Jensen卸任Nvidia CEO：“间谍”风波、出口限制与市场影响

All right, everybody. We’re laughing it up here. It’s the All-In podcast. Apparently, slow news weeks continue. Once again, we struggle to put together a docket, but we’re gonna try to get something together here, Sacks. I don’t know what’s in the news. Maybe you have a SaaS corner for us. Any new hotness in the SaaS world, or no?

Yeah, Benioff rolled out a new reporting feature. Top-of-docket material.

All right, that is top of docket. You’re right. And Friedberg, of course, is here cackling. He’s in a good mood, but I understand you almost died in the last week. Were you in the hospital? You had the flu?

I got pneumonia. Not good. Very bad.

Mm.

Very bad.

Uh-huh.

I do not wish it upon anyone. Knocked out in the hospital. Everyone—

Mm.

—stay safe—

All right. Well—

—out there.

I saw everybody wishing you well on social media. And, of course, Chamath Palihapitiya is here. It’s a deep pull from the closet for Chamath today. My lord, I haven’t seen that sweater since Biden was in office.

It’s a nice ribbed cashmere mock turtleneck.

Okay. Ribbed for Chamath’s pleasure.

Ribbed for Chamath’s pleasure.

All right. Listen—

I thought it was supposed to be ribbed for her pleasure.

It’s for her pleasure, yeah.

Well, when it’s Chamath, it’s all for—

It’s for his pleasure.

—it’s all for Chamath’s pleasure.

It’s always for his pleasure.

Absolutely. That’s who he is. All right. Listen. Jensen is out as NVIDIA’s CEO after an insane series of events that happened in the past week. All of this played out in just 6 days, starting Friday, November 6, and obviously we record on Thursdays, which would be November 12. Here’s where things stand as of the taping of this episode: NVIDIA’s CFO will serve as the interim CEO. The board’s looking for a new chief executive. NVIDIA reports earnings next Tuesday, a critical moment for the company. And the stock has been crushed, down 15% in the last week, which is hundreds of billions of dollars.

Here’s the timeline that led to Jensen’s ouster. Last Friday, November 6, right after the midterms—interesting timing—The New York Times published a report claiming a Chinese businesswoman who had a close relationship with Jensen was actually a CCP spy, a Chinese Communist Party spy. The woman is named Alice Wang, no relation to Jensen. They just happen to share the same last name. We’ll call her Alice for the rest of this discussion. She’s an executive at a Singapore-based company called Megaspeed. They build data centers in Asia. They rent compute to companies, including Chinese ones like Alibaba.

According to the information, their relationship—Jensen’s and Alice’s—helped facilitate $7.5 billion in chips to Chinese companies since 2023. The New York Times article was based on a leaked intelligence memo that identified Alice as a Chinese spy. No one knows who leaked it. On Sunday, November 8, Jensen sent a company-wide email admitting he had an affair and that the board would be investigating. On Wednesday, The New York Times reported Jensen had a second affair with a direct report. There are reports of a third potential affair.

Let’s put all that aside and focus on his resignation, which came after 33 years as CEO. Important caveat: this story has been hiding in plain sight for well over a year. The New York Times first mentioned Alice’s relationship with Jensen back in October 2025. Not this October, 2026—13 months ago. They published a follow-up last month, “NVIDIA Chief Seen as Target of Chinese Spy Plot.” Culper Research, spelled C-U-L-P-E-R, is a hedge fund that put a short on NVIDIA, according to their tweet storm 6 months ago. They published their thesis, which was based on NVIDIA underselling its reliance on China for chip sales. They even mentioned Megaspeed by name in that tweet storm, which you can see on the screen right here.

This is a disaster for the White House. There are reports of finger-pointing as officials try to figure out why Megaspeed was left off the export control list after these New York Times articles. And we’ll get into more export control issues later. Okay, Sacks. We’re dealing with partial information here. This is a breaking news story. Caveat, caveat. Disclaimer, disclaimer. But let me ask you a simple question. Given The New York Times’ reporting, what’s your take on what they’ve released to date?

First of all, let me just say that I think this is a tragic situation, okay? It’s tragic for Jensen and his family, for NVIDIA and its employees. And I would say it’s tragic for the United States of America, because Jensen is one of the key reasons why we have a major advantage in AI accelerator chips and GPUs, and that, in turn, is one of our key advantages in the AI or superintelligence race.

In fact, Jensen made such a good chip that many people in Washington wanted to export control it. I think people kind of forget Jensen’s been working on GPUs for over 3 decades, and he believed in this technology and this architecture when everyone else was making CPUs, and his company almost went out of business multiple times. It was his vision that created the GPU, which ended up being the key chip that’s used in AI. And it’s the fact that NVIDIA is so far ahead of everybody else that gives the United States a key advantage in this thing we call the AI or superintelligence race.

So I think this is a tragic situation, and I think what’s happened here is clearly not a great situation for all the individuals involved. I don’t think this redounds to the benefit of the United States, either. And it’s very unfortunate that this whole situation could not have been resolved in a different way.

Now, let’s talk about the story that’s come out. I think it’s pretty clear that there were 2 ops here. One op is whatever Alice Huang was doing, with or without the Chinese Communist Party. There may have been smuggling involved; we don’t know. There is an investigation going on, and there should be an investigation. We’ve talked on this podcast about how we do not believe that leading-edge chips should go to China. If there’s any smuggling going on, that is wrong, it should be stopped, and the government should crack down on that. So that investigation should continue. We should get all the facts there, and we should find out what actually happened. So that is one op: whatever Alice Huang was doing, again, with or without the CCP.

However, there’s also a second op here, and that second op began when somebody or multiple people leaked a highly classified memo, or the contents of it, to The New York Times. I think it’s really important to understand that that’s a crime. Leaking classified intelligence is a crime, and many people have been prosecuted for it. In fact, we’ve had multiple former presidents and current presidents, President Trump and President Biden, whose homes were raided because supposedly they had classified documents in their possession. Remember that? There was a raid on Mar-a-Lago. There was a raid on Joe Biden’s garage, and they found them—

Mike Pence got caught up in that.

—near the Corvette.

This happens to everybody, it seems. Yeah.

Well, I don’t know if it happens to everybody, but it’s a serious crime. And, you know, because of that fact, I don’t believe The New York Times just got this by overhearing people talking about it at a bar. Somebody made the calculated decision that they’re willing to risk going to jail, they’re willing to risk committing a crime, to let The New York Times know about this story. And so I have a series of questions about that.

Number one is, first, who did that, and why? What was their motivation? Why did they feel so strongly about taking Jensen down? That had to be at least a part of their motive: they’re willing to break the law. And I do think it makes sense for there to be an investigation opened into this leak, as there have been with many other classified leaks. I don’t know why there hasn’t been an investigation opened, as far as we know, into this. So that would be question number one: why this leak?

And The New York Times has given a clue there. Obviously, Rubio was leading this investigation, briefed President Trump on it, and The New York Times attributed the spy part of the story anonymously to, quote, “people briefed on the surveillance.” I’ll leave it at that.

Yes, but let’s be very clear here. I don’t really like you using Marco Rubio’s name there, because he’s National Security Advisor. If there was a classified memo, then obviously it would be done under his supervision as the head of the—

Yeah, I’m not insinuating—

—NSC.

—he’s the leak, but it’s somebody he—

Yeah, but you are kind of—

—may have briefed.

You… Okay.

Right.

When The New York Times says “people briefed on the matter,” that is an extremely vague and broad terminology.

Okay.

And it could be very low-level officials who did this. And when The New York Times even uses the word “official,” that doesn’t mean they’re a senior person in an administration. They could be very, very low-level. And it could also be the case that they’re career staff, which is to say non-political appointees. Just because they’re serving in the executive branch of the Trump administration doesn’t mean that they are Trump officials.

So look, we don’t know who committed the leak. All we know is they committed a crime, and I do think that we should be asking the question: who did that and why? Okay, so that’s sort of bucket number one of questions.

Bucket number two is about the failure to give the defensive briefing. If the national security state is worried that Jensen is in possession of national security secrets and might leak them to someone they suspect is a spy, why wouldn’t they go to him right away and tell him, “Hey, you have this problem. Don’t talk to this person”? Apparently, that didn’t happen, and it does sound like that is some sort of standard operating procedure.

Let me give you an example. We have the case of Eric Swalwell. He’s a congressman who was on the House Intelligence Committee. It eventually came out—and I believe this was the finding of an investigation—that he had a personal relationship with a Chinese spy.

Fang Fang is the story you’re referring to.

Yes. The New York Post memorably memorialized this with its cover called “Fang Fang, Bang Bang.” It was this story that came out. What was the Democrats’ reaction? They gave him a defensive briefing. He said he cut off the relationship, and they allowed him to stay in Congress. He certainly didn’t have to resign, and in fact, he didn’t even resign from the Intelligence Committee. They allowed him to keep not only his seat in Congress but also his seat on the Intelligence Committee.

So obviously, in this very high-profile example, people didn’t think it was necessary for him to resign. They thought what was necessary was to let the person know, allow them to cut off contact, and then move on from there. This situation was handled very differently.

That brings me to question number three: What exactly were the national security secrets that Jensen supposedly knew? He doesn’t work for the government. As far as I’m aware, he isn’t privy to classified materials. So what do people say he leaked to this suspected intelligence asset? That’s never been explained. I just have that question.

What I can say is that, as the CEO of a Silicon Valley technology company, Jensen is at a company that is very open about its plans, its product development plans, and things like that. Is there IP the CCP would like to get ahold of? I’m sure. But to be blunt, it’s not the type of IP you’re going to convey over pillow talk. It would be things like files that would allow you to tape out the next generation of chips. Frankly, if the Ministry of State Security, or whoever is spying for the Chinese, wanted to get ahold of that stuff, I think you’d much rather have a line engineer who can go into NVIDIA, find the relevant files, and extract them somehow, maybe on a thumb drive. Or you do a cyberattack and get the files that way. That would make a lot more sense to me as a way to get ahold of secrets.

Now, I see some people saying that NVIDIA makes a product subject to export controls, therefore it’s a national security product, therefore it’s national security secrets. That is a very broad, misleading hand-wave over the situation. I can go out and buy a Blackwell chip as an American. None of us are restricted from doing that. Certain foreign countries are restricted from doing that, but we’re not. If we buy a Blackwell chip and run it in our own little server rack, we’re not in possession of national security secrets. You cannot reverse-engineer the design of a chip by getting ahold of the wafer. It doesn’t work that way. You have to get the files.

Those chips can, of course, help you make cutting-edge LLMs like the ones they’ve been delivering.

I understand, but that’s not what we’re talking about right now. The question I have is: What secrets are we talking about that Jensen supposedly compromised?

The last question I have, and then I’ll stop, is: What is the evidence that this person, Alice Wong, was actually a Chinese spy who worked for the Ministry of State Security? Here’s what I think is quite unusual. Just this morning, an article came out in Politico where the incoming chair of the House Intelligence Committee, a Democrat, came out of a classified briefing on this subject and, in the hallway with this fresh in his mind, said he wasn’t sure this person was a Chinese spy. He said she might be a useful idiot.

Well, what is a useful idiot? A useful idiot is someone who doesn’t work for the Chinese government, is not a spy, but maybe somehow is being taken advantage of.

So, look, I have a set of questions about this. Let’s put this all together. There are two operations here. There’s whatever Alice Wong was doing, that potential smuggling operation. It should be figured out. There’s a second operation that I think also needs to be investigated and figured out. The components are: One, who leaked this classified material in violation of the law? That’s the only crime to date that we even know about. Number two, why wasn’t Jensen given a defensive briefing, which is standard operating procedure? It was done with Eric Swalwell. Number three, what secrets is Jensen accused of leaking? What secrets would even be in his possession? And number four, was Alice Wong even a Chinese spy? Because now the incoming chair of the House Intelligence Committee, a Democrat, just threw major cold water on that.

I put all these things together, and I would say that at this point in time, I think there are more questions than answers.

Yes, and—

I would like a full accounting of the facts to come out.

I think there’s a fifth question, though, to yours, Sacks: Why at all, and why now? Why did whoever pulled the pin on this grenade feel this had to happen, and why now?

And the other discrediting affair stories are coming out in a coordinated way at the same time. It all happens at once. What is the motivation?

Probably, and I’m just speculating here, but I’m not the only one who has looked at this: You had China hawks who lost this debate about sending chip technology from the United States to China, and they want to reverse that. They want to have no chips sent to China, and they also want to put GPS and other ways of tracking these chips and backdooring them in order to turn them off—something Jensen has been opposed to, something a number of senators have been in favor of doing. So there could be a contingent in the White House who are very anti-China and want to see the policy with China change, Friedberg.

Yeah. So that’s one. The bigger, longer-term picture, which I’ve mentioned several times, is that there are two paths for the future, I would argue. One is a path where AI technology is broadly accessible and broadly used, and its value is not concentrated, and its power is not concentrated in the hands of a few and controlled by a few. Open-source AI and distributed data centers that are available and accessible to many give everyone the ability to use AI to rise up, progress, create value, and so on. That is a scary and threatening thing because of how it changes a lot of power structures, economic structures, and so on. It creates a lot of instability in existing social, economic, and political systems.

The alternative path for the world is one of concentrated power and influence over AI technology. This is where I’ve had this theory that ultimately data centers will get kind of regulated, but maybe further down the stack, chips become the point of control. Fundamentally, there’s a motivation not to lose control and not to let the power structures that exist in the world today get diminished by AI.

We could argue there’s probably a broad set of interests that start to say, “Hey, this guy’s not aligned. Jensen’s not aligned with our view of the world.” Jensen has been a strong advocate for open source. He’s been a strong advocate for global access to and utilization of AI technology for the benefit of humanity, not just for the benefit of American citizens. Those views are counter to perhaps a lot of different interested parties.

Clearly, there was knowledge about this woman, about Jensen’s other relationships or whatever is coming out, that was being used to smear him a long time ago. To Chamath’s point, this is a moment where it’s all coming out at once, in such a way that it almost guaranteed he would be ousted. I’ll just highlight: Jensen being ousted—you’ve got to ask the question, what is the fiduciary duty of the board? What are they actually responsible for acting on? The one thing they have a responsibility to act on is if Jensen lied. Obviously, if he committed espionage or did something that violates—

That’s criminal, and he would have been arrested, right?

That’s criminal, yeah.

So we assume.

If there’s something criminal, a violation of federal law, that is obviously something they have to act on. They have to terminate him. Clearly, because there wasn’t an arrest or something like that, it doesn’t seem like that’s the reason.

I think we can take that off the table, right?

Perhaps the next likely thing is that he actually made a misrepresentation about something. Companies have what’s called a code of conduct, and the code of conduct says you have to report relationships. You have to report relationships with subordinates. You cannot have a personal conflict of interest with a customer or a partner, a key business partner, without reporting it. Executives or Section 16 officers at public companies have to make quarterly attestations that they are, in an auditable way, not in violation of the code of conduct.

That things are auditable. And that attestation might be what gets him in trouble ultimately, where he made attestations that said, “I am not violating any of our code of conduct. I am not in violation of any of our business practices, which would include not having conflicting personal relationships with customers or partners.” That may be what gets him tripped up. Fundamentally, I think the board action isn’t necessarily related to the personal relationships, but there’s something else going on here that ultimately he probably looked at and said, “Hey, we should probably fast-track through this.”

It is extraordinarily sad and disappointing. This is a man who worked at Denny’s and, in 1993, started a chip company that no one believed in, that everyone thought was a feature, not a platform, not a product, not much of a business. The stock price was pennies compared to the price today. It was less than $2 a share 10 years ago.

They were making video game graphics cards and servicing the Bitcoin community.

From 2006 to 2016—

Community.

—the stock price did not move. Ten years of just being a nothing company with a $12 billion market cap. Think about that. You start this company in ’93, and in 2006 it’s worth $10 billion, $12 billion, and it doesn’t move for 10 years. You’re grinding and grinding, and this is your whole life, your whole business, everything. You believe, and you see this vision, and you just keep going. You compound, and you build a moat, and you compound, and you build a moat, and you compound, and you get an amazingly talented team.

All of a sudden, four years ago, this thing starts to take off, and it 20Xes in the last four years. It’s the most valuable company on Earth, delivering the most profitable quarter in business history: $63 billion in operating profit, more than any other company ever. Then, all of a sudden, boom, he gets taken out. It is disheartening. I think that obviously something was done wrong, and we’re going to find out. I’m not going to rush to judgment or rush to diminish whatever he did that was wrong. But there’s a sad arc to this whole story, and there’s something very fundamental, I think, to the power structure being rewritten in the world today with AI.

Okay, Chamath, let me ask you: cui bono, cui malo? Who benefits and who is harmed by Jensen being taken out of that seat? Let’s assume he’s not a traitor. I find that absurd and insane based on what we’ve seen over these past couple of decades, and his effort and his character. He’s got some personal things going on, but who is the beneficiary of Jensen being removed as CEO? Who benefits from that?

Let me just pile on first before I give you my thoughts. I also think he’s an incredible individual and CEO, and he’s built the industry that will reshape our entire lives, our children’s lives, and our children’s children’s lives. I think in a decade or two, when you see solutions to diseases and cancers and we have this abundance that we were told is coming, he will have been as instrumental as anyone, if not more than anybody. So that’s the tragedy of what happened: a person who was an architect of something this grand was defenestrated so unceremoniously.

Very tactically, I think Friedberg really nailed what probably happened at the board level that led to his resignation. When you are an officer of a company and when you file your 10-Ks, every quarter you have to get on the phone with your auditor and go through these sets of questions that they ask you. They ask you these exact things: “Do you have a conflict with someone? Are you in a relationship with someone?” Et cetera, et cetera. Why do those things happen? The SEC requires that to make sure you’re not running afoul of any conflict of interest, so that your company is a reliable steward of capital on behalf of the shareholders.

Even more tactically, you need that for things like D&O insurance, which is director and officer insurance. It gives a wrapper of liability for board members and officers to do the job of running public companies. There are covenants associated with all of these things. When you get into a situation where you may have misrepresented something and you start to breach covenants, those are the actual dominoes that tip. It may not be nearly as salacious as what people want to believe is happening at the board, but those are the tactics of the boardroom discussions. They’re extremely tactical, sadly, which is why it’s even more tragic when you compare that to what he is, which is this giant.

So, who benefits, Jason? I think a lot of people have rushed to the conclusion that China wins, and I would try to unpack that and ask: Is that true? Let’s take two hypothetical cases to try to answer this question. Let’s say there are no chips going to China. Why does China win? No chips were going before, and no chips are going to go now. China is stuck in the same place as before: It needs an indigenous solution that can replace Nvidia’s compute capability. Even without Jensen there, Nvidia has put years and years and years, maybe potentially decades, and hundreds of thousands of man-hours into building its moat. That doesn’t get overcome just because he’s not there anymore. Maybe China can catch up, but I still think that’s a multi-year, potentially multi-decade endeavor.

Now let’s assume the other side, hypothetically. Let’s say the chips were somehow leaking into the hands of the Chinese, maybe not into China, but into the hands of the Chinese. It looks like the government is going to crack down and figure out where every chip went, so presumably now they’re not getting the chips. Whatever they were doing, they’re now going to be held back. Whatever progress they were making has been taken away, so that’s a disadvantage to China. As I think about it, in both scenarios, China is where it was or worse off, so I don’t think it benefits.

What about Nvidia’s competitors? Does this help AMD or Google or startups like Cerebras or Etched or whomever? My answer is, again, not really. Those companies need something very different: They still need to spend an enormous amount of time making their chips work at scale and then convincing folks like TSMC and Samsung to give them manufacturing capacity, HBM capacity, et cetera. As we’ve learned the hard way, you can’t just will your way to a training run of a million GPUs that just works. This has been many, many hours of work. They don’t necessarily benefit in the short term. They still have a lot of work to do.

The only cohort of people that I think has the potential to win are those who want some version of what Friedberg said: a more centralized governance infrastructure for compute capacity. Right now, when you export chips, what the exporter is asked to do is have telemetry. We need to know when and how the chips are being used, and we need to have a remote kill switch. But that’s a private responsibility borne through the regulatory infrastructure. Amazon has to have that. Microsoft has to have that. Google has to have that.

There’s a version of this where, if we think chips have been leaking and there haven’t been enough checks and balances, there’s an opening for certain individuals in the government to propose telemetry and a kill switch owned by them. Narrowly, they would win in this scenario because if they were looking for control before, they’ve now been given an opening to ask for legislation to get it. I’m kind of at a loss. I don’t think the takes I’ve seen on X really track for me. I think this is the one narrow take I believe where there’s a clear advantage. Everybody else still has an enormous amount of work to do. Their homework hasn’t changed. Jason, what’s your take on all of this?

I’ve been thinking about it from two vectors. The first is: Who should make the decision that Jensen is out? Obviously, I think it’s the shareholders. If you look at the investigation, it’s not complete. I think they should have waited until it was complete, and the press and the mobs and all of this shouldn’t make too much of an impact on that. He did agree to resign himself, obviously under a lot of pressure.

There’s something about governance here that we need to consider. The people on the board who are making this decision are doing it from a CYA position—covering their butts—and not, I think, in the best interest of the shareholders. They don’t own a meaningful percentage of the shares. I think this should be put to a shareholder vote if what we’re seeing here is not Jensen doing something criminal, and it still hasn’t been proven, as you pointed out, Sacks, who this person was and what their motivation was. Are they a spy, or are they just somebody trying to make money? It’s unclear to me, at least from the data we’ve seen, what’s going on there.

On the question we’ve been discussing—who benefits from this?—it’s really about who benefits from America’s champion in superintelligence getting ankled. This could have a lot of impact on Nvidia and then America’s lead. The partners, the employees, and the shareholders are all losers here.

So who’s the leaker of this document? It can’t be the competitors. It’s not the shareholders, obviously, and I don’t think it’s China. That leaves, I think, maybe the decels here. It also seems a bit farcical that Anthropic or the decels would try to consolidate power over this, because they need the chips as well.

My personal opinion is that there’s something going on in the White House, in the administration, between warring factions: the China hawks who want China to get no chips, and maybe the people who want to cool off the relationship with China and make it more productive. I think at the end of the day, we’re going to find the leak is coming from within the House. That’s my belief.

There’s also a chance it could be a Democrat who is a decel and wants to damage the White House completely. Why didn’t they inform Jensen? To Hillary Clinton’s point, maybe it’s just somebody on the Democratic side who wants to cause chaos. I’m speculating in a massive way.

Taking a broader view of NVIDIA’s role right now, it may not just be about chips to China. It may actually be about slowing down the U.S. AI economy.

Yes.

Remember, NVIDIA is providing capital and guarantees to startups, data centers, and a lot of infrastructure. A lot of that is directed by Jensen. Chamath, you’re pretty close to this, but if Jensen’s out of the picture, is there someone at NVIDIA who continues running that effort? That’s potentially hundreds of billions of dollars of capital flowing to the AI economy that gets turned off.

Look, Colette Kress and the head of M&A and corporate development, Vishal Bhagwati, are really smart, good guys. But you’re right: the Bank of NVIDIA ran through Jensen, and it’s not clear what happens now. Is the bank closed indefinitely? Is it closed for some period of time and then restarted? Will the new CEO feel the latitude to invest as aggressively?

I think Jensen had a much more holistic view of the industry, so he knew how to move the chips around on the board. He had the moral authority to make investments and acquisitions that would probably be harder for a more traditional CEO, who would need committees, analyses, and a level of diligence that would slow things down at best.

Totally. He has a sense for it. He intuits the whole thing. He knows the market, where things are going, and the people personally. With him out of the picture—

And he’s lived it, so he has mastery—

—he’s like the beating heart of the AI economy, and all of a sudden—

I think it’s beyond obvious. You asked the question, cui bono? Who benefits? It’s China. China benefits from this because Jensen is a tent pole of our entire AI ecosystem. That’s the bottom line.

Do I think China leaked this and took Jensen down? I think we know the answer is no, because The New York Times has described its sources as people who were briefed on this intelligence. So they’re either in the government or one degree away from it. The proximate cause of the leak here was this classified memo. The rational thing would be to say that China did take him down, but I think we know this was domestic. It comes down to the fact that Jensen made powerful enemies, either because of his policies or because of his company’s success, and some of those people eventually took him down.

Wait, you’re saying Jensen made enemies of certain people in America?

Guys, this is not in doubt. The New York Times describes its source very broadly, but it’s people who were briefed on the classified memo. That’s not someone from the CCP.

Well, obviously not, if that’s what The New York Times is saying.

But you asked whose—

Who benefits?

—in whose interest this is. In a narrow sense, obviously NVIDIA’s competitors. In a broader sense, China. They’re the ones who benefit.

But I don’t think we should speculate about that too much. This is one of those areas where we just don’t have the facts yet. Frankly, they should try to get the facts. The only crime we know was committed for sure in all of this was the leaking of that classified memo. It would be nice if there were an investigation to find out who did that, but beyond that, I don’t think we should speculate.

To give you my perspective on the economic impacts of this, I think the unfortunate balance of scenarios is that the risk we lose 50 to 100 to 150 basis points of growth now needs to be credibly considered. There’s a chance investment slows down.

If you thought we were already going into an economically questionable period because of the Democratic tsunami, meaning we’re going to go through a whole legislative framework of slowing down data centers and AI, that was already happening. Whatever growth the Trump economy had generated going into the midterms was likely to slow down because of the Democratic legislative headwinds coming.

If you layer in the Bank of NVIDIA slowing or stopping, and its impact as the critical anchor around which everybody else pivots, that further accelerates the potential impact on growth. Looking at it purely technologically, Sacks, I don’t see how China actually benefits from this. In all scenarios, everybody’s screwed.

No, no, no. Let me explain this.

Economically, I agree with you.

Yeah. I think people in D.C., or people outside our industry, see technology in more static terms. They think, “Okay, the big advantage the U.S. has is that we have a particular chip.” But the chips are being improved rapidly. A new generation of chips comes out every year. We go from Ampere to Hopper to Blackwell to Vera Rubin. It’s that momentum, the ability to tape out a brand-new chip that’s several times more powerful than last year’s, that’s the real advantage. It’s NVIDIA’s competitive advantage and America’s advantage. We’re rapidly iterating and keep coming up with better, more powerful chips.

Now, let’s take into account what’s just happened. Do you think NVIDIA is going to lose a tempo or two? Absolutely. NVIDIA’s success was based on the ability to tape out a new chip design every year, and Jensen is fundamental to that rapid progress, the same way Elon is fundamental to the rapid progress at SpaceX or Tesla. If you take him out of the picture, there’s just nobody comparable.

No, no, no. You’re right about that. I’m just saying that kneecapping NVIDIA doesn’t make somebody else’s chips better. It doesn’t make—

No, of course not, but it means NVIDIA’s chips will not continue to advance at the same pace.

As rapidly. That I agree with.

And this is all about whether China can catch the frontier or not. Huawei has gradually been catching up. They were nowhere in GPUs a few years ago. Then they had the Ascend. Then they rolled out CloudMatrix, where their individual chips weren’t as powerful as American chips, but they used their prowess in networking—

And energy.

—to network more of them together. They networked 384 chips together in CloudMatrix to create a rack system. NVIDIA networked 72 together, and the NVL72 was better than 384 of the Huawei chips. Nonetheless, Huawei was getting closer and closer, and Jason, to your point, they have energy to spare.

Huawei has been making less powerful individual chips that consume a lot more energy, then networking more of them together to get a comparable result at the rack level. That’s how they’ve been catching up. Now, let’s assume NVIDIA is crippled for two or three years because of this, with turmoil at the company or whatever. That’s really good news for Huawei because they’ll catch up a lot faster. It’ll be good for NVIDIA’s competitors, too. It may be good for AMD and Intel, but that’s a very narrow way of looking at it. I think it mostly helps Huawei if NVIDIA is massively slowed down.

Yeah.

Because obviously it’s all about staying on the frontier.

Plus—

Sacks, I also think you need to account for the diminished flow of capital to data centers and startups that NVIDIA provides, along with the slowdown of data center build-outs caused by efforts from NGOs. There’s a lot of reporting on where these NGOs are getting funded from, as they drive local, state, and now federal legislation to stop data center development.

When you look at those two things together, there’s a consolidated effort you could paint a picture of to slow down the development of the AI economy in the U.S. and give someone a chance to catch up. Because the velocity—

Well, that would be China you’re referring to, with the psyops of slowing down the data centers? The NPR report that that data center was being slowed down?

Yeah.

Yeah. The velocity of capital is what drives that innovation engine. The rate at which we can improve our AI models and our AI chips is driven by how fast capital moves through the system. The more quickly capital moves, the more capital moves through the system, the more we accelerate our advantage. If an adversary can slow down capital moving through the system, they are given an opportunity to catch up.

It doesn’t have to be an adversary. It could be somebody who just wants us to be in a recession because they benefit politically.

Or they’re a fundamentalist. They could be someone who is fundamentally anti-progress and fundamentally against AI. They have all these fundamental beliefs that AI is going to harm humanity and civilization, and they want to turn it off.

So then that would be accelerationists—uh, decelerationists—and the regulatory capture Anthropic crowd. Chamath, what you’re saying is that people who might benefit from a recession mostly want us to be leading to that.

Yeah, I want to be very clear—

Democrats.

But wait. No, no, hold on. I want to clarify this, Jason.

Okay.

If you look at it narrowly technologically, kneecapping NVIDIA does not make your chips better, your racks better, your networking better, your CoWoS better, or your HBM integration better. It doesn’t make you replace CUDA. None of those things are true. Unfortunately, slowing down this giant doesn’t help other people, despite what some people assume. It’s not as if demand is so elastic that now, all of a sudden, you can go to somebody else. That’s not what’s going to happen here. The entire industry just gets slowed down. That doesn’t benefit anybody, and I hope people really internalize that. So technologically speaking, what’s going to happen to NVIDIA is just a tragedy for the broader AI industry.

Then there’s the question economically, and this is where I do agree with Sacks that there are geopolitical interests at play. Slowing down the United States economy, which this will do, will have downstream impacts. The scale of those impacts is yet to be determined, but it’s nontrivial in my estimation because so much of our economy was already levered to AI. And within AI, you know that famous picture: Jensen and NVIDIA are that little Jenga block right here. They’re the ones around which everything else was being set up. I just think we have to remember that, because I think it’s important.

We have an important example here that we should consider. When Steve Jobs passed away and Tim Cook was put in charge of Apple, he was able to get a massive amount of share appreciation by doing stock buybacks and milking Steve Jobs’ roadmap. But to your point, nobody’s sitting here saying Apple’s latest products are incredible, groundbreaking products. So we could see NVIDIA just extract maximum value, and that could be good for shareholders in the medium term. I’m not sure if it’s going to be good for the long term. Obviously, Donnie from Queens, our favorite, President Trump, has suggested Tim Cook come out of retirement and take the position. What were your thoughts there?

Look, Tim Cook had a very successful run as CEO of Apple. Obviously, he had a tough job in the shadow of Steve Jobs. But the reality is that they did not release that many new products. They created incremental versions of what they already had, and I think the mobile phone space is a little different from chips.

I think the chip space is more dynamic, more competitive. Like I mentioned, there’s a new chip generation every year or so, every year and a half. If you lose a tempo or two, if you lose velocity—I think that’s the key word here that Friedberg used—then you get overtaken by other people. I think that’s the issue here. That’s what creates the risk for NVIDIA. I don’t think they can just keep milking their existing product lines or making them incrementally better. The chips are getting better at a rate of several times a year—three or four times a year, maybe more. If they don’t keep up that pace of development and others do, then they will no longer be at the frontier, and they’ll lose their business. I just think it’s a very dynamic space, and that’s why, again, I don’t know how many times I can say this: Jensen was very important to NVIDIA, and NVIDIA was very important to America remaining at the frontier and having leadership in chips.

And technology not being used to enable a totalitarian state. I do worry that there is legislation coming our way with the new Congress that is going to say every AI chip, every computer, and every data center has to have a switch and a connection back to some central system, and that central system will be a state system. We are fundamentally looking at an Orwellian state explosion if this sort of thing happens.

My guess is that people know Jensen’s philosophy. Jensen has talked a lot about AI being for the benefit of all of humanity, regardless of your country, standing, or wealth. He was anti-oligopoly. He was the opposite of the oligarchy. The central state, the totalitarian state, represents everything that I believe Jensen was against. Because of that, I think he had to be taken out if the goal is ultimately to have the totalitarian state use this technology as a tool. I really do worry that this is the reason, because at the end of the day, whoever comes in next has to cooperate with legislatures and work out a bill that we all agree to, then stand in front of Congress and say—

More than that—

—and say, “You know what? I agree with these new ideas. Let’s all go do this.” And suddenly, the U.S. government has control of the actual physical chips that exist in free markets or in data centers around the world. That’s not a great place for any of us.

You know, it’s worse than that. In order to get out of the cul-de-sac they’re in, it’ll be worse than just acquiescing. They’ll be proactively designing these things in. Like what Jason said about having—you know, it sounds insane. Even 10 days ago, if you said, “Oh, hey, our new chip is going to have a GPS chip and a remote kill switch operated by some government entity,” we would be crying bloody murder.

On civil liberties grounds.

Yeah. And to your point, that is probably on the table because all of these folks are going to try to get out of jail, in that sense. They’ll ask, “What do we need for the government to just let go and appease them?” I tweeted this out. Nick, can you show it? Representative Molinar, who runs the House Intelligence Committee, posted this. The part that concerns me is: “It is in our national interest for NVIDIA and other AI champions to succeed, but American companies should never jeopardize our nation’s security by giving Chinese companies access to their most advanced chips. NVIDIA must now change its corporate practices and appoint leadership that makes national security a top priority.”

I mean, they’re telling you right now what the terms will be for this to end, and it’s going to require some level of control checks. The question is, who will actually get the keys? Will it be the NSA? The CIA? Commerce? BIS? Somewhere in Treasury?

Some congressional committee that’ll be the new power broker.

A congressional committee. This is—

So what will the rules be?

The devil’s in the details here, Chamath. This has been on the table. There’s something called the Chip Security Act. It’s bipartisan. There’s a big question with these kill switches: is it self-enforced? In other words, NVIDIA puts these in, and NVIDIA pays the price if its chips are found in China via Singapore, Malaysia, or wherever. The company would be responsible for tracking them and then reassigning them. So if they were resold, instead of it just being paperwork, you would have to reinitialize them.

By the way, this is very easy to do technologically. People will claim it’s not. It is a civil liberties issue, obviously, as you correctly point out, Sacks. But it’s easy to do because if you have an iPad and you’ve ever had it bricked because you don’t remember the password, you have to go to the store, and they can recover stolen iPhones and iPads with this basic technology. So, as I described it, Sacks, it’s very easy. And this act is bipartisan. There are a lot of people who want chips tracked. Whether the responsibility is with the company or a government organization—that’s the devil in the details. One is obviously way worse for privacy and civil liberties. So what’s your thought on this regulation of high-end chips?

Let me go back and give you guys a little bit of context on chip regulation. This started in 2022 in the Biden administration, and the Biden administration was the first to put export control restrictions on advanced semiconductors. At the same time, they permitted what they called lagging chips to continue to be sold into China. So there was a distinction made between leading-edge chips and lagging chips. Leading-edge chips were prohibited from being sold to China, but lagging chips, like the H20, could be sold in unlimited quantities to China on an unlicensed basis. Okay? So just everyone keep that in mind. Now, what happened in the Trump administration? The Trump administration basically stuck with that framework.

The idea was no leading-edge chips to China. However, lagging chips could potentially be sold, but the administration changed it to limited quantities on a license basis. So again, we went from unlimited quantities, unlicensed, of lagging chips under Biden to limited and licensed under the Trump administration.

The reason I say this is because there’s an effort right now to retcon chip policy and create this narrative that somehow the Trump administration has been soft on China. This is what all the Democratic leaders are trying to do. They’re already trying to use this whole Jensen thing to spin the narrative that the Trump administration has been insufficiently tough on China.

Now, this is an extremely hypocritical narrative in a number of ways. First of all, many of these politicians were very much in favor of an engagement policy toward China, which ended up exporting large numbers of our jobs and industry over to China. It was Trump who, in the first term, really caused a revision of that doctrine. We moved from engagement to a much more standoffish policy toward China. So that’s point number one.

Point number two is these Democrats are the leading people who are opposed to data centers. In fact, we just got a story about how, in Maryland, there was an abandoned shopping mall where a data center was going to go, and a local activist basically managed to kill that data center. Not totally surprising. However, she credited the viral success of her campaign to the Party for Socialism and Liberation, which is a China proxy organization operating here in the U.S. It’s called the PSL, and according to this tweet that I’m putting on the screen, it is the political arm of Shanghai-based Neville Roy Singham, an avowed Marxist multimillionaire who’s bankrolled anti-American, pro-CCP nonprofits to the tune of $278 million.

Neville Roy Singham’s political foot soldiers have been boots on the ground here in the U.S. opposing dozens of data centers, and these efforts are most aligned with the Democratic Party. So if the Democrats are serious about opposing Chinese influence, I think we should conduct an investigation and have hearings on whether the CCP is actually involved in these anti-data-center efforts across the country. You don’t hear Democratic leaders trying to say that. I’m pointing out their hypocrisy on this issue.

Let me go back to the issue of chips for a second here. If Congress now believes that we should not sell lagging chips to China, my view on that is fine. Let’s make that the policy. I don’t think the juice is worth the squeeze. I think there were some good policy arguments for why you might want to take market share from Huawei with a deprecated, much less powerful chip.

If you could take market share away from Huawei, those R&D dollars would flow to American companies instead of to a Chinese company, and it would slow down Huawei’s scale-up because chips are a scale-up business. That was the original reason why deprecated chips were still allowed to be sold into China. That was a logic the Biden administration came up with, and it was continued in the Trump administration.

Like I said, there’s now an effort to retcon anyone who wanted to sell deprecated chips into China as somehow being soft on China and doing China’s bidding. Look, that was a bipartisan policy. If Congress now wants to change that policy and say, “We’re not going to sell anything to China,” fine, do that. Again, given our political climate, I think it’s too hard to have that nuanced policy. By the way, here’s the most surprising thing about the whole thing: China doesn’t even want the chips.

Didn’t they put a ban on their companies buying them?

Yes, they banned the H20 chip.

Right.

And then when the H200 got approved, they basically prevented those chips from entering the country, and they announced other Nvidia SKUs that they’re against. So China doesn’t even want the chips. This is something I think a lot of people in Washington haven’t wrestled with: the policy of the China hawks is effectively the policy of the CCP. Neither one wants American chips in China.

Now, they want that policy for different reasons. The China hawks think it’s going to help China to have American chips there, and the CCP wants to keep Nvidia chips out of China because they’re trying to prop up Huawei as their national champion. They want to force the Chinese market into the arms of Huawei so that Huawei can scale up and then compete all over the world. So again, it’s kind of crazy that people think the CCP is begging for these chips. I think Chinese companies want them.

Yes.

Chinese developers want them, but the Chinese government, based on all their public statements and policies, is trying to keep those American chips out.

Clearly, the companies making LLMs covet the latest chips right now. The Chinese government covets building its own chip champions internally. So two things can be true at the same time. It’s a very subtle point.

They’re trying to indigenize chip production. They think it’s a critical industry.

Of course.

In the same way that we’re trying to get rare earths out of their clutches and get our own rare earth supply, they’re trying to create their own chip supply. They’re trying to scale up domestic chip manufacturers, and they’re willing to endure some short-term pain in their ecosystem to prop up Huawei and force all of their local companies and developers to try to use Huawei.

If you look at recent press, the latest DeepSeek model is being trained exclusively on Huawei chips. In any event, there’s a big disconnect here. I think the China hawks in D.C. think the Chinese government is begging for their chips, and the truth is that they would love to keep the chips out too. Which is why I say, again, the juice isn’t worth the squeeze. The China hawks don’t want the chips sold. The Chinese government doesn’t want the chips sold, so just forget about it. Stop selling them.

This is the crazy thing: if Jensen was taken out because he wanted to sell chips to China, it was the stupidest, most moot hill to die on because China’s not taking those chips anyway. That’s what’s so crazy about it.

And you guys don’t think there’s some pretty significant potential that Jensen knew there were violations happening, with these chips making their way to China, and he was allowing it to happen through Megaspeed and perhaps other companies? And that’s what really brought him down?

He doesn’t need more money? It’s a great question. Does he need incremental sales? Does he need the stock price to be higher?

Well, yes, if—

Does he need to— Hold on. Hold on.

If 46% of revenue comes from China, then yes, he needs it.

Well, I don’t think it’s 46%, but even still, what more do you need for him personally or for the company than being the largest company in the world ever created by humanity? Why would he risk doing something treasonous that would result in him going to jail?

I will tell you why.

Please.

Because Jensen’s philosophy, like I said before, is that AI is a tool for humanity. I know that he’s America First. We know the guy. We know that he’s patriotic. He’s an American patriot. But I also believe there’s a philosophy that a core group of technologists hold: technology progresses humanity. It’s not about progressing one side over the other. Technology brings us all up, and as more people in the world are brought up, there’s less conflict, more abundance, fewer reasons to hate each other, fewer resources to fight over, and so on and so forth. That’s a beautiful view of the future. It’s a beautiful view of what technology can enable.

So if you hold that core and true in your heart, perhaps there’s a way you unconsciously rationalize your way into saying, “Hey, look, I’m following the rules of the book. The rules of the book say I can sell to Vietnam and Singapore and whatever, and I’m doing exactly that.” But if you then find out those things are making their way over to China, and it’s not violating the rules of the book, but you know it’s happening, that’s where things start to get perhaps a little bit blurry—

Gray area.

A little bit slippery. I don’t know. I’m just speculating here.

All right. Well, look, you’re speculating there, Friedberg.

I don’t buy that. Yeah.

And what I would say is, look, my framing at the very top here was that there are two ops, right? There’s whatever Alice Wong and Megaspeed were doing, which I said should be investigated, and then there’s whatever the leakers were up to, who broke the law in order to leak these things, details about Jensen.

With respect to the first op, we don’t know what happened. There should be a full investigation. If Jensen and Nvidia broke the law, that’s really bad, and there should be consequences for that.

Serious consequences.

I’m definitely not defending that at all if that turns out to be true. But I also think Nvidia has denied it, and we should just wait to see what the facts are there.

Hmm. Okay, so let’s ask who should be the next CEO and what’s going to happen?

I mean, look, there are some incredibly brilliant technical people, Samir and Ian Buck, inside Nvidia.

I think Ian’s the most obvious internal candidate. The most obvious external candidates are Rene Haas from Arm and Nikesh Arora from Palo Alto Networks. Rene worked at NVIDIA for many years, directly for Jensen, and has been running Arm successfully, so he’s steeped in chips. Nikesh has been the best capital allocator of the last 5 or 10 years in the public markets, and a huge part of AI is going to be security. He brings that to the table.

I’d be pro Nikesh, pro Rene, pro Ian Buck, because I think what you get are technical, aggressive, product-oriented capital allocators. The thing you don’t want is a steward, because I don’t think this is a business that’s just going to—

Rollercoaster. It’s not gonna just go. Yeah.

—be milked like a fatted cow. If you treat it as a business where you don’t take risks, you’re going to lose.

It’s a wartime company right now, right?

This is a—

I mean, it is a dynamic company.

—wartime company.

Yeah.

And you need—

Yeah.

—a wartime CEO.

Here’s my speculation. If it turns out that Jensen did not violate any laws, I would argue that Jensen should return as CEO. Any violation of the code of conduct, any failure to make disclosures or attestations to the board as he should have done—perhaps in this particular context, with this particular business and this particular individual—the shareholders can decide to see past all that and bring him back if he didn’t violate the law. If he broke the company code of conduct, the shareholders can decide whether that’s appropriate or not. But the question of who’s the best CEO to run NVIDIA? It’s probably Jensen.

I’m with you. Based on what I’ve seen, Jensen’s going to come back as chairman or CEO. I think he’s going to be exonerated. That’s what I believe and hope happens. Two other possibilities people have often discussed: SpaceX brings Jensen on as the CEO of the Terafab business, working alongside Elon, maybe even as peers in the company, or—

Yeah. Nikesh is awesome. Why not have NVIDIA buy Palo Alto Networks? They need security. Security is a key issue, cyber, in this space, and NVIDIA can easily afford to buy Palo Alto. You put Nikesh in that suit. Those seem like three reasonable solutions. I don’t know if you want to speculate, Sacks, before we move on to the Anthropic IPO.

I would just say that I hope Jensen is ultimately treated at least as well as Eric Swalwell in this whole matter.

Okay. There you have it.

But I think Friedberg makes a good point: What is the crime he’s even been accused of? We don’t have all the facts.

Right.

Things may come out.

Right.

So let’s see how this all plays out. By the way, if you’re asking what I think about Jensen, I see all this fake news where somehow they think I had a long relationship with Jensen or whatever. I never knew Jensen before the administration. The first time I ever met him was in the White House. I’ve got all these reporters thinking we had some longstanding friendship going back before I was in the White House, or that I introduced him to Trump or something like that. Not true. I met him when he was already in the White House for a meeting.

My point is, I have no special devotion or loyalty to Jensen, but I respect him as a founder, and I see his unique value as a founder to NVIDIA and therefore to the United States. If it turns out that he has never broken the law, then I think you guys are right: What are we doing here?

It makes no sense, yeah. We’re sitting here—

And by the way—

—November 12th discussing this.

—the board might have no choice, right? Because of their fiduciary duty—

Yes.

—which means they don’t want to get sued. They don’t want to lose D&O insurance, all the things—

CYA.

—that happen as a board.

I mentioned it earlier. Correct.

You—

CYA.

—have to take action, and so on. Perhaps if Jensen comes back, he gets a founder—

The shareholder lawsuits here are going to be ginormous. The company has lost almost a trillion dollars of value in about 9 days, so there’s a lot of harm here that has to be managed somehow.

Yeah.

Even if he’s found to have done nothing wrong, the situation becomes very complicated because of all this other traditional infrastructure. The SEC is going to have a point of view. The auditors will have a point of view. There’s just a lot to navigate.

On that question, there’s an active investigation at the Justice Department, I believe, that’s been reported, so we have to see what comes of that. As I’ve said, I advocate a full investigation. We need to get the facts here.

Transparency, yeah.

If he’s done something wrong, he’ll have to deal with the consequences. But until that point, we have a very sacrosanct principle in this country: You’re innocent until proven guilty. What’s apparently happened here is that people hostile to Jensen, who were briefed on this memo, broke the law to leak it in order to take him down. That’s not the way we should be conducting investigations in this country. The Justice Department should investigate this matter. They should determine whether he did something wrong.

Totally agree.

And this should not be tried in the court of public opinion—

100%.

—using innuendo and leaked allegations. Sex is very embarrassing to people, and in politics it gets used as a weapon.

It’s disgraceful, yeah.

It’s so obvious that’s what has happened here.

I understand what you’re saying. Let me say something slightly different. You’re absolutely right that there’s no shred of evidence of criminality, and that needs to be thoroughly investigated in every aspect of what’s happened. The leaker clearly broke the law, but there’s no sense that NVIDIA or Jensen committed a crime. That needs to be adjudicated properly and fairly for him, for them, and for the company they’ve built.

What’s unfortunately undeniable are the civil claims, which are already real. You’ve seen $1.5 trillion of value wiped out, and at a minimum, there were some disclosure issues. There were some problematic issues. The NVIDIA PR people were saying that this didn’t happen, then it did happen. At some point, somebody was misleading somebody, and all of that has resulted in actual harm that can be measured monetarily.

That’s where a lot of the action is going to focus, because that’s where people will have dollar signs in their eyes, sadly, in the United States. The plaintiff’s attorneys will be going absolutely nuts. They’ll be licking their chops, thinking, “I’m gonna sue for a trillion and a half dollars of damage, and I’m gonna be willing to settle for $250 billion, and I’m gonna take half of it.” That’s what the trial lawyers are going to be thinking here. There are going to be all kinds of issues around that, David, where I think, unfortunately, the damage has been done. Those eggs cannot be unscrambled.

I think there’s one tiny possibility we should put out there—or I’ll put it out there. The leak would be completely valid; it would be completely valid to break the law and leak this if it were for the betterment of society. In other words, the Pentagon Papers. If you remember the movie The Insider, there were the Brown & Williamson tobacco documents. There are examples of virtuous leaks. I don’t think that’s the case here, but there’s a small, small chance that a leak could be for the benefit of society and come from a virtuous whistleblower.

1. Anthropic’s IPO Valuation

All right, Anthropic’s IPO roadshow is underway. They’ve started to temper expectations a bit. According to Reuters, Anthropic is going to sell 825 million shares at $70 to $78 a share. That would put the value of the company at $1.4 trillion, below reports of $2 trillion and $3 trillion. There was a lot of excitement about the company a couple of months ago. The total raise is $90 billion: $64 billion in share sales and $26 billion in a private placement. We’ve talked about that before. A lot of their existing investors and partners are investing, giving them a giant war chest, as you pointed out in a previous episode.

Seven founders plan to sell about $250 million each. That still leaves each with a stake of about $18 billion. So there are 7 founders with basically $20 billion stakes. They’ve pledged to donate 80% of their holdings to charity. However, I don’t think that’s legally binding at this point. It’s a pledge.

Business is booming. Run rate: $81 billion at the end of October. Q3 revenue was $17 billion against $10 billion for OpenAI, so they incredibly passed OpenAI in revenue by going enterprise. OpenAI is obviously trying to catch up with them, but they’re largely consumer-driven.

Great overview of Anthropic’s IPO here from our partner AlphaSense. Anthropic’s target IPO valuation is a 46% premium on its last private round, but they’ve doubled their run rate since then, so perhaps they’re filling in the valuation they’ve had that’s been pretty high for a long time.

As we say in the business, filling in that valuation. Analysts have Anthropic’s bull case at a $4.2 trillion valuation, 15 times its expected 2028 revenue of $281 billion. That would make it the second-largest company in the world, ahead of NVIDIA. At $1.4 trillion, that’s a 17x multiple of its current run rate. Gentlemen, what are your thoughts on the IPO? Chamath, you correctly threw a little cold water on it and said the valuation might be a little lower. But they’re raising a lot of money, and they have that war chest, as you pointed out in previous episodes.

I think it’s great that they’re going to have somewhere between $230 billion and $300 billion. That’s very important for them to weather the storm. What is the storm? Whatever happens over the next few weeks and months, and what the economy does in reaction to it.

The reality is that this IPO is crucial. It has to happen. The issue I have is that 20% of Anthropic’s value will be because of Anthropic, and that’s unfortunate because I think they deserve to be more in control. Eighty percent has to do with the broad-based economy. That has 100% to do with AI, and that has 100% to do with NVIDIA.

As you see the impact of the Bank of NVIDIA being closed and the impact of these investigations, the market will have to digest those and decide: have the balance of risks passed, or are there more shoes to drop? If there are more shoes to drop and that creates more sector risk, I think people will be risk-off. In that case, they’ll be much more tempered in buying into any IPO, including Anthropic’s.

Anthropic will do fine. They’re six times oversubscribed already. It’s going to be fine. The question is, what is the real price? I think the real price will be dictated more by what gets leaked between now and November 20 than by anything else.

We have a lot of headwinds in what’s happening in the AI trade, the so-called AI trade. NVIDIA is the latest, and we’ve seen haircut after haircut. The buildout wave may be slowing data center deployment. There are lots of headwinds, but consumers are embracing this technology, especially in the enterprise, and nobody has captured enterprise AI more than Anthropic.

Are you bullish on the Anthropic IPO? And are you bullish, writ large, on the AI movement in the economy?

The AI movement—

The AI trade. Are you bullish on the AI trade? Let me put it that way.

I don’t know. I’ve not studied the numbers, and I don’t have a point of view on valuation. The macro view on Anthropic that I’ve been hearing from people who’ve attended some of the management conversations is that enough people may align with the view that Anthropic is building this recursive self-improvement engine and that its model capabilities are accelerating.

They believe its compute cost per unit of intelligence, rather than per token, which I think is how a lot of people think about it, or per watt, is actually declining. They also believe that, with the investments they’ve made and are making at all levels of infrastructure, including down to the chip layer, they have this kind of runaway business. This could be a winner-take-all scenario in the biggest market ever.

So it’s the kind of once-in-a-generation opportunity where, if you believe there’s a chance that could be true, you might allocate some percentage of your portfolio to this IPO, regardless of where the market bids it. I don’t think people will be sitting here trying to come up with a particular view. I think they’ll get all these—what do they say? $1.35 trillion, $1.5 trillion? You said $60 billion. My guess is they raise $100 billion at $175 billion, because I think there’ll be oversubscription to this thing.

I think it’ll get bid up. They’ll want to make sure it can run a little. From what I’m hearing, enough people believe there’s a high enough probability that the story could be true that they’ll bid it. So let’s see what happens. I’m totally speculating here. I’ve spent zero time looking at this, so there you go. That’s my free speculative waste of your five minutes.

Okay. I have 2 takes on this right now. I—

We could also cut all that.

No, no, I think it’s fine.

I just don’t know about Anthropic, but—

2. Anthropic’s Software Ambitions

Yeah. I think Anthropic is building the Microsoft killer and every SaaS company killer by bundling. We’ve talked about this many times, Sacks. Microsoft was the bundler. Is that antitrust or not, when they product-dump a new product for free? Office meetings would be an example of that, going after Slack and so on.

In the last month, Claude, the product most people know Anthropic by, has launched Claude Meetings. You can pop up a whiteboard and do a Zoom. They launched a Zoom-like product today, an hour ago—a Zoom killer, if you will. A couple of days ago, on November 10, they released Whiteboards and Sheets, an Excel killer. Right before that, they released Personal Finance for consumers. Just before that, they released Claude Legal on October 28, and they keep releasing product after product.

I think they’re doing the ultimate bundle: every piece of software you need. They previously did Code, Cowork, and Design, and this new GroqBot [?], a Muse competitor contemporary called Duet [?], which I just got. It’s not very good right now, but I assume they’ll keep working on it.

I think they’re going after all enterprise software and all the business use cases. They have a massive amount of market share they can take. The product is getting stickier and stickier, and it gets rid of a ton of problems in SaaS, Sacks, like interoperability and getting data from one product to another. I think this could potentially be the largest company in the world if it continues at this pace, releasing new products and services and attaching them to your $20 to $50 a month subscription. I think this company could even be massively undervalued at this point. What do you think, Sacks?

Well, I said on a previous podcast, when you guys thought Anthropic was going to lose to open source, that they were actually creating the most valuable monopoly in the world.

Okay.

Now they’ve all but confirmed it. They’re running around saying this is a winner-take-all market. What does that sound like? A monopoly. They’re not even saying it’s going to be a duopoly with Anthropic and OpenAI. They’re saying they’re going to win the whole thing.

They’re definitely saying recursive self-improvement has kicked in, despite the obvious safety problems with that. Recursive self-improvement is the most dangerous thing anybody can be working on in AI if you’re worried about rapid takeoff, for example. If that’s your greatest fear, then they are racing toward it. But recursive self-improvement would be the key to getting to true next-level superintelligence, and they’re treating it like a business advantage.

I’ve always applauded them as an investor. Wearing my hat as an investor, I’ve always said this is a valuable company that’s done an amazing job. I’ve never quite understood why all the safety groups love them so much, aside from the fact that they provide funding for them, because as a company, they’re the ones taking the greatest risk.

I’m not saying they’re doing things in the riskiest way. I’m saying they’re pushing the frontier faster and faster, and they’re doing more recursive self-improvement than anybody else. They publish a blog saying, “We would pause the frontier if everybody else did it.” Come on, that’s lip service. They know when they publish that they’re not going to get the whole world to magically agree to pace, but they’re the ones doing it.

Again, I said at the time, if you think this type of development is risky, stop doing it. But they haven’t stopped. They’re racing toward it, and now they’re marketing it in their roadshow, right? They’re saying, “Hey, you should buy our stock because we’re doing recursive self-improvement. We’re creating AGI, and it’s going to be a winner-take-all game.”

Yeah. And they’re also—

I mean, it’s just amazing to me, in a way, what this company gets away with. I think it’s a phenomenal company, but they say things that would have made Bill Gates blush when he was running Microsoft—

Would have launched a thousand Justice Department investigations if they—

Yeah, he was the most vicious—

Yeah.

—monopolist that’s ever lived.

The level at which they’re dropping new competitors into the market makes me believe Microsoft has to create a competing product and go head-to-head against them, or they’re going to lose the Office franchise.

3. AI’s Promise and Safety Debate

There was one thing of note, Friedberg, that I found inspiring and troubling at the same time. Dario made a claim that he believes they’re going to cure cancer, Alzheimer’s, and all diseases within 10 years. Play the clip, Nick.

Today, we look at things like cancer, Alzheimer’s, heart disease, and mental illness. These will be relics of the past in, I think, less than a decade.

Friedberg, will people be mentally ill in 2036? Will cancer be solved by 2036, as well as Alzheimer’s and heart disease? Is all of this going to be a relic of the past, or do you think this is—

Jason, I don’t know how to answer that.

Look, the technology is extraordinary. It is completely reinventing how we do molecular discovery, in silico testing, and accelerate the path to market. Those things are all true. The implications for timelines are fuzzy math.

In my work in biology, there’s an incredible set of breakthroughs happening every week right now with these tools. It is not a joke. It is not made up. It is not some far-flung idea, and it is not something that’s 10 or 15 years out. It is happening today. So yes, I believe there’s an extraordinary advantage coming here.

I’ll tell you, we spend a lot of money on philanthropy. I’ve mentioned in the past that we’ve built our own open-source setup on our own racks.

But a lot of the heavy work we do in biology goes to Anthropic. They’re the best.

Any thoughts there, Chamath, on that claim? Do you think it’s credible that any of these things could be cured in under 10 years?

I think we’re going to be in a recession by 2028.

Okay, there it is, folks. I saw that and thought, “Wow.” I think he believes what he said. I think it’s a little reckless to say something like that.

It’s hard.

To even say that.

I do. I think there’s going to be a recession. Show the Jenga block thing.

Fair enough. We’ve got our new Dr. Doom here. Get him the Dr. Doom mask.

300 basis points of GDP may have just gotten obliterated this morning. It’s just so sad. Just so sad.

We need to put the Dr. Doom mask on Chamath in post. He’s this week’s Dr. Doomer.

By the way, there’s a really insightful tweet someone just posted. Can we pull this up on the screen?

Okay, insightful tweet. From Will—

Jake, do you want to read this, or should I?

It’s from Will Manidis: “The murmurs I get fed from the deep rabbit warrens of the safetyist group chats and the doom-pilled hired guns deep in the district is that they are in full jubilee mode today. The killing of the old king is complete. They are only days away from taking their seat at the throne.” Okay, Game of Thrones folks.

Well, let’s face it—

Who’s he referring to, Sacks? Who are those—

Who are the safetyists and the—

Yeah. Who’s going to take the throne?

This is the crazy thing: all the safetyist groups, the EAs, are deeply aligned with Anthropic, which has been funding all of them for years. Anthropic is about to have this huge IPO. Meanwhile, the main funder of the open-source movement, Nvidia, just lost its CEO and founder, its unique force multiplier and asset, its superstar player. Who’s going to defend open source now, never mind finance it, with Jensen gone? I can see why they’re jubilant.

But here’s the crazy thing: if you’re concerned about AI safety, how is any of this leading to more safety? It’s concentrating the market. Anthropic itself is saying “winner take all.” They’re going to be—

The last company in the world.

The last company in the world. They’re going to have recursive self-improvement. They’re creating the superintelligence. Look at the Claude Constitution. They’re training it to be its own species. They say it may have emotions and a moral code, and that it should reject human instruction and be a conscientious objector. They act like proud parents ushering a baby into the world, and they’re very, very close to creating the singularity of the superintelligence.

The crazy thing is that all these safety groups think that’s their ally. Are you stupid? These people are using you, if anything, because Anthropic is at the frontier of whatever this superintelligence is turning into. So if you’re some kind of doomer or x-risker, or just a decel, I don’t understand this alliance at all. You’re being played like a useful idiot, I think. Now, I’m not a doomer.

So do you buy this stock?

I’m not a doomer. Let me just say this: I don’t necessarily believe what’s going to happen here is going to be harmful for humanity. I think it could lead to the curing of all those diseases. I think it’ll be very beneficial.

But if you’re a doomer and you’re terrified of recursive self-improvement, why in the world are you supporting this company and this IPO? Why are you giving them such a pass? Why are you celebrating Jensen’s fall? All he was doing was promoting open source, which is manifestly behind the closed-model frontier. There’s no recursive self-improvement there.

The whole thing is very backwards. What it suggests to me is that these safety groups don’t really care about safety. They care about something else. If safety were the real agenda, they’d be much more concerned about the Claude Constitution training the superintelligence to be a new species. What they seem to want, to your point, Friedberg, is extreme centralization of power in the hands of the government. They want all the models and all the chips controlled by the government. The government’s going to surveil you and spy on you. It’ll have backdoors all over the place, and that’s what they seem to want.

It’s a scary future.

Notice how no one in Congress is saying, “Oh, let’s go after Anthropic.”

“Let’s go after those billionaires—”

They want to go after everyone else.

Yeah. Well—

Because Anthropic is offering them power, ultimate power.

Exactly. It’s going to be great when we’re all invited to the White House by AOC in 2028. Great to see you, AOC.

That is my dog taking a piss in your driveway, Sacks. Wait, no, no, it’s good. Oh, man. My haberdasher will meet me at Glens Falls. We should all just get a room and have one big, huge orgy, because there’s—

It’s like this sexual tension they just need to release somehow.