Massive Somali Fraud in Minnesota with Nick Shirley, California Asset Seizure, $20B Groq-Nvidia Deal

All right, we have a massive show for you today, besties, but it's not going to be our prediction show. We thought we were doing predictions at the end of the year, but we had so many amazing stories to cover in the news that we're going to do predictions next week. The first story is that we have investigative journalist Nick Shirley on. He has uncovered, in a breaking 42-minute video that went viral, $110 million in potential fraud in Minnesota. It's part of $9 billion in overall fraud, and we've got him on the show here exclusively.

This video apparently prompted responses from Kash Patel and DHS Secretary Kristi Noem, who have sent agents in to inspect these facilities. Here's some important context. These entitlement fraud cases in Minnesota have been going on for over 10 years. It's a 13- or 14-year-old story. It started with an investigative reporter named Jeff Wald, who launched his first investigation into this in February 2013 at Fox 9 News. He's a local investigative journalist. After that exposé, charges were brought in 2014 against a Somali woman and her husband. They skipped bail. They never faced trial.

Jeff Wald

Ali is facing numerous counts of theft by swindle and racketeering. She ran a daycare business and a home healthcare company that catered to low-income families. But former employees told the Fox 9 investigators back in 2013 that it was really part of a scam to collect millions in public subsidies.

When I saw the bank account for the business, there were large cash withdrawals on a continuous basis.

Can I ask you a few questions?

A year after our investigation, Ali was arrested and charged with billing the state out of about $4 million.

Since 2018, Minnesota has seen around $9 billion in entitlement fraud, according to federal prosecutors. Just to give you guys a concept of what that means, that's half of the total amount spent on 14 entitlement programs in the state.

Here's the direct quote from the federal prosecutor on the Minnesota fraud: “The magnitude cannot be overstated. It's staggering. Industrial-scale fraud.” There have been over 90 convictions for more than $800 million in fraud since 2022. In 2022, 47 defendants were charged in a $250 million fraud scheme called Feeding Our Future that was supposed to feed hungry kids. Then up to $220 million was stolen in funds for kids with autism. Then $300 million was stolen in Medicaid funds meant to help people with disabilities avoid homelessness. Starting with that Feeding Our Future fraud in 2022, 82 of 92 people charged have been Somali.

Joining us right now is 23-year-old investigative journalist Nick Shirley. Welcome to the program.

Thank you. It's been a crazy past few days out here in Minnesota.

I guess a good place to start is for you to tell the audience a little bit about your background and when you got into investigative journalism. Obviously, you've got a YouTube channel. I watched some of your early videos when you were 16 or 17 years old. I would say they had MrBeast vibes, and then you suddenly made a turn into politics, specifically around immigration, with some vox pop, man-on-the-street stuff. Maybe you could tell us a little bit about how you got into all this and how you got into this specific story.

I've been doing YouTube for as long as I can pretty much remember, since I was a sophomore in high school. It was just something I thought I could be good at. All I could do in high school was prank videos, sneaking into places, just fun stuff you can do on the weekend.

As I've grown older and had other experiences, I've matured and wanted to get into more serious topics. As I've been able to go places, see the world for what it is in different countries, and have different experiences, it led me to get into this more investigative journalism content. Also, back around 2020, you couldn't make political content on YouTube without being demonetized. For instance, if you were to put “Trump” in a YouTube title or thumbnail on my channel, you would get demonetized because I was a smaller channel. It was impossible to make that sort of content, and I was younger. I was about 17 or 18 years old at that time.

Now YouTube allows you to monetize. I noticed you had ads baked into the program, like many podcasters. You're not affiliated with any news source, and to the best of my knowledge, you're not backed by any special-interest groups or some rich billionaire. Where's the money coming from to do this reporting? Just to confirm that for the audience.

Everything I do, I'm 100% independent. I make my money off YouTube and brand deals inside YouTube videos. If people want to donate money, they can do that. However, everything I do is straight from my own hands, and I don't have any other people really working for me other than me, myself, my mom, and a few other editors.

Tell us about the origin of this story, and then I'll hand it off to the rest of the besties to do some follow-up questions.

I've been looking into this fraud for a long time. Since last June, I came to Minnesota to do a video on what was happening with the Somali population—how much it was increasing, how certain towns' demographics had changed, how churches were turning into mosques, and how mosques were growing in Minnesota. I thought it would be an interesting topic for people to see.

When I was there, a lot of people started telling me about the fraud that was taking place. I couldn't just come and label everyone, saying there was fraud happening. I needed evidence. I needed actual proof. So I've been doing my own investigation.

Then a man by the name of David, who's inside my YouTube video, started doing his own investigation. He had been doing it for years because he works next to some of these childcare centers. He had driven by them and never seen a single child at any of these daycares. He started looking into the funding and was able to get the numbers showing how much money these people were receiving from CCAP funding, which is tax exempt and it was in the millions of dollars.

I told him, “All right, I'm coming to Minnesota. Let's go see what's happening at these daycares.” When I got there, I was shocked. At the first daycare we went to, all the windows were blacked out, and you didn't even have the option to open the door. Everything was locked.

Explain the mechanics of the fraud, just so the audience, if they haven't seen this, understands how these frauds are being played out.

Massive welfare fraud is being committed. People are opening these daycares, home healthcare clinics—you name it. Anything that has to do with health, welfare, or even just helping people in general, like daycare or healthcare, they're opening these companies, and then they're able to receive millions of dollars.

The state—I don't know if they're doing any checkups on these places—because these places literally had signs that said “learing” instead of “learning” on their doors outside. What business is operating in a way where you can't even go inside or all the windows are blocked out? Very strange.

Nick, let me ask you a question that I think a lot of people have. First of all, let me just say that your video took a lot of courage and was well produced. You communicated some very complicated information in a very simple way, which I think is a tremendous skill. But the question that everybody asks is: How do we know that you're right?

In traditional investigative journalism, there's a process that people follow, insurance that you have to get, errors and omissions, and you typically have to deal with lawyers. Did you go through that process when you made this? Do you think it's an important part of what needs to be done for your credibility and for this piece to stand on its own?

I think everyone knows that fraud has been going on for years now. Like Jason was just saying, everyone knows that the fraud is being committed, but nobody's actually gone to see it firsthand. They know this fraud has been happening, right? That's why it's been so hard for people to say, “Well, this is happening.” It's also why mainstream media has had such a hard time getting exposure on the fraud, because they've never actually gone and seen it firsthand or had the opportunity to have a platform where they can share it on their own. Right.

But did you check all the traditional boxes that the New York Times or other people would? Because what I'm trying to get to is: How do we make sure that you're not attacked, that you're not discredited, and that people don't say this process is faulty, that you're mudslinging? How do we make sure that you're not sued into oblivion?

Yeah.

To specifically build on that, the allegation has come out: “Oh, you went on a Saturday. Oh, you went during Christmas.” I guess you could address that, because now people are obviously vetting your journalism.

I went on December 16th. It was a weekday before Christmas break, so there's that. As far as whether I did the vetting, the man who helped me lead the investigation himself, David, had all the paperwork from the Capitol. He had somebody from inside the Capitol leaking him the information.

So my fact check, per se, was that he had a source from inside the Capitol. That's how we were able to get the number specifically.

Do you think it's going to be important for you to have lawyers to help you navigate this? Because if you build on this, there's obviously more fraud in Minnesota.

There's a bunch of stuff in our home state. A lot of people would love you and people like you to start looking in all of these crevices. But how important will it be that you have all of the legal eyes dotted and the T's crossed here?

Yeah, that's a good question. I've never been in this position where you have hundreds of millions of people watching. I think over 500 million people saw that video just from all the impressions, aside from the main video getting 100 million, 125 million views.

That's something I definitely need to think about. But more than anything, I'm not trying to go in and barge into these places. I'm more so just giving people transparency from the outside, where people can't see it when they're sitting behind a desk talking about it.

I was simply asking, "Is it possible to enroll a child in here?" And they would say no. What daycare center doesn't have paperwork for somebody to enroll a child? I guess if I was going to do defamation on specific people and stuff, like James O'Keefe style, I know he's always having to lawyer up, which I don't ever want to have to do. That would suck because I hate dealing with that stuff.

Are you done with Minnesota? Have you uncovered everything you need to uncover, and now are you going to look at another state? There was a lot of traffic this weekend about Ohio, Illinois, and California. What do you do now?

I've been making YouTube videos consistently for the past 104 days, and I'll continue to definitely show the fraud that's taking place here inside Minnesota. It's not like I only do videos on fraud, but I think just showing people what's happening inside the country is super important.

Yes, there's a lot more fraud taking place here in Minnesota. I do have a part 2 episode on a whole different segment of the fraud that's taking place within the state of Minnesota. A lot of people have reached out to me, whether it be from California or Ohio, and at that point, I'll have to do my research as well so I don't have to be in a position where somebody can try and sue me.

What does it make you feel, Nick, as an American and also as a young American? You grow up, whatever your belief system is—what do you think? Put aside the investigative journalist part for a moment. What do you think as just an American, as a young American, about the fraud?

I think it's very upsetting. So many of my friends and so many people are working so hard just to be able to get by. I don't even have a friend who owns a house at this point in their life, and they're 23 years old.

We talk to our grandparents, and they're all talking about how they bought their first house and were married. It's like that's not even a possibility for most of us, right? When you see that people are making millions of dollars—and not only is it millions of dollars, it's tax-exempt money—they're getting it from CCAP funding, which is tax-exempt.

When we're working hard and paying anywhere from 20% to 50% of our money back into the hands of the government, while people are just funneling money, it makes us all mad. It's not fair to anybody, quite frankly.

It's interesting. Friedberg, I know you're interested in the media as well, like I am. This story has been covered for over 10 years by local news. Nick came in and did this, and it became essentially a national story.

When we did our research, we found a New York Times story last month, but none of the CNNs of the world have actually covered this. So there seems to be a little pocketing going on here, Friedberg. The local news is covering it doggedly, and run-and-gun journalists like yourself, Nick, are doing an incredible job knocking on doors, but there's this vacuum on the national level. Any thoughts on that, Friedberg?

Well, Nick, I think one of the things that makes your content so compelling is that it is long-form. When you watch 60 Minutes or CBS or whatever, they're cut down. They're segment pieces. They're 7 minutes long.

What's so great about your footage is you get the raw, true experience. It really is what citizen journalism is meant to be. You and I have talked for a while. We talked months ago about some of the work you were doing in Portland because I was asking all these questions, like, "What is everyone else in Portland up to?" All the video from all the news stations was about what was going on right outside that gate where the ICE facility was, and there were 20 people going crazy. But what's the rest of Portland like? You went out and collected that content.

That's the sort of stuff that makes your work so compelling. It feels so real. There just isn't a way for a network news station or CNN to do that sort of work, where you can sit down and spend 45 minutes looking at the very real footage that you put out, which is awesome. Can I ask you a question? You grew up Mormon, is that right?

Yeah.

And did you do a mission?

Yeah, I did a 2-year mission in Chile.

Do you think that prepared you—knocking on doors or engaging people openly in your missionary work—to be able to do this? I can tell you, I know so many journalists who would be scared shitless to go do the stuff you've done in New York City and Portland, and now in Minneapolis, where you're actually going into these facilities and looking people face-to-face. How did you develop that capability? Was it rooted in your missionary work?

I think that might come from a little of it, but being the youngest brother also really helped. I always had to impress my older brothers and be the daredevil for them and their friends. I just didn't grow up with fear. It wasn't even a concept for me to go do a bike jump when I was 5 years old, right?

It's always been something that I haven't been afraid of, and I've never been afraid of rejection either. I used to do door sales, and on the mission you're literally just walking around trying to talk to people about Jesus for 2 years straight. You get denied every single day, and you're just hoping to have a small sliver of success from what you actually do. So that definitely helped.

My mission more so taught me about the effects of mass migration because I would see so many people fleeing countries like Venezuela. Then I came back to the U.S. and saw what was happening at the border, and I was able to learn Spanish.

I think my upbringing in general, being the youngest brother, and also my morals from being a member of The Church of Jesus Christ of Latter-day Saints have all helped. I don't drink, I don't smoke, and I don't do any of that. I feel like I have an advantage compared to a lot of people, as far as my mind goes. I'm not getting skewed by addictions or trying to go and do something else.

Nick, are you still very religious?

Yeah, I am.

Sacks, what's your take on this? And the question I asked Friedberg, which you didn't get to, maybe you could take: This hasn't seemed to make the national press, but it has been covered locally, and obviously it's on X. Maybe you could give your handicapping of the media sphere and Nick's role in it as you see it in 2025.

I think it's an indictment of the press. They haven't covered this, and they still haven't covered Nick's video, which is now, like you said, a viral video with hundreds of millions of views. Everyone can see what's happening.

You basically have this huge, multibillion-dollar fraud taking place. Yes, there were stories going back a decade, like you said, Jason, but they were isolated stories where they could be portrayed that way. I think what Nick has done is show that the fraud is massive and in plain sight, and no one bothered or cared enough to expose it.

Nick, you did this by just going around to all these supposed daycare centers, which are receiving vouchers from the government of anywhere from $1.5 million to $4 million per daycare center per year, based on fictional enrollments of children. These centers aren't even operating, and they're collecting millions from the government. All told, I guess it adds up to $8 billion to $10 billion.

This is taxpayer money that's being stolen from Minnesota by this Somali community, basically. I think the story's gone viral because it includes so many aspects of dysfunction. You've got the issue of illegal immigrants. Some of the people in the Somali community got here illegally, and some of them didn't.

You then have these progressive judges who foolishly voided convictions of some of the fraudsters who were doing this. It's just a classic example of suicidal empathy or something like that. Then you've got the political corruption. Again, these are not isolated incidents. This is a case where I think we have to see this as a system at work, not just an example of a few isolated fraudsters.

There's some round-tripping here, where some of the funds that are going into the pockets of the Somali community through this fraud end up back in the hands of politicians. The really extreme example of this is that Tim Walz even changed the flag of Minnesota to resemble the Somali flag. He lowered the old flag and raised this new flag that resembles the Somali flag, which shows the political clout of this community. That's why I think a lot of politicians turned a blind eye to what was going on.

I just think you've got all the ingredients here of this story.

You've got this suicidal immigration policy that we've had combined with massive government fraud, with dereliction of duty and incompetence, combined with political corruption. And that's why the story is going viral and has gotten hundreds of millions of views. So, kudos to you, Nick.

And, of course, the way that they are defending themselves—well, first of all, the press is trying to ignore the story as much as possible. But to the extent that they have to confront it, what they do is just accuse us of being white supremacists: that anyone who notices that this fraud is being perpetrated by this Somali community, somehow that must be racial animus, that that's the only reason people care about it or something like that. And so they've accused Nick. And that actually is the last element here, which is, again, this tired, worn-out trope of accusing anyone who threatens this corrupt government machine of being somehow racist. Anyway, let me stop there. Nick, let me get your reaction to all of that.

Yeah. No, I love everything you said because it's so true. For instance, they found a man here with $7 million he had committed in fraud, and then the judge overturned it, right? And then Tim Walz is calling people like me white supremacists. He says we're acting on white supremacy. No, Tim, it's millions and billions of dollars in fraud against hardworking Minnesotans that's being sent who knows where.

And so it's not like—today I'm just looking at the media and people are... It was the craziest thing. I get on there and people are starting to say all these crazy allegations about me. I'm like, whoa, where are you guys? People have even come out and said I'm a pedophile. It's like, what? I literally just went and did the job that everyone's been wanting to see done for years, right? And I just brought everything into the limelight, tried to make it just a simple issue about fraud happening.

Let's just be clear. You just went to these daycares and just—I looked up the CCAP that you mentioned. It's the Minnesota Child Care Assistance Program, which is what CCAP stands for. It's a state-administered program, but it's funded largely by federal dollars to subsidize childcare for low-income families. So, it's not just Minnesotans who are paying for this; it's all of us through our federal tax dollars.

And I'm seeing a lot of follow-on commentators in other states now saying, "Hey, you know what? In Ohio or in the state of Washington, we're looking at the government rolls and we're seeing that there are over 500 Somali-owned daycare centers." And by the way, that's just one type of fraud or one type of very suspicious behavior, but you can start to see that people are starting to pull the thread here and they're seeing where this fraud goes.

And it's starting to raise questions about lots of other government programs as well. For example, in California, we have $24 billion going to quote-unquote homeless programs, and yet the number of homeless people keeps rising. And everyone knows it's called the homeless industrial complex. They can't pass an audit. The state refuses to even permit an audit. So, we know there's massive fraud going on in that program.

There's massive fraud going on in entitlements across the country. And I think part of the reason why Nick's video has gone viral here is people can feel that the whole country is really being eaten alive by this fraud and corruption. And it is a huge part of why we have such a huge deficit and why we have so much government debt.

And it feels like finally someone's blowing the lid on it. And Nick, it feels like you're achieving what DOGE set out to do. And I think there's no one feeling more vindicated right now than Elon Musk, because literally some of the things that he was saying back in February, you have now proven true: that there's huge amounts of entitlement fraud. Some of that money that is stolen then goes to politicians, who either support the expansion of that system or turn a blind eye to what's going on.

And some of this is even connected, I think, to voter fraud. So, you're talking about stolen money maybe leading to stolen elections. I mean, it really feels like you've kicked this rock over and we're starting to see a bunch of nasty things underneath it.

And what I think is really cool is that you're inspiring copycats. Now, some people have called this decentralized DOGE, where hopefully we get 1,000 or 1 million Nick Shirleys all over the country who start to show up and try to shine a spotlight on what's going on with all these government programs.

Yeah, I think it's essential that people realize what's actually happening and realize that, like you said, we are getting eaten from the inside. Why is our money going to these places? We always talk about how Tim Walz was ranting about healthcare the other week. I'm like, well, maybe you shouldn't be giving hundreds of millions of dollars to healthcare companies that have nothing to show when you go to their business, and all the other stuff that goes along with what you were saying.

I think the reason it sparked Elon's interest is because it's physically showing people with their eyes, not just a contract. And it sparked such a conversation across the internet because it's something people can physically see, and people are actually feeling it inside their communities.

Nick, do you think that the fraudsters are going to get a little bit better at covering their tracks now that you've exposed them? Because I feel like one of the things that was really amazing is you would just show up at these daycares that, from the government rolls, are receiving millions of dollars. They call themselves a learning center, but they misspell the word learning. So, it's a "learing center," and it's these cinder-block buildings. There's no reception. There's no one there. I mean, it's almost like they've made it too obvious.

Then there were cases where you would have people who got busted a decade ago. The locations didn't even change. They just renamed those fraudulent businesses, and they were literally operating from the same locations a decade later. I mean, it's almost like there was just no attention paid whatsoever to where this money was going. And I guess the only thing I'm worried about now is whether, with you blowing the lid off this thing, the fraudsters are just going to get better at covering their tracks.

Yeah. Well, I think that they're going to have to look into where they're sending all this money, right? Because if they wanted to really confront this fraud, they could have just cut off the money and said, "All right, one sec. Let's take a month. Let's figure this out." But no, they just kept giving more and more and more, and they even started expanding it.

For instance, how does a place just have an increase in autism? How does that happen? It made me wonder whether a lot of our statistics about issues like autism—to what extent are they manufactured? Because we're creating this huge incentive for people to create cases of autism at these fraudulent healthcare centers, and it does make me wonder: Can we trust any of the numbers?

Just to be specific, in the areas that you guys are talking about where they think there was fraud, Medicaid claims for autism in Minnesota spiked 130× in 5 years.

130×? What the heck? 130, not 1.3. Oh, my God.

From 2018 to 2023, it went from $3 million to $400 million.

It's probably the water. It's probably the water or vaccines. It could be anything. Who knows what it could be? It could be fraud.

So, I think Nick is doing the most fundamental act of journalism, for which he should be lauded and is correctly being lauded, which is just go knock on a door, right? And ask the simplest question in the most unbiased way. Now—

Are there kids here? And can I send my kid here?

You know, I looked into Nick. I looked into your videos.

Most basic could you get?

Yeah. Incredible. And they failed the test. They failed the most basic, simple test. And, you know, I looked into all of Nick's videos because I saw—

Anytime you do something like this—investigative journalism—people will correctly, and you alluded to this, Chamath, in the beginning, start to vet the vetter, right? And I was like, okay, tell me everything about Nick Shirley. Let's look at all his Twitter feed. Let's look at his YouTube videos. Who is this person? Why are they doing what they're doing?

And I watched Nick as you asked questions at a Bernie rally and some other events when you're doing your man-on-the-street stuff, which is also very brave because you can get your ass kicked. I don't know if you have security or not yet, but you're going to need it. Do you have security?

Yeah, now I have to.

Yeah, of course. So, this is brave stuff, but this is the core task of journalism: to get this primary information and let the viewer decide without bias. And we can criticize 60 Minutes and The New York Times, and there's plenty to go around, but if you look at the history of it, I think, Nick, you've got incredible potential to take the baton that you saw from that local newscaster on Fox 9 and keep building on that.

And to your point, David Friedberg, I think you made about crowdfunding and crowdsourcing this journalism, it's going to be very powerful in the future. If you look at how long it takes, though, to do this, these things take decades. So, I think you've got to stay on the story. And if you look at the Catholic Church, Spotlight, the FRONTLINE documentary, 60 Minutes, and what they did with Big Tobacco, these things do take a long time.

So you should keep your hooks into them and keep working it. The other thing I thought that's really interesting here is this could be the opportunity right now: everybody in the United States who is a taxpayer does not want to see fraud. They don't want to see waste. They don't want to see abuse. So although, Nick, I think your leanings are right.

Are you sure?

I am pretty sure that 90% of Americans don't want to see their tax dollars wasted.

What if there's a group of people that would be okay with it, even if they were told it was fraudulent, but it allows their side to keep winning?

Yeah, that's like a conspiracy. I don't think—

No, it's not. I'm just saying it's a boundary condition. I just wonder if, if you actually put it there, you would get 95% that says this is wrong.

Yeah, I think you'll get 95% that will say it's wrong. But we'll see. What I think could happen here is that this could be the issue that pulls Americans together, that we could have consensus on: We don't want to waste our tax dollars. Putting aside the fact, Nick, that you're conservative, it doesn't matter. You're religious; it doesn't matter. What matters is the truth. And the truth here is there's massive waste, fraud, and abuse.

Elon saw it. Elon told us; he confirmed it, and he got attacked for it. Elon was 100% right. Everybody who attacked him may not have liked his tactics and how fast he was going, locking doors and turning off credit cards. They may not have liked his techniques, but we as Americans can all get behind not allowing any more fraud. We should not be increasing taxes into a system that is ripe with fraud. I think everybody will agree on that.

When all that fraud happens, it keeps us from actually sending the money to things that we might actually, as a country, pull us together even more on, which is, I don't know, maybe we could have universal health care like the other 80 most developed countries in the world if we rooted out this fraud, because there's just far too much waste. I think you did a great job, Nick. I think this is where we could see massive opportunity for investment in new publications and new news sources that take folks like Nick, pair them with 2 or 3 other folks, and now you've got a team, which it seems like you're building. Then you could have a permanent funding source.

You only have GoFundMe, Nick, right now.

No, I don't have GoFundMe. I just accept donations via Venmo.

Yeah, you should start a subscription service, like Substack or any of the other ones, beehiiv, and you should literally use this momentum to get to 10 to 100 to $1,000,000 a month in donations that recur. That's the key: the recurring donations. Go ahead.

You have young people reaching out to you who want to do this work with you now.

Yes. I think people are interested. People are asking, “How do we start? How do we do it?” It's a good question. I didn't go ask somebody how to do it. I just went and did it.

And so a lot of people are so scared to take those steps, when in reality you just have to go do things if you want to make stuff happen.

There was an image that I saw on X, and it had a ship running into an iceberg. Nick, maybe you can find it. The ship's name was the USS Taxpayer, and the top of the iceberg that was visible was Minnesota, but the bottom of the iceberg was California.

That's great.

Which is the fourth-largest economy in the world—the state of California. I don't know if you can just show the tweet from Kevin Kiley, which I retweeted, with a couple of things on it. Here it is. What he says is: A third of college applicants were fake. $17 billion was spent on high-speed rail with no track. $24 billion in homelessness funds disappeared. $32 billion was lost to unemployment fraud. Medi-Cal and SNAP programs are rife with improper payments.

It's probably $100 billion a year that's being completely pilfered out of California. So, I don't know if, Nick Shirley, you have the time to come out west, but if you do, you're just going to find an entire treasure trove of opportunities to look at.

Oh, there's massive fraud in California. The homelessness has just increased as they receive more money. And that's just one part of it. Like you talked about, the light rail and everything like that—the fraud is crazy in California, and they have the highest taxes.

Yeah. They want more.

Yeah. Nick, has anybody approached you about this? I tweeted about it. I had never heard about it, but these guys educated me on it. It's called qui tam, which is this framework where you can actually sue on behalf of the state and on behalf of taxpayers. Has anybody approached you about thinking about using all of the information that you've gathered to try to launch some of these lawsuits?

No. Yeah, I actually had somebody reach out to me the other day about it. So I'm going to hop on a phone call with that guy.

Yeah. Also, as I understand it, some of these whistleblower laws reward the whistleblower with something like 20% to 30% of amounts that—

Up to 50% in some cases.

Yeah, I don't know if it's fines or amounts that are recaptured.

Recaptured. Yeah.

But I don't know, Nick, you could become a billionaire here just with all the billions you've exposed.

I have to sit down and figure it out.

I know that's not why you're in it, but—

You'd be the most well-loved billionaire in America if you did.

Absolutely. Well, the way to do it is, since you're drafting off of these other news reports, to set up your own tip line. So, Nick, what's your website? Do you have a website where people can donate? And do you have a tip line? You wouldn't get the whistleblower awards for the stuff FOX 9 has been doing for a decade, but for the next one, you could. So, what is your website where people can donate, Nick?

Yeah, everything's just on social media. They can message me on any platform. I should probably get a website going. [laughter]

Nick, what's your social media handle where people can DM you and donate?

Yeah, it's just Nick Shirley. If you go on X, I do have my tip section open. If you would like to donate there, it gives you all the options, whether it be Venmo, Cash App, or crypto. You can do it all right there.

So, X.com/nickshirley—you can go right there and tip if you want to support this kind of research. Well done, Nick.

Thank you.

Are you spending all your time in the U.S., or are you still thinking about some international stuff?

Yeah, I have international trips planned for this month as well that I had planned before this. It's funny that everyone's talking about this fraud stuff, but I have a business I have to run with my YouTube videos. I've been posting every week consistently for the past 104 weeks or so at this point, and so I have to keep moving on and keep producing content for my followers. I do have other videos, and I have other places I'm going to go film as well.

Look into those whistleblower laws.

Yeah, make some money, man.

No shame in the profit. You'd probably get a ton of investors.

Yeah. I need to look into all that stuff. It's been cool. I've had some crypto communities that have even funded money. I'm just down on my laptop at night, and people are sending me money. I'm like, “What's going on?”

It's awesome. Well done. What's the sweatshirt you're wearing? Show us the sweatshirt. The Quality Learning Center. Is that for sale now? Is that the merch?

Yeah. I'm going to go do a video outside of it right now.

You put it on your YouTube channel for merch?

Yeah, I'll put it on my YouTube, and I'll put it on X. It'll probably be a one-time drop.

Oh my God, dude.

You saw the guy who I guess runs that place or owns it. He had a video on X today saying that—

No, no, no, no. This is a real daycare center. Nick just happened to come by in the morning, and that's when all the kids are at school. He just came at the wrong time.

What was super funny about that, too, is the Minnesota Department of Children, Youth, and Families was doing a live feed at that same time, and she said that the daycare had been closed one week ago. It closed after I posted my initial video. While he was saying that it's open, the lady who runs the whole thing—or runs something in the government—said they closed it last week.

Sorry, Nick. Just one before we lose you: Do you have evidence, or have you collected evidence, that people within the agencies are part of the fraud syndicate and participating in the fraud?

It's hard to say that you have the paper trail, because you don't have access to that. But I think if you just look at Ilhan Omar's net worth, if it's true that it went from negative to $30 million since she's been in Congress—

Yeah, let's make sure we put a couple of allegedly in there.

You're right. It's all over social media, but—

Yeah, which means it could be wrong. It could be wrong.

I haven't seen a fact check. I've not seen it.

Always put an allegedly there.

Yeah. Also, I think members of Congress can report a range. I think the range is $6 million to $30 million, so they use the upper end. But let's just throw in a couple of allegedly.

Still, she went from negative to being a multimillionaire.

I'm not debating that.

I think the trend is quite curious, Nick. I'm not talking about the federal congressperson; I'm talking about people within these agencies who are signing off on the checks and signing off on these centers. In your investigation and the conversations you've had, do you have reason to believe that the individuals within these agencies, within the government agencies, are complicit, partnering in, and participating in the economic fraud?

Yeah, 100%. A lot of these daycares have 6 or 7 violations, and they're still continuing to receive funding. They have the same name, and the same person has opened them up. I was in one of their fraud committee meetings. The same person had been opening up daycares and health care companies, and it was all big. They had it all mapped out, and somebody from inside the government in Minnesota was still continuing to write these checks.

So they're not—they can't be dumb, right? They can't be that dumb, I guess is the point. Well, I mean, it's possible that they're totally incompetent, they're turning a blind eye, or they're getting payments. Probably one of the first 2, but who knows, right?

Well, the thing with the money they're receiving is that it's CCAP money. It's tax-exempt, and so they literally get the money, and they get it in cash somehow. They don't pay the women who are working there. There are videos of them just handing the ladies cash. In Islam, they're able to have 4 wives, and so they're able to collect the welfare on top of that. That's why 81% of the Somali population in Minnesota is on welfare: They're not paying the people; they're just collecting the welfare from it.

If you go into any of the grocery stores here, they're not grocery stores. They have 6 different shops inside of them, and they all have money-transfer sites inside, where they're just siphoning money out to other countries and back home. A lot of the time, you can—Fox did a segment on it in 2017. I actually had somebody who's going to be in my next video talking about this. He used to work at TSA. The Somalis would literally bring in millions of dollars in cash through TSA, and they'd fly from there to Atlanta and then to Dubai. Because there are no taxes in Dubai, they then send that money back to Somalia. So the rumors of them funding al-Shabaab—they're real, because they've been able to funnel all this money. Once they go through TSA with luggage full of cash and make it to Dubai, they're able to send it wherever they'd like.

That's a terrorist group?

Yeah, the terrorist group. Nick, let me ask you another question. In the last 2 days, since your video went viral, we've seen the mayor of Minneapolis and the governor come out and effectively say, “Hey, we need to protect this community.” Why do you think the leadership is not up in arms about the obvious fraud that you've demonstrated so clearly? Why are the government officials within Minnesota not throwing their hands up and saying, “We have to make this stop right away”? Why are they taking a defensive posture? Are they incompetent, or do you think there's complicit behavior here?

It's because that's such a large group of votes that they can receive, and David said it as well. There's some weird voter fraud that's also taking place here, where you literally just need a license. Even in one of their committee meetings, they said that.

Essentially, this happens in the UK too: When they bring in, specifically, Muslims to a lot of these areas, when it comes time to vote, the leader of the mosque or the leader of this apartment complex will say, “All right, everyone, now it's time to go vote, and let's go vote for this person.”

Because of Islam and everything, their religion, they should be more conservative if they're actually voting based on what they care about and their values, but they're always voting Democratic. They're always voting for the Democrats. If people are going to give more money, they're not really voting for what they actually believe in. They're voting for who's going to keep funding them and who's going to keep writing the checks. That's why you'll see them going to eat at a Somali restaurant, and you can tell the guys are ready to barf when they're trying to put the food into their mouths, and then the lady putting the hijab on inside one of their grocery stores. It's all pandering to get the most.

Nick, you mentioned this terrorist allegation and the funding of terrorism from the social programs. Is that something you've investigated firsthand, something you read online, or something you talked to an insider about? Can you unpack that first? That's a pretty explosive one, and I know Bessent has mentioned it, but can you unpack your firsthand knowledge of it?

Well, there are reports from 2017, and it's still coming out. People are talking about that. I think even the U.S. government has said that as well. I've also talked to people inside these grocery shops, where they have 10 different stores, and I asked them what they do. They have these shops where they wire the money off to Africa.

Right. But specifically, the funding of terrorism—you don't have firsthand knowledge of that, just to be clear.

Well, I don't think Somalia is run very well.

I mean, there's a lot of corruption there. When your main imports and exports are pirates and piracy, I don't think that's probably the best thing.

Okay, got it.

I just want to confirm because it's an explosive allegation. I want to make sure you're not saying you know this—

Bessent said it on national TV this morning, JCal.

Yeah, no, no, I know. That's why, with the way Nick phrased it, I wanted to make sure there was firsthand knowledge or if he was just referencing the Bessent stuff.

Yeah, it's really tough to say it's firsthand because how does somebody just go get the papers? That's why you rely on the government. For instance, as he just said, Bessent comes out and talks about it. It's our responsibility to keep investigating and looking into it, and also trusting the people that we trust.

Is that going to be your international trip? Are you going to try to track that down internationally, if even $1 went abroad to a terror network?

This is an entirely new kettle of fish, because now you're not just talking about domestic fraud. Now you're talking about international terrorism. Now you're going to bring in every single agency of the United States of America, all of which will have an opinion.

Yeah.

That is bad news bears for these guys if this is true.

I'll tell you where you double-clicked on it. This could be the next story.

Watch out. Yeah. And I'll tell you where I have the most concern as a citizen. I'd be most concerned about these members of the government who are complicit or turning a blind eye to allow this capital to flow to individuals who then turn around and use that capital to make donations to those government representatives' campaigns. If that paper trail is found—if the government representatives are causing money to flow basically back into their own pockets or their own campaign coffers—that, to me, is the most offensive thing as a citizen. Not only are they committing fraud, but—

We already know that.

I've had mayors in California tell me about that. They've given me firsthand accounts of knowing that family members of people inside the government are opening up nonprofits, and that's how they get a lot of campaign money.

Yeah. Look, there's a very important word here that we haven't used. We've talked about incompetence, greed, and theft. There's a very important word: patronage. This is a patronage system.

An X account called Amuse wrote a really good blog post about this. Let me just read you this part. Basically, this fraud is not incidental misconduct. It is the patronage system operating exactly as designed. Large welfare states generate predictable cash flows. Fragmented bureaucracies create blind spots.

Language barriers, slow audits, and cultural differences paralyze enforcement. When one operation is shut down, another opens under a new name, a new board, and the same people. Money moves through layered nonprofits, shell entities, and informal remittance networks. Accountability evaporates.

And then, crucially, the system does not require that all patrons be Somali. It requires only that patrons be paid. Non-Somali politicians learn quickly. They adopt the language, symbolism, and rituals of the community. They attend the right events. They avoid uncomfortable questions.

In return, they receive votes, campaign muscle and money, and insulation from accusations of racism or Islamophobia. Investigations stall. Prosecutors hesitate. Regulators retreat. The system expands. And play this video.

Whoa. Wait a minute. This is Tim Walz, the governor of the state, replacing their old flag with a new flag that's designed to resemble the flag of Somalia.

So the allegation, Sacks, just to be clear, is that they are giving this money knowing it buys votes and knowing that the Somali community is incredibly well organized in Minnesota. There was an interview with the attorney general—this is another X video that you can find. I think his name is Keith Ellison. Anyway, he was saying that the Somali community was incredibly potent politically and was a big reason why he got elected.

And like I said, it's very well organized, and they're trying to get their votes by giving them this money to steal.

It's not even a question. It's a fact that that's why they're not going after it, and so they're allowing the fraud to happen because of the votes.

Wait, again, you're saying that's a fact—that they are—

Please don't act shocked. Come on.

No, no, no. It's an allegation. I would tell you, as a journalist in training, Nick, to put “allegedly” in front of these things until you actually know it's a fact.

You think that's a coincidence? Put “allegedly” in front of these things until you actually know it's a fact.

Where did that new flag come from?

I'm not saying it's not pandering to them, but to say it's quid pro quo—just—

That's the same thing. Yeah. Instead of taking Sacks's advice here, my best advice is: put the word “allegedly” in there until you know it's a fact. Don't say it's a fact unless you know it's a fact.

Allegedly. Okay.

Yeah, just so you don't get sued, you know.

I mean, is speaking the truth criminal? Because it is a fact.

Okay, great. You say it's a fact.

How much more proof do you need, J-Cal?

No, no, it's—

You won't believe it until Tim Walz is caught on video accepting an envelope from one of these Somali fraudsters. Not my point. My point is this is political patronage. A lot of it is incompetence, and they probably didn't think they were going to get caught. But on top of that, it's turning a blind eye to an obvious problem because it's going to alienate a critical demographic who supports and has supported you in all of your elections. It's that simple.

What's Polymarket say, J-Cal, about whether Walz is going to get prosecuted or go to jail?

Let's find out from Polymarket. “Tim Walz charged by…” There's a lightly traded market with $60,000 in it—a 9% chance—

29% before 2027.

And here's your other Polymarket: Will anyone be charged over daycare fraud in Minnesota by the end of January, the end of June, or the end of December? 56%, 91%, 94%.

So if Bessent is listening—friend of the pod—yeah, double-click, double-click, double-click.

It's already on Scott's agenda. That's why he talked about it on TV, dude. He's been all over it.

You can't hide now. This is Pandora's box.

As part of that investigation, someone needs to investigate why these 3 liberal judges have repeatedly refused to hold Somali fraudsters accountable, even when the evidence is overwhelming and a jury has convicted them.

Unbelievable.

These 3 judges set aside convictions.

Well done, Nick Shirley. And next time you have a great story, please come on the pod again and let us know. Thank you.

I appreciate you guys. I appreciate all the support. Support on X and everything like that means a lot. And believe me, there's a ton more in California.

Okay, let me just go around the horn here. Lightning round, Sacks: A year from now, what will happen in relation to what we've seen in Minnesota?

Well, I hope that there will be a serious investigation. I hope there will be indictments. I hope there will be deportations—hopefully massive amounts of deportations. And I hope there'll be impeachments of some of these officials who let the fraud happen.

The country is being eaten alive, it feels like, by fraud. Government funds are being stolen. Votes are being stolen. I believe elections are being stolen. And it all comes from the fact that the party of government doesn't really care where the money goes. It's all just patronage to them, whether it's to Somali daycares or whether it's to this high-speed rail line that doesn't have 1 piece of track. I mean, how much has California wasted on that?

Yeah.

Or $24 billion on homelessness, only to see the homeless population increase. Look, these politicians don't care how the money is spent at all. All they care about is rewarding their supporters. That's the whole game. And then those supporters round-trip a portion of the ill-gotten gains they've gotten from the government back to those politicians. That's the whole game.

And then when the whole thing blows up because it's just so corrupt and inefficient and so absurd, what do they do? They try to find productive people to scapegoat. They say that billionaires are your problem. They'll blame billionaires for that, or they'll blame the tech community. Look, the startup community, or the tech community, is one of the last extremely well-functioning parts of American society, but they don't control it yet. And so what the politicians will do is try to find scapegoats to expand their control and expand the size and scope of the corrupt system that they're running.

Friedberg, what do you think? A year from now, where will we be? And what do you think this says about America at the end of the empire, which you've been focused on?

Probably 2 things. This is like everyone pocketing the silverware as the Titanic is sinking, because the spiraling spending, the lack of audits, and the lack of accountability effectively enable an environment like this. We've increased government spending so much to try to grow the economy, prop up the debt, keep the debt-service payments flowing, and so on.

As a result, anytime you have a bubble—and in this case, we have a bubble in government spending—you have frothy, fraudulent behavior. My guess is this is the tip of the iceberg. Elon's estimate was that 20% of federal spending falls under this kind of fraud category. It could be more.

And then when you add in state and local spending and start to do the accounting on all of this, we're probably talking about a sizable percentage of overall GDP that is effectively theft through government agencies or government checks being written. I think that's going to be the great uncovering of 2026. We're going to see on the order of trillions of dollars of—

Trillions—

Trillions of dollars of this sort of behavior happening across the economy.

And I also think the other side is that nothing will happen. I think nothing will happen because the cost is going to be so significant. It's almost like staring into the abyss. It's going to make people feel sick to try to address it.

Actually, let me ask you a question. How do you differentiate between legal theft and illegal theft? I think what the Somali daycares were doing was outright fraud and is illegal. But when Stacey Abrams creates an NGO in the final days of the Biden administration and that gets stuffed with $2 billion, technically, I guess that's legal, but it's clearly a different kind of theft and fraud.

Would you throw up in your mouth when you heard the news? That's the test.

That's the little test. Yeah. I call that the common-sense vomit-in-the-mouth test. If you don't pass the common-sense vomit-in-the-mouth test, it doesn't matter whether it's legal or illegal. It's wrong, and you'll realize that pretty quickly.

Chamath, your thoughts on what we just discussed and, maybe a year from now, will any of this change?

It is a crucible moment for American society. If nothing happens and we deem this kind of theft acceptable, it is the beginning of the end of the American empire. It's just a level of disrespect and lack of care for this country. I will be waiting and observing how important it is to root this out. That's number 1.

The second, which is more tactical political calculus, is that this is an enormous opportunity for the Republican Party. If they take this and run with it, is there waste, fraud, and abuse in every state? Absolutely. I don't think this is endemically a Democratic problem, but the scale of it is so gargantuan in these Democratic states that if the Republicans don't take advantage of it, I think it is a huge political miscalculation.

So there is this tactical opportunity, which I think—if you want to have a chance in the midterms, and if you generally want to have a chance to level-set the country—you must take this and run with it.

Yeah. And separately, if, as Friedberg says, it does die on the vine, it is the beginning of the end of the American empire, unfortunately.

Yeah, I think you're right, J-Cal.

I was thinking the same thing as you. These Democrats have nothing to hang their hat on. They have no platform. They're lost. They're adrift. It's going to be impossible for Gavin Newsom to do this because there's been so much corruption in California. But if he did—hypothetically—Gavin Newsom, Josh Shapiro, or Pritzker, if they came out and said, “Elon was right. DOGE is the right idea. We should take what Elon did, take every agency, audit them, prosecute anybody and fire anybody who's incompetent, prosecute anybody who's a criminal, and cut these programs 10% a year for 2 or 3 years,” then tighten them up and make them work for the American people so we can lower taxes and provide better services.

That's my platform for 2026 and 2028 for president. That is going to be the easiest path to victory and rebooting the failed, dopey Democratic Party.

Yeah, I think you're right, J-Cal. If the message from both parties is “Enough is enough”—and let me just end on an optimistic note—if they say, “Enough is enough,” we've seen it. It's staggering.

We are going to fix it. That is the party's message. That is the country's message. That is the government's message. Whether they're holding hands or yelling across the aisle, they're saying, "We're going to fix it." No, we're going to fix it. It's an opportunity.

The reality is, if the fraud, waste, and abuse is of the scale that it seems it might be, based on what we're just seeing with the tip of the iceberg here, then there is a very significant opportunity for us to significantly reduce government spending and get out of the debt spiral at a federal, state, and local level. If it is this easy to just stop this sort of thing and you could actually save trillions of dollars of wasteful spending, we could be in a very good position with a growing economy.

Here's why I think it will actually happen. I'll build on something that Friedberg and I talked about over the holidays last week. We were talking about all of this fraud in California, and he said, "Chamath, mark my words. Wait until the bond market sniffs out how fake and propped up the California economy, balance sheet, and pension system is." He said, "You're going to see these bonds run because those folks don't care about anything other than the ones and zeros of their own financial survival."

I completely agree with that. If you take that to the limit, the optimistic part of this is that now that this is being exposed, you are going to see risk get repriced. If risk gets massively repriced and munis hit the bid and a bunch of state bonds hit the bid and a bunch of these issues get broken, these folks will have no choice except to run and hide and cover their ass.

And that is a very important point. By the way, that falls at the feet of a lot of people outside of the United States who, when they see this issue, will have a lot less tolerance, even if Americans may not run to solve it. The good news is that there is an overwhelming amount of debt in the United States. There is an even larger amount of debt that's owned by outsiders, and those folks, fortunately, I think will have zero tolerance for this. They will want their debts paid back.

This is so key because muni bonds have been the tax-free staple. I mean, I've traded on that tax advantage, but not for much longer. If you know that this is happening—

Yeah, if you break munis—

You can't underwrite this. What happens to bridges and schools and all of these things? In order to build infrastructure, you need these muni bonds to work. It all starts with 3 words: Elon was right. That's why I said at the beginning, the first Democrats to say, "Elon was right," are going to win the prize. If you don't say that, you don't win the prize.

I don't think they're going to say that.

Those are wonderful sentiments, Jay Cal, but Democrats can't do that. Look, Democrats denouncing government waste is like Don Corleone denouncing the mafia.

It's a myth. It's an urban legend.

No, that is what they are. It's not like the Democratic Party is the party of government waste and spending tax dollars. It's the party of government, okay? They just want the government to be as large as possible. If a big chunk of that goes to fraudsters, so be it. You know what? Those fraudsters are donors, too. The issue here is this is all just political patronage.

So, it would be a smart strategy for some Democrat to say the words that you're saying. In fact, Ro Khanna just did. He said, "I support having an investigation to root out government inefficiency."

Perfect segue to our next story. Thank you for the masterclass.

I don't believe them. I don't believe them because they are the party of government. And it's the Republican Party, when it functions well, that is the party of the people.

It's the party of everyone else.

No. When it functions well, it's the party where the attack comes from the right, and Trump marshals that populist energy.

So, it's got to come from the Republicans, who may not deliver.

I'm not saying the Republicans are perfect, but let me just explain how to marshal that populist energy.

Okay. Go ahead.

The tick-tock of this is: you have all this fraud, let's say in California or Minnesota, and you're going to bury it. Nobody wants to do anything. They want to just sweep it under the rug and keep it going. The fraud needs to keep going. The deficits keep growing because, again, it's fraudulent, right? You're not accomplishing your goals.

You keep raising taxes, and eventually people start leaving. First, it's the people that can leave, then it's the people that must leave, and then you have whoever is left over. Now your tax rolls actually start to shrink at some point, and your deficits start to become bigger and bigger because you've decided not to root out the fraud.

The bond market will look at that and throw up in its mouth first. They will pass the throw-up-in-your-mouth test that Friedberg talked about, and then they are going to go down the throat of these state balance sheets. That is the technical term that I want you to understand: down the throat.

What that means is that the 401(k)s and the pension systems that all rely on these muni bonds and all these tax advantages to actually generate yield will start to turn, and it will be the fault of these politicians who let that happen. What I am warning all of the governors and all the politicians who listen to this podcast is that you need to get in front of this issue. Even if you think the voting population will not force you to do something, the financial markets will.

Now that they've seen this, they will not stop. They will reprice and reprice and reprice this risk until they get you to capitulate. California has half a trillion dollars of bonds outstanding, and the state of California is looking at an $18 billion deficit. They're going to continue to issue bonds over the next year, and that number is going to climb to $30 billion.

So, the bond market is crucial for California to continue to operate. This is the world's 4th-largest economy, the state of California, and it is already in a bit of a fiscal bind. Not to mention what we've talked about in the past, which is the looming pension obligations. The state of California is going to have to borrow somewhere on the order of another half a trillion dollars or more in order to pay out its current pension obligations.

How the hell is that going to happen? The U.S. government will give it to them. That's it. They're going to go to the Fed. Obviously, they're going to try to get bailed out, which is what the states always do. Just go for the bailout.

My point is, the pressure is on. I think Chamath is right that this market is going to start to basically put pen to paper on the reality of how things are operating. It's not just going to be—

And by the way, we're about to light the spark, which is the Billionaire Tax Act. Once the BTA gets on the ballot and gets passed, it lights the spark on the death spiral of these states.

Right. Yes.

Yeah, I think you're all right. I think you're all right, and I think Jay's right about it. Look, California, Illinois, and New York—these states are all in a death spiral. They're all in the process of collapsing. They will try to get bailed out by the feds. That's their only potential savior because they're not allowed to declare bankruptcy.

By the way, that would be a good thing if states could declare bankruptcy, so you could unwind some of these crazy obligations they've taken on. But you can't do that. So, they will go to the feds, and I think they're all just trying to hold on until they can get Democrats elected back in Washington.

So, 2028 will become a very important election because this is going to determine whether these states have to finally make ends meet or whether they will basically just try to federalize their problems.

No, the bill always comes due. That's the truth. The bill always comes due.

I've gone through that scenario analysis with a bunch of macro folks and a couple of external central bank folks. That's not going to happen. The reason that's not going to happen is that you'll see 20% to 30% of the bond buyers just leave the U.S. bond market, and you will have auctions that start to fail.

This is what I'm saying: there is no way out for these states. If the states think that they can fail and federalize their debt, that's not going to happen. Once whoever is the then-sitting secretary of the Treasury starts to call and says, "We're going to run this auction," they are not going to like what they see.

The reason is because of what Nick Shirley has exposed. Everybody will go back to this and say, "Hold on a second. If you could have cut 20% to 30% of all of your budgets over the last 10 years, that's $25 trillion or $30 trillion you could have used to pay down your debts, and you chose not to. Now you want to come to us?"

I just think that it's an untenable situation. The dollar will basically have decayed another 90% in that entire process. Whoever is sitting in the seat of government at the federal level will not be able to do anything at that time. That could be 2028, it could be 2032, it could be 2036.

My point is, this is just a wake-up call for America. We don't have a choice. As much as you thought you could hide it, you can't hide it anymore. You're just going to have to clean it up.

Do you think that Gavin Newsom will cut $1 of state spending? I don't think so.

No, no, no. I'm not saying he will cut a single dollar of it proactively. He will try to keep the gravy train going and growing. What I'm saying is, whoever is then secretary of the Treasury, if somebody goes bankrupt at the state level and they ask to federalize the debt, what he or she will do is sensitize the United States balance sheet to absorb that and then have to go and see who's willing to buy the debt of the United States of America to backstop that.

What I'm saying, David, is that's when it fails.

That's your prediction. Yes, and it makes sense.

I think these scenarios can be run now. And I think that's why it probably makes sense for the Federal Reserve and all these folks to basically write the white paper now that says we're not in a position to do it, so the states get the memo.

This is all going to require somebody to get elected who has the platform of austerity and fiscal responsibility.

You don't need austerity. These programs can work. Stop pilfering and stop stealing.

Number one, it's—

Be competent.

Yeah. But it's going to require a message to the American people, Chamath, that I am not going to allow not only fraud, which people agree on, but we're going to need to have some level of austerity as a country. And nobody has gotten elected on that.

You don't need austerity.

You need fiscal responsibility. I do think that is different than austerity. You don't need to cut these programs. These programs don't work. They don't work because everybody's stealing all the money. Why don't you first spend the money for what you told us you were going to spend it on when you asked us to give you the money and forced us to give you the money, then measure it, then tell us it's not working before you ask for more?

I think this is the core of this issue: Can somebody get elected on the platform of fiscal responsibility? Nobody has been able to.

I will say this: We did have, I think, a bit of impact on this podcast when we kept harping on lowering the deficit. Even though that hasn't happened, it's still top of mind in the country. And I think, putting that above everything else, my number-one issue going into these elections is going to be who is DOGE-positive and will run DOGE at all levels of government. If you're not willing to say, "I attack fraud first, and then, second, balancing the budget and reducing the deficit," then why are you even running for office now? You have to do those first 2 things. If you don't do those first 2 things, everything's existential from that point on, which leads to our next story.

Well, I hope you can admit that closing the border was a big win in this regard.

100%. That was long overdue, and I was wrong about how many people were coming in because it made no logical sense to watch it go like this, with my hand going straight across at 1 million a year or so, and then pop up to 3 or 4 million. There was no data to support it other than people sharing random clips, which I don't trust.

The border problem has exacerbated this massively because there are some states giving entitlements to people who are here illegally. That's insane. And if we want to maintain a low unemployment rate while jobs are displaced, the best way to do that is to shut the border and not let more people in because they're going to take jobs, obviously. So that actually could be the mitigating factor in all of this.

And it's probably—I would say that's the topic that got Trump elected. The number-one reason Trump got elected is because Biden was senile. And the second is because Kamala was an idiot and couldn't even debate. So you take those 2 things together. The third issue was obviously immigration.

Okay, but we have to get on to this next story because I don't want to run out of time for it, which is California wants to do an act called BTA. This act stands for Besties to Austin. This is the Besties to Austin, and it's marked: 2 of 4 besties, I believe.

Well, no, no—4 of 4. The other 2 are actively looking for houses. We just haven't found something we like. They're circling. They're in India.

We haven't found something we like. I don't want to say where I'm living, but—

Okay, Besties to Austin, boys. Let's go. Ride them, boys. There's the 4 of us on horses. Let's go. Let's get some Terry Black's.

Oh, man. Sacks and I at Terry Black's, eating beef ribs with our shotguns and our pistols. It's going to be a good time. Let's go.

Anyway, we brought this up back in October. A lot of people are taking victory laps, but we got on this first. This billionaire tax is going to target residents with over $1 billion in net worth. The history of this is really interesting. Friedberg, why don't you walk the All-In audience through how this came to be?

California has a direct-democratic ballot process, so anyone can file for something to go on the ballot. It allows them to get around the state Senate and the Assembly and basically allows the citizens to vote directly on an issue.

When they make a filing, it costs $2,000. Anyone can file for a ballot measure, and then you have to go collect signatures—roughly 900,000 signatures. Once you've collected those signatures, it makes it onto the next ballot. The state attorney general looks at it to make sure that it's legally compliant and so on. They write their summary of it, and then it makes it onto the ballot. People vote for it, and if it gets the votes, it passes.

So, in this particular case, the Billionaire Tax Act, as it's titled—which is likely going to get retitled when it's finally filed for people to review—is a 5% tax on the assets of anyone with a net worth over $1 billion. It was proposed by a guy named Dave Regan, who runs SEIU, which is one of the unions, in order to make up for the healthcare shortfall that his members are going to be experiencing.

So, this was not a broad coalition that filed this. This was not filed by the state. This was not filed by anyone in the Assembly or the Senate. This is 1 individual at 1 union who's put it forward and is now trying to collect signatures to get it put on the ballot.

To be clear, I just want to read it back to you. It's a union leader who has a shortfall in healthcare for some number of members. I don't know how many members are in that union, and they just came up with the idea: People hate billionaires; we'll seize their money—5% of it—to get healthcare for our members of this very specific union.

And the truth is, it's actually been set up as a negotiating technique. It may be—yeah. I mean, look, there's momentum behind it at this point, but it's fundamentally a point that creates leverage that allows this individual to go out and negotiate with other parties to try and find a way for this money to show up so that he can reduce the healthcare costs for his members, which is what his objective is. And this is the way the direct-democratic process works in California.

Now, it's not the first time a wealth tax has been proposed in California. And I want to be really clear on this. I think this is very important for everyone to understand.

Forget the term billionaire. Forget the term wealth. What we are talking about—and this is now being proposed in multiple places in the United States, and there are also several federal bills being proposed or considered—we are talking about, for the first time, a tax on individual people's private property, not on your income.

The way taxes work today is, when you earn income either via labor, so you collect a paycheck, or via the sale of an asset, so you sell a house and make a profit, or you sell a stock or bond and make a profit, you are earning income and you pay a tax on that income. And you only pay taxes when you realize income—when you sell something or do work and get a paycheck. So, only when you get paid cash.

For the first time ever, we are talking about placing a tax on people's private property that hasn't turned into cash. For example, you own some real estate. You own an apartment building.

Well, I think it's worse than that. I think it's worse than that because a lot of people were calling this an unrealized-gains tax, but it's not an unrealized-gains tax. You could have realized—let's say that you had just had a big outcome—

—and you sold your stock and you made $1 billion. You were fully paid up on all of your taxes.

Let me just say, not even $1 billion, right?

Forget about $1 billion. Let's say that this asset tax—because in some cases it's being proposed on anyone over $50 million or anyone over $1 million in the country—and this is why this is such a principled discussion. I'm trying to avoid this current California thing as the primary topic because there are multiple of these being proposed around the country, and they have been tried in the past.

You sell a stock or you do some work, you make some money, and that money now sits in your bank account. You've paid your taxes on that money. You sold your stock. You sold your house. You did your work. You got paid. You pay your taxes. After you pay your taxes, the government comes and says, "Hey, how much money do you have in your bank account? What's the value of your car? What's the value of the thing that your grandma gave you? Give me the value of everything you have in your house. Add it all up and give me a percentage of it."

That's what this is. It's a private-property seizure. It is a seizure of your assets to pay a tax based on all the things you own, even if you've already paid your taxes on all those things. Correct?

Now, this has been tried, and I'll give you guys a couple of anecdotes about this. In France, in 1988 and 1989, they passed this millionaire tax. Anyone with €1.3 million or greater net worth had to pay a tax of about 1% a year—1.5% a year—of their total assets. And it raised €4 billion to €5 billion a year in new tax revenue.

But what happened? €200 billion of net worth left France, and total income tax went down by €8 billion. So they ended up seeing a complete reduction in overall tax revenue for the country of France when they passed this.

So by 2018, they had tried to revamp it a bunch of times. They never got it to work. 20 years later, in 2018, it got completely turned off. So there's no longer this asset tax in France, and that was a small asset tax.

The reason they're calling it a billionaire tax is to make it easier for people to vote for it and sign up to this entirely new tax system that they're proposing to put on all Americans at some point in the United States, and for the first time ever degrade our private property rights. Forget about how much wealth you have. Forget about how rich you are. Forget about the term billionaire, millionaire, whatever it is. We're creating—or proposing the creation of—a new tax system that allows the government, for the first time ever, to come in and audit everything you own: all the jewelry your grandma gave you, the value of all your couches in your house, the value of your car, and the value of all your stocks and bonds. The government can now, for the first time, look through the veil into your personal property and say, “Here's how much all this stuff is worth. I'm charging you a percentage of that. That's what I need to get paid.”

It doesn't matter that it starts with billionaires. What matters is that we're giving the government the right to look into our private property and take a percentage of it every year, which is different from an income tax, where every time you sell a stock or bond or your house, or get a paycheck, you pay tax. That's totally reasonable because all of that is trackable, and that's a transaction that's happening legally in the public, and so on. The government has a right to look at that stuff, but we're giving the government the right to look into our private property.

Now, I'll say another thing. It's totally reasonable to say that billionaires aren't paying their fair share of taxes, and it's totally reasonable to say that ultra-high-net-worth people aren't paying their fair share in taxes. They pay an income tax, but the truth is, a lot of ultra-wealthy people borrow money against their assets and live off that borrowed money, so they never have to pay taxes by selling the stuff that they own. That's the core, fundamental issue that people are trying to address when they say that folks aren't paying enough.

And there's a simple way to address it, which is to charge them a capital gains tax if they borrow against their assets that they haven't paid capital gains tax on. Very simple. That can resolve this. Another thing you can do is raise the capital gains tax rate. It sounds unpopular. I don't agree with that, but that's another way to deal with this: take the capital gains tax rate from 20% to 30%. Make it more like an income tax. You could do that.

I'll give you guys another statistic. In the state of California, these billionaires—there's 200 of them. The total net worth of billionaires in the state of California is $2 trillion. So you're talking about raising $100 billion on this one-time 5% tax, or, as Ro Khanna would say, $20 billion a year. California is looking, again, at a $1.5 trillion liability hole that it's facing. Taxing billionaires doesn't solve any of our problems. We have more fundamental problems with respect to spending and the overall debt levels that we've already taken on.

And if you tax billionaires across the whole country, let me give you guys the statistic on this. There's about 900 billionaires in the United States. The total net worth of billionaires in the United States is $8 trillion. So if you took, let's say, 1% a year—every year you take 1% of the billionaires' net worth—that's $80 billion of income for the federal government every year. That will pay 20 days of interest on our debt. Twenty days.

Yeah. The real money is in the middle class. The net worth of the United States—the middle class and everyone else—is $170 trillion, compared to $8 trillion of the billionaires.

They need a way to open the door so that they can go after the real honeypot. The real money.

So the real goal of this, just so everyone understands, is not to tax billionaires, because there are other ways to tax billionaires. The real goal of this is to create, for the first time in American history, a private-property asset-seizure tax.

And to use that as a way to take a percentage, because they're going after the $170 trillion, not the $8 trillion of the billionaires. They're going to normalize auditing every American to understand what they own and then take a percentage of it every year. It's been tried in France. It's been tried in other countries. It never works. People leave.

It never worked.

That's why this is so offensive. Why not just raise, as you said, capital gains or an income tax here?

The biggest lie in this whole debate over this supposed tax is the term “one-time.” They keep describing it as a one-time tax. See, even you said a one-time tax. It's not a one-time tax. There's no guarantee in the language of this ballot initiative that they'll never do it again. They're not writing into the Constitution that, okay, we're just going to take 5% this one time and then prohibit doing it thereafter.

This is the first of many. This is not a one-time tax. It's a first-of-many tax. It's a precedential tax. And, like you said, the goal here is to create a new—I don't like using the word “tax” because—

It's not—it's a taking. It's not based on—

Income. It is. It's an asset seizure, and the idea—

Property-seizure system.

It's a private-property seizure. It doesn't matter whether the assets are realized or unrealized, or whether you've paid tax on them before.

But look, the point is that it establishes a precedent that we can define an arbitrary group of people and confiscate a bunch of their property because they're politically unpopular. And if it succeeds here, it will be replicated over and over and over again. Obviously, the line will come way down below billionaires because there's not enough money there. It's $8 trillion out of $170 trillion of assets.

The billionaires aren't the target. At the end of the day, the billionaires don't make a dent. If you took 1% of the billionaires' net worth every year—even if you took all their net worth—you still wouldn't make a dent. You've still got $40 trillion of debt outstanding at the federal level, and we're adding nearly $2 trillion a year. It's not going to make a difference. The impact is in the middle class.

Let me tell you another lie about this.

That's where the money is.

So when you got into that debate with Ro Khanna, who, by the way, I think is actually very smart—as far as progressives go, I like him in a lot of ways—he was trying to frame this thing as, “Oh, it's only 1%, right? 1% a year for 5 years.”

That was the first line.

Yeah. And again, this minimizing language they're using—1%, one time. They're trying to say, “Well, this is just an eensy-weensy little thing.” It's like, “We're only going to use the pinky, not—”

Not the fist, right? We're going to use—

Just the tip of the pinky.

This is just the tip of the pinky here.

Oh, too much. Too much. Too much.

Too much. No, the point is they're trying to minimize it because they know that the real value here is in establishing a new precedent that asset seizures are permitted, and that's the beginning of basically the government owning all of your property.

In fact, all of your property is effectively owned by the government, subject to people thinking that you're a good enough person that you should be allowed to keep your property. Because basically what they're saying is, look, there's an old line about democracy that democracy can't be two wolves and a sheep voting on what they're going to have for dinner. In other words, people have rights. And so you have the system of democracy, but you also have this system of rights. And those 2 things go together.

We have a Bill of Rights. We have protections. There are some things that a majority of the population cannot take from you. A lynch mob cannot vote to take your life. You have rights. You have due process.

I just want to make it clear. Look, I think what's going to happen is that if people don't see the forest for the trees here and this thing passes, it's going to get litigated because I think many of us feel that this is fundamentally illegal. That's going to take 6, 7, 8 years to resolve itself. And I suspect that it will go all the way to the Supreme Court.

Let's just say that it does pass. The thing is, it's much easier for 900 Americans to litigate in tax court over the fact that this asset was mispriced, that other asset was mispriced, because you're going to be talking about big, chunky things. But by the time that rule—if it's valid and stands legal scrutiny—rolls down the hill to 170 million Americans, they're not going to be in a position to take it to tax court.

What's going to happen is that there are going to be these frameworks and actuarial tables and all these other things that are set up that say, “Oh, you have a 2025 Lexus. It's worth this.” And you'll say, “But I don't think it's worth that. It's a little beaten up. I had a car crash in it. This and that.” “Sorry, that's the price.”

You live in a certain neighborhood. Your house is worth that. You have a certain asset. Okay, well, we think it's worth this. Your wedding ring, which is a Class C diamond, it's worth this. And you'll say, “But, you know, it's kind of nicked and it's not—” “Sorry.” And when you multiply that by 170 million people, there is no recourse.

Now you have this level of taking, which I think is just egregious. And then on top of that, what are you actually taking it for? Because we've already proven that you can't properly spend what you're already being given.

And you're creating some kind of corrupt money wheel, but you're going to create another avenue of just taking more and more and more. I think it's crazy. The fact that this story broke the same week that the California State Auditor released a 92-page report saying that over $70 billion in taxpayer funds had been, quote, lost—I think that's a euphemism for stolen.

It can't be accounted for. This includes things like the $24 billion on homelessness, the $18 billion for the high-speed rail, where not a single track has been laid, and $2.5 billion for SNAP fraud. I don't even think this includes the $30 billion—

That $72 billion would have paid for the healthcare, and it would have plugged the deficit.

And that's kind of where I was going.

Just by not allowing it to leak out.

And that's kind of my point. But it's politically easier to say that you're going to plug this hole by confiscating the wealth of an unpopular group, or a group of people that you can demonize, as opposed to actually making the government more efficient. Because, again, every single one of those fraudsters who receive the government payment is basically a political supporter. Those people don't get chosen by accident, right? It's a patronage system, and they're the ones who are part of the Democrat machine.

This homelessness-industrial complex and all the rest of it—they're never going to see cuts. By the way, the only reason this hole happened, this cut, if you want to call it that, is because the One Big Beautiful Bill Act said that you can't use federal Medicaid funding anymore for illegal aliens. That's the origin of this whole thing. That's why they're trying to plug this hole.

But look, this is why these deep-blue states are fundamentally broken and probably unfixable. I don't want that to be the case. But Sacks, is the Trump administration or Congress, if that's what it's going to take, going to be able to get legislation passed—or an order passed—that will allow for the bankruptcy of states?

Because some people—I think you've mentioned this—but some people have suggested that that's ultimately going to be a path to resolution for the bad fiscal condition that these states are in. It will allow them a way to crawl out of the holes with respect to all the obligations that they've accrued and can't actually pay for.

I just don't know. I think it's a great idea. I think states should be able to declare bankruptcy. I also think that if states go broke, there needs to be a way to put them in some sort of receivership, right?

They're not allowed to today, right? There's no mechanism.

Yeah. I don't understand what happens when a state goes broke, which these states are on the verge of being. So I don't know what happens. To get something like that passed, either you do it through reconciliation and get 50 votes—maybe that's possible—but I don't know.

I haven't heard a lot of conversation about that in Washington. Not yet. But it should be on the docket. If anyone's listening, I think it's a good thing to start thinking about.

You have the ear of certain people who might be able to do something about it. Keep us posted.

Just to do a little self-reflection here, I always like to think: Why or how did we get to this billionaire's tax? I think the fundamental issue is that people really don't feel safe in this country when it comes to healthcare and housing. We heard that come up with our guest earlier. He said, “None of my friends have a home.” And then, obviously, we hear it come up all the time with, “Hey, can I get some forgiveness for my student loans?”

But just looking at healthcare, the fact that the United States does not have universal healthcare is a complete disgrace. There are 80 countries in the world that have it. We are the second biggest economy in the world. We are the leader of the free world still to this day. The fact that we're so polarized as a country and have so much fraud as a country that we can't solve something as simple and basic as universal healthcare—that is the root of this evil.

I think the technology industry has not participated in universal healthcare, but there is a solution to it. If we, as very affluent people and as leaders, cannot come up with a way to give the poorest people in this country—and this is not virtue signaling, this is just catching up to the modern world—some base level where they can go and get healthcare, we're going to continue to see people turn to a billionaire's tax. We're going to continue to see people like the CEO of UnitedHealthcare get murdered. That's where this is coming from.

There is a deep fear among poor people, among the lower classes in this country, who feel like, “Hey, if I get sick, I could go bankrupt.” We must solve this problem. It's become such a political hot potato that there's no creativity. There's no plan. It's just fighting: Obamacare is terrible, and back and forth. That's what needs to be solved. I don't know which politician is going to be able to create some unity on this.

Poor people get incredible healthcare. It's the middle class that gets screwed over.

Okay. The people in this country still feel fear that we don't have universal healthcare.

The problem is the middle class is getting squeezed because the price of it keeps going up, because Obamacare did not bring down the price. It made it more expensive.

Yeah. So what's your solution?

You keep wanting to give it away for free.

I know you guys can criticize it. What is your plan? What is your plan for doing this? You don't have to give it to me now, but I think, as an industry—we represent the technology industry here—Sacks, you represent the 47th administration in some way. You're part of it. We need to come up with a plan for America.

If you look at healthcare, just as an example, and you can graph it, there was a trend line in the cost of healthcare. It was going up. And to your point, which is fair, under all administrations, we had not yet cracked that code.

But there was something that was massively discontinuous that happened: Obamacare was passed in 2010 and implemented in 2014. And what was that? Obamacare had this one incredibly fatal flaw, which I still cannot understand how these folks did not understand. They capped the gross margin.

Some people, at the extremely high level, would say, “Well, that makes sense.” Except it doesn't, because then how you make more money is by just charging more. If you can only make 15%, instead of making 15% on $1,000, you'd rather make 15% on $10,000. That is what's happened. It has just gotten steadily up, up, up, up, and then the quality has obviously decayed.

So if we're going to unwind this, we need to unwind the gross-margin caps that exist in Obamacare and try to wind these cost curves back to normalcy.

Friedberg, if we look at ourselves globally, I'm curious what you think.

You mentioned 80 countries that are supposedly better than us. Would you want to have surgery in any of those countries? Just wondering.

Oh, for me, I'm rich. I can do whatever I want. I would go to the best place. And if you look at Americans—

In your view—

Absolutely America.

Oh, unless it was plastic surgery, then South Korea.

No, no.

So these 80 countries that supposedly have figured it out somehow—the healthcare you would not want to go there for?

No, no—

Just wondering. No, I'm just wondering.

If you looked at the price-to-value, which is the point I was about to get to—

Where would you get your next proctology exam? On the All-In podcast, they have to remove a gerbil from your ass. Where are you going?

I would go to you. You seem to have the most experience. I would look to you for a referral. Sacks, where did you get your stuff?

Good sir.

But the point is, let's get serious. No, I want to finish my thought. Thank you. If you look, Friedberg, at the cost here, in the top 5 healthcare-provider countries that have universal healthcare, it's 6 to 8 times more for bypass surgery and 4 times more for a knee replacement. Just getting an MRI is 5 to 10 times more than in the United States.

Obviously, there's some problem here. We're paying a lot more than everybody else, and we're not getting 5 to 10% more. What do you think? If you had a creative solution, if you put your great entrepreneurial mind to this, how do we solve the problem of America not having universal healthcare?

I'm not the guy to answer that question. There are people who study this, and AI is going to solve all these problems. There are a lot of proposals out there.

I want to throw up this one chart because I do think this is our politics in a nutshell. Here we go. Someone had this great tweet. I've got to just show this, and then we've got to move on. The people who created the red lines are blaming the people who created the blue lines. This is our politics in a nutshell.

Yeah. The more the government gets involved—and I agree, you've got to have healthcare for poor people, I understand—but the more the government gets involved in healthcare, the more expensive it gets. And the same thing goes for college tuition and every other category.

Sacks, what would you do?

Well, look, you've got to have market forces. That's what that chart shows: Where you have the most market forces, which is technology, that's where you have continual quality improvements and price decreases.

And while that's happening, the people who create the red lines—basically, the people who create this out-of-control fraud and corruption and cost problem—they're the ones attacking the people who need to attack this with innovation and marketplace dynamics and get the government out of it. That's the solution in part. It's a solution—

In part.

That's what I'm trying to get across here: Our industry is uniquely qualified to lower costs and create marketplaces and competition. I would like to inspire our industry to get back on this. I know that none of us do it because it's the hardest castle to take, but we could, as an industry, have a dramatic impact on this.

Just like our friend from Spotify, Daniel, is doing his 3D scanning, and then you have Function Health and Superpower—tons of these companies trying to get self-directed healthcare going and lower costs. Anyway, we have one thing we need to get to here on the docket, which is a victory lap for our bestie, Chamath Palihapitiya.

This week, NVIDIA entered into a licensing agreement to license Groq's technology for inference chips. Chamath was the backer of this company for close to a decade and had to come rescue it a couple of times. It was a brutal, non-consensus bet. You invested in Groq and essentially formed the company with your partners 5 or 6 years before ChatGPT even debuted. So this was a visionary thing to do, and it was a hard bet. Congratulations from one bestie to another on this incredible non-consensus bet you made, Chamath. Maybe take us through a little bit of the backstory.

We started the business 10 years ago, and the whole idea was just observing that there were these patterns happening inside of AI that we wanted to be ready for. I think that this is going to be really important over the next 5 to 10 years.

To the extent that you're either a technologist or an investor, let's just take 30 seconds. In a world of LLMs, there are 2 terms that I think you're going to hear a ton about over these next few years. The first term is prefill, and the next is decode. Gavin Baker had an excellent tweet that broke this down. Nick, you can include that in the show notes.

What prefill and decode are is 2 very distinct ways of how models think and how a model goes through the process of answering a question that you ask it. When you send a prompt to AI, what happens is that the model processes it. This is called the reading phase, or prefill. It reads your entire prompt all at once, and then it does a bunch of math. It calculates all these relationships between all the words, and it stores them in temporary memory.

The problem is that this is really compute-bound, so it requires massive brute force. NVIDIA GPUs crush you, and their architecture is designed for massive parallel processing, which makes them really amazing at digesting these long prompts. Sacks and a bunch of other people have talked about context windows growing and growing, so the problem just gets bigger and bigger. NVIDIA just completely dominates.

But the next phase, the critical phase—the decode phase—is the writing phase. The model starts to generate a response. You ask it a question, and it responds one token at a time. Then, to pick the next token—to pick the next word—it has to look back at everything it has said already so that it doesn't hallucinate.

The problem is that this is incredibly memory-bandwidth-constrained. The math of all of this is easy, but then you have to do all of this nonsense. Imagine a building, and to get from point A to point B, you have to take an elevator up to the 10th floor, take the next elevator back down to the ground floor, and then walk across. That would never make any sense. You'd want to just walk across the hallway, right?

In our architecture, a long time ago, we made these design decisions from day 1. We said, "You know what? There's an entire technology stack that NVIDIA and Google have pioneered. If we try to go and build a building that looks like that, we will fail. They're too smart, they're too capitalized, they're too good, they're too big, they'll get the best deals, and we'll just be shut out."

So what we did was take a very different architectural approach. We took a very conservative process technology. We weren't pushing the boundaries of physics, and we used a lot of what's called SRAM, or memory on the chip, so that we could do this decode thing as well or better than everybody else.

Now, when you put these 2 things together, I just think it's going to create a huge acceleration in the ability for this entire infrastructure layer to get much cheaper and much more valuable. I suspect then it'll have a lot more developer pull. You'll get a lot more applications being built and billions and billions more people using it.

Think about it as prefill and decode. We were really great at decode, and I think partnering up was the strategic rationale. Essentially, what happened was that last May, Nvidia announced this thing which allowed their chip to talk to other things. Our team reached out and said, "Hey, can we experiment to see if our chip could talk to your chip and we could do this thing better?"

Over the summer, there was some kind of spreadsheet work that happened. Then they were interested enough that they were like, "I'll give you a couple of engineers." Jensen was kind of curious about it. Then, about a month ago, he and I had a call on a Saturday, and he's like, "I think this thing is really real."

I called Jonathan and Sunny right away, and I said, "You should be prepared that if this thing works, there's going to be something interesting to be done here." One thing led to another, and they acted decisively.

Here's what I'll tell you about Jensen: Having seen him a little bit up close, he is operating at a level of insight about what's happening in this industry that I've really never seen with other folks in other industries, other than Elon in his industries. It's a level of mastery and a level of skill that's really impressive. Obviously, it's a really big deal, and I'm really thankful to have been a part of it. Yeah, it's great.

Slack, $25 billion. Groq, $20 billion.

But Slack we sold to Salesforce. The thing with Groq is that I just think it wasn't a point product. I think what will happen here is, if successful, we will be a foundational layer that NVIDIA can use to make AI much more accessible, much cheaper, and much more beneficial to everybody.

Was there a point, just as a capital allocator—as an entrepreneur, which I consider you very entrepreneurial in the case of Groq—that this looked like it was not going to make it? Because we went through COVID; we went through things.

The first 8 years—I mean, look, Jonathan is a genius of biblical proportions. I said this on X. His vision for the TPU V2, V3, and V4 chips—he is a volcano of technical creativity, a true volcano. He was the inventor of the TPU at Google. There are very few people like this in Silicon Valley or the world.

Savant.

But he's not a savant. I just think he's incredibly brilliant. If that roadmap can be married with Jensen's brilliance, I think that, like I said, it'll be hugely beneficial for AI in general.

Separately, 2 years ago they acquired Definitive Intelligence, and we were able to bring one of our other besties, Sunny Madra, in as president. I think the combination of those 2—Sunny's team, which are very practical, put-your-head-down-and-go-to-market technologists, plus Jonathan's vision and technical brilliance—frankly allowed a lot of this to happen. It wouldn't have happened without those 2 working together.

Well, congratulations. It's awesome to see you get a win.

Yeah. I'd like to say a couple of things to a couple of people.

Yeah, you do. Absolutely. You got to number 2 in the VC community. You can also [laughter] be number 3. I have a message to all the people on social media and Reddit: You can also [laughter]—

Now the audience knows what it's like to lose a huge pot.

Yes. Wow. For your turn, be prepared.

He's a sore winner. He's a sore winner.

Winner, loser.

He doesn't give a speech when he loses like Phil Hellmuth. He gives a speech when he wins, and he berates you.

Yeah.

And how stupidly you played the hand.

They were terrible. And I hit my [laughter] 2-outer. Literally, Groq was a 2-outer. I bink it, and I'm like, [laughter] "I told you it was coming. So much for your nut flush."