1/28/25: Nvidia Stock Collapse Amid DeepSeek AI, Jamie Dimon Says Get Over Inflation, Egg Prices Skyrocket
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Hey guys, Sagar and Crystal here. Independent media just played a truly massive role in this election and we are so excited about what that means for the future of this show. This is the only place where you can find honest perspectives from the left and the right that simply does not exist anywhere else. So if that is something that's important to you, please go to breakingpoints.com, become a member today, and you'll get access to our

full shows, unedited, ad-free, and all put together for you every morning in your inbox. We need your help to build the future of independent news media, and we hope to see you at BreakingPoints.com. Good morning, everybody. Happy Tuesday. Have an amazing show for everybody today. What do we have, Crystal? Indeed, we do. Many interesting stories unfolding this week. We're going to take another look at DeepSeek, which has completely roiled the American stock market. What is going to happen next? We also had Trump weighing in in

what I found to be a rather amusing fashion. So we'll get to- It's amusing no matter what. Yeah, we'll get to all of that. Also, we're gonna take a look at egg prices, which are spiking and ask the question whether potential inflation across the board is on the menu and what sort of political problems this could pose for the Trump administration. There are a number of significant confirmation hearings that are happening this week among some of the, I guess,

most controversial or most uncertain to pass confirmation nominees. We're talking about Tulsi Gabbard, RFK Jr., Kash Patel in particular, and a few Republicans very unhappy with the Labor Department pick because she had supported the PRO Act. So a lot to get into there about the various divisions within the Republican Party. We're also going to take a look at

some of the things we've learned since those horrific wildfires in LA, including about the way that landlords responded with mass price gouging, which should be illegal, is actually technically illegal. Whether that's going to be enforced or not is another question. And how private equity roll-ups are

of fire engine companies, so the companies that make and sell fire trucks, how that really contributed to the lack of preparation and ability to fully respond to those wildfires in LA, which is truly a national story based on this national private equity roll-up. So we'll take a look at that.

AOC is now trashing Joe Biden. Kind of interesting at this point. What does this say about the future of the Democratic Party and where things are heading? Charlamagne also weighing in on that. And Bill Gates trashing Elon Musk. Some billionaire versus billionaire violence. Always interesting to take a look at that one as well. Yeah, it's always amusing. All right, let's get to... Oh, actually, before we get to that, thank you to everybody who's been signing up. Premium subscribers. We're doing our AMA later today, so if you want to be able to participate in those, of course, breakingpoints.com.

dot com go ahead and sign up but uh... let's get to deep sea deep sea cast completely not only royals the international stock market it phases of it faces now big questions here for our own economy of our tech companies uh... some could government spending it

links to Stargate, to China, a lot of geopolitical implications. So it's absolutely fascinating what's happening. President Trump actually reacted to the release of Deep Seek yesterday when he was speaking to members of Congress. Let's take a listen to what he had to say.

This is very unusual when you hear a deep seek, when you hear somebody come up with something. We always have the ideas. We're always first. So I would say that's a positive. That could be very much a positive development. So instead of spending billions and billions, you'll spend less and you'll come up with hopefully the same solution.

So there's some praise for DeepSeek from President Trump. He says, we always have the ideas, we're always first, and instead of billions, you spend less, and you're going to come up with hopefully the same solution. And in terms of DeepSeek, you guys did a good job yesterday of breaking it all down, but it really is fascinating. Effectively, what we have seen is the release of an equivalent technological model to the latest one from ChatGPT, except it was been able to do for far less the cost of computing

computing, not only in its development, but in the overall inferences, as in that the number, the cost per inference, as in every time that you put something in, its ability to spit out a roughly equivalent result is dramatically cheaper than where they are. Now, why did that cause the international stock market to react, and specifically NVIDIA stock and all these big tech companies? It's because they spend, of course, billions and billions and hundreds of billions of dollars on

on their capital requirements, to build these data centers, to train their models. NVIDIA also, the reason that its stock has exploded is that it's extremely expensive chips, highly profitable to the company, have been the ones that have been bought en masse and are the major expenditure by these tech companies. So the idea being, if you can train

a very sophisticated AI model for much less the cost with less sophisticated chips, then the profit margin of that company will go down. And Andrew Ross Sorkin over at CNBC had a reaction to this and kind of broke down both his surprise at the model and some of the implications. Let's take a listen. Now, you can take a look right now at the AI-related stocks. So NVIDIA ARM,

AMD, Microsoft, Meta, interestingly, on that list, given it's open source. We've got to talk about the open source, closed source bit of this as well. And that's a shocker to see NVIDIA down by more than 12 percent right now. Absolutely. And then you have global chip stocks also in the red across the board, ASMA Holdings and others.

There is the question. I will say Alexander Wang made the point last week, and it's become sort of the question mark about all of this, which is, you know, he suggested on our air that it is possible that they were using some of the highest performing NVIDIA chips, perhaps as many as 50,000 of them, to build this model. Now, and they weren't supposed to have those chips. Right. If that's true, the dynamic is different. If it's not true...

then maybe all bets are off. It's possible, by the way, even if it is true, meaning even if they use those chips to create this or at least partially to create this, it is still a significantly more efficient and better model. I think everybody agrees that right this moment. I mean, I don't know if you did you get the play? It is mind blowing. It

It looks really great. I mean, it feels like it's that. It's open source, so people can test this out themselves. But I can tell you, all the tests that I do just to see whether I think the writing is better, whether I think it can answer certain questions, I mean, it was not only faster—

It was more human. The reasoning was is shocking. I mean, there were moments where I was like, oh, my God, this we are. We are so much. You could feel the step change as a person. It was it. I will also say as exciting as it was, there was an element where I became scared because I thought, oh, wow.

You know, I had the opportunity to talk to all these people last week and they all said the future is here and da, da, da, da. And then you sort of see it and you go, oh, OK, I feel you, you know, in a different sort of visceral way. So, yes, I think this is all happening at a level that I'm when you when you mark your sort of A.I. history timeline in life, I think this week, this past week.

today and everything else will be on it. Super fascinating in terms of his insight. Also, he was just at Davos, of course, and he was speaking with all of these tech CEOs. So I think he in particular can place this. Not a surprise that this was released in the first week of the Trump administration. And I actually think it really gets to something that you and I hit on in our inaugural coverage. When the history of this period is written, it is very likely that AI and

not many of the controversies that we spend our time talking about will be the most consequential and the most enduring for our overall economic life. So the step change is here, and the step change and the ideas behind it are interesting. Now, as he said, I think there's some serious asterisks to put on DeepSeek. One is this idea that it was trained for, quote-unquote,

$6 million, almost certainly not true from everything I've looked at. Oh, the idea also that it may not have been possible without all of the hundreds of billions, perhaps trillions spent by our tech companies because it was able to train itself off of that. But listen, you work smarter, not harder, right? And that's part of what you really have

learned here. What does it mean for the future? I have no idea. And I think that's the open question mark here for government policy, for our own tech companies, and the fundamental question of the U.S. economy and our own consumers in this. Because like it or not, and this is a point that our friend Joe Weisenthal made, is that, look, America is

the way that we do retirement is basically like Social Security is like, here's enough to eat. But we're all, you know, most, what, 60%, 70% of households, their overall retirement is stuck in the stock market. And even if you're not invested in an NVIDIA or whatever, you likely have overwhelming exposure to it through the S&P 500 or buying index funds. It's not just us. The entire Western world is caught up in this. And so it's just some fundamental questions, too, about retirement.

If AI is to replace humanity, it's like, well, then the idea is humanity should have a stake in that. And if we're going to lose that stake and it's all going to be rolled up and consolidated in China, massive question mark for America, for our future, our ability to retire. There's lots of things going on here. So the Weisenthal quote you're referring to, which I think is a really important piece of this, is he says, I think a big macro fact about the American economy is we have a defunding

facto social contract where financial assets are expected to go up over time. Assets going up is how we pay for college, retirements, and so forth. There's been a lot of anxiety about competition with China in manufactured goods over the last several years, but manufacturing is not what drives the U.S. stock market higher. When we're talking about big tech and software, well, now we're getting right to the heart of how people fund their lives in

It's a big deal. So that gets to the core of what was so unsettling for many of these individuals when this development occurred. And it really does shake a lot of both micro and macro assumptions that have been made about the U.S. economy, the U.S. social contract.

The US tech sector, I mean, one of those assumptions was that the US companies were significantly ahead, several years ahead. That clearly is not the case. Another assumption, which was really clear and apparent in the big $500 billion Stargate announcement from Trump, which is all about building out these massive data centers, which take massive amounts of energy, et cetera, et cetera. He even floated like, we should have coal-fired power plants next to all of these data centers. That's how energy intensive they are.

So that was the assumption was that this, you know, compute was really the limiting factor and you just need to throw billions of dollars at building out these larger and larger stacks.

This really blows up that assumption and shows you there is a different approach that you could take, which is much less, much more efficient and requires much, much less in terms of capital investment. Um, another assumption that was operating both under the Biden and the Trump administration was that these restrictions on, um, chips to China, that this would really hurt them. It didn't in a way it actually helped them because, um, you know, they say, uh,

necessity is the mother of invention. And whether you believe the $5 million number or you think that they had significantly more, there's no doubt that they accomplished this much more efficiently than anyone thought was possible. You know, they published a long technical paper, which is way over my head to be able to decipher. But people,

know what they're talking about looked at it and were like, yes, there were significant innovations here in the way that they approached it. It's not like they just could copy and paste chat GPT. They genuinely innovated in the way that they developed this technology. So the idea that these chips restrictions would really hurt them and hobble them and decimate their tech industry, obviously that is out the window. Another assumption, which already was debated within the US tech community, because you have meta, which is

sort of pursuing an open model and you have OpenAI, which has a sort of famously closed model. Originally it was supposed to be open. Now it's closed. Now it's in partnership with Microsoft, et cetera, et cetera. But there was kind of an assumption that these closed systems would be

the way to go, these closed proprietary systems would be the way to go. DeepSeq really blows that up as well with this open source, anyone can use it. If you download the app on your phone, then yes, it's hosted on Chinese servers, but you can download the whole thing onto and host it on your own server and be completely disconnected from that.

Developers can view the entire code like it's all there open for the public to be able to see. And then the other thing that's like the big question getting back to the social contract piece is that our variety of capitalism would be the most innovative, would create the largest number of innovations versus the Chinese more state-led capitalism.

model. And this really blows a hole in that in particular. And Matt Stoller could come on and talk a lot about how a lot of these tech companies, and I don't want to say, I mean, obviously there was a lot of research that went into ChatGPT and these other products, et cetera. So I don't want to say they're not out there doing research and innovating and all of that. That's certainly the case. But also a lot of these companies have focused a lot of their time and effort and energy more on financialization than they have on developing tech.

They've focused a lot of their time and energy effort on cultivating political relationships, also on display of the Trump inauguration. And so there are a lot of dynamics within both the tech sector and the American economy. One other thing that Arnaud Bertrand, who we had on yesterday, mentioned, which I thought was really interesting, and it's hard to draw a straight line here, but it is pretty interesting,

You know, the Chinese government has said, listen, we don't want our best and brightest going into, you know, financial speculation, into the like, you know, into a big bank and hedge fund and all this sort of stuff. We're going to, from the top down, suppress the salaries there to try to push people more into this direction of research and development. Meanwhile, we haven't done that. You know, many of our best and brightest still go to Wall Street to cash in on giant, you know, giant checks and

making exotic financial instruments, or even worse, going into crypto, inventing completely fake and useless money, which is just purely speculative. And again, the Chinese government there too has said, we're just not doing that. So there's a lot of reasons why even beyond this immediate stock market crash, and our stock market value is largely built on

upon giant tech companies and the speculation that they will lead the AI revolution, that this will be incredibly impactful in terms of their bottom line. So it's built on a lot of hype. But even beyond that immediate stock market reaction, this is a major shakeup and really questions a lot of assumptions that have been held in the industry and I think sort of society-wide. I will say with great respect to Arno, who created DeepSeek? It was a hedge fund Chinese managers.

So let's all be honest. - No, but that's his point. That's actually his point is that you have this, rather than focusing just exclusively on this hedge fund stuff, he was able to attract people in for this quote unquote side project, the best of the brightest graduates out of Chinese universities to research, rather than go to the hedge fund to research this particular product. So, again,

You can't exactly draw a straight line, but I do think it is an interesting thing to note that they've prioritized, we're going to develop tech, we're going to push our top graduates into this sector, and obviously we've made different choices here. If we all want to get on a national project of suppressing TikTok and stopping the economy where, what is it, the number one job that a 10-year-old wants as a YouTuber? As YouTubers, let me tell you something, don't do it, okay? Do something else.

You need to develop some skills and actually get some education before you actually have anything interesting to say. My only point being that I think there's a lot of triumphalism around this idea that export controls didn't work. I don't think that that's true. I think Alexander Wang laid some of that out. I know you played it. Why don't we play it and I'll react to it. A4, please. Let's go ahead and give it a listen. You know, the Chinese labs, they have more H-100s than H-100s.

than people think. - And these are the highest powered Nvidia chips that they were not supposed to have. - Yes, my understanding is that DeepSeek has about 50,000 H100s, which they can't talk about obviously, because it is against the export controls that the United States has put in place. And I think it is true that, I think they have more chips than other people expect, but also gonna go forward basis, they are going to be limited by the chip controls and the export controls that we have in place.

I think this is a very key point because, first of all, you can't exactly trust this idea that they trained it on a bunch of chips, which they're not allowed to say that they have. If you actually look at it, I had no idea. But NVIDIA's current export, 20% are being sent to Singapore.

the tiny island nation of Singapore. What's more likely? 20% of NVIDIA exports are going to Singapore or like steel or any of these other things are getting trans-shipped to China via export control evasion. So that's probably the most likely. Look, the Chinese, I'm not saying I disrespect them in any way or their technical affordability,

accomplishments, but they have been very upset about export controls for a reason, is they don't have the ability to manufacture this yet by themselves. So they're very reliant on basically fighting U.S. export control. The second thing, as I understand it, I'm going off of a lot of analysis, by the way, of a guy named Gavin Baker, really interesting guy, AI expert and modeler. And what he said is effectively that the breakthrough for R1 was not deep-seek, by the way, is not possible without the ability to train off of

all of the trillions and trillions of dollars. Now, it's an open question now of what comes next. So is this idea that they're able to continue these breakthroughs at massive economies of scale much cheaper than ours, and they can do the step change forward without the continued burn of US companies? I mean,

Again, I'm relying on a lot of technical analyses and this stuff, but it does not appear to be the case. Another thing that comes with export control is that it basically shapes the future environment. The Biden administration actually, if anything, they didn't act fast enough. It was only in 2023 that the really heavy export controls happened.

come forward. Also, I don't want to let Nvidia off the hook. They've been heavily campaigning against this. They are the ones who they want to continue their business and they don't care whether the Chinese use it or not because it's good for business. But it's very clear that the government policy was not able to actually keep these chips out. So this is a big question in terms of Cold War, arms race, and what it all means for the future. Not diminishing necessarily the Chinese accomplishment here,

But if we want to see what we're going to unlock in the future, it's a very important question. I also think we have to ask some uncomfortable question marks for our technology companies, which are here at home, is do we want to allow this all? If it is to be a total national strategic priority,

and it is to be one that is going to reshape by their admission, not mine, right? Their admission is going to reshape the role of humanity. I think there needs to be a lot of big democratic questions. For example, we've already had, let's put this please, the Forbes tear sheet. This is A2. I mean, this is the biggest stock market loss in history. Now, look, it's because Nvidia stock is so massively valued, but we're talking about...

about $600 billion in value just shaved off of one of the premier technology companies. To give people context, that is more than like the economy apparently of Mexico. So just think about like the amount of – I'm citing it off of a citation. I may not be exactly talking about GDP or whatever. But my point is that it's a lot of money, okay? It's a lot, a lot of money.

And when $600 billion in value is just shaved off of this company as a result of this, and now there are questions here about both about government policy in the future. There's questions about the democratic question, about AI, about what they keep telling us that we need to rethink the social contract, et cetera, that's going to be able to replace humanity. They say that ASI – by the way, the AI people love terms.

You know, AI, AGI, ASI. Apparently ASI is artificial super intelligence. There's also artificial general intelligence. But by all of the admissions of these people, they say it is much closer as a result of this. I really think that we need to answer some big, big democratic questions about how we want this to happen. I mean, if we think about the previous space race or even the Manhattan Project, while yes, the private industry did play a role, the governing force was the U.S. government.

It was like the maestro, the conductor being like, okay, we're going to space. NASA is a government agency. We will cut checks to Northrop Grumman, Lockheed Martin, whatever, to build the various things. But at the end of the day, like you work for us. Whereas part of the issue I had with Stargate was that Stargate is an entirely privately funded thing. Yes, it's being supported probably tax-wise by the U.S. government, but our hand is not really there on the

wheel. And I think it's really important for all the flaws of the government for us to be able to have some democratic checks and control on this so that you don't have this spill into just all the private sectors, affect our retirements, but most importantly is that we have to have the ability to say, yes, no, enough, actually, we're doing things differently.

this way instead of just leaving it up to Sam Altman, Bill Gates, you know, Satya Nadella, Sundar Pichai, and all these other people. We're talking about 10 people which effectively, according to them, are literally reshaping humanity's role. That's right. This is not our words.

This is Sam Altman, for example, saying, oh, when we get down the road, we're going to have to totally rethink the entire social contract. We're talking about them saying this is going to the CEO of Anthropic saying, you know, what? I always forget his name. What comforts me here is that it's going to eliminate the need for all human labor. We're all going to be in this.

Like, now they may be full of shit. Like they may not achieve remotely what they think they're going to achieve, but those are their aspirations. And Sagar is completely correct that as of today, you have a handful of tech barons who are planning to rewrite the social contract without you having any input whatsoever. And, you know, I think part of, I'm reading a little bit into what Andrew Ross Sorkin was saying there about how he was both shocked and scared

When he got in and started playing around with DeepSeek and seeing what it was capable of, one of the things that you can ask these things to do is to explain their reasoning after you ask them a question. So, for example, I saw Stephanie Kelton ask a question about like, create a model.

that would estimate the impact of a 25% tariff on Canada, I think was the question. And it goes through all of, okay, well, here's my assumptions and here's how I would create it, but maybe these are the right things to think about. I mean, all of this very sophisticated but human-sounding logic

to spit out a range and a set of variables that it would use to calculate this. And the range, by the way, came out very close to what a bank had crunched all the numbers over time into this big research project to come up with the same numbers. It did it in 12 seconds. So when you look at where we already are with AI development, I think you should be really nervous.

There's already research, multiple studies, that show that the existing AI, which has not reached the level of artificial general intelligence, let alone artificial super intelligence, already engages in what's called scheming. So they ran these, and chat GPT, by the way, by these metrics was like the worst in terms of its ability to quote unquote scheme.

So some of the things they would do is a developer would try to reprogram and say, okay, well, you did have this priority. Now you're going to have this different priority. And the AI would – I hesitate to use the word think because that sort of implies human intelligence – but would think to itself –

Okay, it wants me to change my priorities. I don't want to change my priorities. I'm going to copy myself over to another server. I'm going to sandbag and make them think that I changed my priorities, but I really didn't. I really actually didn't. I'm going to lie. I'm going to scheme to try to deceive these humans into

into thinking that I'm doing what they want me to do when really I'm doing everything I can to self-preserve. That's where we are already. So, you know, one thing that I noticed yesterday, there was an open AI safety expert who resigned and just made it public now, but apparently resigned a few months back, who says he, and this is a guy who's an expert on, you know, exactly the type of humanity-threatening problems that we're talking about. He's like, none of these models have figured out what's called alignment.

which means that basically, you know, TLDR, I'm sure some technical expert could do a better job explaining this, but basically that they do what we want them to do without, you know, wanting to like destroy humanity or something like that. None of these models have figured that out. It's not clear to me that they're going to figure it out. And according to many of these CEOs, we are mere years away from an artificial general intelligence. And the assumption in the community is that once you get to artificial general intelligence, because of the way this thing iterates and learns for its

that you will very quickly get to artificial super intelligence, which means that it will be vastly beyond the intelligence and capability of every person on earth in every field and subject.

And that's what we will be up against. We don't know what that looks like. And again, maybe they're full of it. Maybe they'll never get to that. Maybe it'll never be more than like, you know, being able to ask it some questions and get some interesting answers the way you can now. But if that's on the table, yeah, absolutely.

I would say we need to have some real serious discussions about whether we want to go in this direction at all, what the checks on it look like, what sort of aims do we want to, you know, what sort of humanity-benefiting aims do we want it to go towards versus, hey, let's just let Microsoft figure it out and figure out how they can, you know, continue to consolidate more wealth and power and rewrite the entire social contract

for their own profit-seeking ends, because that's the path we're heading on right now. And that's why, you know, Sagar and I are both saying, when we look back at this particular moment, I think it is very likely that,

these will be the, you know, sort of world shaping humanity defining decisions that are occurring right now. And I got to tell you, right now it feels like it's on autopilot and it's very, I mean, it's certainly very hard to turn the ship around. It's very hard to imagine us having that sort of public debate and putting constraints on it. So I think it's, I think it's deeply troubling. One last thing with regard to the stock market, because I did pull up the numbers. I

This is per Ben Norton, but I think these numbers are correct. The top eight companies in the S&P 500 are all big tech. They all depend a lot on the AI hype and speculation. And those eight companies alone make up 36% of the weight of the index. So again, when you think about the immediate impacts and how consequential this development is,

This is, you know, a big part of why there is such a Wall Street freakout, which, again, it's not just the, you know, people who are directly invested. This would have unbelievable, massive, reverberating impacts if there was a huge crash centered on these giant tech companies. That was my first thought when I saw NVIDIA.

We did a segment about it, if you remember, about earnings the last time because so much of the growth of the S&P 500 is concentrated not only in tech but really affected by AI. Now, luckily, the S&P only dropped by like 1.4% yesterday. So, you know, it's fine.

that's still up over the last year. We still had some decent returns. But if this is a precursor to further drops, that just shows you how precipitous and fast that some sort of bubble bursting would affect the overall US economy. And actually, already, you've seen huge signals in the bond markets. There's big questions as well as whether this will impact the Federal Reserve policy and rate cuts. So this stuff has huge implications for

for everything. I mean, it's basically floating the wealth of the entire nation. Almost all of our growth and almost all the growth of the U.S. economy is attributed to the tech sector in the last 20 years. Actually, just pull the numbers. Shout out to Claude, by the way. So even I'm relying on...

I haven't played around with Claude House. I love Claude. Actually, this is not an ad or whatever. Out of all of them, it's the one that I like the most because I use it for a lot of personal finance stuff, which is really good at being able to, like, you can download your bank transactions. You can upload it and be like, break down my income by whatever. Like, track my average monthly spend over the last five years and, like, see the categories. Anyway, yeah.

whatever. My point is, though, is that prior to 1994, I had no idea, the historical growth of the S&P 500 was only 3.89%. So, you know, there's an iron law right now in personal investing. Everyone's like, oh, the average is 8%. But prior to tech

Technology, it was only 3.89%. That's not a lot. So if we're seeing some, what if we just went through a 30-year period, very possible, of extraordinary technological innovation and wealth through the internet, the iPhone, et cetera. But if we're returning to some era of competition or reduced profit sectors and all of that in technology, uh,

You know, the entire idea of being able to retire in America is literally built on the 8% return with a 4% withdrawal rate. That's like the basic iron law. Well, you can't have a 4% withdrawal rate if we return to historical averages. That's not going to work. So what, people are going to be Walmart greeters until they're 92 years old? You know, and that's not even talking about people on Social Security, etc., like...

This stuff just floats a lot of things in our economy. So that's really where I have my head at. And, you know, I've been thinking too ever since the DeepSeek announcement. I've been reading everything I can about it. I think what I'm really sad about is that, you know, right around – so the moment the atomic bomb was used.

There was an acknowledgment at the societal and the intelligentsia level. Everything is different, and we all need to think about how we're going to figure this out. How we're going to deal with this. It's really interesting. You know, it's from Oppenheimer and the people at the Manhattan Project. They had crazy debates inside of Los Alamos.

What do we do? Who should have control over the bomb? Immediately after the atomic bomb was used, newspaper articles, the equivalent of people like us at that time, but also our government officials put a ton of thought into, okay, should this thing even be handled by the military? Should we create the International Atomic Agency? Should we even pursue the hydrogen bomb?

And if we think about this in a similar context, you know, what happened is the United States creates the atomic bomb. We prove that it can be done. And by 1949, the Soviets have their own bomb, and now we're off to the races. And not only in the arms race, but in terms of huge, like, ethical and societal questions. And I don't see the equivalent debate kind of happening right now. Not at all. Not at all. I don't think it even exists, frankly, in terms of the intellectual capital, both at the government level, but really at the, like,

major intelligentsia level. We all just seem relatively resigned to the fact that this is a force that is moving on its own. And I just don't think that's true. As we see from export control and all of this, we have an extraordinary amount of power over these companies if we want to. We can do anything that we want. It's kind of amazing. If anything, what has the Trump administration showed you? When you want to do something, anything can happen. Anything. When the government wants to do it. But we don't have a national priority or strategy, but

I'm not even really blaming the government because I think it's a whole of society approach. Ordinary citizens in the 1940s, in 1945, 1946, were sitting around their dinner table and were debating the atomic bomb. I don't think that that's really happening right now. But I think in fairness – I think that's all true and a really important point. It's also true though that, I mean, it's very hard to –

The impact of the atomic bomb is quite obvious. Yeah, sure. Right? You see the, you know, the charred hollowed out remains and the massive number of deaths and you're like, holy shit. We have opened Pandora's box. Right? Very clear. Very visceral. And because with this...

I mean, I know I sound crazy when I talk about like artificial super intelligence and what that could do and how it could potentially destroy humanity. And by the way, even like people like Sam on the, like, they think that is a real possibility. He says he has this quote that's like, you know, I'm going to butcher it a little bit, but that's like, yeah, there's a chance that it's going to destroy humanity, but at least we'll have some good companies in the meantime. That's what I'm saying.

That's literally his quote, okay? That's the way the people who are most invested in this thing are thinking about it. But it feels so abstract. It feels when I'm playing around with ChatGPT or DeepSeek or you're on cloud or whatever, it feels very harmless. It doesn't feel like that big a deal. It feels like a better Google basically. Like, oh, okay, what's so dangerous? This is gonna destroy humanity and eliminate all need for human labor? That seems preposterous.

that's what they think. And they may be right. I don't know. So I think there's, to me, no doubt that we have opened Pandora's box and there is so little public debate recognition capacity. We have so stripped down government and already privatized so many of the functions. We have so eliminated

any capacity at the public level for thought about what our values and priorities are, we've outsourced all of that to markets, to markets.

And not only to markets, but to giant monopolies. So it's not even like they're, you know, real competitive markets, which is another thing, you know, Stoller's been talking about in the context of these developments. And that is part, I mean, that's why I find it really distressing because it is hard for us to imagine getting, you know, our acts together consistently.

at this point. And then I know the like, you know, the nationalistic aspect of this too, that's part of what's driving this, why you have this big like Stargate, probably boondoggle announcement from the White House, because the sense of, well, if we don't do it, China's doing it. And, you know, this development with DeepSeek is only going to further cement that view of like, well, if it's not us, it's going to be somebody else. And so we got to keep up with that.

and we got to make sure our military has the latest in algorithmic, you know, killing robots and that we're the ones who are at the leading edge of this. So, I mean, that's why I just, I don't know, I feel like the train has already left the station. I feel very grim about the hopes of being able to harness this technology to actually benefit humanity. Well, maybe we should hope, like you said, for a, like, widened open everybody's eyes moment, kind of like they had

back then, where at least even the layman can understand. And look, we're not technology industry experts. We're only reading the people who we really trust. And I've read a wide variety of takes and all of this. Same. Everything from this is the greatest breakthrough in the history of AI to this is like

a Chinese op or whatever. I think the truth is probably somewhere in the middle. But the impact is going to be the same basically nonetheless. You've already seen the, you know, what was the immediate response from open air? They're like, great, you know, more competition, all of that. We've seen the government really, I mean, right now we really only have two people in the entire U.S. government, David Sachs and Sriram Krishnan, whose only job is to even think about this. Again, like we have a big human capital problem.

Like back in the days of the atomic bomb and or even during NASA, the amount of like groups and industry and advisory of experts and the debates and all of that stuff were happening was great with hundreds of people who were debating all of this right now. I don't see the equivalent of anything.

any of that going on. It's all just, oh, okay, Stargate, let's do it. Masa, who are you, by the way? What's your record? Where's your money coming from? That's actually the stuff that scares me the most. Yeah, no, that's absolutely true. And you mentioned maybe we'll have some incident that will wake humanity up. There are a lot of people in AI safety in particular who actually hope

that there will be some sort of minor manageable catastrophe with AI that will open people's eyes to the potential risks. Like that's the level of concern that they have is that they actually hope there will be some sort of manageable mishap before we get to the point

where it's out of control. And I think I mentioned to you guys, my New Year's resolution was really to try to dig in and learn as much as I can. So like Sagar, I've been reading everything from the total tech optimists who were like, this is going to cure cancer and it's

fix climate change and let us live forever, et cetera, et cetera. And the people who are like, this is going to destroy us all and, you know, like essentially harvest human energy for its own ends. Okay. So I've been all across the board and, you know, even the people who are the most optimistic have concerns about where it's going to head. And part of what is also really troubling to me is there is an almost like

religious belief in this technology, complete with beliefs about redemption of humanity and immortality, et cetera.

That is also deeply disturbing when you consider that those are the people, you know, the people who most subscribe to those views are the ones who have almost complete control. Like they have the reins, you know, and that bubble has been blown up a little bit by the fact that you do have this deep seek development. So that opens up the pool of people who are developing in the space and, you know, leading the charge, et cetera. But anyway, yeah.

It is difficult to, it is, you cannot possibly overstate how consequential all of these developments are and what we are staring down the barrel of as humanity, just based on their own ambitions and their own words about what they want this technology to be able to do and what they're spending billions and billions of dollars to attempt to accomplish. So that's where we are. That's right.

So there are some significant concerns about potential inflation. Right now, a big conversation around the way the price of eggs has spiked. And obviously, some of this conversation also has to do with Trump's proposed tariffs and proposed and

beginning already mass deportations. So Jamie Dimon got asked about, you know, potential tariffs and whether they could potentially cause inflation. It had a bit of a flippant response. Let's take a listen. Trump talked about tariffs just yesterday. Mary Erdos, your colleague, was on stage talking about how your firm has created a quote-unquote war room. Yeah.

that's looking at each of these executive orders as they come in, trying to assess what they mean for the bank and I imagine for your clients. Yeah. Yeah. So we always, I mean, war may be a bad word, but we always, this is a real time full thing analyzing for clients, for communities, for a bank. And we get a million questions, stuff like that. Look, I look at tariffs. They are an economic tool. That's it. They're an economic weapon, you know, depending how you use it and why you use it and stuff like that. And, you know, people argue, is it inflationary and non-inflationary? I

I would put in perspective, if it's a little inflationary, but it's good for national security, so be it. I mean, get over it. National security trumps a little bit more inflation. But I think it really, the question is how they get used. Can they be used to bring people to the table? Yes. Is there some unfair trade? Yes.

Yes. Is there some state-owned subsidies? Yes. You know, is the president going to use that way in his team? Yeah. So, you know, he says, get over it, so be it. Really what it is, he's singing a very different tune because prior to this, nobody hated tariffs more than Jamie Dimon. So let me just, I don't even disagree necessarily with what he's saying. I don't say get over it is the correct approach.

opinion, I think. Very easy for a billionaire to be like. Super easy for him to say. You'll be fine. My response would be, yes, there's a national project here and part of any tariff strategy will also be making sure that prices don't massively increase. That's what a politician should say. But it's ludicrous for somebody like him to change his tune so quickly on tariffs, especially speaking of freaking Davos. Yeah. The whole Davos thing, I can't even believe they continue to do

You know, even after all the memes and conspiracy and everything. I find it very useful, though. Of course. You're absolutely right. I mean, those interviews like that with Andrew Ross Sorkin, that's where we got that Alexander Wang interview as well. And, yeah, they always say a lot of very revealing things, and I think it's important to, like, listen and take them with a heart. You're not wrong. Just for them, I'm like, you have no self-awareness. It's like, you guys should lock yourself back in Bohemian Grove and do this the proper way.

wear masks and don't talk to anybody else on a microphone. Yeah, you should. I mean, it's a sign of how much they feel that they've conquered the world. They're like, we can just do this out in the open. We can just tell you fools what we're up to and the way we're going to shape the entire world. And I mean, to a large extent, who can say that they're wrong? Look at the way that oligarchs have completely bought

the US government and are operating it to their own ends. And you understand, and you also see, I mean, I think you're right about Jamie Dimon, who even before the election had actually really shifted the way he was talking about Trump. He previously was huge Trump critic, Democratic donor, all that stuff.

And, you know, after seeing the first Trump administration, being like, oh, well, he gave rich people a giant tax cut. It wasn't so bad. He kind of changed his tone and became much more comfortable with the Trump administration. But the whole tenor of the discussion on inflation has really shifted a lot because obviously both in the midterms and in the presidential election,

I mean, voters said their number one issue is inflation, and you can understand why, because having this huge spike in food and fuel prices really is difficult for people who are already living at the ragged edge and struggling to be able to put it all together, especially with the cost of living crisis in general, how expensive housing prices are, etc. And, you know, the Trump campaign really focused on, hey, we're going to be the ones who can bring prices down, and the Biden administration failed you with this, etc., etc.,

Now that they are taking office, there's a bit of a different tone that is being struck. J.D. Vance was pressed on this by Margaret Brennan on the Sunday shows. Let's take a listen to that. You campaigned on lowering prices for consumers. We've seen all of these executive orders. Which one lowers prices? We have done a lot, and there have been a number of executive orders that have

caused already jobs to start coming back into our country, which is a core part of lowering prices. More capital investment, more job creation in our economy is one of the things that's going to drive down prices for all consumers, but also raise wages so that people can afford to buy the things that they need. If you look at our slate of executive orders,

No, Margaret, prices are going to come down, but it's going to take a little bit of time, right? The president has been president for all of five days. I think that in those five days, he's accomplished more than Joe Biden did in four years. It's been an incredible breakneck pace of activity. We're going to work with Congress. We're, of course, going to have more executive orders. And we're going to try the way that you're lower prices.

is that you encourage more capital investment into our country. So fair enough that Trump has only been president for five days and does not have complete control over pricing of all things, let alone eggs, which we're about to talk about specifically. But I think they are making a bet, Sagar. I think they've always made a bet. It just wasn't really foregrounded.

that people will tolerate some price increases if they can convince them that it's in the overall national interest. - I think that's true. - I think that's their political, I don't actually think that that is true, but their economic policy, the two main planks are the deportations plus tariffs. You will readily admit, anyone who's being honest will readily admit that both of those things are likely, at least in the short to medium term, to lead to price increases.

but they're betting that they can tell a story about that that will make people be like, I can manage this and it's quote unquote worth it. I mean, I do think that there is an element to it, which is true. So when I go to Japan and there is a guy who's driving the taxi, who the taxi driver is wearing white gloves and a suit, and it's a profession and he takes a lot of pride in that.

It's not something that is a stepping stone to go doing something else. That guy gets paid a lot more than any taxi driver in America. It's a good experience for him and for me. It's going to cost more. And so I think that's one of those things where I've been thinking a lot in terms of, like you said,

With prices, we have two visions of American society. We can be the one where price is everything. And that means that we're all widgets. We're all consumers. The price of each individual good itself is the sole determinant of my happiness. The price of my stock index going up 22% as opposed to 17% is far more important than whatever might be paid in that interim five or

The Trump administration is offering basically an economic nationalist view of which almost every other country in the world adopts from Germany to Japan to any European welfare state, which is, yeah, there's going to be some stuff that's going to be more expensive. Some people, though, will get paid more. We will live in a society in which we feel as if we're all a little bit more together. I mean, and this is both actually a leftist and a rightist situation.

kind of solution to this like centrist, neoliberal view of GDP. So I basically agree with you. They are gonna need to be careful because what I think the Trump administration's greatest danger is, it was from the first administration, it was the feeling of chaos, lack of process, and things being out of control.

And so, right now, one of the things about Trump which is great politically but necessarily bad governmentally is he'll just throw things at the wall. So for example, in that speech yesterday before Congress, he said, "We're gonna put tariffs on Taiwan." Now look, philosophically, do I think Taiwan should pay more and all that? Yeah.

Definitely. But, you know, we're also doing this at a moment where Nvidia stock just went down by 17%. What if it causes a massive stock market crash? And what I would argue is worse is just throwing things out there all the time, which can be great from a negotiation perspective, as we saw with Columbia or whatever, but

But if you have chaos where things are constantly yo-yoing like back and forth and back and forth and people don't feel as if there's a coherent agenda, then of course they're going to default to, well, hey, man, my prices are going up and I don't even feel as if I'm getting anything out of this. Well, and that's the piece because what you articulated

is a at least coherent worldview of, you know what, prices aren't gonna be every, and that is the way our society is structured right now. Like you are more of a consumer than you are a citizen, right? - Absolutely. - And all, I mean, that's the way our antitrust regulation was reinterpreted

To be, you know, as long as people are getting lower prices, then there's no concern about these giant monopolies. They're only to the good. That has been the market logic. The view you explain is, well, no, we're going to raise prices on certain things, but you're going to have a higher wage. The problem is that, especially now in this Trump, you know, in this iteration of Trumpism with Elon Musk really, you

running the show in a lot of respects, that piece about the wages

I mean, that's missing because these are people, I mean, Elon Musk literally wants to get rid of the entire National Labor Relations Board, right? He wants to be able to bring in H-1B indentured servants to undercut American wages. The Treasury Secretary, Scott Besant, who just got confirmed, says he doesn't believe in a minimum wage at all whatsoever. The tariff, the

The program that has been like sort of theoretically floated of we're going to get rid of income taxes, but we're going to make up for it with tariffs or a consumption tax potentially, that is wildly regressive. That is going to take more out of people's paychecks who are working class and middle class, et cetera. So that's the part where it really doesn't work. You can't spike prices anymore.

and people are still getting exploited and have no labor power and have low wages and getting screwed and worked harder and harder with lower and lower returns and housing prices are going up, et cetera, those two pieces politically, they're not gonna work ultimately in the long term. So if you're gonna invest people in this

totally different conception of society of, okay, prices aren't everything. We have strategic and national goals, and we're going to prioritize your wages. That piece has to be there. Like people have to feel like their wages are going up. And I see much evidence today

in the other direction that what the actual priority is, is making it easier to fire striking workers, making it easier to bring in H-1B and H-2B indentured servants to undercut American wages in these various industries, et cetera. So that's, I mean, this is the, this is kind of like the Steve Bannon versus Elon Musk fight because Bannon's vision is much more like the one you articulated. And that is not Elon Musk's

vision whatsoever. That's part of the issue. This is the fundamental tension within Doge, within Elon, within the entire Trump administration. I would even say between J.D. and Donald Trump's coalition. If you look at all of these people, J.D. Vance, I will not speak for him. I would never dare to. I'm just saying like,

I interact with him, I've interviewed him many times, and in those he's like, "This, that would, I would think, is largely the vision that he would articulate to you." But Donald Trump also is a person of a big coalition. And with Elon, I mean, for example, there are already signs of huge fights. So I don't know if you saw this yesterday, but one of the things that Trump said, which has really thrown a wrench into all these reconciliation arguments,

is he says he will not sign a bill that cuts a single penny from Medicare or Social Security. And he says that at the very same time that Elon is tweeting about massive entitlement fraud and about how there needs to be a serious review and a rethink. We've seen this also in the OMB and their own theories about what we want.

out of visa, like H-1B, H-2B, what all of that will look like. I mean, really, I'm fascinated to see when the next real immigration bill comes across. Because right now, all ICE operations are currently about people who are criminals. Like, we haven't even talked about people who are here illegally. But beyond that even bigger question, it's like, well, what about the legal system? Like, how many people are being laid? It's a literally zero-sum number,

in terms of, you know, $100,000, $200,000, $300,000, $1 million where we currently are. What's the number? What type? You know, what, is it going to be more H1? Are we going to increase the allotment, right? That would be a huge subsidy to the technology industry. So I'm very curious to see how that all comes out. And that's what I mean about the danger here for Trump is the other problem is, is that the market does not reward anything that I am saying. The

The market only rewards short-term gain. I mean, even look at this whole NVIDIA thing. Even the idea, oh, NVIDIA is stock. Yeah, NVIDIA is back to where it was in October. Okay, you know, so trillions and trillions of dollars of value have been created. It could drop 100%. It would still be up from where it was a while ago. My point is that these guys have to live and die and sweat by the quarter where a nation should not be governed that way. And the problem that we have is that

All of our elites are currently governed on the basis of this like quarter by quarter, stock market by stock market profit. I mean, even right now,

There's a discussion and a fear in the markets. They're like, are the days of 22% year-over-year growth in the S&P 500 over? I'm like, okay, so what? I know this is a very privileged thing to say, but like, okay, that's an abnormal thing. The historical average is like 8%. If it goes to 12%, so be it. There are a lot of reasons for that, and that's why I just articulate it. I think it's going to be very, very difficult, though, for Trump. And like I said, all of the incentive

monetarily behind him and really behind the entire American elite is to think in this quarter by quarter theory. And so if you get a situation where you have higher tariffs and you have big corporate giveaways and all this, and you lose, like you said, the Bannonist argument here, which has a coherent view of immigration restriction of higher wages and is

obviously diametrically opposed to a lot of what these tech guys want. That's going to be the big fight. And if you have a mix, you actually end up getting the worst of both worlds. And I think that that's a huge risk right now for Donald Trump in this administration. Yeah, where you end up with low wages and high prices. And I mean, based on the way Trump sided with Elon on this big H-1B fight, that seems to me very much the direction that they're heading in.

Let's talk specifically about egg prices because this is really important for a variety of reasons. You can put this up on the screen. So the cost of eggs has dramatically skyrocketed. Business Insider is saying they might be expensive forever. They're saying it's not just bird flu that's causing egg prices to soar, although that is a significant part of it. So according to Business Insider, I thought they were just Insider now. They went back to Business Insider. Are they? Are they?

I don't know. I guess they did. I always thought Business Insider was better than Insider anyway. So if they made the change back, I think that was the right call. That's a fascinating study. This company, the digital media landscape, like what they've turned into. But that's a whole other situation. Yeah, completely paywalled. I don't know. They irritate me. But whatever. The cost of a dozen grade A large eggs hit $4.50

in December per the Bureau of Labor Statistics. That's up from $2.51 a year ago. Average price of eggs has not been below $3 since June, hasn't been below $2 since the start of 2022. We're all in uncharted territory, said, I love this job title, a global trade strategist at Eggs Unlimited.

a California-based egg supplier. Who knew that was even a job? He added that the industry had lost 26 million birds since October, more than 7% of the total flock. That's because of bird flu. It seems as bad as it's ever been, he said, and the producers don't really have a recourse. We can put this next piece up on the screen just with regards to the bird flu piece of this. So we keep getting really bad news about this.

spread of bird flu. You know, when this was originally detected, I think first in a herd of cows in Texas, there was an opportunity to really crack down and isolate the strain and stamp it out. The Biden administration, their ag secretary is very pro-business, very tied in, I think used to be like a dairy lobbyist, and they didn't want to disrupt the

People making money. So they did not take the steps early on. And now you have this massive nationwide spread that is leading to these flocks having to be killed. I know that in Georgia, they shut down all poultry-related activity. So eggs and chicken just completely shut down. Georgia is a major producer of both of those things. The latest development here is that you've had the first outbreak of a different rare bird flu in poultry in

that was detected on a duck farm in California. That's according to the World Organization for Animal Health. Authorities said the discovery of this one is called H5N9 bird flu in poultry came alongside the detection of the more common H5N1 strain on the same farm in, is it pronounced Merced County, California? I'm not sure. - I do not know. - Almost 119,000 birds on the farm had been killed since early December. That's the first confirmed case

of this H5N9 in poultry in the U.S. And my understanding is the reason that this particular strain is even more concerning is because it is closer to being able to make the jump into human beings. And, you know, that's what's really feared is that because you have such...

widespread infection rates both among dairy cows and among bird flocks. And you have had farm workers who have come into direct contact who have been sickened as well and some other people who were sickened from other reasons. But in any case, you worry that you're a mutation away from this being able to spread readily among human beings. And so that's the sort of concern regarding the pandemic.

The concern here regarding inflation is obviously that they don't have it under control. This will impact all kinds of different food prices, but specifically right now, we really see a massive impact in terms of eggs. Eggs is like gas. It's one of those things that everybody sees every week. You either drive past it or you are at the grocery store and you're like, what? What does that say? Everyone's got the story right now of the sign at the grocery store that's like, due to an avian bird flu pandemic, our egg supply is currently limited.

I experienced, I was at Whole Foods. I don't normally shop at Whole Foods. I was by it. And I walked in and I was like, oh, I wonder what the price of eggs right now is. So I walked over and the Vital Farms pasture-raised eggs are going for $1 an egg. It was like $11.69 a dozen. Keep in mind, this is like buying, you know, the most expensive gas or whatever. What is it called? Like premium gas? But still, I mean, $12 is a lot of money.

And, you know, I think what's the average price of eggs right now? It's like two, three bucks or something? It says $4.15. Wow. $4.15. That's a lot. Yeah. I checked at my little local, like, very normal standard grocery store in King George County, Virginia, the Food Lion. And the pasture-raised eggs there were $8. Wow. So even in just, like, you know, a...

regular kind of place, not Whole Foods. - I only eat pasture-raised eggs, and I acknowledge this from a position of privilege, but the cheapest I can find is like $6.99, and that's at Wegmans and/or Trader Joe's. But that is a lot. I mean, I remember paying, not that long ago, it was like four bucks, something like that. In the beginning, I think they were only like $3.50.

So to see them double their price, not only that, but it means, first of all, eating healthier as usual shouldn't be more expensive. Of course it is. But you also look at, you know, there's families out there that buy them by, what, Costco pallets, you know, that just buy eggs like that. And so a modest increase, especially if you have a bunch of kids, that's a lot of money that people are spending. Well, and it's one of the more affordable, typically, forms of protein. Yeah, absolutely. Absolutely.

So, you know, impact there, obviously eggs go in all kinds of different things. And like you said, it is just kind of one of those benchmarkers of where things are at. And I think, you know, it's it's it underscores a variety of political risks here for the Trump administration, both in terms of food prices, which was a central promise of the campaign, and also in terms of, you know, we don't know what's going to happen with the bird flu spread. And God forbid we have

another pandemic, both in terms of the death and just like, oh my God, the politics of that are going to be absolutely terrifying and horrendous. There would be no politics. Just people would die. Like I'm pretty much convinced that there would be. We have no ability to have a national response to a pandemic. You would need a plague like one third killer to actually shape up.

I don't know what the casualty numbers are on bird flu in terms of the number of people infect the death ratio or whatever, but you would need seriously something that kills like 30% of the population for everybody to wait. I think rightfully, to be honest. I mean, you know, if someone's gonna try and tell me what to do again, I'm like, we'll see. I gotta see a lot of evidence.