房屋可负担性危机、Palantir 的优势、AI 大空头、H-1B 滥用与太阳风暴袭击地球

Let's start with Michael Burry's short. As you guys know, Michael Burry is the capital allocator from The Big Short, and he just deregistered his firm with the SEC. He made a big bet against AI and Palantir. He disclosed the shorts against Palantir a couple of weeks ago. They weren't huge. CNBC apparently reported that the value was like $900 million. Burry says CNBC was wrong, that it was just $9 million. But he had a really interesting accusation, and it's related to what we've been talking about here on the show with the build-out of—

Can we—I'm sorry, but can we just talk about the complete and total financial illiteracy of the mainstream media? How do you confuse $9 million and $900 million? How do you do that?

I think maybe it's the cost of the shorts versus the value of the stock that the shorts represent.

No, it's because there are 100 shares per option. So they were—

Oh, I see. Yes, because the options have 100. Of course.

They applied a multiple and got it wrong. Got it. It was—yeah.

So the math—the calculator is—they got the calculator—

It's not that they got the calculator wrong. It's just that they're so uninvested in assets that they don't know how asset markets work, I think, is the more logical explanation. Meaning, if you've ever bought a home, you probably know what people are talking about when they're talking about financial elements related to a home. But I guess if you've never owned a stock or you've never hedged a position or had an option, you don't really know how any of it works.

But then the problem isn't the person who wrote it. There's no fact-checking, and the whole thing just gets an entire news cycle of its own. Which, by the way, helped his short, and it never should have, because if you heard that some random dude had a $9 million bet against the market, you would think nothing of it. But then to manufacture a headline about somebody—

That's a good point.

—who had a moment. It was almost 20 years ago, but whatever. He had a moment where he was kind of right and is short the market, and you get it 2 orders of magnitude wrong. That seems quite wrong.

Yeah. And to your point, there is a ramification of it, which is that it created a headwind against the already deflating AI bubble after Brad Gerstner popped it.

I'll take a walk down Conspiracy Corner. Maybe the actual person is not economically illiterate but the exact opposite, and writes the error on purpose, knowing that whoever has to review it has absolutely no idea what they're talking about, and then they themselves are short. So I wonder if CNBC should investigate—

—whether this person actually had a trade on.

Oh, there you go. Conspiracy Corner. Let's get our tin-foil hats.

You're either completely financially illiterate and don't know how the financial markets work, in which case you probably should be working at some other media outlet, not CNBC, covering the markets, or you know how well they work and you know the people above you have no idea. And so you yourself short the market. You're basically copying the Burry trade, but then you rewrite the headline to look like it's 2 orders of magnitude bigger, which actually could have moved the market if you saw a yard short.

I mean, yeah, that would have probably gotten my attention had I read it. A $1 billion position is a reasonable position to have. He was accusing—he's got the Palantir short, but on the AI side he was saying, “Hey, Meta and Oracle have been cooking the books with $176 billion in hidden depreciation to inflate earnings by over 20% in 2028.”

And so, here's the chart. Basically, we've talked about what is the reasonable life of an H100, of an NVIDIA chip, or really an NVIDIA server if you think of it that way. Do these things have a 3-year lifespan, a 4-, 5-, or 6-year lifespan? CoreWeave might be putting them at 6 years, and that dramatically changes your expenses, which then, of course, given the scale of the data center build-out, could radically change your earnings, because dividing the cost of a data center that costs $100 billion by 6 or 3 is 2x. So, your thoughts, Friedberg?

Yeah. So, just to go into Accounting Corner, it's our most favorite but least often visited corner here on the All-In podcast.

Get your pencils.

So, in accounting, we need a jingle for Accounting Corner.

Sharpen your pencils. Get your calculator.

Under GAAP standards—these are generally accepted accounting principles—when you report your operating expenses every quarter as a public company or GAAP filer, you take your capex, anything that you make a big investment in, and you depreciate it over some lifetime. There's an accounting process by which you can do an internal review and determine that, if your depreciation schedule doesn't actually map to reality, you should make an adjustment. And so there's a periodic assessment that's done to do that.

And just to give you a sense, to your point, Jason, on the math, Google in the last 12 months made $120 billion in operating profit. Let's assume they're making $70 billion in capex this year. That capex does not get deducted from their operating profit when they report earnings. You take the $70 billion and divide it by what's called its useful life, and you report that every year. So, if you do it over 3 years, to your point, it's about $24 billion a year, versus 6 years, it's $12 billion a year. So that would impact the operating profit by, on the order of, call it 10%, if it's the difference between 3 and 6 years.

And so what Michael Burry is saying is that all of these hyperscalers have extended their depreciation schedule, or the useful life of their data centers, by roughly 2x, which cuts the operating costs in half when they report it in earnings, and so it's making their earnings inflate. So he's claiming they're cooking the books.

But if you go back to the chart that you showed—or I can just speak to this—Google first made this change in Q1 of 2021, where they said the servers are now going from 3 to 4 years. The chart shows the combination of servers and networking equipment. Separately, in 2021, Google took networking equipment from 3 to 5 years, and then in 2023 they took it from 5 to 6 years. And so this is a result of this effort where they went in and did an analysis.

So what happened in the data centers is that the data centers transitioned from being primarily data-storage and data-transfer systems, where you would use hard drives, RAM, and memory to store data and then transmit it back out, to being data-processing centers because of the AI boom. As AI became more important in the data center, more of the dollars going into data centers were allocated toward chips, from data storage—which initially was hard drives, and you throw away the hard drives every 18 or 36 months—and then solid-state memory. Solid-state memory would last 2 years, 4 years, 6 years, depending on the type of memory you're using, and RAM had this kind of variable lifetime as well. And then suddenly, when you put these processors in to process the data, to do AI, that's the majority of the spend, and the majority of the energy is going toward the processors.

If you pull up this clip, this is Google's head of AI and infrastructure speaking at a conference here recently:

“Where are we, do you think, in the capex spend cycle? But more importantly, what are the signals that you guys use internally in your thinking? I mean, you have to plan data centers, whatever, 4 or 5 years in advance. You have to buy nuclear reactors and whatnot. So how do you think about the demand signals, as well as your technology signals? And G42, same thing for you, but from the point of view of enterprise and neoclouds, et cetera.”

“We're early in the cycle, is what I would say, certainly relative to the demand that we're seeing. Our internal users are—we've been building TPUs for 10 years, so we have now 7 generations in production for internal and external use. Our 7- and 8-year-old TPUs have 100% utilization.”

And I think that's the key part that's been going on. I've made some calls and checked around with some other friends, and everyone says the same thing: These 7- and 8-year-old TPUs and GPUs that are sitting in the data centers are still being used, and they're being used at 100% utilization. So that actually justifies and validates the depreciation schedule being much longer versus shorter. And I actually think Michael Burry's got this wrong.

Chamath, what do you think? You're involved in, obviously, inference. How long will the Groq inferences be out there doing jobs? And it does seem like, to Friedberg's point and the gentleman in the video, that there are other jobs to do, right? As these things move down the life cycle, there'll be something for them to do. When would you actually unplug them, I guess, is the question, and stop using them?

The business models of these companies are just far too good for them to get to the point of having exhausted every other operational tactic, where they then have to cook the books. These are not the 7 companies that are going to cook the books.

Yeah. The practical thing that's happening that Michael is not technical enough to understand is that there are meaningful iterations in how kernels are working, in how the attention mechanisms of these models are being rewritten, in how people are swapping out HBM for SRAM in these designs, in how they're building, in some cases, really huge dies, in some cases, much smaller chiplets. All of this creates more and more utilization. So these things last longer, and they also need more.

I think that in order to make these accusations, you need to have some modicum of technical grounding that I don't think he has. Here's the thing with shorts in general: I don't like shorting, so let me just say this. There's supposed to be a check on financial malfeasance, but it's not that. When you look at these short-selling firms, for every one of them that actually uncovers malfeasance, what it really is is them creating chaos and innuendo under the guise of their right to free speech. What they do is put out some screed that tries to move the market. They're positioned against the stock before it comes out, and then they hope to close the position out and make some money.

I think that's just a pretty sad and terrible way to live one's life, but it's legal, and so you're allowed to do it. It almost makes no sense for Michael to become technically literate because he probably wouldn't have written it. So, to your point, the fear, uncertainty, and doubt you can create if you're Michael Burry, if you did The Big Short and you shorted the housing crisis correctly. Now, that took 2 years for him to be correct. So these things are painful to execute on, in his defense.

Diversified revenue streams.

Otherwise, my point is it's just that shorting is just somebody's ability to cry fire in a theater. Quite honestly, it's extremely hard, if not impossible, to commit financial fraud as a public company in 2025. I guess the other short we should take a look at is the Palantir one because Palantir—man, it's way out there. Alex Karp has been doing some great interviews. He's a national treasure. They obviously have a great business. They're on a $3.5 billion run rate, according to their last quarter.

But the valuation is $480 billion. This puts them at 137 times their sales. It is extraordinary. It's way out there. Datadog and Snowflake, Microsoft—these are at 13 times their sales. And I guess Cloudflare is out there at 37 and CrowdStrike at 30. So this is truly an outlier.

David Friedberg, if you were to give Palantir the same price-to-sales ratio as some of those highly valued ones, it'd probably be a $60–$70 billion company, $29 a share instead of $170. So what do you think of his Palantir short, Friedberg?

Based on the statement you just made, you're saying that a company is worth its historical sales numbers. And I don't think that's how shareholders often do, or perhaps should, think about what they're buying, which is an ownership interest in the future of the enterprise that they're buying a piece of. When you invest in a startup, you're not saying, “Hey, that startup is worth what the employees did last year before they even started the company.” You're making a bet on the future potential of the business and what you think the cash generation over time will be. Your time horizon may be different than mine. And that's how a market finds a price.

As a result, I think there's probably a market trying to find a price for Palantir where folks have a great deal of difference in opinion over what the future potential of the business is and, as a result, what the earnings generation will be at different time scales in the future. That's how they're getting to the current market price. Who am I to judge? I am the person who would make my own decision on my own time scale and my own estimation of the future of that business if I were putting my own capital into the business.

I've not studied the business well. I don't have a strong point of view or opinion on the value of the business relative to its future earnings potential. That's how I would look at it. I would make an investment for the long term if I were to buy the shares, not look at last year's numbers and say that there's a valuation arbitrage opportunity and that's what I'm buying. So, you know, to each their own.

Over time, the market corrects itself, as they say. It's a voting matter today, and it's a weighing matter in the future. That's Warren Buffett's famous quote: the actual earnings generation in the future will determine whether someone paid a good price or a bad price, depending on the point at which they bought in the past. Meaning, at a $400 billion market cap, you could be getting a steal or you could be significantly overpaying. That's going to be based on your assessment, your judgment as an investor.

I think people are looking at, like, 30% to 45% year-over-year growth, Chamath, and saying, “Yeah, it's got a lot to fill in that valuation; it would just take a lot of growth. Maybe the growth accelerates.” We saw that with Nvidia, right? They started to have unprecedented growth. Any thoughts on the Palantir short while we move on to our next subject?

Well, I think the Palantir short is stupid, and I think those people will lose money. The thing with all of these other companies—put your chart up there—the thing that the people who are shorting this company don't understand is that all of these other businesses that you put up there have a viable competitor of some kind that you can switch to.

And so what I would say is the opposite of what they're saying, which is: you have a low multiple to sales when the churn risk is higher. So look at the one with the lowest multiple to sales, MongoDB. There's 90 versions of what MongoDB does. I'm not going to say whether MongoDB is good or bad. It's actually a good company. It's an extremely well-run business, but it's not unique. It's just extremely well-run. Snowflake is not unique, but it is well-run.

Palantir is both unique and well-run, and there's no clear alternative. So there's no place to turn to. And so I think the reason why it has a premium valuation is because the duration and the durability of these cash flows are much longer than what you typically see in any of these other companies. And if people took 1,000th of a second to actually use their brain, they'd come to that conclusion.

Lack of competitors would be the reason you think it's more defensible?

By the way, I'm neither long nor short. I was long in the private markets. I was an investor in Palantir's Series B. I'm not long anymore. I wish I was, but I'm not. So it's not like I have a vested interest in this being right. But it's just so obvious that what they do is completely unique and completely differentiated. There is no alternative in the market for it.

That's why they trade at such a huge premium to sales. And if you look in any market for any product that is unique and is effectively where they are the only competitor for what they offer, you will see an equivalent market dynamic like this.

God, I'm in such a bad mood. I've gotten no sleep. I'm so tired.

I know. I'm cranky. You're cranky. Spanky. You're in a bad mood.

I couldn't sleep. Sacks goes in the back. Sacks sleeps. He's like fresh as a daisy. When we land—by the way, when we landed—the winds in San Francisco, I don't know what's going on. We landed in Oakland. Holy man, it was like a Category 4 hurricane going on on the West Coast this week.

Unbelievable.

You were coming in, of course, from the East Coast. You were, I guess, in D.C. meeting with—I don't know. You had some business meetings there or some political meetings.

Oh, you can—you can. Let's play Where's Waldo? Here, Nick. Post the picture.

Here's the picture. Okay, we got a picture here.

No, no, Nick. Zoom out. Zoom out.

Yeah, to the zoom-out photo.

There. Where's Waldo?

Oh, let's see. Okay, here's a bunch of people in the White House.

Bill Ackman is right in the back. You can see his hand right beside Nat. That's Ken Moelis, obviously. Steve Schwarzman, me, Scott Bessent. Great guys. Will McDonough. Yeah, yeah, yeah.

Look at you all the way.

Well, one of these guys is not like the other.

Yeah, it was awesome. What happened was we were having dinner, and then he said, “At 9:45, I'm going to go down to the Oval and sign the bill to reopen the government.” He said, “Do you guys want to come?” So we all came. It was just—

When you say you were having dinner, you and Nat were having dinner with the president?

No, no, no. He was hosting a dinner for financial leaders.

And you were there.

We were invited. It was cool.

The dinner. Very nice. So you went to dinner with the president, and, yeah, that looks like almost as amazing an extravaganza as the—

I got a cologne. You know the cologne where he sprayed it on?

Yeah. He's spraying it on foreign leaders. They come in, he sprays it on them, and then they're allowed to come in the White House. Steve Schwarzman and I got a push on both sides of the neck, and we got—

Trump carrying the cologne with him and spraying people at the dinners.

No, after the press conference was done and he reopened the government, he's like, “Hey, you guys want to come back?”

I think they should have a little gift shop at the White House with all the Trump stuff, the steaks.

I will be honest with you: it smells very good.

All right, listen. There is an affordability crisis. We talked about it here for the last couple of weeks. Last weekend, the Trump administration floated a pretty wild idea of a 50-year mortgage that would ostensibly cut monthly payments by 20–30% and maybe theoretically boost homeownership. We'll discuss this in depth here for young people.

The idea was slammed by many people in MAGA, saying, “Hey, this is debt slavery, and it's going to triple the lifetime interest. You can just be paying through the nose for your entire life, and you'll be an indentured servant.” Politico said the idea was brought about by FHFA director Bill Pulte. Pulte tweeted that the FHFA was “actively evaluating portable mortgages.”

Now, this is a really good idea. That means you can take your mortgage with you if you go buy another home or upgrade a home. That would obviously get people out of homes that maybe they've outgrown, or where their kids have left and there are extra bedrooms. And that is not happening because people are afraid to unwind a 2% or 3% mortgage to upgrade it to a 6% or 7% one.

There's been some data going viral on X. The National Association of Realtors released a report last week. The average age of a first-time home buyer is now 40 years old. That's up from 28 years old in 1991, when I was in college. In the 30 years from 1991 to 2021, it only increased a modest 18%, from 28 to 33 years old. So in the last 4 years, it's jumped from 33 years old to 40 years old for the average first-time home buyer.

That clip of friend of the pod Ben Shapiro went viral. Here's a 25-second clip, and we'll talk about it after.

Ben Shapiro

If you're a young person and you can't afford to live here, then maybe you should not live here. I mean, that is a real thing. I know that we've now grown up in a society that says that you deserve to live where you grew up. But the reality is that the history of America is almost literally the opposite of that.

The history of America is you go to a place where there is opportunity. And if the opportunities are limited here and they're not changing, then you really should try to think about other places where you have better opportunities.

Pretty obvious statement there from Ben Shapiro. Your thoughts generally on affordability, Chamath?

It's a real problem. I think that this is the keystone topic that has to be navigated correctly for the Republicans to win the midterms. I think there are 3 critical issues, if I had to put my finger on it. Issue number 1 is housing. So Ben is right there. Specifically, the problem is that older folks own all the homes and own multiple homes, and younger folks just cannot get into the housing market. Cities and states do not do a good job of creating incentives for new homes to be built. That's 1.

The second, I think, is still around health care. The emergent data on the cost of Obamacare is horrible. Obamacare has been an unmitigated failure. The concept of capping gross margin, while it seemed good theoretically, has really turned out to be an incredibly stupid thing. So what that meant, Jason, is in Obamacare, there was this feature that said you can only make a 15% gross margin, right? What the folks at the White House at the time thought would happen is that costs would go down because their gross margin would be limited.

Instead, what they did was they just started to raise the gross prices of everything so that the 15% applied to a much bigger number. And so you saw the president this week trying to see if he could just take the health care subsidies and give them directly to people and put the money in their HSA accounts so that it didn't need to flow through the health care infrastructure and the insurance companies. So that needs to get fixed.

And then the third is on the student debt side. I said it last week, I'll say it this week. I'm copying Peter Thiel here, but he's been saying for a while that we have to be much more sympathetic to loan forgiveness, and I think he's right. So I think if we get these 3 issues addressed—something in housing, something in health care, and something on the student loan side—it is a transformational domestic policy agenda that puts affordability front and center and will impact 50 to 75 million American households.

Friedberg, your thoughts? If you pull up this article from yesterday, the L.A. City Council held a vote. The vote was 12–2. In this vote, they limited the amount that a landlord can increase the rent every year.

This is rent stabilization.

Yeah, rent control.

So it limits what a landlord can charge in rent. Basically, they passed the vote 12–2. What they voted is that a landlord cannot increase the rent on an annual basis by more than 90% of CPI. CPI is the Consumer Price Index, which is published by a federal agency every year, as we know. It's the inflation index number that we often talk about on the show, with a floor of 1%.

So the landlord, regardless of CPI, can increase rent by 1%, and there's a cap of 4%. So if CPI spikes for some reason—which I don't think has happened in recent times—you can charge up to a 4% increase.

To think about this as an investor, if you're buying a building or building a new one, you are now going to have your equity capped. Your upside—the amount of cash flow that you can generate from that asset, meaning the apartment building you're buying—is now limited by the amount that you can increase the rent every year. So that creates a disincentive for capital, for investors to buy new buildings, put money into upgrading buildings, or put money into building new buildings.

At the same time, as we know, the city of Los Angeles, the state of California, and the federal government of the United States have passed law after law, regulation after regulation, statute after statute, each of which has gone into effect, making it more expensive, taking more time, and making it more difficult to build housing. The increase in regulation, combined with the cap on economic access to free markets, I think has made it increasingly difficult for there to be a free flow of capital to go and build new housing and develop units for people to live in and for sale.

Every time the government gets involved in a market, it distorts the market. It limits the flow of liquidity, and it limits the market's ability to find lower prices. I think that's fundamentally what's gone on. The government is now trying to limit what a landlord can charge in such a dramatic way that it's ripped out all of the incentive for landlords to buy and own these buildings, because they're now only going to be small-yielding investments and there's no upside.

So there's no incentive to go and build new housing. And then the government's made it difficult to build new housing for lots and lots of different reasons. The same thing happened with Prop 13, which we passed in California in 1978, I think, and which creates a huge disincentive for people to sell their homes and reduces liquidity in the market.

Now, I'll just flip to the federal agencies. Fannie and Freddie combined have issued or supported about $8 trillion in home loans. The initial view on that would be, okay, great, they're creating liquidity for a market that doesn't have liquidity, for people that need access to capital, for banks that don't have assets to lend. As a result, it's going to make housing more accessible to more people. That was the fundamental premise of setting up a government lending agency to support the purchase of housing.

But as you fast-forward over many years, the fundamental reality in the very liquid, well-capitalized marketplace that we have today is that that capital is actually excess liquidity that can, in fact, drive prices up. Much like we've seen in many other markets, like education with student loans or health care with Medicare, Medicaid, Obamacare, and so on, when the government gets involved and provides capital to, quote, “support” a market and make it more accessible, the prices skyrocket.

So people will use a Fannie or Freddie Mac loan to buy a first home, and then they can go buy their second home or their third home, or they can now afford to buy a more expensive home that they otherwise might not have bought. And so, over time, it creates an inflationary effect in the markets.

I think that this is a fundamental question of how we're going to get out of this doom cycle, because fundamentally, we're adding restrictions for building new homes. We're capping the amount you can make on homes. And we're giving liquidity to markets to drive up the price of homes. All of which create this perfect storm of disaster where we're just raising our hands.

And you know what we say? “Please, government, do more.” If the government does more, I can tell you one thing for sure: Prices are going to go up even more. And so I think one of the most challenging and hardest things to do is say, “Hey, government, do less,” and figure out a way to back out of this situation.

Perfect segue into what I'm seeing on the ground. I lived in New York, Los Angeles, and San Francisco, and as folks know now, I live in Austin, Texas.

Perfect segue there, David. There are really 2 different countries here. You have people living in coastal cities where you're not allowed to build units, rent is incredibly expensive, and you make the same amount of money. If you look at when I grew up in Brooklyn, I went to school at night. I took 5 years to get my degree from Fordham University. I had $12,000 in student loan debt, and I was making $40,000 to $60,000 a year while I was in college doing it. That's a big salary for back then, but my apartment in Brooklyn was $500 a month. I lived in an attic apartment.

If you were to take 2 people like that in America today, they're making $60,000 to $70,000. That's the average salary for college-educated people who are 27 years old. If you live in Austin, it is absolutely no problem for you to own a home. Let me explain to you how easy it is. We have so many units in Austin, Texas, and in Houston, it's even more pronounced.

But Nick, pull up the chart there just on rent, because you start as renters. Obviously, Austin rent has gone down 20% in the last 3 years because we build units. When you build units, when you have supply, prices go down. And the stupid, woke people in San Francisco are like, "Oh, you're building luxury units."

Let me tell you what happens, dumbasses, when you build luxury units. The rich hipsters who are living in shitty apartments in the Mission upgrade to luxury buildings. How do I know this? They're doing it in Austin. If you live in a crummy apartment in Austin and you see these beautiful apartments being made with luxurious pools, restaurants, cafés, and co-working spaces, you move to one of those, and that frees up that unit.

In Austin, if you make $130,000 a year as a couple, your rent is going to be 10% to 15% max of your income. You're going to be able to put down a 10% down payment because the homes within 25 miles, under 45 minutes of driving to the city center—do you know how much they are per square foot where I live?

How much?

They are $200 to $300 per square foot. You can buy a 3-bedroom for $300,000 to $500,000. You can buy a brand-new 3-bedroom for $500,000.

Ben Shapiro is absolutely correct. The people who are upset at Ben Shapiro are a bunch of hipsters who went hundreds of thousands of dollars into debt, are paying $5,000 or $6,000 a month in rent, and can never get out from under their rent payment or their liberal arts degree. If you're a smart person, go to the University of Texas, graduate with little to no debt, live in a modest apartment, put down a down payment, and buy a $500,000 home. This problem doesn't exist in Texas. It doesn't exist in a lot of markets.

Last night at dinner, Jason, the president asked, "What could we do? What are some ideas around student debt?" And Bill Ackman had a great idea, which was that we need to put the university on the hook as the first loss.

Yes. And his suggestion was $20,000—that's what he said. I don't know if that's the right number or not, but the logic that he made, which I thought made a lot of sense, was that if the universities are forced to underwrite these degrees and they know that they'll take the first dollar loss up to a certain amount—$20,000, $30,000, $40,000—they'll be much more circumspect about what degrees they force onto people and the amount of money that they're willing to actually underwrite via these loans.

And that will be a telltale sign that a lot of these degrees don't make any sense. Right now, we don't have a market check to tell young people that. And so we push them all into school thinking that it's the right thing to do, and then they're just completely saddled and they'll never get out from under it.

You have to do the math, people. You have to have agency, and you have to be self-reliant. When I went to school, there were some kids—and it's happening now—who think they have to live on campus. They think they have to go for 4 years. If you have a job and you take 5 years to get your degree and you don't live on campus, your debt position when you graduate is going to be much different.

If you have a job that is in demand in the world, you'll make $60,000, $70,000, $80,000. If you come out with less debt, if you live in an attic apartment, if you do a little austerity, people, and you do a spreadsheet of your finances—which I had to do because my dad was a bartender and my mom was a nurse—I had to pay for college myself. I had to think it through.

These elite, lunatic kids in New York City or San Francisco think they deserve to live in Manhattan. You don't have a God-given right to live in Tokyo, France, Hong Kong, or any of the major cities. You need to live in the suburbs. You need to commute an hour to school.

France is a country.

In Paris. Thank you.

Okay.

In Paris, sorry. If you live in Paris or London, these are not your God-given right. Live an hour outside the city center and take the Tube, people. These lunatics think they deserve it. And this is why Mamdani and the Luigi episodes—

Can we just title this episode "Grumpy Chamath and Soapbox JCal"?

Absolutely.

Did you bring your own soapbox to Tokyo, or did you buy one there?

Soapbox. Soapbox. Soapbox. Yeah, Japanese. You're going to upset so many of the private equity wives that you spend most of your time currying favor from.

I don't even know any private equity wives. I haven't met any private equity wives. I don't know where they are, but literally, these kids are so—

They're in your comments for sure.

I don't think they're following me on that.

I'm sure your bot army pays for some of them to—

They're not. I'm telling you something. They're not. They're definitely not private equity wives for JCal.

When you run—listen, you're such a narcissist. You will eventually run for some political office, and that'll be—

Absolutely. You'll be the first to donate to my—

Give me a break, bro.

You know why I would? Because you're one of my best friends and I love you. So, yes, sight unseen. You tell me how much you need, I'll give it to you. But it's not because I believe you're right or you should win.

Okay. Coming back to New York after Mamdani burns it down: MayorJason.com. Bookmark it. My donation to you has no alignment with philosophy, ideology, or your potential chances of winning. It's purely for—

There it is. Hey, guys, book it now: I'm controlled by big tech and finance interests.

I guess related to the angst about affordability was the flare-up of H-1Bs. Again, Trump went viral after Laura Ingraham on Fox kind of pushed him pretty hard on H-1B visas, and he stood his ground. President Trump stood his ground that we need high-skilled workers in America. Here's your 25-second clip. We'll be back on the other side.

Laura Ingraham

The H-1B visa thing will not be a big priority for your administration, because if you want to raise wages for American workers, you can't flood the country with tens of thousands or hundreds of thousands of foreign workers.

Donald Trump

You also do have to bring in talent when you don't have talented people.

Laura Ingraham

No, you don't. No, you don't. We have talented people.

Donald Trump

No, you don't have certain talents, and you have to let people learn. You can't take people off an unemployment line and say, "I'm going to put you into a factory. We're going to make missiles," or "I'm going to put—"

Laura Ingraham

How did we ever do it before?

Chamath, your thoughts here? We've obviously talked ad nauseam about the value and the abuse of H-1B visas, but it's coming up again. And I guess, at a time when Trump's popularity is a little bit low and people are suffering with inflation not going down, yada yada, this seems to be another point of contention.

I think that we have to overhaul the H-1B program. Last night at dinner, Howard Lutnick actually explained how some of these abuses happen. It's really unfair, actually, how it works.

What he described is that when the application window opens for what is a very small number of H-1Bs, a company that has, call it, 300,000 employees abroad will apply on behalf of all 300,000 because they're all roughly the same kind of employee. Whoever gets it gets to come over.

Now, if you're filing 300,000 applications, obviously you have a disproportionately larger chance than Friedberg's company or my company or your company, Jason, who's filing 1, obviously. And so when those kinds of things happen and you can now use the data to understand it, you have to fix it.

So that's 1 very material and obvious change we need to make right away, which is we have to allow American companies to find these folks and have it be very precise. The second thing is that we're introducing a price that each of these companies can pay for, so that then you can signal clearly the disproportionate economic value that that person can create and the fact that, after all the effort possible, you can't find that person here. That's why you're willing to pay $100,000, which is a nontrivial amount of money.

I think that when both of those 2 things—the $100,000 thing is introduced and the visa application abuse is fixed—we will go a long way toward cleaning up the H-1B thing and putting ourselves back in a much better place. But right now, there's just a lot of abuse, and so the program itself is not working the way it should have.

I think this has largely been solved. I think it's a communication issue for the Trump administration because they did put this $100,000 fee on it, and that's already in effect. And I've been saying this here at CNBC, this startup, for a decade. There's massive abuse on the bottom half, and it's necessary on the top half. If you're bringing in IT people for $40,000 to $80,000, it's not viable to put a $20,000, $30,000, or $40,000 fee on top of that.

But if you’re Google or Facebook and you’re bringing in a PhD in AI who’s going to get paid $1 million, well, that $100,000 fee—$20,000 to $30,000 a year, whatever it winds up being—is nothing. It’s de minimis. I take it one step further, Friedberg. I think we should be auctioning these.

Use a more narrow example.

Yeah. Let’s say Friedberg: it’s a startup. He has capital, but he has to return it. Friedberg, would you pay $100,000 for the right person that you could not find? Are there jobs where, right now, you’re like, “Man, I can’t find people who are highly specialized,” or not yet?

I could see that. Yeah. I mean, fortunately, we can recruit those sorts of people in my industry because we’re very special, but yeah, I could understand it. Particularly as it relates to software, I could see people definitely doing that.

Yeah, and the way to really do this—and this is Trump’s superpower—is turning something that’s a cost center into a profit center. I always give him credit when he does something brilliant. The brilliant thing to do is to take the $100,000 and make it an auction. I would auction off half of these to the highest bidder.

Then you would have Google, Facebook, and Meta saying, instead of, “Give me 100,000 of these at the rack rate,” they would be saying, “Hey, I need 10 of these for sure. I’m going to bid $1 million. I need another 100 of these. I’m willing to bid $750,000.” Then take that money and just allocate it to vocational training and retraining.

The problem is this administration has 2 different sides. You have the brilliant people in this administration, whom I admire very much, like Lutnick and Sacks and the businesspeople. And then you have the knuckleheads, in my mind—the people who are doing the stuff with ICE agents and the deportations.

The perfect example of this has come up with the H-1B visas. They took the Hyundai plant, where you needed high-skilled workers, and they arrested and deported a bunch of South Koreans in a very brutal, very disrespectful way. At the same time, Lutnick is out there trying to get people to invest in the country and build factories here.

You can’t be deporting people with Stephen Miller’s deranged process of running people down and treating them inhumanely, and then at the same time be saying, “Hey, we want you to invest and build a battery factory.” Hyundai has a battery factory. These lunatics came there and arrested and chained up South Koreans who are our partners, who are helping us rebuild our navy.

This is where the administration has to speak with one voice, and it needs to be the professional, smart people. This is another example of it. They already solved this problem, and they can’t communicate it properly. Let Lutnick go out there and communicate this over and over and over again: it’s a profit center now. And don’t arrest the South Koreans who were trying to build factories here. Scratch the next topic.

There were 3 massive coronal mass ejections this week. These are giant waves of charged particles, mostly protons and electrons, that shot off from the sun. You can see a graphic.

You have to pick better words because—

That looks like Uranus right now. Did you have a burrito?

Mass ejections shot out right from Uranus.

Okay. So, the sun goes through an 11-year cycle. As you know, the sun is a giant ball of plasma. Plasma is where the particles are so hot and energetic that the electrons, the protons, and all the particles split apart.

You have these subatomic particles moving around at extremely high energy levels. When the protons smash into each other, that’s what fusion is, and that’s what causes the energy that we get from the sun. Because these are charged particles—protons have a positive charge and electrons have a negative charge—when they’re moving around at this high energy in such a dense space, they actually create very powerful magnetic fields.

Those magnetic fields pull and stretch the physics of the surface of the sun. Over time, there are these cycles where those magnetic field strengths get so strong that, once in a while, they snap and shoot out a chunk of those particles into space. That is the fundamental physics that drives these coronal mass ejections: these big waves of charged particles that shoot flying through space at thousands of miles a second. That’s how fast they move.

These high-energy waves of charged particles then hit the Earth. Because they’re charged particles and we have a magnetic field around the Earth, they interact with the magnetic field and disturb it. The disturbance of the magnetic field on Earth can actually have dramatic effects on GPS and communications, and it can create shorts in conducting material on the surface of the planet.

For years, we’ve talked about how there could be an extinction-level event one day. If one of these coronal mass ejections is so large, it could actually wipe out satellite communication, turn off all computers, and cause shorts in the electrical grids around the planet. There are all these major risks.

This is often talked about as, “When’s this big event going to happen?” This week, it was a very big event. There were 3 major coronal mass ejections in a row. 2 of them combined and hit the Earth at the same time, and we had the highest recorded level of geomagnetic storm, which was G5.

This G5 storm caused massive disruptions in the magnetic field strength of the Earth. Fortunately, there was not a lot of reported damage, but we did get to enjoy the beautiful aurora as far south as Texas in the United States. These charged particles, with the magnetic field, move toward the North and South Poles, and then they combine with molecules in the atmosphere.

They release light, and you can see these beautiful waves of orange, yellow, red, green, and purple lights that look like they’re coming down from the heavens all over the planet. It was really an amazing and spectacular sight. It was a scary week from a solar storm perspective, but it created a beautiful view here on Earth. That was the explanation for what happened with the geomagnetic storm this week.

But to be clear, there were no other adverse effects from the CME?

So far, there are some reports of communications going out in Africa on small networks and things like that. I did not hear about widespread satellite failures, which is obviously always a big risk with these things because they can actually short out satellites.

These are clouds of protons moving very densely. Actually, you know what, Nick? Can you pull up this one chart to look at?

This chart actually shows, on a log scale—which means every step up on the chart is 10 times bigger than the number before it—that right around midnight London time on November 12th, which, by the way, was just before I got on the airplane to fly from Japan to San Francisco, I was actually considering not getting on my flight.

Around this time.

Really?

Yeah, very seriously.

Well, he didn’t want to have a mass ejection on his flight.

That would have been really bad. You thought the GPS could go out or something like that?

No, no. This has happened in the past, and they do have redundancy for the GPS going out, but the radiation level spikes when you’re that high up, and only at higher latitudes. I was looking at the latitude of my flight path, but they actually turned off all flights going over the North Pole because the radiation gets so high.

You can’t fly over the North Pole when you have this much magnetic flux happening, particularly in the northern latitudes. You can see in this image that the red bar is protons moving with an energy greater than 10 megaelectronvolts, which is not a super-high energy. More scarily, though, is the green one. The green one is actually 100 megaelectronvolts.

This is a massive amount of energy in a proton that can cause serious damage on a microscopic level. It can shred DNA, for example, and it can shred circuits and so on. This is a very powerful set of positively charged protons.

They count how many are hitting these satellites, where they have these kinds of detectors, as the particles come from the sun. You can see this extraordinary spike: it went from what you normally see—call it 1—all the way up to 1,000. It spiked by 1,000 times in 5 minutes.

This is a massive increase in the natural background effect of charged protons shooting at this extremely high energy through space and hitting Earth.

There was that Carrington event, which was the largest one ever recorded. I’m sure you’re aware, Friedberg, in the 1800s. What would happen if we had that level of event today, given the infrastructure? Back then, we had telegrams, right? We didn’t have a lot of equipment, but some of that equipment got fried during the Carrington event.

Yeah. That’s the sort of event that can absolutely short-circuit electronic equipment, either in satellites, in which case they would be rendered permanently unusable. It can also, if it hits the surface of the Earth—because remember, what protects the Earth is the magnetic field we have.

The reason we have a magnetic field around the Earth is because we have an iron core in the Earth, and as that iron core rotates, it creates a magnetic field. We’re very lucky to have that because that magnetic field is like a shield. It’s like a force field around the Earth, and it shoots charged particles away from the Earth and keeps them from hitting the surface of the Earth, which would kill all life on Earth over time.

That's why we can't go live on the surface of the Earth.

Without protection. We're preparing for a Carrington event. If it happened, you could turn off all the equipment.

No.

Power grids and stuff like that.

So what would happen is you could have these voltage spikes that can actually short-circuit and physically destructure the microchips, the little wire connectors. This is a very serious risk to civilization, which is why people always talk about these solar storms as black swan events—one-in-a-million-year events or one-in-a-hundred-year events—that could render us back into the Stone Age.

Some people say the probability of that is unclear. But the Sun does go through an 11-year cycle, and during that 11-year cycle, there's a minimum and a maximum. We're close to the maximum right now, so we are seeing these events very predictably every 11 years. But how big they are is something that's unknown to us. We try to study the dynamics of the Sun, but it's very difficult for us to be predictive about how big these CMEs are going to be or when they're going to happen.

So we have to be on top of observing them as they happen. But then we only have a few hours to say, “Oh my gosh, this thing's coming for us. Beware, everyone. Watch out. Be careful.” There's not very much we can do to prepare.

I will say I have a belief that electron-based computing is going to go by the wayside by the end of the century and be replaced with photon-based computing. I think we're going to move most of what we do today with copper and semiconducting material over to photonic material and photonic systems, and what will ultimately be quantum-meets-photonic systems, probably at some point this century.

When that happens, these risks go away. But for now, while we're relying on electrons and moving electrons around through copper wire and so on, we run the very strong risk of these geomagnetic storms having an adverse effect on the planet and on our core infrastructure.

Friedberg, I got to see you earlier this week in Tokyo. We shared a little tempura. Good times.

Yeah, good times in Tokyo. Definitely a lot of expats are making their way from the tech industry to Tokyo. It's a booming town with a booming tech scene. There's a lot of people from America who have come to the conclusion that the Great Confiscation is upon us. This is what I'm calling it: the Great Confiscation. Whether it's California or New York, they're coming for your bags.

And so people are now looking for not 1 but 2 escape hatches: a state—a sovereign state, Friedberg—in the United States, the great state of Texas, where I hail from, and an international one. Everybody's getting themselves a passport or a golden visa. Japan, Riyadh, and Singapore, where I've spent the last 2 weeks, are among the top choices.

Do you see this image behind me? This is that Forest City in Malaysia.

It's the craziest thing I've ever seen.

You went there?

I went there last week. They put $100 billion into building this island—a whole city.

This is the thing that Balaji owns.

No, he rented a hotel. They have a big resort hotel, and he rented the whole hotel. That's where he's running his Network School. He's running essentially an in-person Y Combinator network state. You pay 1 fee for your apartment, your food, your gym, and you hang out with other people who want to be part of a new society with their own rules.

Kind of interesting on the margins.

Yeah.

But between that, Singapore, and Tokyo, there was a really interesting cross-section of people who are on the frontier of tech, who feel like it's not in the United States anymore, and who are looking for what feels like the Wild West. Where can we go? Where can we put down roots? Where can we establish a new town for a new era?

A lot of people view the United States as being at the end of a cycle. Look, it may not be a massive community today, but it's a burgeoning community. It's a growing community, and there is this really interesting, maybe scary, trend line of folks wanting to see this stuff happen outside the United States and making an effort to—

Put down roots.

Elsewhere. I'm going to start my own little community.

For vicuña.

Vicuña and Wagyu. Those are the 2 litmus tests for entry. Chamathopolis. Apopoulos [?].

You could only wear vicuña, and you could only eat 1.

Chamathopolis.