Trump向美联储出手、美国与Intel交易、破产潮为何上升、OpenAI长寿突破

Oh, look at that. Sorry, guys. I got a little visitor—the moose. Hey, buddy. The moose has landed. Oh, he’s up on my desk. Where’s your Uncle Jason, huh?

Let’s see that handsome face. There he is.

There’s the moose. The moose is loose. So, want to do a side-by-side?

What a handsome visage. There it is. There’s no good stuff.

That’s a stately animal.

Here, buddy. You ready for branch time? All right, get him out of here. Get him out of here. We’ve got to show the position.

[Music]

We’ll let your winners ride.

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

All right, everybody. Welcome back to the number one podcast in the world, the All-In podcast. We’re back. We’re back. It’s the original crew. You got your classic. You got your classic. And speaking of a classic, Friedberg’s been tearing it up. What an amazing event we’re going to have. September 8th and 9th in Los Angeles, the fourth annual All-In Summit, allin.com/events. And now comes the incredibly awkward moment in the program, David Sacks, where we see Friedberg attempt to do an ad read. I’m going to let him just try to do the first one, and then I’ll interrupt him and say, "Let a professional handle it." But let’s give it a shot here. Let’s see how Friedberg does with his uncomfortable promo.

These are not your typical event sponsorships. Every Summit partner is building an insane activation.

All right, stop. It’s terrible. Three, two. All right, Oracle’s coming and they’ve done an amazing job. They’re going to build out this amazing bar in the expo hall. Drinks on our friends at Oracle. Yes. And they’re going to be sponsoring the PE and VC dinner as well as the AI infrastructure dinner. We have all these bird-of-a-feather dinners where you can meet people in your tribe. Our friend Jeremy at Circle, he’s also supporting it. He’s building out a huge tech networking lounge right in the heart of the event. And Circle and BVNK are also partnering to sponsor the stablecoin dinner. Chamath loves his stablecoins. He’ll be there. And Iron, they operate data centers powered by my favorite renewable energy, and they’re putting on—you’re going to be at that.

Absolutely. Me and my pal Chris Wright are going to go there, and we’re going to be in the solar tent.

And it’s going to heat up. Yeah. And we also have—how crazy is this? BVNK. It’s not enough. They’re doing the stablecoin dinner with Circle. They’re going to build out an arcade in the expo hall so you can get some.

We have to have a competition. Do you want to do Donkey Kong? What do you want to do? You want to play Stargate? Tempest? What are you going to—

We have to have a competition. Do you want to do Donkey Kong? What do you want to do? You want to play Stargate? Tempest? What are you going to—

Whatever they have. What’s your game? Tell me your game.

You and I—we’ll see. Street Fighter 2, maybe Championship Edition. We’ll do a 1v1 for $10,000, two out of three.

I feel like I’m getting angle-shot here. Did you write the code in that? Did you write it later?

We rented the arcade for my bar mitzvah.

So I played a lot.

Yeah. All 7 people showed up for your bar mitzvah.

No.

What was your bar mitzvah like?

It was in the backyard. Street Fighter 2—the arcade was the highlight. I didn’t have a fancy thing. That was the big deal: we got to rent an arcade.

Your mom rented an arcade game.

That’s like a big deal. Then we had it in the backyard, and that was it. It was pretty chill.

Very nice. Well, David Sacks is with us again.

Where did you have your bar mitzvah, Jac?

I’m from Brooklyn. We didn’t have any of this stuff, man. You know what we had for our birthday parties? You had a choice: pizza, bowling, or both. Basically, we’d rent a bowling alley, get a couple of lanes, get a couple of pizzas, and you could invite a dozen of your friends. That was fun. It was fun.

There you go.

There you go. And after that, we robbed some stores, tagged the R train, and did some petty crime. So, very basic. How about you, Sacks? Did you have a bar mitzvah? What was the theme of your bar mitzvah? Was it Reagan?

Was it Reagan-Bush? Was that your theme? What did you have as your theme?

The Reagan bar mitzvah.

No, I mean, when would this have been? This would’ve been 1985, I guess.

Yes. Was it a tribute to Richard Nixon, or was it—

I wasn’t involved in politics back then.

You weren’t into politics yet?

I was not. No, I didn’t know anything about it.

When did you get the political bug? Was it at Stanford, when they—

Probably Stanford. When they tried to shove political correctness down our throats, I had a negative reaction to that.

They created a reactionary.

It’s kind of like this whole Gen Z thing. If you look at the polling, this generation of kids is super conservative because it’s a big reaction to wokeness being shoved down their throats. They’re total squares. They do not like to do anything that’s on the margin in any way unethical or a hack. I have my daughters. I pissed off the maître d’ to skip the line, and my daughters wouldn’t let me hear the end of it. I said, “What do you think the maître d’ is there for? What do you think $50 bills are for?” They designed the $50 bill to get a table before everybody else.

They felt like it was inequality, that it was unfair. Everybody else is waiting in line, and then you went to the front of the line, gave the woman $50, and she seated you immediately. That’s not right. There are other people who can’t afford to do that.

Yeah, that’s their problem. Work harder. It was an important lesson—that’s what I told them.

How are you doing, Chamath? You’re back. You’re back on American soil. I can tell you’re back. How’s your decompression? You did a decompression stop in Vegas or something. How did you decompress? Did you stop at, like, Loro Piana and do a decompression stop, or what did you do?

No, Nat and I went to this island last week between Sicily and Tunisia called Pantelleria. It’s an incredibly beautiful island, but she got really sick, so we didn’t have much of a vacation last week, actually, when I was posting from there. She was not well at all, and we were going to consider flying home early, but then she got better. Then we went to Milan, decompressed for a few days, packed her bags, and came home on Monday.

Did you do a little shopping in Milan? Good shopping in Milan?

No, your old gear.

By the way, let me say something. Nat and I bought a pair of Ons. Do you guys have a pair of Ons? I’ve resisted.

You’re talking about the fun On Running shoes. Yeah.

We bought the walking shoes. And I walked all summer. These shoes kick ass.

They’re really good. I’m ditching all my Nikes.

Ditching your Nikes for On Running. Yeah.

On Cloud is actually technically—

Yeah, I think I bought the Cloud Monster, I think, or something like that.

Very nice. And use the promo code Chamath and you’ll get 15% off on your—

If my friend Roger Federer is listening, which I know he does from time to time, I would love to help On.

Oh my God, hold on a second. You dropped off—here’s the name back. This guy name-dropping on the pod.

You know, he did a great deal with On. He got a bunch of equity and helped build that business. He deserves all the success in the world. He’s a phenomenal human being.

A lot of brand extensions going on. My friend Ben Stiller—I was talking with him this week. Sorry, I dropped another name here. Let me get that back on the table. I was talking to my friend Ben Stiller. He’s doing—you’re going to love this—David Stiller’s Sodas.

Ben Stiller, the comedian.

The actor. The genius.

The Jewish Tom Cruz.

Wait, was it that guy? I haven’t heard that name in a long time. Is he still relevant? Shots fired.

Shots fired.

Oh, Jason, you had an announcement this week you wanted to make.

I did. We just soft-launched that we’re going to be bringing Founder University to Riyadh. One of the things I do—my day job—is invest in startups, so we created this Founder University. We do it here in the United States, but we had a lot of interest in bringing this course on how to build companies around the world. We decided our first city would be Riyadh, so we’ll be bringing Founder University along with Mina.co, which is the leading venture firm in the region, there in November. I’m going to be spending a week there, and I’m really excited about it. Then we’re going to launch it in Asia next, so we’ll have it in 3 cities starting next year.

Do you take equity in the startups that they start? Is this like Y Combinator?

It’s kind of a pre-accelerator. Most of the teams are not incorporated yet. Some are, some aren’t, and we teach them how to do that. Some of them, like TaxGPT, went on to Y Combinator, or they’ll go on to our accelerator or another one. When we watch them work for 12 weeks, we’ll invest in maybe 10% of them. We don’t have a fund for these yet. We’re not obligated; we just do it to help the community and get more startups built.

But that must be good. So it sounds like it’s deal flow for you too, right? You get to see the companies.

Yeah. What happens is a couple thousand people apply, and we meet with half of them on a Zoom call. Then we accept the best, and we invest in the best after that. So it goes from 5,000 people applying to 50 people, with 10 of them that we invest in. So, yeah, it's a filtering mechanism.

Okay. So, lots of stuff going on here. I think the number-one story remains that Trump is still fighting with the Fed. They say he can't fight the Fed, Sacks, but apparently President Trump is fighting the Fed. You remember he was threatening to replace Jerome Powell, and he did the site visit and all that drama.

Well, Trump recently fired one of the members of the Fed, Governor Lisa Cook. And you remember he called Powell “too late, stupid, numbskull”—all these great adjectives here. But breaking as we're taping this on Thursday, Lisa Cook has officially sued the president, arguing that the White House has no authority to fire her.

To give a little background before we get everybody's opinions, she's one of 7 Fed governors. The governors vote, obviously, on the rate cuts we've talked about here. Maybe they were too late to raise rates. Maybe they're too late to cut rates now. There's a big debate going on.

She was nominated by Joe Biden in 2022. Two weeks ago, the Federal Housing Finance Agency director accused Cook of mortgage fraud, claiming she had 2 different homes listed as her primary residence. You're obviously only allowed to have 1. This is alleged, and she did this long before she was a Fed governor. But they have sent a criminal referral to the DOJ, and Cook has not been charged with any crime yet. So that's important to put out there.

And this is all important because Fed governors can only be fired for cause. You need to have cause. Trump asked Cook to resign, and she declined on Monday. He said he was firing Cook for cause for deceitful and potentially criminal conduct. It's the first time in U.S. history that a president has fired a Fed governor.

This has brought up, Chamath, a lot of issues around the independence of the Fed, which it's supposed to have in its best iteration. We can debate that as well. An important note: There is an emergency hearing set for 10:00 a.m. Friday morning in D.C. So by the time we publish, there might be a decision on whether she can continue serving or not. ABC News reported this will likely go to the Supreme Court.

Here's your Polymarket, folks. Shout-out to my guy Shane. Congratulations on the investment from Donald Trump Jr., who's also joining the board. There's a 25% chance that Lisa Cook will be out by the end of the year. So it's not huge, but it's not a long shot.

Let's stop there. There's more to discuss about the Fed mechanically. Chamath, we'll start with you from the markets perspective. The Fed is supposed to be independent, so do you have concerns about it being independent? And does this feel like lawfare or ticky-tacky, or are they weaponizing the Justice Department to get what they want, which is rate cuts faster and more of them?

I think that the Fed is no different from any other appointee to a part of the government, which is that they are partisan. If I said to you, “Is the Supreme Court viewed as partisan or nonpartisan?” I think that most people at this point would say that the president who appointed them did so because they aligned with his ideology.

If I asked you, “Are the political appointees to any department of the United States federal government political or nonpolitical?” the answer is that they're political. And the idea that we still can't admit that the Federal Reserve is political is part of the problem.

The reality is that the people who appointed these governors did so because the people who were appointed were aligned with their philosophy. So we should stop pretending that they're independent, because they're not. And insofar as they are closer to a regular civil servant than a Supreme Court appointee—which is to say, a lifetime appointment, which it's not—I think it's very reasonable to say that any sitting president should be allowed to remove a Fed governor if he believes that person isn't aligned with the wishes of the electorate and the voters and the plan that was voted in.

I think that's a reasonable thing. It's true for the rest of government; it should be true here.

But the bigger issue, I think, is asking from first principles: What does the Fed actually do in 2025? We have an extremely vibrant, complicated, and interconnected $130 trillion global economy. It's moving at the speed of light. The Fed gets together once a month and tries to divine what monetary policy and the money supply should look like, based on data that is often incorrect.

We see that in the BLS data. We see that in the GDP prints. We see it in all of the inputs. And so we've turned over responsibility to a handful of humans using bad inputs.

I think the real question is that there are certain parts of what the Fed does that it can continue to do, and everybody would probably say that's okay. To be very specific here so I get this right: Could it be a lender of last resort? Personally, in my opinion, no. I think the Treasury does a better job. I think we saw the Treasury do that during the GFC, and I think that the Treasury has a better mechanism to get the American taxpayer a win than the Fed does.

Does it actually create monetary policy and price stability? I would say that the capital markets and the free markets actually do a better job of that. They define much more what the spread is. I think SOFR is a much better rate mechanism than the Fed funds rate at this point.

Does it do banking supervision and regulation? Yeah, it probably does a reasonably good job of that. That is probably something that most people would say it could continue to do. Does it do a good job as a payment system and clearinghouse? Again, that's probably something pretty uncontroversial that it could continue to do.

So I guess my point, Jason, is that the 2 things that are the most dynamic, it is the worst at doing. And so I would actually question whether that responsibility should sit with a handful of humans looking at faulty, month-old data.

For example, today the Commerce Department did something that was pretty exceptional. It said, “We're going to start publishing data to the blockchain.” All the GDP data is now going into a blockchain.

Can you imagine what this starts? I think, and we've talked about this before, that employment data from all these employment companies and payroll companies should get published this way. GDP data can get published this way. All kinds of economic measures, scrubbed for anonymity, should get published so that you can have pricing oracles that actually tell you what's happening in real time.

The markets will then react and set rates in real time. Those are the 2 most sensitive things that I think the Fed does that create controversy, and that it shouldn't be doing anymore.

Friedberg, I guess the question that Chamath didn't get to there, when he zoomed out, was: Do you have concerns about the independence of the Fed? It's designed to be a very rigorously independent group.

They're not independent. They're partisan.

I know that. But the question I had also for you is, do you have concerns about whether it's President AOC in 4 years or 8 years, or President Shapiro, moving these things around and firing people like this? And the weaponization of the government against government workers, as some people are claiming.

Why do you have to use the word “weaponization”? When you appoint somebody to the Commerce Department or to the Treasury, is that weaponizing that? No. They're political appointees.

The concern people have is that the head of the FHFA is the one investigating her mortgages, and that felt like lawfare to people—the same way people accuse Letitia James of lawfare against Trump, right?

First of all, Bill Pulte is an exceptional American. He's a brilliant businessman. He's actually probably better served sitting at the Fed in some role, quite honestly, because he has been in the rate markets and the mortgage markets his whole entire life.

So if Bill Pulte was able to get this in a reasonable, fair, and transparent way—which I have no doubt he would have done—the data is what the data is. And I don't know. I'll let somebody else litigate whether that's important.

The more important issue for me is just acknowledging that these people are political appointees. These are partisan employees. And this idea that the Fed is independent is maybe something that we should revisit, because most of the things that it does can be done by the Treasury and other people better.

Okay, Friedberg, what are your thoughts?

The members of the Board of Governors at the Fed are appointed to 14-year terms specifically to try and insulate them from the political cycles that occur. I think that system is meant to create a bit more resiliency in the institution, so it can operate without necessarily being affected by the electoral whims of politics.

It seems like there's a lot of declarations to basically reduce the overnight rates, the short end of the curve. So the short-term rates come down and interest rates come down. The problem is, as a lot of economists have talked about and as we've seen in the bond market, that could really push up the long end of the curve.

If you suddenly start to flood the market with capital in the short term by dropping rates today, everyone will borrow and everyone will buy. It'll stimulate the economy, it'll stimulate growth, but it'll also stimulate inflation and government spending.

Then, in the long range, the government's ability to make its debt payments and the cost of inflation bear out. So you end up having 30-year rates spike up. There's a sensitivity that's worth noting here: it's not just that the Fed is in control of the money supply, but that there's a consequence to the effect the money supply will ultimately have on the cost of borrowing over the long term and on the United States' ability to service its debt.

I do think it's very important to have an independent board of economists that makes those trade-off assessments. It should look at short-term inflation, short-term money supply, short-term demand for capital, the elasticity of pricing in the market, and also consider the long-term cost of capital. So this independence notion, I think, is very critical.

The 14-year appointment term, to me, solves this problem. We have the same issue in the Supreme Court, where they serve until the end of their lives. I do think the consideration here isn't just about taking action to fire a member of the board. Perhaps we should go back and relitigate whether the 14-year term is appropriate and whether we should be much more specific about the rights that we want to impart to the executive branch of the government in being in charge of the money supply.

Any concerns about how this is going down? We'll go to you next, Sacks. You'll clean this up. But any concerns, Friedberg, about having another governing agency looking into the Fed's governors and then looking for ways to remove them if they're in the other political party? Do you have concerns about that at all?

And this is, by the way, a concern that Republicans have also raised: “Hey, this feels like lawfare. This feels like weaponization.”

Yeah. I just think that once people are appointed, if there are reasons to believe that they're breaking the law, then they should be investigated. Everyone in government should be investigated all the time. There should be ethics and rules, and they should be investigated.

But I don't think we should use that as a mechanism to get around the 14-year term. Fourteen years is the term, and if we want to affect that, we should change the 14-year term and actually get Congress to do its job. Both sides may agree to reduce the term.

Okay, Sacks, what's your take on what we're seeing here? You were obviously quite animated about lawfare in the previous administration against Trump. What do you think about what's going down here?

Well, this isn't lawfare. This is the president pushing back on, I think, a Fed that's been overly political. And just to agree with Chamath on something, I have to push back on this myth that the Fed is strictly apolitical. All the Fed governors are politically savvy and connected people, and they understand the politics of this. The best example is Powell himself.

Let's go back through the history. In the summer of 2021, we got that 5% shock inflation print, and it was Powell who played along with Biden and Yellen that this was transitory. They used that transitory narrative to basically avoid any interest-rate hikes or any change of policy for 6 months.

What was the importance of that timing? Powell was renominated for a second term by Biden on November 22, 2021. In other words, he went along with this whole transitory narrative to get renominated by Biden. Then, a week later, on November 30, he said it was time to retire the word “transitory.” He essentially announced that there would be a policy shift, and then they didn't raise interest rates for another several months.

And it was a historic tightening cycle, meaning the shock to the economy was incredible because the rate and the velocity with which he raised rates were unprecedented. So the real question is: had he been truthful going into the nomination process and done it much sooner, would the economy have been better off? The answer is probably.

Yeah, for sure. In the second half of 2021, we had a bubble. We had an asset bubble. We saw it in startups, and we saw it in real estate. That bubble was caused not just by artificially low rates, but also by the continued QE buying.

I think Stanley Druckenmiller has noted that the Fed bought something like $180 billion of government bonds and added them to the Fed's balance sheet. So not only were they resisting rate increases during that roughly 6-month period, they were continuing a QE policy designed to stimulate the economy even though we were clearly in a new type of inflationary environment.

But do you think that was incompetence, or do you think that was political, Sacks?

It was obviously political. Think about it. If Powell had stood up and said, “No, I think Biden and Yellen are wrong, and this isn't transitory,” or even, “If it might be transitory, it's still a 5% inflation print. We've got to raise rates, or at least we've got to stop QE,” that's what he should have done.

But he didn't do that because it would have meant contradicting the Biden administration, and it probably would have cost him a second-term renomination. So that was intensely political behavior by Powell. It's the only reason he's in the job right now, and it caused an asset bubble in 2021. It caused the 9% inflation that we had the following year, and it caused the crash that we saw in 2022 and 2023.

And it's causing all these bankruptcies now, which we'll talk about later. Just to give the counter here—

Think about all those real estate deals that got done in late 2021 because rates were artificially low. They were able to finance them, and the valuations were artificially high. Now that wall of debt needs to be refinanced.

Jason, what should the Fed do that is valuable today? When it was created, I could understand how the government moved faster than industry. I think I can give that claim.

Well, it was about providing liquidity, too.

But 50, 60, 70 years later, when all of private industry is operating literally at nanosecond scale, using infinite data and a financial motive to price risk, how is it possible that a handful of humans looking at data that's a month old have any sense of what's really happening? How is it even—

Possible? I think it's probably unfair to say they're looking at only data that's 1 year old. It's also unfair to say that they're a partisan group, because if you just look at the facts, they meet monthly.

Yeah, that's true. But I don't think they take the other 29 days off, obviously. If you look just statistically, 2 of them were nominated by Trump, 1 was made chairman by Trump, and 3 were nominated by Biden. There's 1 vacant seat.

So right now, when you look at it, it doesn't make sense that it would be political. They have been acting with very little dissent in their decisions. I hate to bring the facts to the table here, gentlemen, but it doesn't seem like they're doing this in a partisan way. It seems like they're doing it—you could argue maybe they're too slow to react or they're not perfect—but it's certainly not partisan.

Maybe they don't want to publicly contradict the Fed chairman. By the way, you didn't let me finish—hold on before you say that. They have dissented. There's been dissent. There have been 1 or 2 people who will dissent and say, “I think we should have a rate cut now.”

They vote, and Powell doesn't have 5 of the votes. They each vote. It's not a god-king kind of situation. So, just factually and statistically, it's an evenly balanced board, unlike, say, the Supreme Court at the moment. There's 1 seat open, and there might be 2 seats open.

Now Powell is the leader of the Fed. He needs to get renominated. This is why we had a 6-month delay in stopping QE and not recognizing the fact that we had this big inflation spike. That lines up perfectly. Look at the timing: he was renominated.

That was political. You just glossed over what I explained—that Trump placed him.

Okay, maybe it's just a huge coincidence, JCal. But Biden nominated Powell for a second term on November 22, 2021, and then on November 30, Powell finally acknowledged that “transitory” was wrong—a week later.

Okay, you don't think that's a big coincidence?

Let me give you another one. I didn't get to present the second part of my argument here, which is that Powell started the rate-cutting cycle last fall with a 50-basis-point cut, right before the election, shortly after Elizabeth Warren sent him a letter demanding a cut.

Let me bring up this letter for a second. I want to read this because there's so much hypocrisy here on this issue. By the way, it was expected to be a 25-basis-point cut, and he ripped in a 50 going into the election.

But everybody was saying, by the way, “What's going on?” At that time, not just Elizabeth Warren—we were all saying, “Hold on, let me finish my sentence, please.”

We were all saying on this very podcast that there should be rate cuts because we had seen 6–7% inflation come down, and you were arguing at that time, Chamath, that it was time for a rate cut. It wasn't just Elizabeth Warren. It was consensus that they were slow to cut rates during that time period.

So, again, I don't think it's political because we could all read it and realize what was happening to the economy, which was, okay, it was time to find a glide path.

But a glide path means 25, 25, wait, 25—not 50, then 0.

Okay.

That's not a plan. This is from Elizabeth Warren to Powell on September 16, 2024, a few months before the election. She says, “We're writing to urge the Fed to cut the Fed funds rate.” She says, “For months, we've been calling on you to cut the Fed funds rate.” And it says, “In fact, it may be too late.”

Your delays have threatened the economy and left the Fed behind the curve. Inflation has fallen to 2.5%, well below the mid-2022 peak of 7%. She goes on to basically say that employment numbers adjust slowly, so the Fed should front-load rate cuts to avoid sliding toward a potential crisis.

So, the bottom line here is that Elizabeth Warren was saying that Powell needed to cut dramatically when inflation was at 2.5%. Now Elizabeth Warren is saying that Powell needs to stand up to Trump and not cut rates. So you can see the hypocrisy here. You've got Democrats like Elizabeth Warren browbeating Powell to cut rates before the election. He apparently gave in to that pressure, cut rates 50 basis points, and then, once Trump won instead of Kamala, he stopped the rate-cutting cycle.

Just a little correction there. You keep saying that Powell makes the decision. He is but 1 vote. When they had that September 50-basis-point cut, which we were all a little shocked about, people thought it was going to be 25, so it was double. There was 1 dissenting vote from 1 of Trump's appointees.

So, basically, the Trump appointees were opposed to it.

1 was; the other 2 weren't. And you'll remember that at the last meeting—I think it was July—2 people voted out of step with Powell. So they do have dissent there sometimes. This idea that it's just nakedly political doesn't add up. He's putting together the majorities.

You're cherry-picking Elizabeth Warren, because Elizabeth Warren is 1 person.

You just think all these things are coincidences.

This argument that it was political just can't be true if there are other Republicans on there who also voted for it.

Well, they're establishment Republicans.

Okay, sure. They don't like Trump. I know. I mean, I know there's some conflict within both parties, actually. So he does a 50-basis-point cut a few months before the election, which can only help the incumbent administration, Kamala. That didn't work. Then, when Trump gets elected, he pauses the rate-cutting cycle.

That is factually true. What is also factually true is that inflation started to tick up a bit. Additionally, what the Fed said—not just Powell, the entire Fed—was, “We don't know the impact of Trump's tariff policy.” Since they didn't understand that, and it was unprecedented as well—and we all admit it was unprecedented, and we all admit that it was kind of shocking, which is why the stock market took a nosedive when he started making really intense tariff demands—they said, “When the tariff data comes in,” which came in in May and June and was good, “then we're going to work toward a cut in September.” So we're talking about a 5-month period here.

Hold on a second. You're saying something really important. Can I pause on this?

You talked about this, and what you said was that the markets reacted and went down. You're absolutely right. But you know what they did? They also repriced that risk well before the Fed got back together. It was within a few weeks that the market had completely repriced what was happening with tariffs.

This is why I'm telling you that we're better off imparting the rate-setting mechanism to the free market. When places like Commerce and Treasury increasingly publish all this real-time data into a blockchain, you can have pricing oracles, Jason, that make these decisions in real time and reprice this, just like the stock market does every day.

Oracle—explain to the audience what you mean by that. You mean an AI would tell us what the rate should be?

No. Every bank will have oracles that divine what they believe the risk-free rate would be. Then, when you have a Treasury auction, you submit a bid. When people submit bids, you converge on a market-clearing rate that happens independently of the Fed.

What I'm saying is that if you actually inspect the ability to finance the United States government, the 2 critical things that happen can be done, and are done well today, by Treasury plus the free market.

So you want to abolish the Fed?

No.

For this purpose—for setting the rates?

Listen to me. They have 4 major responsibilities. If you revisit what's happening, you can find 2 of those responsibilities that they can probably continue to do with a lot of usefulness. But it is clear that the free market does a much better job of setting the actual rate.

It's called SOFR. We all use it. We use fed funds as a guide, but fed funds isn't even specific anymore. It's now a range. They don't give a specific rate; they give a range because they don't know. It's okay not to know, but we should just acknowledge that that's where we are today: We have precise data in the free markets and imprecise data in a group of people.

There are 12 people who vote in these meetings. 7 are the Fed governors we've talked about, and then 5 are the Fed bank presidents, who also get a vote. It's very simple: The majority wins. There's a vacant slot now, so there are 11 votes.

We've all been in large board meetings, and we all know the dynamics of these meetings: There's a leader. That person is either the CEO and chairman or just the chairman of the board, and they're the ones who lead the discussion, put together the majorities, and set the agenda. It takes a revolt by the rest of the group to basically stop their decisions.

So you're trying to diffuse accountability for Powell's decisions here, when he's the leader of the Fed and ultimately has responsibility for their decisions. By the way, I don't think you'd be seeking to diffuse accountability that way if Powell had made a bunch of good decisions, right? Why would you be trying to diffuse that accountability if Powell had made a bunch of good decisions?

I don't have a horse in this race. I have 0 horse in this.

Clearly, you're trying to defend the Fed here.

I'm just trying to correct the facts. There are 12—well, there are 11 people.

He's the leader of the institution. He's the leader.

He gets 1 vote.

He's putting together the majorities.

Again, I hate to bring facts into the discussion, but Bowman and Waller preferred a 25-basis-point rate cut in July. So there is dissent in this organization. They're going to cut 25 basis points, obviously, in September. Some of them wanted to do it in July, and then in August they said, “Yeah, it's time to do it.” That's why the market popped, and Polymarket is showing that's going to happen in September. So we're talking about a 6-month period here.

Let me just have the last word. Go ahead, Sacks. You get the last one.

Look, here's the bottom line: I think Trump is right to be frustrated. Powell has been intensely political. He went along with the transitory narrative on inflation to get renominated for 6 months. That created a horrible misallocation of capital, and then, a few months before the election, he went along with the 50-basis-point rate cut. There was no outrage about Elizabeth Warren jawboning him then, like there is now about Trump, and then he stopped the rate-cutting cycle when Trump won.

When Elizabeth Warren said that, we actually said she shouldn't be doing that. That wasn't like Elizabeth Warren speaks for the country. She's totally irrelevant, Sacks. We all know she's irrelevant, and we all agreed Powell was behind on the rate cuts.

Okay, let's go to the next story. We're not going to agree on this one. There's going to be a rate cut in September, so it's all good.

The U.S. government just took a 10% stake in Intel. Last Friday, Trump announced that the U.S. government would acquire 10% of the chipmaker. As we all know, there was this CHIPS Act to try to onshore chip manufacturing. There are a lot of chip companies that are U.S.-based, but they don't actually make the chips here in the United States. Most of the chips in the world are made in Taiwan, obviously, by TSMC.

These grants were created. $9 billion of them were grants. There were also tens of billions in loans, and that was the CHIPS Act. We talked about it here many times 2 years ago. These grants have been allocated; they were not paid out. So Trump and Lutnick came in and said, “Hey, instead of giving this money for free, we would like to get something for it.”

They are going to get nonvoting shares. There's no golden share like in China, where you get board representation and can kind of control the board. This will be passive: no board seats, no governance rights. Lutnick was very clear about that on CNBC.

This all happened 3 weeks after Trump called for Intel's CEO to resign over his ties to China. President Trump said, quote, “The CEO of Intel is highly conflicted and must resign immediately. There is no other solution to this problem.” But they found a solution, which was to take 10% of the company.

Let's stop there. This has been pretty controversial, I think, Chamath, in terms of people wondering if this is going to become a playbook. Do you have any concerns with swapping the grant to getting equity? Do you think this should become a playbook where the U.S. government starts to own percentages of companies in exchange for loans and grants, as opposed to giving loans and grants?

Yeah, I think some historical context is important. In 2006, Hu Jintao gave this speech, and in that speech he talked about 6 or 7 boxes. The way that he described these boxes was that these are the critical parts of the Chinese economy that they must persevere and win over the next 20 or 30 years to ensure safety, security, and prosperity for the Chinese people.

And in those boxes were things like semiconductors, rare earths, and pharmaceutical APIs. What it described was a willingness by state governments in China, as well as the central government in China, to use the balance sheet to support those companies incrementally. Jason, as you said correctly, they would also ask for a golden vote. In return, what did they do?

I can talk to you about rare earths as one very specific example through my involvement with MP Materials and now with Intel. The Chinese have an extremely sophisticated, market-driven approach to how they help when they are on the cap table. They'll price-shape, they'll price-dump, they'll change the spot markets, and they'll perturb the ability for other people to compete.

What that does is lock the capital markets because it says, “We can't compete with these companies, so we're not going to finance an alternative.” That has long-term, strategic negative consequences for everybody that isn't those Chinese companies.

So, let me just pause there. Now, look at the United States. What the United States has always done is be the lender of last resort, but we've never participated in the upside that being that lender of last resort has given us as the American taxpayer.

For example, in 2008, we created TARP, where we bailed out all kinds of toxic assets. What did we get in return for that? Nothing. We barely got our money back. When Warren Buffett stepped in to backstop Goldman Sachs, he was able to get the United States government to help him backstop that. Who got all the gains? Buffett and shareholders of Berkshire Hathaway. Who put up more money? The United States taxpayer. Those are but 2 examples.

I think that this approach is the much better approach, which is to say we can do exactly what China did with a couple of tweaks. It's way better, as you said, Jason, to just put in the equity, own something on the balance sheet of the United States, not have a golden vote, have complete transparency, allow the capital markets to finance these businesses, but give them a chance to compete all around the world. Then the US taxpayer gets some of the upside. That is awesome.

What we have done up until now, until what Lutnick has done and what the president has done, is the opposite. We've given money away in times of duress with absolutely no upside, and I think it has to change. Sacks, what are your thoughts here on this model?

It's something to think about when it comes to, as Chamath correctly points out, China subsidizing its champions. It's happening right now with BYD, the car company. Allegedly, all these car companies are dumping cars all around the world, and supposedly they're being underwritten by the Chinese government explicitly to do this—to take away American, German, and European auto manufacturers' ability to compete.

So, what are your thoughts on this? Do you want to see it continue, or do you think this is kind of a one-off, specialized situation?

Well, I agree with Chamath that if you're going to give large amounts of money to chip manufacturers, it's better to get equity for that than for it to be a freebie. I think there are 2 reasons for it. One is it's a better deal for taxpayers. We might be able to recoup the money and even make a return on it.

But the other is the incentive for companies. We don't really want our companies going to the federal government to try and get bailed out, and at least if they have to give up equity or warrants, things like that, there's a cost to it. We would rather that these companies get financed privately.

But that didn't happen here. Intel received something like over $8 billion under the CHIPS Act because we let the free market do its thing, and it resulted in chip manufacturing being offshored. It all ended up on the island of Taiwan. That's a huge national security issue for the United States because now our whole supply chain for this critical resource is single-threaded on Taiwan.

So, we made the decision as a country to onshore chip manufacturing. That's what the CHIPS Act was about. It had large bipartisan support. There's this priority to bring chip manufacturing back onshore, and the question is how you do it.

I think that if you're going to hand out billions of dollars to these companies, you're better off, again, getting something for it, having the taxpayers have some upside in it, allowing the government to recoup, and creating the right incentive for these companies so they're not constantly seeking bailouts. I think this is a big improvement over where the CHIPS Act started.

But to answer your question, would I be looking for lots more opportunities to do this? I think there has to be a national security interest or something of that kind, and I think it has to be a situation where, for whatever reason, the free market has failed to deliver on that priority.

Friedberg, it looks like we're going to have consensus here that we all agree it's better to get some upside, or equity, for the American taxpayers as opposed to giving free money. There has been some pushback as to the style in which this was done—the bullying of the CEO and then, 3 weeks later, a deal. What are your thoughts on that criticism of the administration?

Just taking a step back, I think it is an indication that the free market has failed in some way. If the government is stepping in to either provide a unique regulatory unlock, provide capital, or basically step in to be the biggest or primary buyer of a private company's products or services, those are the 3 reasons why I think these scenarios are emerging.

A unique regulatory unlock, providing capital, or being a buyer—all 3 indicate that the free market has failed and the government is playing too big a role in our economy. I think that's just the unfortunate circumstance that we find ourselves in, and we can recount, as we have many times here before, why the government has become so big, why it is too big, and why it is having such an outsized influence on job creation, economic growth, stimulus, market strategy, and so on.

I hear Sacks's point that there are very specific circumstances where we have to fix free-market action, and I totally get that. But I think there are these bigger, broader things that are happening. The government is also the biggest buyer of products for a lot of companies, and the government is providing capital either through contracts, procurement, or some structure that is stimulating a very large percentage of the economy.

I do think there is a notion that some have shared, which I don't fully disagree with, that there is some degree of socialism underway—that the government is providing such a large role in the economy and replacing so much of the free market. We can argue why that is and have different points of view on why that is, but that de facto state is an unfortunate state.

Now, I think the question is: Under these circumstances, should the government be getting equity? I think the answer is yes. I agree with that. If the government is getting equity, the key question I want to ask is: Where does it go?

There are 3 places that equity could land. It could just sit on the balance sheet of the federal government, in which case there are no real goals or oversight of the investments. There's no overarching strategy on what to do with that equity over time. How does the American taxpayer benefit the most? When does the government sell? How does the government choose to sell? Who makes that decision?

The second is that you form a new sovereign wealth fund to hold all these equity assets. You form a new sovereign wealth fund, and then you have a whole group of people who are going to be hired to oversee those investments. They're going to make good decisions. Hopefully, they're going to be good investors and good fiduciaries on behalf of the American taxpayer.

But I would argue that what we should be doing instead, as I've mentioned in the past, is use what we already have, which is the OASI, the Old-Age and Survivors Insurance Trust Fund, which is the trust fund behind Social Security. That's actually where Social Security's assets lie.

Today, the only thing in that trust fund is US Treasuries, and they're actually a special form of Treasuries. If you've paid into Social Security, you're effectively loaning the federal government your money, and then they are supposed to pay you back your retirement benefits in the future.

Rather than just loan the federal government money, those assets should be held and become the largest sovereign wealth fund to make strategic investments and grow those assets over time on behalf of those American taxpayers as retirees. I would argue that the right solution, of the 3 options—forming a sovereign wealth fund or sitting on the balance sheet with no strategy—instead would be to have that sovereign wealth fund sit within OASI.

That would require statutory changes because the Social Security trust funds were set up in the 1930s, and Congress passed an act that said you have to hold only Treasuries. We would have to get Congress to revisit that concept.

But I do think that if we are going to be in this state, where the federal government is playing this outsized role in the market, we should take equity, but we should be very strategic about where that equity goes. I think the best place to put it is in the Social Security trust funds. It can kill 2 birds with 1 stone.

Rather than create new holes in the government, meaning new spending, new debt, and the creation of new vehicles for us to spend capital, I think we should fill holes. One of the holes we need to fill is Social Security, which is going to go bankrupt sometime between 2030 and 2033. I would encourage us to strategically think about evolving this system.

I think it’s a major moment, by the way, because as I’ve mentioned in the past, in addition to setting up an equity vehicle based on these deals, the Social Security trust fund could also be buying public equities on behalf of the retirees, which would have a significant compounding effect for them. Jason, what do you think?

I love the substance of it. We talked about it, actually, back in the day here. There were a series of loans that Obama set up for Tesla, Solyndra, and Fisker. A bunch of those companies blew out and didn’t pay back their loans. Elon paid back his ahead of time, but the government had no upside to it, with interest, of course.

Imagine if they just owned warrants for 1% of Tesla or something. It could have been incredible, and I’m sure Tesla would have still taken that deal. It wouldn’t have been crazy.

The thing I don’t like about this is the bullying of the CEO of Intel. This is a lot of my challenge with President Trump: sometimes the style in which he does something detracts from the actual substance of it. The substance of this is great, but we are now getting into a situation where it feels like crony capitalism. It’s crazy that the president bullies the CEO of a company, says he’s going to be deported, and then settles a deal like this.

The optics look terrible. It would have been much better to say, “Instead of giving you a grant, we’d like the option to have equity. What would you prefer?” Then have a decent negotiation where you don’t have to threaten to kick the guy out of the country.

Do you think maybe that happened, JCal, and it just wasn’t public, and this was, like a lot of things, a public negotiating strategy?

Yeah, I think probably that is what Trump does. He beats somebody up and then says they’re incredible. I just think it detracts from the substance and the good work when you use those techniques.

Yeah. Do you think we should have a sovereign wealth fund?

Not when we’re in debt.

The president addressed what happened. Senator Tom Cotton wrote a letter attacking Intel and questioning the CEO Lip-Bu Tan’s past, and the president posted a Truth in response to that. But he hadn’t met Lip-Bu before.

The CEO of Intel went in there, got an audience, and told his side of the story, which was that, yes, he invested in China, but when everybody was doing it, it wasn’t controversial at the time. I don’t think he’s been involved in China for like 6 years or something like that.

So he cleared up the situation, and that’s how the conversation happened.

Ready, fire, aim is the thing I don’t like about when Trump does these things.

Well, I think the American people like when Trump gets results, and you’ve got to break some eggs to make an omelet. The question is, is he getting good results? I think the American people are happier getting something in exchange for billions of dollars as opposed to just being handed out.

Also, exactly my point. I just wish he would do it in a more thoughtful way.

It would have worked. It absolutely would work.

Yeah. Do you think we should have a sovereign wealth fund?

I didn’t finish my thought on that. That’s an interesting question. If we had a sovereign wealth fund and we’re $36 trillion or $37 trillion in debt, I’m with Lutnick’s position that maybe we pay down that debt and then we can think about that.

Sovereign wealth funds usually come from some natural resource. Norway’s, the UAE’s, the Saudis’—we don’t have some natural resource that is throwing off all this money. So I don’t know how we get one.

I’ll do the other side. I think that we should start a sovereign wealth fund right now. Who should fund it? The great news is that these Trump tariff deals come with huge amounts of capital that these other countries have committed to spending inside the United States.

For example, there’s $600 billion now that Japan has to spend inside the United States. There’s $300 billion that Korea has to spend. There’s another several hundred billion that Europe has to spend. If you add that all up, we’ve exceeded $1 trillion of inbound capital on the investment side. In those deals, we get 90% of the upside, if you remember.

I think a lot of that capital should be the seed capital for a sovereign wealth fund. You’re right, Jason, that we can then choose to direct some of those gains to things like debt reduction. Friedberg is right: We could direct some of those gains to fund Social Security. I think we should set that up right now, and it can be additive.

For example, there’s the $1 trillion that these countries are investing in the United States with a 90/10 carry. It’s unbelievable. All of that should go into a balance sheet that the American taxpayer can benefit from.

Number 2, when we do these programs like we did with MP Materials and we’ve done with Intel, they’re really smart. We need them anyway for strategic reasons, but now we get the backend participation of the equity. That should go into a sovereign wealth fund. All these things make a ton of sense.

I think all of them make sense, is what I would say. The concern I have is that anytime we create a new income stream at the federal government or we have some sort of growing asset that you mark up on the books, someone tends to invest ahead of the curve on that. Meaning, someone takes that and says, “Oh, great. I can spend more now.”

We even saw this in California. Gavin Newsom and the budget skyrocketed as income went up. Rather than take the surplus and book it for a rainy day, they went and spent ahead of it, and then all of a sudden they had a huge deficit.

I worry that the tendency in the federal government—which is what happened with Social Security—is to say, “All these people are providing this income every year to the federal government, which they’re supposed to be paying into their Social Security trust fund.” But then what happened is we raided the coffers. We took all that money and started spending it on random new programs.

The problem is that by giving the government more assets and more income, we set ourselves up for a circumstance where the federal government and Congress say, “Great, we’ve got more money to spend. Let’s do X, Y, and Z programs. Let’s build a high-speed train. Let’s do this.” These are all good for the American people, and all of a sudden, you don’t actually solve any real problems.

This is why my argument is that we should use it to fill the hole we have, for example, in Social Security. That needs to become an asset that’s strictly used as an offset for Social Security, because if you don’t put it in that box, it just becomes another spending mechanism.

I don’t like the sound of taking people’s Social Security savings, or the money that’s earmarked for Social Security, and having the government act as a venture capitalist and start investing willy-nilly trying to get us out of this hole. I don’t think that’s going to go very well.

What I think makes sense is that maybe it’s just an offset, Sacks. Maybe it’s just incremental, where, when it goes liquid, it can be used to pay down the Social Security Treasury obligations. That’s my point.

Yeah. Look, I think we should just be selective about this. I think it makes sense in situations where the government was going to do a bailout anyway because there’s a national security priority or some other kind of priority that the government has determined we have to do. You want to get equity for it.

It doesn’t make sense to give—I mean, frankly, even with Solyndra, where does that equity go? That’s the key. I think that would help keep everyone’s grubby hands off of it. How do we use it as an asset rather than have it be another spending mechanism?

I like the idea of putting that equity in the sovereign wealth fund. It could go to Social Security. I think that makes a lot of sense.

I just want Sacks on record saying he agrees that it should go into Social Security.

Well, I like that idea. I don’t like the idea of taking people’s Social Security funds. Definitely not. Those funds don’t exist. Those funds were already taken by the government and spent, and there’s an IOU sitting in an account.

It’s literally a piece of paper: “We owe you your retirement.”

We’re talking about situations like TARP, where you had all these Wall Street firms bailed out. Yes, some of them paid back the money, but the government should have had equity—percentage equity—in those firms. I want to make sure that equity goes somewhere, because people book it as income and then they take a lower-deficit year and say, “Great, the deficit was lower. We can spend more.”

That’s how this gets booked. If it’s not accounted for separately, it gets blown out. That’s what I hate.

That’s a perfect segue. Grover Norquist wrote an op-ed in The Dallas Morning News. You can pull it up, Nick, and show it there. It’s about the discussion we had here on the podcast a month ago.

I had talked about this. He has his Taxpayer Protection Pledge that Republicans made back in the ’80s, where people signed on to agree not to increase taxes. We had talked here, and I had proposed something similar for spending, because we all have concerns about the debt.

He pointed out that this is very difficult to do, but he had a really interesting piece of information that I hadn’t heard.

In Colorado, a Democratic state, they have limited the size of the budget based on population and inflation. So, they have been returning money to taxpayers and lowering their state interest rate. He says this model, pioneered in Colorado, could be the model that saves America, and that we could have a situation where population plus a little bit of inflation equals what you're allowed to spend.

Gentlemen, your thoughts on Grover Norquist responding to our pitch on the All-In pod—or my pitch on the pod, I guess.

What?

Okay, crickets. Somebody's got to have an opinion.

This is so uncontroversial. I don't know what there is to talk about.

What's the analysis we're going to do? Yeah.

It'd be a good thing if every politician pledged not to increase spending.

But let me ask this: Were you guys aware of Colorado doing this, that they had this device set up?

Yeah, nobody was aware of it. Yeah, it's pretty interesting. So, Grover Norquist, come on the pod anytime. I actually told Elon, and I tweeted as well, this is what the America Party should do. This should be the entire America Party platform. Just get senators and House of Representatives members who believe in this and work on that one issue: balancing the budget. That's the thing that neither party will take on.

All right, let's talk about corporate bankruptcies. According to an S&P Global report, so far in 2025, we've seen the most corporate bankruptcy filings since 2010. That was after the Great Financial Crisis. You remember—or some of you might have been too young.

Corporate bankruptcies, according to S&P, are public companies with debt of at least $2 million and private companies with assets or liabilities of at least $10 million. I'm not sure why the threshold for public companies is lower than for private companies. It didn't make sense to me, but there must be a reason. These are also called large bankruptcies.

Here's a chart showing you corporate bankruptcies since 2008. The blue bar is through July; the gray bar is the full year. So, we're looking at a partial year here. Obviously, in 2025, we're at 446 large bankruptcies 7 months into 2025, which would put us on track for the most since 2010. Nothing close to GFC numbers, but it's not trending well.

If you look at corporate bankruptcies broken down by month since 2020, you can see that bankruptcies are increasing after the massive rate-hike cycle in 2022 and 2023. So, obviously, rates have something to do with this. What are your thoughts, Chamath, on what we're seeing here? It's not super dramatic, but it's definitely notable.

Yeah, it's notable, but I think it's notable not for the reasons that the mainstream media tries to describe it in. I read these articles and was a little caught off guard because initially what they said was that tariffs were causing this, and I was like, large companies don't go bankrupt 30 or 60 days—

Yeah, because of the tariff. This makes no sense.

But the narrative was very strong, basically trying to paint the Trump administration as having caused this. So, I just started to look into this, and there are a couple of interesting conclusions that I came to.

I think the most interesting is that there were a lot fewer bankruptcies over the last 4 or 5 years than there should have been. I think there are 2 reasons. The first reason is that you had rates artificially suppressed at 0 for an incredibly long amount of time. So, you had all kinds of companies able to raise enormous amounts of capital that they probably shouldn't have been able to raise, or at a minimum should have done so at much higher rates, which weren't really there because the Fed rate was at 0.

What that means is that many companies were able to fill the reservoir of money, and then, when the core structural business started to fail, they had a lot more oxygen in the tank to survive a lot longer. So, I think a lot of what you're seeing—and if you look, Jason, at some of these companies like JOANN Fabrics and Party City—these were businesses that were upside down for years.

Yep. And a number of these were PE buyouts, where the strategy is to saddle them up with a bunch of debt, too. So, that speaks to what you're saying.

I think the reason why bankruptcies are up right now is because the reservoir of free money—the money printer that printed, frankly, since 2010 up until about 2021, because we still gave an enormous amount of money during COVID—is finally starting to run out. That's number 1.

But the second is that we actually haven't had a process of creative destruction in American company formation for a while.

Yeah, probably since the GFC, right? A similar thing happened at that time too, Chamath, right? We had all these backed-up companies that probably should have died, and it kind of—

Well, what I think happened was that startups ran out of money. There were certain parts of industries that had some trouble, but by and large, there was no transformational or catalyzing M&A that could have actually happened. That, in part, was a structural issue because of the way the federal bureaucracy reacted to it—not just in the United States, to be fair, but around the world.

When you relax those constraints, what you can start to see are companies identifying assets that they want inside other businesses and being much more aggressive in getting them. You have businesses that are floundering, able to see that they're about to run out of money and have the confidence to try to do an M&A deal to survive. You need all of these things to work in lockstep for a market to be efficient.

The market was incredibly inefficient since 2010: artificially suppressed rates and a regulatory regime that disallowed any form of M&A and consolidation. Now that those constraints are lifted, you're going to see a lot of this creative destruction work its way through the economy. That's 1 big trend.

The other big trend—and I think we saw this in—Nick, can you please find the tweet from Delian where he talked about the Chipotle competitor that T.K. launched? I just want to point to this because I think this is another wave of competition that's going to put a bunch of categories of businesses under duress.

Our friend Travis Kalanick, who's the founder of City Storage Systems—what is it called?

CloudKitchens is how—

CloudKitchens, okay. He launched a Chipotle competitor, and it's apparently totally kick-ass and way better than Chipotle. It just starts to show that there's a wave of competition coming from completely different companies you never would have expected, going after a bunch of these businesses.

So, if you put these 2 things together, I think you're going to see more, not less, bankruptcies. But I think the outcome is probably positive in that you clean out a bunch of businesses that were taking up time and resources. You should allocate a lot of the human capital in those companies to different businesses, and I think we'd be better off.

Man, it's a long list of companies, but I just want to know which one hit you harder: Forever 21 or Hooters? Which one of those bankruptcies hit harder for you? I'm trying to game it out here. I think we should buy Hooters, Chamath.

If you have a teenage daughter, what I'll tell you is Forever 21 was going to go to 0 anyway. You need to be long Brandy Melville.

Like yoga pants, Alo?

Kids wear a lot of those. They're into the athletic wear.

I wonder what's the name of that clothing store where Sloan always wants the skirts and stuff. Not Brandy Melville, but the other one.

Anyway, there are all these brands. Forever 21 was not it. What do you guys think? Should we buy out Hooters and put Sydney Sweeney in as CEO? This could be a great brand extension. I don't know. The chicken wings are amazing.

Sacks, any thoughts here on the creative destruction and what we're seeing? Obviously, it can't have to do with tariffs because they're only 3 months old, and it seems largely the companies—

Well, every company you've mentioned is a retail business. They have physical locations that people have to go to do stuff or get stuff.

23andMe, you had Wag—

Yeah, but I think the retail channel getting flushed out makes sense, given the age of Amazon, Shein, and Target.

Yeah.

Well, the retail channel, like others, is highly levered because, in order to have a retail store, you have to pay a monthly fee to the physical real estate owner. It's unlike other businesses that are services or are more nimble and can relocate. It's the equivalent of having debt.

When you sign a lease, you're stuck in a 10-year debt cycle. You have to pay every month a fixed amount of money, and you can't get out of it. So, the retailers make a lot of sense. They were basically levered businesses, in addition to all of the macro trends of people not going to physical locations and COVID.

But I think Chamath has it right, which is this is all ZIRP-era indigestion that's being washed out. To the point that some percentage of overfunded, negative-unit-economics businesses are also getting cleaned up in the, call it, tech space—which typically involves a lot of companies that are not tech, but we just call them tech.

So, that definitely makes sense to me. Sacks, any insights here?

Well, just to pick up on this.

When you showed those charts on bankruptcies, I didn't see a huge trend there. I can see that there's some pickup since the ZIRP era, but it doesn't look like a huge trend to me. We just had a 3.3% GDP print for Q2.

I think that was restated, right? That's what happened today—they restated it.

Well, no, there was an estimate. Remember, the Atlanta Fed had this 3.3% estimate, then they reduced it to 3.0%, but now the actual number is 3.3%.

So the economy seems pretty hot, and it's doing well. But I would say that there is some softness in the economy in those sectors that are exposed to high interest rates. The best example of this is real estate.

I remember on this program a year and a half ago, we talked about the wall of debt on commercial real estate that was coming due and had to be refinanced. There is $2.2 trillion of commercial real estate debt maturing before 2028. What we talked about back then was that the banks don't really want to foreclose on these buildings because then it hits their balance sheet.

So everyone has an incentive to restructure this debt. There were a lot of these blend-and-extend deals where they would extend the debt and work out a lower interest rate. Some people call these deals “pretend and extend” because you're pretending that the real estate sponsor still has equity in these buildings.

Have these started to come back?

What I'm seeing is that some real estate developers are starting to lose buildings. The reason for that is that the debt is coming due and it has to be refinanced. There are 2 problems when you refinance. One is that you're paying a higher interest rate, so you take a building that was cash-flowing and, at that higher interest rate, it might have negative cash flow. In other words, it's basically bankrupt.

Those buildings don't make sense anymore, and those are situations where you're going to lose the building to the bank. The other problem is that when you refinance, you might not be able to get the loan-to-value that you had before because valuations have also come down. Real estate valuations are inverse to interest rates.

In other words, let's say you had a building that was worth $100 million before. At ZIRP-era interest rates, you could borrow two-thirds of that, so call it $66 million. Now, if the building is only worth, I don't know, $60 million, then you can only borrow $40 million.

The amount of proceeds you can get when you refinance is much lower, and that gap has to be replaced with something. In that situation, the equity holders would have to come in and do an equity-in refinancing where they've got to put up that gap. In the example I gave, that gap would be $26 million.

The equity holders have to come out of pocket, which is very difficult to do, and they might not want to do it. In that case, you're also going to lose the building.

Sacks, I have a question. Nick, can you pull up this image? How does this trend build on top of that other trend, which is on top of everything else now? It seems like the real estate financing flows are moving far away from typical office construction toward data centers.

If you add that to the mix, then people seeking funding for traditional office—or refinancing—are going to find fewer lenders. Is that true or not true?

Well, yeah, I think there has been a little bit of a credit crunch, but also there's no reason to really be building so much office space when there are so many buildings that are underwater or vacant.

Yeah, like a third of the real estate in San Francisco is basically vacant still.

Still, so why would you build any more real estate? What needs to happen is that those buildings effectively need to go back to the bank, and then they need to be auctioned off at some lower price so that new equity holders can come in and new cap tables can be formed. Then you can get the money you need to do the tenant improvements, the TIs, so that you can get more tenants in there.

Right now, one of the reasons why a lot of these buildings are empty is that the equity holders don't have an incentive to put in more money to do the TIs necessary to sign new tenants. You have these zombie buildings where, even if there were a tenant who wanted the space at some lower rent, the owners of the building have no incentive to do that because they can't put any money into the deal.

We finally need a bunch of these buildings to go back to the bank, or we need rates to come down so that you can do refinancings without there being these punitive refinancings. I do think that there is a lot of risk in the economy in this sector because of this wall of commercial real estate debt that's coming due.

And I think this is the problem. You have Powell sitting there in his ivory tower. He's willing to keep rates artificially low so he can get renominated, and he can help Biden and Yellen. He's willing to cut rates to help Kamala. But as soon as Trump gets in there, he stops the rate-cutting cycle even though inflation is down to 2.0%.

So you have this Too Late Powell and the rest of his Fed cronies. J-Cal wants to make it sound like they have some dissenting voice. It's nonsense. In any event, they're all collectively sitting there in their ivory tower, completely out of touch with what's happening in the economy, and they're being slow to cut rates.

I do think that at least sectors like real estate need these cuts.

Friedberg, tell us about the Yamanaka factors. How long can I make this bulldog last? Can I make him last 40 years? That's what I have left.

Well, in mice, they're using these Yamanaka factors to make the mice age the equivalent of about 250 years now. It's really incredible. And there are human clinical trials starting.

The Yamanaka factors, as you guys will recall, are the 4 proteins that were identified that can basically turn any cell back into a stem cell. We'll call those 4 proteins OSKM. When these 4 proteins are applied to a cell, they basically start to trigger a bunch of gene expression that then turns that cell back into a stem cell. That cell becomes youthful again, and you can then turn it into any other cell.

Later, research was done where they took those 4 Yamanaka factors and applied a low dose of them to a cell. Rather than having the cell turn all the way back into a stem cell, that cell effectively became young again. It started to repair and heal itself, repair its DNA, repair its gene-expression networks, and the cell returned to its original state.

The equivalent of this in a body is that you've got skin that loses its wrinkles, eye cells that start to see better, a brain that starts to work better, and muscles that start to work better. That's rejuvenation.

The search has been on for how we turn this incredible discovery of using these 4 proteins into therapeutics that we can apply so that humans can take them to rejuvenate cells, reverse aging, and create youthfulness. This has been done, by the way, in mice. The mice end up living for the equivalent of hundreds of years, and there's an incredible phenotype, meaning physical characteristics that you can see.

This week, it was announced, amazingly, by OpenAI that they developed a model called GPT-4b micro. What they did is they took the GPT-4 model and reduced it down so that they just had typical good general knowledge, language capabilities, and so on. Then they added a bunch of training data, mostly protein sequences and some biological text data, and they also tokenized 3D-structure data.

That is describing a 3D structure with words or with some sort of textual form. This was a really interesting data set that they then built into the model. They used this to ask, “What else can we do with OSKM to make those proteins more effective?”

Remember, a protein is a series of amino acids. That O protein is 360 amino acids long. There are 20 different amino acids, so if you were to change just 1 of those amino acids and perturb it a little bit, you have 20 to the 360th power. That's how many changes you could make to just that O protein, just to try and perturb it. That's more than there are atoms in the universe.

This is a very numerically difficult problem to tackle if you're going to try and make more efficient proteins. The goal was, how do you make a new protein by changing the amino acid sequence? They asked that question of this trained LLM and got a bunch of results back.

Remember, each amino acid is encoded by 3 letters of DNA. You can easily make new proteins by creating DNA, sticking it in a bacterium or yeast, and it will make the protein you want it to make. You can run all these different DNA sequences, try them out, and see what happens with that protein.

That's exactly what they did. They did it in partnership with a group called Retro Biosciences. They had the LLM, or the GPT-4b micro model, come up with all these ideas on how OSKM could become more effective. And why do they want to make them more effective? Well, today, less than 0.1% of the cells that you apply those proteins to actually go through the rejuvenation.

We have a long way to go to discover new proteins or get these proteins to be more efficient. Rather than doing 3D modeling and all the other stuff that other people might be doing, this LLM basically predicted a bunch of proteins and said, “Here's the amino acid sequence, and here's the DNA you need to make those proteins.” Retro Biosciences made them, tested them, and then got these incredible results.

They actually got these new proteins to be 50 times more effective than the OSKM proteins in terms of rejuvenation, or cellular reset. Within 7 days, they got more than 30% of the cells to show the markers. By day 12, 85% of them expressed critical stem cell markers. This really showed that these new proteins the model came up with worked, and the results really are amazing.

But I think there are a couple of things to take away from this. Number one, we have an incredible path ahead of us to reverse aging using proteins. We identified so many new proteins just with this experiment. There are multiple other companies, like Altos and others, investing heavily in this area. We're going to develop therapeutics around these proteins, and they're going to have an incredible ability to reset our cells, make them young again, and fix all the DNA damage and gene-expression damage that causes aging.

The functional driver of aging is that gene-expression networks are messed up in our cells. It turns out that this sort of therapy can reset them. So, number one, we should be very optimistic about the path we're on to reverse aging. Number two, it's incredible what these LLMs can do.

This kind of follows that EVO2 model story I mentioned a few weeks ago that the Arc Institute put out, where they just took DNA data. The model didn't know what the DNA data represented, and they found that if you fed DNA into it, it would tell you if there was an error in it. They identified all these pathogenic variants in DNA and genes that they had no knowledge of. It just identified patterns.

Some of the stuff in protein structure, protein shape, and protein function may actually be these kinds of emergent phenomena. We can simply reduce them down to letters of DNA, and these LLMs can come up with new ones and write new ideas—and they're working. So, there's this whole new area where we don't need to build completely new neural networks using graph nets or something else to try to develop predictive models in protein structure, which is going to open up new areas for therapeutic drugs. It's working with just text.

Yeah. When do you think we go from the cellular level to packages of cells, to multicellular? How does that cascade work? Is there an idea?

What I found is that a couple of the therapeutic companies working on this reverse-aging stuff are actually targeting specific health conditions, and they have their therapeutics in clinical trials now to test for efficacy in that particular target. The idea is—

Efficacy as in a 2A or a 2B, or are they still in phase 1?

Yeah, they're still in phase 1. They're testing to make sure humans can handle it, what the dosing is, and all that sort of stuff. So, it's still phase 1. They have lots of animal-model data that seems pretty good, but as we know, that stuff can all change as you go into 2A. For now, they are targeting specific disease indications. That's how they're going to get approval of the first batch. As that happens, the goal over time is to get aging itself to become an indication and then apply for aging.

What's the over-under on the first drug using these pathways, using these mechanisms of action, getting approved? When do you think?

Just knowing the clinical path, I would say we're probably somewhere between 7 and 12 years.

7 to 12 years away.

Okay. So, the midpoint is like 10—like a decade.

Yeah. And then you know what'll happen, just like we see today.

You think there's a version where people fly to Costa Rica, making Costa Rica interesting, and can do something for themselves in the next 3 or 4 years?

Yeah, that's a great question. I think that's a very interesting idea that might happen. That's a really interesting idea that might happen because these are proteins, and because I own land in Costa Rica, I'd love to develop a kind of hospitality—

I'm just kidding.

Well, I mean, people are doing this for stem cells right now. I'm totally kidding. I own no land in Costa Rica.

No, I mean, people are using peptides and stem cells and all of these alternative modalities.

But you know, the risk with these historically—

Well, we could partner with J-Cal and open something in Wyoming. Is it Wyoming?

Right. But when they overdosed someone on the early version of these proteins and gave too much to someone or an animal, when your cells reverse all the way back to being a stem cell, they start dividing and growing like crazy. That looks like cancer, and you can't stop it. The cells don't know how to differentiate back into differentiated cells.

So, there's a major risk in this therapy still, because you're actually changing the gene-expression networks in cells. You're taking a skin cell and turning it all the way back into a stem cell. You don't want a bunch of stem cells growing on your skin. That's not going to be good. Those are going to end up turning into what looks like and acts like cancer. So, there's a real path that needs to be explored here: How do you mediate that, and how do you modulate that?

I thought this was incredible both from a breakthrough perspective for this cellular-rejuvenation work and for what you can do with LLMs. This is not something where people said, “Hey, let's use LLMs.” It also shows, importantly, that we're going to have these fine-tuned, smaller models for specific applications rather than one massive AI model that does everything for everyone in every context.

People are going to take these base models, tune them, and they're going to require far less compute while being extraordinary at specific applications. This is one very narrow example of that, but it certainly seems to be a use case that should open the door for many others like it.

Yeah, agreed. Hey, Friedberg, I am not fully briefed on this, and it wasn't on the docket, so we can skip this if you're not as well. But RFK has made a lot of decisions about mRNA vaccines, government funding for them, who should get the COVID vaccine, and whether we should be paying for it. What are your thoughts generally, and have you been monitoring this?

I want to be more prepared for that conversation.

Cool. I think I've heard different things about the funding, and then I've heard different things about the rule change. I just want to make sure I know the facts.

Yeah, let's tackle it next week. It was interesting. I think he largely wound up where we all wound up, which was: for healthy people, maybe it's not necessary; for people at risk, it is necessary. But they're codifying that now, and some people are losing their minds while other people are not.

What happened? I wasn't following.

So, this is all a sort of moving target right now, but RFK withdrew federal funding for mRNA vaccine development. He removed the COVID vaccine from the CDC recommendations for healthy children and pregnant women. If you want to get a COVID vaccine, healthy individuals must consult with a physician first. Remember, you could just go to any pharmacy and get a shot. Now you have to consult with a physician.

The COVID-obsessed people are losing their minds. Everybody else is like, “Isn't that kind of the standard where we wound up anyway?”

Yeah.

I'm really interested in hearing or reading his report on the autism linkages that he says he found data on.

Yeah, I really want to know what they're going to publish on that. I think that's such an incredibly important conversation to be had, and I'd really like to see what they come up with.

What's the story then, Friedberg, of why people are so bent out of shape about even talking about the number of vaccines we give to kids? I understand people are scared or whatever, but it just feels like people are losing their minds over even having a study or a discussion of it.

It's one of these dogmatic things, man. It's like, fall in line or there's something wrong with you for asking questions. The idea that you may have made a mistake about the most precious thing in your life, which is your child—

I think there are a certain group of people who, when they underwrite a decision, become so firm and set in stone that anything that says they made a bad choice—

Yeah.

Cognitive dissonance, right?

Sends them off the rails.

I mean, I re-underwrote my decision, and I was like, “Yeah, I was excited to get it because they told me it would be good for society and it would stop the spread.” So, I was like, “Okay, I'm more than willing to do that.”

You're so magnanimous, Jason.

I still want Grandma and Grandpa to die, Mr. Magnanimous.

You did your part. You did your part.

You did your part. Yeah.

That's what it felt like. That's explicitly how they said it to healthy people. They said to healthy people, “Do your part.” And I was like, “Okay, I'll do my part.”

You should be nominated for a Nobel.

Maybe I should be nominated for getting the vaccine.

Yeah, you're taking medical advice from Stephen Colbert, and then you wonder why you regret your decision—

From the CDC. I thought they could be trusted.

I thought they would tell us the truth. Sorry, I didn't get the memo that these guys were all engaged.

Here's a little news flash: pharmaceutical companies were lying. Here's a news flash for you, Jason: if your underwriting process is going to LinkedIn and looking at somebody's educational credentials, you're an idiot.

Yeah, I would agree with that. All right, if you've come to this realization about the CDC, why can't you come to it about the Fed? In other words, these are hyperpartisan actors who are very political, and they don't know what they're doing.

Totally. They're not some high caste of priests who are making decisions.

I'm all for questioning everything. I question everything, of course. Nick, make a graphic.

Oh my gosh. Here we go.

Smoke bubbling out of a cauldron.

Folks, I think the rate should be the same. Hold on. Hold on. What a joke. I mean, what is Uber trading at? Is it over $88? Okay, fine. Let it rip. Let's go for the full 75 bips. Let's go. Free money for everybody. I'm in. Let it rip.

Too late, pal. He'll cut for Biden. He'll cut for Yellen. He'll cut for Kamala. He will not cut for Trump.

Even though we have 2.0% PCE.

What's your favorite government agency?

I'm in favor of less government.

I could take that seriously. Nick, pull this image up.

Do I have a favorite agency? Maybe it's—

Oh, look. The secret camera from the Fed. Here's your Fed meeting. The scrolls.

Isn't it hilarious, Chamath? None of us are part of any clubs. You two knuckleheads had to start your own club. I'm not part of a club.

You had to start one.

I'm a founding member of Executive Branch.

And you had to start your own.

I have locker number 27 at Shadow Creek in Las Vegas. Four lockers down from my hero, Michael Jordan.

Oh, really?

Which is right next to Phil Hellmuth. Actually, Phil Hellmuth is—

No, he does not have a locker then.

No, no. Phil Hellmuth shares Michael Jordan's with him. It's like it says MJ and PH. They share their locker. They both have their shoes in the same locker.

I'm also a member of Zero Bond in New York and Little Beach House in Malibu.

Oh, look at you. Look at you. But it's called the Groucho Marx rule: we don't want to be members of any club that would have us as a member.

Absolutely. Can I say one club that I went to by accident? I was invited and never been invited again. It was the Links Club in New York. But here's the hack at the Links Club, which I think is incredible: they have bought so much wine over so many years that the menu shows the price of the wine when they bought it.

So I saw $75.

No, dude. There was a 826 Lynchbage and it was 120 bucks.

Yeah, that's like Deutsche's Club. It's Deutsche's Club. That place is incredible.

I went there with a former member, and we tried to buy all the wine because we're like, what the fuck? They sell it to you at that price? No sense. And then they wouldn't let us buy it because we weren't members.

But isn't it an incredible benefit that it's the price you bought it at? They keep it at that.

Why don't we start an All-In club? The All-In Club. Maybe I'll get my membership approved. I don't know. I've been waiting.

I mean, I don't know what club all 4 of us would want to be in. I'll be honest with you.

I don't know. If it was a poker table, I think we're done. A poker table. Some good ideas.

We have that club. It's in my house.

Well, no, but imagine we had one in 5 major cities, and you could go and play backgammon or smoke a stogie.

All right, everybody. This has been an absolutely amazing, fun episode of the All-In podcast. Your favorite podcast, the number one podcast in the world. But while you’re at it, why don’t you tell your knucklehead friends—all three of them that are left that haven’t heard of this pod—and tell them to link and subscribe and whatever. Go to allin.com, put your email in, maybe you get invited to a party. See you at the Summit, everybody. It’s going to be super exciting. Sacks came over the top at the last minute and added 3 spectacular speakers that I’m not going to say, but Sacks came through in the final minute. He added 3 amazing speakers. Surprise speakers, they’re coming at you.

Bye-bye.

Love this. Bye-bye.

We’ll let your winners ride.

Rainman David,

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

Queen of [Music] besties are gone. Yeah, my dog taking on shared driveways.

Oh man, my habitasher will meet up.

We should all just get a room and just have one big huge orgy because they’re all just useless. It’s like this sexual tension that we just need to release somehow.

[Music]

We need to get merch.

[Music]

I’m going all in.