Bernie Sanders 要求叫停所有 AI，中国取得突破、通胀回落，2026 年迎来黄金时代？

Guys, we've got to start out with Bernie Sanders. I know this is becoming a bit repetitive, but AI is the topic. We reached a new level of retardation this week that we cannot avoid. Bernie Sanders has a major de-sell pitch: a moratorium on new AI data centers.

Here's his argument. Number 1, the billionaires are pushing AI because they want more money and power. Number 2, there's going to be massive unemployment, and he cites Gates, Dario, and Elon saying that AI would replace most jobs. Number 3, he has an interesting point, actually: AI is harmful to kids because it decreases social interaction.

Actually, we kind of agree with that one, I think, across the board. But here's his pitch, Sacks. His pitch is, “You want your kids using these chatbots? I don't think so.”

Look, if you actually look at the data, if you look at what kids are doing, it's so much more interactive and engaging for them to talk to their friends on Snap or to watch videos on TikTok. Those things are super engaging, whereas doing research on an AI chatbot is way less engaging, and you see this in the data. I'm not saying there's not an issue there. You want to pay attention to the way that these technologies are shaping the minds of young kids.

But I think people get a little bit confused. What they're really talking about is social media, and then they attribute all the ills of social media to these new AI chat apps, and they are a little different. When I ask my kids, “How much do you use these things? Are they addictive?” they say, “No, they're more just really useful.” It's like Google. It's like, “I couldn't do school without it.”

Yeah, there's two pieces here. One, using AI to be smarter and to learn stuff and ask questions—absolutely fantastic, phenomenal. I think we'll all agree on that. There is Character.AI and a long tail of spicy chats where people—we talked about getting one-shotted—and these parasocial relationships. That's, I think, what he's referring to, but maybe I'm reading it wrong.

But let's get into it here. His pitch is that we need to slow down so that, quote, “democracy can catch up,” and that Congress should put a moratorium on new data centers. That's his solution. He got roasted, obviously, on social media for this. It's the most absurd, I think, solution to what are valid concerns.

Friend of the pod Ro Khanna, who represents Silicon Valley, I guess supported it a bit. Then he replied to me and said his concerns are not as acute, and that he just wants to make sure we use renewable energy, which I guess is a fine position to have. Polymarket put up a little market here: “AI data center moratorium pass before 2027.” Yeah, we'll see if that comes true or not.

Hey, Sacks, you are our SME. Sacks, our SME, this is your time to shine. You have framed the AI debate as, “We can't lose to China.” Bernie framed it as not letting the billionaire class get more power and money by eliminating American jobs. Last week, on this very program, Tucker framed it as, “What are Americans going to get out of this?” That was the framing as of December 2025.

So here's your chance, Sacks. Why should Americans who have some concerns about losing their jobs care about beating China? Why should they care about that, Sacks? Why should they care about beating China?

Because AI is a profound technology that's going to have huge economic and national security implications. The thing that Bernie gets wrong is that he can't stop the progress. He can't stop China from making progress. We can stop progress in the U.S., but it's not going to stop China from advancing these technologies.

A lot of this is just math. Just because we stop doesn't mean China is going to stop. So this would be the biggest own goal ever if we took our leadership in the AI race and just handed it to China.

But look, I appreciate Bernie's honesty in a way, because he is actually telling the truth about what he wants. I remember just a week ago, when President Trump signed an executive order to advance a national AI framework, a lot of critics and a lot of Democrats were saying this was a violation of states' rights, and that we need to support the states in regulating AI.

Here, Bernie is acknowledging that this is not about states' rights, because he's saying that there needs to be a moratorium on new data centers even if the states want them. So he doesn't support states' rights, either. He just wants all the progress to stop.

I think the truth of the matter is that all this talk about states' rights or affordability is a red herring. What's really going on is that there's a large and growing contingent of people who just want all the progress to stop. But again, we can't stop China from making progress. All they would be doing is ceding leadership in this AI race to China.

What people like Bernie really want is for the U.S. to become like Europe. Europe has half the share of global GDP that it had 30 years ago, and that's because of its hostility toward innovation and technological progress. That's kind of where Bernie wants us to be. He wants us to go down the path of Europe, and the reason he gives is, “God forbid someone gets rich.”

Capitalism sometimes results in the unequal distribution of wealth, but socialism always results in the equal distribution of poverty and misery. If the U.S. stops developing AI, we hand this leadership to other countries. It will make the United States poorer. It will make the American people poorer, and it will cede our leadership globally. We will not be the preeminent power in the world anymore. So I'll stop there.

No, no, it's great. Thank you, SGE, David Sachs, of Bloomberg.

There seem to be a couple of conversations. Unfortunately, we weren't here last week, but we had a really nice visit from our pal Tucker, and we talked about this. He seemed to think there was a bit of a communication problem with selling the public on the value of these technologies. Do you agree with that, and what do you think is going on here in terms of the cross-conversations?

One group wants to de-sell and has some concerns—environmental issues, job displacement, et cetera. Then there's the question of whether beating China resonates with the American populace. You've been harping on the rise of socialism for 4-plus years on this very podcast. From where you sit, what's the actual disconnect in these multiple conversations that are going on concurrently and seemingly coming to a head here at the end of 2025?

If you ask any of the politicians making these proclamations about the, quote, “tech barons,” and try to talk to them about what AI technology is delivering and what it's not delivering, you typically hit a wall pretty quickly. It's very hard for folks to articulate what is actually happening. There's a tremendous amount of capital being put at risk against infrastructure to build out the capacity for many companies—for the entire economy, the entire industry—to deliver AI tools.

There isn't an aggregation of value creation at this stage, with the exception of Nvidia, which has really had this $3 trillion market-cap creation happen in the last couple of years. Peter Thiel said this best. He's like, “Look at all the money that's going into AI. There's really only 1 company that's making any money, and that's Nvidia.”

At this point, the jury's still out. We don't even know what AI is. It's sort of like when the internet was happening. Everyone thought these fiber-optic switch companies were going to make all the money. It turns out that was wrong. It was the end applications that made all the money, and they competed in many different markets, from Google to Amazon to Uber. You can go down the list of all the beneficiaries of the core infrastructure technology of the internet that was built out.

So what is really going on? AI is the new lightning rod for fear and divisiveness that ultimately breeds compliance and control, which is where these politicians are trying to drive the populace and the voting conditions in the United States. That's what's going on right now.

There's a lot of fear about, “Putting this data center in my town is going to do X, Y, or Z,” with no real conversation about the truth of that matter. There's a lot of fear about wealth creation being aggregated in the hands of a few, when, as we saw with the internet, it benefited the many.

That fearmongering is a very similar tactic to what we've seen in prior generations, where policies were misstated, fear was used, and then voting control allowed folks to come to power who were looking for power. So I think it's just the lightning rod at the moment.

Okay, Chamath, what's your take on this big picture of what's going on here?

I think it's important to understand that politicians have an incredible sense of self-preservation. So the question is, why would Bernie Sanders think he would not look totally foolish in putting that video out? The reason it went viral is not because it sounded so crazy. It was that, to some faction and percentage of people, it sounded rational and reasonable.

The problem that highlights is that we have a huge perception issue in AI. We have a handful of companies, and all the PR that you see from those handful of companies is a bunch of circular deal-making.

It's a bunch of capital that flows from one to the other. It causes these stocks to go up, of which a small percentage of people benefit. At the tail end of it, it's accompanied by a completely different set of articles that everybody also reads about this sword of Damocles that's about to fall on their head—whether it's electricity prices, their jobs, the jobs of their children, or the quality of their education.

So, we have a big perception problem. The question at hand is: How do we fix it? How do we get back to the place where a video talking about stopping all progress would seem as laughable as it should be?

I think you can go back to the Gilded Age and ask the question: How did the industrialist leaders of that era respond through that 1880 to 1920 age of industrialization, when you had all of this technological upheaval accompanied by a handful of people with incredible success? Andrew Carnegie, John D. Rockefeller, Henry Ford. What did they do?

I think the lesson we can borrow from them is that we now need to be on the front foot as an industry. Enough of the stupid haircuts, dumb watches, ugly clothes, and ostentatious displays of wealth. We've all done it. I've been guilty of it. It has to stop—absolutely stop.

Instead, we need to start using a percentage of the balance sheets of these companies to benefit as many Americans as possible. That is the absolute minimum. Andrew Carnegie built 2,500 libraries. The idea was that, as he built the railroads, you were going to scale GDP, education, and knowledge. Those libraries are artifacts that allowed people to feel a dividend from that Industrial Revolution.

John D. Rockefeller took all of his wealth and invested in institutions and universities. Henry Ford specifically focused on wages. We need to self-organize better, and we need to be more on the front foot. We need to start doing things that are practically measurable by tens of millions of American citizens. That starts to beat back the perception problem that we have.

Because Sacks pointed out last week, the data does not support the misperception. But the problem is—and Sacks and I were talking about this last week—that the misperception is gaining steam. I think we need to use these tools that we have to provide some more practical benefits that every man, woman, and child can feel. Otherwise, this thing is going to build, and you'll see crazier and crazier versions of this Bernie Sanders video.

All right, I think it's well said. As I said last week, I think beating China does not matter to the average American. It's below their line, Chamath, I think, in many ways. What they care about is jobs. They care about their kids getting jobs. They care about costs, inflation, and energy costs going up.

Our industry has done a terrible job of explaining how this benefits the average American. They're seeing all these headlines about, as you mentioned, all the cross-deal booking and all these stocks going up. Half the country doesn't own stocks, so they're not participating in it. They're not blind to seeing self-driving cars or seeing their kids having a hard time getting a job. They're hearing everybody talk about job displacement, and that's a valid concern.

People are scared, and our industry is scaring them, I think, by not meeting them where they are. And then, beating China, respectfully, is important, Sacks. Super important. I can intellectually agree with you on that. But if you lose your job and your kids can't get a job, that's existential.

It's not that my child needs a job next year. They're graduating from school with $100,000 in debt, my energy bill's going up, and my grocery bills are going up and haven't come down. That's what Americans are experiencing.

The war with China is existential. Because if we can keep it on the battlefield of AI and intellectual and economic prowess, we have a very good chance of winning. If it devolves and all of a sudden becomes a different kind of battle, that's bad for everybody, especially our children and our children's children.

So, we need to win the current game on the field. But in order to do that, we need to change these misperceptions. We need to start showing tactical artifacts that show that this is a dividend that can benefit everybody. And we need to start now.

I'm just putting it out there. We have so much cash on the balance sheets of these companies, and Wall Street values it at zero. If you look at the enterprise value of any of these companies and do a sum of the parts, nobody cares about that cash. So, we need to start using that cash more effectively.

What's the equivalent of the library metaphor here for you, Chamath? Do you have any ideas?

I'm not going to front-run what's being worked on, except to say that the leaders of these companies have gotten the message. They are working on a whole host of solutions. Again, we're fighting misperception, which is the complicated battle, but it's winnable, and I think you're going to start to see stuff in the new year.

I would say education's at the top of that list. Sacks, your thoughts here as we wrap on this first topic?

I'm not sure whether to address the particular hoaxes or the fact that there's a larger effort here to try and discredit AI and get AI development to stop entirely. Let's talk about some of these particular hoaxes.

On the job-loss claim, I feel like I do this every week now, but there's a new study from Vanguard where they analyze job growth and wage growth in occupations that are highly exposed to AI automation versus all occupations. They find that both job growth and wage growth are higher, not lower, in the occupations that are exposed to AI.

If you look at job growth in occupations exposed to AI, it's 1.7%, compared to 0.8% for other occupations. For wage growth, it's 3.8% versus 0.7% for other occupations. What you see here is something that's maybe counterintuitive, but it makes sense to me: As you make workers more productive, the value of their labor increases, not decreases. They end up getting paid more, and you want to hire more of them.

So, this is a huge narrative violation. Again, this is coming from Vanguard, and it's showing that AI productivity is good for workers. This follows on the heels of that study from the Yale Budget Lab, which I talked about on a previous show, that said there's no discernible disruption to the job market based on 33 months of data after the launch of ChatGPT.

I understand that you can make predictions as to the future—that this state is going to change, that there will be AI job loss. But what I'm saying is that if you look at the data so far, there is no AI job loss. Quite the opposite: It's job growth and job gains.

By the way, we have a 2% tailwind to GDP growth right now. That's coming from this AI boom, this CapEx boom that's happening. So, this is, I think, a very good thing for the U.S. economy.

Now, why do people want to sabotage it? There's a really interesting article on Semafor recently that described how AI critics were funding journalism fellowships at major publications like NBC News, Bloomberg, Time, The Verge, and the Los Angeles Times—which, by the way, I track these things, and they're relentlessly negative about AI.

These fellowships were funded by the Future of Life Institute, which is a doomer group that believes AI is going to become sentient and replace humans. They were funded by a donation from Vitalik Buterin of Ethereum. It's an interesting story, actually. He donated his Dogecoins to the Future of Life Institute, and they ended up being worth $600 million.

Dogecoins?

Doge. And then, you remember how there were those other Dogecoins?

Shiba Inu.

He had a collection of Dogecoins. Apparently, people air-dropped them to him as a promotional thing.

Got it.

I don't think he wanted them, so he thought, “How do I get rid of them?” He donated them to the Future of Life Institute, and they ended up being worth $600 million.

So, by this almost accidental process, this doomer think tank ends up with a $600 million war chest, and they've been funding these journalism fellowships. They've been funding grants for academics to study AI. Obviously, that's going to end up being very negative.

They are funding a lot of these NIMBY organizations that are opposing data centers, because their goal is just to get it to stop. That's their goal. They just want the development to stop. You can't, I don't think, underestimate how much of an impact this has on the public discourse.

But if you look at their actual claims—for example, the water-use claims—it's a total hoax. These data centers do not use a lot of—

Yeah, that was one of the things I wanted to get into. Compared to a golf course, they're not using that much, or compared to eating walnuts and almonds in Central California. So, I think it is worth maybe just—

Jason, you're throwing a lot of spaghetti at the wall. Look, you have to remember who Ida Tarbell was, because it's quite interesting in this context.

Ida Tarbell was an American writer. Again, in the Gilded Age, she was part of the muckrakers, which was a group of journalists doing investigative research around the abuses of the Industrial Revolution, labor abuses, and the like. She took on Standard Oil.

I'm sure that the people in this current generation who have a Tarbell fellowship are living out this desire to tell a story about exploitation, wrongdoing, and misconduct. The problem is that these things don't factually hold together. But unfortunately, it adds to the perception problem that we have, and that has been growing.

As Sacks said, so many of these things have been debunked, but it's playing whack-a-mole, Jason, because they'll throw the water thing out.

It’ll get debunked. Next week will probably be something about liquid cooling and all the PFAS and forever chemicals. We’ll have to debunk that. Then we’ll go to air cooling and how that’s a problem. Then we’ll go to something else. Eventually, it’ll be the upland grouse. But they’re not going to stop.

Sacks, how do you—do you have a plan to reframe this to the American public? You’re explaining how these bad things are happening and all the evil forces at work behind the scenes.

Well, look, it’s not evil forces, but I don’t think people understand the extent to which the discourse has been impacted by a few anti-AI tech billionaires.

And on your podcast?

I brought it up—hold on. I brought it up on the show, and I tweeted about it way back in November. I linked to a writer named Nir Eyal Weizmann, who has analyzed this whole doomer-industrial complex. She has shown that there are hundreds of these front organizations, and they’re all really just funded by a few big tech billionaires: Dustin Moskovitz, Jaan Tallinn, and Vitalik Buterin.

When I first described this, people thought that it sounded kind of crazy, like a conspiracy theory. And then, sure enough, Semafor came out with the article explaining that all these journalism jobs are being funded by the Future of Life Institute, which was the big donation by Vitalik Buterin. So, my point is just you can’t underestimate the extent to which a few billionaires who’ve donated over $1 billion to this cause have distorted the public debate. And you really see this, actually, in the relative popularity of AI in the United States versus China.

There was recently a poll—they call it AI optimism—where they asked people, “Do you believe that the benefits of AI will outweigh the harms?” Eighty-three percent of people in China believe the benefits will outweigh the harms. They’re AI-optimistic. In the US, it’s only 39%. So, again, the discourse has really been affected by a few of these institutions.

Let’s say that’s all true. My question to you is, what’s your plan to turn this around and explain to the American people why they should be optimistic about this? What’s your plan, David Sacks?

Well, look, you’re right that we have to flip the narrative around. And I do think that the tech companies have done a really bad job explaining the benefits. We talked about this with Tucker. I think he brought up some really good points. And you’re right, the AI companies leaned way too much into the whole job-loss narrative as a way to explain their value proposition. I think it’s either what Chamath has said, which is that this is about their next fundraising round, or it’s a form of laziness, because it’s easier to describe job loss or job replacement than it is productivity, right? Multifactor productivity is a difficult concept to explain.

So, I do think that they’ve played into this narrative, but I think that what we have to do here is just debunk these narratives. Again, there’s no evidence of job loss yet, and no evidence of the water problems. I think the electricity issues with data centers are addressable, and you have to let the AI companies build their own power. They don’t have to connect to the grid. In fact, that’s what President Trump has called for for the last 6 months: let the AI companies build their own power so they’re not drawing on the grid. So, that problem is easily addressed as well.

Talking about the affordability problem, you’re right: we have to get the message out about how this technology will benefit Americans. And the bottom line is, look, I’ve always said I’m a techno-realist, not a techno-accelerationist, because at the end of the day, we don’t have a choice. China’s going to develop the technology if we don’t. So, we don’t really have a choice.

As I said last week, I think the 3 most pressing issues, Chamath, are education, housing, and health care. Our industry is in a unique position to use AI to impact all 3 of those. So, why don’t we as an industry collectively explain all the great things going on there? I gave a shout-out to Daniel Ek, Prenovo, Pronova, rather. All these great companies are analyzing our blood. There’s so much going on in health care that could massively lower the cost and make people’s lives better. Obviously, in construction, you could have incredible advances, and certainly in education. But we haven’t explained those 3 things. What’s your point? Is there anything you can think of to add to that list?

We have to understand that the president and Sacks are responsible for shepherding the GDP of America. And as Sacks said, half of American GDP growth over the next few years is forecast to come from all of the capital that goes into building out our capabilities in AI. We need this to happen. There’s the existential reason why, but there’s also a basic economic reason why.

So, Jason, the social license comes when, off to the side, the private companies start to take this perception problem more seriously. To your point, are there things that they can do around housing? Yes. And again, not to front-run, they’re actively working on something that I think could be transformational. Separately, could they do something on health care? TBD, but we should look at it. Can you do something in education? TBD, but we should look at it.

But the point is, if you can have the same companies that are on the forward foot building this revolution for us recognize that we need to bring some more folks along, take some of their balance-sheet capital, and invest it to create the social license to operate, we will flip this perception on its head.

Yeah, I think it’s well said. And you know, there was a really interesting—I don’t know, you guys must remember this—the AT&T “You Will” commercials. Do you remember those?

By the way, sorry, that’s another great example, Jason. AT&T at the turn of the century—what did they do? They took their capital and they created Bell Labs.

Yes. What did Bell Labs do?

Bell Labs drove all of modern information theory. It was the precursor to the internet. They did so much fundamental research.

I want to be clear: I don’t think that this is a five-alarm fire. This is very fixable right now. And the litmus test, quite honestly, is in 3, 4, 5, 6 months, Jason, when you see the trickle of progress, if we can get organized, does your perception change? And does the language that you use and the tone that you’ve used over these last 6 months—has it changed?

Me?

No, no, no. I’m actually thinking that you’ve been quite a good early-warning system for what a certain percentage of Americans think. And so, in that sense, it’s been extremely useful. But now we’ve got to act on it, and you have to change your mind.

Oh, no, no. My mind has been very crystal clear.

What I’m saying is, my opinion has been that job displacement is coming. Jason, let me be clear: we have to earn you changing your mind publicly on this show. If we do that, we’re back in a good place.

Yeah, no, I think that you’re saying that in a very condescending way. I have brought it up. You’re unintentionally framing it as if I’m misguided.

No, no, no. You have a perception. What do you think my perception is? That, on balance, it’s a coin flip about whether AI is going to be all good for all people or very good for a small subset of people. That’s what I would roughly summarize.

I would say that’s accurate. Job displacement—

Okay, let me finish. Hold on. Okay, I understand. Let me finish. If we can execute this plan, again, meaning marry all the stuff we’re doing on the forward foot with investing—

Yeah.

—with some of the stuff that we also need to do to bring a broader swath of the American population along, you will have a different perception if we are successful. And what I’m saying is, you’ve had this one perception, and our goal would be to shift you and people like you.

Okay, I take it. I think it’s completely fair. Yeah, I have been trying to bring up that, as an industry, we have not recognized people’s valid concerns about job displacement. That’s all I’ve brought up on this program. I’m not saying I think it’s going to be cataclysmic or that we can’t handle it, but I think if we constantly talk about, “Hey, winning the AI race in China,” that’s abstract for people.

And if we deny the fact that robotaxis and humanoid robotics are coming, and intelligent people like Elon or other leaders are saying, “Yeah, we’re planning on replacing those jobs,” we’re doing a terrible job communicating this. I do think part of this is communication, and part of it is, “Hey, these are valid concerns.” So, I think it’s a great resolution. Yeah, sure, I’ll be the litmus test.

Do you guys know what the motte-and-bailey fallacy is?

No, explain it to the audience. I mean, I think I’ve heard of it, but—

The motte-and-bailey castle is an early medieval fortification where there’s a very protected area, the keep, or the motte, and then the bailey is kind of this looser area that’s hard to defend, right? So, what happens is, if they need to retreat, they’ll go into the motte.

Okay. Yeah, “Lord of the Rings.”

Right. So, this has become known as a debating trick or fallacy where people will make a really outrageous claim. They’ll basically run to the bailey. And then, when you prove that it’s false, they’ll run back into the motte and say something very unobjectionable.

So, in the context of the AI job-loss fallacy, the bailey is people will say, “This is causing massive job loss, massive disruption. It’s already here. You can see it.” And then, when I point out, “Well, actually, if you look at the Yale Budget Lab study or you look now at the Vanguard study, there is no job loss,” then they’ll retreat into the motte and they’ll say, “No, no, no, I’m talking about what’s going to happen in the future.” Which is a position that’s fundamentally irrefutable.

And then when I point that out—“Well, wait, you just totally changed what you’re saying”—you’re like, “No, no, no, I was only talking about the future.” As soon as we seem to have agreement, the people in the motte will race out to the bailey, basically saying, “Well, look at what’s happening with the Uber drivers,” or what have you.

There is this motte-and-bailey thing happening all the time on this job-loss question. I just want people to be straight or honest about it. Look, if your claim is that this will cause job loss in the future, it’s true. I can’t refute that because none of us can prove what’s going to happen in the future. But be honest about what’s happening today.

In the first 3 years after the launch of AI chatbots, there’s been no discernible disruption to the labor market, and the early studies and data are showing wage increases and actually job increases. There are definitely job increases in blue-collar jobs because of the construction boom.

This has been our first debate club corner. Every week, we’re going to teach you how to debate better here. No, I appreciate that. I have really tried to say here that I’m not a doomerist at all.

The statistics I look at—I talked to Dara, and I have, sincerely. That’s why I don’t use “displacement.” I use refined language. I do. And when I talked to Dara, he told me that in areas where robotaxis like Waymo are operating, what they did specifically to deal with this issue was stop trying to hire drivers in Los Angeles and San Francisco because there are so many Waymos. They don’t want the drivers to have a bad experience.

So, wherever in the conversation we’re talking about this, I don’t have a horse in this race. I’m not part of this cabal of Dustin Moskovitz’s people. I just know from talking to Uber and Waymo and these other companies, as well as other companies that are building software, that they’re trying to eliminate jobs.

I’m just bringing that up as a really interesting example. Uber and Waymo, and Elon with Tesla, are actually making plans right now to deal with this displacement of drivers. They’re coming up with new products and services for those drivers.

One of the things they’re doing is data labeling at Uber. They bought a data-labeling company, and they’re taking the drivers and saying, “Hey, do you want to do some data labeling over here?” They’re actually creating AI jobs for them. So, this is something that the whole industry is working on.

Look, there’s going to be a spectrum, right? Some jobs are going to change, and some jobs will be eliminated. The question with respect to job eliminations is whether that will be more than offset by the net new job creations.

If you’re looking at things like Uber drivers and we go to full self-driving, then obviously there’s going to be some category of job loss there. I’m not claiming that there’s not going to be any elimination of certain types of jobs, but I believe that, on the whole, what we’re seeing is that when you improve the productivity of workers, their wages go up and there’s more demand for their labor, not less. That’s what the data is showing so far.

I just don’t think you get that from the media right now because they are promoting this doomer narrative, and a lot of that is astroturfed by these enormously deep-pocketed organizations that have been funded by a few effective altruists.

All right, topic number 2. Economic numbers are out. It’s a mixed bag. The unemployment rate is up, government payrolls are down, and inflation is somewhere in between. Let’s get into the numbers here. Fun with numbers.

The unemployment rate rose to 4.6% from 4.4% in September and 4% in January 2025, when President Trump took over. The US economy added 64,000 new jobs in November. In October, there were about 104,000 job losses, but 162,000 of those job losses came from the federal government.

You remember the Doge buybacks our friend of the pod, Elon Musk, was involved in. Those all took effect at the end of September, so there was a little bit of a balloon payment that occurred. An analyst from Moody’s says, “It’s a frozen job market. There’s not much hiring. There’s not much firing happening.” That tracks with what I’m seeing on the ground.

Meanwhile, inflation came in better than expected at 2.7%, beating the 3.1% expectation, but still far away from the 2% target for the Fed. Trump gave an 18-minute, very loud, emphatic address to the nation last night. It was not about invading Venezuela. It was mostly him talking about his accomplishments in terms of prices and affordability, with a little bit of admonishing Biden. Here’s a 20-second clip.

Donald Trump

The last administration and their allies in Congress looted our treasury for trillions of dollars, driving up prices and everything at levels never seen before. I am bringing those high prices down and bringing them down very fast.

Sacks, your thoughts on the economic data?

Well, you’re painting the economic data as mixed. I don’t know how you have an economic report that’s better than what we just had today.

First of all, we saw that CPI came in at 2.7%, like you said, but the expectations were 3.1%. That’s why the market is rallying today in a big way. Core inflation is down to 2.6%. These are significant beats, and this puts core CPI inflation in the US at its lowest level since March 2021, since the whole COVID thing.

If you listen to Kevin Hassett, he said that over the past 3 months, core inflation’s been running at 1.6%. So, the trend line is going down even further. It looks to me like inflation’s rolling over, and that’s just about a solved problem, which is really good news for what it implies for interest rates because it implies that interest rates are coming down. That’s going to bring down things like mortgage costs and the cost of financing a car payment.

Now, you talk about unemployment. I think the unemployment news is very, very good. If you look at the data from September to November, overall employment is down 41,000. But why was that? Private employment was up 121,000, but government employment in the last 2 months declined by 162,000.

This is what the media was focused on. They were trying to claim that unemployment was up, but actually it’s just that government jobs decreased. Why did government jobs decrease? Well, you remember that when DOGE went in and made its cuts at the beginning of the year, they offered people a buyout as of October 1st.

Some people took the buyout right away, but a lot more waited until the last possible day, which was October 1st. That’s why you saw this big spike in October unemployment. But those are government jobs that are being cut. Moreover, they were people who voluntarily wanted to take the buyout, and they took that deal.

Again, I think the employment picture is looking quite good. If you believe what we believe, you don’t want an excessive number of government jobs. President Trump has presided over, I think, the first decrease in the federal workforce in decades. We’ve seen a 10.7% decrease in federal workers in 2025. Basically, the number has gone from 2.4 million to 2.15 million. I know that’ll make Friedberg very happy.

But look, what we had during the Biden years was 9% inflation and a very weak economy. We did have a recession. It was that 2-quarter shallow recession, and the media even tried to start redefining what a recession was to avoid those headlines.

What the Biden administration did in response to that was go hog-wild with government hiring. What we’re seeing now is inflation coming back down, the number of government workers coming down to a more reasonable level, and the private economy making up for it. We still have a relatively historically low unemployment rate, so those numbers look good.

Then you look at the deficit. We’ve reduced the deficit year over year by $600 billion. That will help bring interest rates down. On prices, you’ve got the lowest gas prices in 5 years, below $3 nationally.

Finally, on wages, real wages are up by over $1,000 on average. It’s $1,300 for factory workers and $1,800 for construction workers. Again, that’s a big change from the Biden years, when you saw that, in real terms, wages went down by about $3,000 on average per worker.

It seems to me like we’re on the cusp of a golden age here. I don’t see how the numbers could really be better. On top of it, you’ve got this AI tailwind, which I think is a huge positive, not a negative. It’s adding roughly 2% GDP growth every year because of huge capital expenditure investment, with so far no job loss associated with that.

I would just say sit back and enjoy this. I think we’re headed for a gangbusters 2026. Rates are coming down. Inflation’s coming down. You’re also getting tax cuts going into effect next year because of the Big Beautiful Bill: no tax on tips, no tax on overtime, no tax on Social Security, plus the standard deduction is being beefed up.

People haven’t even felt the benefit of those tax cuts. That’s coming in April. I don’t see how things could be much better.

Okay. Friedberg, any thoughts here on the data as it’s coming in? Or Chamath? I’ll go to either one of you.

Directionally, I think it’s really positive. You want to see private-sector jobs growing. The shrinkage of government-sector jobs has profound impacts not just on the budget, but it starts to create obvious air pockets where you get a little bit more rational regulation. You can deregulate in the appropriate places. You can shift the burden and the responsibility to private industry, so it’s more than just what’s in the numbers that I think is positive.

I’ve told you this story before, Jason. To do some of the things that I’ve wanted to do, I’ll give you an example.

When we started a battery business 5 years ago, when we filed with the DOE, the Department of Energy, these are 700-page reports. You spend millions of dollars, and you hire teams of 50 and 100 people. What are we trying to do? We're trying to build a battery business in the United States so that we can deleverage from the Chinese.

To the extent that we could do that a little bit simpler and a little bit easier because there are fewer folks, the burden goes to state and local regulators, which we all already have to deal with. These are just generally good things for productivity. They're generally good things for GDP. It allows us to invest more aggressively in the things that help America, so it's trending in the right direction.

By the way, Sacks didn't mention this explicitly, but I'll say it. The other thing in 2026 is you get a bunch of tax cuts that kick in: no tax on tips, no tax on overtime, and the deductibility of the cost of interest for things like car loans. These are big stimulative actions, including accelerated depreciation—big stimulative actions for the United States economy.

I think what you guys are missing, respectfully, is that Trump promised something completely different. He said, “Starting on day 1, we will end inflation and make America affordable again” to bring down the prices of all goods. When he was running for election, he promised Americans that he would reduce prices.

What's happened is prices have not come down. They've gone up 2.5% to 3.1%. But what really matters—and I think you guys are doing a great job as the pro-administration part of the administration—is that you're missing the fact that the American people don't believe you. The American people are experiencing something different.

When you look at the approval rating, Trump's approval rating is at historic lows. Specifically on inflation, pull up the Silver Bulletin meta-analysis there. This is the disconnect, and this is why it seemed tone-deaf last night when Trump was telling everybody it's great. When you say it's the golden age, Americans aren't experiencing that. That's just not what they're experiencing.

They're experiencing grocery prices that have continued to go up. They're experiencing unemployment that's gone up 15%, whether it's federal employees or the private sector. You can debate the numbers, or you can debate whether there's a golden age coming because of no tax on tips. These are all talking points. What the American people remember is that the Trump administration said prices would go down. Prices have gone up.

They were told that jobs and manufacturing would grow, and maybe there are all these incredible manufacturing projects coming, but obviously that's going to take years. That has not happened yet. I hope for the best. I hope inflation goes down to 2%, and I hope they turn this around. But the American people don't believe the Trump administration, and it's a big difference between promising stuff in 2024 and delivering it.

Here we are in the first year, and the delivery from the Trump administration on inflation and the economy is not good if you're in the bottom half of society that doesn't own equities. Period. Full stop.

First of all, prices have come down. Gas prices are the lowest in 5 years. They're below $3 nationally. I don't know how you want a new administration to come in and literally affect every single change on day 1. How do you do that?

Oh, no. That's just what he said.

He would start working on it.

Bernie Sanders

Hold on, Sacks. I'm not saying it's possible. That's what he said.

No, he said he'd start working on it on day 1, and so he did. Look at the results. Inflation's now down to 2.7%, way below expectations. I don't know how you want a better report than this. Unemployment is very low.

The economic target was 3-3-3: 3% GDP growth, a 3% deficit-to-GDP ratio, and 3% inflation. They're below 3% inflation. They're above 3% GDP growth, and the deficit-to-GDP ratio is not where it needs to be, so cutting is still ahead.

I looked at the budget for 2026 for a number of the departments in the Cabinet over the last couple of days, and they do have big cuts that they're trying to implement across the federal government. We're going to be interviewing Scott Bessent tomorrow morning. That'll come out shortly after this episode airs. This is the catch-up conversation with Scott on how the 3-3-3 plan is going.

On 2 of the 3 metrics, it does appear that things are good. I'm not trying to be a spokesperson for the Trump administration, but I'd say if you look at this just from the raw economic data and the goals of the administration, there should be a flow-through in terms of job growth, affordability, wage growth, and all those other economic indicators that actually affect people on Main Street every day.

That's all still TBD, and the narrative is still to be written. But those high-level economic goals are starting to fall within the framework of what they set out to do, which is generally good, right?

I'm just pointing out the disconnect. Again, this is the disconnect: the American people want the administration to implement an agenda.

No, no. I'm looking at year 1. Just year 1. We're here at the end of year 1.

I totally agree. I'm just telling you that the American people don't believe the Trump administration right now. There's more work to do. That's the disconnect.

The data that came out today is looking awesome. By the way, that Vanguard report that I mentioned, which also exposes the AI job-loss hoax, has a new economic assessment for next year. It's projecting 3% growth for next year, which I think is conservative, and an improved labor-market outlook for 2026. It says the most robust improvement will come in the second half of the year.

Vanguard is saying that 2026 is looking very good. By the way, that's when the fight for Congress will unfold. The thing about polls is that they're obviously just a snapshot in time, and they don't tell you what things are going to look like 6 months from now or a year from now. I think they're going to look very good.

Maybe he turns it around.

I think it's already been turned around. It just takes time to kick in.

In the public's perception, it hasn't turned around. Inflation was supposed to go down, and it stayed—

It has.

No, it stayed at—it’s still way above the 2%—

For the last 3 months.

Bernie Sanders

No, it has not. We just said 2.7%. 2.7%—

This is CPI.

No, no, the number—

Open the cover of The Wall Street Journal: 2.7% CPI, 2.6% core, and 1.6% for the last 3 months.

Obviously, the last 3 months are going to tell you what the trajectory is.

The fact is, you're looking for every excuse you can to basically downplay the report. By the way, look at the stock market, which is ripping today because this is way below expectations. You're the only one who's not happy about this news, Jason.

No, no, the country's not happy about it. I don't have a horse in this race. I'm doing fantastic. I own equities. I'm doing better than I ever have in my life. I'm talking about how the bottom half of America perceives it. This is the blind spot of the Trump administration. You've proved my point by not addressing it. Let's go to the next subject.

No, you haven't.

What? What?

No, no, the fact is, you guys—

My point—

I guess your point is that the American people expected inflation to go down and prices to go down. Prices have continued to go up. The Fed has a 2% target. It's a little bit unrealistic to say that what you want to—

Wait, you want to have a negative inflation rate?

Trump said prices would go down. They have not. That's what the American people feel. Unemployment has gone up. They expected it to go down. So this idea that we're in the golden age is not tracking with the bottom half of Americans. That's just facts, David. You have work to do. Trump has work to do.

Bernie Sanders

You're saying that anything less than deflation, anything less than deflation, in your view, is—

I did not say that.

You keep telling me what I'm reporting in terms of facts, and then you tell me I said something different. I didn't say that. The American people are very disappointed in the Trump administration's first year when it comes to inflation and the economy.

I don't understand how the numbers could be any better. We just blew past expectations here: 2.7% versus 3%.

I don't know whose expectations you think you have your finger on, but the economists who put together these expectations were expecting 3%.

Pull up the chart one more time for me. Pull up the chart so I can explain that this isn't bias on my part.

These are numbers that you can look at and see. Trump's 2 worst categories right now are the economy and inflation. The American people thought he would do better.

In time, they're going to be completely different next year. Every month, you have 12 months there to look at.

I don't know what's so hard about this. This is a really partisan point that you're making. You're basically saying—

Partisan? The U.S. economy is like a giant supertanker. It takes time to—

Can I finish my point?

Sure, you can.

You must know this, and I think you're pretending not to. The U.S. economy is like a giant supertanker. It takes time to—

It takes time to turn around. It takes time to implement your economic agenda. It took the president the first 6 months of his administration to implement the big, beautiful bill, which is his economic program, but it doesn't even go into effect until January 1st. So, the tax cuts have not gone into effect.

The inflation reductions have happened. We've gone from 9% under Biden to now 2.6% core, and 1.6% over the last 3 months. I don't know what more you could want. Interest rates have come down. They're projected to come down even more because inflation's coming down.

This is, again, a huge ship that's in the process of turning around, and I predict that by next year, the numbers are going to be even better. Let me remind you of what happened in the early 1980s under Ronald Reagan. When Reagan took over, the misery index was at around 20%. Reagan implemented his economic agenda, but it took a couple of years to actually implement it.

By 1983, we actually had a very severe recession because Volcker had raised interest rates so much to tame inflation. We're lucky we don't have that issue today. In any event, it took around 3 years for Reagan to implement his economic agenda, and his popularity was very low by 1983. But by 1984, the program had worked, it was morning in America again, and he won the biggest landslide election, I think, in American history.

So, you have to give it time for the president's agenda to play out and work. It certainly looks like, after 10 months, it's performing extremely well, and we're just beginning to see the impact of it.

I think the core issue is Trump overpromised and underdelivered in year 1, and it's not the golden age for the bottom half of Americans. They don't feel it's the golden age. I think just tackling that head-on and saying, “Yeah, we have more work to do,” is important.

I actually think that's what the address last night was about. I suspect somebody—maybe Susie, the chief of staff, or somebody—said, “Hey, we've got to start communicating better about the cost of living and our promises during the election so that we turn this around.” That's actually what I think is happening, but I don't have a horse in this race.

I'm doing fabulous because I own equities. I'm happy. I'm concerned, sure, that the bottom half of society needs to do a little bit better. That's all.

All right. But, you know, listen, I'm never going to win with you, Sacks, because you're the captain of the debate club. You'll win every debate. You're incredible.

Well, look, the president made the right point last night, which is that he inherited a giant mess. Again, under the Biden years, we had a $3,000 reduction in real wages for American workers. That's already gone up by $1,000 under President Trump in the first year.

But, yeah, if you're a worker and you're just looking at your situation, you're underwater by $2,000 relative to where you were 5 years ago. So, obviously, you're going to be salty about that. But that's the situation that President Trump inherited. I don't know how much more progress you can make in 10 months, but give it another year and then we'll really see.

All right, I am rooting for you guys. I hope you turn it around in year 2.

Okay, Friedberg, we have an important story here we have to get to. Do you guys want to hear a crazy personal story for 2 minutes as a palate cleanser?

Oh, yes, a palate cleanser. This is an amuse-bouche. It's like a little pamplemousse sorbet. All right, this is the craziest story in my life right now.

Pull up the photo, Nick. The first photo. You guys remember my dog, Monty? Yeah, this is the virtue-signaling dog.

No, no, this is the best dog. This is the only one. Monty was my dog for 10 years. I got him 10 years ago in January, and he died suddenly in May. It turns out he had a tumor on his heart, and his heart burst open in front of me and he died.

It was the worst thing. He was with me every second of every day that I wasn't at work. He slept on my bed. He was in my office all day. You guys have seen him a million times in the background during the All-In pod. He was my best friend in the world, the greatest thing I've ever come across in my life.

So, he died suddenly. It was very brutal and very hard. I'm at my house the other day, and my next-door neighbor walks in and he's got this dog on his leash. Pull up this photo. This is the dog.

My next-door neighbor found this dog at Rocket Dog Rescue. It was pulled out of a kill shelter. The vet estimates this dog is around a decade old. Today, I live probably 40 miles away from where we got Monty. He was found wandering the streets of the Mission District in San Francisco.

This random dog was found at some random kill shelter somewhere in California, pulled out of the kill shelter a few days ago, put into Rocket Dog, and rescued by my next-door neighbor. He brings him over. He's walking him in the street, and I'm like, “Oh my God, that dog looks just like my old dog, Monty.”

We ran a DNA test. This dog is Monty's brother.

What?

This dog is Monty's brother. It is the craziest thing. There are like a billion dogs on planet Earth, and of the billion dogs, some random dog from some random litter from a street pup in the Mission District, from a decade ago, found its way into a shelter, into another rescue center, into my next-door neighbor's arms, and back to my house months after Monty died. How crazy is that?

What is his personality like?

I'm going to hang out with him this afternoon. I've got to go see. But how crazy is this? It's Monty's actual brother from the same litter.

In fairness, no, the angles are off, but, yeah. Monty's more robust.

Yeah, well, Monty was well-fed. This dog lived in a freaking kill shelter, so take 12 pounds off Monty.

DNA tests don't lie. Where's the dog that was being tortured by Revlon[?]?

That dog's gotten robust, too. Was it Revlon[?] who was torturing your current dog?

Daisy has a thousand siblings, not just one.

Daisy, I'm fine with. It's Marshall Friedberg I hate.

Marshall.

Marshall Friedberg I hate.

I got to hang out with him. He ate the pistachios last Christmas.

Monty's father must have really gotten around San Francisco.

What are the odds of this? Same mother, same father.

Same litter, same mother, same father. Same litter on the streets of San Francisco a decade ago, and they all find their way to different parts of California and come together. Monty's buried in my backyard. I don't have the samples.

Was it the Summer of Love?

You would say the same. You would say, “No way,” but you've got to see better shots of it. I'll put more photos up next time.

Yeah, this doesn't make sense. I know. It's the craziest thing ever. And, by the way, it doesn't look like they're related. I'll be honest with you. You've got to find a proper photo of him.

What's going on, Chamath, with Oki and Joker? How old are these dogs now?

Oh my God, from your lips to God's ears, bro. Oki is 14 and a half. She turns 15 in July.

She's so precious.

And Joker's 8 or 9, so touch wood. Golden retrievers don't really live to 15, but my God, she's—you've got a lot of good years. I was just on the floor last Thursday snuggling with her, and it was so precious.

I think the best thing that we did was get much more disciplined about Oki's diet when she turned about 13. We restricted her calories a little bit. It's not nearly as much. She lost a few kilos, which just helped her a lot.

She's walking, and she's a little deaf, unfortunately, but she can see. Dogs are the best.

Dogs are the best. Here's my other photo of the dog that Chamath hates. Pull it up just so you can see what it—

Last Christmas, at Nat's birthday dinner on the 26th, which is her birthday, Marshall Friedberg jumped on the table and started eating all of the pistachios and the nuts. He ruined all of them and slobbered everywhere.

All David Friedberg was like, “Oh, look at that.” Allison Friedberg was like, “Marshall Friedberg!” They have no control over what's going on in the house.

Here, pull this photo up, Nick. This is a medical issue Marshall Friedberg's been dealing with. He wakes up with irrecoverable erections, so he can't walk.

What? Pull this up.

Irrecoverable. Oh my God.

Whoa! Dude's packing.

So, this little guy weighs like 8 pounds.

That erection?

He has these erections, and the doctors say we just have to wait. If it ends up staying for too long, there's going to be surgery, but right now he's okay. He can't move when he gets them. He's stuck, and he'll just sit there, unable to move, for around 20 minutes.

Sacks gave Chamath some of my Rose Sparks, and he had a similar thing happen. He was frozen.

There's a Brian Johnson joke in here, but that is a problem.

How's Moose doing, J Cal?

Moose is my special guy. Oh, here he is, Sacks. Is that your dog, Sacks? This is the Moose. The Moose is trying to keep him off, buddy. Oh, man. This is my buddy. Looks like a good boy. What are you doing? What's he chewing on? I think he's got a puck.

Look at that. Get that out of your mouth. Come on, get that out of your mouth. He is such a little love buddy, such a little love bug.

It's like a gremlin. He loves—

It's great to see you so in control. You're such a natural dog guy, Jason. He's a disciplinarian.

This dog loves food. He really loves to wrestle.

Does he headbutt you? The dog whisperer. Moose, take it easy, buddy. I know. He loves to wrestle, this dog. He's heavy, right?

Well, we added about 4 or 5 lb because he wasn't eating all that much when we got him, and then we realized he needed a little bit of extra food. So we gave him a little more food, and then he became a little less grumpy. Then we take him for maybe 3 1-mile walks a day on the ranch. Totally fine. If he misses a walk, the dog's got way too much energy. So he's a ranch dog, not a city dog.

Yeah, no, I know. I told you. Yeah, he needs to run. When he doesn't run, you've got a problem.

Canine corner is the best corner.

All right, let's keep going through the docket here. That's dog corner. That's canine corner. What do you guys think? That's a good corner. How crazy is that? One in a billion, it's got to be, that this dog lands up next to me. It's just the craziest thing.

Cats are horrible. Shout-out to our friends at Waymo for eliminating the cat problem in San Francisco. I mean, that was the greatest update to their software ever. If they can eliminate more cats—

What's that paradox that the AI has where it's like, "Do I hit the dog? It's like the cat problem. Just go for the dog. Go for the cat. Just go for the cat.

Absolutely. You could get somebody there on time, or you could get them there 30 seconds late and take out a cat. Take out the cat. Less stray cats. That's horrible. Shout-out to our cat ladies listening to the pod. What do you think? How many cat ladies listen to this pod?

I think zero.

Oh, there are a few. Are there a few?

Yeah, they're on Bluesky talking about it.

Oh, God, I had a joke. I'm not going to do it.

According to a Reuters report, China has built a prototype of ASML's EUV machine. If this report is true, it could have a profound impact on the AI race that we talked about. For those of you who don't know, ASML is the Dutch company worth $400 billion, the 22nd-largest market cap in the world. They are the only company that makes EUV machines, also called lithography. EUV stands for extreme ultraviolet. That's how you make H100s.

Here's a photo of one of these giant machines. They cost $250 million to make, and they take 6 months to make. They're filled with all kinds of important parts, including Carl Zeiss lenses. Since 2018, sales of these machines have been limited by the Dutch.

Why can't China buy these machines? In 2018, Trump's secretary of state, Mike Pompeo, put pressure on the Dutch to impose export controls on China, and later that same year, they did. So, according to Reuters in this news story, China used former ASML engineers, allegedly, to reverse-engineer the machines.

Reuters has pointed out that the machine in China has not yet produced any working chips. It's a prototype. The CCP is targeting 2028 for working chips. Some sources say maybe 2030 is more likely.

You've been talking about China's lithography on the show. We can play the “Chariots of Fire” music that Friedberg insists we play when he does his victory lap, Chamath. Here's his victory lap from Episode 224.

Last year, China announced and began a $37 billion investment in developing its own 3-nanometer chip technology. China claimed that this investment was starting to pay off and that it had developed its own EUV system.

Its big semiconductor company is called Semiconductor Manufacturing International Corporation, or SMIC, in China. They launched a 7-nanometer chip with Huawei in its Mate 60 Pro, which is sort of like their iPhone competitor in China. So they're proclaiming that they've already got this EUV technology. From what I understand—and Sacks would know better than I—it sounds like there was a lot of reverse-engineering and workarounds of existing technology in order to deliver that system.

Who do you think has the best chance of challenging NVIDIA?

My early prediction for 2026 is Huawei, where I think there's lithography technology that exists in China that is not publicly discussed, and that is going to be deployed in Huawei and all these fabs that they're building in mainland China.

So, announcements in 2026, impact in 2027? Probably fair. They have first dibs on All-In. Friedberg, congratulations on your weekly victory lap here.

I honestly don't think that the Reuters story is necessarily news, because I think it's a little bit narrow in scope in trying to describe what happened, which is that they quote, “stole ASML technology,” because scientists are working on it. That's not really the full scope of what's been going on in China for a number of years, and it really understates the technological progress that China has independently made in using other systems to try and achieve lithography parity.

If you go back a number of years, the current investment vehicle is actually Chinese banks putting capital into a fund that's roughly $48 billion U.S. dollars, which is what's called the National Integrated Circuit Industry Investment Fund Phase III. There was Phase I, which started in 2014 and focused on manufacturing, developing fabs with groups like SMIC. Phase II was stood up in 2019 and focused primarily on design and materials. Then this Phase III fund was established in 2024 explicitly to pivot to what they call choke points, or bottlenecks, in the manufacturing process.

State media has confirmed the existence of this Phase III fund and the intentionality of the Phase III fund to try and replicate lithography technology.

A couple of months ago, if you pull up the link there, here's a publication on this paper. This is the leading research group out of China that's been backing into lithography technology using AI-driven systems. They published this paper, which was a very good summary of where they are in July.

Was this in Nature?

No, it was in Light: Science & Applications. This paper is called “Advancements and Challenges in Inverse Lithography Technology: A Review of Artificial Intelligence-Based Approaches.”

If you read the paper and then read the other publications from this particular research team at Tsinghua University, they have made a number of breakthroughs in using AI to try and reestablish alternative systems to the traditional Zeiss optics and other control systems that are used in the ASML platform.

The way that they've done it—I won't spend too much time on it—is by using a bunch of neural networks that they've trained and made discoveries from, including doing things like working with suboptimal optics, meaning you can have optics that have a degree of diffusion. Then how do you actually recreate 3-nanometer printing techniques or 3-nanometer masks by having shadowing effects accounted for in the AI? You almost assume that the shadowing effects are going to come out, and you print differently than you otherwise would. You don't need the degree of precision that you need, and you don't necessarily need to get the Zeiss optics.

There was another paper published early this year by another Chinese research team that demonstrated how they used AI to discover a novel method for doing optics. So there was a very broad and well-funded effort underway for over a decade, but just in the last couple of years, with artificial intelligence-based approaches, they've made a series of breakthroughs. It is very likely the case that Huawei already has a lithography system that they'll be putting into production. This is why I talked about it when we were in Vegas and pointed it out earlier this year. But again, I think Reuters just caught on to some narrow segment. This is a bigger story and a bigger set of progress that's been made over quite some time.

Ramifications, Sacks? Here's what I'm thinking: Obviously, you've talked a bunch about, “Hey, let's sell our stack in there.” And they're clearly working on their own stack. What's the ramification of this if it's true?

Well, I've never supported selling EUV lithography to China. It is probably—

The stack of H100s, whatever the previous NVIDIA stack was, yeah.

EUV lithography—these machines that are made by ASML—is probably our single biggest advantage in the AI race, because they're the only machines that are capable of creating, say, 2- to 3-nanometer chips, semiconductors.

It's sort of the perfect export control because there's only 1 company that makes these machines. Like you showed, they're gigantic and expensive. So if you think about trying to put an export control on a commodity, there would be a lot of ways to circumvent it because there are a lot of sources for a commodity. But in this case, there's literally only 1 company that makes these machines.

It's been a tremendous advantage, I'd say, for the West that we have EUV lithography. I'm not surprised that China is trying to reverse-engineer it. It's kind of the obvious thing to do. No advantage is forever. It does seem likely that at some point they'd be able to figure out how to do it, so I think that this article is not altogether a surprise in that sense. I'm sure that China is trying really, really hard to reverse-engineer this.

In the meantime, however, they've also made substantial progress with DUV lithography. The previous generation of lithography before EUV was DUV. E is extreme, D is deep.

In any event, DUV was supposed to top out at, say, 14-nanometer chips. China was able to push the technology to get to 7 nanometers and now to 5. So they've been able to get a lot further using DUV lithography than anyone thought possible.

That is why the Huawei chips—the Ascend chips—are not as good as our chips, but they are serviceable. They've been able to use their prowess in networking to string more of them together.

You have the CloudMatrix 384 technology, where Huawei will string together 384 of its Ascend chips into a rack. That will perform comparably to an NVIDIA rack, but using a lot more power.

The bottom line is that China has been able to create a lot of workarounds to our restrictions. But if they figured out how to reverse-engineer EUV, that would be a blow because it is a real advantage for us. I’m not convinced that this Reuters story is the full picture. I think it’s just a data point. Chamath, any thoughts here?

If you want a very short summary of how the last generation of chips works, the best way to think about it is that the most profitable and valuable chips to date have taken a compute-centric approach. That’s why we’ve needed these ultra-advanced process nodes.

But the reality is that in a world of infinite inference, let’s say, the next generation of silicon will not take the same compute-heavy approach. It will probably rely on a much more memory-centric architecture that uses a lot of SRAM.

The value of that is that you can produce these things, as Sacks said, at 14 nanometer at 75. All of these process nodes that are much less advanced—I actually think that is the future.

So, in a weird way, if they steal this—which I think we should assume they’ve already stolen, quite honestly, and they’ve figured it out—the question is, how bad is it? That’s the really important question.

The thing about a more memory-centric approach for AI inference, or these next-generation forms of silicon, is that it demands a lot more from compilers. It demands a lot more from the software. I still think that’s where we are light-years ahead. So, I don’t think it’s the end of the world, and we’re still in a very good place. But it is bad.

Friedberg, weren’t we supposed to start onshoring with the CHIPS Act and maybe get toward having this production ability in America? Obviously, that’s been really hard to do. China’s relationship with Taiwan, and the possibility that it actually takes over Taiwan militarily, has been this existential concern—or even a short-term concern. Maybe that’s a better way to say it.

I think the biggest security implication to consider at this moment is that both the United States and mainland China are onshoring manufacturing. That makes Taiwan less of a strategic point of interest for the United States and for U.S. industry.

Maybe one way to think about the positive aspect of what is going on—which we’ll call the balkanization of manufacturing generally, but specifically semiconductor manufacturing in this case—is reduced security concerns. There’s no longer this flash point, perhaps, in Taiwan.

If China did invade Taiwan and the United States had fab manufacturing, we’d be less likely to want to defend Taiwan. And frankly, if China has fabs on the mainland, does it really need to invade Taiwan? What’s the economic interest in doing so?

Yeah, that’s kind of where I was going with it.

But if they also wanted to jump-start their industry, they could just go to Taiwan and take the machines. Is that actually the plan? I don’t know what the CCP’s plan is. I think that’s a pretty simple statement to make. Going to Taiwan is probably a lot more complicated than—

Of course it is. My point is, if it were super existential for China to get those chips, and it went to Taiwan, then it would have reverse-engineered the machines by default.

We need to recognize that we keep using the term “reverse-engineering” as if ASML is the only way to do this, and it is not. If you read their papers and read what’s coming out, there are alternative production methods and manufacturing systems being developed in China that may not only provide parity to ASML, but get ahead of ASML.

I think this is really important to understand. China is not just in a catch-up race; it’s in a primacy race. It is trying to develop primacy in lithography technology, which will give it primacy in manufacturing, which will give it primacy in AI, which will give it economic leverage over the planet. That is very critical for us to understand.

This is not about stealing data from ASML. No one gives a shit if you’re sitting in China and thinking, “I’ve got the world’s best scientists, or some of the world’s best scientists, and I’m giving them the resources and the mandate to go solve this problem.” The government, as I mentioned last year, put $40 billion against this problem and said, “Go figure it out.”

These guys at Tsinghua are publishing some groundbreaking research on how to do it. But it’s easier to catch up or to copy than to innovate, right? So, if you’re China, the first thing you want to do is just copy EUV and get that technology for yourself.

Well, let me ask you this: What would you do? You’re the AI czar, you’re sitting in the United States, and China has this lithography technology. Is your goal to steal its technology, or is your goal to get your best scientists and say, “Let’s get ahead of its technology”?

If I’m China? Neither. I think it would be to solve the problem. What is the actual economic and commercial problem we’re solving?

Right. And so, if you can figure out a way to do manufacturing better, cheaper, and faster than the way China does it, you would obviously take that path. You’re not trying to get to parity with China if you view yourself as supreme to China.

You have to understand, even with these EUV machines, at 2—or even sub-2—nanometer scale, you have these incredible laws of physics that you are pushing to the boundaries of. That causes these chips to have pretty low yields. You have a lot of systems that actually aren’t that efficient or highly utilized as a result. So, these systems are brittle.

The second thing is that when you have these compute-centric architectures, you end up making design decisions like HBM. They’ll have to go and steal all the HBM, which is the high-bandwidth memory business that SK hynix and Samsung have. But again, that’s where NVIDIA and Google have an effective monopoly.

Let me ask you a question, Sacks. What’s your strategic response if China next year goes into manufacturing with a sub-2-nanometer system that has higher yields, is faster, and is cheaper than anything we’re seeing anywhere else in the world?

Well, I don’t think that’s going to happen. Let’s talk about that if it actually happens. I don’t think it’s going to.

But what would I be focused on right now? I would say we want to get more of the leading-edge manufacturing in the United States. TSMC has already opened a big fab in Arizona, and it’s planning on increasing the size of that. That’s really important.

We should get all these restrictions out of the way. They’re facing all sorts of permitting restrictions. I mean, all the stuff that Bernie’s talking about where he wants to slow down—I mean, he’s talking about data centers, but the concepts are the same. So, if you’ve got Bernie Sanders, Ro Khanna, and Elizabeth Warren, this is exactly wrong.

I mean—

Anti-tech, anti-progress people are saying, “Let’s stop all this stuff.” Meanwhile, China is not just racing to catch up; it’s likely going to get ahead of the United States. If we’re caught flat-footed because we’ve got a moratorium on development and a moratorium on production, it’s going to be extraordinarily damaging.

Right. Well, look, this is where I agree with you: If this Reuters report is accurate, it does speed up the timeline on China closing the chip gap from being adjacent to being a few years away. You can go read the Tsinghua papers. You’ll see that these guys are so advanced.

If they care about being ahead, why are they publishing that paper?

So, by the way, this is a really important point, and I’ve picked up on this from a number of different disciplines in scientific research.

What’s been going on is that scientists in China are very smart people, and there are very great scientists there. Like all scientists, they don’t necessarily think in terms of nationalism first. They think in terms of science. They want to publish their research. They want to be known. They want to be the discoverers of these new frontiers.

What we’ve seen in several instances is that the scientific research groups will publish, and they’ll publish slightly ahead. Once they get ahead of the market or get ahead of the world, suddenly they stop publishing. It’s almost like the CCP comes in and says, “Okay, you guys are now going too far. We don’t want to tip our hat too far.” And the stuff starts to recede.

I think there was one paper on optics that was designed to replace the Zeiss monopoly in optics that suddenly disappeared, and that research team stopped publishing. I’ve got to find this paper. This came out last year.

But there are a number of these disciplines where publications go to a certain extent, and then they stop publishing. So, I think there’s a little bit of a mechanism—

—of the funding cycle in China. You have every single local government that’s been given capital to invest in businesses. They compete and compete until it gets to the state level, and you have 1 or 2 national champions.

But if this was so important, Friedberg, would there also be an argument to publish things that would send misinformation or send people down the wrong direction?

No, because, again, the funding cycle is that, as a policy person in Shanghai, you get promoted because you make a good bet.

Yeah. And you make a good bet. So, by the time it becomes 1 national champion—to Friedberg’s point, when’s the last time you saw BYD or CATL publish anything meaningful? But when they were not the national champion, they were probably publishing very aggressively.

But at that time, there were 50 different companies competing to be the national champion. So, I suspect what's happening here is that there are 50 different semiconductor startups all over China. Everybody's trying to support their own local version, and eventually, when there's 1, they disappear.

Hmm. Okay. Interesting.

One of the things we see is that China does give money to these research institutions on frontier science, and then there's an industrialization. It's something the U.S. isn't quite as good at, and I think, again, we've talked about the co-opting of our universities as research institutions over the last couple of decades. They've become these sort of employment centers, if you will, and they've become these sort of weird social-engineering systems. They've gotten away from some of the core research, or that research has been somewhat co-opted.

In China, there are these dedicated research centers, and then there are universities where there's very clear independent research that goes on at university campuses. They typically get quite a bit of funding. And the way this worked, if you look into the details of the China National Integrated Circuit Industry Investment Fund, there were 3 funds—1, 2, and 3—and the funds get bigger and bigger as the research teams make progress.

It's a very smart way of doing things from a central-planning perspective. Then, in phase 3, they're now targeting these specific unlocks that will enable industrialization. They're funding some of this core research, the core research has these breakthroughs, and then it gets industrialized. It's during that research phase where we see a lot of publications happening.

This is happening in life sciences as well, and in physics and materials science. As soon as they start to get a little bit ahead of the curve, then it gets industrialized, and the publications kind of stop. I don't know if it's necessarily the CCP stepping in and saying, "Hey, stop publishing. You're going to let the world know too much of what we're having," versus, "Okay, the handoff is now happening, and industrialization begins."

Yeah, look, I would just say that, to me, the takeaway here is that the timeline on China closing the gap with us is being sped up. Whether it's the fact that they're copying what we're doing, whether EUV is being reverse-engineered, or maybe their scientists are figuring out a way to leapfrog, we are in a pretty close race with China. That's why I think it's really important that we don't listen to Bernie and others who just want to stop the progress, because the progress is not going to stop. It's just going to happen in China, and that will be a big problem for the United States.

All right, speaking of socialism and communism, are you guys thinking about coming to Austin, my neck of the woods? I've been pulling up these photos of homes in Austin. You know I'm doing it, right?

Welcome to Texas, boys. Like, on the lake.

Sacks already bought a house. Sacks already bought a house. Sacks already hooked me up with the agent. What does she have you looking at?

I'm not sure yet. We're just going to do a pool.

We're bidding against each other?

You can have my sloppy seconds. You have the high ground, so you can negotiate hard.

There is so much inventory, but only about 20% of the inventory is on the MLS. Eighty percent here, because it's a non-reporting state, is off-market. So, it's completely different from any other market, certainly California. I want to be on the lake. If I'm going to do this, I want to be on the water.

Oh, really? I don't want the lake. I mean, if you're there, here's the challenge with the lake: people are going to come up to your house and take pictures and hang out about 2 feet off your house, starting at 7:00 a.m.

It's like having a house in San Francisco. Everybody's zipping around the lake in motorboats starting at 7:00 a.m. It's beautiful. I love the motorboats.

It's great, but just understand it's going to get loud.

There's nothing a good motorboating doesn't fix.

Who doesn't love a good motorboat?

J Cal, I heard you're like an hour away. You're not even in Austin.

I'm in the Hill Country on my ranch, but we're getting a place closer to the city, actually. So, we're 30 minutes outside the city. We're 30 minutes away.

My God. I heard you're an hour away. I heard you're in the sticks.

No, not that far. Not that far.

No, he's in the suburbs of the suburbs. If you want to have dozens of acres, you can't do that in the city. When I was growing up in Memphis, they called that Bumblefuck, Egypt.

An acre in Tarrytown? No problem.

An acre is doable. 2 acres is possible.

You know what's so sad? Even if this bill doesn't get on the books—which there's a decent chance it won't—everyone's leaving. It ripped the Band-Aid off. The revenues of California are going to plummet.

Mm-hmm. Plummet.

That one bill, this proposed billionaire tax, has single-handedly changed the trajectory of the California economy by $100 billion to $200 billion over the next 5 to 10 years. It's an enormous self-own. People were here willing to pay the money, and now—

People were putting up with it. As soon as you tell people, "Hey, we're doing property seizures," or even the threat of property seizures, or the fact that people didn't come out against property seizures, that's enough for everyone to be like, "See ya. See you later." The fact that all the politicians didn't stand up in unison and say, "This is ridiculous. We're never going to let this happen"—they let this happen. By not defending the property rights that are endowed in this country, they lost everything. They have to defend it.

What do you think happens to the state budget over the next 4 or 5 years as a result of this?

You're right. It's trash. And, by the way, that's what drives the socialist spiral, because then they try to do more property seizures, and they try to get the money back.

They're going to tax? Everybody's going to be gone then. Here's the other crazy statistic that we never talk about. I was going to try and put some data together and get it as a topic, but we should save it for the new year. The California pension-fund system is underfunded by roughly $1 trillion.

These folks in the California pension-fund system are sitting around waiting for money to come to them every year for the next 30, 40, 50 years, and the money isn't there. They're guaranteed that money from this pension-fund system, and it's not there. What are they going to do? They're $1 trillion short. That's a state obligation. Why would anybody hear something like that and think giving politicians more money is a good idea? These people are so fiscally irresponsible. They're fiscally illiterate.

There is that.

It's pretty clear to me that in New York and California, it'll be 60-plus-percent taxes. If you were living in a perfect society that appreciated it, and you had this incredible safety, extraordinary schools, and the roads and public transit—everything works—you'd pay 60% and you'd be ecstatic.

Yeah, like Japan. You'd be like, "Okay, whatever. It's a lot, but hey, this is a pretty great place to live."

If you're paying that and people are breaking into your home and there are 9 overdoses a day, you're like, "Wait a second." And then, on top of that, by the way, they're seizing your private property now. They're seizing your property, and they don't care about you. When you look at the laws, I was just talking to the law enforcement people. City's using your money to give homeless people vodka. It's just—

Well, I mean, if it was tequila, I have a good tequila brand we could give to the homeless. Maybe we could make a deal.

Yeah. Shout-out to all the tequila coming to you.

The delivery's happening right now.

In all seriousness, I was talking to some security folks, and I was talking to my security guy, who's up in California. In California, not only do they not have the castle doctrine, they've replaced the castle doctrine—where you can defend your home if somebody comes into it with your gun and protect your family and your property—with a duty to flee.

You have to be able to run out of your home with your family as opposed to defending your family. So, they're literally telling the criminals, "Hey, listen, if you break into somebody's home in California, don't worry about getting shot. They're going to have to run out, or else they're in the wrong." This is deranged. The inmates have literally taken over the asylum.

I realized this 2 years ago, and I pulled the rip cord. Even Elon realized it 6 years ago when he tried to build a factory. He pulled the rip cord. You guys are realizing it now. Everybody's realizing this. The hedge-fund guys in New York, New Jersey, and Connecticut realized it, what, 3 years ago?

Hollywood guys—I know a bunch of Hollywood guys leaving.

Yeah, I literally know this producer, one of the major producers who has produced billions of dollars' worth of films. He came here last year. I met him at a football game. He said, "Tell me everything." I told him everything. He moved here. He moved here. He's going to start making movies here, and he is one of the top producers. I won't say who he is, but you'll know his films because his partner, an incredibly high-profile comedian—among the highest-profile comedians in history—with whom he makes films, moved here.

Why? He doesn't want to live in LA and risk his family's life in a home invasion and the house burning down because they don't fill the reservoir with water. I mean, guys, hopefully not everyone realizes it, because I need to sell my house to someone.

Good luck. You'll be okay. You'll be okay. There's a Chinese billionaire—

Actually, you know who you'll be able to sell your house to? There are no billionaires left in California. It's whoever the politicians are that are able to aggregate power and money in the socialist—

Gavin will buy your house and turn it into a home for the show.

You guys are going to look back on Gavin and realize he was the most upstanding, moderate governor that California had in the modern era, and suddenly we're going to be like, “What the—”

And I think that's a great place to stop it, boys. We will be doing a couple of episodes between now and the end of the year, and, yeah, no weeks off. Hopefully we get to see each other over the holidays. I'll see you, Sacks, and you as well, Chamath and Friedberg, shortly.

By the way, the president just signed an executive order reclassifying marijuana from Schedule I to Schedule III. Schedule I to Schedule III. That's something Obama wanted to do in the second term and never did. I mean, it's a good thing. Schedule I is like heroin, and it's never made sense to treat it the same as heroin. I know a lot of people aren't thrilled about marijuana. It's not great when people are smoking in the streets.

But I agree with this too.

It's not heroin. I think most people intellectually would put it on the same level as alcohol, right? I just want it studied so that we can have toxicity labels. That's the big thing that I want.

Yeah. That's the most important thing. You just put a tox label on these things, so you know what you're taking. The strength of these things over the last 50 years has changed dramatically, and there are these shards they create of this incredibly intense THC that will make you go psychotic. It's really dangerous.

Smoking a joint from our youth is very different from smoking these resins and stuff that they've created, apparently, that are 200 times the potency, and they can put you in a psychotic state. Really dangerous, folks.

Well, that's where the FDA should regulate it more like tobacco or something.

100%. Much better process, especially since kids are getting ahold of this stuff.

100%—this stuff, yeah. All right, everybody, another amazing episode of your favorite podcast. Happy holidays, everybody. Merry Christmas. Happy Hanukkah. Festivus—whatever you're into.