Anthropic's Generational Run, OpenAI Panics, AI Moats, Meta Loses Lawsuits

All right, everybody. Welcome back to the number one podcast in the world.

Fantastic for the original. Oh, the cast is back. The cast is in arms. Brothers in arms.

Here we go. Good boys. We got a big news week. David Sacks is back and he's in the great state of

Texas. How's it been? Sacks? How's Texas been free so far? It's been great. Although I just

got back from DC. I got like three hours of sleep last night. So, but we had a lot of news this past week.

Yes. And we'll be talking about P cast and your role in the end, and your role going forward

in the Trump administration. Big news that we'll be talking about today also relates to you.

Oh, Sultan of Science, David Friberg with your background from the iconic film for those not

watching looks like the iconic film in Louise. I wonder if that is something to do with the

budget of California, which you've been outspoken about recently. Great. Great rent, which I

read. We make a great list. Thank you, boys. I read tweeted it too. If only, if only you could be

allowed the time and space to do those kinds of rants on this pod. Yeah. Thank you very much.

Thank you. Thank you. Thank you. I'll start talking over now. Here he is. He's going again. He's

going. There it is. Dr. Doom. Dr. Doom. You're mayor. You're new governor. Would you consider it

Friberg after a hollow running for governor? There is no after a hollow. Oh, please do it.

Oh, please do it. Wow. That'd be so great. I'm tempted to buy a hollow for like five or six

billion. So he just, it's a dirty game. Paul, it's California politics is dirty, man. I don't

even know what it does. I'll just have somebody else deal with that. I did the oboe research.

The amount of the freeberg. No, no, no, no, we get him elected. He would do an incredible job. He

would save the fourth largest economy in the world. It would be incredible. It'd be amazing.

I would love the Kirstie Oppo Resource Act. David Friberg went to a rave in 1999 and stayed

up until 10 a.m. We have witnesses. Once he got tilted at the poker game, stole a bunch of pistachios

and locked date and ran home. He did.

Anthropic on a generational run and opening eye, crashing out a bit, boys. Let's chop it up here.

Just looking at Anthropic, pretty major heater this year. January, they launched co-work

for business users. You know what that does, cron jobs. You can connect to your Gmail, your notion,

whatever it is. And then Opus 4.6, which consensus wise, everybody thought this is a major step

function. Chenson, Michael Dell, everybody's called it out. Chenson actually called it back in

November an inflection point and the first agentic model. Opus 4.6 has basically

Dell said, hit a threshold that we haven't seen before in terms of real productivity in teams

February. They dropped a bunch of clogged code plugins that caused the SaaS apocalypse, not the

SaaS apocalypse, the SaaS software as a service. Oh, it was a SaaS apocalypse too. Yeah, there was

a little bit of that back and forth as well. No, I mean, as a SaaS investor, it was a SaaS

apocalypse. It was a big event. You were the tip of the spear there. We'll get into it. My exit

comps were affected. That's all. Yes. It seems like you may have divested at exactly the right time.

All right, six billion dollars in annual run rate was added in February alone. Brad referenced

a couple of weeks ago here on the pod. Earlier this week, they announced computer use,

a new agentic system for enterprise grade, kind of open cloth functionality. Now you can use

the clawed app from your phone to control your desktop computer. Really slick feature. Here's

the calendar release over the past two months for the team at Anthropic Dario. Come on the pod anytime.

Sachs, you've had a couple of flare ups and obviously the administration and the Department of

War had their kerfluffle, but just looking at it objectively. What's your take on the surging

Anthropic generational run as I have described it here? Well, I've never been a critic of Anthropics

products. I've always been in a mirror of their products. I think last year I gave them credit

for MCPE. I agree that they seem to be performing very well now. The company made a big bet on

coding as the big breakout use case. Whether that was done for business reasons or ideological reasons,

I'm not sure. Anthropics is sort of the most agi-pilled of all the frontier labs. I think

they made this bet on coding as their way to get to our curses self-improvement. As it turns out,

it was a very good business move as well because code is the gateway into enterprise and enterprise

IT budgets. They allowed to grow revenue pretty quickly as a result of getting into enterprise.

Also, coding seems to be the basis for these other product extensions. Like you said,

they went from Cloud Code to Cloud Codework. The idea being that if you can generate code,

you can also generate PowerPoints or spreadsheets. You do that by generating the code to create

that output. That was the first extension. Now they are extending into agents. This computer

use product is kind of like an open claw knockoff. It looks like the generational run for Mac

Mini is just about over. I think they're firing at all cylinders. My issues with them in the past

were related to what I have called the regulatory capture strategy. They do want a permissioning

regime in Washington for chips and models. Meaning you have to go to Washington to get permission

to release new models or to sell GPUs anywhere in the world. I think that's excessively having

handed. Their motives for doing that may be pure. It may not be regulatory capture,

it may be ideologically motivated. Regardless, I do think it is a form of regulatory capture because

it plays into the hands of the big companies and creates modes that new entrants will not be able

to overcome. I have, let's say, philosophical objection to that part of it, but again,

I'm not a detractor of their products by any means. With respect to what happened between them

and the Pentagon, I'm not involved in that. I've stayed out of military procurement. In general,

I don't get involved in what are called party matters. I just focus on policy matters which affect

the whole space. I saw Emil Michael making this point a couple of weeks ago on our podcast

that if you as a company don't want yourpox to be used in war, don't sell to the Department

of War. It's in the name, but if you do decide to sell to the Department of War, you should expect

it to be used for all lawful uses. I think that was a very pragmatic observation. Again, I just have

to underscore this again. I'm not involved in that dispute. It's the base of a lawsuit right now,

and I don't want someone trying to draw lines between dots that aren't there. I'm saying one of

that one. Objectively, they've been treated the same as any other large language model, even though

they're not fans of the administration, they're not donators to the administration. They have

specifically been critical of the administration as a company, perhaps cynically,

freeberg as a strategy to get. It's one of the conspiracy theories here in Silicon Valley is

Dario's taking the position of being anti this administration, anti-President Trump. In order to get

all the PhDs, it's like three or four thousand of these highly sought after PhDs, and it's a way

to have them vote with their presence to come work an anthropic. You have thoughts on that,

and then just generally their general. I think he actually believes it, and I think they've

actually created and thought sort of culture of that since the beginning, and I think that they're

representing it as a branding exercise at this point, but I don't think it's made up. I think it's

directly representation of the people that work there and what they believe.

And it's a strategic advantage, because probably of those three thousand PhDs, 90% of them

are left leaning and wouldn't want to work necessarily. Like most things we see in the world today,

in economics today, in markets today, in business today, everything seems to be politicized,

and you have a left and a right version of everything. You have a left and a right version of media,

you have a left and a right version of what food to buy, you have a left and a right version of

what AI tool to use. So this effectively may just be the natural manifestation in the AI market

of what's going on elsewhere in society as we all kind of fracture and hustle over to our side.

I trim off before I go to open AI, and their recent moves, any thoughts on anthropic and

Dario's positioning of the company. Look, I think both are incredible businesses. We're in the

part of the cycle where we're trying to create drama where I don't think drama exists,

because they're still fundamentally in very different go-to-market motions. Now they may

converge and compete over time, but I think it's important to separate where each of them are

good from an enterprise language, which is where I see most of the action, particularly through 80, 90.

It's all anthropic all the time, and I agree with Sachs. My philosophical issues with the management

aside around their ideology, and sometimes how they use some of the capital for things other than

tech and R&D. I have issues with those things, but in terms of the quality of that technical

team and what they create, it's head and shoulders above anything else. It allows us to build

a vibrant business. Now, do I have issues with how much it costs? Yes. Do I have issues with how

fast we're consuming tokens? Also, yes. But I think those will get sorted out, and those are

really tactical issues. So the reason why I think we're all breathlessly trying to pit open AI

versus anthropic is because we want some drama. But the reality is these are very different businesses,

and Nick found this tweet, which I thought was really interesting. Because even at the absolute

highest level, these things are presented in an apples to oranges way. And there's these very

basic issues of RevRech that are fundamentally different. And you may say, well, who cares about

revenue recognition? Well, the people that are trying to write the headlines that say one is overtaking

the other and this or that sort of miss the fact that they're in completely different businesses,

which is guided how they even think about growth. And so if you normalize these two businesses,

what you would see is open AI is still the overwhelming revenue generator in this space.

And that over time, anthropic is catching up. And so this is this little diagram

that tries to explain this. Open AI is three quarters consumer subscriptions and a quarter API.

Anthropic is almost the exact opposite. Open AI is used by consumers overall mainly. Anthropic

is used either directly or through things like GitHub and cursor. Open AI, as a result, has a very

conservative way of recognizing revenue. Anthropics, they sort of recognize gross tonnage as their revenue.

And so when you start to hear these things about like, oh, this thing is a 20 billion and open AI is

an end billion. They're two totally different conversations. And I think right now it's more

about the press cycle of trying to create clicks than it actually is about the underlying quality

of each business. Both are incredible businesses as this demonstrates. And by the time it goes public,

both of these two businesses will have a very clean and I suspect normalized way

of telling a story so that you can actually compare. But what I would tell people right now is

everybody is running with numbers to try to create a narrative that I don't think makes sense

or applies to either. Yeah. And there's been a lot of strategy change. Open AI, some people are saying

is crashing out in panic mode. Obviously, they own the consumer with chat GPT. They are the verb,

like, you know, taking an Uber or googling something. People consumers always to say, hey,

did you check chat GPT? But obviously other large language models are catching up. Here's

we say something to that Jason, because like, you mentor tons of startups, sacks has done it,

freebrook has done it. I do it. What is the one thing we tell folks? Focus, focus, focus, focus,

focus 100%. Do one, maybe one and a half things, but do it incredibly, incredibly well.

And everything else, you start to bleed and smear. What was that Brad Garling house term?

Peanut butter. Peanut butter. Yeah, you smear the peanut butter too far out. And so this is a good

moment, by the way, if either of these two companies are in the smearing phase to recalibrate and

reset, because yeah, you just can't do everything. Speaking of smears, I couldn't help but notice that

Emil Michael was smeared by an article, was it an lever or something like that, accusing him of

having a conflict in the anthropic to smears conflict. Did you guys see that? I didn't. Yes,

I saw the art. There's an article that said that he was an investor in perplexity.

And therefore he's conflicted in his negotiation with anthropic. That's what the article said,

pretty much. Perplexity is LLM agnostic. That's a stupid claim. Right. Well, it's obviously

for my people who don't understand anything about AI really. Perplexity is a rapper. You're like

you're saying it uses multiple AI models. And I don't think they sell to the Pentagon. They're

not a competitor to anthropic and moreover. As I understand it, Emil's ownership of shares in

that company was blessed by the office of government ethics. Nonetheless, I think the timing of this

is very suspicious. And it reminds me of what happened to me when I started opposing

anthropic and all of a sudden there was that hippies and the New York Times accusing me of having

conflicts. And I'll just say that anthropic may pose as this company that's on the side of the

angels, but they've hired a number of very seasoned brass knuckle political operatives in Washington.

And you know, members of the Biden administration, Laura Lumer actually just had a piece today on one

of them. I'm not going to rehash that. But the bottom line is this is, I think frankly, a political

operation that's willing to get down and dirty. And they're not always on the side of the angels.

I think they can be quite ruthless.

Saks, remember, I told you you get one Biden mentioned a month in 2026. So you just used it up.

So I don't want any more Biden, Biden, Biden. He's retired. That was not a Biden mentioned.

No, but the truth is these dips, whoever wrote this story, the actual best feature or amongst

the best features of perplexity, which is actually got a really great co-work competitor called

computer I've been playing with. I'm not a shareholder to be clear. There's no book being pumped here.

The model council is like the greatest feature that they have. And what is really brilliant about

it is you ask it a question, Saks. It will go to all three different major models. You can pick

which ones, including open source. Then it tells you where they differ. And it tries to figure out

why they differ. This is like one of the great features of the product. I think perplexity is like

could be a really great company as well, even without a language model. But let's talk a little bit

more about opening I here and their market share. Because I think you're correct, Shemaaf,

but they are getting off their game. Here's what's going on. Quick look at the consumer market.

And obviously they started with a hundred percent market share, right? They created the

category in 2023. Drop down to 85 percent market share, 2024, 75 percent market share, 2025.

But by how much has the market grown? Precisely. So the market is still growing. So in terms of

number of searches and queries, they're obviously growing tremendously. But they have major,

major competitors. And the market share is going down. I had my team over at this week

and AI do a more thoughtful analysis of where this is going. And if you take a look at this,

there's three players and I'd like to get your guys to take on this who really haven't shown up

yet. Apple meta and obviously windows. All three of those underrepresented. If you give them credit

for just getting, you know, a half point of market share here and starting to intercept,

which I think those three players were here will be here. They're going to be well under 50 percent

market share. And I think Chatchy PT is going to have some big challenges there on the consumer side.

While they're doing this stuff in consumer, they are cutting back on all their side projects. So

you probably heard about the Sora video app. That's been shut down. This has kind of made your

news because Disney was going to put a billion dollars into opening as part of it. And they had

done a licensing deal. And they were going to integrate Sora, this, you know, short video product

into Disney Plus. All of that's now been canceled. The billion is not going in. The billion is not

going in. The licensing deal, all of that. And then in addition, they're supposedly at OpenAI,

a newfound focus on chasing and throbbing down the enterprise path. So getting off their game,

getting a little discombobulated, perhaps or maybe getting focused on what matters, which is

enterprise, apparently in terms of revenue. OpenAI also offered private equity investors a guaranteed

minimum return of 17.5 percent as part of a joint venture. That would help PE firms deploy AI

and ease the high upfront cost of that. So lots of questions here, Chimoff. I don't know if you've

tracked this PE model, but obviously a lot of people are doing roll ups in services, accounting,

legal, Josh Kushner's got a big effort here, a bunch of private equity firms trying to

essentially, I guess, end run the transition process. And arguably what you're doing with

the software factor at 8090. So your thoughts on OpenAI and this pivot and this

private equity focus. I think it makes a lot of sense for OpenAI to focus on a few things and do

them exceptionally well. I disagree slightly with your first part, which is I think that people

like to make new decisions about new experiences. And I think that OpenAI has incredible consumer

mind share. I just see how my kids use it. They started there and it's very hard to get them to

switch even when I say, Hey, have you tried Gemini? They use Gemini. And to your point, the reason is

because they stumble into it more. But if you give them a cold navigation experience, they rely on

chat GPT. And it's the same, by the way, on the other side in the enterprise, if you give us a cold

problem, my default reaction would be to use Anthropic. Now, I actually think that that's quite

healthy because you're going to segregate the market. And I think, look, if you go into the

way back machine when we first started talking about this thing, this is sort of how we all

postulated this would work. Where even if OpenAI just won the consumer business, it is a multi-trillion

dollar company with enormous scale and value. And I think that that's okay. So I think that

what they probably need to do is say, where are we the strongest? Where is there the most obvious

traction? Contraction in another market like an enterprise bleed into consumer usage?

If it's true, then you have to win the enterprise. I think winning the enterprise though is a very

different game than winning consumer, very different set of features, very different set of expectations.

So I think people either have to decide you're going to compete everywhere,

or pick one thing and just nail it. And if I was OpenAI and you had to pick one thing,

you would pick consumer because they're the juggernaut and they're the clear leader and they have

an enormous brand. Freiburg, let me pull you into this because my base case here is that

all consumer queries are going to be free. Apple is going to make them free. They're already

free for Google. I think Metta is going to make them free and actually have a decent product soon

and Microsoft same thing. ChatGBT has decided to push off advertising. They were going to put

advertising in it. You remember they got mocked by Anthropic with their Super Bowl ads.

So what do you think is going to happen on the consumer side? Consumers generally don't pay for

services. That's usually five to 20% of the market is paid services and everything else is free

and ad supported. But it looks like Apple and Google are going to just let it rip. So that could

take the revenue oxygen away from ChatGBT. So what is your thought here on who wins consumer?

I don't think that it's going to be free. I think there's 290 million subscribers

for Spotify. They're paying, what are they paying? 20 bucks a month or something?

Probably last one average because it's global number, but yeah. Netflix has 325 million paid

subscribers and AI that can book your travel, answer questions for you, track your calendar,

do your email, et cetera, et cetera, et cetera, et cetera is likely going to be the most valuable

call it meta service that consumers have ever seen. And I think it's very likely that we're

going to end up seeing many more consumers subscribe to a consumer AI service than we've seen

even with cable television. I mean, think about your cell phone. Everyone's paying 50, 60 bucks a

month for a cell phone. Why not pay any more? More, more. You pay 100 bucks. You pay 100 bucks.

And by the way, in the pandemic, remember what we saw. The two things that people refused to cancel

was not your mortgage payment or any car payment. You were willing to go into arrears and into

default. The two things that people would would always keep was the cell phone number one and then

electricity number two. Chat GPT will be there. So I think that's going to be the case with these

consumers. I think that they're all going to be like ultra valuable and they're going to layer

in services on top of them. Like, for example, do you want to watch video embedded in your consumer AI

app? Do you want your consumer AI app to, you know, do your finances for you? And it could be

that the consumer AI app becomes the new platform much like the iPhone was for the app economy.

There could almost be whether it's through kind of connectors or embedded tools and incredible

ecosystem that were traditionally advertisers actually pay to be embedded and show up inside of

the AI app. And the consumer can either pay for it or the advertiser can pay for it. So I think

there's going to be a very different economic model and it's still very early days.

Sax the numbers right now would be more in my estimation. About 50 million people

subscribe to chat GPT. They got a billion users or they're trended to a billion. I think

they probably hit it in the next month or two. Certainly they had 900 billion two three months ago.

So it's about five percent. Where do you think this winds up? Do you think it becomes

you know 300, 400, 500 million consumers are willing to pay 20 bucks a month for this or do you

think it's more free and the data and the ad supportedness of it go the meta and the Google route?

I think it's possible that you could get a few hundred million subscribers for the premium tier.

Look, I think most consumers will take the free service in exchange for advertising, right?

Some ad supported model, which by the way I think could be quite successful when

chat GPT started displacing Google for search. A lot of people were predicting the death of

of Google's model because who do I want to look at 10 blue links? I think that's true,

but I think you can do something much more compelling in AI chat compared to just a list of links.

So in any of it, I think ad supported models might make it come back here in addition to premium

models. All that being said though, you know, as an investor, I always liked B2B businesses

better than B2C because it is hard to monetize consumers. The willingness to pay is not that high

and they tend to have high turn rates. Whereas businesses tend to be very sticky and you can

upsell them and you can get more than 100% net dollar attention year over year. So if you can make

an enterprise business work, it's always been a model I've liked, but you know, that being said,

obviously some of those valuable companies in the world are consumer companies, Metta,

Google, Apple, these are all consumer first companies. And look, I think ultimately both models

can work. Obviously both can work. Question is which one. I guess it really comes down to how

motivated do we think Google and Facebook will be to build that bridge from their ad networks to

their AI offerings. Obviously Facebook is kind of MIA in all of this, but Google is not.

And I think that will be the determinant here is. Well, Google is going to compete very vigorously

for the consumer because it is existential to them. I mean, it's very clear that search and

AI chat are kind of merging into one space. That means that ad links will kind of merge into being

in chat advertising. So they have to adapt with that. It can be for the consumer. I also think that

Google is in an outstanding position to do the whole open claw thing because they already have

access to your calendar, your documents, your email. So the agent doesn't really have to earn

your trust because you're ready to trust Google with all of your stuff. So I'm kind of waiting for

the Google version of open claw because I don't really want to share all my documents with

some new service. They're the only one that has so much free cash flow that they can almost

view it as two separate companies, which it effectively is. GCP over here runs the enterprise play

and then Google consumer over here runs the consumer chat pop play and they can keep them segregated.

That's so much harder for a startup to do because on top of just keeping everybody organized,

you have the financing problem of constantly having to raise more money because you don't yet

have a profit engine that spits out cash. They're probably the only one and you can see it in

the valuations actor, which I'm going to get to in a second, but people believe the durability

of Google more than they believe the durability of anything else. And Sachs, I think you weren't on

the pod last week or maybe two or three weeks ago, but Google has announced Google Workspace Studio

to do AI automation and it's online and people are playing with it already. So they have joined

the open claw party. By the way, Jay's tell you asked a different question earlier as well, which is

around the PE story and I think the PE story is a window into the rest of the broader market.

The real open question is what are these companies worth? There's like a very threshold question.

It's sort of like a very important fork in the road right at the outset, which is do you believe

that we're on a path to super intelligence where everything is incredible where there's infinite

abundance where you can magically describe things and beautiful things appear, complex things appear,

groundbreaking things appear. Or do you believe that it's good next generational software?

And the answer to that question is really important because we're financing things like it's the

former. And GC has a big move in this. Hamant was on the program in January when we did the interview

show and he's got GC buying up and rolling up accounting firms, et cetera, healthcare firms,

hospitals, et cetera. This seems to be part of the future of venture capital is taking AI

sacks and actually buying out or I should say big VC kind of starting to look like private equity,

buying out hospitals, accounting firms, business processing firms in India, putting them all together

and then running them with AI. So any final thoughts on that tax as a business strategy?

Well, I think it's interesting. They're kind of betting on the idea that they can

own the change management around AI. And this is the thing is everyone just kind of assumes that

you throw AI over a wall and a business just automatically knows how to use it and drive

efficiency from it. And what we're seeing is it's pretty difficult. Tremoth, you've seen that.

There's McKinsey study showing that like 95% of enterprise pilots aren't successful.

There's tremendous value, latent value in AI, but it's hard to know exactly how to deploy it at

this point in time. So I guess what these private equity firms are saying is that we know how to

drive value from this and if we own the business and then own the change management, then we'll be

able to create value that way. Their business model makes solving this problem existential.

And this is sort of along the lines of this essay that I wrote. Let me just give you the thought

exercise in you guys react. Today we live in a world where the whole market is trying to debate what

is the PE ratio that you'd be willing to pay. So Facebook is incredibly durable. I'm willing

to pay 30 times. Nvidia is really durable. I'm willing to pay 40 times. Tesla is incredibly

asymmetric to the upside. I'm willing to pay 200 times. And then Caterpillar or John Deere,

I'm willing to pay 15 times. I'm just using these as an example. And what it's effectively

signaling to you is how durable all of these cash flows are. And all we do in the public

markets when we make an investment is we're just guessing. When do the cash flows run out?

And we try to say, well, here's how much it's worth and here's how much I'd be willing to

pay for today. But if you go back to this example and you say, well, what if there's this super

intelligence on the horizon? I think it's fair to ask the question, what is anything worth?

And what is anything worth in year 10 or year 15 or year 20? Because if you have infinite

abundance and you have all this creativity, won't all companies be disrupted?

And won't we be in this constant churn of everything getting disrupted all the time?

And if you were faced with that problem in the public markets, how would you react?

And I think the canary in the coal mine are the SaaS stocks. Yes, we jokingly call it the SaaS

poplips, but I think it's much more important. I think it's a big societal question. How do you view

capital markets? How do you view the health of a company in a world where we've been told there's

a super intelligence on the horizon that makes everything much more fragile than it was before?

And the market reaction is to put all these companies on a spectrum and they started here in

software and they're re-raiding everything down. And they're changing the way that things are

being framed from price to equity to a multiple of cash that you have on hand.

And I think that has huge implications mostly to Silicon Valley and largely to employees because

we all sell the dream. We start a company and we're like, okay, small salary, big equity upside.

But that's implicitly saying in 15 or 20 years this thing is going to be worth some gigantic number.

But if instead every business gets disrupted every five or six years,

all you're going to end up with is just the cash. And so what should employees do? The rational

reaction from employees will say, you know what? I don't want your equity. Give me more money.

And if all of a sudden you do that, the valuation multiples and the complexity changes again.

So I had my team put this chart together. Okay, what is this? Took a handful of SaaS companies

and took the Mag 6. And I just said, okay, if you take the market cap and you divide it by the

annual free cash flow, what that tells you is how many years does it take to get back if you

bought a share of stock? How many years does it take from the free cash flow to come back so that

you've earned back the cost of one share? Snowflake in 2023, it would have taken you almost a hundred

years. And where is it now? It's been cut in half service now. It's last year in work that you

see it. And I think what this speaks to is the beginning of this re-rationalization in the

public markets of saying, if super intelligence is coming, we have to be very careful about what

we're ruling to pay for these things. But if you look on the right hand side and the Mag 7,

what's so interesting is Apple, Microsoft, Meta and Alphabet, the market is completely friped

the other way. And what they're saying is, we believe that these cash flows are essentially

monopolistically durable forever. That's the only reason why you would walk them up like this,

except in video, which is the most unbelievably accretive, well-run company, highest margins,

you know, making $200 billion. And they're treating it like they're treating service now in Snowflake.

I just think it's so interesting what's happening. I can't explain this, but here this data

sort of shows this reset that we're going through. A very complicated reset in the company.

Friber, what's your take on this reset as Chimoff describes it, do you think? This is just a flight

to the quality of the free cash flow of the Mag 6 and just how much cash they print. And then maybe

the other ones are smaller footprints and they're just more disruptable. We had this discussion

many years that Google and Apple, Microsoft, they would all be disrupted at some point Facebook.

And that just simply hasn't happened. They've got much more nimble at copying products or

incorporating, you know, features and products into their core offering. So your thoughts?

It's probably generally correct that there will be a decline, but there's also the selective

opportunity. Did you guys see the LP slides that went on the internet from Toma Brava's LP conference?

Yeah, those are great. Nick, maybe you could find that they kind of highlight

that within the broad market scape, there are companies that are not just going to sit idly by

and let AI kind of delete their business value, but they're integrating AI themselves,

and they've got high quality people to do so. And they're reinventing their product themselves.

So they've already got a beach head. They've already got customer access. They've already got

enterprise users. And in fact, if they can integrate AI into their products and into their tools,

there's almost this like selective dispersion that happens in the market. And so the winners

are going to win. I think truly in every market, not just in software, but across every market,

including an industrial supply chains on who is going to implement and utilize AI tools

and agents to do work. And it's going to expand the work productivity of that organization,

not just create new features, which is what we focus on when we talk about software companies,

but really imagine a complex business being able to do 10 times the output it can do today

with the same capital equipment and the same labor force.

What do you pay for in a world of super intelligence versus in a world of non-super intelligence

in terms of the durability of the business? Yeah, it's hard to say, man. I mean, we don't know,

right? And that's why all the discount rates are going through the roof. And that's why

the valuations are collapsing because we just don't know what multiple or what discount rate you

apply or what terminal growth rate or which effectively implies. What are you doing in your

PA? Like do you say, I don't think Disneyland is going anywhere. You know, I think there's some

stuff that you could say is the counter AI portfolio and the counter AI portfolio, I think it's like

physical experiences. Halo, they call it halo, high asset low obsolescence. Okay, that's a great

thing. Yeah, I'm not a big investor trader like you guys, but that makes a lot of sense. I mean,

I think that's like intuitively to me, that seems to be an area where people are going to be spending

a lot of time and they're going to they're going to have durability in those businesses. I think

businesses like Nat Gas production, you know, I just bought LNG, that Chenier company. Chenier,

yeah. Chenier, given all the craziness in the Middle East. And you know, I visited there with

Doug Burgham. So the first time I've ever been exposed to this business and I checked it out. That's a

great business. That's a great business. So I think that's got durability. Obviously, unless

it gets blown up by some enemy, that would be a problem. So the atoms, that TK share, atoms,

real life, mining is a great one. Obviously, I think the space industry is going to be a lot bigger

than we recognize. I actually think there's probably a 15 to 30 trillion dollar a year economic

opportunity on the moon. That kind of a business, like you're going to see with SpaceX's IPO,

it's going to have an insane multiple. So I think to your point, you know, there's a lot of stuff

getting steamrolled here with crazy high discount rates where you just don't know. And there's a bunch

of stuff where the pathway over the next 15 to 30 years is maybe independent or unlocked because

of the AI. And then there's a bunch of stuff that's just unaffected. And that starts to get a higher

multiple because that's where capital starts to flow. So there are probably three things that we

would agree are great modes for businesses, brands, network effects, and the management team.

Those come into play here as well. Yeah. I don't know if I would consider a management team to be

a moat. I mean, it's like Warren Buffett says that you want businesses that are so strong that they

could be run by a bunch of monkeys because one day they probably will be. Well, I was thinking

more like obviously Elon and Tesla is going to just relentlessly innovate. It's a great point,

by the way, and it's true, especially in the age of Agentic AI. Yeah. I mean, look, I think

though that just up leveling a bit, I think you are right that the key question is moats because

I do think that there are still strong moats in a lot of different kinds of businesses. And

a lot of them are very subtle. Like you said, some of our network effects, some of them

are the difficulty of producing fiscal world products, things like that. So there's a lot of

different types of moats out there. And that is the key question as we enter a world of, let's call

it digital abundance. Yeah. The network effect of Apple's ecosystem and they have hardware,

right? And they've been just on that path of making their own. So look on the shirt.

Credibly defensive. And they have brand, right? So that is pretty strong for Apple. And then

you'd take Tesla the same thing. You got Elon, relentlessly innovating and it's hard hardware

stuff. And then if you look at meta and Google, these are incredible brands with great management

teams, my assumptionally innovating. If I had to bet, I'm going to bet that brands go to zero.

Really? Yeah. Because I think that when you can make things that are as good or better,

and you can make them in a cheaper, faster, better way, people want that abundance more than they

want an affiliation to a brand example. So the perfect example is actually what Tesla did to BMW.

You know, what Tesla did to Mercedes, what Tesla did to Porsche, what BYD and Gile have done to

the car manufacturing cycle in China. This is a fundamentally cheaper, faster, better product.

Yes, it's got a great brand, but nobody's going to pay a premium for these products.

The reason why Y has outsold everything else is because the model Y is priced better and it's

superior on every operational dimension of comparison. That's also true for the cars in China.

So I think it's the opposite. I think that brands and the pricing power brands other than maybe

premium luxury goods, but even that's eroding. Look at the stock, I don't know Nick, show the stock

chart of LVMH or Ferrari. This is not a commentary on the quality of the actual product,

but what this shows in erosion of pricing power. All of these things are being eroded away.

Yeah, this would be the value, most people in brands would just say value propositioning. So

JetBlue is a value brand with Tesla Model Y, perfect example of a value brand. And if you look at

Apple's recent cohort, what did they focus on? The Apple MacBook Neo, which is a value laptop,

600 bucks, 700 bucks. So they're even going down market to try to capture that value. And to your

point, maybe the right word is abundance, like the brands that bring abundance, that bring more to

the table than their competitors, and they're able to bring more at the same unit cost or less

capture share. That's probably true. You know, it's interesting about that. As we open up the

aperture of this, if you, one of the thesis we talked about here a couple of years ago, say,

what happens with AI disruption, job disruption, etc. Costs coming down on cars with Model Y,

getting cheaper cyber cab coming in, BYD. Obviously, if you go to any foreign country, BYDs are

everywhere, and they cost 15 grand, then you'll look at Apple making the Neo. That's a $600

laptop. Everything getting cheaper seems to be happened. I just think it's very hard to know which

these companies going to be disrupted. A year ago on this pod, we were saying that Google was

going to be toast, or some of us were saying it because it looked good. Okay, fine. But you know,

it looked to us, like ChatGbT was taking a massive share from Google search, and the

AdWords model was becoming obsolete. Now, because of the success of Gemini and the potential for

personal digital assistance, personal agents, I think we're probably pretty bullish on that

company, and look at their stock chart. It's reflects that. I mean, I think it's doubled in the

last year. Now, you take something like Apple on the other hand, and I'm not saying this is going

to happen, but I'll just throw out a counterfactual, which is what if your personal digital

assistance or a personal agent gets so good that you don't need to check your phone. You just

tell it what to do, and you don't need the wall of apps anymore. I mean, the way that you call

an Uber won't be to punch a few buttons. You'll just tell it what to do. So you could imagine the

phone operating system getting disrupted if the agents are good enough. You're onto something huge

because what you're saying is I can confirm this to you. 89, did we sell enterprise software? I'll

tell you three conversations with huge enterprises asked exactly what you just said. And we joking

called it strangulation as a service, which is they all say the same thing. What you just said.

Okay, look, get all this complicated UI out of the way. Get all of these products out of the way.

Find a way to create a shim where I can just write what I need, tell it what I needed to do.

It deals with all this complexity in the background. I never want to see these things ever again.

And that's what people want to your point. They want to be able to like say, okay,

pay this with my Venmo or use my MX in this situation or get me that flight in some way

and have all these wonderfully smart agents do all the work behind the scenes.

And that's actually tracks with exactly what I've seen with OpenClaw for

Plexigate computer, clawed co-work instead of going to your notion instead of going into your gmail,

instead of pulling up your calendar, you ask it, hey, what's on my schedule this week? It brings

it to you. So you could have a dumb, you know, flat terminal, you know, chatting for face on the

$100 device and it would do just as good. Just to make the counter argument against myself. I mean,

even though I think that you'll just increasingly tell your agent what to do instead of be

clicking around or, you know, touching the screen, you still need a dashboard or a user interface

to like check on it and just see readouts of information. You still need to be able to visualize it.

Where is the Uber that I've asked to be sent to me how far away is it? I still want to see it on

a map. So I could imagine that even if let's say, you know, Siri Plus Plus becomes the dominant way

of interacting with your iPhone, you'll still want that Apple user interface. Harts just say,

I mean, I see a lot of people out there tweeting that Apple is brilliant for kind of missing the

whole AI wave and not spending a lot of money on data centers or catbacks. And then there's other

people who say, wait a second, they're, they're missing critical capabilities. Then there's a

question of will they be able to make deals for, you know, an AI powered Siri? I don't know,

this is very hard to know at this point in time. All right. And we will be discussing all these hard

topics at liquidity. May 31st June 3rd, Jamath. Some big announcements here from you. You have

taken control. This is what happens in the game of thrones, known as the all in

cooperation. The partnership. The partnership. If we have a partnership. The chaotic partnership.

No mids. There literally is chaos. So why are we doing this in California? I don't

only think it's, I can go back to the state at this point in time. You can come for 48 hours,

making a currency. By the way, there are so few days. You know, zero days in state at this point in time.

Love it. Love it. You can do 48 hours. So well, Gavin Newsom might meet you at the airport.

You can get it up at the airport. By the way, the airport is about 10 minutes from the venue.

You could fly in and fly out same day. And you don't have an overnight. No, it's count.

That's how it's counted as an overnight in California. Hello. Yeah. You can come in on Monday.

Then fly out to fly out to incline sleep at, you know, at our friend's house and then fly back

in on Tuesday and then fly back out. You'll be fine. You could fly to Vegas to a blackjack run

overnight, blackjack run. And then you come back in the morning. We just freshen up.

Notice for your fresher. Nice and rested. Let me announce the next two speakers.

Oh my god. I'm so excited. But just for background, Tremoth comes into this thing.

Liquidity was this little conference I did. It's now part of all in. And I start setting up all

the speakers. And then Tremoth goes, not good enough. I'm not showing up unless I pick all speakers.

And you know what Frayberg and I did? Well, finally, this melon farmer is going to actually do

some work. Great. What do you call me? Melon farmer. It's a, when they play a Quentin Tarantino movie

on like TV instead of saying mother, effort, Samuel Jackson says melon farmer.

Oh, I see. So this melon farmer took unilateral control of the 10 speakers. 10 speaker slots

very coveted. Okay. So we've announced Dan Loeb. We've announced Sarah Fryer. Incredible.

And I'm very, very, very honored and excited to announce that Bill Ackman and Andre Carpethy

will also be speaking. Edlett Quiddert is four heavy hitters six to go. Two more goats on the roster

of goats. So good. And we have a handful of other times. It might be some surprise guests.

Unannounced gas show up TV. Can't say TV. TV. More announced soon, but we're making. Let's get

Dario to show up. Dario come to the show. Come hang out with the Owen boys. I'm really excited.

I do. You know what Andre is going to do. What Andre agreed to do is he's going to do like

five or 10 minutes of slides on like the future of the world with AI. And then we'll do a far side.

Love it. That's going to be tremendous. And you know, he's he's been on a heater himself with his

recursive GitHub. Oh, dude, auto research is incredible. And Bill Ackman has a ton of points

of view on all of this stuff. So we'll get a lot of his thoughts. I want to give a shout out to

Fieberg because when we did the interview with Jensen, he's like, guys, I was like, I like had

a glass of wine on a Sunday. I put it in a replacement to my HR right as system. I asked all my

team to do it. I was like, oh my god, this is incredible. So I asked our folks. I'm like, hey,

I don't like the website. This is 8090. And the next day, they're like, yeah, we vibed

coded a new one. We'll have it up. And then I'm like, well, do you like the CTAs and how it's

doing? They're like, no, no, no, no, no, we put it into auto research and we doubled the click

through rate. And I was like, to Fieberg's point, this was, this would have been many man months,

tens of people. And instead, all these recipes, by the way, in these playbooks, you know,

like the person that runs growth at OpenAI publishes his recipes. Yeah, you've been claw-piled.

That's it. You've been one-shotted. It's really incredible. This is why I mean, you commented on

my post gesture. I wake up every day in my head spins. I'm like, what is going on in the world?

It's crazy. Like every day feels like a new era right now. Yeah. And it's disoriented.

Because I think what's really interesting is you pull what would have normally been something

that's called it a period of timeout, like a year out or two years out. And you can pull it in and

say, I can get that done in three days. And I don't need to hire people. All the sequencing and staging

that would normally go into accomplishing something has been reduced. And then the time rushes in.

So all your ideas rush into you. And they're all like immediately accessible. And that's why it's

like so every day is like, oh my god. It's disorientated. Yeah. Yeah. I have, I bought the domain name

annotated.com like 15 years ago for four grand. And I wanted to create a service, like a bookmark

service, you like highlight a paragraph from the New York Times. And then you write your comments on

it, saves it. And you basically have the service. And I was talking to some developer. I'm making it.

And I literally vibe coded it and the Chrome extension this past week. And I was like, okay,

I've been sitting on this domain and project for like 15 years. And I did it in a weekend.

Isn't it crazy? Weird. It's like very weird. It's really. It just makes it feel like a simulation

to me that everything can just manifest itself. It's the Star Trek version of the world.

Like remember the replicator of sacks we just say, or all great tea at this temperature.

That's happening in business now. You're like CRM system build annotated.com. Build this new

website for 8090. Boop. And it's a replicator just gives it to you. It's very strange. I've only felt

this feeling twice once I was on the outside looking in. I was a derivative straighter in Toronto.

I was looking at the first.com wave. And I was like, I got to be a part of this. How do I get to be

a part of this? And I got a job and I went and and kind of the rest was history.

When they original iTunes, but I missed the wave financially didn't do anything for me. But I was in

the right place. You got to the beach with a surfboard. That's all that matters. Then the second

wave I crushed and the move to mobile and social. But this way feels like a hundred times

bigger than that. It's a tsunami by comparison. I had three of these. It's probably what it's like

to be at Nazare, importantly. You guys ever see those clips of like that crazy place where like

there's like 100 foot waves or whatever. And you're just towed in and you're like, okay,

let's just get one of two ways. Let it go. Let's do it. Goodbye.

No, it was like literally when I first saw a PC when I first got on the internet and then saw

a mosaic like those two moments in the early 90s. And then seeing the iPhone, I think that like

those three iPhones was very special. All right. Rough week for Zach two verdicts went against

meta in two days. They were first found libel for allowing child predators to access minors on

Facebook and Instagram, New Mexico, Jury ordered meta to pay 375 million in damages. The AG's

office there ran an undercover investigation. They created fake child profiles. Facebook

Instagram, these accounts were contacted by predators. People showed up. Yada yada yada. A whistleblower

and former meta engineer testified that his own 14 year old daughter received sexual solicitations

on Instagram. Then on Wednesday, an LA Jury found meta and YouTube negligent for designing

addictive platforms. That harmed a young user's mental health. Basically, the plaintiff in this case

sacks said they started using YouTube at age six and Instagram at age nine. And she testified

that features like notifications algorithms made the app so addictive that it caused depression

and anxiety through that compulsive use. You have some thoughts on this and we had Jonathan

Hate. Didn't we do an interview together? Was not one of the first joint interviews?

Free, but I did. Incredible book. These things are absolutely. He had a very important point,

which is to try and keep kids off cell phones and social media until they're 16 and he was kind

of cheerleading this this Friday. But I'll take a little bit of a contrarian to the popular

kind of sentiment on this. And I'll just talk broadly about this idea of port litigation.

Tort litigation costs our economy $900 billion a year in the United States. $900 billion a year.

That's how much it spent on the litigation costs, the settlements, and the judgments. It's

3% of GDP and it's growing roughly 10% per year. And these civil penalties decided by juries,

like they're going against big companies like meta and YouTube. But it's also food companies,

restaurants, everything. Anytime there's a window to sue someone and extract value from them,

tort firms are all over them. You know, it's called the tort tax now in America. It's not just

losses paid by the companies because fundamentally when a big company pays out these tort taxes,

they're going to invest less. There's less R&D, less product development, costs stay high.

There's fewer new product launches and there's all these crazy restrictions on stuff. So,

you know, look, I agree social media causes immense harm, particularly causes harm for kids.

Kids should not be on social media until they're 16. Absolutely agree. Maybe adults should

neither be on it as adults. But fundamentally, I think there's an important question that we

often ignore, which is, who is fundamentally responsible for that harm? You know, should the sugar

beat and sugar cane farmers be responsible for diabetes in America? Should the soda companies be

responsible? The retailer selling the soda? The FDA for not stopping it all? And fundamentally,

I think we have to ask the question, what role does individual choice play? An individual

responsibility play in this equation? If everything is a liability, what do you say? Anything? I think

we have to take personal responsibility. I think the parents that are absent taking care of their

children are responsible for harm to their kids. You shouldn't let your kid play with a gun. You

shouldn't let your kid go to some sketchy neighborhood after hours by themselves. You shouldn't let

your kid play video games 100 hours a week. You shouldn't let your kids eat nothing but soda and

potato chips. You have responsibility as a parent. And I think parents should keep kids off screens

and keep kids off social media. Once the harms are known of excess use or the harms are known of

exposure to the sort of thing, I think there's responsibility that sits with the parents.

What about things like tobacco or processed food? Yeah, this is the key. The same is true of alcohol.

I mean, dude, alcohol is terrible for you. There's nothing good about alcohol. But I think I should

have a choice on whether or not I want to consume alcohol, whether or not I consume tobacco,

whether or not I consume processed goods. And the recognition that it's bad for you should be

publicized by the government should be publicized by the government. If I had to summarize what you

would say is product liability law makes no sense. There should be human liability and human

responsibility expectations in a society. We never talk about responsibility. We always talk about

where the government failed us and where these companies f**k us. And we never talk about what did

we individually do wrong? How did I individually choose to eat 100 f**k sodas a week? How did I

individually choose to get my kids addicted to social media? Where the f**k was I as a parent?

Like, we don't talk about our responsibility. And by the way, this fundamentally addresses this

point about human agency, which I think is more critical in this era than ever, because AI is

going to flood us with f**king everything all the time non-stop. What we choose to do in a world

where we're already getting everything and how we choose to not take everything that's being offered

to us, I think is a critical part of what's going to disdain with human success from human failure.

And it's going to become more apparent in the future. And not everything is about liability.

And not everything is about the government failing us. It's about people making choices.

And we don't talk about it. That's my right. What I counter, I agree, personal choice.

Super important. What you're probably leaving out here, which you're definitely leaving out here,

is when these companies know they're doing something damaging and they do it anyway,

that was the key to the RJ. What about a whiskey company selling whiskey to an alcoholic?

Okay. So I don't have a company selling potato chips to an obese person.

I'll put those two aside because I don't think we've seen major cases about that. But I will say

the auto industry knew for a long time about seat belts. You remember that. And they didn't

deploy them. RJ are Nabisco. They knew that these were addictive. And they designed the

cigarettes to become more addictive. And they didn't tell people about the health risks. Asbestos,

same thing, lead paint, same thing. This has happened over and over again where corporations

subvert the release of information to make additional profits. So the question here with Facebook

is did they know how addicted these were? Did they know kids were being assaulted sexually

and they could have done something about it or didn't they? And so agree that there's too much

punishment. That's absolutely true. The kids being assaulted absolutely through.

Yeah, we're not releasing information about the level of addiction if they had it. That's certainly

bad. Should the product be legal? Number one. And if the product is legal, who's responsible for

using it? And where do we draw the line? And if we don't want people to make noise so we shouldn't

put it out there. But if you as a corporation know it's dangerous. And then you lean into that.

If you know is the case with Facebook that this is super addicting, super damaging to young girls.

And then you lean into making it more addictive. And you don't put safeguards in place. And you

can prove that like RJR, like asbestos, like what are the safeguards of whiskey? What's the

what safeguards as a whiskey company put age? What safeguards as a casino put? Hold on. You

asked the question. Yeah. Yeah. It's not about age. Yeah. Second, after age, which is what we're

really talking about with kids and Jonathan hate would agree that they shouldn't be using this until

a 16. So I think that's a perfect analogy, age gating and then labeling. And then if they know

of something that's really damaging, releasing that. So there was a whole thing about alcohol and

pregnancy. And they covered up in the alcohol industry or didn't disclose exactly how damaging it was

to drink alcohol on a on a fetus or a developing fetus. And then remember all those signs went up

in bars in the 70s and 80s. That was directly because of that. So labeling, information,

and age gating would be the logical things to do for social media. And that's what's happened

the past. So that's the answer to your question. I don't know about age gating, but I think

informing parents about the risks is fine. Like that should be a responsibility. But you know,

the tort lawyers are one of the largest donors in political elections in the United States.

They donate largely to Democrats in local elections and Republicans in national elections.

And then they are the largest donor class to elections of judges. And it's a business. And I

think we don't talk enough about the business of court law, the business of litigation in this

country. And we often ignore this question about choice. And I don't want to live in a world

J. Cal where the government and companies are telling me what to do and what not to do.

No, I don't live my life, etc. Exactly. Jump in here. Personal freedom and personal

responsibility versus, hey, corporations may be knowing. And parental responsibility,

J. Cal. Transponsibility on there as well. Yeah. What do you think sex?

Well, look, there's no question that the trial lawyers want to turn meta into R.J.

Arden de Biscoe and the cigarette companies and try to fit their fat pattern around that.

I just think that the activity is fundamentally different than smoking. I mean, smoking is

manifestly harmful to you regardless of what your age is. And the only reason we allow it is

because of assumption of risk. It's a free country. I think in the case of social networking,

it's much more unclear what the harms are and what the benefits are. And I think it's much more

subjective and it's much more of a personal choice for adults and also for parents.

Freebergwean one area where I disagree with you a little bit is you said the harms of this are

immense and well known and understood. If that's the case, then let's just ban it for under 13 or

under 16 or whatever it is. But I don't think that's the case. And because it's unclear,

I think it's up to parents decide what's appropriate for their families. And at the end of the day,

I think the right way to deal with this is parental empowerment. You give parents the controls

to set screen time limits or to decide what apps their kids install. Now, the debate has now

moved over to AI apps. And there's a lot of parents groups that want to ban kids or teenagers

from being able to use AI chat apps because there was a couple of cases of self-harm.

Now, my reaction to that is, look, I've got a 10-year-old. And if he starts using

chat cheaply to get answers to questions, I would consider that to be a good thing. I mean,

I'll keep an eye on the usage, but I want him to be an AI native. I want him to be able to do

research. You know, I want him to be able to know how to use these tools. I want him to get the

right skills to be successful in the 21st century. In China, they're incorporating AI into K-12

education. Are we going to ban it for our kids and teenagers? I think that'd be a terrible mistake.

So I think when it comes to AI and AI chat apps, it has to be up to the parents because there's

too much manifest good that can come out of kids learning how to use these apps. Maybe social

networking is in a different category, but I got to say, I do think that the harms have been

exaggerated because the trial lawyers have an incentive and just to give you some facts about

that LA case. So just so you understand, in this LA case, they were sued by a 20-year-old woman

who claimed that she became depressed because of using social media. And she apparently

suffered body image issues because of social media. And she was able to win this judgment

for millions of dollars. Look, I think there's big causation problems with that case. In the case

of that plaintiff, the evidence showed that she came from an abuse of home. Her father had abandoned

her, her own mother had body shamed her. So it was very unclear where her body image issues were

coming from. I think it's possible that social media contributes to them or it could just be

that social media was a scapegoat. I also got to say that I do think it's a dangerous precedent.

I mean, are we going to allow plaintiffs, lawyers to sue Spotify because you created a playlist

of sad music and that music contributed to your emotional distress? I mean, that's kind of what

we're saying. You got to remember, these are free services that people have a choice

whether to use them or not. And if social media is making you feel bad, if listening to the wrong

playlist is making you feel bad, then stop doing it. But what's going on here, I think, is the

trial lawyers are trying to create the next big tobacco. And their goal is to try and sue these

companies into oblivion. And I don't think that's the right answer either. The consensus,

Chimoff, is kids who use this two or three hours a day. This has been across many

survey, many research studies is that it's massively correlated with depression and anxiety.

And eating disorders specifically in young girls, like if you get to two or three hours a day of

this. So that correlations, I think, pretty well established. You pretty famously said, hey,

and you worked at Facebook, so you saw this coming. But I think at Stanford 27, 2018 timeframe,

you actually had some comments on this. We could either play the clip or you could just describe it,

I guess. I said, what was obvious to me then? I lost a lot of friends at Facebook when I said it,

unfortunately. But essentially what I said was, I don't let my kids use it. And I don't think that

this is a constructive part of a developing child's diet. I do think that SACs is right that I view

AI chat differently. There are different guardrails that are required so that if you go down some

sort of, you know, dark corner. But that's possible to understand. And the product is

architected in a way to create cul-de-sacs. So if you're thinking about self-harm or you're

thinking about these other things, social media is very different. It's an incredibly fast,

which algorithm. And that's the optimization. And until the incentive for that optimization

changes, these outcomes will continue to compound. I think the interesting thing is that the LA lawsuit

was an individual lawsuit. The young woman, I think, was awarded three or six million dollars.

Yeah. The other one, though, that they lost this week was in New Mexico, and that was for $375

million. And that was more around, I think, child exploitation. Yeah. The thing that I'll note is that

these trial lawyers, which I'm not a fan of either, have been trying, as SAC said, and as

Freeberg said, to make these folks a target because there's so much money on the line. And they've

been batted back pretty successfully. But this was the first time where they were able to navigate

the section 230 protections that Facebook and Google have typically used to protect themselves,

because Google was a part of the LA lawsuit. And they were able to go down the pathway of

product liability language. Now to Freeberg's point, I think he's generally right. I think it's

my responsibility as a parent to take care of myself and my children. But to the extent we don't

change these product liability laws that are on the books, I think the door has been opened

and a map has been drawn, which is this is how you navigate around section 230 and you can get a

decisive lawsuit in your favor against these large companies with enormous cash flows.

And so I expect that this will be a death by a thousand cuts kind of scenario where folks are

just going to rally around us. I don't think it's right. But I do think that that's the rational

reaction to what just happened. I mean, look, six million dollars to an individual 20-year-old girl

or three hundred and seventy five million dollars. These are huge numbers. And the reality is that

I think we've opened the floodgates. I do think there should be a better response. And I do think

that parents should take a lot more responsibility. But I do hope that these products allow us

a kill switch for when our kids are under the ages of 16. Frankly, I would love a kill switch

under the age of 18. And there has to be simpler ways to age validate. You know, we used to work

around this thing called Kapa compliance. Kapa's bullsh**. It's nothing burger. Like a six-year-old

can vibe code their way around Kapa. So it doesn't do anything. And so age verification is completely

broken. It's harder to get age verified for a porn site than it is to get unage verified for

face. Same work. Jamoth, how did you get around it? Yeah. How do you know that? How do you know that?

That's just for uploading. You were not uploading at the time. This is not your only

fan proof of age. We actually deal with this in our new AI framework

that the administration released last week because the number one issue is around online child

safety, which I think again is mostly about social networking. But it touches on AI. And so it's

kind of gotten lumped together. And I think we're, I mean, I'm referring now to the White House,

has said it's willing to support some form of age assurance, technology, and parental controls.

So look, I think there needs to be a conversation around how true it is that social networking is

just a fountain of ills for young people. If that's true, then why wouldn't you just

disallow it, right? But if it's unclear, and I think it's more on the side of unclear, this is me,

then it's up to the parents. And what you want to do is again, have the age assurance

technology and the parental controls. I don't think I don't think that social media is net

bad broadly speaking. But I will tell you that if my child uses it for two or three hours a day

for multiple days in a row, they become retarded. Yes, they act weird. And so I don't know what to tell you

except I would love a kill switch until these kids turn 18 on all these products.

Well, you can use this has to do with opening, by the way, these what I do instead is I use

Apple's family sharing. But it's hard. And I'll tell you how wide it's hard. Our schools

give our kids from books and say use these Chromebooks because that's the way you're going to

access your LMS, your information, your content, your homework. And you know what's an integral

part of that YouTube. And then now it becomes a backdoor. So even when we take the devices,

I take my devices, we lock them down. You can't bring them to your room. The whole thing.

But if they need to do homework, and I catch them in a little break, I'm like, what are you doing

on YouTube? They're looking at shorts. Of course, that's what they do. Yes. And so it is a whack

a mole problem for parents. I think I'll just give myself the final word here on behalf of the

group. It's obviously a dick thing. It's obviously the industry has not policed itself nor would

they police themselves because they want to get people addicted now. So they're addicted when

they're adults. The rest of the world has realized this. Australia now has 16 and forest,

Malaysia 16. Other countries are right behind them, Spain, Germany, UK. And what should happen

here in the United States is this should be done with the handset manufacturers. If Android

and Apple showed leadership with Facebook and said, we're going to buy default. When you buy a

phone, you're going to have to age verify, you know, kids under a certain age, which you kind of

do already when you create a family plan like it did, we could solve this problem. And then parents

would opt in to giving their kids access to this. No good comes out of kids under 16 using social

media. And Jonathan, by the way, in our interview said you should be putting phone lockers in.

And our school is doing that. Other schools are doing it is the greatest thing ever. Kids

are school. No, and then they love it. I don't think it's that great. I'll tell you why. Our

school does the phone condoms. I don't know what they're called, but like you put them in this,

the bags and whatever. The real problem is that there's enormous social pressure when you're in

high school to use these products. I'll give you a specific example. Our rule is you cannot get

Instagram or TikTok until you're 16. I would love it to be 18, but we all agreed 16 and we're

able to maintain that rule. But then high school comes around and I've two kids in high school now,

oh, we need Snapchat. No, you don't. No, yes, we do. No, you don't. Okay, great. We'll have no

friends. Thanks a lot. We'll just sit here in our room dark and there. And you know, there's an

enormous amount of social pressure. So when you talk to the other parents, it's like, hey guys,

can we all agree that we don't need Snapchat? You just can't get uniform agreement across all

parents because everybody uses problem differently. And so I had to change the rule. Now when you're

get to high school, you're allowed Snapchat, but not Instagram. And you know, when you're 16,

you get Instagram. And that's the best we could do. And TikTok, all that stuff. But it's an

impossible task for a parent. I find it indispensable. We'll be able to do iMessage with my kids. And

also, I like the location awareness. You can track location. You compare iMessage. Those features

to snap. Is it really that different? I don't think it's that different. So you're really

gonna, you're gonna, you're gonna, you're gonna ban snap? No, I can't. My point is I had to give them

snap. But you're right. I was like, why can't you use iMessage? They're like, Dad, don't be a loser.

Yeah. No, I saw our snap account just so I could iMessage them where they are where they're messaging.

I prefer if they were just on iMessage. But anyway, that's the reality. You can talk about

banning all these things. But again, I think you're on a slippery slope. And I gotta, I gotta

just. I'm saying me as a parent band. Yeah. No, I'm saying me as a parent. Yeah, you're setting

guidelines in my house. This is the rules. When you become a freshman, I'll give you snap.

And when you're 16, I'll give you Instagram and TikTok. Otherwise, shut the f*** up. Put your head

down. By the way, I also have a tip for parents. You know, this issue with my kids in headphones,

where they want to be listening to stuff all the time and your kids walking around like zombies

with headphones, I replace their headphones with over the these brand called shocks or something.

It goes over your ear, but your ears open. So you can listen to an audio book or music and still

be able to talk. And so since we did that, it's like much less drama around the over the ear

headphone issue. Man, many people are zoning out. Well, again, it sounds like you're exercising

parental supervision. Yeah. Does it really make sense that later when your kid turns 20,

they could sue these companies for. Well, to your point, I just think it had to be good.

I'm emotional distress. That doesn't make sense. You're right. Because to your point,

that girl said she was using it from the age of like six and 10. Yeah, to be good. One product,

six and yet that's crazy. Crazy. I agree with you, Saks. That's crazy. Where were the parents?

All right. We got time for I think one more topic. Be amazing. President Donald Trump,

47th President of the United States announced his Council of Advisors on Science and Technology.

It's called Peacast. Saks, you have now am I correct in saying moved from the czar of crypto

and AI to now the leader of Peacast. Is that the correct way to frame this? Well, the president

was appointed me to be a member of his Council of Advisors on Science and Technology into co-chair it,

along with Michael Kratzios, who's the director of OSTP. I'm still an AI advisor, but I do it

on behalf of Peacast now. So you remember last year I was an SGE. We got up to 130 days. I used

that time up in the president appointed me to this new role. It allows me to continue being a

technology advisor. In fact, on a wider range of issues. So before it was AI and crypto,

now it's whatever Peacast wants to study or talk about or make recommendations. I think in

addition to AI, other areas that are interesting are nuclear power, quantum computing, advanced

semiconductors, all these different areas. I think we've got some biotech. Thank you,

Freeberg. And we have some incredible people who are now on Peacast to kind of run with this.

Yeah, I'm looking at it. Mark Andreessen, Sergei, Michael Dell, Larry Ellison, David Friedberg,

Jensen, Lisa Sue, Mark Zuckerberg, and some other folks there that maybe not as recognizable by

the audience. How were they selected? So the only criticism I've seen of this is lots of business

leaders. Great. Lots of technology. Great. But maybe a little light on the scientists.

Well, I don't know. We have people who've won a Nobel Prize for physics on there. We're talking

about people who are experts in, like I mentioned, quantum computing, fusion, nuclear biotech

pretty much everything across the board. I would say that one difference between this Peacast

and previous ones is you have more doers, more builders, people who've actually created products or

companies. We think that's a good thing. Why would it be a bad thing? I mean, is it a bad thing that

Mark Andreessen invented the first internet browser or Jensen invented the GPU? If you're going to

make recommendations about advanced semiconductor conductors, don't you want to have someone who

actually invented some of the key products in the space? The big question, of course, Axis,

as we've seen here with Science Corner, is how do you plan on staying awake for these meetings?

If it's going to be like all science is usually when you dig your bio break.

It's science and technology. So I'm going to focus on the tech stuff. Got it. And then we got

freeberg to focus on the science stuff. Got it. So freeberg, this is incredible. You've joined

President Trump's administration now. I will say I'm honored to be invited and appointed by

the president. And I appreciate SACs and Michael Kratzios. You look back at Peacast. It's kind of

rooted in FDR when he formed this council of advisors on science when nuclear physics and

quantum mechanics was starting to reinvent what was possible in the world. We're sort of at a

similar era today because arguably AI is reinventing what is possible in the world. And I think

there is this kind of acute moment that we find ourselves in in this extraordinary race against

China. I'll give you a statistic 10 years ago. China published 50% of the number of scientific

research papers and peer-reviewed journals as the United States. Last year, they published 50%

more than the United States. This is across all disciplines and domains, including physics,

material science, chemistry, biochemistry, broad life sciences. There's this moment that we're in

right now where both the world is being reinvented by AI. But there's this extraordinary race with

China, not just in fundamental research and discovery, but in the industrialization of new

discoveries and new technologies. You could feel it in DC this week. I was at the Hillin Valley

for them, but literally everyone in Silicon Valley, everyone in DC is like absolutely honed and

focused in on what is going on in China. It used to be in biotechnology, for example, that China

was kind of a copycat in a M2 or they were really good, for example, in manufacturing. But it is

now the case that in many sub domains, China is becoming the scientific leader in biotechnology

and in life sciences. And that is a scary thought, because ultimately China could end up engulfing

the entire pharmaceutical industry and basically becoming the leader in things like medicine. But

most importantly, foundational things like AI. So I just want to defend and speak for a moment

about the choice about putting what I would say are like industrial science and technology leaders

on this commission, because this is a moment where there's an industrial race, not just a

discovery race underway. That's why this moment is so critical. Anyway, I'm very appreciative to

to have an opportunity to serve and thankful to David for his leadership.

And related news support will be joining the President's Advisory Council on BOMPOTS

and wagering and joining that. And when I saw this act, I saw PC and I was like, oh, is it

podcasting? I'm in. Finally, I've been invited to the President's Council on podcasting. So big

big news coming. I don't want to tip anybody's cards. Well, let's you know when that happens.

Yeah, absolutely. The President's Council on podcasting emerges. Man, Lex Friedman will make

our way to Washington. I want to thank the President as well. And that's a great honor to be named

to co-chair this. It is like Friedberg was saying this is a fairly august body that goes back

a long time. I think the modern incarnation was created in 1990 by George Herbert Walker Bush.

So this has been around for over 30 years in its current formulation. I think we have a slightly

different take on it, which is we're going to have these these builders and doers on there.

Like Friedberg said, we got some catching up to do on our industrial policy.

We have named 15 people. There's still nine more slots. We can have up to 24. So I think it's

possible that at some point, there'll be a second round. And for missing some expertise,

they can be filled in. Obviously, that's up to the President. He can decide later who else might

join us. All right, everybody. What's another amazing episode? The number one podcast in the world.

The all-in podcast. Bye-bye. Love you boys. Bye-bye.

We should all just get a room and just have one big huge or two because they're all just

just like this like sexual tension that we just need to release some of them.