Transcript of Hurricane fallout, AlphaFold, Google breakup, Trump surge, VC giveback, TikTok survey

All right, everybody. Welcome back to the number one science, politics, technology, and business podcast in the world for five years running. We're about to hit our fourth anniversary here. Episode 200 is coming up, and a bunch of lunatic fans are getting together. You can join them, allin. Com/meetups. Holy cow, we got the domain name Allin? Fantastic. Go to allin. Com/meetups, and hey, subscribe to our YouTube channel. We're going to do some crazy event for the Million Subscriber Party. We're like 300,000 away, gentlemen. This is nuts, huh? Can you imagine this thing made it to 200 episodes?

We have allin. Com. How much did we spend on this?

This is great. I negotiated it. I got it. It took me two years, and I got a sick deal on it. I don't even want to say because I don't want to change it. Don't say. I'll just say you bleep it out. I got it for... We're selling it for a year or so. And that's a million dollar domain, just so we all know. Five letters in the dictionary. So good for branding.

Good job, J. Com. Thank you, my friend. Yeah, now we have allin. Com/tequila.

Oh, I love it. Exactly. And you can... I got you sacks. Com, didn't I? You have the domain name, sacks. Com. Oh, yeah. I negotiated that for you.

Wow, we have all the way back to episode one. This is incredible.

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Allin. Com. Allin. Com.

That's our website?

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After four years, we got our shit together. This looks great.

Here we go. I want to give a shout out to podcast AI, one of our... Remember those fake all-in episodes? That became a startup, podcast AI, and they built our website for us. So shout out to the team over there. All right, ladies, let's move on. I am, of course, your executive producer for life and the moderator of the all-in podcast. And if I may, just a tiny plug, if you're a founder, we are having our ninth cohort of Founder University. It's a 12-week course I teach on starting companies.

What are you doing?

What is this? Stop. What is this? I'm just giving a quick plug for Founder University. I need to get a plugin because I wanted to be Founder.

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Let your winners ride.

Rain Man, David Sass.

And it said, We open source it to the fans, and they've just gone crazy with it.

Love you guys. I'm going all in. Speaking of that, your people use me in an ad, Friedberg. So don't talk about plugs.

A few weeks ago, when I shot it out that Glue AI was hiring engineers, we had like 100 applications just from that.

From Glue AI, looking for engineers?

From one blog on the show, yeah.

For Glue AI?

Yeah.

Right. That's awesome for Glue AI. And if you haven't tried Supergut, Friedberg's team literally made an advertisement with me talking about Supergut and didn't tell me.

And we're still hiring.

Okay, well, there you have it. So go to founder. University to apply for my twelve-week program.

Check out grok. I'm running a GoFundMe. A GoFundMe? Yeah, go to gofundme/freberg. Really?

For what? Where's Annex to deal with your panic attacks? All right, let's get started, everybody. Enough of this shenanigan's hurricane season is upon us, as Friedberg had predicted. Hurricane Milton made landfall on Wednesday evening along the West Coast of Florida, as many of you know. It's been downgraded. It started as a Category 5, potentially, then a Category 3, and then it looks like it's a Category 1 now. So I guess these things are quite random. Leading up to Milton, though, 6 million Floridians across 15 counties were ordered to evacuate. That's a lot of people moving out. And it was a pretty powerful storm. It ripped off the roof of the Tropicana field in Tampa. So far, the death toll is at four, but it's expected to rise, sadly. Just two weeks ago, Hurricane Helene swept through six Southern states, killing over 220 people, tragically. Devastating Western North Carolina, and entire towns were wiped out. These are also So beyond the tragic human losses are economically staggering in terms of the losses. Accuweather estimating the total economic damage could be between 145 and 160 billion from Helen. And Moody estimates the property damage alone could be as high as 26 billion.

Tons to get into here. Fema, Starlink, saving the Day, tons of stuff. But Friedberg, back on episode 182, you predicted this would happen. What's causing all this? And let's just start with the science angle, I guess, before we get into the other political and insurance issues.

Well, I think if you'll remember when we talked about this a couple of months ago, the sea surface temperature was at a record high in the Atlantic, and warm ocean temperatures drive moist air up that evaporates. The warmer the air, the faster the evaporation, and that starts to cause the movement of the air, which drives ultimately the hurricane. And then the hurricane sucks up more warm, moist air from the ocean, and it creates a feedback loop. The more energy you have in the ocean, the more likely you are to accelerate wind forces in storms. That's why you get these massive hurricanes that suddenly form seemingly overnight and go In the case of Helene, that hurricane went from a cat 2 to a cat 4 or cat 5 in like 48 hours because of the energy that's stored up. Here's an interesting stat. 90% of the energy that we get from the sun is absorbed and stored in our oceans. The other fact that's playing into this, if you pull up that nature article, and this is something that I think you guys may remember we talked about. This was an article that came out, a paper, a science paper that came out a couple of months ago.

In this paper, the scientists identified that removing sulfur dioxide from cargo ships that travel across the oceans is actually causing accelerated warming in the oceans. The reason is that the sulfur dioxide forms cloud formations as they travel across the oceans. Those cloud formations reflect sunlight. In the absence of those cloud formations, that sunlight makes its way into the ocean and you get more ocean warming. And by their estimation, removing sulfur dioxide, which causes acid rain, and that's the reason it's been pushed to be removed, and they started removing it in 2020, 2021 from cargo vessels. By removing sulfur dioxide, we are now going to see a doubling of the rate of warming of the oceans in the 2020s and going forward.

Let me pause there for a second just to make sure people understand what you're saying. Emissions from cargo ships block sunlight, which then, of course, reduces the heat by the oceans. We're now choosing between pollution of the air or overheating of the oceans. Am I correct in summarizing that?

That's roughly it.

What is the pollution again? Sorry, I just don't understand.

It's emissions. Sulfur dioxide. Sulfur dioxide. Yeah, that goes into the fuel of cargo vessels. A couple of years ago, they started to implement these mandates that Sulfur dioxide no longer be used in the fuel. As a result, when Sulfur dioxide is emitted from these vessels. It goes into the atmosphere and it actually triggers cloud formation. Now you have these clouds that are forming. Nick is going to pull up this image right now. Yeah, here you can see that. All of these tracks are these cargo vessels moving across the ocean. As they move across the ocean, they create cloud cover. That cloud cover actually reduces the warming in the ocean because it reflects sunlight. Now that sunlight energy gets absorbed into the ocean. This is another driving force that some people are now speculating, maybe accelerating the warming of the oceans that we're seeing, which drives this extreme storm and hurricane event. This becomes a more frequent event.

Now, a lot of people also- Sorry, can I ask you a question? Does that mean that we're mean reverting? Meaning if we improve the quality of the fuel source that are used in shipping, doesn't that then mean that we're reverting back to what would have happened in the absence of these dirty fuel sources?

Yeah. In addition- No, I'm asking you the question.

Is that true or not?

Yes, we are no longer reflecting as much sunlight. For several decades- We had bad fuel sources. We had artificial cooling, effectively.

We had an artificial cooling, and now we take... But that's counter to the narrative of what we all think is happening.

Well, the argument is that we've actually been warming the atmosphere, which we have been. We can see the data that shows that everywhere, all over the Earth, not just about sunlight coming in on the oceans and not just ocean warming. But the atmosphere is warming, the planet is warming. By blocking the sunlight above the oceans, we were artificially dampening that effect, and we were reducing the amount of heat energy that was getting into the oceans. Now, by taking that away, we're seeing the heat energy in the oceans accelerate, and now the oceans are getting much, much warmer.

So the pollution was good?

That's the paradox here, is that it was creating a blocker for sunlight. To your point, to get him off. Exactly. Shouldn't we just be going back to what was normal? But at the same time, in the same system, we had heated things up. This is a multifactored system that we're dealing with, Friedberg. I guess the takeaway from all of this is that We got to be really careful with what we do with the environment, right?

Well, let's talk about economics, right? How much real estate do you guys think is on the Florida coastline? What's the real estate value?

Sorry, Friedberg, can you just anchor this? Was it that it was supposed to be a Category 5, and now it's Category 3 when it hit land?

What happens typically when storms hit land is they no longer have that hot ocean pumping energy back into the storm that keeps the feedback loop going. The storm cycle starts to break down. All hurricanes, when they hit land, they start to break apart. The category which measures the wind speed actually reduces. This is just a natural thing that happens. But this was a Category 5 hurricane. When it made landfall, I believe it was Category 4. So It was a massive hurricane as an approach.

We should not dismiss it because my understanding was Hélène was cat 4 when it hit North Carolina. But I read yesterday that- What happened with Hélène was it was cat 4- Milton is Cat 3 when it hit Tampa or something. Is that not right?

Yeah, so that's right. But what happened when Hélène hit North Carolina, it was not a Cat 4. What happened is as that storm moved inland, it hit the mountains, and the first mountains it hit are on Western North Carolina. That area is elevated. There's mountains there. So when a heavy, hot storm runs into cold mountains, all the moisture dumps out. It's like it runs into it, and suddenly everything precipitates out of that storm. And that's why some parts of Western North Carolina got 18... Some people measured as high as 30 inches of rainfall in a couple of hours. So this insane dumping happens when that hot air hits a cold region and suddenly all that warm moisture precipitates out and dumps to the ground. So it ran into mountain. It's effectively why everything fell out in North Carolina.

Wait, so you're saying that it wasn't Democrats who basically- What do you think, Sacks?

What do you think, Putin? Who did it, Sacks?

I thought Nancy Pelosi cast a spell or something.

Well, isn't there a lot of geoengineering, conspiracy theories going on in your cohort?

I don't think so. But Vinod wants us to be very clear that we need to stop all this disinformation that somehow Democrats were behind that storm. We can assure everyone that it was just precipitation.

There's a lot of theory online that there's a ton of lay geo-engineering being run by government agencies to drive these storms.

I don't think people are taking that seriously.

Well, I mean, the origin of this, though, Friedberg, is people have done experiments for decades on trying to control the weather or alter the weather, and they're doing that in the Middle East by seeding clouds and creating more rain. We saw that with the Dubai floods, they said that that might have been caused by over seeding of clouds, which they're doing there. And then there have been experiments, just for the crazy laser people, conspiracy, there are SunX. There actually have been experiments with lasers being shot into hurricanes and storms, correct?

Are you Alex Jones? Is that what we're doing?

Well, no, I'm not saying Alex Jones. I'm just saying that's the origin of where people are building on this.

There have been the amount- Okay, so let's just talk about the hurricane, the amount- I'm teeing it up for you to debunk it is what I'm doing here. Putting particulates in clouds to accelerate precipitation is... I mean, we've done that for 100 years. You can increase the precipitation rate when there's already clouds that have formed. But that has nothing to do with creating 200 100-mile-an-hour wind speed. That requires an extraordinary amount of energy. All of this energy, the oceans are like giant batteries. When a hurricane gets going, that battery is accelerating the hurricane, and the hurricane sucks up more power from the battery, and it this incredibly dynamical system. There is no human-created energy system that can form a hurricane. A hurricane is an extraordinarily powerful natural phenomenon that arises from the amount of energy that can come out of very, very, very hot oceans, relatively speaking. That's really where these hurricanes are coming from. Now, they're going to be more frequent if the ocean temperatures remain elevated as they seem to be and continue to be elevated. This can be a function of, generally, the temperature is warming on Earth, generally, the removal of sulfur dioxide We're in, generally, these El Niño-Lanina cycles.

There's a lot of factors, but it seems to be the case that we are having a very significant trend of continuously warmer oceans. Those continuously warmer oceans means that we're going to have what used to be called a one in 500-year storm which is what Asheville is being termed at, one in 500 year. These sorts of storm events can happen every couple of years. We're now looking at one in 100 year events happening every 2-3 years in the United States with the hurricane activity that we've been seeing.

I think a lot of the conspiracy there are built on actual experiments that happened. This one, Project Stormfury, I'm sure you know about, was to try to modify hurricanes by putting in some chemicals that would freeze them and dull them. They're building on this.

They're building on this. Break it apart.

Yeah, break it apart. There have been experiments here with altering weather, altering hurricanes, but that doesn't mean it's Putin, Pelosi, or the Illumina.

Okay, so let's get back to brass tax.

Let's talk about the economics. There's $500 billion to a trillion dollars of real estate value on the Florida coastline. What used to be a one in a hundred year event, the average Florida homeowner historically has been paying about 1% of the real estate value in insurance. Now, if your real estate is likely to be wiped out one out of every 20 years instead of one out of every 500 years, the cost of insurance gets to the point that it is untenable for most people to pay for their insurance. Florida has a state-back reinsurance provider called the Florida Hurricane Catastrophe Fund. This fund issues debt to meet its coverage demands because it reinsures insurance companies in order to incentivize them to come into the state and underwrite homeowners insurance.

You should explain the loop here, which is you go and get a mortgage. The bank says, You need to get insurance if I'm going to lend you the money to buy the home. Then a bunch of insurers need to decide that they're willing to underwrite that area. Then when they give you that insurance, they then want to lay that risk off go to a reinsurer. Is that the cycle?

That's right. What's happening is they would normally underwrite that risk. They would say, This is going to cost... You're going to lose the value of your home every 100 years or every 200 years. But now, the models are showing, because of the frequency of these sorts of hurricane events and the severity of the hurricane events, that maybe you'll lose the value of your home once every 20 years or once every 30 years. No consumer is going to be willing or able to pay that much for the insurance on their home. The state over the last several years has had to step in and effectively subsidize the insurance. Now, the state reinsurance vehicle only has statutory liability maximum of $17 billion in a single hurricane season. Now, I think We got lucky with Milton today, but some were estimating that the Milton losses were going to be in excess of 100 billion, bigger than Katrina. It's likely, as of this morning, the reinsurance websites are all saying it's probably a 40 to $50 billion loss event, which still exceeds state's reinsurance capacity. You can think about Florida State's reinsurance thing being effectively bankrupt. It doesn't really have the capacity to underwrite the insurance anymore.

The real question for everyone is, is the federal government going to have to step in and start to support the price of homes?

Because if they don't- Well, it's a terrible precedent to set, because if you do it for Florida, then you'll have to do it in Texas, in Louisiana, in Mississippi- California with wildfires. California, in Arizona, and Texas. There's going to be no way to to create a clear demarcation of who gets a bailout and who doesn't, which will mean that everybody will get a bailout or nobody gets a bailout. That's right. If everybody gets a bailout, and if you think about how systematically unpredictable, at least in the Southern States, the weather is, you're going to be talking hundreds of billions of dollars a year, probably.

The total value of all mortgages and homeowner mortgages in Florida is $454 billion. Those people typically have a debt to equity ratio, probably on the 50 to 80% range. If the value of your home dips by 25% because everyone starts selling their homes, leaving Florida, or they can't get insurance, then the people that live in Florida, most of them have their networth tied up in their home, are going to see their personal networth wiped out or cut in half. It's not just an economic problem, it's a social problem that now there are so many people that have put their entire networth into their home, the value of their home is written to a point that it no longer makes sense given the frequency at which homes are going to get destroyed.

That's probably the reason why they'll have to do it because they'll...

Exactly.

But then that calculation will have to happen for every single homeowner in every single state where this is an issue.

Wait, Friedberg, are you saying the entire Florida coastline is no longer economically viable?

No, it's totally viable. It's just the question is, what are you willing to- At what price? At what price? Will you pay 5% of your home value for insurance every year? Will you pay 2%, 3%?

If the expected life of a house is 20 years, then that's not It becomes very untenable.

Well, it used to be 1 in 500.

Now, it's probably 1 in 15. My question is, does this apply to the entire coastline or just parts of it?

Well, I mean, you saw that the range at which these events can happen is all over the place. The challenge is the events are getting more significant because of this warm ocean weather that we see, this warm ocean temperature. The only good news, Friedberg, is that now people are building the first couple of floors in high rises in Miami and homes on stilt with concrete and with saltwater resistant material.

There is a counter to this.

We might be looking at- An investment in climate resilience. That's right. Yeah.

It might actually be an opportunity to upgrade all these homes to resistant ones using another set of technologies But the bailout is really interesting, too, Sacks, because Florida has got a lot of electoral college votes, doesn't it? I hate to bring this back to politics, but promising people bailouts is how these politicians seem to be getting votes these days.

But is anyone talking about a federal bailout? This is something you're predicting.

I think what Friedberg is saying is that there's a pretty obvious parade of parables here where the question will have to be answered one way or the other. Because If you only have a $17 billion reinsurance fund and there's 50 billion of damage, somebody's going to have to come in and cover the gap. If it's the insurance companies, expect your insurance premiums to double or triple.

That's right. That's what happened in California. By the way, State State Farm left a lot of California.

This is what I was going to say. Most of these big insurance companies have already done the calculus to realize that these regions are no longer profitable enough to justify the downside risk. That's the bigger problem. Then the ones that are left are insolvent reinsurers or insurers that are just funding short-term arms because they know that the odds are they're going to get wiped out, so they'll price gouge effectively. A different example is that here where I live in Menlo Park, we're not in a floodplain, we're not in a fire region, none of that stuff. But in order for us to get home insurance, you have to now go through a risk assessment. In our specific case, we were like, Hey, what should we do with our roof? They were like, You got to take the roof off if you want home insurance. We're like, Well, home insurance is probably a good thing to have.

Was it a wood shake roof on your house?

You saw our house. It's a beautiful wood shake roof, and we had to remove it. The two choices were a $350,000 iron roof- Composite materials, yeah. Or 70K for composite. It's like, this is insane. The cost of insurance was just egregious in the absence of going in one.

Anyways, we ended up getting the- For most homeowners, when the cost of insurance gets to a certain threshold, you don't have budget for it, you can't afford it. That's a lot of why the insurers leave. They'll underwrite anything at any price, but they just know that most consumers can't afford it. Here's some other interesting statistics, related but unrelated. In the early 1900s, the city of Phoenix, Arizona, averaged five days a year of temperatures of 110 degrees or warmer. By the 2010s, Phoenix averaged, during the 2010s, 27 days a year where the temperature was 110 or higher. Since 2021, Phoenix averaged 42 days. And in 2024, it's been 70 days so far this year that the temperature is over 110. So this is affecting, and so there's increased risks in California with wildfires, increased risks with hurricanes. There are a lot of these factors, and I have friends that work in reinsurance in the insurance markets.

Even if you don't get affected by a wildfire or disaster, when that article was in the Wall Street Journal, I think it said that the number of average days above 100 was like 100 something. Yes, that's right. And They profile this retired woman who is an insurance adjuster or something. And the whole point of the article was not that her house was destroyed or at risk, but the cost of electricity has gone just absolutely sky high. Even with solar panels, even with storage, you need to basically lean on the grid, and the grid now just charges you an exorbitant amount of money. So these folks were paying thousands of dollars a year. If you imagine the trifecta, you have all of this climate risk that could destroy your home. You're paying an enormous premium for home insurance, and then you're paying an enormous premium for electricity from the mainline power utilities. It's not sustainable.

Yeah.

And just for this background, FEMA manages something called the NFIP, National Flood Insurance Plan. It's historically about 50% cheaper than private flood insurance. They have 4.7 million active policies providing 1.3 trillion in coverage, but they instituted a new risk assessment system, and that caused rates to increase. Because of all this, the policies have decreased over the last couple of years, meaning less people have flood insurance at the same time that these things are getting worse. And so, yeah, this is a really tough issue. I wonder if this is an opportunity, Chama, if you think about historically how insurance worked, it worked in communities where people would help each other out and do barn-raising events when somebody had a problem. So if we just put on our entrepreneurial hats here, if you look at the cost of insurance, if a hundred different people bundled the cost of their homes together, put money into some platform like an Uber, Airbnb marketplace, and there were some management structure here of self-insurance, because I know some people are doing self-insurance for health care at their companies for this thing. Do you think there's going to be a new business opportunity Money here.

That's called a mutual. That exists, Jason. It's called a mutual. A good chunk of the industry are mutuals where the shareholders are the members and they all share the risk and the ownership.

The problem is- Those things work because you have broad geographic If you had to go just into Malibu and self-insure, the rates would literally be greater than the value of the homes.

No one would pay into it. If you do proper underwriting, what's happened in the last couple of years is all the reinsurance companies and all the insurance companies have They have to re-underwrite the rates that they charge for insurance because the frequency of a disaster has gone up. The new price that they should be charging is so high. It doesn't matter how the capital structure is set up. It's simply there's one big event that's going to cause a big It's like that for a large number.

My personal belief is I think that the real estate markets in some of these places are meaningfully mispriced. Specifically, what I mean is that they are massively overpriced. That's right. Because I think when you actually account for the climate damage and the long-term financial stability of the insurers and the reinsurers, I don't think that many of the markets that have seen these crazy sky high I'll name two to be specific, West Palm Beach and Malibu. So both ends of the coasts. These things just don't make sense. I think people view these things as investments. But on the West Coast, when you deal with things like soil Erosion and other things, I think it's a calamity waiting to happen. I think on the East Coast, when you factor in the extreme weather conditions, even Jason, your comment about rebuilding these homes in a more foolproof way doesn't solve it because you won't be to rebuild the entire state. There's a lot of people that just can't afford it. There's a lot of folks that will not have adequate coverage. I just think these are disasters waiting to happen, unfortunately.

Yeah. Sacks, there's a movement right now. A lot of people, even of means, are renting their homes. In the real estate market, what are your thoughts on that? Just renting versus buying now becoming a Something that people in the top half of homeowners or potential homeowners are now electing to not own their home and rent.

Have you been monitoring that? Honestly, I hadn't heard that. The trend that I thought was happening was that you had these big funds, like BlackRock or whatever, buying up huge numbers of homes and then running them to-Low-end homes, yeah. Low-end or medium to families. I thought that's what was going on. I hadn't heard that at the high end of the range that people were running.

Well, if you think about it, there seems to be a cap when you have a $10 million home of what you can possibly rent it for. The prices are now making more sense to keep your money in the market or in other places and then rent. I'm just hearing that over and over again.

Friedberg, are you long real estate in Florida or coastal California, if you could, or do you treat them differently?

I think they're different, but Florida is like... I don't know how you do the math on I just don't know what you do on a trillion dollars of real estate value with half a trillion of mortgages. When you have real exposure on loss more frequently than one in 100 years, to your point, they need to be repriced. How do you reprice those homes in the significant level that they need to be repriced without causing massive economic and social consequence? That's what's, I think, challenging me in thinking about what's the path here.

It was a good thing that I sold my Miami place.

Once again, Sacks makes a great trade. Pretty awesome. Well done, Sacks. I top-ticked it. You top-ticked it again. Well done, Sacksy. Just like, Sacks, boop.

I love that house. It was on the Miami Highs.

You love that house? Where do you think I stayed when I was in town? You're so selfish. I lost a place to stay. I mean, the yacht access alone, being able to get out on the bay and get on a boat, the skidoos, all this great stuff. Okay, All right, let's keep the Friedberg train going here. Huge news. Alphafold creators just won a Nobel Prize in chemistry. Two members of Google's DeepMind AI research team, Demis Hasabis and John Jumper, received this year's Nobel Prize in chemistry. They both work for Google's DeepMind, as you know. And Friedberg, again, all in getting there first, explained what AlphaFold was back on episode 14 in December of 2020. That was almost four years ago. Friedberg, maybe you could explain.

Did we predict that they would win the Nobel Prize at the time?

I believe you did. We'll go check the receipts using- Hold on. Hold on.

It became much more likely that they would win the Nobel after they won the breakthrough prize. I mean, just to point this out. Yeah.

Shout out, Yuri Milman.

Shout out, Yuri and Julia. And Julia. Because when those guys won that award for 2023, and you heard the extent of what they've done, it was almost obvious that they were going to win Nobel after the fact. I think the really interesting thing is actually in this community, I think the breakthrough prize is actually meaningfully more relevant and a positive directional indicator to breakthrough science.

Well, it's like winning Sundance or Cann. You win the Palm Dore, you become a favorite to win at the Oscars, in the Academy Award. So that's actually interesting. The regional or more industry A centric award could lead to the next one. So Friedberg, just explain to us why this is so important before we go on.

I just think it's much more rigorous than the Nobel. I think the Nobel can be a little bit gained, I think.

Oh, interesting. Okay. What do you think, Friedberg? Explain to the audience why this is important and what's transpired since we talked about it four years ago.

There's been a long challenge in biochemistry on understanding or predicting or visualizing the three-dimensional structure of proteins. Because remember, proteins are produced by long chains of amino acids, and those amino acids create like a beaded necklace, and then the whole necklace collapses on itself in a very specific way That three-dimensional molecule, that big, chunky protein, does something structurally, physically. So trying to understand the shape of a protein is really hard. We've used X-ray imaging systems to try and identify it and tried to build models to identify how does that protein folding work? How do those amino acids collapse on each other to create that three-dimensional construct? I don't know if you guys remember in the early 2000s, there was a Stanford Folding at Home Distributed Computing Project. Do you guys remember this?

Yeah. It would use people's machines and extra CPU like the Study at Home Project to- Precisely, yeah.do this.

Exactly right, yeah. It was like it ran on the background of your computer. It used your CPU cycles when you weren't using your computer, and it tried to model protein folding. This has been a problem that have tried to tackle with compute for decades to figure out the 3D structure. This is so important because if we can identify the 3D structure of proteins and we can predict them from the amino acid sequence, we can print out a sequence of amino acids to make a protein that does a specific thing for us. That unlocks this ability for humans to create biomolecules that can do everything from binding cancer to breaking apart pollutants and plastics to creating entirely new of molecules to running, in some cases, like what David Baker did at University of Washington, he shared the Nobel Prize, creating micromotors, mini motors from proteins that he designed on a computer. This becomes, I think, this great big Holy Grail in biochemistry 3. The AlphaFold project at DeepMind, inside of Google, solved this problem. By the way, since then, they've come out with AlphaFold 3. They've launched a drug discovery company called Isomorphic Labs, where they're basically predicting molecules that will do specific things for a target indication, and then they use the AlphaFold models to actually design and develop those molecules.

There have been literally dozens of companies that have been started since DeepMind was published, and probably several billion dollars There's this capital that's gone into companies that are creating new drugs, creating new industrial biotech applications using this protein modeling capability that was unleashed with DeepMind a number of years ago. It really has transformed the industry. It'll be a couple of years before we see it transforming the world, but It's an exciting thing.

Not to burn your signal here, but those are plus-size proteins now, free bird. They don't like being called chunky. They're calling them plus-size proteins.

Plus-size proteins.

Yes. One really difficult technical question for you, free bird, Is there any way for you to take this amazing breakthrough and make Sacks interested in it? Is there any possible vector here for it to relate to Sacks and get him off his Blackberry right now?

Blackberry.

I think he's playing chess with Teo and JD Vance is watching them play chess. I think that's what's going on right now. It's really hard. I mean, the poor audience here is watching Sacks looking down. All right, let's keep this train moving here. Enough of the shenanigans.

Anyway, congrats to the teams, the very teams that wanted to know. Congrats to Demis and Jumper. It's just great. And David Baker, the Baker Lab in University Washington.

And David Baker, also a breakthrough prize winner. What's interesting to me is these two Nobels, these guys, but also Jeffrey Hinton's. You're really seeing now the convergence of the hard sciences in computer science. Totally. In a really meaningful way. I think that that's so interesting and cool.

I think in the group chat, Chamath, you had an interesting, Hey, maybe there should be a computer science award for a Nobel Computer Science Award.

I actually think it's the opposite now, which is that it's amazing to see folks using computers to improve our understanding of the natural sciences. I think that that's a really great place to be. What Demis and John and David are doing in the life sciences is amazing. What Jeffrey Hinton did 30 and 40 years ago and 20 years ago in terms of training deep neural nets Also really amazing.

In related news- All computer-based. Yeah, all computer-based. And in related news, Benioff just nominated himself for excellence in CRM management. So congratulations to Benioff on nominating himself for a Nobel. What is that about? What is that comment? It's just a Why are you attacking Benioff?

It's just a strength.

The audience loves- What did he do wrong?

It's just a joke. It's a joke.

What are you doing?

They're just jokes. Have you not learned anything to a problem like the incident?

When you attacked the people that attacked you- It's not an attack.

It's a joke. Benioff has done so much for philanthropy. Just ask him. If you- Oh, my God.

Dude, he's doing the best he can.

He's doing a great job. This is how I got in trouble with a problem like the incident. What are you doing?

Exactly.

Can you people have a sense of humor about yourselves?

No, but it's not even funny if you had He said something else.

I mean, okay, give me a funnier Nobel. Go ahead.

Penia runs a 300 billion market company.

He's chomping at the bit to come back on the pod and explain why AI is not going to disrupt SaaS. Really?

Oh, we see he wants to be back on the pod.

He's texting me. He wants to come on.

We'll check in in $100 billion. He had his chance. That chance is closed.

He shot his shot and it did not land.

That door was closed when he insulted our guests about not being able to afford the Disney course. When he called the All-In people, boors.

Oh, my God. Now you're piling on.

Anybody coming to Dreamforce 2025? Okay, let's move on.

Sorry. Anyways, leave Benny off alone, G.

It's like Leave Brittany alone. That famous meme. Leave Benny off alone.

How many new enemies do you want to create?

Every week, there's got to be somebody. They're just jokes.

Just when you thought he was running out of feuds.

I'm not in the field with anybody. I'm making stupid jokes. The reason people tune in is because you laugh and learn.

Did you guys see that tweet that somebody suggested throwing a conference with all of J. Cal's haters?

Jason Kohn. Jcon. Jator's. Jator's Convention.

What is it called?

Jader's? Jader's, yeah. Jay Hater. Yeah, Jason Hater. Jay Hater. I'd like to shout out my Jader's. They're just jokes, folks. I I love you, Mark. I'm penny off. Come on the pod, Zack.

I think somebody could launch a successful summit just doing that. It's like a ready-made audience. And they're clearly passionate. They're clearly passionate.

All the YC founders will be there.

Keynote, day one, Palmer lucky. Keynote, day two, David Sacks.

I think it would rival the All-In Summit in terms of the passion of the fans.

All three of us would show, and Jake L will be so devastated. Keynote, what?

Are you kidding me? I think it's hilarious.

I have to- Paul Graham.

I like Betty Off. I'm not trying to make any music for Betty Off. He's just got to have a sense of humor.

Oh, my God.

I'm at Megan Kelly.

A special fireside chat, Megan Kelly and Farmer Lucky.

Wait, does Zuck hate you, too?

Why does Zuck hate me? Oh, my God. J. Cal was just so- I was brutal to Zuck in the early days. Brutal, yeah.

Why? Anyway, we'll get to it later.

But you're right. Throwing a conference for J-haters would just be- J-haters? That's like a ready-made. J-haters. J-haters. That is an underserved and passionate demographic.

It would be bigger than 10.

Just look at Sacks' replies.

Community with shared values.

Hey, man, if I can get 25 % of those ticket sales, I'm in. Let's go. All right, let's keep the train moving here. We have an update on the DOJ's antitrust suit with Google. Looks like they're going for the breakup, as off, predicted. You remember the Bloomberg report back in August? We covered it in episode 192. Google was found liable for maintaining a monopoly in search and digital ads. Now the DOJ is working on the remedy, right? Okay. They're guilty, so now comes time for the remedy. And the DOJ is, quote, this is from Bloomberg, Considering asking a federal judge to force Google to sell off parts of its business. And according to this filing, the DOJ is specifically considering structural remedies that would prevent Google from using products such as Chrome, Google Play, that's the app store on Android, and Android itself, to advantage Google Search. 32-page document released by the DOJ lays out several options, and we'll go through them and talk about them here. The obvious one, terminating Google's exclusive agreements with hardware companies like Apple, the default search engine there for 30 or 40 billion a year, Samsung, that's a layup.

Separating Chrome and Android, my God, that would be drastic. Ripping that out of the Google ecosystem, prohibiting certain kinds of data tracking, that's a layup as well. Or other behavioral and structural changes for the company. I'm going to pause there, Friedberg, and get your thoughts on this as a former Googler, and you interviewed Serge at the summit, but I don't think we talk to Serge about this because obviously, he would not be able to talk about it. So what are your thoughts here on a potential remedy?

I think we've talked about this. I mean, look, I've shared in the past my belief that companies that are big, that have excess capital, that then invest that excess capital in R&D, can be a net benefit for all of us. Look at Bell Labs. Bell Labs had a monopoly through their association with AT&T, with developing radar, microwave, deep transister, integrated circuitry, information theory, everything that is the basis of the internet, computer including even nuclear technology and so on. It's because they had this extraordinary capital flow from the scale of the business and they were able to invest in R&D. Similarly, Google acquired and invested for many, many years in DeepMind We just talked about how Demis and team won the Nobel Prize for the work that they did. They, by the way, published the protein structure for 200 million proteins for free out of that service. I just want to zoom out for a minute and talk about the fact that this isn't about whether Google has a monopoly in search that prohibits competition or in ads that prohibits competition. But is it really worth penalizing any company that's big, particularly, do we lose the benefit of those big companies investing in technology that pushes us forward?

Google also invested in Waymo for years and years and years, which arguably spurned and drove investment from many other companies in self-driving technology. If Google hadn't done that, would self driving have taken off the way it did? I don't know. Same with Kitty Hawk and Larry's investment in Evital, and that spawned a lot of Evital investing. Similarly, if you think about Amazon and their investment in AWS, where they were burning cash for many years, That turned out to spawn, arguably, a lot of interest and investment in cloud. I don't think that these big companies are bad just because they're big. I think we should take apart the monopolistic antitrust actions and behaviors that they take and then identify ways to remedy those behaviors versus just saying anyone or anything that's big should be taken apart because there is a tremendous benefit to be gained from the R&D dollars that they all put into things that move the whole industry forward. I think that leadership is important to need it. Otherwise, if you got a bunch of startups that are trying to get $10 million checks from VCs, I'm not sure they're going to build a Waymo, and I'm not sure they're going to build Amazon Cloud, and I'm not sure they're going to build a DeepMind protein-folding company and publish it for free.

I don't know. That's just my point of view. Shemoth, what's the likely outcome here? How we should think about this stuff?

Shemoth, you nailed this one. Pretty good with these predictions. Tell us, we'll be sitting here five years from now, what will have occurred?

Unfortunately, not what Friedberg just said. It'll be the opposite. There'll be some form of forced remedy. I'm sympathetic to Friedberg's argument. I don't think that it's really a good thing in the end because I do think there are some incredible examples of Google specifically reinvesting in a way that's really added value in the world. I think the problem, though, is that the technology innovation cycle has gotten too elongated. So you're not seeing creative destruction be the natural force that keeps all of these companies in their own swimways. And so they are allowed to become too amorphous and too profitable. I think it becomes an obvious target for politicians.

I think that's a really good observation there about the timeline of this, because if you look at this, I have started now, and I know many people, are starting their search journey on Claude and ChatGPT every day. I'm doing 30, 40, 50 queries and follow-ups per day. I force my entire team to do that as well. Just as there's an actual viable competitor to Google, this action has reached, I don't know, the halfway mark. This is going to wind up being completely meaningless, Sacks, if ChatGPT does build a viable competitor coexister that siphons off search. Am I wrong here?

Well, it is ironic that frequently the government takes actions on these monopolies at precisely the moment they're subject to the greatest disruption. Totally. The same thing I'm with Microsoft in a way. But it was still a good thing that the government acted when it did because there was a risk of Microsoft porting over its desktop monopoly into this new era of the Internet. I think it's still a good thing to be looking at breaking up Google. I actually think that would be good. At the end of the day, it might even be good for shareholders. This thing should be probably three separate companies like we've talked about on our previous show. But it is true that Google is facing the most existential threat to its search monopoly, and it is a monopoly in the form of OpenAI at this point in time.

I have one final thought here, a piece of advice for Serge and the team over there. And I told Serge directly, they have to get good at making apps. To go use ChatGPT, you take out the app, and it's a wonderful, beautiful experience. When you go try to figure out how to use Gemini. It's like shoehorned into search results, and then it's like some subdomain. That's why people aren't using it. Go buy the domain name chat. Com and make a dedicated app just for Gemini.

You're 100% right.

And make it kick ass.

You're 100% right.

Google, you suck at apps.

We said this when you asked about the bear case of OpenAI. If the DOJ is going to go after Google, and by the way, the interesting thing, Jason and I mentioned this to you is that in the same article that floated the trial balloon about this remedy of a Google breakup, the headline in the Wall Street Journal, which I think was very purposeful, said Google and Metta. I think that they, if given their druthers, they being the powers that be at Washington, will probably want to take a run at both of these companies. They'll start with the one that they think they can disassemble the quickest, and then they'll go to Metta afterwards. My strong advice to Metta and Google is if this is going to happen, you got to go out kicking and punching and fighting and scratching. I think the most obvious thing is what you just said, Jason, which is You are the front door through to the internet, and there is this completely new, emerging technology. Where is the same response to ChatGPT that you had to X or that you had to Snapchat or that you had to TikTok? Because if it's going to happen, it's going to happen, and then you might as well just go for it.

Build the apps, make them kick ass, make the ChatGPT alternative, and get it to billions of people yesterday. That would be the most logical game theory thing to do, to build up a pool of users that you will rely on when the DOJ tries to come with some consent decree or whatnot. So this is the time to build up the assets now, as aggressively as possible.

Yeah. And selling YouTube would be the ultimate. I know that the ad networks you pointed out, Freebarg, are connected. But if they distributed, if they spun out.

I'll give you something about the ad thing.

Can you imagine $500 billion going into Google's coffers in YouTube share? They would have $500 billion in cash, Chamal.

I talked to a company He's the CEO of a public consumer-facing company. This was in the context of some '80, '90 stuff. He said that he and two other CEOs, the three of them, you You guys would all know, these are very big companies, the three of them, combined or particularly large. They said they've had multi-year roadmaps to try to build a reasonable set of tools in advertising, and it's been impossible. Partly why is that the tools that the big folks offer are so good that they just cannibalize and run over the entire market. What they hear from CMOs is, We would love to advertise on your company, your site, but A, your tools are substandard, and B, even though your inventory is cheaper, you just don't give us the same scale and breadth that we get in these other big places. I'm not saying that that's either right or wrong, but through the lens of probably what the DOJ sees is when a lot of these folks write letters to them talking about what they're going through, this is what they're saying. I suspect that if you could actually have a more fragmented market in some of these key markets, it's going to be a little bit easier for these smaller companies to have a business.

Now, you could say, well, tough luck. You tried and you couldn't build it. I get that argument, and I think that at some point that is legitimate. But the problem is if you're public and you're trying to make your company profitable, what do your engineers want to work on? They want to work on consumer-facing forward features. And so what always falls off the list, it's the stuff at the end.

The tech, yeah.

And so anyways, it's this recursive negative loop that a lot of these other companies are in in the shadow of these big companies that I think is going to cause the DOJ to try to do something.

This is a great setup for M&A. It's a great setup for IPOs starting to look like. And this is a multi-administration case that's been going, right? I think this started under Trump, went into Biden, and is now going to continue on to Trump or Harris. So what are your thoughts here, Sacks?

Well, in terms of the political environment for M&A next year? Yeah. Yeah. I mean, so obviously it depends which administration is in power. A lot of Democrats, prominent Democrats in tech, like Mark Huber or Reid Hoffman, have been making the case that if Kamala is President, she's going to be much more hospitable and friendly towards M&A. And they've been saying explicitly that they want Lena Khan fired. Well, in response to that, AOC just came out and said, We're going to have a throw down if you do that. Let's go. I would not expect a substantial difference or improvement in the regulatory permissiveness towards M&A if we have a Democratic administration. If you have Trump in office next year, I think that there will be an opening up of M&A. I think the Republicans have their own issues with big tech, but those issues tend to revolve around censorship and bias and search results and LLMs, things like that, as opposed to bigness per se. So I think it will be easier to get M&A done next year if you have a Republican administration.

Absolutely. I am going to be printing money in a Trump administration. It is going to be obscene how many M&A deals and IPOs are going to occur. There is such a huge backlog. But I do think Democrats want to get this moving as well. I was talking to Reid Hoffman and you and Peter Thiel in the Illuminati meeting, and they voted 190 to 2 to replace Lena Khan in the Illuminati meeting. Chamath, why didn't you make the Illuminati meeting last week? I'm shocked that you weren't there.

I'm not invited to that.

People don't know that you're being facetious, Jason.

Oh, really? They don't understand that I'm joking about the Illuminati?

They often don't. They often don't.

Well, I'm sorry to the low IQ listeners who don't know that the Illuminati is not real.

Oh, now you're insulting the audience?

No, I'm insulting the ones who believe there's an Illuminati.

He's trying to sell tickets to the Jader's Ball.

I'm trying to sell tickets to the Jader's Ball. But buck Nasty, Zuck Nasty. Jane Cowd is the biggest hater in the tech industry. You ever see the Hater's Ball, Sacks?

I have not seen that.

Shapelcha?

No.

Chamoth, it looks like between the time we mentioned it on the pod, it's actually happening. Here it is. The Jader's Ball is happening. There it is. Lena Cohn, David Sacks.

Wait, why am I there?

Because you're a headliner. You're organizing. I think you're the host.

I'm going to be a keynote? You're the MCAP. Okay, wow. I'm the MCAP.

Look, there's Zuck Nasty and there's Palmer Lucky. You guys don't know this bit from Shapel? No. The Hater's Ball from Chapelle? No. Oh, my God. It's the funiest bit on Chapelle's show.

It's literally- I saw a lot of Chapelle's show. I remember that one.

God, just show the real picture, nick. On the Chapelle's show, they have all of these pimps who have a yearly convention, which is their player haters' wall.

Oh, I've seen this. I've seen a player haters' wall. And all they do is sit there with a toothpick in, and they hate on each other and make fun of each other.

I've seen this. It is the funiest bit in the history of the Shapel show. All right, let's Keep the train moving here. Crv is giving back or maybe not calling down 275 million from their LPs. Charles River Ventures, shout out to my pal, George Sackrey, and Greek Brother from CRV. Historically, they invest in early-stage startups. They did DoorDash, Airtable, Twitter back in the day. They had two funds that they raised back in 2022, a billion-dollar early-stage fund and a 500 million growth fund. Sometimes people call that an opportunity fund or a select fund. The New York Times reported CRV is going to give back about half of that, 275 million, to investors, or technically, probably not call it down. The four partners at CRV gave an exclusive to the New York Times, so either getting ahead of this story or maybe who knows what the motivation here is. But the reason they gave is that the market conditions for late stage have worsened dramatically and that the valuations are still too high. Yes, the rent is too high. And that there aren't any exit options, as we just talked about with the administration, no IPOs, no M&A.

And that VC map doesn't work in the late stage. So I'll just stop there. There's a bunch of other notes here. Obviously, this isn't the first time this has happened. I think Founders Fund cut the size of its eighth fund in half from 1.8 billion to 900 million. They didn't actually give the capital back to VCs like they're saying CRV did here. Again, I'm not certain if that's what's happened or not. They put the extra 900 million into its ninth fund if they decide to raise that, which I'm assuming Founders Fund will. Chamath, do you have any thoughts on this?

I I guess trend.

We got two stories here, so I don't know if it's a trend or not.

Peter Thiel did this, and he gave back quite a large piece of his fund a couple of years ago, and then CRV just did it. I want to make sure I get the citation right. I think it was Thomas Lafonte at Cotou who said this. It was really powerful. It made a huge impression on me, which is that the Nasdaq creates about $800 billion of enterprise value a year. He brought that up in the context of private markets have to exceed that in order for it to be a real viable alternative to just owning public indices. If you factor in illiquidity risk and the duration, you have to probably generate, I don't know, a trillion, $1.2 trillion of enterprise value in private tech every year. That just seems like it's really hard to do. Where is all of that value getting created? I think that venture needs to go through a phase where it re-rationalizes. This is what I said at David's LP Day, which is I think that LPs have made a couple of very big mistakes. I think the biggest mistake that they've made is by smearing too much money across too many general partners.

I think if you had to redo it, A, it's probably a lot less money in total. But B, and the example I gave there was instead of giving $50 million to Kraft and $10 million to somebody else, you're better off giving $60 million to Kraft and not even having that other GP. Because that GP makes everybody's life complicated. They overpay, they mispay, they're probably not supposed to be a GP in the first place, and so they force returns down. Then when you contrast that, again, to a public market that is systematically creating $800 billion of enterprise value a year, this is an incredibly tough game, and it's getting much, much harder. I think that if you just take a step back, these are the right things to do because you're much better off having a smaller pool of capital that you can concentrate into the things that matter. You're probably better off having smaller teams versus bigger teams. And you're probably better off trying to forge LP relationships where they're not doing 50 fund investments because it just makes the entire industry lag public liquid alternatives. And I think that that's just not good.

Peanut butter getting spread a little bit then there. Any thoughts, Friedberg, on this trend, if we can call it that? Or is this like maybe they're reacting right as the market is changing and valuations are getting more reasonable and the exit opportunities are getting more reasonable? It seems like this was the right reaction two years ago, but maybe it's the wrong reaction Now, what do you think, Friedberg?

For a venture firm to return capital, they need to have at least one or two big winners. If that winner needs to be a 10X or a 20X or a 30X of the fund, because most of the investments in the fund are not going to work, you need to be able to enter at a reasonable price, and there needs to be enough opportunity relative to the capital trying to invest in that opportunity out there for it to make sense. In a market where there is excess venture capital, where valuations are at a premium, and where you don't see the exit path, the M&A or the IPO events that make sense, that you can actually realize that model, you should take less capital and make fewer sure investments. I think that that's what some folks have realized. They don't want to be chasing highly valued inflated opportunities, and they don't want to be putting capital into tier B or tier C opportunities just for the sake of deploying capital. This is a really interesting moment where you can see who are the right folks in terms of thinking long term in Silicon Valley, long term in terms of building an investment practice and private venture, and maybe who are folks that are trying to build their AUM stack.

Folks who have done reasonably well, like Founder's Fund has probably the most exceptional track record in Silicon Valley as a venture firm, they are very cognizant of the market conditions, and I think that they're being very smart. By the way, the other thing I've heard from LPs is they're similarly trying to find more concentrated capital themselves. They're trying to put more capital to work in fewer managers. There's a real wheat from the moment happening in Silicon Valley venture right now. What I think a couple of years ago was, Hey, everyone's going to go do a startup. A few years ago became, Everyone's going to go do a venture fund. And now I think the froth that has occurred because of that is being cleared out.

And to just explain this math before I get Sax thoughts on this. If this was a $500 million fund, let's say they were putting $25 million into each... We'll take management fees out of it, $25 million into each opportunity at a billion dollar valuation, they would own two and a half %, obviously, of those firms. They need to get probably a $30 billion power law exit of 30X, Sacks, in order to just return the fund. There'll be some dilution, obviously, along the way. That's why it's not 20X. And the number of companies that go from a billion to 30 billion per cycle is incredibly low. Uber, Coinbase, Airbnb. It's a really short list, Sacks, in recent history?

Yeah, I mean, Look, just go back to the CRV thing. You said at the outset of the conversation that this was either a growth fund or an opportunities fund. That makes a really big difference. Explain, please, for the- Because an opportunities fund typically exists to back up your winners. In other words, if the venture fund is producing some big winners, the opportunities fund exists to deploy more capital into those companies, as opposed to a growth fund, which is you'd be underwriting brand new companies from scratch. Typically, an opportunities fund is limited to companies that you're already an investor in through your venture fund. So that makes a big difference. I mean, if CRV has a billion dollar venture fund and only a $500 million opportunities fund, it may just be the case that they don't need all of that capital to back up the winners. They can do their pro-ratas out of the main fund. So I suspect that that might be what's going on. I actually think this is a pretty good time to have a growth fund. Why? Well, because a lot of the crossover capital has left the ecosystem a few years ago.

The tigers and that cohort, SoftBank, Masayoshi-san.

Tiger and SoftBank are still around, but there are other very large investors, hedge funds and so on, who had come into the ecosystem with billions of dollars a few years ago, and now they've left. And some of those funds that you're talking about, Tiger used to be $10 billion funds, now they're $2 billion funds. Right.

They've been rightsized. They're not violently doing... I mean, the Tiger deal, as my understanding was, they weren't joining the board in a lot of the cases, and they outsourcing the diligence. And that was a pretty violent pace. I don't know all the details.

Yeah, this is the best time in probably five years to have a growth fund.

Interesting.

But to your point about the size of the venture fund, the bigger the venture fund, the bigger the winner that you need to make that payoff, obviously. Yes. And so because of the power law, so to take an example, let's say you've got a billion dollar venture fund. Let's say that at IPO, you own 10 % of whatever that winner is. And because of the power law, your fund performance is really determined by your best outcome, right? Yeah. In order to take a $1 billion venture fund and say deliver a 3X, so 3 billion of returns, and your best company you own 10 % of, That implies you have a $30 billion winner in that fund. And there are precious few outcomes where you have a $30 billion IPO, right? Yeah. This doesn't happen very often.

Count them on two hands the last cycle, like I just did. You You got Uber, you got Robin hood, you got Coinbase, Stripe will eventually come out, you got SpaceX. Well, that was two cycles ago.

Yeah, you're going to need to have a meaningful ownership position and a massive company in order to make a fund that big payoff. The data that I think LPs look at shows that smaller venture funds tend to perform better for this reason, 500, 600 million dollar funds. So yeah, I personally wouldn't want the pressure of a billion dollar venture fund. That would be really hard. As a five or $600 billion venture fund, you need to have or want to have a decacorn outcome to make that a great fund. But to have to have a $30 billion plus outcome, it's even more difficult.

Moving on. Pew just published some really interesting research on TikTok. If you don't know the Pew study, they've been doing it for decades. It's very well respected and bipartisan or non-partisan. Four in 10 US adults aged 18 to 29 are now regularly getting their news from TikTok. Here are some charts for you to take a look at. As you can see, the younger generation is really spending a lot of time on TikTok and getting a lot of their news there. I know this because I've talked to a bunch of kids about this. People that use TikTok, 52 %, are regularly getting their news from the platform. And that number has skyrocketed compared to other social platforms. Take a look at this chart. Here's X. 59 % of people say they get their news at X. It's a news platform, so that makes total sense. You look at Facebook, it's 48 % right now. Reddit, 33 %. Youtube, 37 %. In 2024, Instagram, 40 %. But TikTok, 52, up from 22 %. So it's no longer just dancing. And this is the reason I think many people in the government were concerned about the attack vector that the CCP would have in the United States, since they still control the company.

For services like Snapchat, LinkedIn, and WhatsApp, and next door, it's below 30 % get their news from there. There's your Truth Social there, Sacks, 57 % of people get news there, and Rumble, 48 %. So what's your takeaway from this, just, Sacks? Looking at it in this impact that TikTok has, is this concerning on a national security level since the algorithm is a black box, and you could tweak it if you really wanted to to really change sentiment. And young people are obviously very impressionable on this platform and their big users of it.

Well, I thought there was other data in this study that should calm people's fears that TikTok would somehow be used as a political weapon. So in the same survey, you're talking about 95% of adults that use TikTok say they use it because it's entertaining. So that's the main reason people use it. And only 10% of accounts followed by US adults post content related to political or social issues.

That's posting and the main reason, right? Yeah.

So In my case, your 90% of the accounts that get followed aren't even posting political or social issues. They're there for entertainment. It's people watching dance videos. It's people watching... The main thing I use it for is to watch wrestling highlights.

You're a wrestling guy?

Yeah, I'm a wrestling fan. What? Yeah.

You're into this kabuki theater of wrestling? This is new information.

I'm talking over 20. I get my WWEE on on TikTok. You do? Yeah, I don't have to watch those. Who's your favorite?

Are you a Hulk Hogan guy? Are you an undertaker guy? Vince McMahon? I mean, Jimmy Superfly Snuka. Who are you, Andre the giant?

The crazy thing is I know all those names.

I also love the Road Warriors. Ultimate Warrior, I loved. I was a huge wrestling fan. That was the one thing that my dad and I bonded over. We would watch wrestling every Saturday. Sacks, did you ever watch the specials on Saturday night?

Oh, yeah. Oh, those are so great. That was the era of Hulk Hogan, for sure. Saturday night's main event.

Randy Mottis and Savage.

Oh, Savage, yeah. Savage is great. Yeah. I mean, look, my all-time favorite was Stone Cold Steve Austin.

Stone Cold is great.

I marked out the hardest for Austin.

He was Anti-Woke before Antiwoke became a thing.

Totally.

This is crazy. You guys are into wrestling.

I love wrestling. I'd say Flair was number two for me.

Wait, hold on. Have you gone to a wrestling event in person?

Did you only like the WWF at the time, or did you like the NWA as well?

They had their moments. When Hogan turned heel and joined the... Was it the NWO? That was a big moment.

I'm a big Andy Kaufman wrestling fan. That was my only interest is when Andy Kaufman came in there and trolled them.

But have you been- Andy Kaufman. Yeah, that was in the 1970s, wasn't it?

It was the late '80s. Remember he was on David Letterman? With Jerry Waller. And he comes a wrestling match, Sacks, in the South. And he gets in there.

That was where I grew up in my hometown of Memphis.

Right. So he goes there and he gets in the ring and he says, All of you rednecks, I want to show you some new inventions. This is called soap. And this is called the washcloth, and you use it to clean yourself. And he's just mocking the Southern accent and Jerry Lala. I remember Jerry Lala smacks him on Letterman.

Oh, it's the greatest bit ever. It was a huge deal where I grew up because this was on the local news.

Yes.

When I grew up in Memphis, there was no professional sports teams. All we had was the Memphis State Basketball and wrestling every Monday at the Mid-South Coliseum. That was it. That was professional sports in Memphis.

You also had probably some state fairs or best goats, best sheep or something.

Lawler was so popular that he could have been elected mayor. In fact, I think there was talk at one point of him becoming mayor.

Wow. I mean, the inter-gender champion, Andy Kaufman.

Did you guys like Mouth of the South?

Jimmy Hart. Oh, yeah, of course. Jimmy Hart. Yeah, of course. He was amazing. He was the main heel manager for a while. This is before the WW took over. I guess it was called WWF back then. But there were all these little fiefdoms and kingdoms, and Mid-South wrestling was one of those kingdoms, and Lawler was the king of it. Then you had all these guys come in and out and wrestle.

Friedberg, You ever watch wrestling? And what do you think of this TikTok survey?

I don't watch wrestling.

Okay, very good. And TikTok survey, anything? Where are you? No. Any thoughts?

Looks like they gathered some reasonable data.

Okay, there you go. There's your hard hitting- This is to finish the point.

My point was that it's mostly an entertainment app where people go to watch dance videos, wrestling clips, style influencers, and so on. And I think that this idea that it's somehow a propaganda tool around programming our youth, I think that It's a moral panic that's been exaggerated.

What do you think the odds are that TikTok is hacked to allow you to passively listen even when the app is not being used?

Zero.

You think it's definitively zero?

No, like 5%. I think that's right. Five %? Yeah. Because someone said that there was some code that enabled that in the early version of the app, and then some other people audited it, and they said they did not find evidence that there was any technology. And Apple's got a very good audit system for this.

Did those same people audit WhatsApp? And then it turned out that it was- Telegram.

Can they passively listen? Yeah. Does WhatsApp passively listen?

Yeah, it's one of the most well-known breaches.

Well, maybe they do.

Maybe it's 10%. I'm 100% certain that the CCP is using it because people have tracked already journalists using it. So if they've already done it, it's 100 %. I don't know about the passive listening, but any thoughts on 50 % plus of young people getting their news here? Chamat, any news on that? I mean, obviously, we don't have evidence that it's being used currently to manipulate people, but it's over 50 % of young people are now getting their news there or say they're getting their news there.

I bet more than 50 % of young people are getting their news from podcasts, and those podcasts get chopped up and clipped, and then people watch them on TikTok. Yeah, for sure. I bet that's how it's happening.

There are a lot of people who think this show is a TikTok show, and they don't know it's a big show.

We'll have to prepare for a brave new world in the following way. There was an article, I think it was in the Wall Street Journal, that said that Russia and Iran were paying low-level street criminals to create chaos. I read that article and I thought, Okay, well, what does this mean if you actually extrapolate this? Which is that the hot wars are very complicated, not worth doing. These disruptive fissures are the better way to sow chaos. It occurred to me then that tying this back to something that we saw before, it does make sense for a lot of folks to sponsor a lot of long-tail content that say a lot of different things. I think that that just is pretty obvious. I think that if you put these two ideas together, it stands to reason that a lot of people will be paying influencers a lot of money to create all kinds of content that is specific to a perspective that they have. Then on top of that, if you can algorithmically amplify one over the other, you're to have issues. Is it the biggest issue in the world? Probably not.

It probably wouldn't swing an election, but it would cause chaos. We just had the Southern district of New York target that Russia Today was giving $10 million to four podcasters. They didn't even know they were getting paid by the Russians. They just picked them because they liked their opinions, and they gave them $100,000 an episode to promote pro-Russian positions.

If the Russians were actually doing it, it's the stupidest use of $10 million dollars ever because- That's great use of it. Those podcasters already had their own channels. They're already putting out lots of content, and this other content is a drop in the bucket. I think Jamoth, the issue with what you're saying is just there is so much content out there already. People create it for free People create it because they have a career in it. There's a whole long tail of influencers. There is so much content out there already through podcasts, through websites. It's all being chopped up. That trying to do it as some This information strategy, I think, is very hard to do because it's just when there's billions and billions of impressions, any effort that you try to engineer ends up just being a drop in the bucket.

I agree with you. Yeah, it's definitely a drop in the bucket. But that's not the goal. So that's the problem with it.

It makes sense in theory, but It makes sense in theory. It's very hard to do in practice.

Yeah. The goal is not to win any specific argument. It's to create mistrust in the entire news ecosystem, in the information system, so that people give up trying to figure what the truth is. And that's what the Russians and the KGBs- I think the mainstream media is doing that on their own.

The mainstream media lies so much. That's what's creating the distrust.

As are the Russians paying off podcasters. Okay, let's give- How is $10 million going to accomplish anything if that story is even true?

It makes no sense. Oh, very simple.

Great question. Great question. May I answer it?

It's a great question. It's a conspiracy theory.

Not a conspiracy of the air at all. These were very low-level, mid-tier B, C, D podcasters. If you give them $100,000 per episode, they can spend money buying cameras, promoting their shows, hiring people. So you're just finding people and dropping money on their heads so they can do more of the same. So it's a very smart strategy, in fact, I think.

I think it's the stupidest thing I've ever heard. They took podcasters who were already successful and paid them to release content through a less watched channel.

That's the quote. Yes, it was just more about getting them money to produce more content. And then they- These guys are already on.

Allegedly. These guys are already livestreaming 24/7.

Oh, there's your puppy Here he goes. Friedberg trying to win more people over with his puppy love. Unbelievable. This guy is absolutely ridiculous. Unbelievable. All right, listen, let me give Sacks some red meat here. He got his little steak ta-ta with my Russia Today story. He got your little Amuse Bouge, and now I give you your Tomahawk. You ready, Sacks? You want your Tomahawk? You want it rare? Here it comes. 2024, election update. The betting markets and polling indicate a really tight race, but maybe Trump is surging this week. Polymarket, which is a betting market, has Trump, 55 to 45, versus Kamala Khalshi, another betting market, 52, 48, Trump. Bovada and Points bet, those are offshore booking, and Polymarket is also offshore, 52,48 Trump. Nate Silver, friend of the pod. His algorithm has it 53.47. Kamala, real clear polling. That's an algorithm has Kamala with a two-point lead. New York Times, Ciena, Kamala with a three-point lead. Reuters, Ipso, pretty well trusted three-point lead for Kamala. Npr, PBS, Maris Poll has Kamala with a two-point lead. So Sportbooks and Betty markets are favoring Trump slightly, while the polls are slightly favoring Kamala Sacks. Iiced it up nice for you.

You got nice 10 slices of meat here. Which slice you're going for?

Well, I think you're The recitation of the polls there mixes up a couple of things. There are popular vote polls, and then there's Electoral College, which goes state by state. If you look at pretty much now all the main pollsters, you look at Tony Fabrizio, you look at RealClearPolitics, they're now showing that Trump is winning the Electoral College right now. He is up in almost every swing state, including, I think, Michigan, which is pretty surprising. Clearly, there's been a huge swing towards Trump over the last week or two. Look, there's still It's 25 days to go, so anything can happen. I don't want to overstate this, but yeah, this is a good example right here showing that Trump now has a lead in every sense.

I think the Electoral College is 296 to 242.

What is Fabricio?

He's just a Republican Polster, but his accuracy is pretty high.

I've never heard of Fabricio.

Well, another guy who I think is more neutral is Mark Halperin, who is a pundit who has been very accurate this election cycle. Remember, he's the one who broke the scoop that Biden would be replaced by Harris. He even said That's exactly when it would happen. He predicted it down to the day. He was exactly right about that. If you follow his account, he is now saying that both Republican and Democrat insiders that he talks to are both saying the same thing, which is their internals are now showing Trump ahead in every swing state or almost every swing state. Things seem to be breaking Trump's way right now. Again, there's 25 days left. But if you're wondering why is Harris all of a sudden doing interviews, it's because their internal started showing that she was in trouble, so they decided to get her out more.

Or is it the other way?

Is it that her Howard Stern interviews or whatever are causing her to lose votes?

Well, yeah, exactly.

Which one is it, do you think? Because I don't know when... I don't have the dates of all these polls versus that.

No, I think it's what I predicted a couple of months ago. It's the doom loop. So what I said two months ago is that if Harris gets behind, she's going to have to abandon this basement strategy of not doing interviews. She's going to have to start doing interviews. The problem is she's not good at interviews, and if she does more interviews, she's going to fall further behind in the polls, and it could cause a doom loop. That's where we appear to be right now. I said that on August 30th.

Okay. Chamath, you heard that?

I think that Donald Trump has basically stuck to his strategy, which is he is a generational retail politician. I just heard parts of what he did with Andrew Schultz, another great I think David's right that the editing and the massaging of the Kamala Harris talking points are galvanizing the people that have already decided and turning off the people that have already decided to vote for Trump, and she's losing the folks in the middle. This is what's causing her to have to be out there. She's going to have to deliver a very crisp message. I think that right now, it's been a little bit lacking, which is why you're seeing the polls, at least the Electoral College, which is really what matters at this point, turn Trump. She's going to have a bit of an uphill fight between here and November. The other thing I'll say is that If you've seen what's happening in the appellate court, it's not clear whether the Trump case is going to get overturned before the election. But if that does, that could be very meaningful momentum for him. Then I think the The third thing is that we should now buckle in because if the last two elections are any guide, there are going to be a bunch of spanners in the works between now and November.

Wait, what did you say, spanners?

Spanners in the works, yeah. What does it mean? What do you call it? Wrench in the system?

You mean like an October surprise? You mean like some crazy turn of events? Okay. Friedberg, any thoughts here? Would you like to Roshok test this and see what you want in the numbers? Or do you have some objective thoughts here? What What's your take?

On the polling data?

Yeah, where we're at in the election. You're pretty open-ended here. You can make a note on overall what you see between the betting markets and the polls and that disparity. You could just talk generally about where you think we are. You could talk about Kamala on Howard Stern and doing a bunch of interviews with friendlies. Where are you at right now?

I didn't see her interviews.

Okay.

I saw some excerpts on Twitter. Oh, boy.

Let me just follow up on a point Shemoth made. Shemoth said that she had to be crisp. If you look at any of these interviews, they're the opposite of crisp. She's asked softball questions by Stephen Colbert saying, Why are you running for President? How are you different than Joe Biden? Yeah. And she doesn't have good answers. She starts free associating. She gives these very long-winded answers that don't go anywhere. She says she can't think of a single way she's different than Joe Biden when pushed on that. It's very strange.

These are questions She did the most favorite shows. I wish she would do some challenging shows. I think she's got to do Joe Rogan, All In, and what would be another good podcast for her, Dutromat, if she really wanted to do the adversarial thing or something more because- Why would she do an adversarial interview?

Why would she do an adversarial? Just come to All In. Come and have a conversation.

Come and have a normal conversation here. No, I'm just thinking it seems like, Sacks, if she comes and has a conversation, you'll be respectful.

Yeah. This whole idea that I didn't treat Cuban respectfully nonsense. Just watch the tape.

I don't even keep all that.

Somebody asserted that.

No. I mean, if you look back on every single presidential-related one we did here, they were all respectful and they were all conversations. I think the Cuba one dipped, because of both of you, into a bit more of a debate, and it was a lot more crossover than the other ones.

He wanted that. That's what he wanted. That's his style.

I was wearing back to him in style.

He likes to come out. He likes to do his thing. That's exactly what he wanted.

If you look at all the other ones, I'm trying to think of a moment where it... If you look at the other, Dean B. Phillips, Chris Christie, Vivek.

Boring. Got to go. Love you guys. We're all interested.

All right.

We'll see you guys later. This has been another amazing episode of the All In podcast. What episode is this? Episode 199. Make sure you go to allin. Com/meetups. Make sure if you're starting a company, you go to founder. University. If you're an engineer, please go to... What are you doing? Please go to... I'm doing whatever the fuck I please. David Sacks, make sure you go to...

Super good.

Glue, AI, if you're an engineer. If you like potatoes, go to ahalo. Com and order your potatoes, pre-order a subscription.

I mean, if we're doing a ad, let's sell some super good.

Shama, fine, happy. 80, 90, 80, 90. Go to 80, 90, and 80, 90. Okay, the executive producer is out of control. We'll see everybody next time on the All In. Love you, boys. Bye, bye.

I got you.

We'll let your winners ride.

Rainman David Sack.

And it said, We open-source it to the fans, and they've just gone crazy with it.

Love you, Westies.

I'm the queen of Kinawa. I'm going all in.

I want your winners ride.

Besties are gone.

That's my dog taking a notice, and you're driving 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 they just need to release somehow.

What you're about're the bee.

We need to get merches.

I'm doing all in.

I'm doing all in.