美联储对关税犹豫不决、新 Mag 7、VC 之死与后搜索时代 Google 的价值

We went to an amazing restaurant Friday night. Shiso is the name of the restaurant. The owner, Shimon, is a superfan of the All-In podcast as well. Wonderful food.

We had this incredible omakase, just A5s all the way. The guy comes and we go to pay. He says, “Oh my God, Philippe, listen to this story. Your money is no good here.” He refused to let us pay after we ran up a hell of a bill.

Is that a French restaurant?

Jason, she said it was more like an Asian fusion restaurant, with great sushi. And now you see Friedberg running. Friedberg just ran off the show. Why did he run off the show, Jason?

Then Jason says to me, “Chamath, you guys make this up to try to make entertainment out of me.” I’ll tell you the truth. Jason says, “Guys, I’ll see you guys later. If Friedberg’s going to talk for more than 3 minutes anyway, go ahead.”

He said, “If they’re going to comp all the food, just make sure you give a great tip. Huge tip. Huge and J-Cal-level tip.” That totally makes sense. Friedberg’s like, “Yeah, got it. No problem.”

We had about $19,000 worth of food, and he goes, “Is $175 appropriate?” Friedberg literally calculates it. Jason says, “No.” Then Friedberg says, “Hold on. Fine, I’ll double it to $350.”

No, he was joking. I gave the guy $1,000, and I said, “Actually, I think we should give $3,000.” So then we tipped the woman an extra $2,000. We gave her $3,000 for a 10-person dinner, which I think is appropriate. She was ecstatic.

The food was phenomenal. It was great. Go to Shiso if you’re in Miami. Dave, are you adjusting the tips for the no-tax-on-tips thing? Are you making the middle smaller tips?

We open-sourced it to the fans, and they’ve just gone crazy with it.

The besties are riding high. Why are we riding high? Because we went to Miami. We had so much fun at F1. There were so many great stories. We were laughing the whole time.

We did a little stage show, and Tony Robbins came up. We had Nico Rosberg, the Formula 1 champion; our guy Antonio Gracias, who’s working on DOGE; Valor Capital, a friend of the pod; and Mayor Francis Suarez join us. Then, at the end of the show, a surprise guest: none other than Sergey Brin, who is punching a clock. He’s working about 70 hours a week over at Alphabet, and we’ll talk about that a bit today.

Did you have a favorite speaker or a favorite moment?

Sergey. Sergey did a great job. He was very casual and very chill. We had a great conversation, and I think we should probably publish that as a standalone. I thought it was really good—maybe drop him as a little midweek episode or something.

I will say Antonio—I gave him a shout-out just because I think the work Antonio is doing is so important. I am super impressed, and I was really appreciative of him taking the time to come hang out with us. Obviously, he’s working with Elon on DOGE, but he’s also uncovering a lot of stuff in the government. It’s really powerful to see someone actually go in, do the digging, and present it with the transparency he has.

He’s not doing it for any angle. There’s no money, and there’s no individual benefit to him. He’s just doing it. It’s probably a net negative on the margins for him. It’s really hard for him.

Based on Elon’s experience, it’s definitely net negative. People maybe don’t like having their grift canceled.

I thought all 5 of them were amazing. I did think Sergey did a really good job. I like Nico Rosberg a lot, too. I’m really excited to see what Francis does next after being the mayor of Miami. Maybe governor. We’ll see.

I think they were all great. Tony Robbins, I have to say, his energy is very unique. When you’re near it, you can feel it. I didn’t have many interactions with Tony until that first time. I’d met him through Peter Guber a couple of times when I was part of the ownership team of the Warriors. Peter’s a co-owner, and they’re very good friends, but I’d never really spent much time with him.

He’s a special person, and you can tell there’s a big energy there. They’re all great.

I’m interested to see how the audience likes that interview because he is a ball of energy. I tried to get him to open up and talk about himself a little bit, but he was kind of on his own tip. The audience loved him, though. We did a great meditation exercise that everybody loved. It was a lot of fun.

Joining us this week from Coatue Management, we have Philippe Laffont. Philippe, welcome to the program for the first time.

Thanks, guys. Great to be here.

Have you heard the show before? Have you listened to the All-In podcast, Philippe? Let me ask you that question right off the bat.

I’ve been listening for about a week at 1.8 speed, so I think I’ve gone through about 10 or 12 episodes. I’m catching up.

Are you an F1 fan? You’re French, so I don’t know—is F1 popular in France? We had a good F1 driver, right? Alain Prost?

Alain Prost. He won a few years, you know. It’s incredibly popular in Europe.

Jason, what did you think of Formula 1? That was your first time, right?

It was my first time at F1. There was a lot of pomp and circumstance. We were very lucky that the Trophy House—my friend Ford, whose partners are on the Trophy House—included us. He gave us a level of the Trophy House. It was a beautiful structure with 3 amazing floors and tons of activations, which means free stuff for those of you who aren’t in these circles where celebrities get all kinds of free stuff.

We had a poker game. It was wonderful. The best way to watch F1 is to play poker.

By the way, when you’re live at F1, it’s a little bit hard to get into the experience because the cars just zip by you. You get to see the car for a few seconds, and then there’s dead time.

We made an executive decision, because it was raining, to pull the table inside the Trophy House. Then we had an incredible view of the finish line. There’s Friedberg standing up, with me next to him. We had an incredible lineup.

Travis joined us. You can see Phil Hellmuth haranguing poor Travis from Uber, who was sitting next to me. This is what he always has to do. He has to have his hand on a billionaire. If he’s not within 5 feet of a billionaire, he has a panic attack.

Phil Hellmuth was there, too. My friend Timothée Chalamet came by to say hi to me, and of course Phil was tackling him. Look at those meat hooks going over a giant panda bear, and Chalamet’s the bamboo. I felt so bad for Timothée.

He’s done such amazing work, and you can see how engaged he is with Phil Hellmuth. He’s like, “Who is that person? Why is he grabbing me?” But then again, Phil Hellmuth was presenting him.

Is that dealer Larry Summers? He sort of looks like him.

It is Larry Summers. After his appearance, he actually dealt. After he was here, he lost so much sponsorship and so many deals that he’s now moonlighting as a dealer. He wanted to continue the great debate.

Can I just point out the proper way to embrace an A-list celebrity you’re friends with? You just let them come up to you. Look at this. Timothée comes over. Timothée and I are just—me, just as a background—

This is your good friend Timothée Chalamet, right?

I will not say “good friends.” We’ve met a couple of times—a handful of times—because we’re both Knicks fans, and I’m friends with Ben Stiller. Ben Stiller, myself, Timothée, and my brother Josh went to the Pistons game—the Knicks versus the Pistons—when we crushed them and crushed their souls.

Timothée came over just to say hi to me. His friends Frankie Bones and Cody Block were with him. He’s got a great crew, and he came over to say hi and thank me for the tickets I was able to get, because it was hard to get tickets for that.

Anyway, Phil Hellmuth, don’t tackle people at events. This is why Chamath banned you. It’s just complete inappropriateness. Hellmuth was also going around—I don’t know if you knew this—telling everybody that he created All-In and that he was the executive producer for life. Just so much inappropriateness from Phil Hellmuth. It was brutal.

Man, if I may, let me also thank our partner, OKX, the new money app. They’re a big major sponsor of the McLaren F1 team. They’re the main sponsor on McLaren, and they won the race. We were there with Haider, the CMO, and his team. Super guy and his wife. We had dinner with them. Shout-out to those guys. They just launched their crypto exchange here in the US. So if you love All-In, do me a favor, go check out OKX. And thanks to some of our other partners: Solana, Google Cloud, BVNK, Circle, shout-out to my guy Jeremy Lair, and my brother in Knicks fandom, Shane from Polymarket, who I got to hang out with a whole bunch. This is a really great guy. Wonderful event. We’re going to do it again. We’re going to run it back, I think, for F1 Austin, Vegas, and maybe Vegas. Who knows? Maybe the Super Bowl, maybe NBA Finals. We’re going to do some more of these 200- to 500-person events. I got to say it was so fun to hang out also with the fans that came in for the show, the sponsors. It was just so great to go to these events and hang out with people.

I need to ask you guys a question. What was the most fun—the Friday, the Saturday, or the day of the race? Saturday for me. So, you like the content best? Saturday was—I woke up, I went straight to Jeff Gross’s house. Me, Travis, Hellmuth, and a couple of others. We played poker until 4:00. I ran to the hotel, took a shower, went on stage at 5. I spent 4 hours prepping. 5 hours out of your pockets. It was great. I was in the nightclub till 5 a.m. That’s a true story. All right, start the show. Let’s get the show. I’m going to start the show once I remind people that September 7th, 8th, and 9th, we’ll be in Los Angeles if you want to come hang with us like we did in F1 for the All-In Summit, the fourth year. And my lord, I got a preview from Friedberg of the content. It is going to be another peak All-In event. Our goal is to have the world’s most important conversations, yada yada yada. Our experience at the summit this year is what’s going to be awesome. It’s in addition to the content being great. We’ve got some really awesome—Well, you told me the party location, which I won’t say here, but you also told me that you’re—I did $900K was the peak two years ago. Then you spent $1.2 million on the party last year, and now you told me you’re spending $2 million on this year’s party. Forget—is that true? The $2 million whispers. It’s going to be more than that. Oh my word. Anyway, if you want to apply for tickets, allin.com/summit. And yeah, Chamath and I were on Megyn Kelly. Let’s get started. I love it when JCal and Megyn Kelly have their—Oh, it’s the best. It’s the best. Well, she likes—she understands it’s broadcaster-on-broadcaster action. We like to mix it up. We know how to do ratings. He’s a radio show. Come on. All right. The Fed held its rates steady again this week. If you remember, last year the Fed cut 50 bps in September, then 25 bps in November and December. But so far in 2025, the Fed has kept rates in a steady range of 4.25% to 4.5%. They said they want to wait and see. They're in wait-and-see mode because they don't know what Trump's doing with these tariffs and how that's going to impact the economy.

Here's the quote from the Fed: "Economic activity has continued to expand at a solid pace," but they warned about potential stagflation. Risks of higher unemployment and higher inflation are their concerns. I talked about that last week. I'm hearing a lot of hand-wringing about layoffs coming soon. So, what do you think, Philippe, about the Fed not taking any action? And what's your general take on the markets? The markets have seemed to recover largely from Trump’s "Independence Day" tariff announcement, but it feels pretty shaky out there. A lot of M&A is on hold, and a lot of hiring is on hold. What are you seeing on the streets?

It hasn’t been a boring year, has it? On the Fed, a lot of people are saying, "The Fed should cut," and this and that. I actually think there's also the scenario: What if the Fed is cutting because things are not so great? Maybe that's actually not a good message. And what if the Fed is not cutting because the economy is really strong? And so I think that the Fed not cutting is actually not that bad of a message.

I'm surprised, just in general, at how bad sentiment is, but how good the hard data is. We have this ratio at Coatue where we divide hard news as a numerator and sentiment as a denominator. It's the first time when the news is so good and the sentiment is so bad. I don't know if the sentiment is bad because the market went down a lot or for other reasons, but I actually think the economy is doing really well.

We also learned 2 really important things. One is, when the market did go down a lot, the government did budge and said, "Hey, we need to step in here." The second part is the Fed did something that I thought was very clever. They basically said, "We're not going to cut just to bail out the equity market, but if market liquidity is no longer functioning—emphasis on liquidity—then we'll step in to restore liquidity."

I think those 2 things really brought the market back up. I think it's more a little bit the case of a tariff correction or a tariff tantrum, but not a tariff crisis.

So you said there was a lot of good fundamental news. What would you put at the top of that list? You said there were things in terms of sentiment that were making people quite negative. The economy as viewed by consumers is really shaky. What is the sentiment news that you're most tuned into, and what is the hard data that you're most tuned into?

On the hard data, the part that’s most surprising is that consumers have very, very weak sentiment, but in the meantime, consumer spending is remarkably resilient. You can see this in a number of ways. You can look at the Visa and Mastercard earnings, but I also like just to listen to little quotes, little tidbits that you pick up in the transcripts of companies reporting earnings. People will say, "Even in the month of April, consumer spending is very strong." And even in the last week, when we adjust for the front-loading—some people are pre-buying ahead of the tariffs—even when we strip that out, consumers are really good.

So I think the part that, to me, is most surprising is that the consumer is great. With respect to sentiment, it's really bad. But one thing that's funny is whenever the market goes down, sentiment is bad. So I don't think sentiment is necessarily a good leading indicator. I almost think it's a lagging indicator. I bet you that now that the market's gone up, we look at sentiment a month from now and it'll be like, "Oh, sentiment's getting better." So I think that's what's going on.

Chamath, our friends at Polymarket are showing an 84% chance of no change in June, a 51% chance of no change in July, and then a 48% chance of a cut in September. And Powell—obviously, Trump has been mixing it up with him, saying he's going to fire him, then he's not going to fire him. What's your take on the Fed and what they should be doing here at this moment in time? And then maybe you could respond to Friedberg's insight there that I think was pretty good: that there is a juxtaposition between what consumers are saying they're going to do and how they feel about the economy, and what they're actually doing.

I agree with Friedberg's diagnosis that the Fed will really be focused on liquidity. I agree with that. In fact, Nick, I just sent you something on Signal. If you could just throw it up here, it's a really interesting view on subprime. What it shows you is the spread between where Credit Acceptance is versus where Capital One is.

The point in bringing this up is that, when you look back historically at these subprime lenders, whenever these guys start to see price-to-book ratios escalate and get to highs, it tends to portend a liquidity crisis. It tends to show that things are about to roll over. And from that perspective, I think there are some blinking yellow lights that the Fed needs to take seriously.

But then where I deviate from Friedberg's perspective is I think that the Fed is getting increasingly political in how they want to react to the conditions on the ground. I'll give you 2 perspectives. The first is, if you actually read the press release, either the word "waiting" or some synonym of that word was littered in there 22 times. It just seemed like an incredible amount of verbal gymnastics to try to justify why they weren't cutting.

If I had to just take that at its face value, I would at least put some percentage of probability on this case, where Powell views that if this lever is the only thing that he has going into the midterms, it's almost as if he's holding it back. I think that if you look at some of these leading indicators, particularly on the liquidity side, I agree with Friedberg about how important that specific metric is. I don't believe in the Fed put—we've talked about this—but I think the liquidity measures are starting to blink yellow. And I think that if the Fed really wanted to get ahead of it, they could cut, but the political overlay is that cutting helps Trump. And I think there's this tension between these 2 people. And I think that the Fed is saying, "We're not going to cut."

So your position—or what you're hypothesizing here—is that the Fed is saying, "Hey, we have to wait for Trump to clean up the tariff stuff, the trade war stuff," and that that's a political act by Powell in retaliation for Trump saying he wanted to fire him. Is that what you're insinuating?

No, no, it's not what I'm insinuating. What I'm saying very directly is that the Fed is acting in a manner that is as much politically motivated as financially metric-motivated, because the financial metrics—some of the most critical leading indicators, particularly around liquidity and the credit health of the American consumer—are blinking yellow.

So right now they are choosing to ignore these historically useful leading indicators. And the only reasons that I can come up with to ignore them are political reasons.

So, Friedberg, do you think there's a political beef going on here between the 2 parties? And what do you think about subprime, and maybe this being a leading indicator that maybe it's time for a cut? Maybe we're going to see people miss mortgage payments, car loans, et cetera. I was just looking at the mortgage delinquency rates. They're pretty flat right now. And that's, I think, because so many people did refinance when rates were low, and there's a tremendous amount of mortgage balance with a low rate outstanding.

But remember, I think the Fed has a whole bunch of data that they're still going to need to wait on. The CPI data for March was 2.4%. Their target is 2%. The next CPI report comes out, I think, next Tuesday, so that's going to be an important indicator.

But I do think one other data point that is now going to be part of the calculus is: What do these trade deals look like? This morning, it was announced that there's a trade deal with the UK, and in that trade deal there are lots of provisions that relate to parity and are expected to provide better market access for American businesses into the UK. But there's also a really important piece of data there, which is that there's a 10% tariff rate for imports from the UK into the US.

So this is the first time we're seeing a trade deal actually get announced and finalized through this whole tariff-trade negotiation process that's been underway now for several weeks, with all the hoopla and all the drama attached to it. What we're seeing is that for one of our friendliest allies, for one of our best trade partners, we are keeping in place a 10% tariff rate. So if that holds with other trade deals and that becomes a standard across the board as they get more of these trade deals done—perhaps with countries that are less friendly, with more onerous and less regulatory parity in the trade relationship between the US and that country—maybe there are higher tariff rates.

What that means ultimately is that there is now maybe a pretty sizable long-term revenue stream for the federal government that didn't exist before, which means that there's room to cut taxes. This is all going to be part of the calculus of the Fed's decision on whether or not, and why, they would need to cut rates, because this is going to drive inflation, GDP growth, and employment. I think that there is a pretty dynamic situation at play right now. It's not just that there's a static tax-revenue base and a static federal-spending model, and then CPI and employment data that are going to follow them.

Do you think Powell thinks that this Trump thing is going to work? So he's holding bullets in the chamber because he's worried about inflation.

I think they're going to wait for data.

I would agree with that. Yeah. Dave, in fact, a couple of things I was wondering about your opinion on: One, I was with this retailer, a gigantic retailer in the US, and there's this sort of false narrative that when you have tariffs, 100% of the tariffs are going to get passed through in pricing, and therefore a tariff is like a tax, right? That retailer told us that they think only about 50% of the tariff gets passed into pricing. So I sort of agree with you. There is going to be a net-net positive, and retailers have a way to work things around and stuff like that.

I would also say that today, post this announcement, the market's very strong. Initially, I was a little bit surprised because we're taxing 10% not only on the most friendly country, but on one where we actually have a surplus. So it's like, if it's 10% when we have a surplus, what is it when we have a deficit? But on the other hand, the market is speaking as we speak.

I also think that there were a lot of announcements that seemed to make it like, hey, we're going to make a deal with China. We want China to do well, but we need to do well, too. It seems to me that at some point maybe there'll be a bit more of a win-win, rather than such an acrimonious approach, and maybe that's why the market's reacting a little bit more positively.

By the way, in that trade deal, we also eliminated the 2% tax on big tech companies. Howard Lutnick just said today that they're going to announce a $10 billion order from Boeing on top of that as well. So these are going to drive GDP. They're going to drive employment.

It's really hard to cut rates into a market where a driver for GDP, a driver for employment, and potentially an impact on inflation are not yet priced in or not yet well understood. It's really hard to go into that sort of an environment and cut. I mean, if we're in a sustained period of 4% to 5% rates, we should talk about that at some point, but there are huge implications for the economy if this thing stays where it is. Huge.

Philippe, are you in the camp of 4D chess with these tariffs and these negotiations, or, you know, throw some stuff against the wall, react to it in real time? He's shaking the snow globe, it's chaos, et cetera. Where do you sit between those 2 opinions we've heard on this podcast over and over?

When you ask a tech investor for his opinion on macro, this is the beginning of the end, right? I think I've predicted 7 of the last 3 recessions, so my track record is pretty weak.

Well, let me ask a different question. How is this impacting the tech market? Private companies that are thinking about going public, M&A—we saw DoorDash buy 2 companies this week. We've seen a bunch of companies file to go public. We've seen them pausing.

Does this kind of uncertainty, which it seems like is causing the disconnect—you explain this disconnect between how people feel about the economy and then their behavior—is that disconnect caused by the sort of communication that Chamath and I and other folks were saying, “Hey, this needs to be improved here”?

And it seems to me that with this UK deal, if this had been the process from the start, where we're like, “Hey, we're going to do one of these a week for 50 weeks, and you're going to get this good news each week as we sort this out,” that seems to me like something that would build confidence, as opposed to, “Hey, everybody's going to go back and forth. You say 50, we're going to go to 150,” tit for tat. So maybe talk about the impact this has for founders, startups, and executive teams.

I think for tech guys, by and large, a lot of the tech is in services, so that's out of the picture for now. But there's obviously going to be a lot of tariffs for semis and then for the assembling of the motherboards into computers. So those are the 2 key areas, and one of the difficulties is we have these sort of base tariffs, but we also have these sector tariffs. We've had sector tariffs in cars—25%.

There are rumored to be sector tariffs in pharma that could come out next week, and there's also been potential sector tariffs in semis. So it's been pretty disruptive, and I don't really know how to think about it. I think nobody knew, which is why the market just went down 25% peak to trough.

And then after that, we learned, well, the government is actually smarter. One of the things that I love to see is all these executives that get to come to Washington and plead their case. Maybe that was never the case a few months ago, and there seems to at least be a feedback loop: Okay, we do something, we see what breaks, we listen, we readjust, and stuff like that.

But to be honest, I don't really know how it's going to play out. I was very conservative for a period of time, just waiting. Then, to me, what happened last week with Microsoft saying that AI had really picked up was a really big deal. I almost coined it in my own mind as “tokens >> tariffs,” and I think that's one of the reasons why the market's moving up right now.

Hold on—just explain that a little bit: over tariffs?

Tokens—I put the greater-than sign there. Tokens are much greater than tariffs.

Tokens—you mean AI tokens?

AI tokens. Yeah. I don't really understand it as well as Dave, for sure—all the AI models and stuff like that—but I sort of view tokens in an AI model like fuel to a car or electricity to a computer, right? Microsoft said that in their Q1, they processed 100 trillion tokens, 50 trillion alone in March. So the tokens are really going vertical, which is probably because of these reasoning engines, which are much more sophisticated and require more compute power.

I think the market didn't just go down because of tariffs. If you remember, it went down because people freaked out: We're in an AI bubble. AI is not really working. What's the ROI on AI? That was maybe—I don't know—a third to a half of the problem.

I think what Microsoft said is that capex is going up, and everybody has a gigantic shortage of chips right now. I know that for sure from all of our private companies and public companies. There's a shortage of chips, a shortage of compute power. So I think that's also maybe why the market's going up.

For me, I got so emotionally drained with the tariffs and thinking about tariffs and having to think about something I don't really understand. I feel now there's a chance that, when you look at the next year or 2, at some point tariffs go away, Trump makes this big deal with deregulation, the tax breaks sort of cancel out the tariffs, and we move on. What are we left with? We're left with tokens.

I think the world of tokens, for me—I've been doing this for 35 years—is maybe the most exciting trend and thing that I've seen. All these people that say, “Oh, this is the end of American exceptionalism,” I almost wanted to say, “No, you guys are wrong. This is the beginning of American exceptionalism, because we've got Wall Street, we've got Silicon Valley, and we've still got a pretty good government that at least tries to get stuff done.” So I'm pretty excited by that.

I've been talking with my management team a lot about AI first principles, and we're actually doing an offsite in 2 weeks on this because I've been following a lot of what the other CEOs have been doing and hearing stories. We had a great conversation with Sergey Brin. He gave us 2 anecdotes of how he personally has used some of these tools to make management decisions, and his observation was: Managers are the first to go.

And if you zoom out from that statement and you zoom out from the comments you're making, Friedberg, there's, I would say, a once-in-a-generation opportunity to select companies that are going to accelerate growth because of the leverage they're going to create by adopting these tools. Not tech companies in the traditional sense, but companies across the entire economy.

Some of what we're seeing right now in the reformation of venture capital—and I know you're going to talk a little bit about CO2 here in a bit—but so much of the thesis is around traditional businesses being reinvented using AI. As a result, it's not just the few tech companies that are providing the fuel, but there are these fires that are going to take off in all these different markets that we could sit and spend hours extrapolating and theorizing on. That creates a real opportunity for incredible market value creation.

Traditionally, the market grows and the differentiation among competitors is minimized once the market has matured. But for the first time ever, every mature market can be completely disrupted. If you're smart about selecting management teams and selecting companies, there seems to be an incredible opportunity to realize investment returns, even in a mature equity market.

Let's move on to our next topic, which is obviously super related. Google was down 8% on Wednesday after some bad search data came out because the Justice Department, as everybody probably knows, is doing this antitrust lawsuit with Google. The key part of that lawsuit is Google paying Apple $20 billion a year to be the default search engine on iPhones.

Obviously, we all know iPhones have elite customers. Those are very precious searches from people with a lot of money because iPhones are expensive. Anyway, Eddy Cue, who's been with Apple for 35 years, said, quote, “For the first time ever last month, our search volume actually went down.” Quote, “That has never happened in 20 years. If you ask what's happening, it's because people are using ChatGPT. They're using Perplexity. I use it at times.” He believes that AI search is going to replace classic search like Google.

Quote, “Again, there's enough money now, enough large players, that I don't see how it doesn't happen.” Bloomberg reported on Cue's comments at 11:00 a.m. An hour later, Google was down $100 billion in market cap. It bounced back a little bit today, when we're taping this on Thursday.

Here's the statement from Google responding to Cue's comments: “We continue to see overall query growth in Search. That includes an increase in total queries coming from Apple's devices and platforms.” Friedberg, is it time for Google to panic, or for Google shareholders to panic? We talked last week about making bold decisions about what is the default and how Google might get out of this classic innovator's dilemma. What do you think?

We keep coming back to the “Is search dead?” conversation. Everyone knows that the search-click-repeat paradigm is over, and there's a new model in what I would zoom out a little bit and say is kind of a difference in human-computer interaction for knowledge, information, and services.

It may not be that I type something into a search box. It may be that I'm having a chat. That chat may happen in a chat window. It may happen via voice. It may happen on a screen. It may happen in an earbud. We don't yet know where the consumer is going to go with this, but there are a lot of paradigm shifts underway.

I will say Google has models that are, if not the best, competitive. The underlying models and the underlying technology exist. They are certainly aware of the shift in the paradigm, and so the transition for Google doesn't need to happen overnight to a chat interface that looks like ChatGPT.

It may be a standalone app. They have a standalone app. As Chamath has pointed out in the past, they don't do a great job promoting it. They don't do a great job integrating the chat interface into search or replacing search with a chat interface, because remember, search ad revenue today is $200 billion. The cost to serve an AI query is an order of magnitude higher than the cost to serve a search query.

Flipping the search interface over to a chat interface overnight doesn't make sense, and they don't need to. They have the users, they have the models, and they already have the product. It's going to be a slow process of finding the optimal course for them to make the transition, would be my guess about what they're doing.

It's a question of at what point you change the default on Google. Do you make it a slow one-box—which is that answer section at the top of the search page—and slowly get people used to that, leading them over to the chat interface? Do you do it all at once, or do you tell people, “Hey, go use the app instead of the search box”?

There's a lot that I think they're going to discover. If anything, this is an organization that's used to doing testing, making incremental changes, and then making big changes once they're tested and proven. I'm pretty positive on their ability to respond to the shift, if there is one underway.

I guess there are 2 important data points, Chamath, that I'd like you to respond to. Search is only 56% of Google's revenue right now. People forget they have Cloud, so they've diversified. It's not a one-revenue-stream company anymore.

Also, these Google search results at the top of the page are dropping precipitously—the number of clicks below them. Different studies show 15% to 35% of the clicks below the box are dropping. This is significant, but it seems manageable.

Where do you stand on it right now? Time to panic, or as Friedberg was saying before, maybe it's a great opportunity for Google to add yet another product line, yet another revenue stream?

They definitely have the best models in many domains. I would say that the code-generation models from Anthropic are really good, but in many other domains, including general information and chat, I think Gemini is exceptional.

So what is the problem? The problem is that they were effectively at 99% share, and we were always just waiting for that shoe to drop, which is where they started to go from 99% to something less than 99%. The point is, now that it has happened, it is very easy for anybody to build a model that precisely calculates the economic value of every single basis point of share shift that happens. What you saw was an initiation of that process this week.

What do you do? The problem is that this is not Google's problem. This is a consumer-choice issue, and consumers have chosen something different. Whether we like it or not, and whether they like it or not, the reality is that ChatGPT is running away with it. If you look at the growth and the share that OpenAI is seeing, it's quite an incredible thing.

What does one do? Instead of waiting for data, I think that you have to assume that you're going to go from 99% share to 75% in the next 2 years, as an example. You need to start asking yourself what will go wrong. If you can ask yourself that question honestly and red-team it, then I think the conclusion you get to is that you need to start very aggressively integrating Gemini as the front-facing window to Google Inc.

Again, as I said last week, that requires a combination of taste and courage. Otherwise, what will happen is, if you're waiting for the data, you're just going to get caught off guard because Apple will do things and then make a press release months after the fact. OpenAI will announce a press release. Facebook will do something.

What that does is destroy the morale of the company—the brilliant product managers, of which there are many, and the brilliant engineers, of which there are many, inside Google. If you're sitting around waiting to react to some sandwich served up by your competitors, that's a terrible approach.

Philippe, what are your thoughts here on Google? You obviously participate in public markets. Is it a buy right now? I mean, I don't want to give investment advice, but do you think the company has the talent and the temperament to make these hard decisions and to turn this around or avoid the iceberg—the iceberg being ChatGPT and people getting answers instead of links?

Well, I think you guys have summarized the situation pretty well. I would just add a couple of small things. One is that the market cap of Google is like $1.8 trillion, and that of OpenAI is, let's say, $300 billion. Is that the correct ratio into the future or not?

The second one is that I was around, sadly, in the times of the Yellow Pages, and I remember when the Yellow Pages—the way you went somewhere to browse and go somewhere else—basically got replaced by the blue link, and the Yellow Pages companies went away. Part of the reason they went away is that they were highly leveraged.

Google has no leverage, sits on a lot of cash, and imagine what someone like Elon would do if he had to reengineer Google. It's a much larger company, let's say, than Twitter.

The part that I'm wondering about—I haven't made an opinion on Google—is, hey, is this the next IBM? You're going to stick around for a really, really long time, but you're just not going to be a company growing as fast as you used to. Maybe there'll be little growth and you'll just sort of struggle ahead. Or can they completely reengineer their business?

They do have 3 great businesses: Waymo and YouTube, and really Cloud and all the cloud apps. So they have 3 great businesses, and then they have this one search business. Like you said, maybe it's 60% of the revenue. It's probably 85% of the profits because it's just so profitable.

No, I would say it's 110% of the profits.

110%, right? So you're right, because some of these others lose money.

That's actually a good point. If you put that together, it's just a classic innovator's dilemma. Imagine they create a Gemini app and we start downloading the Gemini app. I would love to be a fly on the wall between the head of the Gemini app and the head of the search box, and they're both fighting because one guy is stealing the business from the other.

Personally, I found these stocks a little too complicated for me, and I think that sometimes in life you just have to say, "Hey, this is tricky." There's a lot of forces at work. But the one thing, stepping out, that I would think about is that there was this concept of the Mag 7. For the last 2 or 3 years, everybody was like, "Oh, you just need to own the Mag 7. It's really easy. I can do it on my own."

And I think what AI is showing is that at a time of great change—and like you guys said on the show, a couple of you, AI is precipitating so many fast changes—to me, it's a little bit like the end of the Mag 7. What we should do is almost think, "Hey, what is next?" Remember when the Mag 7 used to be FAANG, and then FAANG+? Nobody talks about FAANG anymore. Now, I don't know, the Mag 7, the Sexy 6, the Fabulous 5. There's going to be a new index that comes up, and I think we should think about who's going to be on the new index: which private companies and which public companies. I think Google, for sure, has some struggles, but it's got a lot of advantages and a lot of cash.

You know, to your point, though, to add one thing, which I love about this framing, here's another data point. If you were going to make the case that we need to go into harvest mode and say, "We don't know the rate of change of the search business, so let's just have as much money on hand so that we have as much optionality," that's a very reasonable and fair strategy. You would probably not spend $75 billion a year of capex on making these models.

The opposite is also true. If you're going to drain your cash at a rate of change that's greater than it needs to be, to the tune of an extra $75 billion a year, there's probably a case to be made. Well, if we've made the cake, let's sell the cake. We've made the dog food; let's have the dogs eat the dog food. It's the in-the-middle strategy of both spending the money but then stage-gating the product that is the worst outcome, in my opinion.

I think they're right to invest. I find that these companies that decide to harvest the cash cow and buy all their shares back—it never really works. I think the only chance Google has to create an amazing company is that you've got to take some risks. At the end of the day, the man in the arena, he who takes the risk usually gets the spoils, and they've got to invest in the future. It'll be interesting to see if the shareholders agree with that or not. What do you do, JCal? What do you think?

Great question. You guys teed it up perfectly. I think they're going to cut a large number of employees, get people to return to the office, and take this a little more seriously on a corporate level because you got that sense from Sergey, who's in the office every day.

I use Gemini, and I have an AI-first company where everybody's required to do their work with AI—two or three different tools: Claude, Gemini, Grok, et cetera. What I've been noticing inside these products is that they're very deeply integrated. I got surprised just the other day. I was asking it about a travel question, and it referenced my Google Calendar. I didn't know they could do that. Then, obviously, you can use Gemini inside Google Docs.

Now they have 4 or 5 products right now with 1 or 2 billion users per month. Obviously, Chrome might get spun out, but you have YouTube, you have Google Docs, you have Android. They have such a data advantage and such a deep integration into people's lives because they use 3 or 4 services. I use YouTube TV. I use YouTube, and I have a subscription to YouTube Music. They have such integration.

I think Google's going to figure this out. If they cut their team size down, the earnings are going to go massively up, and they're spending $75 billion on infrastructure. Would you integrate these models more aggressively in front of the consumer, or is this the rate that makes the most sense in your mind? I think you mentioned maybe going all in on certain other services.

I think YouTube search is the place to go all in right now. When you do a YouTube search, it just gives you 10 links, right? It just gives you that scrolling thing. You should be able to ask a question to YouTube, and you should be able to ask questions about your calendar. You should be able to say, "Who have I met with over the last 10 years who I'm no longer in touch with, and what are they up to?" It should do a Gemini search inside of Google Calendar. It's very light right now.

Then if you did that on YouTube—"Hey, tell me everybody's opinion on Google and their strategy over the years and how it's changed"—and you asked that on YouTube with all their transcripts, they could make a supercut of all of that. This would train people at the point of pain in a very deep way without sacrificing Google search queries too aggressively. YouTube is such a secret weapon.

I hear you. I would just remind the Google management team that very, very, very smart people like Philippe and others who control trillions of dollars of wealth collectively are not making decisions about today. They're taking the trail of breadcrumbs of what they see today and guesstimating what 18 to 24 months in the future looks like.

All I'm encouraging them to do is recognize that the data point from Eddy Cue is the beginning of a stream of such data points. I just encourage them to inoculate themselves from the morale hit that will come if they don't have an explicit, aggressive strategy and instead become reactive to external data. It's really demoralizing.

But what if they're actually tracking the data and seeing their own set of search queries driving clicks and then driving a positive response to the AI-driven one-box results that they show at the top?

Oh, I think that's exactly what they're seeing.

And they're just making the requisite balancing decisions, right?

No, no. What I'm saying is that's absolutely what they're seeing. The demonstrated strategy is emblematic of exactly that. It's the rationalization.

My point is that there's something you can't rationalize because you don't know until it's presented to you, which is: What is the other company doing? They don't have spies inside OpenAI. They don't know what the OpenAI product strategy looks like. They only hear secondhand what OpenAI's growth looks like.

All I'm saying is that it's a bit of a sword of Damocles. At some point, the sword drops. You're not in control of it. Once you start to see a trend, that's the rationalization that I think puts companies in a very difficult and tricky strategic situation.

It takes a lot of courage to say, "Oh my God." It's like what Buffett said. Buffett has this very famous thing of putting his CEOs on the spot and saying, "Stop telling me all these things that can go right. Let's go paint the death case. What can absolutely go wrong? Red-team me the solution, and then justify for me why you haven't done it."

All I'm saying is, if you start to think about it—for example, you saw OpenAI today: Fidji Simo is leaving Instacart, right? She's going to go and be the CEO of Applications at OpenAI. You're seeing a level of talent concentrate that I have not seen since I was at Facebook. There was nobody we couldn't get when we thought we were building a model that was totally orthogonal to Google.

Now, it did not mean that Google diminished in any way, but it creates a different use case. In that example, the social use case was very much non-cannibalistic to the blue links. And to your point, David, if it turns out that question-asking is not cannibalistic to search, Google will be fine. All I'm encouraging them to do is play the scenario in which it is cannibalistic and figure out what to do.

I think there's a chance that we're underestimating the power of Google's ad network right now. It's quite possible that knowing your queries in Gemini, knowing what you're doing in Calendar, and knowing what you're watching on YouTube could lead to a stream of more targeted ads that do better and are more valuable.

We've been seeing a number of companies—startups in the early stages and year-one startups—that are figuring out how to use your queries and what you're doing in AI to present search results to you. Imagine you’re doing a Gemini search, Chamath and/or Philippe, and on the side of it, it's giving you a rolling list of ads or offers that you might be more interested in. That could be a better advertising product than even search itself. Friedberg, your thoughts?

Well, let me ask all 3 of you a question. Since ChatGPT came out, along with Gemini and other tools like it, do you find that you're doing generally more stuff or less stuff?

I find that I'm using search a lot less.

But the aggregate—your aggregate usage of the internet to do things for yourself, for work—are you getting more?

Yeah, I've learned how to ask things that I've always wanted to know but didn't even know were possible.

Right. But all of that, to me, goes to OpenAI and X. I use that, that's fine. But I'm just saying, what I'm trying to do is paint the picture of where the denominator of so-called search queries is going, because if search queries is no longer—

That's the wrong way to think about this. No, I like your point. I'm doing 5 times as many queries, and I would say they're spread across a number of different platforms because instead of asking humans to do work, I'm now doing it myself.

You used to ask a human, “Hey, can you do this research for me?” They would come back to you. You would hire somebody or use a consultant. Now I’m doing it myself. So you’re onto something: the total volume, the total pie, could be 5 to 10 times bigger per person.

Yeah. If the old paradigm is measuring search queries and market share as a function of search queries, I don’t know if I care about having 99% of that, or if I’m actually better off having 80% of something that’s now 3 times bigger.

Yes. There’s so much more. Imagine you lose 99% of one bucket, but you’re only getting 10% or 20% of the new bucket.

That’s exactly right. That is the bad scenario. That’s the issue, guys. That bucket is getting built right now, and they’re nowhere in that bucket. How are you going to show up in 18 months and say, “Oh, that new bucket that’s so shiny. Pick me. Pick me”? This is why it’s a strategic error.

Well, think about it. Let’s say you’re running growth at Facebook, Chamath, and you guys have a new product you want to launch. You’ve got 1 billion users. How do you get them to use that new product? Because Google has a ChatGPT competitor. How do you get them to use that product?

Yeah, I walked through this last week, but I’ll do it again. I think that today, the part that I agree with you on is this whole view on search is antiquated, and it makes no sense. I think instead, what you need to think about is: where are the inbound actions into the house that is Google, right? Google Inc.? And you have to have a very simple way of deducing what is the value of that inbound action.

If you rank them, the inbound actions to the Google search bar are obviously way more valuable than the inbound actions in all these other apps. I would start in those places that are more bottom of the list on the money side, but high on the list in terms of intention and behavior, and I would redo the experience around Gemini. But that requires taste and cannibalization that you have to be willing to take the hit on—which service you think is number 1: YouTube.

I think your idea, Jason, around YouTube is a very smart one because it’s a juggernaut business. I also think Workspace—we use Workspace here every day: Gmail, Calendar. I think Workspace could be really interesting as well.

Gmail is a great one.

Yeah, inside of Gmail, and it is going to get better. There are smart people thinking about this. All I’m saying is that the market will now start to price this decay in. I’m long.

Well, Philippe, I want to know your bucket of the most important companies that matter the most. Go through your top 10 companies. Why? What’s the number? Not top 10—what’s the number? What are the companies that matter the most?

Yeah, I’ve thought about that a lot. I’m not sure I have great answers, but the first one is, I keep defaulting to the number 25. I can’t explain to you why, but they’re not 100 companies. But if you think there are only 5, and all these money managers have 5 stocks that represent 80%, I feel the level of risk that you’re taking is too high. I start with the public markets.

Most French people are not known to be particularly humble, but at least if you’ve been in the stock market as a French guy, you’ve been beaten up so badly. I started January 1, 2000, so imagine what my first 3 years looked like. I got reduced to ashes, just beaten up by the market.

We did reasonably well because, thank God, being a hedge fund, you have different tools that you can use. I think you need to have a certain number of stocks. You need to know that some stuff you get lucky, some stuff you get unlucky, some stuff you get right, and some stuff you get wrong.

And then I think there’s a 2nd phenomenon. Once you agree to the 25, you say, “Wait a minute. Why are there no IPOs? Why are these private companies—amazing private companies, some of the best in the world: SpaceX, Stripe?” Answer that question. Why OpenAI? Why, in your mind?

I think that the cost of being public is too difficult. One reason, I think, is the reputational and regulatory risk: you get busted left and right by agencies. When’s the last time that a public company had an issue with a government agency? During the last administration, someone told me—I don’t know if it’s true or not, but I love the quote so much that I’m using it without checking whether it’s 100% true—that something like 35% of the S&P had an issue with a government agency in the last few years, right?

When’s the last time you guys remember a private company that had an issue with a government agency? I’m sure it happens, but off the top of my mind, it seems like a fraction of that, right?

I also think that the private markets have become so sophisticated that, in essence, our private markets are public markets that just trade 3 times a year. These companies do these rounds once or twice; they’re becoming pretty sophisticated. They match buyers and sellers, and I think that’s okay.

And then the last piece, which I think is a very bad piece for the 4 of us, and all of us on this call, and many of your listeners, is that there’s such a view that large companies are bad, and we’ve got to bust them, and we’re not going to let them do any M&A. As a result of that, small companies no longer get bought by big ones.

For me, it’s a disaster because if I fund small companies, but now you take away one of the best ways I have to monetize my investment, why should I invest in risky private companies? I can just buy the public one. So I’m really hoping that as part of this deregulatory move—and you guys, and Sacks, will have way more influence than we do—you convince people that, in my mind, the best way to create competition is to allow these large companies to fight against each other.

The battle between OpenAI and Google is the best way to do that, but not by telling Google not to buy something or telling OpenAI not to buy something.

Double-click on that, Philippe. I think it’s a super important point. The singles, the doubles in the industry—I’ve been harping about this on this program as well, so we’re simpatico.

What about a proposal where maybe the non-Mag 7—let’s pick a number under $1 trillion, under $750 billion—we let those companies buy and sell each other at a very vibrant pace? We saw OpenAI buy a $3 billion company, I think, this past week in the coding space. Like I mentioned earlier in the program, DoorDash bought 2 companies.

What if we said, “Hey, okay, we understand Google getting bigger, Apple getting bigger, and Microsoft getting bigger would be competitive, but how does size make a difference to whether or not someone should buy a company?”

Very simple: because they have such a market-dominant position.

Hold on, let me finish my sentence. They have such a market-dominant position. When a company like Apple has half of the mobile phones, or Google has Chrome, Android, plus all these things, they could shove that product for free down the throats of users, price-dump it, which is illegal, and create less competition in the future.

But if you said DoorDash and Lyft, or Coinbase plus a stablecoin company, this would build the Mag 7 to the Mag 70, and then you would have many more larger companies. What do you think of this, Philippe?

I’ll respond to that because I don’t think that makes any sense, and I think that the comments you’re making about size shouldn’t drive these decisions.

Consider the fact that Apple, for example, has a minority market share in operating systems on mobile phones. Remember, Android is the majority. That’s no longer true in the US, by the way. Right? Not globally, right? And Apple comes along and says, “Hey, I want to buy a car company or I want to buy something else.” Why should that affect consumers in any way whatsoever?

The ultimate objective of antitrust authorities is to prevent monopolistic practices that hurt consumers and hurt the market, and take away options, choice, and freedom in the market. But if companies want to make orthogonal acquisitions, if companies want to continue to grow and become a large holding company, why should we step in and say, “Oh, you’re too big now”?

Ultimately, Jason, you could see that threshold very quickly becoming a slippery slope that leads to a general anti-capitalist concept, where people say, “Well, let’s stop all companies from getting bigger than $1 billion, or let’s stop them all from getting bigger than $100 million now.” That is a very slippery slope. Scale shouldn’t matter. At the end of the day, protecting consumers from monopolistic or antitrust practices should be the objective of these antitrust authorities.

Yeah, I think my response to that would be: except in the case where bundling, as we’ve talked about in previous episodes, makes it so that a large company could kill all the competitors instantly by price-dumping. You take something that people are paying for, say Robinhood or Coinbase. Google buys Robinhood or Apple buys Coinbase, and they just say, “Everything’s free. We’re going to make our money from our main business.” Yes, it’s better for consumers, but it’s not as good for competition in the long term.

Then you would kill all the competitors, and then they can do unnatural acts. That would be the argument. I’m not saying it’s a great argument. That’s a great argument for what you’re talking about. It is not a great argument for stopping companies above a threshold of market cap from doing things while allowing companies below that threshold to do them, because a company below a threshold in market cap could have the same effect as what you’re describing in a smaller market.

You’re 100% correct if they’re in the same arena. So Coinbase, Robinhood, and E*TRADE merging could cause the same effect. You’re right, Philippe. What are your thoughts on just how to get the country out of this debate: big companies bad, no, we shouldn’t let them do any M&A—the wrath of Lina Khan? Is there an off-ramp here? Can Trump just unilaterally kind of make this happen? What are your thoughts? Or should he?

Oh, I think that, to me, one of the best parts of being a venture capital investor is when you have a really big idea and it works out, it takes care of a lot of sins. There’s a little aspect of, “Would you like to play the lottery?” If the lottery was capped—if you won the lottery, you couldn’t win more than $30 million—$30 million is an insane amount of money. But I read that there are some lottery guys who make $1 billion and $2 billion, and the reason why people are willing to bet so much and most people are willing to lose is they all think that they’re going to have this one ticket that’s worth $1 billion.

I think when you reduce the financial incentive—and I agree with Dave, success should be rewarded as much as possible—but if you’ve done something wrong, then use these existing laws to define what success is. I don’t think you can cap, because once you start capping, what happens if the stock market goes down? Do you then have to just recap?

But I agree with you. You bring up an interesting point, which is that in these bundles—Amazon Prime bundle, Apple bundle, there’s a Costco bundle—we seem to be living in this world of bundles where the stock market is willing to pay 40 or 50 times earnings just for the membership fee, as long as whatever you do on the side, you basically make no money. Costco, I think, makes 100% of its money, more or less, on the membership fee and trades for 50 or 60 times earnings.

There is a limit to how big the bundle is before you start dumping. I don’t think I’m saying anything super interesting. I just hope that you don’t cap the upside, because that’s what enables all of us to fund these new companies. The reason why all of you guys and me were willing to fund these companies, knowing that many of them are going to fail, is the hope that you get OpenAI.

Yeah, it’s well said—the power law. Chamath, I think this is maybe a good time to talk about private markets and liquidity in VC.

Yeah, it’s just so hard. It’s hard to make money. And if you view making money as some derogatory thing and you put a bunch of impediments in the way, the downstream impact is that interesting ways to make money will be out of fashion, and simple ways of making money will be the only things that people do.

The problem is that society doesn’t move forward if all you do are simple things. You need people who are willing to put risk capital to buy these lottery tickets. And if you marginalize the upside, you’re just going to have exactly that: a stagnant society of marginal things that doesn’t move along. Unless people fundamentally embrace that idea, we’re going to lose—we being America.

If you look, for example, at the last 5-year period in China or Canada, where both of them—two totally different political regimes—but they both had the same thing happen, which is the amount of investment capital that went into both of those countries fell off a cliff for two totally separate reasons. What’s interesting is what the downstream impact of that will be in 10, 15, and 20 years.

You can look historically back, and we know what this looks like: countries stagnate in the absence of investment and risk capital. So you will become a marginalized, also-ran country. Not to slag Europe, but part of what Europe got wrong was that capital didn’t exist: too many administrators, too many hall monitors, and not enough ability to put risk capital to work and actually get gigantic outcomes.

The most important thing we can do on that dimension is figure out how to have less regulation, have these companies fight it out, and create the incentives for these smaller businesses to be bought and/or to go public.

So let’s back this up with some data here. Nick, pull up the chart on exits. This is an important one for people to see. We’ve had, since the wrath of Lina Khan over the last 4 years under Biden, this 2021 spike of IPOs, peak ZIRP, a lot of inventory, and a lot of risk capital had been put to work for 10 years.

After that 2021 spike, things have flatlined, and companies are preferring to stay private. Now we have venture capital constricting in terms of new funds being done, and people are making larger funds to do later and later-stage investments.

And Jason, it’s constricting at the absolute worst time, because what Philippe said before is that we’re in the midst, in the early phases, of an entirely new economy that’s going absolutely parabolic. But the people who are supposed to accelerate that innovation and make these companies come to life are going to run out of gas, because if they don’t return money to their limited partners, where are they going to get the incremental capital from?

Yeah, retail investors and sovereign wealth funds outside the US seem to be the answer to that question. Does this lead to a normalized market, Philippe and Chamath? Ultimately, shouldn’t the exit volume define the amount of capital that LPs should invest in this asset class to get a return that compensates them for the illiquidity relative to public markets with the same kind of risk levels?

At the end of the day, it is what it is, and you’re going to see a reduction in venture dollars. That’s just the market normalizing. The economy only grows and only innovates at a certain pace. Maybe that’s what the data shows.

I think about this as an LP, and maybe Philippe can talk about this as a GP, but as an LP, when I think about putting capital into different funds, I have a base return in my mind. I want, after taxes, net of everything, to generate about 10% a year. That’s where my risk of ruin is basically zero; it compounds to infinity. I like the profile of the return of my assets. How do I get to 10%?

Sometimes, when I’m holding short-term stuff, I’m only generating 4% or 5% on paper. So then I have to go out on the risk curve. I talk to a hedge fund; they’re going to give me 12% or 13% net, maybe in some cases. I try to understand their risk, but I can only get so much working.

Then I talk to some private credit and private equity guys who tell me, “Yes, I can give you mid-teens returns.” Then I do the analysis on that and I think, “Okay, I’ll give you some money, but they’re going to lock me up for 5 or 6 years.” It’s still not enough to get to a blended rate of return of 10%.

So then I go yet further out on the risk curve. I call my friends at Sequoia and all these other places. And when you talk to the venture investors, the problem is you are so illiquid for so long that the rates of return need to be in the mid- to high-20s net to me.

But when you look at the data of what’s possible, they actually look like a 3- and 4-year hedge fund. Part of the reason is because of this strangulation of illiquidity that’s caused artificially by administrations, by regulations, and by agencies like the FTC. The question is, if they didn’t exist or if the regulations were a lot smaller, what would the upside return be? It’s probably 500 to 1,000 basis points higher.

Much higher.

100%. Yeah. But I think at the current course and speed, with the lack of IPOs and the lack of M&A, you can't justify that asset class on its own, in my opinion, unless you think about it as something that you're doing almost philanthropically—unless capital comes out, prices come down, and return multiples go up.

Let me put some numbers on this. Here's the second chart: annual IPOs. I'll just give you some broad strokes here on how amazing 2021 was for a lot of firms. Rivian went out at $66 billion, Affirm at $24 billion, Qualtrics at $25 billion, Robinhood—which I was involved in as one of the first investors—at $30 billion, Duolingo at $5 billion, Toast, and so on. Roblox was $42 billion, Squarespace, and then you had all this M&A: Square bought Afterpay for $29 billion, Zoom acquired Five9 for $15 billion, and Mailchimp—remember that one?—for $12 billion. Microsoft acquired Nuance, the speech AI models, for $20 billion.

Do you know what the distribution of these IPOs was by method—SPAC versus direct listing versus traditional IPO?

I don't have that here. We'd have to do it not just on the names, but also on the amount distributed.

Yeah, that's a good question. When I look at that data, what I look at—if you just bring it back for 1 second—is that 2020 and 2021 were very high.

If you look at 2022, 2023, 2024, and now 2025, I'm like, how is this worse than 2004, 2005, and 2006, which were normal years? How is this worse than 2013, 2014, and 2015?

Yeah. She scared the hell out of people.

She scared people.

Correct. I've talked to M&A people, Philippe, and they have said it's not even worth bringing it to the board. It's not worth the discussion. She can't connect the dots. She's like, “I want people to not play the lottery anymore. I don't care for them.” She doesn't understand that our system is based on this risk-taking.

And so, listen, I think this might change. It's also worse than that. I think they probably look at Adobe-Figma, and they look at the cap table, and they probably just make a judgment that, “Hey, I don't want these people to be billionaires.”

Yuck. I hate these people, but they don't understand, to your point, the waterfall effect of not returning capital to all kinds of other investors who are in the business of taking risk.

It's this collateral damage. One of the things I feel none of these people understand very well is all the collateral damage. You think you're moving in one direction, and all these dominoes sort of fall around you.

Exactly. The second- and third-order impacts—this cascade.

You know, it's the Ford Foundation, it's Harvard, it's California retirement. Those are the people who are going to be the beneficiaries.

And the third thing, because I've been talking to a lot of geographies in the Middle East, Japan, Australia, Singapore, and Asia, they all want to recreate what we have here. What we've created here in Silicon Valley and in America is these diasporas that start when a company like Google goes public. Then those people go create Facebook or go work at Facebook, like Sheryl Sandberg did, and they accelerate the growth there. Then those people become angel investors. They become LPs.

This incredible flywheel was cooking. It was so smooth. And now we've literally stuck a stick in it, the car flipped over, and you don't have the downstream effect of Canva in Australia, which has done incredibly well.

Phenomenal. Oh, you're involved?

Yeah, we're involved. But sorry, just 1 thing I would add, because it makes what you said so much more powerful. On top of that, when these people die, most of them give all their money away to foundations, which is something very different between the U.S. and Europe.

In Europe, and in many other countries outside of Europe, a lot of the wealth basically continues for generations. In America, these people build companies, create new companies, invest in new companies, coach new companies, and mentor new companies. When they die, all that money goes to foundations that continue to promote and do some of the work that governments would do.

Finally, how great is it that some foundations are competing with the government to decide what needs to be done, as opposed to a larger government? That ultimately serves the DOGE mission.

Atlassian and those incredible founders who did Jira bought other companies. They wound up being the seed investors in Blackbird, the venture firm in Australia that did Canva, and they were investors in Canva. Both of those companies are creating this incredible flood of entrepreneurship in Australia, and we're breaking that in America.

Australia copied that playbook. I want to know about the new fund you're doing, Philippe, and why. Maybe you could explain it to people. I guess this is 1 of these—what do they call it?—closed-end or open-end funds, and they operate differently from venture funds.

Also, the seeding—you seeded it in a very unique way with a couple of very unique family offices.

Yeah, you guys are nice to ask, and a couple of you have tweeted some nice things about it. I really appreciate it.

I loved it.

Let me tell you a bit about the story behind it. On 1 hand, you've got private funds. They're only available for the super, super-rich. You've got to be a super-duper accredited investor. You put your money in there, and you might not see anything for 10 years.

Then, for me as a GP, every 3 years I need to raise a new 1 of these funds. So, God forbid we have 1 fund that doesn't work. Can we raise the next 1 or not? Right?

That was on 1 side of it. On the public side, what's basically going on in the public markets is very strange. In essence, the BlackRocks and Vanguards of the world make it so that almost everybody wants to invest in an index. As a result, the people who are still active managers are all basically closet indexers, because the risk of being wrong is so high. You do better for 10 years and then do worse for 1 year, and you're out.

Basically, in the public market, everybody wants to index, which is why I think the Mag 7 is so big and stuff like that. The other part that's weird with the public markets is, since everybody needs to be indexed, everybody needs to be fully invested at all times.

Why? Why is it that you need to be fully invested in 1999 if the P/E multiple of the market is 60? Why is it that you want to be fully invested when you're already down 10% and things aren't working? Why not raise a lot of cash, freshen up your ideas a little bit, go take a long walk on the beach, and try to understand maybe you've made some mistakes and stuff like that?

I've always wanted to do 2 things. On the public side, I want to have the ability to be different in the stocks that I own, but also, if I'm nervous, what's wrong with holding cash?

I hate to put this in the same word, but you look at Berkshire Hathaway today, and everybody wants to compare themselves to Berkshire a little bit. Berkshire today is a $1 trillion company: ⅓ in cash, ⅓ in public equities, and ⅓ in private equities.

I was like, okay, what if we have a system where we can be in public stocks, we can be in private companies, but we can also be in lots of cash? Investors know on day 1, “Please do not compare me to an index.” If you come in, you've got to give me 5 or 7 years to do my work, and I'm also going to let you take a little bit of money every year.

In essence, I'm willing to work at much lower fees because you give me capital for longer, but you don't give me the capital forever, and you're not stuck forever. These interval funds are really interesting because I think the minimum investment is around $50,000 or something like that. The conditions to qualify for such a fund are much smaller, so there are many more investors who can come.

I look at it a little bit like this is the democratization of tech investing, and I really believe in it. I've been doing my thing for 30 years for institutional investors. Why can't I do it for people who don't have access?

You have, what, $53 billion under management? Something like that—something in that zone. Obviously, you've been phenomenally successful.

Talk about the fees and the carry, and how you decided how to set that. Then tell us how your competitors reacted when you announced this fund. I'm very curious about both of those things.

We got a little bit lucky in that we studied the fees of other funds. These are things called interval funds, and it seems like the fees were more like 1.25, 25, and 12. So we're like, well, can we live at 1.25 and 12?

I was like, yeah. It's a really good deal for other people, but I get something for it, which is near-permanent capital. In exchange for that near-permanent capital, I'm willing to live at lower fees because I think I'm going to be able to compound it for longer.

In essence, it's not like I'm being altruistic. I'm not claiming, “Oh, I just want to do a good deal for people.” I'm being selfish. If I can compound capital at a 12.5% incentive fee for a very long time, it's better than 20% for a short period of time.

For the investor, I love the fact that I'm sort of investing like—if you told me, “Philippe, start from scratch. Write on a little blank piece of paper: What would you do?”—I think all of us on the show would say, well, it would have to be something that looks like Berkshire Hathaway, right?

Berkshire is the model. You want to do cash, you want to do public, you want to do private, you want it to be a good deal for people, you want it to be permanent capital for you, and you want to try to be able to do that for a long time.

And I think that's what those things do. Then I thought, okay, but the problem is you have a snowball at the top of the mountain. How do you get it to roll and get big? We're not very well known. I have to admit, this is sort of one of my first podcasts ever, so I really appreciate you guys having me here.

I thought, okay, maybe I can get some tech entrepreneurs to help me out who believe in this concept of democratizing tech investing. So I went to see the family offices. I didn't quite see the founders directly, but I saw the family offices for both the Bezos family and the Dell family, and I pitched them the idea. They liked the idea. Then we pitched it to the founders, came to an agreement, and they gave us a combined $1 billion to get going. We're also going to put a lot of personal money in it.

I had read—I don't know if it's true—that one of the first Blackstone funds launched at $1.3 billion. So then I said, okay, I need to launch a fund that's $1.301 billion so I can claim that it's the largest launch ever. I don't know if I'll get there or not, but that was the idea. I think it's nice to have the backing of these guys.

Typically, what happens is people come to see me in my office. I'll ask some folks to do diligence, and then I sign up to an LPA. Is that how this works? If I'm interested, is that what I do now, or is this totally different?

You mean you as an LP now?

Yeah. Me, just a normal person.

This fund in particular starts to be marketed by one of the Wall Street firms. For this one, we picked UBS. They were the first ones who believed in us, but many other firms will work with us, and we have great relationships with J.P. Morgan and others. In time, it'll be available on all these different platforms.

Most of the people we target usually have a relationship with a wealth management firm, and our hope in time is to work with the leading wealth management firms. You can invest, and frankly, I'm saying, hey, just start giving me a little bit of money and see if you like what I do.

How many people can be involved? When you do venture, obviously there are caps. You can only sell to accredited and qualified purchasers. That's about 6% of the country. You can only have 99 accredited investors in a venture fund, and then it's, I think, uncapped. Then you can have 200, you can have up to $10 million, and I think it can be 250.

I did this when I did our fourth fund, and I had $120 million in interest. I could only take $10 million from the accredited investors, so it really is capped in the venture space. But you're doing a different type of vehicle. Is there a cap on the number of LPs you can have?

Of course, I knew I should be more prepared for this. I don't remember exactly what the caps are, but the point is that the number of people who can join the fund is much greater, and the amount of money they can put in is also much smaller. As a result, you're reaching a wider audience.

That particular audience is happy because, if you think about that fund, one thing that's a pain in the ass is: How do you manage all the capital calls? They drive me crazy. How do you manage all the distributions? I just got some stock in a public IPO. Should I keep it? Should I not keep it? Is it a good company like Google that's going to 20x post-IPO, or is it another company that I should just sell immediately?

You basically have one structure; it manages everything, and then you get a 1099 instead of a bunch of K-1s.

So do you think Sequoia, Andreessen Horowitz, Kleiner Perkins, and Founders Fund—how do they respond? That's question one. And, two, does it change the behavior of the fundraising cycle or process for you and your partners when you're evaluating companies, or for the entrepreneurs? Does any of that change? How does competition react, and how do companies and CEOs react?

Listen, when you start worrying about your competitors, in my mind, it's a bit of a version of the grass being greener elsewhere, and you have to focus on yourselves. It's such a hard business. There are so many smart people and this and that. We tried to design something that plays to our strengths. Our strength was that we got the public markets, we got the private markets, and then we've got risk management with the cash and knowing when to be in and out.

I would suspect that other people will do the same. Hopefully, it'll be different because they have different strengths and stuff like that.

I thought what was nice for us was doing this as a bit of a hybrid public-private. Frankly, in private, you guys think there's venture, there's growth capital, and there's private equity. This vehicle could own 100% of a company, you could do debt, and you could go up and down the cap table.

What is your plan, then, for private companies specifically? Do you see yourself leading a Series A or participating in one of those, or buying secondary in SpaceX on the open market from former employees? Maybe buying out strips of other venture firms that are looking to wind down or get early liquidity, and you come into some midsized, $300 million fund and buy out 20% of it? What's the strategy here with private, specifically?

This is a good point. It's a bit like, hey, so what's your North Star? Don't tell me you can do everything. What are you really going to do? To me, the North Star is, Jason, I've got to build for you, in 10 years, the new Mag 7. That's my job.

We know who the 10 largest companies in the S&P or the Nasdaq are today. What are they going to be in 10 years? Some are already public; they're just going to get bigger, and some are private. To that extent, I don't believe that venture is necessarily the right model for this particular strategy, because it's 1,000 to 1 to go from $0 to $1 million in revenue, then it's 100 to 1 to go to $10 million. That's the insight.

You mentioned this on our call earlier today, and I actually think it's really powerful: the Mag 7 was this set of 7 correlated companies that sucked up all the attention and all the money. They moved in unison, dollar for dollar.

Now that correlation has broken down, it allows you to ask this question: What are the real Mag X companies? To your point, if it's a 25-company basket, you're absolutely right. SpaceX would be in the basket. It's private. Stripe would be in the basket. To belong to some random public company because it's public and ignore SpaceX and Stripe would just be stupid.

To your point, that's really powerful. The optimal basket of the companies you'd want to own for the future, because of these rules and regulatory burdens, is partially public and partially private. You need a vehicle that can straddle both if you want to own it.

Yes. I think that makes a ton of sense to me. That's the idea. Also, the people who choose who the Mag 7 are—it's some employee at MSCI World or something like that.

Will you actually go out on a limb and try to publish what you think the version of that index is as you construct it inside that fund?

We have some public requirements which will force us to do that.

The private markets are overheated. There are a lot of secondary offerings. So if you try to get into Stripe, SpaceX, or Anduril, or there was recently one of these robotic companies that has zero revenue and wanted a $40 billion valuation, there are all these civilian retail investors who are investing in your fund but also have direct access to these secondary markets.

You also have to buy at the right price, and these—I know firsthand, for those top companies—are massively inflated. You have $30 billion or $40 billion valuations on companies that are sometimes pre-revenue. How do you think about that?

I have no idea of the company you just referred to. I have no idea which one it is. I don't want to say, but yes, maybe they did a trial with BMW that was in the factory or not in the factory. I don't know.

Listen, humanoids are a pretty exciting area. I don't know what companies there are, but there is going to be one in my top 25. I think it's a bit early. I would have a humanoid company. I'd have a robotaxi company. I try to find whoever is the leader.

I think the point that you make that's really good, Jason, is that we also have to wait. To me, there are 2 key things. Can I establish with a 75% chance that this is the leader? I don't want to do it if there's a 1% chance that it's the leader. I've got to pay more later. That's one.

But, two, there's one advantage that the public markets have over the private markets: We know how to value things because we have comps, and we know about revenues, profits, earnings, and P/E multiples. Sometimes private investors just value a private company like, hey, if the last round was $100, well, this round's $200. But why? Why does the fact that the CEO is really good on camera and funny on Twitter mean it doubles?

I think that in the growth business, being a public investor is important because it lets you at least say, if this company were already public, what would it be worth? When you own a public company, the one thing that the private business gives you—if you want the public comp, the public business—is discipline. But what the private business gives you, which is really cool, is a telescope into the future.

To be a good investor, you need to have one side of your brain that is imagination, creation, and believing in the future.

And you need to have another side that says, “Hey, slow down, Chamath. This is like 80 times earnings, and it’s twice as expensive. Be patient.” For me, the best investors are the ones where you have a telescope into the future, but you also have the day-to-day discipline of the public markets.

As I said before, today, man, you get beat up in the public markets so badly all the time because you buy something and it goes down by half. In the private markets, it goes up, goes up, goes up, and then one day it just goes to zero.

Yeah, yeah. It’s like, “We’re out of business.” You take the loss.

Hey guys, some breaking news: the Pope has been selected. I thought, since you guys haven’t been here, let’s go through it. Here it is. The smoke has come out, and Phil Hellmuth is Pope Hellmuth. A little work to be done on these language models.

Oh, look. Here’s another one coming out. Chamath, congratulations. No, that was black smoke. That’s black smoke. Oh no, maybe Chamath didn’t win it. Who do we have next?

She was trading. She did better than you, Friedberg. You didn’t beat the Pelosi index, so you don’t become divine intervention. Divine intervention on her portfolio. Maybe a little insider information.

Okay, wonderful episode. Philippe, you’re amazing. Yeah, that was great. Chamath, you’ve got competition—your big brother. He did pretty well. So now you know we don’t have two; we have one or the other. We’ll let the audience decide.