will appear to clean up the state?

I think he might want the idiot, although it’s a tough choice for him.

He’ll just scream.

Well, here’s the thing: He also doesn’t want the state to fall apart while he’s running for president, because he might be blamed for that, too.

So, does he want someone like Matt Mahan, who’s criticized him? Mahan has criticized Newsom on things like homelessness, right?

Gavin is super thin-skinned.

They can get past that.

I don’t know. But Gavin is super thin-skinned, so I’m sure he resents that. Probably the machine gets behind Swalwell, even though it probably means a train wreck for the state. But we’ll see.

Yeah, that doesn’t seem like a good idea.

But this is a big opportunity for tech to flex its political muscles.

Yeah, let’s see.

Let’s see if they can do it.

It’s not just tech. It’s anyone that doesn’t want an establishment governor. I think that includes Hollywood. It includes agriculture. It includes large swaths of the state’s economy. So, let’s see what happens.

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