E132: SEC goes after crypto giants, Sequoia splits, LIV/PGA, Messi's deal + LIVE Q&A!
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Everybody, welcome to the all in podcast. I'm your moderator for the week, dave freedman g not the world's greatest moderator. This show is going to be a bit of a shorten version at the back end of the pod.

Today we actually are going to show some Q, N A from Jason's launched summit, which he held in napa valley this week. Great event. Thanks for having us up there.

J. L, great speakers, great content. And we did a live Q N A for the all in pod with the audience there, which will transition to about halfway through through the show today.

Check out. Thanks for your hospitality. Thanks for the fun birthday party, the poker night.

We had a great time. I don't know what I was doing there.

You are made in some of your L. P. S.

You're never met before. I was like a dog and pony show. J, K, was using us sort dog and pony show to raise money.

Fact that you really have L, P, S.

there that you would never met. No, yes. The whole long second I had one. L, P, there, who I have definitely met many times.

Okay, SHE told that he had never met you. SHE wanted an interrogation. So maybe she's getting into the spirit of all and and joking with you. But you had a three hour meeting on your peas. I heard .

rought.

He was daily drinking mark readers in the sun, and then we showed up and he was like falling a sleep by the time where you're done with the state 很小。

卡片。

We can give.

We open sources to the fans .

and got this. You know, by the way, politics is one of these incredible things where you see the minutes people come out of the would work when you even fain support for somebody that they don't support. Now that it's out there, that sucks.

And I are doing this fund raiser for R F, K. Oh yeah, if you look at twitter, some of like the the democratic circuits are out just smacking me and sex around. And it's a great biggest. These people are like the biggest imposter. Lose your clowns.

Theyve never literally done anything in their whole life, and then they show up, and then they just like, how dare you work and help build the company? How dare you help build in other company? How dare you help now und other companies?

I am a talking mouthpiece who's never done anything except work and wanted administration as a speech rider. And now I think you guys suck balls. It's like giving a break.

So you are you .

little kind of emotional about that today?

I I love critique actually because I think like you can learn a lot from critique. But then when mids just feel I just get annoyed, I think mids should not be allowed to talk. Well.

that's so they have internet sex.

Are your republican cohorts friends upset about you hosting a fundraiser? K.

i've got no.

that that's interesting.

What should take on map?

Do republicans generally think that is a good thing if junior gets the democratic combination because he will be easily beautiful?

I don't think they are thinking that way. I think that there's a respect for R F K jor among many republicans because he speaking out on issues that they care about, like i've talked about, he's denouncing censorship. He's in favor of free speech.

He's in favorite of civil liberties and you know, not the this master surveilLance state. He's speaking out in favor of peace inside of war. He's speaking out on the border. He had this amazing video that was a couple of days ago, where he went to the border in human arizona and two I M in the morning and home. And he shows, he shows where the border wall ends and where the border wall ends at the line begins.

And people from all over the world are is entering through this hole in the wall in a never ending stream of people, and then they get loaded onto buses provided by the government. And then they yet handed a ticket to supposedly appear in court to resolve their case in three or four years, and they are never heard from again, and their dispersed all over the country. What I don't understand that is, if the federal government can get its act together enough to provide buses, why can they get their act together enough to plug the hole in the wall? It's absurd.

This is like an active sabot against the united states. And so he's there just pointing this out. I've never seen thing like this before.

IT was interesting as a as a democrat to do this because that's typically kind of a republic and point right? And some of the commentary made about R F K junior I think he was in the new york crime this week um or someone that covered his one of the big media .

companies highlighted .

how much of his agenda seems to be a republican talking point agenda. Is that sound, accurate.

kind of even most uh, people in the country who identify as democrats would be against having an open border. That's what we're talking about when there's a hole in the wall and people going to start forming a line. And then once they get through the line, they are literally disport on their basic, distributed throughout the country on buses.

I don't think most fuel in the country, even democrats, would support that. But what he's violating here is the press blackout on what's really going on of the border. He went there.

but other republic ican talking pots. So the points around the vaccine that's republican. Well, he's expressed .

obviously concerns about vaccines proceeding the covet vaccine. I don't know whether he's write about that or not. Not really need to say whether he's right or wrong about that.

I just don't know enough. I think he's definitely right about the inefficacy of the coverage vaccine. We ve talked about this before. Even gates admits now that the vaccine doesn't work.

it's too short acting and IT doesn't .

hold up against .

very it's not a vacation plated with non scientific thinking from a bunch of of people who should have known Better.

Wow, I think you just .

got our so much channel.

which must have said is just like the factual reality and and you can get that from the mainstream media like there's no reevaluation, there's no appraisal, they control. What we see in here is like prof deal level in terms of the propaganda. And that's why I think arca junior is so interesting is because he is blowing up what the mainstream media wants to control. The really interesting .

thing about him going to the border, I agree with taxes. Hey, let's just have a discussion about this and look at the actual facts on the ground that we can agree on. And what he actually did, he peers the value of, like this is an issue about a certain group of people.

He was there, there, people from afghanistan, china all over the world coming. And he made the point that this isn't just about one country and that these people are suffering. And that, I thought, was like another really important highlight. These people are being traffic there, you being abused at the border, and that it's going across this team before .

the talking about IT and done this with ukrainian well, where he emphasizes the humAnitarian aspect of IT, yes, and I talking about IT, and I think republicans should adopt some of that be rethoric.

And to trim's point, I think IT is, I think it's a money graph. S, I do think get lower death rates.

but you know I do think piercing .

the value on this and books, accs and politics are moving on. We're going to talk to about cryo. So this week the sec serious action against uh, baLance and coin base, you know pretty significant, pretty loud.

S, C, C, filed thirteen charges against finance entities and the founders. C, C, charges include Operating unregistered securities exchanges, broker dealers and clearing agencies, misrepresenting their trading controls and their oversight on the baLance U. S.

Platform, and the unregistered offer and sale of security. The next day, they saw a temporary or training order to freeze finances U. S. assets. And then on tuesday, B, S, C, C, suit coin base over the exchange and their staking programs stock dropped twelve percent.

The S, C, C said that the company was Operating an unregistered exchange and broker in the thirteen of their assets listed on their platform were considered crp to asset securities. Brian armstrong obviously has been on the pot several times, said he's not shutting down his staking service and said, regarding S, C, C complaint against us today, we're proud to represent the industry in court to finally get some clarity and cyntia rules. He generally made a statement that he has tried multiple times to register with the S.

C. C. They have not had a mechanism for him to register.

They have tried to do everything by the book, and that the S, C, C approved the IPO filing, knowing full well the details of their business and the Operating model and still allow them to go public on A U. S. Security's exchange despite full knowledge about their business to mark.

Does anything change this week based on the S C. S. action? Or is this just a continuation of, you know, crypto has been rolled back and will continue to roll back here in the U. S? Or is this something new and a new action and opens up a new front on the uh, the government versus script?

It's a good question. I think there's two ways to look at this. One is the conspiracy theorist way, which you see a lot of on.

Twitter, which is the idea that crp to is making all of these in roads as a replacement mechanism for fiat currency. And so governments are really now invested in trying to shut IT down. I think that's largely untrue and enters the more simple basic reality, which is that there was one part of the S C.

C that Frankly didn't do the job that they were supposed to by either allowing a few these crypto companies or crypto businesses to go public, either a stand alone businesses or as part of other businesses. So coin base Robin hood, it's such a and then there's this part of the enforcement action after this F T X fiasco a which is a lot of C Y A covering your ask by the S C C, especially because IT looked like they had some cozy relationships with them. And so they're coming down hard and they're going to go and systematically dismantle the largest actors and they're going to go through the value chain.

So I think the obvious place that they're looking now or the exchanges to look at the custodial services, they will not approve any etf. And then eventually, I do think a trickle LED into all of the staking services. And eventually, I think it'll touch the venture community and all of those firms and funds that had a huge robust business in staking these crypto projects in order to get coins like founding coins and then being able to sell them.

J. Q, I mean, i've been talking about this since the beginning because I bought bitcoin in and wrote about bitcoin when IT was maybe twenty five cents and then again when I was one hundred. So i've been following this for a long time, and I think thinking from first principles to stepping back for a moment, you know, what we do in technology is fundamentally disruptive if it's at its best, if it's truly going to be important in the world.

And when you hear that word disruption, you kind of file IT as a buzzword. But what IT really means at its core is like competition. And it's not just competition disruption.

When you say disruption, you're talking about existent al competition. Two people go on the rain. One person comes out like somebody seem to get really fucked up.

And if you people keep bring up or you're in investment, uber, they broke the rules. They bent the rules. Uber was going at caps. Airbnb was going against like hotels we work was going against like long term real estate leases.

When you look at all those disruptive technologies and what they did at their core, they disrupted on behalf of consumers and lower Prices, increased choice, succeed when you get crypt on the cyp to crowd, literally said, we are going to replace fiat currency. Fiat currency is the government. And so my thesis from the beginning was, if the government has a way to stop this, they do not want to be disrupted.

A what what is a government? At its core, it's a military, is a bunch of rules, laws and its money. That's the kind of pillar of of any government's power.

We knew the government washing to give this up and you know they they after around and found out but the truth is the and and this where I have some sibly for the crypto people, not the people who are just committing crime with the whole way and just dumping these bags on retail eeta. But we do want to have this innovation here. There are some innovative aspects to IT.

But again, again, ser said, listen, you ready have electronic money. It's called money in the united states. We already have these services.

You don't need this. Consumers don't need IT. You have to understand the asses function in the world to understand why they are taking this action.

Their function is to protect investors. Investors lost that much of money. Therefore, they are going to retroactively inflict pain and hold people accountable for their Mandate, which is to protect investors.

You could have easily resolved this. The S. C, C. And the companies could resolve this.

The companies could have follow these things as securities and only allowed a credit investors. Top five percent of country people will make our church. k.

here. They didn't do that. They said, anybody can buy this. Well, that's just not how IT works in america. And IT should change. I think everybody should be able to buy any security they want in america. I just like anybody can go play blackjack.

And the easy solution for this, just passing congress this week, and will go to the senate and be a law soon, I think, allowing every american in the other ninety four percent to take a test and become a credit. If that happens, you take a test to like to take a driver's license. I know what diversification is.

I know how risky these are once you take that fifty question test to become a credit and then you can buy these coins if you want to. And that's really the easiest path for resolution here. So we don't have bryan ARM sharing movies company to the middle or you know an island in the cream and which is what is going to do, I predict.

So okay, well, look, we've seen this bill make its way, I think, through. Is that going to the senate next? There is IT going to send IT? Yeah, going to send IT, right? So let's if he gets done, I think it's a it's a good point.

One thing all point out, when individual investors were making money because all of these asset values were inflated, all of the coins we're growing or climbing and value, everyone felt good. There was an emergent cry that we all want to have access to these new instruments. We all have a right to make these investments and to own these assets.

And then as the asset values declined and individual investors began losing money, the emergent cry is, where was the government to help save and protect us? And so the S. C.

C, I would argue, was probably a little bit hindered when the market was inflated in being able to step in and take action because that would have been counter to the cries of the retail market. But as the retail market took their their hits, B, S, C, C has to step in and congress steps in, and everyone starts to say it's time to act. We should have acted to her. And this was, you know, fairly predictable.

I think what's happening is more inferior than that. So the S, C, C is doing two different things. They are alleging two different kinds of crimes. One set has to do with protecting investors from having their funds stolen on these exchanges, or at least commingled. F, T, X did that right, where they basically took customer deposits and stole them.

What finances accused of is taking in customer deposits, maybe not stealing them, but coming ing them with company funds that should be looked at and and I think crypto customer should be protected against that. However, the case against coin base, they're alleging completely different set effects, which is effectively what gangs are in the S, C, C are saying, is that IT is not legal to Operate egypto exchange in the united states. That is what the S.

C, C is saying because coin basis basically do everything right. And I believe that gangs, or is far exceeding his authority in staining something like that. IT is not up to the chairman of the sec to say that americans should not be holding cyp to why, as a free people, should we not be able to buy crypto if we want to, you know, why shouldn't we want to buy bitcoin? Now, maybe you apply rules around a credit investor status.

This should be protections against unsophisticated investors buying stuff for getting defrauded. That's fine. That's the rain work that bran or so is asking for. But we, everyone should understand what the sec is doing right now is basic usurping congressional authorities, be congress that makes the law.

If congress wants to ban crypto exchanges in the united states to prevent this is in the united states, from oin cyp to let congress do IT IT should not be up to gang's ler to do that. And the question is, why is gangs are going this far? When previously he had relationships in the industry, apparently he was a consultation to business.

And even worse, he was talking to F, T, X about giving them some special status. And I think the reason is that the scuttle bet is that he has an alliance with eliza th warn, and the rumor is that you SHE will make him treasury secretary. Y, if he basically destroyed in the U.

S. Sorry, where's the evidence for that? That's just someone's rumor and speculation.

The scuttle about the industry.

okay. So someone, this is in.

just to be clear, rumor in new window.

What you're say? No, I look what I would .

say is clear is I gz, lura and alis with warn having alliance to destroy cypher in the us. This is speculator about before with Operation choke point, but now it's clear .

they're trying to shut down.

We've talked about on the show before was a series of .

actions taking what you do when you're in a hotel at night.

Operation check point was a .

series of actions by the U. S. Government to basically destroy all the on ramps to cyp to so you could not get money into the system. Now they are going further. They're basic saying that is illegal to Operate a cyp tuto exchange in the united states.

So that is that a what they're saying is it's not just the exchange is that the exchange contains unregistered security. So so more new once point, I think think .

I agree security.

Could you trade well, if IT passes the however test or IT is registered .

and there are people who have that.

you're back, you pass if you list to a credit investors. And the fact is brian armstrong baLance and a lot of crypto projects refused to exclude non a credit investors. And I watch this happened up close and personal.

Many you right about the unrest to securities thing, they are trying to say that all prop to on the security sixteen .

they named them sex in in the loss they named ed. The sixteen or thirteen what was the freeze? D so they know how to IT was thirteen they know how to craft this saying for these specific thirteen.

Now the industry does feel your correct and the vack channel is everybodies against us. But if they had just registered these, they were not a problem. I don't think they're going to he does not have a way of registered.

They do. They don't want to. So they claim they don't have a way of reaching. They could register just like the .

a lot of people tweet that the sec has put out them and saying is and come talk to us, there is no open door. There is no one to talk to. They have no idea how to get registered.

how to my how do you think this is going to get resolved? Armstrongs talk publicly by going to congress to try and get some clarifying law past. Are you familiar with any of the. And you of the drafting that might be going on to support his cause here? Or do you think it's gna get settled in the courts?

First of all, I think I think brian armstrong is is a really, really, really good entrepreneurs. I'm a really big fan of his. That said, I just don't think that there's a lot of political support to visit this issue right now.

And so unfortunately, unpretty skeptical that you're gona see any form of legislation pass. I unfortunately think that. The S C, C has buying large, put the entire sector into mate.

And so I think that, but Jason said, is largely right, which is that it's going to force these companies to preserve enterprise value to to leave the the united states and to juror's dictionary, Operate from a different place and to basically I P block and I P gate U S. Residents from using their products and services. I also think that they're gonna have to pay large fines. And so the only thing that will be left is to a judicature of the staking stuff that that happened. And mother, that was right, wrong.

So the court, it'll get settled.

it'll get decided. Agree with that. And I think I think that when you start talking about manisha like, well, these sixteen ency pto s are okay or not okay.

Look, you're kind of missing the point. The government LED by gensler isn't a full assault on crypto and the goal is basically to either destroy in the U. S. Or drive at offshore to moh is right about that.

And the question is why? And I think jiao u, you made the point that progressives like a little with warn, see crypto as competition to fio currency, and they do not want there to be a competition. Now what is the reason for that? I think it's because of their radical spending schemes.

Remember, in the first years, the bind administration, the progressive, wanted a four and a half trillion dollar build back Better, bill. Remember, Larry summers told them that you're going to cause inflation, and even the seven hundred and fifty billion dollars scope down version that they also may pass cause a lot of inflation. And that caused the problems that we have now that we're seeing the economy.

But they wanted four and half trillion. And when people were opposed to, and so we can fd, they were in favor of minting trillion dollar coins there. So these are people who don't want any check on their ability to spend down the full faiths and credit the united states. They would basically spend all the money that we have. They were basically eat the sea .

corn or don't have that.

We don't have that. I think you guys agree we should not be spending. And that is why there is a faction in our political system who are most against cyp to .

the two days can be freeze. Then I got, I got revenue. Two days can be true. One, the government does not want to give up control of fia. I agree with that.

Second, ling, that's also true, is that this group of people did not want to play by the rules. They knew the rules. They especially broke them for profit.

That's why they have them deterrent. Tes, you can name this Operation choke point. You can brand IT. You can put .

out any conspiracy there you want.

They did have the option same time, David, this is a tolerance for ambiguity, being able to hold two dogs at the same time. Give me, and they don't want to give up control. That's what's happening. That's the rule you have to .

file as a gree. You have to only find coin base was a good actor.

I believe they have good intentions. Yes, I don't put the other people. Do I do .

that in base? E.

I believe the security, they trading our violation of law. And that's obvious if you. But I believe that lost a change. Let me give you security point. R, C, K.

J, L. Let me give you a third point. And sex. Elizabeth Warren SHE may be motivated by the intention to preserve the authority of the fia, but is IT not also possible that a large number of people lost a lot of money that they work hard for? And they used to buy crypto assets, and then the value, those assets went down and those people lost a lot of value.

I had there was A A group of guys at our house painters that painted my house two summers ago, and they painted to the whole house. They were here every day, for hours every day. So I got to speak to these guys, and these, these guys were were house painters. You know, they they work for narrow ly wage. They do fairly, but every lunch break, every break they got all that they would talk about with one another was what crypto currency they're buying and trading in and out of with the whole intention of making money. They all believed that they had a good point of view because they read something on the internet, or got some tweet, or got some text, or saw something on tiktok about this one crypt to asset, or this crypto asset they were trading and note, and all of the money that these guys worked hard for was being invested in cry.

You're right, that set of facts is not great. However, I don't think that's the motivation. I think the motivation is to basically encrypt as a potential competition to feel out money in the united states that the motivation and they're going to use those fact patterns to basic will public support that?

Because, look, because we could handle that, okay, we could do the accredited investor test. There should be a framework or set a guidelines under which IT is legal for people to buy and hold or trade crypto in the united states. And all that brian has been asking for this give us a framework. And dancer is not giving a framework, he just trying to basically put them out of business.

okay. Look, I think we ve gone around. This topic has been a great conversation.

I'm going to move forward to the next topic, which I think is really interesting in the vein of both the globalization but also you know the scale at at which venture firms have gotten to the cora decided this week and announced publicly that they are splitting off their china and india slide up each day of funds. As you guys obviously know, the koa capital is the eventual capital firm. And within that firm, they manage multiple funds.

Some of the funds that they've rays and managed have been specifically targeted in china where they have fifty six billion dollars. I don't know this number is actually, but that's an incredible number, thirty six billion dollars of assets under management focus just to a china. And then they have a sequoia india fund, which has a about four billion dollars of capital raise in just the last three years.

And now they are separating the management company on the oversight of those funds into separate management company, so sqa capital will no longer oversee those china funds. A new firm has been formed called zoia china that is now owned and run by a separate management team based in china, and sqa india is now called peak fifteen partners, which is only and Operated by a separate team of managers out of india. Roll of voter will manage the U.

S. In european security capital. Neil chain will overseas and just saying will oversee the coa india.

I guess this is a question of the scope get too big or they caving the pressure of the political issues arising with having deep relationships and ties with china. Or as they have said, a lot of competition between these different portfolios and companies. These portfolios amonges each other. Chat, what's you read on the action? Is there anything to read into this and anything to .

extrapolate from IT what's been Operative missteps for the koa in the last couple of years? And all, lets call you figure out who to blame for this. But the reality is that I think felt a lot of formal post soft bank.

They raised this large mega fund that kinds struttings all of the sub funds and struttings all of the regions. And so they dangle the Carrier of trying to get into the early stage U. S.

Fund by investing in this big mega fund that also had china and india exposure and growth exposure. Then they tried this like very convoluted ever Green structure right before the market fell apart, where you could basically become a permanent capital vehicle. And as far as I can tell from the outside looking in IT just seems like a tax tax play for the GPS do not have to selon realized capital gains.

But that only works when the stock market keeps going up, which you didn't end end IT similarly crush tax tax eight hundred ninety percent. That was a missed. And then when you put all these things together, now that china is contracting, and we said this before, I think china is largely on investible for the next thirty or forty years IT just makes sense to jetson IT.

Now I will say though that neil shen is elite. If you consider in investing, I would say I A simple rubrics. Anybody who's made more than a billion dollars for themselves as an investor, I consider elite.

Neil shen is elite. And so hill, do you just fine running that zoia china business? I was surprised about why they would allow india leave.

There's nobody that a leak at the coal india by that rubrics, but india is a country growing at six percent a year. IT literally looks like china in two thousand and eight and nine. And so i'm not sure why you would let them leave.

I think that you would want to attach them to yourself because IT makes the us. Business look Better. You probably gets differentiated and smooth out returns. But I think this is .

a little the point of of competition to out that there is competition between the the different portfolio companies and we're leading a bit.

But I mean, that's dumb. That happens in the united states. So koa has always been known to fund everybody that they think will make money no matter how much they can, pete, no matter .

where they youtube and more was sitting on the border. Google and .

look as an organization is a to make money for their L P S. Period and the story. And so all of the other words that can go in any press release, basically, I think, try to hide the fact that this is an organization that touts and missteps.

They're not on solid ground. They've lost a lot of money and they're trying to figure out what to do next. I however, if I was running that, organza would have probably done nothing and just let the does sell. And I think that all of these actions are too close together, and it's a little bit to me of filing in the water. And so I don't think IT was a good idea to let india leave. I think I made a ton of sense to cut china, but I think all of this stuff happened started happening a few years ago, starting with that eight or nine billion dollar mega fund that they raised to try to compete with soft sex.

Any read on this? yeah. I mean.

I think it's an example, a prominent example of the coupling and the globalization going on. So I agree, we have to treat india and china separately with respect. China, I just think it's become harder and harder for americans to do business in china, both because we don't really have the visibility into that system and there is too much political uncertainty.

so. Kind of such mass point about IT being increasingly uninvestigated. I also think the geopolitical concerns is is very hard to struggle those concerns now because the geopolitical petition is heating up so much.

I think it's investible for people like neill shane, who are insiders in that system. So I think you know eee, chinese investors can, i'm sure, make money in china over the next few decades, but I think it's just too hard for americans to figure that out. So I think then parting ways makes a lot of sense.

I think it's going na simplify the quais life a lot. india. I agreed with the moths that that sort of a different question because in is going to be a huge growth economy over the next few decades and they are A U.

S. ally. So IT doesn't pose the seem geopolitical risk, but my guess is that IT was just kind of unwieldy that is too unreal to can emerge funding sources and firm management across two firms that are really pretty different, right?

The U. S. Is my firm and then this indian firm. So my guess is they just decouple because IT was just going toward to manage.

And if you in lp, don't you just want the ability to say, OK, i'm going to allocate this much money to india. I'm going to allocate this much money to the us. I think lp is probably .

like IT to skoal. China is Frankly over the last fifteen or twenty years as good and probably is numerically Better than sickos. U.

S, so that was in the elite organization just by itself. So quit india, I don't think as much to talk about. And so maybe what roll off decided is this team is just not very good.

So you might as well just cut IT and we can revisit IT later. They probably have some number of years of a non compete and then they could come back into the market five years of the totally new team, and that may be easier. So maybe easier just .

to just where with the team they actually want separate. It's ross returns from two totally different funds, right? Because one side, one side can be unhappy with the trade, right?

Yeah, I, I, I can give J, K, else got actual information to share. Well, no, I know. I have the, I think I have the close.

I an s putting money for me. They back my second, started up rule off on the board of that company still with me. And I was their first scout. When they start the scouts problem, which is the highest a percentage performing fun.

i'd think they ever had, it's when a resident captain, america.

So as a patron, how do you feel? Put twenty percent fact. This is the greatest venture firm of all time, hands down. And this coa fund.

which is for the companies they've .

invested in, twenty guess. And so the reason the skua fund came out, this everGreen fund, was because a lot of their L P S. Wanted sqa to manage the public equities going for because they didn't want to sell them because they realize bullshit that the massive gains, the gains from oodle apple eta of these investments that they did when they were private companies, cisco, to gains from public forward were greater than the gains in private.

And i've been in on these presentations, i've SAT brew them, uh, with the the secret team. And so when you manage those public ones, we've all talked about the domain atr problem here. The domina problems here.

Are the venture returns or they part of the public equity? So in A A giant endowment, they want to put them into the equity bucket, get them out of the venture bucket. It's a choice to are an opportunity there to manages every Green fund. I'm sure there are a taxi manages to IT, of course, but with relation to what they did in china, in india, these these were incredibly president and innovative things they .

did in two .

thousand and in two thousand and five when they started indian. Then china was two thousand and five. I believe they found domestic teams. You need domestic teams to do this properly, especially in places with different governance and different regulations. And IT gives them autonomy.

They were incredible investment, but what's happening right now is all venture investments because of A I and chips in the decoupling with china are now under massive scrutiny. So they can say there's brand confusion. You can talk about, you know, the collisions and who's gonna back. This chinese entrepreneur and indian entrepreneur who also is Operating in the U.

S, right? These businesses Operate in the U. S.

And so what really is happening is the government is going to stop all U. S. Venture investing in china.

That's what's gonna happen in the coming months. And so they're just getting ahead of that. And now they will compete and really has to do with chips and A I. You may have seen any stories and nobody is is going to invest if american invest in A I in china, that's going to be banned and the same with chips.

Yeah, you're right. There are a bunch of stories about whether U. S. Investors should be investing in A I in china.

People were saying this was an american because I was basically going to a give china advantage against us in this key industry. And I think that point is a good example. What i'm talking about with the geopolitical concerns.

This is getting too complicated. Yes, for americans to invest in china raises to many opposition al concerns. And I think so. Koa is martially simplifying its life by just putting these things .

up and being out. Did you see .

Keith for boys tweet .

on this yeah kid for boy tweed based like it's unamerican to invest in china at this point.

We have talked about this before. I can look that the chinese relationship primeur used be seen as an economic relationship. And people are looking for win, win, basically trade as and IT was not seen as are moral to invest in china.

Now the rash is primarily seen through a geopolitics ds, which is to say the baLance of power, which is a zero some game it's about know how much Better is the U. S doing how much more powerful as IT than china and anybody who's perceived as helping china in that ruber. C now is looked on skeptically within united states about that. Well, like I said, I don't think that's gonna change. So I think it's always doing the right thing that kind, like I said.

sympathize in I think that IT should .

be possible to do business with china without IT being seen as either unpatriotic or immoral. However, there are strategic technologies that are just gonna be I think it's too hard and too risky to um to be supporting china chip .

to AI yeah I mean.

look, if somebody is using chinese manufacturing to make toys are clothes, I don't think that's firmly strategic in a geopolitical way. But if you're helping them make the next generation of chips, that's gna raise lot of questions.

So so A V C firm freeze er can take out chips .

and A I sure this reminds me of one benchmark actually had benchmark europe and then they cut IT. You guys remember that? yeah.

And kind of retrench, they were retrenching from a position of strength. They were retrenching to reestablish themselves after a bunch of missteps. So I think typically, these retrenchments happen when there is a little bit of internal chaos and mismanagement in under performance.

That's not the case here. I gonna you.

but I actually think retrenching is good because it's simplifies things you want to you want to simplify you.

Yeah, I totally do you. My point is, when I saw that overlay fund, I was like, this is questionable. But then when I saw that weird, every Green fund that to me to seem like a tax arb.

And I thought to myself as a person who's looked at this exact stuff for my own stuff, what I did was I just converted to a family office. And from a tax perspective, IT was much simpler er but that exact seem structure I looked at for myself and the reason that that structure exists. And Jason, I know you want to think it's because these and diamonds want them to manage public equities.

I still work with a few and diamonds and pension systems. They don't. And the reason they don't is they're not allowed to they're not allowed for concentration purposes.

They pay other people to manage IT. They have these outside consultants. And for for ducal perspective, you have to do all of these things with respect of managing risk. And one of the most obvious things that these foundation tions do as they get distributions and they sell, they don't hold. And so the reason why you'd want to look at the long term gains of a stock that you distributed is because the gp sol too early, not the LPL. And I just don't i'd think that you should not just be a live surrogate on this topic and actually really think about I mean.

I don't think you need to well, i'm not, i'm not and you don't square. If you look at something like that, you rule of stone, the board square, I believe. So the sqa has realized over time. And you know, as it's been explained to me as an L P, that you know these companies grow, the outliers continue to grow massively when they become public and squares now staying on the board of those companies. And so they actually have the most inside into IT because they backed when I was two people, and then they're still on the board.

That's not public money is not infinite. And if you're a foundation and you're legally obligated to distribute some percentage every year, you need the money back.

And the foundations do get to choose some foundations want to go on harvard or whoever picking one of the large ones. If something got thirty, forty billion dollars, they may not need to liquidity that .

and they might very much. The only person that is in a position to actually hold the long term tax advantages is the gp. That is why that fund was created.

And I will bet you, if you ask him under oath, why they did IT, i'll tell you I was for themselves. I will. People have a million dollars for charity. What everyone do. I'd bet you if you put them under oath and you see in them and you ask why I did IT, he'll say he did IT for m self and that's fine. All i'm saying is that's the kind of complexity that says is talking about that does not add to success IT is overcomplex ify something that doesn't need to be complicated?

Yeah so well.

we agree to disagree sometimes here on the all in post, we can move on for today with the I.

can we talk mess? No, we are .

going to do one life topic.

which I think, P. G.

I appreciate the messy interest, but we're going to talk about .

something less messy or even messy. I actually think .

it's pretty interesting for a couple of reasons. So as you guys know, the P. G, A tour has been around since one thousand and thirty.

I think the P. G, A tour makes one point six billion dollars a year if reports are correct. I make one point six billion year boring. I mean, depends on the year, all of the players on the P G. A tour, our independent contractors.

So uh, saudi arabia as public investment fund h and this is what I think is one of the more interesting aspects of this story and maybe speaks to A A broader kind of set of a geopolitical transitions that are under way. The sai radian public invention, uh uh public investment fund started liv golf as an alternative to the P G A tour. Live golf, live golf. They invested uh two billion dollars of of capital and offered guarantees to golfers to come and get on their tour. They ended up um offering at one point tiger words reportedly got a eight hundred million dollar guarantee to join their tour, which he turned down film Michelle skoda reported two hundred and million dollar guarantee which .

he took to join my ducky matama got offered seven hundred and .

fifty and fifty eight so seven of the ten topic golfers in the world actually signed up and um IT caused obviously significant disruption to what has effectively been monopoly, which is the p gator in gulf in professional golf. And uh, here we are two years later. And I was announced this week that live in P, G, A are emerging and the current P, G, A tour condition of jane moya hen will serve A C, E, O of the new entity.

Just by way of reference, jay monahan makes a reported for fifteen million dollars a year and salary A C E O of the P G A tour. He will now be C E O of this combined organization. One big question mark, how much is he getting paid? And did that help secure and isolated fy this deal getting done? But I think another big question is, do we think this will actually close? Will this face regulatory and anti I trust ate me? Will this face size us? Because IT is the sadi raban public investment fund that is effectively taking a large stake in the P G A tour. Um let's go to our resident um professional sports team owner or former minority owner .

to math and he takes on a .

on this announced merger. What does that say about the P G, S. Ability to hold action?

This is what's so crazy about your topic, action. Messi was offered one point six billion dollars personally by the sauces. And you don't want to talk about that as you want to talk about the whole organza playing an antiquated sport that itself generates one point six billion dogs.

Welcome to being the moderator. I don't are .

about golf.

The reason this is so controversial is that they're calling its sports washing, trying to make the reputation of salty more palatable in the west by using sports things people love. The reason this has become controversial is because of the hypocras y of IT, the P, G, A fought against live.

And this guy, jay, or in a hand, who is the see of this, he basically a vote, the nine, eleven families, and went on a whole thing about how evil live was only to then secure the bag. And then there are some back time here about, well, there is a lawsuit between the live golfers, you know, who are now banned from playing the P. G.

A. When they signed up and anti try stuff. And so the apocrypha, the group is what's being .

pulled into question.

This is why it's the players who took were all size .

as supporting an evil regime. And now now clear they were .

smart and tiger should take in the money. And actually the guy who said as much at the time was, was trump you know he yeah he know that one of .

these what's to get .

he's put he .

said he may, he said that take the money from life because eventually live in pg. a. Are going to emerge and then the guys is like p, you're going to get nothing and we're gona feel like idiots. He was .

totally right.

Come on, that's insane. I mean, come on, it's pretty amazing.

Tell me when you get to missing .

and the fact that these guys were proclaiming that if you're going to go join this tour, you're joining, you know, you're .

lighting of money, is been about money? What what we what are we talking about? Money, money, money, money, money.

There is your answer. Money dropping. Money drove the deals. Now, money drove the merger. I don't understand. Can we talk about messy, please? Is so much more interesting.

OK go talk about message.

I mean, the messy thing is so incredible, because Christian, although went to a team and to play in the August of his career the last two or three years, and this has been a thing that started with play in the seventies. Pi came to the new york Cosmos, employed beacham, famously, did IT as well, came to the L. A.

galaxy. But beacham did this one interesting thing, which is he said, okay, i'm going to come to play the on one condition really, which is i'll take a huge pak cut now of this stuff, but I want an option to buy an expansion team for twenty five million box. Fast forward, he ended up buying into miami.

That team is now worth five hundred and eighty five million dollars. So messy is thirty six years old. He's about to enter the August of his career.

He's won everything. He's done, everything possible. He is so incredible. I mean, I love him. I love him. He gets offered four hundred million dollars a year for four years to go plane array ia, a one point six billion dollar deal. And you know, there's no income taxes.

So that's like one point six billion dollars right in his pocket except the deal that he did, which was for a lot less up front, is really interesting. He basically said, all come to the united states and playing into miami for for the miami football club. But I am, you know, basically i'm not sure he said that i'm using my own words.

I'm the greatest player in the world every time I do something magical on the field. And creating content that will sell tickets and create brand awareness and move the interest level of socks in the united states. I'm a content creator, so I want a piece of this content.

And so apple, who signed two and a half billion dollar a ten year license for the M. L, said, you're right. You're probably sell more subscriptions for me.

I'll give you a piece of the rap share and then add us said, you know what, you're right. You're probably going to sell more shoes for me. I'll give you a piece of those shoes. So in one fell swoop, I think what's amazing is messy is not an athlete in the deal. I think going back to a theme that we've talked about, what is he is this ultimate pen, ultimate, whatever he's in a lead content creator.

He's the equity .

who is now creating incredible, who will come to the united states to create this incredible content that will move viewership, move merchandise. And he's going to a monitor ze that. So it's effectively like becoming the Jordan brand, getting a piece of netflix all in ones he is. The equity in those business is basically.

yeah this is subtle point not making in the deal. You have the person whose be responsible for distribution. So this will be the same as like the N B A on A B C E S P, N R T N T and T N T 和 E S P saying， you know what, you're so important, lebron James, to play in this or steff curry, we're going to give you a piece of the subscriptions to E, S, P, N.

So apple is giving him raf share on their apple T V league pass for M L S. That's not like. And this is I think IT goes back to the live, uh, deal with P J, which is people are look at these sports leagues and saying, let's get creative IT .

goes back into a different one. The the N B A just signed a new collective bar and new agreement that they are gona ratify. I always thought that the real thing that the N B. A.

Players association should be asking for equity was equity yeah and that equity could be found to equity in the teams because it's clear that in the absence of the players, there's no viewership and there's no appreciation in the value of those franchise. And so the idea that lebron, you know staff jay K D. Don't own a huge piece of the underlying equity gains that there are creating in the period in which their players is pretty crazy.

Now the ownership their perspective is while we translate that in terms of raf shire, but it's really not true because if you look at the tiger, the I R R of the franchise values versus the key gering of the salaries, they're not equivalent. So I just think IT has huge implications to all the professional sports leagues because these big stars should be asking their agents in their managers, how do I do a deal like message? I am the ultimate content .

creator in my league. The dynamics are changing IT IT will I will no longer be an employee. Capital labor situation, but capital with labor and labor, labor is basically becoming the equity in the equation, and they are going to be in the business.

And and by the way, the reason we see that happening so much is because of the social media age, and it's really incredible. But I was guys jank, I know you have more to say. We all have more to say.

I just want a highlight. I need to go. I have to go to, uh, kindergarten gratuity. congratulations.

Congrats to shery.

I love you guys. I'll see later. congrats.

But was really interesting to mah, uh, to your point about the C B, I is they are going to make these suit salaries. They're not gonna give them the equity as part of they are five year deal. They make the money.

They then have the ability to invest in so you can be a bran and you could be investing in the next. Maybe if somebody wanted to sell a percentage of IT, you can invest in any N B. A team, any sport spending team, any sports bedding.

I actually think there's a simple way to do this, which is I think it's fair to say that when you join a team, it's like joining a company and you can create shadow equity. And that shadow equity says you came in at this point, right? You laugh at this point. Here was the delta of the value. And I think a good agent should be negotiating on behalf of a player.

Most players will not get that much a few basis points of that value yeah but the idea that all the brand, James can go to a miami and double the franchise value double yeah right from, you know, one to the or step step steps to Better OK great stuff comes in at four and eighty million and is now five point three billion. So that's a ten xing plus of value. You know, a step responsible for ten or fifteen percent. Should a billion dollars of that go to step dry and clay, I think you can make a great claim .

that I could yeah absolutely put them on the map. So yeah, IT would be, and I would be pretty easy to do. And what this might do is keep people on the same team longer, which is what fans want, exactly what people moving around.

That's a great point. And private companies like car goal or coke industries, they have the shadow equity programs that they've had for years, for decades that y've run on behalf of their employees. We know how to run fantome quality programs in private businesses. And I just think the leadership of the N B A players association, the N F L players association, is right now still lacking the sophistication to understand this well enough to then propose when the next time IT is to to negotiate this kind of a deal. But when you see things like this messy deal, I think it's a game changer.

IT is a game changer. And I think for sports, I don't know. He saw a adam silver give, you know, a little press conference with the finals and everything. And we were talking about the jay moran situation with the guns is just a lot of like topics coming up.

But one of the topics that was probably under appreciated was he was talking about the bundle, the cable bundles going away, and that people can watch like the T N T N B A on T N T, whatever that is with, you know, Charles barkly eta. And he wants that to be available for free. So he's gona chAllenge people. The new T V deal, if you want to have the N, B, A, you have to have IT available to the number of people who can see N, B, A games has been going down.

I have a to think more people, you think more people would pay for a subscription to watch the next games wherever they happen to be all over the world, or a substitution .

to watch step curry. No matter what team plays on, the old generations are loyal to the team, the new generation to the general. A jump all right now. But I will eventually be to follow the players, because this new generation follows players like our kids, like I know. right?

I think, I think, I think you could probably sell a few hundred thousand subsistence to the nicks, and I think you'd sell mid millions for stuff.

What's gona happen now is I think they're going to they just want this to be ad based and to directly subscribe. So I .

directly, so I get every game for two hundred years. What live did to the P. G.

A? We should do to the N, B. A? Let's get together twenty billion dollars. Let's start a competitive N, B, A league where we give the players a structured fantome quality plan.

Pay these guys a hundred million boxes year, get all the big guys to come, everybody else will come, and just boat the whole thing. I look, by the way, that's the blue print. Now, if you want to really compete with the, with the N F L or the N B A or the N H, this is what you should do. Put together thirty billion, which not that much money, and go for.

you only need to get a couple of stars to to blow IT up and if you .

give stars equity league bill, convince all the other players to come.

I'll give lets give sex and red meat here you sex and give you a little red meat you want. Tuck her on twitter. There's your red meat choices as we read.

You won't talk on twitter. Ter, you want a russian controlled damn being destroyed for a major flood. Or do you want Chris Christie join the race? Which read meat would you like? Which read meat? We put in front of crazy hair.

Well, I mean, what happening? Ukraine is really the big news this week. I mean, the ukraine encounter offensive has, well, the ukraine encounter offensive has started in earnest. And yes, in conjunction with that, you had the destruction of that major damp, which is not clear who did that. I mean, both sides are point in the fingering at each other, so and there are reasonable arguments for why either side may have done IT.

The in terms of who benefits seems to benefit the ukrainians more because the destruction, the damn, washed out a bunch of russian defensive fortifications and villages of russian speakers. On the other hand, the russians were in control of the damn so IT would been easier for them to Carry IT out if they had to wanted to. We just don't know.

But I think you know events now moved beyond that. And we are now probably in the third of fourth day of of the ukrainean account of offensive, of course, has not been efficient declared, but there is major, major fighting happening now where ukrainian armour divisions are seeking to penetrate rushing defensive lines around apparate sia. And so the long waited uh ukrainean counteroffer of extremely begun how does .

the the dam relate to the north stream pipeline? Because these are both situations where people are like, who actually did IT? What's their motivation? And let's face, these are chaotic actors at times.

And figuring out who has the motivation to do these things seems like a leveling up kind of game because you can put the past either party in some cases but in the case of north stream people saying, hey, IT was the ukraine but then there's this argument that the ukraine is not capable of doing IT. Or maybe he was sanctioned by the U. S. Or the west, and then executed by ukraine.

Where do you wind up with all these? So on our third cover story, the CIA sourcing their cenotaphs at the washington post have now claimed that he was six ukrainian dudes in a yacht who blew up north stream. No serious.

Ly, if you look at this boat, i'll I put a photo, the boat on the screen, it's it's pretty silly. Yeah, the opinions do not have a navy, and they certainly don't have navy seals. I don't believe they have the capability to, by the way, this destruction in north street, north room was this huge underwater steel and create structure.

It's not that deep though, because is only one hundred, fifty or two hundred feet deep at .

the lower point and off and took a of explosion.

They had to know what they were doing.

point that when when norton was first destroyed, the media rushed out to say what the russians did IT even though the russians had no motive to do IT IT was their alone is there are pipeline. They could just turn off. They wanted to.

But this is what we hear, is that every time seeing destructive happens, it's the russians did IT. Why would they attack themselves? Because they're so crazy.

We heard this with the north stream when beg od, which is a russian district just across the border from ukraine, was attacked. IT was claimed that the russians did at these russian insurgents. Now that's pretty silly. IT was ukrainians dressed in russian uniforms. And just recently, when they were done in attacks on moscow, we were also told that all wasn't ukrainians who did IT was russian dissidents or something, which again, makes no sense. So this is not to say that the russian didn't blow that damn is just to say that whenever the story is rushed out that the russians is something highly destructive, you have to we need to see some evidence here and we just don't know.

It's just hard to know the fog wars thick, alright, would you think a tuckers first show credit suit? But he got the tweet, got at least like ninety million views, which means the video are probably got ten percent of that or something.

So probably with you yesterday was a seventy million viewers. I thought some more today. Now he's getting huge distribution a through twitter. Arguably, it's more distribution. It's almost certainly more distribution when they got through fox.

Fox was three million, right, right? He had that time of year.

He gets fox, yeah. Well, fox is half of that now because they have IT. They've had treated someone viewership after tucker are left.

But look, the only thing that I think tucker got through fox was an access to, Frankly, of viewership base is not very online. There are a lot of old people who watch fox who to start on social media. That said though, everybody else can see IT on twitter and he's getting more distribution on twitter.

Super distribution is a way to go. He's gonna get to twenty five million people. And of course, monetizing IT is the hard part because foxy subscription revenue .

and everything else in a list, he advertised the website across the com at the end of his video. And you can go there and sign up for you .

describe direct and get on his way.

So I don't think he's monitise ing IT yet, but you can sign up for alerts. So for so he's clearly creating a list of some kind .

h that's probably because he yeah with his contract, he's still getting paid. And so he's like delhi wire is the model. I mean, they y've got well over a hundred million in revenue, I understand, and they have a massive subscription business.

So there's a clear path. They are right. I listen for the world's greatest moderator living in the bay area, a David friberg and a the ticket ter mal to my poop tia and the architect hosting any number of fun raisers for any number of politicians.

Dave sax, rain men, I am the world's greatest moderator taking a we off. I'll see you next week or, uh, enjoy some Q, N, A. Here from the live Angell summer hundred people in nappa. Thanks for come and basses. I cited the see you next time by bye, byebye.

Our eyes will come to a baptism.

Join the baptist, are you ready to accept Christ freeburg into your soul?

I honestly have no idea what i'm doing here. I have no idea who these people are or what this is, or why you're all wearing White. I mean, seriously, I am sure you're very nice people, but I have no idea what this is.

Have you seen the wicker man?

J. S. I, we're taping an episode in nappa.

I might off date.

You know, black sugar.

yes, actually .

echo and .

chips please.

But honestly, like, I didn't sign up for this. I thought we, I thought we disagree ed to a podcast and somehow we've been rope into doing some dog and pony .

show for L P S by away. These are a bunch of your L, P, S as well. You just have never met them.

Literally okay, I drink IT. Yes yes, sir, little is something like jack out. And with this incredible and downwind, we're creatively successful. Well, my god, that's great.

Yes, you heard i'm reading a fn like no, no, no, no, no um we heard sax is going to be here on my god, you want to be fast. I we've invested in all these funds. We just never met. And so wow, that's one way to do IT. That's how successful sexes.

two things they've never seen, sex and a distribution.

To a hot stars, are you fucking decision? Whoever you are.

you are real fucking genius back there.

Wo, except for the fun.

we already paid back.

Oh my god, I lost control of IT in the first ninety seconds. Why should tonight be any different except .

for the five real phone that's already fully returned OK.

So um welcome to the Angel summit these are my best is we do a podcast called all in， we thought we do IT alive. This is the fourth time we've ever appeared on stage together. The first two times read freeburg lp conference in the first city area. A.

I was one of that one.

Two, we know you are .

the first time coming out to see humans. Yes, I came in his mask. He took his gloves off. IT was very uncomfortable for him, but he eased into a seat.

And then, of course, we did the all in summit last year, miami, and this the fourth time. So it's great to be out here. We have a couple of news items on the docket we could start with or go right to Q, N.

A. With these many audience members who have a lot of questions. What would you gentleman like to do?

Chmagh has a few words you .

would like to say, good, good.

cheap is drunk. By the way he texts to us, you can see that grin on his face. That's the chaotic grin he gives when he decided, like tax acol scheme, that he would not have helpers and he would just invest his own money.

He does not care so it's the gloves are off. Let's do Q N A J levis sex. What's the path for the santis to win the nomination um and get the base of .

trump oh red meat running red me .

I think the path basically is he has to when I A and or new hampshire this is that simple but keep in mind that trump did not when I last or two thousand sixteen to cruise ed, I will attend to be more religious. I think scientist is trying to outflank trump on the right actually uncertain issues and um so he's on the ground their campaigning.

I think I understand he's generating a lot of interest and enthusiasm and he's going to keep plugin away out. And I think he's going to out hostile trump. I'm not saying he's going to win, but I think he's going to work harder.

And the path would be that over the next what is IT like nine months, that trump s style and message, which is admittedly much more entertaining than the scientist, but kind of fatigue, whether that kind of gets old, and dissent is more like discipline messaging, could this kind of wake up and say, you know what, like, I don't really want to go back to chaos of of the whole trump h show at this seems like Better to me. So that's basic. What I think has to happen is trump for ty has to set in. People realize that .

there's a different was that CNN town hall assign that some group of people find them incredibly entertaining and the me of themselves won him back because it's gray for ratings. Allah, mankind on session? Or is IT a sign that like, my god, that's so fucking exhAusting like you're saying sex.

what do you think I think that the the base like the town hall because I was trump walking into the lions stand, standing up to the mainstreet media, which is what they like. But I don't think you're doing things out in the general because I think that viewers who don't like trump aren't entertained by trump. I mean, there's nothing there to really crap onto, I don't think so. Um but but look, I think your point about who does the media want to get the republican instance definitely trump because he's good for .

ratings .

and and they think they can beat them so right now the biden people, the trump people and the media all want trump over descendest. And that is why like descendest is getting this bashed by everybody right now is because everyone's kind of a line on this. But the minute that trump gets the nomination is all gonna turn. The media officer is going to turn on trump, and then we're going to see what .

the real campaign going to be. A scientist isn't show business, as they set on the session was at the quote, is show business. His box office is not boah this that is a box office is somebody .

who actually can execute running. But why he would be a good move for republicans, I think, is because he doesn't give the democrats as much to work with. Yeah, comes entertaining. But he gives his enemies so much to work with.

All right, another question from the back go had stand up telephone me yeah 啊 sell out .

her from boston。 And the question is much less exciting. A regarding sort of in the problem of of bank bank rounds and back insurance by the fed and bAiling out you know average people, bAiling out wealthy people.

I've heard a lot of solutions about this. I've been because so careers and banking for a while um the idea of having senior management and the board have direct liability if the feds have to step in to rescue the bag. Do you think that, that could be a step in the right direction in preventing banks from taking risks they really shouldn't taken?

I mean, the two thousand and eight disaster, the surprise crisis could have been addressed with this. I think this crisis with svp could have been addressed with management just having a lot more to lose. okay.

So let me just first take ish with the terminology of bailout. I know that's what everyone calls IT. A bailout in my mind is when the shareholders of the bond holders of the bank get built up by taxpayers.

That happened in two thousand eighty did not happen here. Here the question was whether depositors get made whole or not. I personally don't consider that a bail out. understand. There are people who do, but IT is a slightly different issue.

As to the bank management, you know you're talking about like a strict liability standard here that I basic you're talking about piercing the corporate veil and making the bank executives and their uh, directors liable for this manager of the bank. And that is that's a pretty high bar. That's a really high bar. And the problem with that is that I would never serve on the board of the bank. I mean, I probably want anyway.

But if you told me that I could be liable for that s right? We think called the business judgment rule in delle ware, where if directors and officers of the company perform their job in a good faith way, making the best decisions they can and IT goes wrong, they're not typically liable for that. Maybe the corporations is liable.

but they are not personally liable. I'd like if you did that, the managers wouldn't invest the cash on anything because they wouldn't want to take any risk of loss and ordered to Operate the business, which has a bunch of people working. They're a bunch of banks that they got to Operate.

They are going to charge you a fee to hold your money for you. And so happens as interest rates turn negative and you basically have to pay someone to hold your money for you. And that's what's a little bit mess up about the way the banking system works today, is you're effectively giving a money manager or the right to invest your money for you. They take your money.

They pay you a low interest, right? They go high interest strates stuff by taking on a risk with your capital. And ultimately, they can take losses on that.

And if you wanted to make them liable for those losses, they're not going to take that risk. And the bank is going to have to change its business model from being an arbitrage business to being a service fee business. And we're going to to figure other ways to charging service fees, including charging you to hold your money in order to make money.

And that's what a lot of the banks are now doing first for public. And others have now proclaimed that they're going to start charging a lot more service fees to hold your money and are going to start taking a lot less risk. So we're already headed in that direction. But that's fundamentally .

what I think was another question from the audience.

Good evening. I'm lisa song seton lost biggest in novato AMG p in the veteran find um as investors you all invest in entrepreneur s theoretically support american renewers ship. What role of any do you think VS should have in shaping, advocating, supporting conservative economic policy in the country?

Show zero.

I think that we have to know the role that you're doing if you're adventure investor, which is you're buying a deep out of the money option. And I think that you want to motivate the people that you are partnering with to take really thoughtful but outside risk. And so I don't think there's a lot of room for conservatism.

I do think that there's room for misallocation of capital, and I think that there's people that can help guide that. But the reality is that when you start a company, it's ninety five percent likely to fail. And the venture investor, or is signing up for a seventy or eighty percent probability that they lose capital, maybe a ten or fifteen or twenty percent chance that they get their money back, and then this small five percent chance that IT becomes reasonable.

So in that lens, I don't think that's where conservative economic policies really should play a role. I think you just kind of got to go for IT. And if it's gonna in, it's gna win big. And if IT doesn't, you lose one extra money.

I think like where you want conservative economic and rational thinking is when you go to the extreme other end, which is just like the large scale decisions that affect the economic vibrancy of the country in which you live, and there on the margin, you probably want to be more rational than unrest. Irrational, but as a venture, rather you want to be irrational. But I also think you have to be very judge mental.

And the reality is that most companies aren't going to work. And most people, this may seem controversial. Most people actually, when push comes to shove or a little afraid of the decisions they need to make to be truly successful, they're not willing to fire the people that they need to fire.

They're not willing to be extreme in the product they want to build. They're not willing to Price IT. They're not willing to go to market in an extreme way. And IT tends to be that these companies failed because of that.

a lack of courage, a lack of convention.

lack of courage or conviction because that that's a very heighten word. I just think that when push comes to shop, most people employ with the pressure of making a very.

very hard decision. Interesting, right? In my experience.

that could be years.

could be an I I agree with you largely when I start up does fail. If the experience people around IT are watching and can get through to the founder of the founding team is typically they are blocking their own success. They are unwilling to fire their cofounder, their C.

T. O. As the example you are losing to perhaps or raise the Price of the software and lose some customers or to drive people to work harder because you've got a competitive in the space.

And that's why you see extreme people win in our pursuit. And I think there has been just a great fallacy that's gone on that you can have live work baLance or life work baLance, and you could have this navona where you have at all. The fact is the great companies are made by people who make great sacrifice as period full stop.

And if you're not willing to make the great sacrifice, sure not can add great outcomes. Hi, David Samuel. Earlier today, js, you had kind of a their AI panellist. And my question is, you guys have been thread into the public spotlight and we look at deep fakes in the next year too. As you talk about you tweet on friday versus wednesday, how do you think about somebody having each of you saying things that you did not say? And like how might we know whether to mah said that or was a deep faxing IT?

I really have that problem.

Yeah, business .

insider, last week where somebody was saying I had a phone call I never had.

So how do we solve this, especially for you as two things, two things. I don't think people say more outlandish, damaging things in A I than we say ourselves a on this podcast at times, uh, number two, you know, as we've discussed many times on this pocket, we have rebooted our trust uh, in institutions, what we read, what we say. And I think people are now assuming they're being manipulated, assuming something might be fake news or doctor.

And I think it's like people are building up a much higher resiliency to bullshit like manipulation. And if I were to ask one hundred people, what is the bias of CNN, new york times, fox, M S N B C N P R A. Ninety eight of one hundred americans could describe IT.

Almost exactly. People are not dumb. This is another fallacy I think we have in these countries that people are dumb and are going to get sucked.

People are kind of figuring that out and we've seen deep fakes for what five years, ten years now. And then like, yeah you know Lucy worker didn't look really good in the Manda win. There's a kid who redid IT and now dolly choose doing IT. I think we're kind of a knocked late ourselves to what do you think the fakes and truth?

When the gutenberg press was invented, a bunch of fake IT was printed and people believed that I don't think the current iteration with deep, deep fakes is very different from any form of mass media being used to people in truth and adds 我的 the yeah no I mean， but look, I mean are right one hundred percent right. But I don't want to speak about religion negatively that way. IT is one of many institutions of power that leveraged mass media history ally, uh to get people to believe things, to do things and to ultimately be able to tax people and get them to provide capital and labor uh in the interest of those who are in power and the the system of deep faking is one of a long string of using the current tool kit um to take mass media and and follow that same track so IT will be dealt with in the same way that things have been dealt with that have been fake news in the past which is that there will be an opposing voice and there will be counter arguments and there will be debate and IT will be rankers and IT will be noisy and IT will be hard to decision and alternatives will emerge and tools that identify deep x will emerge and IT will be the same ongoing battle and seeking of the truth that humanity has tried to do um since the donuts mass media you know yesterday's .

conspiracy of areas are like tomorrows public surprises I always say like if you look at o conner ripping up the poke's picture on live in protest and saying like this is the true enemy they're letting children and then the boston globe and the movie fallout is about them a decades later. A winning, a pollo zer for uncovering what anybody who's in the room, who's catholic in the seventies and eighties knew or had heard was going on and so you know maybe the time for me shortening between when we're being lied to and when we figured out .

I actually think it's interesting and good because IT forces us to find ways to find the truth more effectively. And um you know it's kind of without the antagonism. I think it's you know it's it's ABS and what what is the truth? You don't force that debate. You don't force that question.

And this will start to reveal ways that we can kind of find things that are actual evidentiary things versus things that someone told me with either historically anecdotal inuendo or i'm a person in power, or i'm an authority or i'm an expert. And nowadays it's like time, a piece of media you should believe me, or here i'm an image of a person. And that's not going to be the case anymore.

I am jeff. Uh full time corporate V C and part time Angel. Um my questions about A I and higher education and it's actually some covert parenting advice so you can decide who's that's relevant. Um my sound just finished his freshman year of college and i'm questioning what the future is for him in higher education given all .

the change that A I is .

going to gonna have on on every career and every profession and i'm wondering what advice you'd give to to your child or or someone who's in college right now for what what's an area of study that won't maybe won't be disrupted by by AI or or an area that um A I you'll get leverage from your education .

um through A I I think the reality is that most of the existing jobs that we have in the united states are going to go to lower cost locations that have that tool change to accelerate their capability. So we're gonna have to reinvent the workforce and the things that we do over the next thirty or forty years to stay relevant. That's probably like I I think that should just be the Operating principle.

You think about IT, we used to run great call centres. Okay, those call centres are source to the Philippines in india. But in the next you know five or ten years, you'll have this flow less unaccented english or even more early, perfectly accented english for the zip code of the person that's calling in.

So that IT sounds like they're talking to somebody that's literally their neighbor that's like just makes so much sense, right? So it's like all this stuff is going to happen. We're like all these classes of jobs.

You're going to go away. I saw this article where a lawyer, two lawyers, use ChatGPT to submit a legal brief. The problem was that excited cases that didn't exist and now they're going to be disparted.

So this is like serious business, right? Like you can't do that. Like that's like real legal now reasons. So what your kids started .

practice in college.

you know, if I had to choose something from my kids, I would probable, I would probably tell them to do something mathematical or biological. The reason I would point them to math is that I think that is irrefutable. There's a great clip between Ricky jerseys and Stephen koba.

You guys should go in google this, but it's a clipper. He's on the koba show and koba is a deeply devout catholic, and he's offended by the fact that richer vase doesn't believe in god. And he asked them, why don't you believe in god? Ricky? Races is, look, if we wiped out all the books in the world in a thousand years, everything that scientific, mathematical would be reestablished.

But everything that is religious, or theoretically not a mythical, if you want to say, would look very, very different. That's why I don't believe in god. I'm not trying to question that, but it's a way of answering this question, which is I would try to point my children to the body of knowledge that's largely irrefutably, which is biological and mathematical versus bef horigan ted, because I think these tools will change one's belief.

I've been made about this a lot to, I think, teaching them to be entrepreneur, resilient world, ability to communicate, ability to lead other people in teams, that stuff, not gna go away. A communication scale center end. I am encouraging everybody who I work with to just use ChatGPT foreign barred every day for every single thing that they do.

My pace thesis right now is that the job freezes, the hiring freezes at all these companies is indefinite. I'm assuming it's indefinite because the amount of work IT takes to write a job requisition is more work in some cases than actually automating with A I already the job function. And so I think twenty person companies might you know double in size in the next two, three years um but still have twenty people.

This going to be a big chAllenge for the for society uh and if if that does come to pass, 就是 a large watch to people who are not going to be able to get job interviews for anything other than service jobs。 Uh, you know, we need a lot more plumas, electricians, waiters. Those probably jobs won't away, especially we don't let people immigrate.

So I I I am super enthusiastic about that efficiency. But I think IT also means you have to be entrepreneurs because if you can get a job and you can't get mentee, you Better create your own opportunity. You Better create your own company.

And that's what i'm seeing. That's the game on the field right now. Two or three people who don't have job offers from uber and airbnb and google and facebook to saying factors start a company because there's nothing else for us to do and those are highly skilled people right now doing that.

I'll say two quick things about this topic. So one is I think there's a lot of A I fear point out there right now. And I just think that like all these tumour scenarios are, they're not going to play out overnight.

I mean, it's gonna take a while. Second, if you think about like job elimination, it's gonna be some super specialized jobs. So for example, I would want to be a radiologist right now, but doctors will be fine.

So I think if you're thinking about like going into a job category that's super specialized and clearly in the way of A I, then that probably is not a good idea. But most general skills like you're talking about and most job categories are going to be fine. There's this going to be some specialities within them that may get dislocated like I wouldn't to be a truck driver either, you know, because of self driving.

But transport oration companies are still going to exist. So I think you just want to be careful about super specialization. I think about building general skills is always really good that really should meet the point of college.

Where would you put lawyers and accountants on that 点？

There's sufficiently general that I don't think they're gonna eliminated.

but will they be able to do five times amount work? Therefore, we won't need as many?

They may be able to get more done. Yeah, I would expect him you to get more done. Yeah, but I don't think necessary think that means we will need less of them.

I mean, the old story about lawyer is is that there was one lawyer in a town had no business. Second lawyer came to town and they were both more busy than they knew what to do with. Yeah, lawyers get thirty percent more productive.

They file thirty percent more lawsuits. And you good. Yeah, take another.

A question is a great question. suffer. Hey guys. Rx Spencer, um I hope to moths to choose the line.

This evening for dinner, I did not get to choose your lines, so I apologized. And .

events twenty eighteen .

shutdown. I love the busy okay question.

So you talked recently in an episode about the speed of AI, the adoption and how the winners are still unknown. That was reinforced in the session today, a room full of investors. How are you thinking differently about your investment? You know, your strategic investment decisions in your strategy, other opportunities to look at venture investing differently like venture studios in the future? V I I.

this conversation earlier today, I think I started a company in two thousand and six where we took large data sets, and we build predictive models from those data sets, and we use those predictive models to make political tools available to a specific vertical.

In our case, agriculture, farmers and a the models were both, uh, deterministic, meaning there was kind of definitions, algorithm definitions of physical parameters, and there was like all the statistical inference that you get from large data sets. And IT made recommendations for farmers. What a lot of people are calling A I today is fundamentally a predictive model on text, on language.

I am making a language predict that gives you a sentence. And IT seems so profound because this is how we all interact with computers and interact with one another. And as a result, IT is kind of viewed as the c change across all of these industries instantaneously.

It's this whole new era. But the fact is that, generally speaking, the digitization of things and the amount of data that's being generated on earth is going up by some order of magnet de every number of. And our ability to make predictions and build predictive models that are useful to specific vertical segments is improving every specifical cycle that this is happening across every vertical and IT is continued and IT hasn't changed and it's not any different.

So there's in this area of genomics and bioinformatics. There is an absolute c change happening in human health, in synthetic biology. And our ability to understand and predict the biological world and make changes and um create new drugs, create new systems for producing molecules, for producing things that humans consume and IT is all booed by machine learning applied to large data sets and genomics and other meta data associated with human health and biology.

And we're seeing the same thing in other areas, whether it's chemistry, material science, industrial application, consumer markets and so on. The era of what people are now calling A I is an interface layer of language that's really creating transformational opportunities on how these tools, how these system, how these models can be utilized and provided to all these different verticals and allows us to rethink business models, to rethink interaction models, and to really change the economics of different businesses and and the utility and the productivity of humans. Because IT is about speech.

IT is about communication, is about what we fundamentally do as a species. So I would argue that the general trajectory of machine learning, the general trajectory of data generation, our ability to make predictions, generate value across all these different markets is continuing in the way that, that has been continuing for the last twenty years. And IT is profound in its own right now.

I wouldn't say that there's a massive sea change in that evolution because of large language models. Large language models create another set of opportunity. So I would kind of created distinction and make sure that the categorization of the investment opportunities in large language models be assessed on its own and everyone's all over the place.

As you guys probably heard today, foundational models are getting disrupted every other week. They're being the decreased in side parameters are being reduced. They're being commoditize. You can run these things on m two chips.

Everything is up in the hair right now and it's frigate not you're going to invest in a company at a five hundred million or evaluation and six weeks later, it's going to be worth to zero because someone to open source exact same thing that now do for hundred k. So that's very difficult and very different then. But there are still like these incredible points of inflection happening across all these other industries with respective machine learning. And that's where I spent .

my time to mothy wanted add what you're looking at. I think this going to be the big question here. Six or seven years ago, there is a google earnings release where they talked about building their own silicon.

I've told the story before, but I pink those guys and I was basically like, I just want to meet the team that built the T, P, U. Folks are short year later, I put them in business. And you know, we've been building silicon for this moment for years.

It's been really, really hard. And the reason it's been really, really hard is that in video is just really, really good. Kuda is very, very complete and it's is very difficult to justify why one would build once you have something that you think is profound through you implement multiple S D case to like multiple points of silicon just doesn't make any sense.

That being said, I still think you need to be at the absolute bottom of the stack and the absolute top of the stack. I think i'm a little too biased for saying the former, which is i'm hoping that there's vender diversity and silicon diversity because I think it's going to be really important. I don't think we want to have a world, world in video runs away with IT.

So I think there's investment opportunity there just because I think everybody should want that to happen. And then at the absolute top febris, right, that all these foundational models, I think, are changing so rapidly that the thing that you want to figure out is like, what are you sitting in with to drive learning that unique? And that's a data problem.

So there's an example that i've given. This was an an example given to me, but in the casual so it's not i'm not going to take credit. Ford is A C O, L networks.

But he was telling me, you know, when you look at travel, the travel space, all the public travel companies are like three hundred billion dollars of public market cap, expedia, travel o city, all these companies, but their pure middleman. And they sit on top of the data feed that comes from a handful companies. One of them is labor.

And so i've went in, I looked at sabor sabers, like a one point three billion dollars small little company. But they are the ones that go into all the airlines, extract all this globally good data, Normalized IT, and allow expedia traveler city booking to calm to exist in a world of machine learning, where an A I wear theoretically, you can have conversational languages inside of WhatsApp or messenger or instagram. You see at this beautiful picture, you're like, booked me a ticket to that place.

Well, sabor is actually the key value created there. And all these excited examples that are plugins a GPT make no sense. They make no economic sense.

Those company should go to zero. So i've used that as a way of forcing function for me to try to prove that there's really these two barbells. It's a barber book, one is a silicon and one of these sort of like data providers, that's probably an investible thing that's defensible. Everything in the middle, I think what what feeder x said is true, which is today IT looks like it's worth a couple billion dollars tomorrow with nothing. And I so I think you have to .

be very careful if you listen to there's an interview that Stephen war from did was like three me if you guys listen to IT uh.

few weeks agi had on my pot I heard the free yeah he's incredible.

It's incredible if you listen to that interview, I think what form does a great job of describing the difference between inferential models or statistical models and computational models? Statistical models are where you take large data sets, and you build statistical models that infer and predict things in the future, or predict things that you ask you to predict from the data set that is trained on, and that IT creates a statistical representation, has the probability of being right, wrong.

And every prediction IT makes and IT creates a distribution of outputs from the model. And you can train a model from nothing today using a bunch of tools that are open source and generally available and a bunch great silicon and all this amazing stuff that's that's that's now out in the world. But there's a bunch of things that you can't generate data, you can't necessarily trained models on, and that requires computational models, models where you actually have to build some .

system that create a .

deterministic outcome. And the terminal tic means that IT doesn't have a distribution of things that could happen and has one thing. And IT calculates IT, like two plus four is six. There isn't a probability distribution on being six. Two plus four is computable, IT is calculated.

IT is six. The great .

unlock that I think is ahead of us still, generally speaking, with respect of large language models is the connection back to computational models, is the connection back to structure data, where you can make requests and integrate structure data into the output, combine with inferential output and computational models where you can take the inference, you can take the request and figure out what computational models can I now run in addition to making a prediction about an output.

And that's where so much of the value is gonna lie. And it's going to require incredible software engineering talent, applied maths, statistics, all the stuff that made data science, generally speaking. So success over the last two decades is gone to continue, and it's going to be this integration between computation and inference, and it's going to be applied in lots of different markets. And it's going to be really powerful.

And we're going to have our minds plan just in terms of like the seed stage or super early proceed stage, two or three people who are obsessed with this technology, who are playing with that every day, who are keeping up to speed on IT and who understand some customer base, whether it's delighting themselves or are delighting some other customers, are willing to take that small bet on one hundred, two hundred fifty eight because in the previous paradise shifts or or platform shifts, cloud computing apps, and before that desktop computing and the web, you saw people start tinkering with stuff.

And whatever their first two ideas, where are long forgotten? Because they figured something else out. And I kind of feel like that the stage, and there are a lot of people who are are playing with iphones in the APP store and you know they made a calculator or a flashlight back built into the Operating system, is um I think freeburg is specially pointing out that you could just be part of the model and your whole businesses wiped out.

We have one company that's trying to make iconic for travel. And I looked at with their building and then, you know, they're figuring out prompts. They are figuring out the interface, they're figuring out what people want.

And I did the same searches on chat P T, four. us. Like it's not that much Better what you're doing, but it's Better and your ideas are Better.

And so I think that the win the race and they only have to please, you know, whatever number of users and this company could wind up being, like I said before, a twenty person company that does fifty million in revenue. And I think that's gonna a very interesting future. And IT reminds me of the APP economy.

There were a small number of acts, things like this ro kid or instagram, where small teams build things that printed money and had incredibly high margin. So I think that's part of the opportunity here. I do agree with dramatis point date is the new while whatever data set you have that you have that unique is incredibly powerful in terms of defense broad and could help you to outpace one of the generic models.

This, who has been waiting?

Okay, dude, who's been waiting? right? Lighting round. Thanks there for the, my name is atmosphere to transform V, C. And sentences. Ces, so my questions for you should .

ask the last.

finally, jesus, great. What the fuck these guys?

And so, and the last one or two episodes I can recall you you brought up this whole idea how do we get .

non new borne american patrice run for president so um as the growth hacking drunken master, uh, what do you recommend? How do we propel this idea? How do we have a big up seam and not have to wait to twenty five years or whatever you .

way IT can't happen in the next few years? I I do think there's a small probability could happen in twenty five to thirty years. But like the problem is that the people that jill can be president .

on the stage.

but yes.

the three support, but I put you guys in my cabinet, both positions.

I think the how is that you have enough bottoms up citizens journalism and opinion formation that people can independently decide that on the margin. This is a good idea. Like, look, I am not interested in running for government, but if David were in charge of something very important, treasury, your state, I would have immense confidence.

If freeburg were not charged something, I would have immense confidence. So the idea that guys like this. The idea that guys like this and oh.

because i'm born .

here so you are have to say that yes.

you'll get the department .

of .

generation of general.

I do think it's a little it's a little crazy that guys like these two get disqualified just because they emigrated when they were like four and six. That's insane. So I I I think that the foreign, the business of actually deciding that you want the best people for this country on the court so that we keep winning, championing ships, you don't tell john is, oh, you know you're born in greece so choco, you don't get to play.

That's crazy. Put him on the court and let them with. So I do think IT takes twenty five or thirty years though, of us saying this because IT has to be a grounds for of people that say I just want to win because i'm seeing all these other countries starting to win more.

And I don't think I want that for my children. I, I, I do think IT takes a generation. I don't think that .

happens today or guys in a couple of hours IT will be the sult of sciences .

birthday and now in kidders and all kidding and Allen.

so I thought I would only be fitting if one hundred all in superfans .

took a .

moment and sun, happy birthday to day. freeze. G, three, two, one. Happy birthday.

Happy .

birthday. Have bird. Tear free bird.

And many more of science. I know your wish was to be a top ten .

podcasting right to finally casting.

Thank you. as.

Rainman give IT.

We open sources to the fans and .

just got crazy with.

We should all just get a room and just have one big, huge orgy, because they always like this, like sexual attention, but they just need. we.

Need to get .

more 那里。