12天战争、纽约社会主义胜选、股市创历史新高、AI版权与科学角

Did you guys see this White House video?

Oh, is there a White House video?

I honestly think that was the funniest post by a White House ever. It was the “Daddy’s Home” video.

If you say, “Daddy’s home.”

Oh.

I feel like popping bottles to this.

Come on now. Up in the club. Ooh, in the VIP. Popping bottles with the Rain Man. Let’s buy two bottles of that All In tequila.

So we get a double.

That is the best.

The backstory to that is that Mark Rutte, who’s the secretary general of NATO, called Trump “Daddy” at the summit.

Yeah, he called him Daddy.

Uh-oh.

That got weird. Friedberg, you missed it. We were just up in the club. You want to go back to the club for a second?

I do. I love the club.

You ready?

I love the club.

Popping some bottles with the NATO summit.

We’re doing it again. Come on, Friedberg.

If you say, “Daddy’s home.”

Let me see you stand up, Friedberg. You’re the Sultan of Science.

What club are we going to this weekend?

Ooh, Daddy’s home. We are gonna bring the club to us.

I think it’s called Club NATO.

Sacks, can you get the hall pass? You want to come to Vegas this weekend?

Maybe. Let’s talk about it off-camera.

Oh.

Whoa.

J Cal, come out. Where are you?

Pop on a Southwest flight. Meet us in Vegas.

Southwest flight.

I’m going all in.

Let your winners ride.

Rain Man David Sacks.

I’m going all in.

Queen of quinoa.

I’m going all in.

All right, everybody, welcome back to the number one podcast in the world, the All In podcast, your favorite podcast. We're back. We got the original quartet here, and everybody's really excited because we had a fun time on Saturday night. What a party we had at Delilah. All four besties there, step and repeat. Friedberg, you lost a bunch of money playing Bomb Potts with me and Rob Goldberg. You drank a lot.

I hate Bomb Potts.

You looked great. Your impressions of this evening.

Oh, I loved it.

Look at the bottles.

It was great. I think the tequila turned out fantastic.

This tequila has been, I mean, you guys realize when we first started talking about this, this was like two and a half, almost three years ago when we first started talking about this, and it is finally here. It took forever to get through this design development process, but man, I think it turned out great. I thought it was awesome.

You can't rush.

Everybody at the party was surprised by how good it was 'cause they thought that, I don't know, we were just doing this as a gimmick or something, but we actually put in the time to make it great. A lot of time, so. And the packaging's amazing.

Talk a little bit about the sourcing, 'cause I think that sourcing was very important.

Well, we went down to Tequila, Mexico. There's only one part of Mexico that's even allowed to be called tequila, and we found a distillery that had been aging some agave in American oak whiskey barrels for five years. And normally, Extra Añejo is aged for three years, so it was pretty rare to find a cache of five year aged, and so we basically bought it all, but there's only enough for 7,500 bottles, so that's what we did. But you know, this is not about creating some large new tequila label. This is more about creating something that we ourselves like, and that's what we did, sort of a small batch product. I mean, the money's not gonna change anyone's life, you know, except maybe yours, Susie, but.

I don't know. Uber hit another record today, so with Uber past 88, you guys are all, "I don't need to be here anymore."

But look, we do things 'cause they're fun, and it was fun to create this. Here, I've got the—

It is fun. It was really fun.

Well, look at this thing, I mean.

Beautiful box. Slides open.

It's back lit in the box. So that out of the box experience is just amazing.

Yeah, it's a great unboxing. Steve Jobs would be proud. Tell us about the bottle design. That was a lot of work, Sacks. I think this probably took an extra six months to get this right if I'm recalling correctly on the schedule.

This is super complicated to execute. Well, the bottle is designed after a stack of poker chips. And so you can see it, the chips are stacked and they're ajar, so it's like highly, there's a lot of texture here. It's made with glass and then there's these black chip accents that are actually painted onto the bottle perfectly. So this took a lot to get right. We went through a lot of prototypes to get this, and it just looks amazing.

All right, there you have it, folks, the All In tequila, as promised.

It's finally available on our website, so if you go to tequila.allin.com, you can now buy it. There's only 7,500 bottles. I think we're only gonna sell 6,000 because we're gonna keep the rest for our own personal stash.

We've sold a good chunk already. Like I think we're—yeah.

So they're going really fast. We just opened up the website. Previously, they were only available to people who had attended the All In Summit. They could pre-order it and reserve. But now the website is open.

Okay. There you go. Order your bottle, limit to two, and go have at her, folks.

So this is not a cheap product, but if you look at the pure competitor for this product is the Claus Azul Ultra, which I think sells at $1,700 a bottle. Although sometimes I've seen it sell for as much as 3,000 a bottle, so we're priced competitively with that.

And each of those boxes, and when you open it up, the lights up, and you can recharge it, so it's a keepsake, right?

There's a charging port in the box so that it never runs out of the battery to power the light.

So genius. So genius. I love that little touch.

All right, folks, there’s tons in the news. Before we get to World War III, let’s get some room service.

Do you want a side of caviar with your besties’ All In tequila?

Listen, being an elitist, guys, is very hard.

That’s why I was tweeting how stressful it is. Somebody was saying that we weren’t living up to our job as being the elite, and I was like, “Man, it’s really stressful being an elite.”

It’s very stressful.

We need a drink.

Yeah.

Absolutely. I’ll take a double. You have no idea. So, on your eggs Benedict there, did you go with the truffles or the caviar? What did you do? Foie gras side?

I went quite healthy. I have some avocado, mango, and some eggs. Where are my eggs?

We’re up to $72, okay.

David, do you wanna see my pillows with my initials on them?

Yeah.

Oh, Lord. Here we go. Shout-out to our friends at Politico. How out of touch we are.

Look, Sacks. They always put my initials.

Oh, my God.

They do that for me. Isn’t that incredible?

Okay, here we go. There are lots to discuss in the news. We’ll shift from conspicuous consumption and talk about the 12-day war between Israel and Iran. It’s 2 weeks later, obviously. A quick recap here, and then we’ll get the besties’ take on where we’re at today, June 26th, when we tape this.

1. The 12 Day War

Friday, June 13th, Israel launched a surprise attack, took out a bunch of Iranian military officials and some folks who work on the nuclear program, and they traded missiles for about a week before everybody debated if this was going to be World War III. On Saturday, June 21st, quite shockingly, the US jumped in and carried out Operation Midnight Hammer.

Over a dozen bunker-buster bombs were dropped on 2, maybe 3, of Iran’s key nuclear facilities, Fordow and Natanz. These bombs weigh 15 tons each. They’ll go deep underground. Israel doesn’t have them, and that’s the reason we’re given for why we were pulled into this: we’re the only people in the world who could have taken these out.

On Thursday morning, Chairman of the Joint Chiefs of Staff, Dan Caine, showed a video. If you haven't seen it, folks, this came out this morning. Here's the video.

It's a video of what they call a Massive Ordnance Penetrator.

Yeah.

It basically goes through the ground. I think in this case, it's going through a ventilation shaft. It doesn't immediately go off. It basically burrows to its maximum depth and then goes off.

Wow.

This looks like a test to me.

This is just demonstrating it.

This is a demonstration, yeah.

Demonstrating how it works.

Yeah. And so, here's the before-and-after photos you've probably seen. It's kind of hard to understand what's going on here except for the discoloration. Obviously, we're going for things underground.

And then, shockingly, Iran did—I don't know what you'd call this—a ceremonial response, Sacks, where they sent some missiles to one of our bases in Qatar. They gave us a ton of notice. None of them landed. Both countries have been bombing each other a little bit after Trump said he negotiated a ceasefire, which made our president a little bit upset. Here's the clip of the president, not dropping a MOAB, but dropping an F-bomb.

Donald Trump

Israel, as soon as we made the deal, they came out and dropped a load of bombs, the likes of which I've never seen before—the biggest load that we've seen. I'm not happy with Israel. You know, when I say, “Okay, now you have 12 hours,” you don't go out in the first hour and just drop everything you have on them. So I'm not happy with them. I'm not happy with Iran either. We basically have 2 countries that have been fighting so long and so hard that they don't know what the fuck they're doing. Do you understand that?

Whoa.

Donald Trump

Do you have a response?

Trump is not happy. He did the lean-in. Did you notice the lean-in there, Sacks, when he dropped the F-bomb?

Well, in fairness, President Trump is not the first president to drop an F-bomb in frustration with Netanyahu. It was reported back in the ’90s that Bill Clinton, when he had to deal with Netanyahu, who was being very obstinate and basically rejecting all of Clinton's entreaties and plans, was reported to have said, “Who's the fucking superpower here?” in frustration. So this is not the first time that an American president has gotten frustrated with Netanyahu.

But I think people reacted quite well to that on the whole, because it showed that President Trump was willing to—

He cares.

Well, first of all, he negotiated the ceasefire—

Right.

—which was amazing. Then what happens is that there was this deadline, and it's like in a fight where they ring the bell and the fighters keep slugging with each other.

Yeah.

It's like they both want to get a few extra hits in.

Mm-hmm.

And that's what—

Last licks.

That's right. They got some last licks in. But President Trump negotiated the ceasefire, which was extraordinary, and then he's willing to reprimand Israel for basically violating the ceasefire, too, which you have to do if you want to enforce it. So I think that's basically what happened there.

Now, you, Sacks, I'm sure the audience wants to challenge you on this. You were saying, “Hey, Trump is never going to get involved in forever wars.” Obviously, it looks like this might not be a forever war, which would be fantastic if that turns out to be the case. You were saying, “Hey, the reason to vote for Trump is he won't get us into another war,” and here we go. Obviously, Tucker, Tulsi, and a number of people did not want to do this, and you were one of them. So how do you reconcile all of this as somebody who did not want to see us do this?

President Trump accomplished that. We're not in a forever war. We're not in a war with Iran. You look at Mark Levin today—he's apoplectic because he and people like him were advocating for a regime-change war, and they felt like this was the perfect opportunity to drag the United States into such a war. President Trump resisted that and instead negotiated a ceasefire. So it seems to me that he lived up to exactly his promises on this.

Look, I think President Trump had to thread a very difficult needle here. If you look at polling, the vast majority of the American population believe in 2 things. Number 1, they don't want Iran getting a nuclear weapon, by 80-something percent. They also, by 80-something percent, don't want to get dragged into a new forever war in the Middle East, right? They don't want to be in a long, protracted war with Iran.

President Trump managed to accomplish both those objectives. He took out the Iranian nuclear sites in these highly precise, targeted strikes, but he did not get dragged into a new Middle Eastern war. In fact, he negotiated a ceasefire and at least an end to the war right now between Israel and Iran.

I think there are very few leaders who could have threaded this needle. Imagine if Kamala Harris were president. Just do the counterfactual. Would she have had the situational awareness to realize that when the Iranians struck at our base in Qatar, it was performative, it was telegraphed, and it was meant to basically be for domestic consumption and end the war? She might have escalated it. Certainly, a lot of the neocons who were on social media were saying, “This is our chance,” right?

Mm.

When the Iranians engaged in that performative hit on Qatar, they were saying, “We've got to escalate. We've got to basically bomb all of Iran now and get into a big war.” Trump had the overall awareness of the situation to avoid that.

And this goes back to his experience with Soleimani back in the first Trump administration. The Iranians did the same thing, where they fired some missiles at American bases, but they were telegraphed. We were told in advance they were coming. They were easy to avoid. No Americans got harmed, and then Trump ended the conflict there. I think that a lot of presidents might have gotten sucked into a new Middle Eastern war.

Chamath, let me pull you in here. Obviously, there's a little cognitive dissonance. Folks didn't want to go to war, but we don't want WMDs in the hands of Iran. How do you reconcile all of this? Does the outcome make it okay in your mind, or would you rather have seen us not get involved in this?

Can I up-level this slightly?

Sure.

2. America Reclaims Superpower Status

I think that this has been probably the most important week, and I would almost say the most important few months, in US politics in 30 or 40 years. The reason is that it starts to converge a bunch of things together that I think are really worth putting on the table.

From my perspective, I think what President Trump has done is almost single-handedly bring back the United States as the global superpower, and I would put that in all caps.

So what does it mean to be a superpower? I've said this several times, but just to be slightly redundant, in order to be a superpower, I think you need to have 3 things, but they work in a hierarchy. The first is that you need to have technical supremacy, and then from that technological supremacy, you need to establish and project economic supremacy and military supremacy.

If you look at the first one, you saw a tactical demonstration of technological supremacy with the B-2 bombers. But taking a more general step back, if you look at the largest companies in the world, the ones that are actually driving the world forward, these are all American companies.

I think these last few months, you've seen America firing on all cylinders technologically. Economically, at the same time, you now have the stock market back at all-time highs. You have interest rates incredibly starting to compress, even in the absence of the Federal Reserve being willing to act on data. So you're projecting economic supremacy.

And then these last few weeks, frankly, have been a pretty clear-cut case of military supremacy. I think what's pretty simple now is that the US is essentially telling the world, “Our words carry weight again. We're going to shape the global order.”

Countries will now have to calibrate their actions around what the US is willing to tolerate and what it isn't willing to tolerate. In the case of Iran, the president made those lines really crystal clear. He warned them 100 times where the line was, and he was clear: “You cannot build nuclear weapons.”

When the line was crossed—and I think the CNNs of the world want to debate that the line wasn't crossed—all I can tell you is I don't know, because I don't have access to the intelligence. I believe what he, Tulsi Gabbard, JD Vance, Marco Rubio, and Pete Hegseth are saying: They crossed the line, and then he showed that he will use decisive military force when that happens.

But here's what's crazy, and this is where I think you become a real superpower: It's what happens after. Once you cross the line, you notice that he doesn't try to humiliate or dominate Iran. He tells Iran that he wants them to stabilize themselves. He told them that he wants to see them trading oil with China. He wants to see them improving the lives of their people, because he realizes that a stable Iran is a stable Middle East.

So I think it's really amazing. And then the fact that he was able to bring Israel and Iran, which have been on the verge of some kind of conflict for decades, to a ceasefire—it's a really important moment, I think, in American history.

I really do think that if you look at my little framework, it is the closest thing for us to being able to say that we are truly a clear-cut, singular-hegemon global superpower again.

And that's really exciting.

All right. Well, he definitely did provide that golden bridge for Iran to cross over and maybe move into another phase. But David Friedberg, maybe you can steelman the other side of this just for the discussion here. This could have gone another direction. We could be sitting here, and there could be terrorist attacks or sleeper cells in the United States.

It could turn out, when we do the postmortem here, that they weren't close to having a nuclear bomb, and we did this and got goaded into it. So maybe, obviously, things have gone well to date, but things might not have, so maybe you could steelman the other side of this. What's the argument for not having done this, and what if things had gone another way? How bad could this be?

3. The War Is Not Over

I don't know if this is over. That's my point. We're kind of in the middle of a choose-your-own-adventure book here, and I've got to imagine that the Israelis and Netanyahu, who's been pretty vocal about this regime that's been shouting for decades now, “Death to Israel, death to the USA,” and saying it needs to change, are not suddenly going to say, “Hey, let's take a beat and walk away from this, and we'll all kind of have peace in the Middle East.”

I think we've got to expect that there's another page to turn that's coming. I don't know if you guys heard—I don't know if it's genuine or authentic—but did you hear that audio of one of the Mossad or IDF people calling an IRGC commander and telling him that he has 24 hours to leave Iran with his wife and child? Did you guys hear that?

No, I have not.

I saw it. Or, I heard it. It's pretty incredible, and I've got to imagine that there's going to continue to be an effort to destabilize whatever regime remains in Iran by Israel and Mossad. This isn't going to be a quiet, peaceful transition.

Whether these guys are going to be trading missiles back and forth tomorrow, we don't really know, but this isn't over, and I do think that the next set of actions is going to be critical. What I was pretty surprised by—everyone was saying, “Hey, we're on the brink of World War III.” There was some serious statesmanship that must have gone on.

I have no idea, and I've had no insight or conversations with anyone to give me any sort of proprietary access to knowledge about what's gone on here, but I've got to imagine there were calls to China and Russia that kept them in the loop and kept them in play on how this all played out. The whole fear was that this was going to create this magnet in the Middle East, that everything was going to rush in and catalyze World War III, and it didn't happen.

I do think that, first of all, nothing that folks predicted actually happened, and no one predicted what did happen. Pretty shocking, right? I'm not going to sit here and try to predict what happens next. If I'm thinking about game-theory-optimal poker play, I've got to give credit to this president because it was completely unpredictable what was coming next.

I don't think that there was a really clear path on what he was going to do. Just like what has happened repeatedly, everyone always slams the table and says he's starting World War III, he's driving economic collapse, everything's about to end, and then it turns out he kind of ducks and weaves and finds his way through, and everyone's like, “Holy shit, I didn't expect that to happen.”

It's very unpredictable what's going to happen next, so I'm not going to sit here and try to estimate what's going to happen next. I can tell you, I don't think the Israelis are going to sit by quietly and allow this Iranian regime to continue to go out and build up a military that's constantly shouting, “Death to Israel, death to the USA.” I think that they've taken their first shot, and I don't think it's their last. So we'll see how this all plays out. I really don't know.

Let me just tee up one person who did get it right. Here's John Mearsheimer at the All-In Summit just 9 months ago. Let me play this clip here and get your reaction, Sacks.

John Mearsheimer

To counter the Iranian escalation scenario, the fact is Iran does not want a war with the United States, and the United States does not want a war with Iran. And it's the Israelis, especially Benjamin Netanyahu, who has been trying to sort of suck us into a war because he wants us, the United States, to really whack Iran, weaken it militarily, and especially to go after its nuclear capabilities, because, as you well know, they are close to the point where they can develop nuclear weapons.

So the Israelis are the ones who want us to get involved in a big war with Iran. That's the escalation flashpoint, and the $64,000 question is whether you think the United States and Iran, kind of colluding, can work together to prevent the Israelis from getting us sucked in.

That question will be answered based on who leads the next administration.

John Mearsheimer

Well, if you believe that it matters who leads the next administration—

That's true.

And there, Sacks, there's you laughing at this incredible insight, which is, as you were saying last year, and Mearsheimer's been saying, this was manifest destiny. This was going to happen no matter who was president, and here we are. So your thoughts on Mearsheimer? I mean, wow, he just nailed it there.

And that was to your question, Friedberg, by the way, so well done to Friedberg. We didn't put your question at the beginning because he went on for 5 or 10 minutes there. But go ahead, Sacks. Your reaction to Mearsheimer's incredible prediction.

That's Professor Mearsheimer being prophetic, as usual. But let me go back to a point that Friedberg was making. To Friedberg's point here, this is not over. Iran and Israel are mortal enemies, and we have a ceasefire here. We have a pause in the action, but it's going to flare up again at some point.

The question is what US policy is going to be, and I think what President Trump did over the past 2 weeks is make it clear that, number 1, the United States does not want to see Iran get a nuclear bomb, and that we are willing to take military action to prevent that, but that that action will be narrowly targeted, as narrowly targeted as possible, to achieve that objective.

Number 2, the United States does not have an interest in going to war to basically achieve regime change. If the people of Iran want to make Iran great again by rising up and toppling the government, then that's up to them. Certainly, I think we would welcome that.

But the Trump administration rejected all of the calls over the past week or so for the United States to plunge into a regime-change war in Iran, and that's why the neocons right now are not happy at all. Look, I think Trump found the right balance here, which is: We are going to be narrowly focused on preventing a threat to the United States, which is Iran having a nuclear bomb, but we're not going to go plunging into another forever war, another regime-change operation.

We've had plenty of experience with that in the Middle East. None of it worked. Every time we went for regime change, it backfired—in Iraq, Afghanistan, Libya, and on and on. So there's no reason to believe regime change would work. And, by the way, there's no way to get regime change in a country unless you send in American GIs to basically keep that government propped up in power, because it's almost certainly going to be perceived as a puppet of the United States.

If you put Reza Pahlavi, the Shah's son, in power in Iran, he's going to face an insurgency right away, and there's no way that his government is going to stay in power without the American military protecting him and keeping him in power at the end of a rifle barrel. This whole idea that you can achieve regime change without its evil twin, which is nation-building, is a total fantasy. You can't do it. You would need an American occupation going on for decades.

I think that the Trump administration wisely rejected all of this giddy talk. Remember, in the first couple of days of that Israeli surprise attack, where it was Israel that hit Iran, there was all this talk about decapitation, that the Iranian regime was about to collapse and just needed a little bit of a push.

Lindsey Graham.

Lindsey Graham. That's what Lindsey Graham said. That was all heady talk that turned out not to be true. There's no question that the Iranian regime took some damage, but it did not collapse.

In fact, if you look at history, one of the things Mearsheimer's pointed out is that you don't get regime change just through air power alone. It takes boots on the ground, and most Americans are not willing to put boots on the ground in Iran to change the regime there. We believe that it's sufficient just to keep Iran from having a nuclear weapon, and that's what American policy should focus on.

Yeah, I really fell for this check-raise from Trump, who was like, “Yeah, no, we're not doing this. We're not doing this.” And all of a sudden, he does it, right? Nobody expected him to do it. Everybody thought he wasn't going to intervene.

As a Gen Xer, like you, Sacks, and I guess Friedberg and Chamath as well, when I saw them building the case here—the Lindsey Grahams, the hawks, reports of WMDs that were imminent…

Who knows if that's true? “These people support terrorists. They're trying to assassinate the president” became part of this. Remember the last time with Bush Sr.—spreading democracy in the Middle East, the regime-change stuff. That made me all very nervous, and I think the most important next step here is that this administration explain in detail to the American people, so we don't have another damn WMD situation. Just honestly tell us the truth.

Did we hit them? Did we hit some of them? Was there an imminent threat? Was it sort of imminent? We just need to have full disclosure here. I don't like attacking the press for a leak inside the administration. It's the administration's responsibility not to have leaks, and it's the responsibility of the press and the opposing party, whoever opposes this action, to really vet this.

We need that part of the democratic process. I hope we don't shut that down and just blindly follow the leader because it went well, because this isn't over, number 1. Number 2, it did go well. Huge credit to Trump for that. If it does go well and he ends Russia's invasion of Ukraine, give him the Peace Prize. I'm all for it. Fantastic.

But let's get the disclosures here, and let's not blame the press for getting a leak. Let's actually look at this and explain to the American people what we accomplished, what didn't get accomplished, and what the realistic next step is. I give him a lot of credit for telling Israel where the line is and giving the golden bridge to Iran. They will have a revolution on their own timeline, but we should not be part of that, right?

That's the lesson we learned, to your point, Sacks. We can't be the revolution in Iran. They have to be the revolution.

It's got to come from the bottom up.

Absolutely.

May I also disagree with one other thing you said? You said you were starting to get nervous about the stampede toward war. I think you were correctly perceiving what was happening in the media. This includes Fox News, especially Fox News.

There was all this talk about how easy it would be, that it'd be a cakewalk, that the government was on its last legs, that it was weak, that it was basically almost toppled. We just need to push it over. You're right about the WMD talk and the talk about the assassination. This is all literally a carbon copy of the arguments that were made back in 2003.

It's the playbook to get us into the Iraq War. But look, I think 2 things are different now. Number 1 is President Trump is not George W. Bush. That was made abundantly clear. Number 2 is we now have alternative media, so even though the mainstream media and Fox News were basically acting like this was 2003, we had alternative media and people like Tucker Carlson speaking out, and Steve Bannon—I have to give him credit on this—and others who were pointing this out and making the case that this would not go well.

I do think that it's been very helpful to have that chorus of voices as a rebuttal. You correctly felt that we were being pushed into war, but I think this is different now because, 20 years later, people remember what happened—at least enough of them do—that they're able to make the countercase. Fortunately, we have a decision-maker in chief who also remembers and listens to those arguments.

Yes.

All right. I think we've made some good progress here. Let's move on in the docket. We've got a lot of other topics to talk about, obviously—oil prices. Chamath, you had talked about those in relation to this action. You said, “Hey, if this goes poorly, we could be looking at $100-a-barrel oil.” Quite interestingly, while it did spike a little bit, up to $74, almost hit your $100, Chamath, racing up from the $60 mark, we come back down now.

I think our energy independence here in the United States makes us not immune to this, but we're somewhat protected, and I think that's the great thing about energy independence. But here we are. The markets have digested this, priced it in, processed it in a way that I think maybe none of us thought it would. So maybe you could unpack your thinking now on the market's reaction to the war.

4. Oil Prices Defy The War

The fear that I had was that if there was a protracted conflict, what you effectively would see is a bunch of supply go offline. If that supply went offline and the demand stayed even roughly the same, you would see prices go up. My thought was that the price of oil could double. I think Goldman had it slightly under a doubling.

So that was definitely the fear that folks had going into that weekend. But coming out of it, this is where I think you have to be very respectful of the fact that the market is really the sum of many informed opinions. I think what they saw was that Iran was not really in a position to do anything but capitulate and give up.

And I think that what they also saw, whether you agree with the Israeli policy or not, was that they had systematically gone from where they were and marched eastward, essentially. They effectively decapitated Hamas. They effectively decapitated Hezbollah. They effectively decapitated the Houthis.

I think finally putting a nail in the coffin of Iran's nuclear ambitions was not just important for Israel, but it's critical for Saudi Arabia and the UAE.

Yes.

MBS had an incredibly powerful quote, which was, “If Iran gets a nuclear weapon, we will have no choice but to get our own.” Right? So by taking all of that risk off the table, what you're now talking about is an enormous supply that could essentially service world productivity needs unhindered.

Because it's not just Iranian supply. You're talking about Emirati supply, and you're talking about Qatari supply, and you're talking about Saudi supply. So I think what the market realized was, okay, now the Middle East is the closest it's ever been to fully monetizing the oil that they have and investing aggressively in their own people.

The second thing is that Steve Witkoff spoke about the fact that you should expect the Abraham Accords to expand. So if you think about that one-two punch, not necessarily from a geopolitical lens but from an economic lens, the first punch is neutering the Iranians' ability to be chaos monkeys in the region.

But the second punch creates normalization across the region with Israel. It doubles and triples the ability to monetize oil and start to invest those returns in future projects that have a much better ROI.

Yeah.

All of that leads to cheaper energy.

And Iran becomes the odd person out here in this new federation of people in the Middle East who want peace and normal relations, I think.

Yeah.

It's a phenomenal question, Jason, but I think that's what the market sniffed out.

Yeah.

And I think that's what the market is now saying: This is a chapter that we can close and move on.

This could be a big paradigm shift.

Huge.

And Friedberg, the major part of this paradigm shift that we're seeing here comes from an investment in energy in the United States since the Iraq War, since the Afghanistan War. We now are energy independent. We're a net exporter. We've invested in solar. We've invested in wind. We're doing more drilling, natural gas.

And this week, I think we saw some new starts for nuclear as well. So this time around, when we look at our Middle East policy, it is not informed by our need for that oil. Is that correct, Friedberg, in your mind?

Well, I think you have to look at it on a global basis. Iran exports $60 billion a year. About $55 billion of that goes to China, and that number is up from, I believe, sub-$30 billion just a few years ago, or sub-$20 billion.

So the relationship between Iran and China, and the importance of that relationship to China's economy and productivity, cannot be understated. Independent of the United States, on a global stage, the situation with the supply of energy and the partnership on energy with what is effectively the U.S.'s largest rival now is critical to take into account when doing the calculus on how to resolve this going forward.

Which is also why I don't think that we have perfect information. I don't think the public has been given perfect information about the statesmanship that's gone on between the United States and China, or the conversations that have gone on at a high level between the U.S. and China, or at a high level between the U.S. and Russia regarding what is the right way to transition the region.

When I look at the region and hear about other leaders in that region speaking publicly—the King of Jordan, MBS from Saudi Arabia, the Omanis, the Bahrainis, all of the other leaders in that region, even the Qataris, who seem to try to straddle both sides here—they all seem to have a very strong imperative and incentive to modernize the Middle East, to bring those economies onto the global stage, to bring them into a modern economy.

Well, Jason, I know you've talked about this, and you've visited, and the rest of us obviously have relationships there, but there's a strong demand and a strong interest in this region in modernizing. And that modernization is going to benefit the world because they will ultimately be net exporters. They will ultimately be net producers of things that everyone else will buy and participate in, and they will also be very big consumers. They are already—

Very big buyers of American technology and American businesses, and also big financiers of global capitalism.

Hmm.

In that context, I don't think it's just about, “Hey, we gotta go get the oil,” or, “Hey, we gotta go get the energy.” It's about how you balance China's need for energy, how you balance the Russian incentives, and how you help the rest of that region modernize. I think that's where there's a very complex dance underway that we have very little insight into the details of those conversations, and I'm not gonna just sit here and be very flippant about, “Oh, we should do this,” or, “We should do that,” because there's a lot at play. I think that is, in my opinion, the net calculus—the bigger-picture calculus that's underway—

Yes.

…in trying to transition the region.

Sachs, let me ask you a question here, leveling it up. It's pretty well known the Israelis have nuclear weapons, and many of them, and they have for some time, even though they're not part of any of the treaties, and they will claim they don't have them or be a little coy about it. What is the argument for nobody else in the region being allowed to have one if the Israelis have many? And would you be okay with Saudi having nuclear bombs? What is the argument we would make to them as the West, as Americans, as people who have nuclear weapons—Russia and China have them—why can't Saudi Arabia have them? What's your best argument to them for not acquiring them if the Israelis have dozens to hundreds?

Nuclear proliferation is just not in our interest. We don't want more countries getting nuclear weapons. Obviously, some countries have them, but if you use that as the rationalization for everyone being able to have them, then you're gonna end up with 200 countries that have nuclear weapons. So I think the nuclear nonproliferation regime is in the interest of the United States.

We all understand the danger of these weapons. The more countries that have them, the more dangerous the world becomes. Now, it is true that unofficially the Israelis have nuclear weapons, but like you were saying before, if Iran gets nukes, then Saudi Arabia will be forced to get nukes, and so on down the line. And so there will be a domino effect. With each country that gets nuclear weapons, more countries around them that feel threatened will feel the need to have their own deterrent, and the question is just where you stop this. I think we just wanna stop it here. We don't want more countries getting nuclear weapons, particularly ones that we have hostile relations with.

Yeah. And the last country to give up their nuclear weapons was Ukraine. Really bad decision, perhaps, I think, in hindsight.

Well, that was in the '90s. Actually, another country gave up its nuclear weapons program, which was Libya.

Yep.

And what happened to Gaddafi? He got killed by—

He got whacked.

…rebels who were being backed by the United States after he gave up his nuclear weapons program. I think that was a really bad sign—

Well, Ukraine had them, though. They actually had the weapons, not just a program, right? But just a small distinction there.

Well, there's some truth to that, but that's simplifying the situation a little bit, because what happened is, at the end of the Soviet Union, there were a bunch of Soviet nukes that were in Ukraine. But as I understand it, the launch codes were in Moscow, so—

Right.

…these were Soviet nuclear weapons that happened to be on Ukrainian soil. Then, when the Soviet Union came apart, they were there, but they were always under the control of Moscow. And so I don't think that the Ukrainians gave up much, because they were never their nukes. It's not clear they could have used them. And one final point on this is that it was the Russian government and the American government that pressured Ukraine to comply, because—

Hmm. Okay. Let's get onto this Democratic socialist who's on the verge of becoming New York City's mayor. Little-known New York State Assemblyman Zohran Mamdani took the internet by storm this week, shocked the world, beating out Andrew Cuomo for the Democratic nomination.

Here's the Polymarket chart. Just crazy. One month ago, Cuomo was at 93%. Zohran had a 6% chance. My lord, what a flip. A couple of things happened that led to this. Obviously, a bunch of viral moments. He's a great speaker, reminds me of Vivek in that regard. Really good in debates and speaking publicly. He started rising in the polls and got a ton of endorsements from Millennials and Gen Z. AOC endorsed him as well.

Now Mamdani is the 75% favorite to beat Eric Adams, but it looks like Eric Adams is gonna get a shocking amount of support because people don't want a Democratic socialist who's got some really unique and colorful history becoming the mayor of one of the greatest cities in the world—my hometown. He wants to have free buses. Doesn't sound like that big of a deal. He wants to freeze rent and triple the development of affordable housing, as well as city-owned government grocery stores. That sounds crazy. A $30 minimum wage—New York's at $16.50, by the way. He wants to defund the police and replace the cops with social workers in high-crime areas. A bunch of really wacky, interesting proposals.

You were, I think, onto this early, Friedberg, in your predictions. Last year, you saw this coming. Friedberg, maybe you talk a little bit about your prediction last year and where we are right now, and your reaction to this. I don't know—perplexing, shocking. Is this perplexing, shocking, or obvious to you?

For me, it feels like a beginning of a wave that's gonna continue to sweep over this country, starting in cities, and I think that we're at the very early stages. I think we'll look back, and I jokingly say that Kamala Harris is gonna look like a conservative candidate pretty soon.

I do think that this is a broad kind of reaction to the economic condition of the United States. I've talked about how a lot of people don't quite recognize or see how important the debt and the deficit are with respect to how they're ultimately going to lead to socialism, as it has every single time in history when you've had a free-voting democracy, a representative democracy that becomes encumbered with too much debt.

So, Nick, if you'll pull up this chart, it'll just show you a microcosm of it, and specifically how it played out in New York and how it will continue to play out in cities. This is the total amount of student loan debt. In the last 20 years, student loan debt has ballooned from $500 billion to $2 trillion. Four million college graduates per year in the United States—about 40% of them have student loan debt when they leave.

That means that in the last 20 years, 80 million people, young people, have graduated from college, and they've accrued $1.5 trillion of new debt. Based on the percentage and the distribution, that means the average debt for these individuals is sitting around $60,000. So you're a young person. Where do those young people go? Where do they live?

Remember, there's about 32 million of them. They live in cities. They don't go back to rural towns. Most of that population sits in cities. It sits in New York, Los Angeles, Seattle, San Francisco, Portland, and Chicago.

What we're seeing in those cities is a massive political shift. People call it left, but it's actually quite different than just being more traditionally left. It's really a revolution against the system that brought them to this moment.

The promise that we gave in America—the American dream—was that if you go to college, you will graduate, you will have income, you will have stability, and you will be able to buy a home. What we did is we increased the government's role in making that dream possible.

In doing so, we created effectively a system where we gave unrestricted access to capital, which inflated the cost of education. People could go to school, like Zohran, and major in African studies at Bowdoin College. They could get a loan and graduate with $200,000 or $300,000 of debt and then never get a job. The guy has not had a real job.

And this is the truth for 32 million young Americans. They find themselves living in places where they cannot afford to pay their bills every month, and they will never get out of the debt cycle that they were thrust into and believed that they were going to be able to graduate from and excel in the world. They all have what is called negative capital. They have debt, and they will never be able to get out of that cycle.

So where do you turn in that moment? You don't turn to corporations to solve your problems. You don't turn to your friends and your siblings and your family. They're not gonna bail you out. You turn to the voting booth, and you hear a guy like Zohran show up and say, “There can be a better path forward. The better path forward is the government can and should do more to help. And in doing more to help, we will increase government. We will tax the rich. We will tax the corporations. We will take all of that capital, and we will redistribute it in the form of services and checks and support for all of the people that find themselves unable to take care of themselves.”

And this becomes a tipping point when the majority of the voter base ends up in that situation where they're that deeply in need, where they have negative capital.

And that is the situation America finds itself in today. There is no easy answer, and there is no easy solution out of this. But I can tell you one thing for sure: in historical perspective, we have seen it time and time again across dozens of countries that have embraced socialism to get out of the debt cycle that ultimately absorbs and swallows up the young.

It swallows up every family. It swallows up every person in the working class with debt. They’re saddled with it, and they all try to get out of it by increasing government and embracing these socialist concepts, and it has never, ever worked. More government is not the answer. Less government is. We can get into that.

But if you look at the results, Zohran won 61 to 39 with college-educated voters. Young people voted for him. Old people did not as much. White people voted for him because they went to college. Non-white people did not as much.

At the end of the day, young, college-educated white people elected this guy, and that is the beginning of a wave that will sweep over America. I really do worry about where this takes us.

Way to go.

... you know, for—

Dummies.

Yeah, I mean, the—

You’re correct. He won among Asians, whites, and college-educated voters. To put a finer point on it, Friedberg, it really isn’t just college; it’s the cost of college.

Increases in the cost of college degrees have outpaced the wage growth of entry-level salaries by 10X over the last 20 years. You could go $300,000, $400,000—not in debt, but that might be what you paid for those degrees in those major cities—and you don’t believe in capitalism anymore. You believe that you need to tax the rich.

Just one warning for people in these states and these cities: we saw this, Sacks, in San Francisco. We saw the doom spiral. You and I worked on the Chesa Boudin recall, and now they have Dan Lurie there, and things are starting to slowly turn around a bit.

In Los Angeles, we saw this with Karen Bass. They didn’t vote for Rick Caruso. He would’ve been an amazing mayor. They voted for incompetence, and these people are voting for incompetence and a plan that will not work because two-thirds of the tax base in New York is paid for by the top 10%, who are leaving.

People will leave. They will see that Austin and Miami are fantastic cities to live in at half the price, a third of the price, and you get a tax break. You can always go back to New York and California and hang out for a month and get whatever value is left in those cities that hasn’t been destroyed by these socialists and the incompetent people running them.

Sacks, what are your thoughts on what’s happening in New York City specifically?

Well, you’re right that every generation seems to need to learn this lesson for themselves because they don’t study history, and they don’t see that socialism always fails wherever it’s tried. San Francisco went through this. It was a doom spiral. Now I think we’ve turned the corner. Los Angeles is in the midst of going through it.

A large portion of Los Angeles just burned down because there’s no water in the fire hydrants. Basically, all the public services have been looted. New York is about to learn this for themselves. It just seems like every generation has to learn this. There’s no way to teach them.

I do agree with Friedberg that a big underlying root cause here is student debt. It’s the fact that these kids have negative capital. They’ve got no skin in the game. They graduate from college with worthless degrees and massive amounts of debt.

That debt was not used to make their education better. Universities have been using the spiraling tuitions to fund massive amounts of bureaucracy for DEI, woke ideology, and all sorts of stuff like that. These kids have no prospect of getting out of debt or being able to buy a home, so they just have no skin in the game. This is part of why they’re turning against capitalism.

One thing we need to do, by the way, is make student debt dischargeable in bankruptcy. It’s one of the only kinds of debt that you can’t get out of through bankruptcy, and if we were to make that change, at least these kids would have a way out.

100%.

They have no skin in the game. The universities have absolutely no incentive to keep prices down and create a competitive or economic incentive for making sure that their degrees work.

The only group that possibly could would be true capital lenders, people like banks or underwriters that are saying, “Here’s a loan because I expect you to be able to pay it back.” There’s no underwriting in student loans today.

Right.

There’s no underwriting. The federal student loan program needs to go away, because when it goes to zero, people might say, “Oh, that’s awful. You’re taking away education.” What will happen is the capital markets will flood to fill that hole.

Banks and lenders will show up and say, “You know what? We’ll underwrite the loans.” But they’ll underwrite them by saying, “Good colleges get loans, and bad colleges don’t.”

Right.

Good degrees get the loans.

Absolutely.

Bad degrees don’t. People who are expected to pay back the loans will now get loans. All of the rest of the money that’s caused everyone to end up in this debt spiral will stop, and we’ll be able to recover from it.

It’s ironic that a problem being caused by government is going to lead to socialism. It’s going to lead to maximum government—

That’s right.

—which will then create the next spiral of problems. But I agree with you. I think this is very sad.

Let me also say, I think there’s one other thing going on here, which is beyond just the lack of skin in the game. It’s the failure of the Democratic establishment. It’s basically completely antiquated, desiccated, and out of touch.

Who was Mamdani running against? Andrew Cuomo, who is really a perfect avatar for this establishment. He’s a retread. He’s been around for decades. He’d probably be finishing his 4th term as governor except for a harassment scandal that forced his resignation.

He’s 67, which is something of a spring chicken by the standards of the Democratic gerontocracy, but he’s twice the age of Zohran Mamdani, who’s 33. Cuomo hasn’t even lived in New York City for 3 decades. He wanted to mount a political comeback that no one was asking for, and the Democratic establishment just fell in line rather than having a proper contest to choose a less damaged, more dynamic candidate.

He’s a nepo baby, too.

Right. So does this sound familiar? This is exactly what happened with Biden. No one wanted him to run again. He was obviously a very weak candidate, but the Democratic establishment just fell in line and covered up his weaknesses. They used lawfare to take out his opponents rather than trying to find a more dynamic candidate.

Totally.

And, by the way, one of the reasons why Mamdani is set to become mayor is because the Democratic establishment used lawfare against Eric Adams to basically weaken him and take him out over some plane tickets. I thought this was a very weak corruption scandal.

They were upgrades. They were upgrades, even. It was so insane.

Pretty crazy.

By political scandal standards, this is a really lame one.

Yeah.

Did you see Chuck Schumer and Bill Clinton put out ringing endorsements and congratulations to Mamdani this morning? I think the Overton window has blown open on this now.

I do think that the Democrats, to your point, Sacks, are embracing the socialist agenda as the new agenda that is clearly going to win the youthful vote for them. At a negative 70 rating, they’ve finally woken up to the fact that they can’t have no agenda. They can’t have nothing that they stand for, which is effectively my read on what’s been the case for the last year and a half, 2 years for the Democratic Party.

They now have something to stand for, which is these principles of socialism, which they call justice, equity, fairness, redistribution of capital, and all these other features that rang out from the Mamdani campaign and that everyone embraced and ran to. The Democratic leadership perked up like a bunch of prairie dogs popping out of the ground: “Oh? This is now going to be the way we’re going to win? Great. We’re all over it. Let’s do it.”

Well, they’re accepting the inevitable. Look, the Democratic Party right now—the Democratic establishment—is in the process of being remade now the way that the Republican establishment was remade—

Exactly.

—a decade ago.

Yeah.

So remember, a decade ago, the Republican Party was—

Tea Party.

—dominated by people like Dole, McCain, and Romney, and various Bush retreads. It was antiquated and out of touch, and Trump came in there and remade it as a nationalist, populist Republican Party.

And I think in a similar way, you now have these socialists who've come into the Democratic Party, and they are remaking the Democratic Party. In the same way that Trump replaced neoconservatism with populist nationalism, they are replacing neoliberalism with, you could call it, populist socialism.

Exactly.

A decade ago.

Yeah.

So remember, a decade ago, the Republican Party was—

Tea Party.

—dominated by people like Dole and McCain and Romney—

Bush.

—and various Bush retreads, and it was antiquated and out of touch, and Trump came in there and remade it as a nationalist, populist Republican Party.

And I think in a similar way, you now have these socialists who've come into the Democratic Party, and they are remaking the Democratic Party. In the same way that Trump replaced neoconservatism with populist nationalism, they are replacing neoliberalism with, you could call it, populist socialism.

Yes.

And those are the choices for the future, let me tell you. You can basically—

Yes.

—go with either populist socialism in the Democratic Party, or you're gonna have populist nationalism in the Republican Party. And to all my friends on the tech right, your choices in the future are not gonna be neoliberalism or neoconservatism. It's gonna be: Do you want Republican nationalism, or do you want Democrat socialism? Those are gonna be your choices.

Chamath—

So I would get with the program here because—

There is a third way, but Chamath, what are your thoughts here?

There is—

I don't know if there is.

Since we're here, there is actually a path out of here, which is telling the truth to young people. Your college degree is not going to get you an amazingly high-paying job. What will get you an amazingly high-paying job is excellence, learning skills, and having radical self-reliance.

Being reliant on the state, being reliant on the government, is a path to nowhere. It's a path to pain and suffering. To constantly be looking for this guy to create a bread line in his own series of Costcos, which is the stupidest thing I've ever heard—that he thinks that you're gonna be able to create, in New York City, a series of government-run stores. Does anybody have any sense of the arc of history that he wants to create bread lines and literally have the state provide you with food at this promised discount? It's absurd.

Leave the state. Vote with your feet. Go to Austin, go to Miami, go to another state where radical self-reliance and your ability to create your own opportunities—and not get suckered into this debt spiral—that is the path out. And that will be a new party that will emerge at some point. Some rational group of people are gonna say, “Get skills, don't get debt.”

Chamath, what are your thoughts on all this? Then we'll move on to the next topic.

I think the 3 of you guys are a little exaggerated, to be quite honest. All the rhetoric sounds very clever, but I don't think it's accurate. I think the way that I see it is more nuanced than this.

I think what's happened is that Zohran Mamdani is very smart and is running a playbook to win, like all politicians do, based on a formula that has been winning in large cities for the past decade. So I don't know if he really believes in this rhetoric or not, but it's worth noting that most of his platform is copied and pasted from London and Chicago.

The things that he's talked about—universal basic free meals, affordable housing, freezing the cost of transportation, public grocery stores—all 3 of you are reacting like these things were pulled out of thin air. They're not. These were the public platforms of the mayors who have won in London, in Vienna, in Havana, Cuba, and in Chicago.

So I think the reason why this works is that these are small pockets at the end of a large political spectrum. Even though New York feels big, it isn't that big in the context of the United States. And what you see is that when you try to take those policies in a city—take London—and then level it up at the national level, there's a quick schism that happens.

So if you look at Labour, and Labour trying to scale up the policies of a Sadiq Khan in London throughout the country, Labour is now at the absolute lowest approval ratings in the UK of any party ever at this moment in time after an election.

So I think what you're probably seeing is quite a sophisticated A/B test. And I think that the political wingmen and the money people that want to be in control know how to run candidates on platforms that can win, and this is a clear winning strategy in left-leaning major metropolitan centers.

So what I would say, just to refine what you guys are saying, is that this platform is not new. I've seen it for the last decade. I think you're gonna see it for the next few decades. It doesn't work. And so you're gonna see the same results in New York City that you've already seen in London, which has become unlivable, sadly, one of my favorite cities in the world. If you don't believe it, go visit there.

Chicago, which I haven't been to in 15 years—

Oh, it's a disaster.

—and I'll never go to.

Yeah.

It's a disaster. So my point is, it just doesn't work. You can win, it actually isn't very effective, and it doesn't scale to the national level. So I think—

When do you think it returns, Chamath? What's the reversal? Do you think the reversal is everyone has some experience with crime? Is the reversal the city's bankrupt? Is the reversal that—

Your house is burned down.

—you're unemployed.

Look—

Unemployment hits a certain level. What is it?

No firefighters with water in the pipes.

I'll tell you something, which is my view. My view is much more basic. It's much less sophisticated than what you're saying. My extremely simpleton view of things is that humans swing in a pendulum-like fashion between poles, and over multidecade arcs, you go between the thing that works and the thing that should work now because it's not the thing before.

So I suspect what happens is that New York takes a 40- or 50-year journey, and at some point it will look like New York of the ’80s. And at that point, you'll have an Ed Koch-like figure, you'll have a David Dinkins-like figure, you'll have a Michael Bloomberg-like figure. You'll have the broken-windows theory of policing reemerge as the cause célèbre, and the cycle will repeat itself.

So I tend to think that these things are just between 2 poles. We've spent a lot of time in this more independent self-reliance pole. A lot of people will wanna experiment with this other thing. It just doesn't prove to work, and in the absence of something cataclysmically bad, I don't think it's gonna change. So I don't know.

Having lived there and experienced Dinkins—Koch to Dinkins and then Giuliani to Bloomberg—I can tell you it's gonna be really fucking miserable to be in a Dinkins era. The city was chaos. It was dangerous. If you got off at the wrong subway stop, it was going to result in you getting robbed—

Yeah.

—at gunpoint—

And they're gonna have to go through that.

—with a knife.

That's London today. The—

Yeah.

—the London subway costs $35 to go from the suburbs of London into the center of London. $35, okay? That is ridiculous, right? You can't walk with your cellphone in Central London anymore because there are more cellphone thefts than anything. There are knife attacks everywhere.

Why is that? Well, you've had an agenda that was meant to be this socialist, left-leaning, let's resolve all these problems for everybody, and it turns out not to work at a very basic factual level. And every time it's been repeated over the last 15 years, it still hasn't worked. So if you think that this guy is gonna be the exception that proves the rule in New York, I wish him the best of luck.

Well, of course he's not.

But I would—

Of course.

But I would—

Of course.

—be short New York real estate. I think—

Of course.

—it’s going to crash and burn, and then we'll pick up the pieces and we'll reset.

All right. Let me pick up on something Chamath said about Mayor Mamdani—what's his name? Zohran. It's—the last name is hard to say.

Zohran.

Do you guys remember that movie Big, and he would go to the arcade? And it was—what was it called? Zoltar Speaks? And that scene—

It was Zoltar Speaks.

Zoltar.

Ask Zoltar.

Zoltar.

Yeah, yeah.

Zoltar, yeah. Yeah.

Ask Zoltar, can I have free pizza?

Yeah, yeah, yeah.

Zoltar.

I'm gonna run for New York mayor, and I'm offering everybody free pizza and bagels. I'm gonna win.

Let me pick up on what Chamath said about Zohran running an effective campaign, because it is true. I think one of his best moments was during a debate where the moderator asked the candidates, “Which foreign country would you visit first as mayor of New York City?”

Hmm.

And the other candidates said Ukraine or Israel. They're basically virtue signaling. And then they get to Mamdani, and he said, “Nowhere. I wouldn't go anywhere. I would stay in New York City. I would work for the people here.”

Hmm.

“I wouldn't be going to foreign capitals.”

Yeah.

And he just crushed that answer. Now, his political solutions, his programs are not gonna work, but the reason why he's catching fire is partly because he is putting New York first, the same way that President Trump is putting America first.

The American people are sick and tired of the politicians focusing on faraway places instead of their problems at home.

Yes.

It's like the Biden administration going off and defending the border of Ukraine while leaving the border of the United States wide open. And I think that even over the last couple of weeks, you saw that substantial majorities of the American people did not wanna get into a new Middle Eastern war.

Mm-hmm.

And I think this is the failure of both the neoliberals and the neoconservatives, which aren't that far apart. They are clinging to this post–World War II fantasy of America being this global empire where we have to be the global policeman, while America back home is collapsing or at least rotting.

Suffering, yeah.

And they—

Dangerous.

…suffering. They want the politicians to be focusing on our problems back home.

100%, and Karen Bass is that moment. If you need to understand that moment, she's in Ghana. She knew this place was going to go on fire. She extends her trip. She doesn't come back. Just gross to the highest degree.

All right, there's a lot of other stuff on the docket. We could go two ways, but I think, Friedberg, I want to get you involved since I know you've got to get to a meeting. Can we go to the AI story, which I think you would care most about, or do you want to go markets, Friedberg? Ladies' choice. Friedberg, you choose.

Or do you want me to do Science Corner real quick? Then you guys can keep going and I can hop on.

Oh, we love Science Corner. Absolutely. Ready, guys? It's time for a bathroom break. I'm sorry, Science Corner, for the—

It's time for Sacks' Science Corner.

Why is that funny?

All right, here we go.

I don't get why that's funny.

3, 2, 1.

Science Corner. He's taking a leak. I think he's taking a leak in a bottle. Did he finish the tequila bottle? Sacks, get back on camera.

Oh, there you go.

I turned down Science Corner.

He's your head of science for—

He's drinking. That's it.

Sacks, you know you're in charge of science for the government, right?

I am?

Under duress. Under duress.

No, that's Michael Prazios. I just do my 2 issues. I've got AI and crypto.

Do you guys want to talk about age reversal?

Okay, yeah, let's talk about age reversal.

5. Age Reversal Arrives

As is the case with most cutting-edge science nowadays, it is coming out of China, not out of the United States. This research study was done on age reversal. We've talked about using these Yamanaka factors to change the epigenome on cells and make them youthful again. In this particular case, the study was done on engineering stem cells that were then placed into the bodies of monkeys and reversed the age of these monkeys on the order of what would be the equivalent in humans of several decades of age reversal. It's a pretty amazing and astounding result.

So cell therapy is the modality that would be employed at scale for humans to utilize this tool. There's a lot of work that's been done in age reversal in mice, some work in primates, some work in humans now, and there are obviously a few startups doing this based on the studies and research around Yamanaka factors—changing the epigenome and effectively getting cells to act youthful again.

In this particular case, this team focused on a specific gene that is known to create a whole bunch of signaling molecules when it is expressed or overexpressed, meaning the gene is turned on. These little molecules then get absorbed by other cells and tell those cells to start acting young again and reset themselves. That gene is called FOXO3.

What this research team did is they took stem cells and engineered them using CRISPR to get them to overexpress FOXO3. Now these cells start making this FOXO3 protein, and when a cell starts making that protein, it actually makes a whole bunch of other molecules—small proteins and little molecules. They then get packaged up into what are called exosomes. These are like little packets that get spat out of the cell, and they get absorbed by other cells and trigger those cells—we don't know how or why, necessarily—to start acting young again.

So they engineered these stem cells, overexpressed FOXO3, and then put these stem cells in these monkeys. These monkeys were the equivalent of being 60 years old, and then they looked at what happened. They looked at tissue, blood, MRIs, and scans of the brain, and what they found is that the monkeys' brains effectively started to get completely rewired and act like young brains again.

They were able to increase their memory and responsiveness. Their age-related atrophy reversed, so their brains actually grew. Their bones started to grow. Their muscles started to grow. Their blood cells started to reverse aging signals.

Bone degeneration reversed. They looked at 61 different tissues from 10 distinct systems in the bodies of these monkeys after they received the stem-cell treatment, and 54% of the tissue examined showed reversal of aging. In the case of lungs, they saw in monkeys a 4-year age reversal, which is 12 years in humans. Skin reversed by 6 years, which is the equivalent of 18 years in humans.

So imagine a 60-year-old person taking this and suddenly having the skin of a 40-year-old. Skeletal muscle reversed by 5 years in the monkeys, which is the equivalent of 15 years in humans. Imagine going from being 60 years old to having the body of a 45-year-old in terms of muscles. The spleen, the brain, and all across these different systems, they saw significant signals of age reversal.

Then they identified these little exosomes. These are like little sacs that are spun out of the cell, and then they go into other cells and start to trigger all of this age-reversal cascade that happens. By the way, they saw no side effects. They saw no negative health effects. There was no increase in cancer. These are the sorts of things you typically look for, and in tissue, blood cells, and MRI scans, across the board, they saw age reversal.

So it was a really incredible result, and I think that it opens up the door for this idea of using cell therapy based on stem cells that are engineered to be injected into blood to actually reverse aging in humans. I think that we should expect, over the next couple of years, these sorts of trials to begin to see if we can get similar results.

There's a lot of background work, by the way, in FOXO3 and this particular gene, a lot of background work in engineering stem cells, and a lot of background work, obviously, in Yamanaka factors and other age-reversal research that predicated this. But this particular paper put a lot of things together and showed some pretty nice results.

Do you think Yamanaka factors are still the thing, or do you think that there are going to be a lot of other genetic manipulations that advance age reversal before Yamanaka factors do?

The latter is more of what we call a complex cascade of proteins and molecules that we haven't identified yet, that we don't know how or why they do what they do. That's what we just saw with this study. We don't know what's in those exosome sacs, and we don't know why they cause other cells to reverse their age. We don't quite understand the mechanism. It's really hard.

I think that this becomes an easier path, whereas with the Yamanaka factors, if you apply too much, the cells don't just rejuvenate. They can become—

Yeah.

…cancerous.

Let me—

So there's…

Yeah. Let me ask it more directly. Other than the novelty of all of this, do you think there will be something in the market—some injectable or something—that average people like us can take in the next 5 or 10 years to solve a problem we have, or to live longer with better health?

Yes, there are clinical trials underway right now, and I know of the clinical trials that are underway.

Like in Phase III, you're saying? Phase III clinical trials?

Early-stage Phase I in humans.

Like Phase 1A?

Yeah, very early.

So maybe a decade from now.

I think that's right. Well, let's see what the FDA does, but the FDA is trying to accelerate outcomes here, as you know.

Blake Byers came to my house for poker. He's sponsoring a study at UCSF, which I thought was incredible. You know the gene that allows Donald Trump to sleep 4 hours?

Yeah.

They've isolated that gene. Clinton had that gene too, and Blake is sponsoring a trial to basically edit a handful of subjects who want that gene to see if they can sleep 4 hours and be rested. I don't know if you guys know this, but he explained this to me, and it makes so much sense. I didn't realize it: We sleep 20 years of our lives.

Yeah.

And so if you can cut it in half, you get an extra 10 years of living. If you think about it that way, that is an incredible reason to do the gene editing to get the Trump gene. But the thing that nobody knows is what could go wrong if you injected it and manipulated yourself at the age of 30 or 40 or 50.

What could go wrong?

Well, so this is the thing.

We could ski all day and play poker all night.

The thing that they don't know is that Trump and Clinton were born with that gene from day 1. What they don't know is what could go wrong if you injected it and manipulated yourself at the age of 30 or 40 or 50.

Yeah, of course.

But wouldn't it be incredible if you could all of a sudden only sleep 4 or 5 hours and be completely rested?

Hmm.

Well, do you remember at the All-In Summit, Nikki Paul gave a talk on this gene? That was her opening piece. I mean, that's definitely in site, Chamath. I know there's a bunch of labs working on that exact gene target. But this was just amazing because this is a cell therapy, so you can kind of think about getting an injection or an infusion of these stem cells, and all of a sudden your skin is 20 years younger. It's incredible.

Like my foreskin?

I mean, this actually plays out. Your foreskin, yeah, if you have it.

I kept it because it's like a sheath. It's like a sheath for the anaconda.

Like a sleeping bag?

It's like a sleeping bag. Oh, Friedberg.

Okay. Very good.

It's like a man sleeping in a sleeping bag.

Sleeping, with a little hood. We're back, folks. We're back. It's been a strange 6 months, but the pod is officially back.

Oh, my God.

We are so back. The Nasdaq is at an all-time high. We've got IPOs. The wrath of Lina Khan is over.

We're talking about my anaconda.

He's pandering with his dog.

Oh, my God.

Science Corner's back. Sacks is double-fisting.

I'm double-fisting. This tequila is so good.

Tequila's so good?

Jason, we gotta get some bottles for Vegas this weekend.

We gotta get you a double straw.

Hey, David—David, can you send somebody to the airport or to my plane with some bottles?

Yeah.

Please? Do you have an extra few?

I only have this one at home, but we have some. We have them here somewhere.

Actually, Friedberg, I brought 2 bottles to the Bay Area, so I can take them from my house. I'll bring them.

Mm-hmm.

Yeah.

Also, Nick, just take a note: Can I get 1 of those bottles delivered to United Flight 376 to Vegas for Martin?

Terminal 2.

I'll be in seat 2C, Terminal 2. If you could send it to the Centurion Lounge.

Centurion.

I just got upgraded to the Centurion Lounge. Also, fuck the Centurion Lounge.

Friedberg, did you get the—did you follow up with the guys from Robinhood to get the Gold Card?

Yeah.

You didn't get a Gold Card yet?

He was the only one.

What is that for?

Vlad texted me and said, "Hey, Friedberg's the only bestie without it."

Oh, yeah, I got one. The Gold Card is amazing.

So I said, "David, get one."

Absolutely.

Yours is beautiful.

Yuri's bike got lost in the mail. Oh, look, I have mine here. Here, I have mine.

Yeah.

Mine's right there.

But you know where this came from? This came from the BlockFi Card, a startup that I funded that got acquired by Robinhood.

Yeah, I saw.

That's my credit card, yeah.

Those guys did a great job.

Hmm.

Shout-out to Deepak and Sid. Great job.

Great job.

Oh, and shout-out to Brian Armstrong. I'm getting my Coinbase Bitcoin card. Boop boop.

Oh, they have a Coinbase—

Beep boop.

I thought you were saying you were watching the All-In Bitcoin.

Bro, you get 4%, you get 4% cash back in Bitcoin.

Oh, wow.

I mean—

Oh, wow.

I'm gonna buy a, a another Global 7500. It's like—

Oh.

$70 million. I get 4% back.

Now I'm happy. I mean, that was the saddest day of your life when you got rid of the 7500.

What's your burn rate?

I was like, "Sacks, when are you going back from Italy?" He's like, "I'm coming back on this date." I was like, "Okay, I'm coming out 10 days before that. I'm flying home with you." I booked my trip on Sacks's return flight on the 7500.

That is a beautiful plane. I actually flew on that recently because my plane broke down and I chartered a 7500. Man, that is a gorgeous plane.

It's a great plane.

That's unbelievable.

Did you see the leaf?

It's a little overkill, to be quite honest with you.

Yeah, for sure.

It was overkill. My favorite was the fact that you have 2 tables for dinner, and there's a leaf that goes in between the 2.

And make it 6.

And you make a full table for 6.

Oh, my Lord. So good.

By the way, you guys, do you know how good Starlink is on these airplanes now?

Incredible.

I flew to Toronto and then from Toronto back to LA. I didn't miss a beat. I had Starlink. I was doing Zooms and making phone calls. I have never been more productive, and then I was just watching YouTube. It's like I was on the ground in my living room. It's crazy. I think the only thing that you should be searching for when you're flying is: Is it Argus Platinum?

Yes.

And does it have Starlink? It's the only thing.

I was on the first one. I was on Elon's plane with it when he first put it on, and it was nuts. He was playing Diablo, and I'm watching Netflix at the same time.

It's incredible.

No latency. I'm watching 4K Netflix. I was streaming. It was bonkers. And United—the entire fleet is gonna have it. My preferred airline. I think this could change productivity. You think about the flight to the Middle East, Singapore, Asia, or Japan, when I go skiing in January with Tucker. All that is now gonna be productive hours, and then we're not gonna sleep. So it's like you get 2 careers. You could be a podcaster and a venture capitalist, or—

Wow, that's crazy.

6. Markets Reach New Highs

All right, the stock market is nearing a record high. In fact, Uber hit a record high today, just 2 months after the big Trump tariff chaos and the market going down 15%–30%. We've had a full recovery from Trump's Liberation Day tariff announcement. The market might even be up 1%, 2%, 3%, 4% since then. They called it a stunning turnaround at your favorite network, Sacks. CNN called it a stunning turnaround.

Lots of different things are contributing to this. Obviously, you've got the ceasefire in the Middle East. You've got the trade deal with the UK and a truce with China. The Nasdaq 100 is at an all-time high. There's also, with these tech companies, a perfect storm: M&A is back on the menu. People are buying companies again.

That equals growth. People are continuing to lay off the dead weight, so you're having earnings rise. And then the product announcements coming out of big tech, which I think you alluded to earlier in the program, Chamath: American companies are firing on all cylinders. All of this is amazing. The AI trade is on.

This all equals, however, a big controversy. Friedberg, what's the point of cutting rates if we're at an all-time high and employment is somewhat full? There are some concerns there. We'll get into it. But what are your thoughts here on the market? And then Trump is going hard at Powell, saying he's gonna fire him, saying he's an idiot, he's stupid, blah, blah, blah. This is the guy he placed, by the way. So, Friedberg, what are your thoughts here? And then we'll go to you, Chamath.

I'm not sure that equity market prices going up is necessarily the best indicator of where we are, because we did have negative GDP growth in Q1. Arguably, there was a lot of tariff flipping happening in Q1, but there's a real question about this GDP growth outlook for the rest of this year, and we're still running modest inflation.

When you combine those two, and you combine the government deficit right now, there's an argument to be made that we're actually seeing assets inflate. So multiples are going up. I think that may actually be an indication that we expect rates to be cut, that we expect to increase the money supply.

And again, remember, when you end up in this debt-death spiral, all assets go up in value. They all increase because you start to flood things with cash. And as you flood things with printed money, when you start to print more money, everything goes up in price. So one argument here might be that we're actually not necessarily seeing an improvement in the fundamental business environment.

We're not seeing record revenue across the board. As we talked about last week, the S&P 493 are really struggling relative to the Mag 7. And there's a really questionable outlook ahead for the vast majority of equity cap out there. So I would say that there might be a bit of an inflationary aspect to this, not necessarily just a pure business-performance upgrade that we're seeing.

All right. We've got Dr. Doom's position. I mean that respectfully. But give us the other side, Chamath, if you have one.

Yeah, look, if I was a betting man, which I am, I think the free-money trade here is to be levered long. I think you can make a lot of money right now. Why is that? The first chart I want to show you is the velocity of money. So what is this? This is the M2 money supply. It's a measure of how much money is circulating in the economy.

What this shows is the impact of rates: we were able to start to slow down and contract the money supply. But then, as you saw, as the economy stabilized and people started to project what's possible in 18 to 24 months, you started to see money coming back into the system. That's what has given a bid to the equity markets.

That's great because a percentage of this capital gets allocated into things that can generate a superior return to money markets, and that's where the bid to the equity market came from. So you would say, “Well, where does it go from here?” The next chart, Nick, if you just give the second one, is: look at how much money—and again, you can just look at the last 5 years. Look at how much money is sitting in money market funds.

Amazing.

And what this starts to show you is you have trillions and trillions of dollars of dry powder on the sidelines that will need to find a home. I think that Jerome Powell is in an increasingly untenable situation because he will be looked at as politicizing the office of the Federal Reserve. There is enough data that can justify cutting rates.

If you cut rates, and we've talked about this before, 2 things will happen. Number 1 is people will take some amount of money out of the money market funds because they will want to go and seek superior returns somewhere else. Number 2 is it will increase the velocity of money at the same time. You put those 2 things together, and that is a bid to the equity markets.

And so, if we're at an all-time high today with rates at 4.5% and Powell's back against the wall to cut, the only road from here is probably up. You could see this thing get re-rated quite aggressively. And then the question is, do you do it by managing your risk and shorting some stuff, or do you just say, “You know what? I'm just gonna take it all up and take most of my shorts off and let the thing go.”

I think that if Powell starts an aggressive cutting program, either because he has to or because he's trying to keep his job, man, you could see the S&P at 7,000 very quickly.

Sacks, obviously you're a member of the administration, so I don't— I want to make sure people know you're not speaking for the administration. But I guess your personal thoughts on the markets here and what the right thing for Powell to do is, because he does seem to be in an untenable position. He's being criticized super heavily. He might even have his replacement announced before his term is even up in the spring.

And gosh, what is the reason for Powell to cut rates if everything's going so well and then he would look like maybe he poured gasoline on what appears to be a pretty robust economic fire right now?

That's not the right way to look at it.

Okay.

The question is just what's the inflation rate relative to interest rates? Inflation has come down all the way to, I think, 2.4%, so it's way down. We're back to a 2-handle. I think inflation has largely been licked. And it's time to start lowering interest rates, and that will be good for the economy.

There's no reason for rates to be as high as they are. It'll also be good in terms of financing our debt. So I think that it is time for Powell to act, and I think he's being overly cautious here. He's being slow here. Just like he was slow to raise at the beginning of the cycle, he's being slow to cut at the end of the cycle.

And again, I think he's just afraid of being proven wrong here. But I think the timing is right to start the cuts. Now, to go back to the question of how to trade this market, I have a very simple idea, which is: any time that the media tries to sow doom or spread panic about the Trump administration's policies, that's a good time to buy.

We saw this when Jim Cramer started touting the Black Monday that was coming, and Larry Summers has been out there constantly with his TDS. Whenever the media puts these experts on to tell you that there is chaos and doom, that has proven to be an excellent time to buy the dip.

Absolutely.

So I think this is a very easy way to trade the Trump presidency.

I mean, the conspiracy-corner folks are like, “Trump's doing this on purpose.” You know, the volatility in the market is helpful in some way. But it does seem to be the playbook.

I'm calling this—I don't mean this in a derogatory way—I don't like the term TACO because I think that's trying to goad Trump into, or frame what he's doing as, not thoughtful. I think it is thoughtful. I think he does shock and bore. He does something shocking, and he pins his negotiation to that, whether it's what's happening in Iran, what's happening with immigration, or what happens with tariffs. He starts with a bang, and then he falls back to a reasonable position that the markets can digest.

So you just have to take a 90-day view of everything he's doing, and then you'll be fine. When he says, “We're gonna give people a 150% tariff,” just cut it by 2/3 or make it reciprocal. Fine. When he says he's gonna deport 20 million people, cut it to 500,000 to 1 million, whatever Obama did, and that's where it's gonna wind up.

When he says, “We're gonna smash Iran,” it's gonna be very strategic, and then he's gonna give them a path off. So he's actually playing a very interesting, perhaps, dare I say, sophisticated approach this time, which seems chaotic, but there might be a method to the madness. Yeah?

Well, I think the media has an incentive to spread this idea. They have an incentive to hype the chaos, basically. They're the ones who are creating the panic, and they bring on all these fake news networks who've got TDS to basically hype this narrative.

So my point is just that when the media is spreading this narrative, that's a great time to buy because it's an opportunity for those of us who don't have TDS.

It's not even TDS, it's ratings. I'll just tell you right there: being a media executive for most of my life, if you want to work the left, you say, “Trump's out of control. Look at this chaos. He's a dictator,” yada yada, ratings go up. If you're Fox, you take the other side, you get ratings. It equals advertising. You don't really have to think about it.

You want to talk to independent media, like All-In Podcast, Tucker, people on the left, people on the right who are actually having first-principles discussions about this.

I think it is TDS, though.

There are some members.

No, but just as we were taping, there's a whole deluge of economic data that came out. The GDP print for Q1 came in at −0.5%. So how could anybody—

For Q1.

—interpret—

For Q1.

For Q1.

Right. Right.

So how could anybody at the Fed or in the media covering the Fed not understand that...

By the way, when we were talking about this—

Yes.

Just like I said that we're probably going to print like a 3-handle on GDP in Q2, we also talked about the fact that we were probably going to have a negative GDP print in Q1. We've known it for months. We've basically been calling it right. So why is there an inability to just look at the data and say the obvious, truthful thing?

I think it's rumors.

Whatever you think of Trump—

Yeah.

It doesn't really matter. Rates should not be where they are today. They should be 50 to 100 basis points lower, period. It's categorical.

He'll do it in September. He's going to do a 25-basis-point cut in September. It's obvious.

There's no logical explanation for it. There is a subjective explanation, and that's political.

I think after the tariff stuff, he just said, "Let's push it out 2 months, get some more data, and then we'll cut it in September." What's the difference between a July-August cut and a September cut? It's probably not going to be meaningful in the arc of history.

But if you're against the tariffs and you're buying into Jim Cramer's doom narrative or Larry Summers's doom narrative, that's more of a reason to cut.

If you believe the doom narrative that he's not going to relent, yes. But if he does relent and he negotiates it, I think you would say, "Stay the course and see what happens." Anyway, all this is on the margins. The truth is these companies are very strong, entrepreneurship is strong, and the debt's the issue. So we still have to address the debt. We'll see if he does that in Q2.

But to Chamath's point, the last year of the Biden economy was very weak, especially the last 6 months of the Biden economy, such that Q1 was negative GDP growth. So President Trump came into office inheriting a very weak economy. Since then, he's done a bunch of things to turn it around.

Yeah.

There's no reason to have interest rates at—what are interest rates at right now? It's 5%, still at 5%.

Four five to five guide, yeah.

Let's pull up Polymarket real quick, producer Nick. I think the market thinks a 25- or 50-basis-point cut is around 80%. I haven't looked at it in a week. Here's September. What are we seeing here? 59% for 25 bips, 8% for 50 bips. So you put those together, and it's a two-thirds chance he's going to cut in September, obviously. And what does October say?

Is there a Polymarket on who replaces Powell? Nick, is there anything in there about who replaces Powell?

He's going to announce it. I think he'll just announce it, and he'll make Bessent. People seem to like Bessent. He feels like a steady hand. He feels like he's got experience. It's obviously going to be Bessent.

Maybe who is the most likely new Fed chair or something like that?

I think it's Bessent. Here we go.

Oh, there it is. Chris Waller, really? Huh.

Bessent's only at 14%. I think that's your sleeper right there. But listen, there are 6 people with 14% to 22%, so this is a dicey one.

Bessent's only at 14%? Yeah, I agree, that seems low. And Hassett's at 18%. I work with both Bessent and Hassett, and I know them both well, and they'd both be great.

They both would be great, right? They both have a ton—

Yeah.

—of experience, a lot of time in the game—

Warsh.

—which is what you want. I mean, this—yeah. Chamath, is this a case of picking—or Sacks, is this a case of picking from a bench? You have a bench. Do you want to move Bessent out of where he's doing a good job and you can—

I think Bessent's crushing it at Treasury. I would love to keep him in the job, so I—

Yeah, I think that's the decision, right?

I think the thing is, elevating Waller has interesting implications. Warsh is very consummate and capable of doing the job. The question is, does Trump believe he's MAGA, or does Trump believe he's more established Republican?

Sorry, there's another name on the list that we forgot.

Elon Musk or Trump? Oh, Chamath is in there.

Chamath.

Oh, okay. Let's see. Okay. Well, let's get those numbers up. Those are rookie numbers. You can make 99.8 cents.

Well, I think I'm part of a cascade that happens if something else happens, but that's not—

So you put $1,000 in, and you'll make $3. Yeah. All right, let's end on this: AI training. This is a super important story we talked about here. Anthropic received a favorable ruling in an AI copyright case. A bunch of caveats here.

7. AI Copyright Enters Court

A federal judge out of San Francisco ruled that Anthropic's use of copyrighted books in AI training was legal if the company had purchased or licensed the books through legal means. However, the ruling doesn't apply to more than 7 million books that Anthropic allegedly—key to put that in there—obtained through "pirated" means. People have obviously been training models on a lot of what's on the web, and a lot of that stuff might not have been officially licensed. The Authors Guild is going to appeal the decision, which came out of the district court in Northern California.

Interestingly, a day after this ruling, Microsoft was sued by a group of authors alleging it used a collection of more than 200,000 pirated books in its Megatron AI model. On top of that, I did a licensing deal. Harper Business did a deal with Microsoft, and I got paid $2,500 to license Angel for their model, so there are also legal routes occurring.

Per page?

No, literally for the whole book. And I did it. I know, it's crazy. No, everybody got the same deal. They licensed 5,000 books or something.

Per word?

Per word. Wow, I used to get $3 a word back in the day. But actually, for that book, what did I get? I got $25 a word, I guess, with a $1 million deal, so—Meta also prevailed against a group of notable authors, including Sarah Silverman.

Now we know why he's so long-winded. He gets paid by the word.

By the word.

Absolutely, now you know. That's actually my tell-all.

Now we know why no one wants to cut anything.

Well done.

It just goes on and on and on.

Absolutely.

It goes on and on and on.

Absolutely. That's why we're the number-one podcast in the world. You guys can send me my flowers. You know the address of the ranch.

Okay, so there was another one with Meta, and although the judge ultimately sided with Meta, he had a mixed ruling. He basically said that using copyright-protected works without permission is generally illegal, but the plaintiffs in that case failed to present any compelling arguments that there was actual market harm. That's a key one. You have to have some harm in these cases in order for it to play.

A ton of other cases are still in play. The big one is The New York Times versus OpenAI and Getty Images versus Stability AI. We'll follow those as they make their way through the courts. But here you are, Sacks. You are the czar of AI, so I don't know if we're getting an official position here or just your personal thoughts on this, but what's the interpretation of these 2 early cases by the czar, David Sacks?

Well, I'll tell you my point of view. I don't know that I can speak for everybody, but I'll give you my point of view, which is actually the same point of view I gave on this podcast a year or 2 ago because we had this debate over fair use, and David Friedberg and I were on one side, and you were on another side.

Yeah.

This judge in the Anthropic case—the reasoning that he gave was almost identical to what Friedberg and I were arguing—

Yeah.

The distinction he made is between input and output. If an AI model outputs some text that is basically a rip-off of someone else's copyright, then of course it's guilty of copyright violation. But the inputs, or pre-training, are something different.

What AI models do in pre-training is take millions of texts, millions of documents, and understand the positional relationship of the words. They translate that into math, into a vector space called positional encoding. That is a transformation of the underlying work, in the same way that a human can read a body of works and then come up with their own point of view. That is basically what AI models are doing.

So if AI models violate someone's copyright by outputting something that's identical, then obviously that's a violation. But if all they're doing is transforming the work, doing positional encoding, and then coming up with their own unique work product, this judge said that that is not a violation of copyright. I completely agree with that.

One other distinction this judge made that I think is very important is the difference between pirating and copyright. What the judge said is, "Look, you have to buy the book if you're going to do pre-training on it."

You can't rip it off. That would be piracy, but that's different than copyright.

How would you, Sacks—

Yeah.

—on that point, how would you propose a large language model take 1 million books and put them in? Would they buy the physical books and scan them in?

Yes, buy the book. So what Anthropic did is they created this large repository of books. Unfortunately, some of them weren't paid for. They were pirated material.

Yeah.

And so Anthropic is—

Allegedly, by the way.

—in some hot water. I think there is a case that's going to move forward about that. But the judge distinguished, again, between piracy and copyright. The point is, what Anthropic should have done, apparently, is buy each copy of the book that they put in their repository. If they had done that—

Scan them in.

—they wouldn't have had this piracy claim against them.

Oof.

But again, that is separate from copyright. Just one final point on this: I think it's very important that we end up with a sensible, fair-use definition like the one the judge has come up with in this Anthropic case, because otherwise we will lose the AI race to China.

The fact of the matter is, China is not going to care about American copyright policy. They are going to train on every scrap of data that's available to them on the internet. Apparently, they use a pirated book archive called LibGen, and so they're not going to abide by copyright laws at all.

If we don't allow our AI models to have a sensible fair-use definition that allows them to train but not violate copyright in the output, then we will lose to Chinese AI models because they'll have more data. The fact is that the more data you have, the better your AI model. So I do think it's very important for the U.S. to consolidate around a fair-use definition that makes sense.

I'm not saying that this Anthropic case will be the final word. I think there will be other cases that come up with other definitions. There may be other judges that disagree. Ultimately, I think this is going to the Supreme Court. But where we need to end up is with some sort of fair-use definition that makes sense; otherwise, we will lose the AI race to China. Your view, JCal?

8. Creators Need A Licensing Deal

Yeah. Obviously, as a content creator, I'll take the other side of this. There is a nuance between training, and there is a nuance between the output. I like to look at this as an opportunity. YouTube really did a great job with its Content ID system of navigating this.

Google has the most experience here, with Google Images and Google News—the one box where you get a little snippet up top. The output is where this is really going to favor the content holders, because these will be competitive products in the marketplace.

The need to buy a New York Times subscription is no longer necessary. You can go onto a language model and ask it to give you Wirecutter, as one example I like to cite. What are their best picks for these air conditioners or microphones for podcasting? It will give it to you. When they started doing that, that was my main reason to subscribe to The New York Times, and I no longer subscribe to it. I subscribe to OpenAI because they can get the same information there. These cases will be very easy to win.

I'm going to explain 2 things: 1, how you can win this case as a content company; and 2, how large language models can, importantly, win the AI race and actually not destroy the business on which they are built.

These language models have nothing without the content creators and the authors of these books, of which I am one. They need us, and so they should want to pay us. They should want us to be compensated because that will keep us more competitive than China, which will just steal it 1 time.

Here's how you win if you're a publisher. Take Disney, which is suing Midjourney right now for obvious copyright violations on the output, in my interpretation. All you have to do is do a Marvel Me: make yourself into a Marvel character; Disney Me; or Choose Your Own Adventure: Star Wars, and allow consumers to pay for that product.

Any author right now who pops up a website that says, “Subscribe to the Angel book and ask questions of it”—$10 for life, $1 per year, whatever it is—they will be able to prove damages very easily, and they will be able to prove that these language models are competitive.

When they do that, all of the output will need to be scrubbed or contained in some way. You can see this today. If you ask ChatGPT, which is the main target since they're making $10 billion a year off of, in many ways, content creators' work—that's why they're the big target, because they have the most money—they will not let you make certain copyrighted images, specifically the Disney ones. Go ahead and try. Go try to make a Darth Vader image, and they will stop you.

So they know they're doing it wrong, and they've already put the controls in place. You need to show that this is your opportunity as a content creator.

So that's how you can prove your case and win hands down versus all language models: put a competitive product in the market, and you will win. Then the second piece that'll make this tenable is that ChatGPT is making $10 billion a year, according to reports. They should give 30% of their revenue—a small amount, the minority of their revenue—to the top 1,000 newspapers, publications, podcasts, books, and so on. They should do that programmatically, and then they should hope that those companies double their revenue and increase their investment.

ChatGPT and The New York Times should do a deal, and I predict they will do this—or with another language model that's smart enough to do it—where, when you go to ChatGPT and you do a search from The New York Times, you say, “What does The New York Times say about Iran?” or “What does Wirecutter say about cameras?” It should say, “Authenticate with your New York Times subscription to have access to this.” And on The New York Times website, they should say, “Authenticate with ChatGPT.”

This would allow them to have a competitive advantage versus Anthropic, Apple, and whoever else. This will become a massive competitive advantage for the language models, just like cable channels might, or Hulu might, feature Disney+ or FX or whatever stations or content it is. Whoever does this first on the other side will make a tremendous amount of money because they will have access to all that data and the output.

You can make your kids a T-shirt or a birthday invitation using the Star Wars characters. That's the easy way for us to win as Americans: by respecting content creators and paying them money so they can reinvest. The amount of money we're talking about here is de minimis for the tech industry. These companies are going to be worth—

30% of revenue, and the company's losing tons of money?

Absolutely. Yeah, that's their problem.

Okay.

That's not—Sacks, that's their problem.

Okay, well, there's no legal basis for such a specific proposal. There's no legal basis for it.

Well, I mean, there is: the music industry. If you want to play music in your restaurant, you have to pay. If you want to cover somebody's song, you have to pay. If you want to perform it, you have to pay. So there is tons of precedent for it.

If you want to play a Disney film at your kid's birthday party, yeah, you can get away with it. But if you do it and you invite people publicly—

Okay.

Well, you're just going to guarantee that Chinese models like DeepSeek are better than American models because they're not going to go through any of that. They're just going to train—

So that's your reason why people should steal?

They're just going to train on—No, not steal.

Okay.

I don't think it's stealing.

The output—I'm talking about specifically.

No, no, you can't—

Is the output stealing or not?

You can't copy the output. I fully agree there.

Okay. Okay.

And that is what the Disney case is about.

That's what I'm talking about, yeah.

No, I'm talking about pre-training.

I'm talking about the latter. So let's talk about the latter here.

Oh.

I'm talking specifically about the output.

No one disagrees on output.

Okay. So that's the licensing deal I'm talking about. Don't you think it would be worth it to give Disney $100 million a year to have access to all that imagery?

I think you and I have different definitions of output.

Okay. Great.

I think it's reasonable to pay Disney for pre-training, and I think that they do. I told you this: We did a licensing deal with OpenAI—we, meaning, you know, Beast. They paid us, and they're using it for pre-training. It's quite reasonable. Is it the right price? We have no idea. But we did it so that we could be a part of the conversation and shape how these deals get done for content creators.

But Sacks is right. If you think about what the ultimate output is, the output, if you look at how a transformer behaves, it's almost impossible to say that it's copying the input.

It’s just not how it works.

The input gets turned into math. What gets recorded is vector math on the relationship between the words.

This is all a very interesting technical—

And then somehow, and then somehow when you feed that into a neural net with billions and billions of documents, it somehow has an understanding and produces new content.

Mm-hmm.

And that new content is not a copyright violation. So I just think that copyright’s the wrong way to look at this. This is a new technology; it’s transformational. And then finally, we have the national security concern.