OpenAI未达目标、Codex对战Claude、Elon诉Sam庭审、超大规模云厂商大胜、肽类热潮

Jason, do you want to tell us about your new favorite podcast?

Jason Calacanis

Oh, it’s so good. Since cancel culture ended, Sacks, everybody uses the R-word and the F-word right now. My entire feed on Instagram is either gay, Down syndrome, or bulldogs. It’s one of those 3.

Then I stumbled upon The Miss Thing Podcast, Miss Thing, and they do a bit called “Gay Name, Straight Name.” Here’s “Gay Name or Straight Name” for David. Good news and bad news, Friedberg. Here we go.

David Sacks

Gay name or straight name.

Guest

Gay name or straight name.

David Sacks

David.

Guest

David, to me, is straight. But he has my perfect body. It can be confusing because I’m kind of like, “Are you gay?” And it’s like, “No, I just want to be you, David.”

David Sacks

Totally. Well, it’s so—

Guest

The Michelangelo’s David.

David Sacks

Exactly. The male ideal.

Guest

Yeah. It’s an incredible body.

David Sacks

Kind of small. Sorry.

Oh, it’s a little rough.

Jason Calacanis

Oh, boy.

Guest

I know.

Jason Calacanis

What are you watching there, JCal? It’s so great. They basically nailed these two, but okay, keep going. I don’t think Chamath is on their shortlist, but I know Jason will come up at some point.

David Sacks

Gay name or straight name.

Guest

Gay name or straight name.

David Sacks

Maybe this is it.

Guest

Chamath.

David Sacks

What about on the count of 3?

Guest

Yeah.

David Sacks

3, 2, 1. Gay.

Guest

I’m seeing an Italian sweater, really kind of loud—

David Sacks

Ooh.

Guest

—vibrant sweater. He wears it to poker night with his boys.

David Sacks

Yeah.

Guest

And I’m not talking straight poker. I’m talking gay poker nights. That’s the bar.

David Sacks

Yeah.

Guest

Always talking about wine.

David Sacks

Talks about wines.

Guest

Always sort of—

David Sacks

So much.

Guest

—swishing it.

David Sacks

Swirls.

Guest

Yeah, exactly.

David Sacks

Yeah.

Guest

Also, it’s so—the guy at the gym taking off his shirt.

David Sacks

Oh.

Guest

Taking selfies.

David Sacks

Photos.

Guest

Mm-hmm. Yeah, and everyone else is kind of like, “Excuse me, Chamath, I’d like to use the mirror.”

Yeah.

David Sacks

“I’d like to see myself.”

Guest

See you at the next gay poker night.

David Sacks

Totally.

Guest

You bring the wine?

David Sacks

We’ll bring the sweater.

Guest

Yeah.

Jason Calacanis

There it is. Wow.

Wow.

Jason Calacanis

They did do Chamath.

That is fantastic.

Jason Calacanis

A shout-out to my guys at The Miss Thing Podcast.

Wow. That was awesome.

Jason Calacanis

I think I’m gay.

Jesus.

Jason Calacanis

I never knew.

David Sacks

We’ll let your winners ride.

Jason Calacanis

Rain Man, David Sacks.

David Sacks

And instead, we open-source it to the fans, and they’ve just gone crazy with it.

Love you, guys.

Jason Calacanis

I see Queen of Quinoa.

Guest

What did you do, like Cameo? Did you pay them to do that?

Jason Calacanis

They did it for me as a favor, so they did it for free.

Guest

That’s awesome. Well, thanks to those guys. Those guys are—

Thanks to The Miss Thing Pod.

Guest

I’ve seen those guys before in clips. I find them very funny.

Jason Calacanis

It’s so great. Shout-out to my guys.

That was awesome.

1. OpenAI Misses Its Targets

Jason Calacanis

Topic 1: OpenAI. They missed their targets for ChatGPT, Friedberg, both on users and revenue. Let’s talk about it.

The Wall Street Journal says, in a breaking investigative report on Tuesday, that OpenAI expected to hit 1 billion WAUs—weekly active users—before the end of 2025. They missed that, and they still haven’t hit the milestone 4 months into 2026.

Also, Chamath, they missed their 2025 revenue target for ChatGPT. The exact number wasn’t specified, but as we’ve talked about here, they’re at a $20–$30 billion run rate. There’s a little bit of accounting nuance that is yet to be worked out in the industry.

Two reasons why this matters, Sacks: OpenAI has $600 billion in spending commitments for compute. Just to put that in perspective, that’s about what they’re trading for on secondary markets. In other words, the entire value of the OpenAI enterprise equals their spending commitments in the coming years.

CFO Sarah Friar, who is counting on liquidity, is reportedly worried that revenue isn’t growing fast enough to keep up with expenses, and OpenAI wants to IPO later this year. This has put Friar and Altman in conflict, or maybe there’s some natural tension there.

Friar doesn’t think OpenAI is ready for public reporting standards, according to The Wall Street Journal. Altman obviously wants to move faster. So they released a joint statement: “This is ridiculous,” yada, yada, yada.

Let’s go to you, Sacks. What do you think’s going on here? Are these major headwinds, or is this just managing expectations as the leader of the pack in the most important race of our lifetimes—the race toward superintelligence?

David Sacks

Well, I actually have a bit of a contrarian take on this. I know that OpenAI had a really bad week. Like you said, they had that Wall Street Journal article, which said that they’d missed their numbers. They’d missed their 1 billion user growth target. They’d missed their revenue numbers.

That’s called into question whether they can afford the data center commitments that they’ve made. In addition to that, they’ve also had the lawsuit with Elon happening this week. So in the press, it ended up being a pretty bad week for them.

2. OpenAI Regains Product Momentum

But I have a contrarian take on this, which is that over the past week or 2, if you look at what’s happening at the product level, it’s been a pretty good couple of weeks for them. They released ChatGPT 5.5, and the reviews from people I talk to in Silicon Valley have been really strong. You talk to developers and coders, and they’re very happy with it.

At the same time, Claude Opus 4.7, which is the latest Anthropic release, appears to be a bust. People are complaining about it. In many cases, they’re rolling back to 4.6. They’re saying that Opus 4.7 is rationing compute, reducing thinking time, and isn’t as good. There were some bugs in Claude.

So if you just compare ChatGPT 5.5 to Opus 4.7, it does appear that OpenAI has had a better couple of weeks at the product level, and I think there’s reason to believe that the product improvements will continue.

GPT 5.5 is based on a new base model called Spud, which is the first base-model upgrade they’ve done in over a year. Having a new base model will pave the way for future improvements as well.

So I think OpenAI is feeling pretty optimistic about their product right now, and I think you’re starting to see on X that some of the developer mojo is shifting. I’m seeing a lot of people saying that they are shifting their coding usage from Opus to GPT 5.5.

I think Sam may end up being right, but for the wrong reason. What I mean by that is that when he made these big compute commitments, they were based on those estimates of hitting 1 billion users on the consumer side and hitting those revenue targets.

The consumer business ended up being weak, so they missed those targets. But in the meantime, coding has become the all-important sector of AI. Because they made all these compute commitments and built out these data centers, they have more compute than Anthropic right now.

Anthropic is token-constrained. It’s reducing their ability to serve Mythos, for example. It’s causing them to engage in compute gating with Opus 4.7. And I understand why Dario made that decision. I’m not saying—I mean, it was a prudent business decision. I’m not criticizing him for it.

But again, I think Sam may end up being right here for the wrong reason: he missed on consumer, but enterprise is going gangbusters and is giving him the ability now, I think, to catch up on coding, which is the all-important market right now.

Jason Calacanis

We talked about Grok and Cursor teaming up last week—Elon and the team over there. Polymarket is now showing a 32% chance that OpenAI goes public by the end of 2026. This is down from 60% in December.

Chamath, you gave a bit of a warning: “Hey, there are only so many dollars to go around. The SpaceX IPO is obviously getting out first. And now, if OpenAI doesn’t go out this year and Anthropic does, this sets up an interesting dynamic.”

What are your thoughts here, generally speaking, about the massive commitment that OpenAI has made? Are they going to run off the cliff, or will it wind up being brilliant, even if it wasn’t strategic for the exact reasons?

Chamath Palihapitiya

I think they’re going to be fine. I think this is a multitrillion-dollar company. I think Anthropic is a multitrillion-dollar company.

3. Power Becomes AI Bottleneck

I think the thing that’s happening right now is a complete misunderstanding of what’s actually happening inside the world of AI. There is 1 very specific choke point that is constraining everything, which is access to the power that’s necessary to drive these tokens.

To the extent that OpenAI missed, I think what that is is an insight into not having enough compute capacity today, and that problem is only getting worse. You’ve already seen that with Anthropic as well, where they just found a way to economically induce Amazon to give them enough capacity so that you don’t have to route through Bedrock to get to the Anthropic models.

You're also seeing them do differentiated deals now with economic participation on top of what they already had from folks like Google to give them more capacity. What is my point? Everything in this market is power-constrained.

The reason that these folks may miss a number or a forecast has nothing to do with demand. It is entirely 100% due to the supply of the power necessary to generate the output token. There is a really interesting thing that was just announced today that will make this problem even worse, which is that you're starting to see backlogs build up not just for access to power, but also for the componentry that's actually necessary.

Not just reciprocating engines and natural-gas turbines, but now you're talking about transformers and all the actual tactical grid infrastructure. Why is this important? If you look at the actual amount of gigawatts that are under construction, we have a huge mismatch now. People have announced all these projects, Jason, but less than half of them are actually being built. Less than half.

Most of it is stuck in red tape. Most of that is because there are these supply-chain delays, so there's no credible strategy to turn any of this stuff on. Who will this hurt? It will hurt Anthropic and OpenAI the most. Who will this benefit? It will benefit the hyperscalers, specifically Oracle, Amazon, Meta, Microsoft, and Google.

And now what you're going to see is a negotiation and a trade back and forth. How much equity do I have to give up? How much control do I have to give up to get access to the compute, versus how badly will I miss my growth forecasts if I don't?

And now what that means is—and we spoke about this last week—that's a huge lane for Groq to just run through and SpaceX to run through, because they have a ton of excess capacity. I think the Cursor deal was the appetizer, but if I were Elon now, I'd be running all over this market, because if the models catch up in quality, I think he could also do something really crazy with Anthropic or OpenAI right now. Maybe not OpenAI because of the—

Jason Calacanis

We'll get into the lawsuit in a moment—

Chamath Palihapitiya

—the baggage.

Jason Calacanis

Yeah.

Chamath Palihapitiya

But, man, he and Dario should do a deal tomorrow.

Jason Calacanis

So you're framing it as, "Hey, the limited resource here is compute. The demand is off the charts."

Chamath Palihapitiya

No, the limiting resource is power.

Jason Calacanis

Power, which then powers compute—

Chamath Palihapitiya

And, by the way, sorry—

Jason Calacanis

—which then provides tokens, which then services the massive—

Chamath Palihapitiya

Exactly.

Jason Calacanis

—developer and coworker and all these other projects that consumers and enterprises can't get enough of. Got it.

Chamath Palihapitiya

And Jason, the other factor that complicates that for Anthropic and OpenAI is all the stuff that's sort of sitting around twiddling its thumbs—

Jason Calacanis

Mm-hmm.

Chamath Palihapitiya

—40% of that is going to get canceled because they've done such a poor job of creating a good, positive halo around AI. Forty percent of all the announced projects get canceled because 40% of all projects in the last 4 years have been canceled.

Jason Calacanis

Yeah. There are some bad feelings about data centers, AI, jobs, et cetera, and that's causing some headwind. People are literally doing violent things in society and blaming data centers and AI for it. I don't want to give it too much airtime. Friedberg, what's your take on the chessboard we're looking at here, either through compute, energy, or through going public on a business level? The strategic nature of capital, compute, and energy is now playing a role in this massive amount of demand.

It's still a ball-in-the-air kind of game. BCG had this theory, I think I talked about this once before, called the rule of three, where they've shown time and again that any stable, mature, competitive market evolves to a 4-to-2-to-1 ratio of market share for basically 90% of the market. So there's a market leader that has 4 times the market share of the second place, and that's 2 times the market share of the third place. This is the case in pretty much every mature, competitive market.

You can think about AI probably evolving into a consumer market and an enterprise market. OpenAI, even if they're not at 1 billion, are still at 900 million weekly users, which is well ahead of whatever Claude is at. I think Claude is probably sub-100 million. Sacks, you may know. And then Gemini is probably closer to them at 700 million to 1 billion, somewhere in that range. Probably pretty neck-and-neck with OpenAI.

The consumer market looks like it's trending toward a ChatGPT–Google fight for first and second place, and then probably Anthropic in third place. Maybe Elon emerges and takes off, enabled by his compute capacity. The enterprise market is a little bit of a different story, and that's its own market, which is kind of Anthropic—or probably Google in the lead, actually, if you look at all the Vertex use.

Google claims that 75% of GCP customers are active users of Vertex, so there's probably a pretty sizable market share that Google has captured on the enterprise side as well. This is also probably why Google stock has absolutely ripped over the last couple of months: they're literally in first place or fighting for first place in enterprise and consumer.

But I still think that there's a lot of opportunity, to Chamath's point about the compute and energy capacity constraints, in improving how we actually scale and deploy models in both the enterprise and consumer settings. It is such early days.

I just want to highlight this paper that came out from MIT from these 2 scientists. They published a paper on pruning techniques in neural networks. This paper showed that you could actually reduce the size of these networks by 90% and get the same accuracy by pruning very large models down to smaller models, and then you can make a selection on which model to run for inference.

By doing this, you can actually reduce inference costs by 10 times. You can get 10 times the output per energy unit that goes into the data center with no loss of accuracy. It's a really interesting algorithmic technique that can be applied to the existing large models to make them use much less energy.

So if you think about it, you're firing up a very large model to answer a very simple question. You could actually prune away that model. This is probably going to be the case in AI applications as it is in traditional Google search. There's a long tail of searches, but there are a few searches that account for a large percentage of search volume. It's like, "What is the weather?" "What are the movie times?"

Jason Calacanis

Sports scores.

You know, "What's the stock price?"

Jason Calacanis

Yeah.

There's a certain set of things that make up the bulk of consumer energy, and there's probably a certain set of things that make up the bulk of coding output as well. If you can get that 80% of searches, chat interfaces, or coding requests reduced down through pruning techniques to smaller models, and then have a whole set of smaller models that can be called dynamically, and reduce inference costs by 90%, you can make much more use—call it 10 times the use—of data-center and energy capacity than we can today.

I would argue that we're still in the very early days of getting efficiency in terms of output and tokens, and we're just in the very early stage of that—

Jason Calacanis

So there's—

—which also unlocks the opportunity for guys like Elon to reinvent how this is done and potentially compete pretty aggressively.

Jason Calacanis

There are 2 ways to win. You could throw compute at it, or you can do SLMs—small language models—and VSLMs, verticalized small language models.

If you had a verticalized small language model for the weather, let's say—that doesn't exist, but you can use it as an example—they will have one for travel, as an example. When you hit Google for flight information, it's obviously going to route you to something lighter and faster that uses Google Flights, and Google Flights has been incorporated into Gemini.

Gemini now is right behind at 750 million users, and it's exactly what we discussed, I don't know, 18 months ago on this podcast, Friedberg: What if they put it at the top? What would that do to their search revenue? Search revenue is surging, and they're also surging, so they figured out a way to balance those 2 competing forces—having search results that are AI-enabled and still getting people to click on links.

Yeah.

Jason Calacanis

They've done it brilliantly, apparently, and the stock is rewarding them.

I'll just add one statement to what you said, JCal, which is—

Jason Calacanis

Yeah.

—you're using what I would call a human heuristic for smaller models, and I think what we're evolving toward is that humans don't intuitively know what these models are. It's not just a verticalized model, but there are going to be models that will be discovered through automated pruning techniques that will then be working in concert.

So, lots of small models that link together, and we don't define each model by some human heuristic, like, "This is a search—

Jason Calacanis

That's a great point.

—travel model, small model."

Jason Calacanis

Yeah, this is a maps model.

Human model. Yeah.

Jason Calacanis

And so we don't—

—we don't know why these models work the way they do when they get broken down, but I do think that that's really where the evolution is happening. So effectively, a model becomes a—

Jason Calacanis

A macro model.

It's got lots of smaller models underneath it that can be dynamically called, and that allows you to have 10× inference for the same unit of energy.

David Sacks

Let me just build on your point about Google, JCal. I would say that if there's a single reason why OpenAI did not hit its user targets and its revenue targets, certainly around consumer, you'd have to say it's because Google managed to take meaningful share. They were basically nowhere a year or so ago. Sergey came out of retirement, helped focus the company, and, like you said, they did a brilliant job improving Gemini and putting it at the top of search, incorporating it.

That being said, I don't think the news is all bad for OpenAI because I do think that the 5.5 release was great. We're hearing really good things about Codex. I do think that Codex is taking share in coding tokens right now, and I just think we're in a really interesting place where these companies are constantly one-upping each other. Two weeks ago, it looked like Anthropic was going to be completely dominant, right? Anthropic was growing at 10×, OpenAI was growing at 3×, and it looked like Anthropic was running away with it.

Jason Calacanis

And then the servers started going down. Did you see that this week, Sacks? The servers are going down. People who are in my office were complaining, “We can't get on Claude.”

David Sacks

Listen, competition brings out the best in everyone. Anthropic forced OpenAI to compete. Google has forced OpenAI to compete in consumer. I just hope the market stays competitive for as long as possible. I do think that's what's best for consumers, our economy, and our country overall.

4. AI Opens The Cyber Front

Let me just say one other area where I think OpenAI had a good week is in this red-hot area of cyber. Obviously, Anthropic made a huge splash with Mythos. It hasn't been commercially released. They're compute-constrained, but as a proof of concept or training model, it hit a new level of capabilities with cyber.

But now OpenAI has released a new model called GPT-5.5 Cyber, which has just been through a bunch of tests, and they've shown—this was testing done by the AI Security Institute—that GPT-5.5 is the second model to complete one of their multistep cyberattack simulations end to end. So it has the same level of capability as Mythos, and it does appear to be commercially ready. They've got the compute to serve it.

I do think that's a big accomplishment. We knew that other cyber models were coming. It wasn't just going to be Mythos. In fact, within 6 months or so, all the frontier models are going to have Mythos-level cyber capability. But it's impressive that OpenAI got this GPT-5.5 Cyber out so quickly, and I think 5.5 might be the first cyber model that cyber defenders actually get to use because, again, I don't think they're as compute-constrained as Anthropic is.

Jason Calacanis

And this is an incredible opportunity for the CrowdStrike and Palo Alto Networks of the world, both of which have been on the program. They come out, and they start attacking this space. You could really see everything get tightened up, and this could be an incredible revenue stream for everybody who's got, whether it's Cursor, Claude, OpenAI, or Gemini. This is an amazing opportunity to tighten up as much as it is to get attacked.

David Sacks

Yes.

Jason Calacanis

Can I make a point about that?

David Sacks

Yes.

Jason Calacanis

Because, look, there is so much fear right now, almost a level of panic about Mythos. People are treating it like a doomsday weapon or something like that. It's not. It's simply that the frontier models have reached the point where they're capable of automating cyber activities, just like they're capable of automating coding.

That means that a model could power up a cyber attacker or cyber defender the same way it can power up a coder and allow them to discover a lot more vulnerabilities. So there is obviously a risk there, but I think it's important to understand that Mythos or GPT-5.5 doesn't create the vulnerabilities. It just discovers them. The bugs were already in the code. They were sitting there waiting for some hacker to discover them.

If we can now use AI to find these bugs and vulnerabilities in advance and patch them, then you actually harden our infrastructure and our security. I also believe that this leap from, let's call it, pre-AI cyber to post-AI cyber is going to be a big one-time upgrade cycle because, again, you're going to find all these dormant bugs and vulnerabilities.

But I think that once we get past that upgrade cycle, you're going to reach a new equilibrium between AI-powered cyber offense and AI-powered cyber defense. It's going to become a lot more normal. It's not going to feel like this huge disruption. Which is to say, I think people are treating this as some existential threat. I don't think it is, as long as everyone does what they're supposed to do, which is use the new capabilities to harden their codebases, infrastructure, and security before the hackers get ahold of these capabilities.

Yeah, and if, Chamath, you were to look at this, to build on Sacks's point, there are about 5 million or so security experts in the world. We talked about token cost: 40 hours of tokens just pounding it a week. You could create another 5 million for $100 per chief security officer or security expert.

So it's the volume of security-expert agents, Sacks, to your point. You could have 50 million of them, 100 million of them. They're not finding something unique.

David Sacks

Right.

Jason Calacanis

They're just—they never sleep. They're relentless in their pursuit of these problems. It's a really great point.

David Sacks

Just to refine that, there's probably 5 million people in the cyber industry, but there's probably only a few thousand really elite hackers.

Jason Calacanis

Sure.

David Sacks

Those hackers didn't have the time to go after the entire surface area of every possible attack vector out there. So if you train a model to do what they do, obviously, like you said, it can operate with a scale and speed that a human hacker can't.

What you need to do is get these tools in the hands of the white hats. Let them do the cyberattacks themselves to find the vulnerabilities and patch them before the black hats get ahold of these capabilities.

But I think it's just one last point on this, then I'll stop: it's really important to understand that the Chinese models are going to have these capabilities within approximately 6 months.

Jason Calacanis

Oh, they have them now in DeepSeek 4, for sure. They've got some level of them.

David Sacks

Well, no, DeepSeek 4 is impressive in a lot of ways, but its capability is not at the frontier. It's maybe 80% to 85% of, let's call it, the American frontier.

Jason Calacanis

Chamath, you wanted to get in on this. Let's get Chamath in.

Chamath Palihapitiya

Two things. The reason that this is even possible is because humans are error-prone, and when humans code, they create holes. Humans exploiting humans is where we've been for a long time. Now we have computers exploiting humans because the computers go and seek out all these bugs that humans wrote.

In the next phase, it'll be machines versus machines. I think the nature of cyber is going to completely change. Probably in the next 5 or 6 years, there'll be so much reason to rewrite all of the software that runs the world. In part, you're going to be asked to show more operating leverage and revenue growth, but in another part, everything else that was handmade in the past is just fundamentally insecure.

Either way, all roads will lead to all the operational software that runs the world getting rewritten. More and more of it will be written by machines. More and more of it will be impregnable as a result.

But then the cyber threat will actually only increase, because then you're going to try to figure out how to use a machine to inject something into another machine so that some agentic loop injects some malware or injects a bad token. I think that's a very complicated thing.

What I will tell you is—and I'm not even sure if I'm allowed to say this—but a very good, probably the best cybersecurity company in the world, run by one of the very best CEOs in the world, who may or may not be speaking at Liquidity, would tell you that they have penetrated and can essentially manipulate every model.

Jason Calacanis

Sure.

Chamath Palihapitiya

Let me just say it roughly that way.

Jason Calacanis

Okay, perfect. At the Breakthrough Prize, which 3 of the 4 of us were at, I talked to George Kurtz. The other person you were kind of describing was that person.

Chamath Palihapitiya

Yeah, I was sitting beside Nikesh.

Jason Calacanis

Yeah.

Chamath Palihapitiya

I'm talking about Nikesh Arora, yes.

Jason Calacanis

Well, Nikesh and George are the 2 guys leading this—Palo Alto Networks, CrowdStrike—and they understand the—

What George told me was there is just a line out the door of people who want this product or service. And if you look at it, Friedberg, like the murder rate, we're sitting here with the lowest murder rate in the history of humanity. It has gone down massively in our lifetimes, but massively over the arc of history.

I think that's what's going to happen with cyber. There are only so many attack vectors, and the remaining attack vectors are just going to be human factors, right, Friedberg? That's always been the case. As we make the software more resilient, the weak link is the secretary who puts her Post-it note with the password there, or the accountant who uses their dog's name plus 1-2-3 for their password, right? That's the historical one.

Okay. Let's... Anything you want to add, Friedberg, as we wrap there? Oh, that's okay.

Chamath Palihapitiya

Why is your bed so messy, by the way? Why is your bed so messy?

Jason Calacanis

Listen, I'll tell you what happened. I'm here in Atlanta.

Chamath Palihapitiya

And also, why don't you have a suite with 2 rooms? Is there just 1 room?

Jason Calacanis

It is. It is just 1.

Chamath Palihapitiya

This hotel only has 1 room?

David Sacks

It's just 1 room. Yes, it is.

Chamath Palihapitiya

Either you're cheap or poor. Which one is it?

Jason Calacanis

I'm cheap. I'm cheap. Here's the situation: I'm in Atlanta for the Knicks game tonight.

Chamath Palihapitiya

You're in 1 room.

Jason Calacanis

Here's what I do. I just want to explain value for value. Some people spend their money on private jets—

Chamath Palihapitiya

Yeah.

Jason Calacanis

—and they spend $30,000 flying to Atlanta. I spend $30,000 on courtside seats. I don't want the suite. I want to put it into the seats.

Chamath Palihapitiya

Well, why don't you do both?

Jason Calacanis

I want to be courtside.

Chamath Palihapitiya

You can do both.

Jason Calacanis

I guess I could do both, too.

Chamath Palihapitiya

I don't understand.

Jason Calacanis

I'm embracing my richness, okay?

Chamath Palihapitiya

If you've already convinced yourself that you should spend $30,000 for courtside tickets—which I think is outrageous, but okay—you've already convinced yourself—

Jason Calacanis

They're more like $10,000 each, but yeah. Yeah.

Chamath Palihapitiya

—a hotel room that has 2 rooms—

Jason Calacanis

Okay, I'm taking notes here.

Chamath Palihapitiya

—probably costs 15% more than what you're paying.

Jason Calacanis

It's 2 times more, but yes. You're right. I'll get the hotel room with 2 rooms.

Chamath Palihapitiya

Okay, or 20% more. It just looks so sloppy.

David Sacks

What is that room, like $200 a night? So you pay $400 a night and you get another room.

Jason Calacanis

No, it's more. It's Atlanta. I'm in the best hotel. The most expensive hotel is $500 a night in Atlanta. It's no big deal, but everything's sold out because all the Knicks people are coming in.

Chamath Palihapitiya

So you're telling me double that would've been $1,000, and you couldn't spend $1,000?

Jason Calacanis

Everything's sold out because the Knicks are here.

David Sacks

So we have to look at your dirty bed.

Chamath Palihapitiya

It's gross.

Jason Calacanis

The bed's not that dirty. Come on. Just deal with it, okay?

Chamath Palihapitiya

It's gross.

Jason Calacanis

We'll take it out in post.

David Sacks

I have a private jet story about flying to Atlanta.

Jason Calacanis

Oh, tell us.

Chamath Palihapitiya

Oh, here we go.

David Sacks

You invited me. You invited me. Okay, so there was some event there. I flew my team there. There were a few people on my plane, and it's kind of a long flight, like 4 hours or something.

Chamath Palihapitiya

Oh, from L.A.? Yeah.

David Sacks

Yeah. So I went in the back to sleep. First, we started the flight, and I had a few bottles of Pappy Van Winkle on the plane.

Jason Calacanis

Ooh.

David Sacks

We started off with a drink, and then I went in the back and fell asleep. I woke up basically when we landed, so I came out and all 3 bottles of Pappy Van Winkle were basically gone.

Jason Calacanis

Oops. Those are like $2,000 a bottle.

David Sacks

No, they're more. These were antique bottles. One of them was—

Chamath Palihapitiya

Yeah, I have one of those from your plane. I have one of those from the old Flying Falcon. Yeah.

David Sacks

Yeah. They were these vintage bottles of Pappy.

Jason Calacanis

They were $4,000. I remember, yeah.

David Sacks

Anyway, you can't even find this anymore. When we landed, they asked me, “Hey, Sacks, how much did it cost for you to fly us to this event?” I said, “About $8,000 in jet fuel and about $12,000 of Pappy Van Winkle.”

Jason Calacanis

Well, you have to fuel the vibes as well as the plane.

David Sacks

Yeah.

Chamath Palihapitiya

Is Atlanta nice? I've never really spent any time in Atlanta.

Jason Calacanis

Atlanta? Listen, last year I went to the Detroit games, and that city was on the rebound. Atlanta has an incredible opportunity to rebound. I'll say it that way. There's a great opportunity there for them to upgrade the city. I went to a Waffle House at midnight last night. There were no shootings. Okay, let's keep moving.

5. Elon Takes OpenAI To Trial

In other OpenAI news, Elon Musk versus Sam Altman—the trial of the century, or maybe the decade—has started. Elon is, of course, accusing OpenAI of breach of charitable trust and unjust enrichment. He's accusing OpenAI of essentially flipping a nonprofit into a for-profit. He's seeking $150 billion in damages, that they revert to a nonprofit, and that Altman and Brockman be removed.

There were some fireworks between Elon and the OpenAI lawyers. Elon leveled up the discussion. He said, quote, “If we make it okay to loot a charity, the entire foundation of charitable giving in America will be destroyed. That's my concern.”

Obviously, there's a ton of interesting nuance here, specifically Greg Brockman keeping a diary where he was journal-maxing his plans, like a Bond villain. The excerpts from his diary include: “Conclusion: We truly want the B Corp. The true answer is that we want Elon out. If 3 months later we're doing B Corp, then it was a lie. Can't see us turning this into a for-profit without a nasty fight. I'm just thinking about the office, and we're in the office, and this story will correctly be that we weren't honest with him. In the end, it's still about wanting a for-profit, just without him.” Yada, yada, yada. Friedberg, your thoughts on this case? Is Elon going to win?

I just don't know why Greg Brockman has a friggin' diary where he's literally documenting this. I love the guy, but what the fuck is he thinking? You're just sitting here at home thinking, “Let me write about the crime I'm committing. Let me write it, and let me record it. And, by the way, let me never delete it.” I don't understand this.

David Sacks

It's not just journal-maxing. It's discovery-maxing. It's smoking-gun-maxing.

I don't get it. I don't get it, man.

Jason Calacanis

Do you guys remember that scene from The Wire where the guy says, “Is you taking notes on a criminal conspiracy?”

Yeah, totally.

David Sacks

Yeah.

Jason Calacanis

This has got everybody in the room.

Totally.

Jason Calacanis

Can we play that clip?

David Sacks

Yeah.

Jason Calacanis

It's like—

Yeah, find that clip, Nick.

Jason Calacanis

What the fuck are you doing, Greg?

Guest

Is you taking notes on a criminal conspiracy? What is you thinking, man?

Jason Calacanis

If you're going to commit a crime, you do not write down the date and time—

—of the crime in your journal.

David Sacks

Well, look, we don't know that it's a crime. Let's not—

Jason Calacanis

Okay, sure. Sacks, do you write a diary?

David Sacks

Don't characterize the crime, but—

Jason Calacanis

Well, yes.

David Sacks

No, I mean—

Jason Calacanis

You're involved in shenanigans.

Chamath, do you keep a diary?

Chamath Palihapitiya

What do you think?

JCal, do you keep a diary?

Jason Calacanis

No. I'll tell you right now: rumination is the path to unhappiness. Nobody gives a fuck about your feelings.

100%.

Jason Calacanis

Writing your feelings down—

100%.

Jason Calacanis

—is only going to make you miserable. Talking to your spouse about your feelings? Just go to a beautiful dinner, sit courtside at the Knicks, and do what I've been doing for 30 years.

Chamath Palihapitiya

Retard-maxing.

Jason Calacanis

Retard-maxing.

David Sacks

Retard-maxing.

Jason Calacanis

As the register goes up, all you have to do is work. Start new projects. 9 out of 10 fail. Place 9 out of 10 bets. One wins and you're golden. Go sit courtside at the Knicks game.

Keep going. Life's too short.

Jason Calacanis

And just keep—

David Sacks

Yeah.

Jason Calacanis

—moving forward. Don't write anything down. Period. Full stop.

That's good advice. The biggest surprise to me was that this guy's got a diary. I don't know anyone who has a diary. I've never heard of this. So anyway, that was shocking.

Jason Calacanis

Move forward.

Besides that, I have no view on what's going to happen with the case or what the judge will do.

Chamath Palihapitiya

I have no comment on the case either. I think it's weird that Polymarket hasn't budged, even as all of this discovery has been published. It's effectively at 42% or 43% that Elon wins. One of the friends in our group chat said what may just happen is that Elon technically wins, and he's just credited back the $40 million. So maybe that's what this poll is front-running.

Hmm.

Chamath Palihapitiya

On a totally separate note, Jason, I know you say it as a joke, but this idea of just keeping moving forward and not ruminating, I think, is very good general life advice for everybody to follow.

Jason Calacanis

The modern-day therapy industrial complex and the medication industrial complex, I believe, are ruining people's lives.

It pivots around rumination.

Well, it does pivot around rumination.

Jason Calacanis

Yes.

That is the gateway drug to all these things.

Jason Calacanis

Yep. Talk about your problems. When these people go to therapy, you ever hear these people? Howard Stern's like, “I've been in therapy with the same person 2 or 3 days a week for 40 years.” I'm like, okay, what's the incentive for the therapist to stop charging you $1,200 an hour? There is none. Then they lose a revenue stream; they lose a customer. It's all a giant fucking fraud.

Chamath Palihapitiya

I wouldn't go that far. I do think that there's a lot of value in untying some of these Gordian knots that people have because of how they grew up, but there's a difference between that and being specific and just randomly ruminating, because I don't think there's a lot of productivity that comes of that.

Jason Calacanis

If you've got an acute issue, like trauma in your life, yeah, sure, unpack it, figure it out. I'm just talking about this never-ending self-improvement, ruminating thing. But getting back on topic here, Sacks, we're talking about a jury, I believe, in Oakland.

Chamath Palihapitiya

No, but it's a bench trial. This is important. It's a bench trial where the jury is advisory in its capacity.

Jason Calacanis

Yes.

Chamath Palihapitiya

But ultimately, that judge—she will make the final call.

Jason Calacanis

And she'll do the damages. So is this a case, Sacks, where we've got a Bay Area judge, and we've got Elon, who's considered a bit right-wing, and people don't all agree in that area in terms of his politics? Then you have this New Yorker story about Sam Altman, and people finding out that so many different people feel they got screwed by him. You put these 2 things together, and it's impossible to handicap where this turns out. Sacks, your thoughts?

David Sacks

I don't think this is about politics. I guess you could argue that what Elon is seeking, which is to protect the charity, is, if anything, a left-coded sort of principle. Although I don't really think it's left versus right. Look, I don't want to take sides on this trial. I'm just watching like everyone else. The last time I weighed in on some Elon litigation, I got deposed—

Jason Calacanis

Ugh.

David Sacks

—for 6 hours. Remember that?

Jason Calacanis

Yeah.

David Sacks

Because they just assume that somehow I know something. I've never talked to Elon about the case. I don't know anything about it. I'm going to see what happens like everyone else. Now, one thing I will say, having just read some of the coverage, is that apparently the company at some point did offer Elon shares in the company, but he thought that there was something kind of icky about it. Do you remember this?

Jason Calacanis

Yes.

David Sacks

At one point, I said on our show, when this dispute started happening but before it became a court case, “Look, if OpenAI at a certain point decided they had the wrong structure, they should've just gone and done a make-right with Elon, and he should've been a shareholder on the cap table.” What I didn't know is that apparently they did try to do something like that, but Elon turned it down because he didn't want the entity to remain a charitable entity.

Jason Calacanis

Yes.

David Sacks

See what I mean?

Jason Calacanis

He had a principled view of it, according to the reports. He was like, “No, we're trying to save humanity, and then you're giving the keys to the kingdom to Microsoft.” That's all come out. I also have not talked to Elon about any of this, but my guess is, like most of these things, there'll be some sort of settlement or something here. But maybe he takes it to the mat. Who knows?

Judge Rogers, who's doing this, is a 61-year-old Obama appointee. Politics has played a role. Sacks, they have had to tell the jury, like, “However you feel about these individuals politically, whatever, please put that aside.” Of note is that she oversaw the Epic Games v. Apple trial over App Store exclusivity and ruled in favor of Apple, with some caveats, that they don't have a monopoly, et cetera, et cetera. So this is going to be a really interesting one.

I think the worst-case scenario for OpenAI is that they have to unravel this somehow, and that would delay the IPO and cause chaos among shareholders. I guess the best case is some sort of settlement, and if Elon put the first $40 million or $50 million in, he's due 10%, 20%, 30% of the company after dilution. All right, let's keep moving through the docket. Lots more to discuss, and good luck to everybody in their lawsuit and those of you betting on the market.

6. Hyperscalers Bet Trillion On AI

All right, big tech smashed their earnings on Thursday. Google, Microsoft, Amazon, and Meta all reported. I don't know why they do this on the same night, folks, but they do, and performance was spectacular. It was great. However, the CapEx announcements were really the story here. Let me just queue this up and show the chart: $725 billion in CapEx guidance in 2026 from just 4 companies—Amazon, Microsoft, Google, and Meta. Amazon is leading the pack with $200 billion, $190 billion each for Microsoft and Google, and $145 billion for Meta.

You add Grok, you add OpenAI, and some other players to these plans, and we haven't heard from the new Apple CEO yet, but he's going to be taking over, and he's going to have some plans here, I'm sure. We are going to see a trillion dollars in build-out over the next year. I don't know if this is even possible, but this is all being driven by AI and cloud computing.

Google Cloud, which includes the Google Suite, grew 63% year over year. Let that number sink in: 63% on $20 billion in revenue. That's in a quarter. Microsoft Cloud, which includes Azure, Windows Server, and SQL Server—they bundled some things together there to get the number to go up—grew 30% on $34.7 billion in revenue. Amazon Web Services, the original cloud, grew 28% on $37.6 billion in revenue. That's a bit of a pure play; it just counts Amazon's web services.

Obviously, these are all moving to neoclouds. These are all serving AI jobs and tokens now. They have a massive customer base, and the customers, from the smallest startups all the way to the biggest frontier models, cannot get enough compute, and it is going to the bottom line.

But this is shrinking Chamath's cash flow massively. These were free-cash-flow machines, the largest money-printing machines in the history of humanity. But they are giving up free cash flow, stock buybacks, and dividends, focusing on infrastructure instead. Amazon's free cash flow is down 97%. Google, Microsoft, and Meta are down 12%, 12%, and 8%, respectively. Your thoughts on this free-cash-flow deluge ending and the massive, massive investment we're seeing in CapEx, Chamath?

Chamath Palihapitiya

I think we're seeing a very important structural shift in the capital markets. I think the last 20 years, it's been that the Magnificent 7 just kind of ran away with it, that these big companies got bigger and bigger, and they absorbed all of these investment dollars. The biggest reason was that they had these asset-light business models, right? You just build some more software, and it has all this leverage, and it all just kind of worked.

Except maybe for Amazon, because it needed physical infrastructure for warehouses, delivery, and whatnot. But by and large, it was a very asset-light investment cycle. Now, all of a sudden, the pendulum is swinging violently in the other direction. And there's something that I think people misunderstand, which is, as it moves back to these asset-heavy infrastructure investments, the hyperscalers are signing checks that—I mean, I suspect their bodies can cash, but there's a world in which they can't. I'll give you an example. You know, when Microsoft convinced the owners of Three Mile Island to turn their nuclear site back on—

Jason Calacanis

Yeah.

Chamath Palihapitiya

Do you know what their forward purchase agreement was? It was for more than 2x the prevailing spot rate for energy. More than 2x. The problem is that’s not for an enormous percentage of their overall energy needs.

So if you play that out and you think these 5 or 6 companies all of a sudden are not just spending, Jason, $700 billion a year of CapEx, which they are, but then, from an operating cash flow perspective, they’re going to be spending 2x the prevailing spot rate because they just want guaranteed demand into the future, where’s all this cash going to go? It’s not going to go to the shareholder, and it’s not going to stay on the balance sheet.

These companies will now get levered. They’re going to get highly sophisticated around the financial engineering. They’ll have more debt. They’ll have all kinds of different vehicles, term loans, revolvers, and all of this stuff. And so they’re going to look like this big, bulky industrial business in 5 years. I’m not sure that there’s a good valuation case to be made at that point.

And so I think it may be simpler—and this is what I tweeted—to just follow the dollars. It’s like $1 trillion a year going out of the hyperscalers. Where is it going? Just follow those dollars and buy those companies, because those companies are already underpriced.

Jason Calacanis

This is obviously reminiscent of something we all experienced. Nick, can you pull up the Cisco chart I just sent you and put it at max? We had a massive build-out of the infrastructure of the internet in the late 1990s and into 2000. What that caused was a lot of aggressive companies to do massive amounts of spending, and a lot of retail investors to embrace these stocks, like we’re seeing with people trying to get into these private companies.

And Sacks, look at the 2000 peak of Cisco. This is the most extraordinary chart ever. It took them 25 years to get back to that peak, and they had lost 2 decades. We had a massive amount of fiber that wound up getting bought. We talked about that a couple of years ago on the program.

But there’s something for you to build off of here when you look at this massive infrastructure. Do you think it’s going to be Cisco Systems all over again—WorldCom, et cetera?

No, I really don’t. The issue we had in 2000 was dark fiber. You had all this infrastructure being built out, and it wasn’t being used. There are no dark GPUs today, as you know Brad Gerstner likes to say.

So what’s driving the CapEx now is the voracious demand for compute and tokens, and that demand is now pulling forward this additional investment in infrastructure. I think what’s happened here is that the bull thesis for AI just got validated in a single afternoon.

You got Microsoft Azure, Google Cloud, Amazon Web Services (AWS), and Meta all basically exceeding expectations and exceeding guidance in terms of where their cloud revenue would be, and therefore how much they’re going to reinvest in CapEx. This year, I think we were supposed to have $660 billion of hyperscaler CapEx, up from $350 billion last year. I think the new estimate is now going to be over $700 billion.

So, again, it’s more than 2% of GDP. This is a huge tailwind to GDP. There’s another article saying that, I think, in the last quarter, AI was 75% of GDP growth. And by the way, this is just the CapEx part. This is the physical infrastructure. This is not the economic impact of the tokens that are generated inside the token factory. This is the building of the factories.

How do those tokens get used? As we’re seeing, they’re being used not just to do research or answer questions, but to create code. We’re seeing this explosion of productivity in software development, and we’re seeing an explosion of bespoke software being created. That’s going to accelerate every part of the economy.

Every business that now wants to get code will be able to get code for the first time. Before, they couldn’t even hire the engineers they needed to generate it. Now they will be able to. So that is a huge unlock of productivity across the economy.

7. Agents Need Supervision

Then you’re getting into these new use cases, like the co-working use cases and agents, right? The workflow automations that are happening. It’s still early. I don’t believe that this is going to replace humans. We had, in the past week, that crazy case of an agent deleting a production database in 9 seconds—

David Sacks

So great.

—because of a bug. Look, what that said to me is that it’s not that agents aren’t valuable—they are valuable—but they have to be supervised. This idea that you’re just going to be able to automate all the jobs away is a massive amount of hand-waving over the real technical problems and issues.

The agents have to be supervised. Someone has to be accountable. It’s not going to be the CEO. The CEO doesn’t want to be accountable for thousands of agents. You need people—

Jason Calacanis

Yeah, despite what Jack Block said. Six thousand direct reports is a great goal, but it’s not realistic.

Yeah. You’re still going to need—

Jason Calacanis

Yeah.

—you need—

Jason Calacanis

Yeah.

—you need IT people who are savvy, who can supervise this and make sure—

Jason Calacanis

Yeah.

—it’s working. They have to be accountable to the CEO. Someone has to drive the productivity. It’s like Balaji always said: AI is not end-to-end; it’s middle-to-middle. You have to have someone do the prompting, and you have to have someone do the validating. I would add supervision and accountability.

So anyway, the larger point, though, is that I don’t think there’s going to be this huge job loss associated with this productivity boom that we’re going to get. In fact, I think what’s actually happening now is that AI is becoming synonymous with the American economy.

The fact that it’s generating 75% of GDP, you have this CapEx explosion, this energy explosion that feeds it, and, again, this is just the beginning of the applications being unleashed by these new token factories. I think it’s all a very, very positive thing.

And all these doomers who are trying to throw a wet blanket on it or are constantly scaring the daylights out of people—what do they want the American economy to do, just stop? They just don’t want any progress? When you talk about stopping AI or halting AI progress, what you’re really doing is stopping the American economy now.

Jason Calacanis

Yeah.

You’re basically saying you don’t want economic growth. AI is now synonymous with the growth of the American economy. If there’s no economic growth, there’s not going to be money to pay for all the social programs, there’s not going to be money to pay down the national debt, and there’s not going to be money to build up our national defense—all these things we want to spend money on.

We have to have a vibrant economy, and that is now synonymous with AI. I know that AI may not be popular—I see those polls—but having a strong economy is popular—

Jason Calacanis

Yes.

—and I believe that those things are now synonymous.

Jason Calacanis

It’s almost like there was some architect or czar who set up the chessboard in the first year of this to make sure that it was ultra-competitive. Well done.

You know, President Trump set the table on this.

Jason Calacanis

Absolutely, with some good advice, I think, maybe. Friedberg, your thoughts?

It’s always good to have good advisors.

Jason Calacanis

It’s always good to have good advisors. Absolutely. Absolutely.

No, but look, I’ve said it before: The president just wants America to win.

Jason Calacanis

Literally, there are people who, if we were looking at this 100 years ago, would be saying, “Yeah, you know what? We shouldn’t build the highway system,” or, “We’ve built the highway system. Let’s stop building the highways.”

David Sacks

No, the highway system was funded by the federal government. There was no competition. It was the most expensive, on an inflation-adjusted basis—I think it was the most expensive project in U.S. history.

Jason Calacanis

Hmm.

Yeah.

Jason Calacanis

And the railroads before that. You can’t stop these things. They have to keep going. It’s an interesting point: There is so much demand for the resource of tokens, of intelligence, Friedberg, and it’s quite different from the fiber situation, as Sacks correctly points out, where we built all this, but we didn’t actually have an application.

Here, the application is pretty well known, and you’ve got a large number of people and businesses who are trying to vibe-code their way to success, trying to push this stuff. We had an interesting story referenced earlier in the show where Claude ate somebody’s homework. This is the nightmare of all nightmares.

Guest

You gave your AI permission to overwrite code in the internal file system? Were you going to tell me about this?

No. I thought that was the company policy these days.

Okay. Well, your AI just failed epically.

David Sacks

That's unclear. It's possible that Son of Anton decided that the most efficient way to get rid of all the bugs was to get rid of all the software, which is technically and statistically correct. But artificial neural nets are sort of a black box, so we'll never know for sure.

Jason Calacanis

How did they get that so right, Sacks? Five or 6 years ago, artificial neural networks were a black box, so I guess we'll never know. But technically, it was correct. Friedberg, when you blow up a whole system with your vibe coding—which you were absolutely showing off in front of Jensen a couple of weeks ago about how much code you're pushing—who are you going to blame? Are you going to take responsibility yourself? Are you going to blame Claude or Cursor? Who are you going to blame when you blow up the entire stack over at Ohalo? Who do you blame, Friedberg?

Sorry. Blame Dario.

Jason Calacanis

You blame Dario. Okay, that's what I thought. That's the correct answer. Correct answer: blame Dario. He's the one who says it's a doomsday machine. Come on the pod any time, Dario. 17 invites.

On the pod any time, Dario.

Jason Calacanis

I might have invited the guy 17 times. He wants nothing to do with this podcast.

David Sacks

Actually, let me speak to that.

Jason Calacanis

Please.

David Sacks

I think there's maybe a misperception that this error occurred because of, quote unquote, “AI scheming.” Like, in that video, the AI decided that the best way to get rid of bugs was to basically eliminate the codebase. This is kind of like the “AI's going to turn the world into paperclips” type of thing, where somehow it'll mis-scheme.

That's not really what happened here. This is just a case of old-fashioned bugs occurring at an edge case. You've got the fact that this API was not designed for permissioned usage. You've got the fact that a credential was left lying around. Probably it should not have been. There was a perfect storm that caused the agent to do something without quite understanding what it was doing.

I think that if there's a systemic problem here, rather than just a random edge case, it's that AI still doesn't know what it doesn't know. A human would stop before deleting a production database and say, “I'm about to do something really serious, really destructive. Am I sure I want to do this?” A human would have stopped and said, “Wait a second. I need to be more confident in what I'm doing before I take that action.”

AI still has this issue where it can be overconfident. This is where the hallucinations come from: it doesn't know when it should have low confidence in its output. But this is why it has to be supervised.

Jason Calacanis

The longer the time horizon for a task, the more likely it is to go off the rails.

David Sacks

It'll drift.

Jason Calacanis

Adrift, exactly. And this is why I think people are starting to realize that this idea of eliminating all software developers was the peak of inflated expectations.

Yes.

David Sacks

Right? There was actually a really good tweet on this by Aaron Levie, who has the right take on this. Aaron retweeted Matthew Yglesias, who sardonically tweeted, “Five months in, I think I've decided I don't want to vibe-code. I want professionally managed software companies to use AI coding assistance to make more, better, cheaper software products that they sell to me for money.”

Jason Calacanis

Just lower your prices; don't make me vibe-code. That's the translation.

David Sacks

Yeah. Rare win for Matthew Yglesias there. Anyway, Aaron Levie then says, “Agentic coding is a huge boon for software developers that want to get more done, and it's fantastic for anyone curious to learn how to start coding. What it's less great for is casually building complex software that you have to maintain on an ongoing basis and take all the risk for. Upgrades, maintenance, keeping up to date with the latest security issues, bugs, cybersecurity—those are taxes on most knowledge workers who aren't familiar with the system.”

Jason Calacanis

It's not a tax; it's a huge risk.

David Sacks

Yes. It's a risk that has to be managed.

Jason Calacanis

It's a risk.

David Sacks

And if you don't know how to—

Jason Calacanis

People will get fired because there will be some public companies where some goofball tries to vibe-code their way out of something, and they're going to torch the enterprise value. It's going to be glorious to watch because we're all going to laugh and realize that was stupid and should never have happened in the first place.

I mean, there is a chance that this improves to the point that it passes through the trough of disillusionment and becomes superproductive, and you'll be able to get an agent to do reasonable things without deleting your dataset. But we have a way to go.

Here is your tech adoption chart. Basically, you have a technology trigger, you have the peak of inflated expectations, you go into the trough of disillusionment, and then the slope of enlightenment. Eventually, it becomes de rigueur and it's an opportunity.

Hey, Friedberg, you have become Retatrutide-curious.

Chamath Palihapitiya

And also tell me about Reta, Friedberg, because I want it. I want to get on it.

Jason Calacanis

I have a friend who has some advice as well.

Chamath Palihapitiya

Over to you, Friedberg.

8. Retatrutide Sparks Peptide Craze

The coverage is coming out of this phase 3 clinical-trial data release that Lilly put out last month. So everyone's going crazy over the data, which continues to show pretty amazing results.

Unlike tirzepatide, which is kind of Lilly's main product today, it's a dual agonist. It's got 2 peptides in it that bind to different receptors, the GLP-1 and GIP receptors. This other one also binds to glucagon, which is a third receptor, and that glucagon receptor-binding peptide causes the cells to increase their metabolism, which actually accelerates fat-energy consumption over what would typically be muscle-energy consumption.

It's more likely to burn up fat early on, which causes quicker fat loss, but also reduces muscle loss. Some of the other data that's now coming out shows non-HDL cholesterol down 27% and triglycerides down 41%.

Jason Calacanis

Liver fat down 80%.

There's an 80% reduction in liver fat. A1C drops from 7.9% to 6% in 40 weeks, which is amazing, by the way. If you're diabetic and your A1C drops that much in a couple of months, it's literally a lifesaving product.

The average user in this phase 3 trial saw their weight decline from 214 pounds; they lost 37 pounds. That's compared to 6 pounds on placebo in 40 weeks. There were modest side effects: 20% of people felt more nauseous than the people who were on the placebo.

There are a lot of other separate studies being done now that are showing significant reductions in inflammatory signaling molecules. Systemic signaling of “Hey, cells are in distress” triggers this kind of inflammatory process that can cause a lot of other damage to your body. It can accelerate aging. One of the other conversations is that Retatrutide might actually be a de-aging drug as well.

Jason Calacanis

Hercules, Hercules, Hercules.

Yeah. They're rapid.

A lot of the studies, by the way, are done on the very high dose, the 12-milligram dose, but you could probably get this thing dosed down to 2 milligrams and still see a lot of the anti-inflammatory, maintenance, and other benefits. I'm no doctor, but people are going nuts over this being more widely useful than just for clinical obesity or type 1—

Jason Calacanis

When will the FDA approve it?

—or type 2 diabetes.

Jason Calacanis

What's the projected date, Friedberg?

Chamath Palihapitiya

2027. Mid-2027.

That's what they're saying. Could happen sooner. The data's in. The FDA will take its time to evaluate it, but I think, given the way this is all looking, it could happen sooner, or sometime later this year.

Jason Calacanis

SWIM, Chamath, SWIM, said it's incredible and that it's living up to the hype in their experience.

Who?

Jason Calacanis

SWIM.

What is that?

Chamath Palihapitiya

What is that?

Jason Calacanis

Someone Who Isn't Me. SWIM. This is a Reddit term. Someone who isn't me—who has a guy. SWIM has a guy, has cycled on Retatrutide, does push-ups, and says muscle gain has been spectacular, with no muscle loss and a lowering of fat.

Chamath Palihapitiya

If you go on X and just search “Reta,” it's incredible. You see these 65-year-old guys who go from a dad bod to looking like an incredibly ripped athlete in weeks, and I'm shocked.

For me, I don't need that help per se, but my liver health is important to me, and my cardiac health, because I'm South Asian. It just looks like a wonder drug. I can't wait.

When you starve your body, when you turn off the appetite, which is the GLP-1 agonist function, normally your body goes into this kind of mode of starvation, and you have this process by which your body tries to generate energy from your existing cells. Because muscle is much denser than fat, you can have a favoring of muscle tissue being broken up over fat tissue.

Chamath Palihapitiya

But this new agonist—this glucagon agonist that they put into Retatrutide—favors fat burning over muscle burning. That can drive short-term use at a low dose for people to cut weight, maintain muscle, and get ripped. That’s why a lot of people in the fitness community are talking about, “Hey, I want to get access to this and get on it for a while.” So you’ll see a lot more hype, probably in that community, as well as around all the health effects.

It just feels like we’re about to have an absolute avalanche of peptides to choose from.

Chamath Palihapitiya

In November 2025, Lilly cut a deal with the Trump administration—I saw this—to drop the price on tirzepatide pretty significantly. I think it’s around $50 on Medicare.

Jason Calacanis

$50 for Medicare, yeah.

Chamath Palihapitiya

Yeah.

Yeah.

Chamath Palihapitiya

That’s a pretty cheap price point, but it starts to make sense. As you think about the portfolio of Lilly products, you get tirzepatide for $50, but if you want to upgrade and get Retatrutide, that’s the high-premium product, and that’s where they’re going to start making all this money.

Jason Calacanis

That’ll be the Mercedes to the Honda.

Chamath Palihapitiya

Because if I’m Lilly and I’m sitting there looking at this data coming out, I’m thinking, “My God, people will pay for this.” That starts to become sort of like the upgrade to the BMW or the Model S Plaid, if you will.

Yeah, tirzepatide is like the 1-bedroom, messy-bed hotel room.

Jason Calacanis

Yes, and the other one’s the suite.

Retatrutide is like the 2-bedroom suite.

Jason Calacanis

Friedberg, guys, had his own personal Super Bowl. You see me getting ready for the Knicks’ playoff season. I get my courtside seats. Friedberg had the equivalent experience: He went to the Supreme Court in order to hear them talk about chemicals. This was a big deal for him—the Supreme Court coming together.

Oh, Monsanto. Was it the Monsanto case?

Jason Calacanis

Yes, the Monsanto trial happened in the Supreme Court. He got courtside. He went to the Supreme Court and listened in the building.

Chamath Palihapitiya

Have you guys ever seen a live Supreme Court hearing?

Jason Calacanis

No.

No, I’d love to, though.

Chamath Palihapitiya

Sacks, have you been?

David Sacks

No, I haven’t, actually.

Chamath Palihapitiya

Honestly, I think it was one of the most amazing experiences I’ve ever had. There was a massive protest out front. We went through the marshal’s office to get in. That building—you walk in, and it’s sacred. It’s all marble, and you’re not allowed to talk. You have to be super quiet when you’re in the building. They keep going, “Shh, shh, shh,” like you’re in some quiet library.

It’s like people treat it with this level of sanctity and respect.

Respect. Yeah.

Chamath Palihapitiya

There is no politics here. There is no freedom of speech. This is the court. When you come into this court, the justices tell you how you will speak, how you will behave, what you will do, and you will not speak unless spoken to. You put all your stuff in a locker, go up the stairs, and go into the courtroom.

The courtroom—it’s just so amazing being in there. They have this amazing marble frieze above the justices that has some of the great people of human history, Moses and these kinds of amazing historical figures. Below them are the 9 justices. If you guys haven’t watched the case, you can listen to it online. They’re all online. It’s worth listening to.

Hold on. I have questions. Does Roberts sit in the middle because he’s the chief? And then do all of the right justices sit on the right?

Yes.

And then do all of the right justices sit on the right?

No, they’re mixed. I don’t know the exact seating, but they’re mixed.

David Sacks

Probably based on appointments to the court.

Chamath Palihapitiya

Yeah, I think that’s right.

Seniority.

I think that’s right. Then it kind of goes out from the middle, with Roberts in the middle. Roberts occasionally will name the justices and say, “Hey, do you have a question?” if no one’s talking. Otherwise, the justices jump in with their questions when they want.

Honestly, watching this is like watching LeBron James play basketball. These lawyers are so mind-blowingly impressive on both sides that you just sit there, and I was in awe. I felt like my energy was completely sapped from me at the end of this process because you are so engaged and so caught up in the way these guys are thinking and talking.

David Sacks

Right, at a lower court. There are questions of fact.

Chamath Palihapitiya

That's right.

David Sacks

And questions of law. The facts have already been determined by the lower court. The Supreme Court is just ruling on questions of law.

That's right. They have a full briefing with the full history of the case. Remember, they only hear 2 cases a day, so they're 1 hour each.

There are only a handful of cases that are selected.

Hmm.

So you go in, and they only do it Monday, Tuesday, and Wednesday during the last 2 weeks. They only hear cases from October to April.

Chamath Palihapitiya

Wow, so you're really on a shot clock to make your case.

You're on a shot clock. It's 30 minutes a side, and then the justices ask questions.

So this was Monsanto and Roundup, right? What was the law that was being debated?

For years, the regulatory body, the EPA, has set the label for pesticides. Does this cause cancer or not? What are the warnings? This can be damaging for birth defects, pregnancy—all the things we're used to seeing on labels when you buy a chemical product.

The EPA, in its regulatory authority, determined that Roundup does not cause cancer. When you sell a pesticide, you first have to register it with the EPA, get it approved, and then the EPA gives you a label. The label is written by the EPA. It says exactly what you're supposed to say. In this case, it said all this stuff, but it doesn't say cancer because they determined it does not cause cancer.

I'm not going to debate whether or not it causes cancer, but that's the case that was made: the EPA is the regulatory body under a federal act called FIFRA, the Federal Insecticide, Fungicide, and Rodenticide Act. That's where the EPA is given its regulatory authority to put the label on these products. All of the cases that have been lost have been state failure-to-warn cases.

To date, Bayer, which now owns Monsanto, has paid out $10 billion in these lawsuits, reserved $10 billion on its balance sheet, and has 90,000 cases still outstanding in the courts.

Wow.

Chamath Palihapitiya

90,000.

Wow.

This one case got appealed up to the Supreme Court. Last year, the White House solicitor general asked the Supreme Court to take the case. If the solicitor general steps up and asks the Supreme Court to take a case, it's more likely the case gets taken. So the White House said, “Please take this case. We need to have federal preemption,” meaning the federal government has the right to set the label.

All of the cases that have been lost and are being adjudicated are in state courts, where the state has a law—like in California—called a failure-to-warn law. It means that if a manufacturer knows that a product carries a risk, you have to warn the consumer.

The lawyers have been arguing that Monsanto or Bayer knew that this product caused cancer and didn't warn the consumer. They've been winning cases, they've been losing cases, but they've won enough cases that this has now become a multidecibillion-dollar problem.

The argument is that the EPA says it doesn't cause cancer, and it has federal preemption, so the EPA has the right to determine. That's the first argument.

Then the other attorney came up, and this guy was literally like watching LeBron James. Going in, we were like, “Oh, 6–3, Bayer is going to win.” Then the other guy came up and said, “Well, hey, you guys overturned the Chevron doctrine last year.” Do you guys remember that case?

Mm-hmm.

When the Chevron doctrine was overturned, it basically said that the federal agency no longer gets to decide. It has to be a direct reading of the law. Dun, dun, dun.

Now he's saying the states should have a right to read the law themselves. They shouldn't have to just defer to the EPA, and that's what this will come down to.

At the end of it, we were like, “Oh my God, this could be a 50/50 coin flip, 5–4 either way.” Going into it, we were trying to say, “Hey, maybe this could be 6–3.” Honestly, the whole experience was incredible. The case is interesting.

Chamath Palihapitiya

These are very complicated matters. How are these people able to make a fulsome argument in, like—one side gets 30 minutes, the other side gets 30 minutes, there's a little Q&A, and then you're done in an hour?

There's this whole art and science, and Sacks, you're probably familiar with this, of how you distill a Supreme Court case down in the briefing document. What is it you're petitioning the court on? You try to distill it down to the exact legal interpretation you want the justices to rule on.

Jason Calacanis

And this is oral arguments, yes?

Oral arguments.

Jason Calacanis

Yes.

Just a discussion.

Jason Calacanis

Yeah.

Then the justices jump in, and all they're doing is asking the lawyer questions—one lawyer at a time, one side and then the other side.

The solicitor general came up in the middle, made a few comments, and asked her some questions from the White House, and then she sat down. The 2 sides went back and forth. It was 30 minutes of Q&A each on that 1 specific legal question.

Ketanji Brown Jackson said, “But what if, after the EPA issued the label, they found out information that it does cause cancer? Shouldn't they update the label?” And he's saying, “No, they're not allowed to. They can only issue the label the EPA says.”

He also says, “It's a criminal case if they find out that it does cause cancer and they don't report it to the EPA.” Then she's saying, “What if the EPA doesn't act? Shouldn't the states have a right to protect their people?”

Those are the legal arguments, the discussions that are going on in all of this. There are interesting implications, which is that, fundamentally, if the states get to interpret federal law and ignore federal regulatory bodies, it opens up a whole new can of worms. All the states can start to ignore federal regulatory bodies like the EPA, the FDA, the USDA, and on and on and on. So the whole case has a bunch of really interesting implications wound up in it.

When you hear these guys, and they're just talking, Chamath, about that exact interpretation of the law, that's what this comes down to. It's not the actual case that matters.

Jason Calacanis

And after this, Sacks, they go through oral arguments, and then they have a private conference where they'll write their papers and give their final judgment, yeah? Sacks, is that the process?

Yeah.

David Sacks

I think what happens is that I guess there's some discussion that happens behind closed doors—

Yes.

David Sacks

—and they figure out where the majority is, and then the chief gets to assign who writes the opinion for the majority.

Yeah. In that meeting, nobody is allowed in. In fact, you have a double-door system where, if anything needs to come in or out, you have to knock on the door. You're let into this antechamber.

Oh, is it an airlock? It's an airlock.

Chamath Palihapitiya

It's effectively an airlock. I don't know if you were there, Jason, but we had Ted Cruz come to play in the poker game.

I wasn't there for that one.

Ted Cruz clerked for William Rehnquist. If you want to have an incredible dinner, ask him about the Supreme Court and Bill Rehnquist. He's a real student of the Supreme Court, and it just makes the Supreme Court, Friedberg, to your point, sound like the most incredible body that's ever been created anywhere.

More than the White House, more than the Capitol Building, more than any of these other big agencies, this place has these ways that people operate. It's almost like being in England. The security is so different. They kind of stand there in the court, and they all exchange places every 20 minutes. It's very coordinated. They're dressed very differently from any other security.

Jason Calacanis

How many people are in the courtroom listening?

Maybe 150, I would say.

Jason Calacanis

How do you get the tickets? Are they on StubHub or something?

I actually think everyone is a guest of a clerk or someone who works at the court. I don't think it's very publicly available to get in there.

Jason Calacanis

You can't line up? There's no lineup?

I don't know if there's a lineup. This was a connection through the Chief Justice.

Jason Calacanis

I know for the Elon case—

We got in through the Chief Justice. He gave us the pass.

But that's not the Supreme Court. That's not the Supreme Court.

Chamath Palihapitiya

At the Elon versus OpenAI case, I think you can line up, and then the judge gave about 30 tickets to the press that he had selected.

Jason Calacanis

No, but I think there's a lineup for the Supreme Court as well. There's some public access that they're committed to.

It did not look like anyone from the public was in this court.

Jason Calacanis

Maybe it's a lottery or something.

Everyone is dressed respectfully.

Jason Calacanis

No.

David Sacks

Yeah. And I would just say, enjoy it while you can.

I think the Supreme Court is one of the last highly functional institutions in the United States, and—

100%.

David Sacks

At some point, we’re gonna have 13 or 21 or some crazy number of justices up there.

Jason Calacanis

They should put it in arenas, Sacks—

David Sacks

The court’s gonna get packed—

Jason Calacanis

—and get jerseys.

David Sacks

Yeah, the court’s gonna get packed.

Jason Calacanis

And everybody show up with their jerseys.

David Sacks

It’s gonna be row after row of justices there.

Jason Calacanis

Yeah.

David Sacks

And so enjoy it while it’s still—

Jason Calacanis

It’d be so great.

David Sacks

—in its current—

Jason Calacanis

Can you imagine?

David Sacks

—in its current form.

Jason Calacanis

Sacks—

David Sacks

Yeah, I hope you’re wrong.

Jason Calacanis

Sacks, can you imagine showing up with jerseys with the justices’ names on them, having sections, and somebody selling Cracker Jacks? This could be—

Chamath Palihapitiya

Like the Idiocracy version of the Supreme Court.

Jason Calacanis

The Idiocracy version, exactly.

David Sacks

The popularity of the court really depends on whether it’s issuing decisions that people agree with. That’s what it comes down to. If you ask people whether they like the Supreme Court or not, it really just depends on whether they agree with the decisions that are coming out—

Jason Calacanis

Short-term recency.

David Sacks

—as opposed to the process of the decisions, how well argued it is, and all these things that you’re pointing to.

Actually, I just checked the numbers. The court is relatively popular right now. I think it got as low as 35% in the 2024 Gallup survey, but I think it’s back up to 44% to 50% favorability, which for something that’s involved in politics is relatively high, right? You look at Congress—

Chamath Palihapitiya

Yeah.

David Sacks

—or any particular politician, they’re gonna be lower than that, typically.

I just felt so assured of the institution when I visited and saw these guys interact and behave—the way they behaved and the process. Man, what an amazing—

David Sacks

Yeah.

Chamath Palihapitiya

—country. Yeah.

David Sacks

The reason I say what I say is that there was an interview with James Carville recently. Did you guys see this?

I saw that.

David Sacks

He said—

I saw that, yeah.

David Sacks

He said, “Look, when we get power, we’re packing the court.” He says—

Hmm.

David Sacks

“We’re not gonna worry about it. And we’re gonna make—”

Yeah, he said, “Get to 13,” right? He said, “We’re gonna make—”

David Sacks

Yeah, I think they’re gonna go from 9 to 13, and then they’re gonna create some new states and all the rest of it. So that’ll be that.

Jason Calacanis

I don’t know why anyone would do that.

David Sacks

Enjoy it while it lasts.

Jason Calacanis

Enjoy it while it lasts.

David Sacks

Enjoy it while it lasts.

Chamath Palihapitiya

Way to end on a high note.

Jason Calacanis

It’s the end of the empire.

Chamath Palihapitiya

That’ll be that.

Jason Calacanis

By the way, I was correct. There is an online ticketing lottery for the Supreme Court, so we can all sign up, and you can get a four-pack of tickets. We should talk to Howard Lutnick. Maybe he can make this an auction. We could get a revenue stream for the U.S. We could sell 10 of the tickets as courtside seats for 20 grand.

Chamath Palihapitiya

Jason, you’re exactly what they’re trying to protect against happening to the Supreme Court.

Jason Calacanis

Exactly. How can we—

David Sacks

Yeah, yeah.

Jason Calacanis

How can we monetize—

David Sacks

Yeah.

Jason Calacanis

—the Supreme Court?