OpenAI's Code Red, Sacks vs New York Times, New Poverty Line?

All right, everybody, welcome back to the number one podcast in the world, the all-in podcast in the news, in your feed. We're ready to go.

We've got the original quartet here, the bands back together. All right, first up on the docket, a code red has been called by Sam Altman.

He sent a memo on Monday, told employees to stop working on side quests, you know, like ads, et cetera, and focus on the core, chat GPT, the core experience, make it faster, make it it better.

And I think we all know why, because Gemini and Grock and Claude from Anthropic have been crushing it. ChatGPT-5, let's call it what it is, was a bit of a flop.
It didn't perform to expectations.

We discussed that a couple of weeks ago or months ago. Anthropic is beating OpenAI in enterprise revenue

starting this summer.

And I talked about how, you know, previous episodes on the streets, I'm seeing more startups want to use Anthropic's API and also Google, Gemini's API, and they don't essentially trust OpenAI to not steal their business.

So

it's big changes right now. Here is a chart based on data from July.
Most of Anthropic's revenue here is corporate. Most of OpenAI's, as everybody knows, is

consumer. And here's another chart.
OpenAI's new infrastructure deals versus revenue. And this is just for 2025 alone.
A lot of deals being made, but competition is fierce.

Chimaf, your thoughts here on the game on the field. Code Red, for people who don't know, in our industry, is when everybody reports to the office and gets focused on one thing.

And that's apparently what Sam's doing. How do you interpret it? Look, I think that there are two things.
Let's do the strategic lens and then the tactical lens.

The strategic lens is that this is an incredibly vibrant and dynamic market.

And I think it's too difficult and too early to pick winners other than at the silicon layer where largely that die has been cast. I think that it's going to grow.

So we can talk about how there'll be more competition, but it's roughly NVIDIA plus AMD plus Google plus a bunch of inference silicon. So that's sort of that market.

But above it at the model market, it reminds me, frankly, a lot of when we were building Facebook.

I remember sitting around, our senior executive team, six of us, looking at MySpace, who was an order of magnitude bigger than us. And at some point, we were like, you know what?

Our product is just fundamentally better than theirs. And they had 100 million plus users and we had sort of 15, but we knew that we were eventually going to beat them.
Nobody else knew.

And I feel like this market is similarly evolving, which is that you have these early winners, but there's still so much work to do. There's still so many consumer expectations to define.

that it's too early to know who's going to win. And ultimately, what we are learning, especially as all these markets converge, is that distribution still matters a ton, which favors Google.

It favors Meta, although Meta's quite behind. And now it will still favor OpenAI because they have 800 million monthly actives.

So then the tactical thing is, what do you do, knowing that this dynamic is set up to have a lot of competition? And I think what you have to do is streamline the focus.

and try to make a crisis out of every opportunity because look, the companies tend to just grow. This positive entropy tends to cause people to hire at every level.

And you look around and there's thousands of people that you didn't know even six months ago. And so I think if Sam can use different points in time to tighten the core focus, they'll be better off.

And I think that is what Google did a while back. If you remember the whole Black George Washington thing, they were able to use that as a rallying cry to streamline.

the organization and to focus and to get their best and smartest people to work on the most highly leveraged tasks. And what you see now is an incredible overperformance from where they were.

I've said this before, but Gemini is incredible. So I think that that's what's happening.
Too early to call. It's a three or four horse race.
And Sam needs to batten down the hatches.

And I think he used this opportunity to stop a bunch of peripheral activities. Yeah.
And as we saw, Sergei called a personal code red. He said, I have to get in the office.

I have to inspire everybody because this is existential for us if we lose

the search franchise, which they haven't. the code red works.
So David Freerberg, maybe you could discuss a little bit code red as a management technique. You were at Google.

I don't know if they were calling code reds back then because you didn't have any competition, but we're in a much different world here.

This is the most competitive thing we've ever seen in our lifetimes, I think.

Google had an early lead in search, and then Microsoft launched and it formed a code red model at Google that was called Project Canada as the code word for Microsoft.

And there was a weekly war room meeting and a whole bunch of strategy and product decision-making that was driven around the impending threat from Microsoft because Microsoft was such a big behemoth, so well capitalized, had incredible engineering talent.

Part of the response was to set up an office in Kirkland to recruit engineers up in Seattle to aggressively grow that base.

There was a whole bunch of tactics that emerged from the strategic lens of Project Canada. It is a very powerful method.
It is how the United States got to the moon in a race with Russia.

It is how we are now in a race for supremacy in technology and AI against China.

Having an impending threat is a very strong motivational tactic. It is a very focusing setting, and it drives innovation.
And so we'll see what happens. Chat GPT

was

basically the market monopoly in AI or LLM chat interface, And it only had one way to go, which was down. Google, I think at this point has roughly 14%.
So here you can see Open AI is on the decline.

Obviously, a little over a year ago, they were at 90% plus market share in generative AI traffic. And today, Gemini is at 14%, 15%.

The depth, the flywheel that Google has built gives them such extraordinary advantage. Okay, let's go to Emperor Palpatine.

This is coming together as exactly as you orchestrated you as the czar of AI and crypto. Thank you for your service, civil servant David Sachs.
You wanted to see vibrant competition.

Well, here we have it. Assess the playing field as you see it from DC.

Well, first of all, let me give credit to Sam for calling this code red, breaking the glass and pulling the alarm.

I think it's so easy for CEOs in general to engage in happy talk and ignore problems, especially when discussing them is going to create a PR story that they they don't like.

And I do think one of the things that's unique about Silicon Valley is just that the founders and CEOs do treat the situation of their companies in a more existential way because we actually do have tremendous competition.

And so anytime I think a CEO is willing to, again, take a bad PR story in order to focus their troops on a real business problem, I think they deserve credit for it.

Because I think when you look at the rest of the Fortune 500, you know, these CEOs are just kind of managing PR all the time. Now, with respect to the ecosystem as a whole, it is very competitive.

And I think we've got five major companies, and they all have their strengths. So ChatGPT is the leader in consumer.
They have something like 80% market share in consumer use of LLM chatbots.

But then Google came out with their new Gemini 3, and they were starting to take share based on the strength of...

Gemini 3 and the integration it has, obviously, within Google search, because it's very easy for people to discover it when they do a Google search.

And now they're seeing that it's actually pretty good. So they were starting to take share from ChatGPT.
And I think that's why Sam issued the code RED.

Then you've got Anthropic, like you mentioned, where I don't particularly love what I've called their regulatory capture strategy, but I have to acknowledge their products are very good.

Everybody seems to say that they have the best coding assistant, and they're carving out a very lucrative niche in enterprise.

And then you've got XAI, which I think is the best at current events because of the integration with X. And also Elon seems to be able to scale his data center, his training cluster the fastest.

He's got, you know, he had Colossus 1, now he's got Colossus 2. And that portends good things for Grok 5 because it's going to be trained on the largest cluster of Blackwells.

So in any event, you've got all these companies that are doing pretty well. I guess Meta sort of hit some headwinds, but they're going to continue.

investing tremendously in AI, and they've got deep pockets to do it. So I think that they'll come back.
And, you know, what you see is all these companies are kind of leapfrogging each other.

You get a new version, and then they sort of leapfrog each other in terms of leaderboards are showing that. Yes, Sachs.

I mean, you look at the leaderboard, it's constantly Grok comes above Gemini, Gemini comes above. There's a lot of leapfrogging going on.

There's a lot of, also, I'd say, specialization now going on in the ways that I just mentioned. All these companies are developing strengths.
There's sort of verticals happening. Yes.

And so I've described this as sort of a Goldilocks scenario where you're making a lot of progress on AI, but the market is remaining very competitive.

Ideally, it does not consolidate just to one monopoly player like we've seen in other tech markets, because then you end up with a big tech company that's got too much power and control.

That's not generally a great thing for consumers or versus us versus China, Sachs. What does it say versus us versus China? That was the dialogue a year ago.
Oh, my God, China. Oh, my God, China.

Where are we at today? Because this is impressive, this vibrant competition. Well, look, competition brings out the best in the American system.

And I think that that is what creates the most progress. And that's what's going to allow us to win the AI race against China.

China has a lot of competition too, but they do tend to anoint national champions more.

I guess they usually do it more after a competition stage. So, you know, maybe it doesn't prevent competition.
But look, China's formidable. They got a lot of good AI companies too.

And this is going to be a horse race. But again, there's no question that

you're in the US system.

For sure. But look, there's no question that in the American system,

it's competition that brings out the best. And that's what we're seeing right now.
Jason, what do you think?

Interestingly, I just want to build a little bit on what Freeberg showed. The way I'm sort of seeing this is now ChatGPT versus the world.

36 months ago, ChatGPT, OpenAI had 100%, right? They started the category, as you pointed out correctly, David. And

their decline in market share is increasing in velocity. If we were looking at just 12 months ago, they had 84% of the space, and now they're at 68%.
So

this is accelerating. You pointed out, Jamath, correctly, why it's accelerating.
Distribution matters. We've talked about it countless times here.

Meta is forcing you to use their AI search, which is pretty bad, I'll be honest. Every time you do a search on Instagram, it's annoying.

But those all count as users using the product, just like Slack faced competition from Microsoft Teams when it bundled.

And so I just tracked this out, and this is what I think is going to happen over the next four years. I think we're going to see open AI go down to about a third of the market.

And I think the other players are going to take two thirds. The reason I think this is because, to Sax's point, specialization is happening.

If you look at Nano Banana, which is the image processing over at Google, it's fantastic. Grok images, fantastic.
So you're going to have four different, five different choices for images.

You're going to have four or five different really credible choices. Now, you have to look also at the competition and what Sam is facing.
I've known Sam 20 years now.

He is a consummate deal maker, perhaps too good at deal making. He was incredible at recruiting and his PR game was very strong.
Everybody realizes that. And look at who he's facing, Freeberg.

Elon at Grock, Sergei and Sundar at Google, Zuckerberg at Meta, Dario at Ethropic, Satya at Microsoft, who's his partner, who's now his competitor. Elon was his benefactor, now his competitor.

You got the open source projects, DeepSeek, et cetera, SACS in China. And then his former employees are trying to kill him as well.

So you have Ilya doing safe super intelligence, which hasn't launched yet, and Mira doing Thinking Machine. She's, you know, obviously was doing all the video stuff.

So I think what we're going to see here, if we're sitting here, I don't know, next year, they're going to be in the next 12 to 24 months under 50%.

And these companies are explicitly trying to kill OpenAI.

The amount of bad will that Sam has built is colossal. And I think it's from doing too many deals.

And if you look at what he did to NVIDIA, NVIDIA put out a statement recently that they have the option to invest.

So we were sitting here two months ago, and I know people in the industry were staying up late at night worrying about all these deals Sam was doing.

All those deals, apparently, are coming out that they're options. These weren't real deals.
A lot of them were options.

And so Jensen came out and said, hey, we have the opportunity to invest in OpenAI. But you remember Sam did that AMD deal the week after he, or two weeks after he did the OpenAI deal.

A lot of this is creating bad feelings. And I think we're at peak OpenAI right now.
I said it on the show a couple of weeks ago.

I think the pair trade is to bet against every, it's ChatGPT versus the world. And I think the world wins two-thirds.
They can still be in a good place.

I think you're right that this market probably gets split up three or four ways. And so the winner probably gets a third of the market.

Most other markets that end up in a three or four person race ends up in that space. But a third of a market can still be very valuable if that market has five or six billion people using it.

Absolutely. It's going to be tremendous.
Yeah. And that can still support a multi-trillion dollar market cap.

So I don't think it's by any means a death knell for Open AI, but it does mean that a lot of these projects probably need to get shuttered because you need to just do a few things very, very well because

consumers will start to split their purchasing decisions, if you will, or their usage decisions across vertical things for specific purposes.

So, yes, I may use Grok Image because I love that and it's just much better, but then I may use Anthropic for code gen while I use Gemini for deep research and then I use ChatGPT for conversational search.

Yes. Now all of a sudden I'm using all four.
That's highly realistic, that outcome. In fact, I look at my phone now.

I try to limit the number of apps on the phone, but I have Gemini and Grok as the two anchor apps

because I'm so reliant on both of them and I just keep going back and forth between them now. Interestingly, I have four.

I have Claude also in perplexity on my desktop, and I go through all four of them.

Here's what Google and other folks are planning: they're going to take the main revenue stream of OpenAI, and they're going to suck the oxygen out of the room, and they're going to try to strangle Sam and the team over there by making it free.

So, right now, if 75% of that revenue is very metaphor, very, very, very vital for it,

but this is war. This is the greatest battle we've seen since like Netscape versus Microsoft and the internet.
They're going to make Gemini free for life for the best models.

That's my prediction for Google. And I think Meta will be right behind them.
Why? They have the ad network already built.

And they know in that fierce competition, which you were part of, Chamoff and Freeberg, how fierce that competition was. That duopoly does not want to become a thruple with Sam.

I think this is going to be very analogous to what happened with Netscape. People used to pay 50 bucks for a Netscape browser.

And then the idea when Microsoft came in and made it free, and Chrome became free, and Dolphin Browser, and a million other providers, same thing's going to happen to ChatGPT.

Right now, 80% of the revenue comes from $20 subscriptions. That's going to get decimated to zero.

I don't think consumers are going to pay for this product, just like they won't pay for search and they won't pay for a browser because Google and Meta will make it free.

I think it's a different reason, actually. The reason why they will do it is because they have such an inordinate amount of cash, and that cash is valueless on the balance.

So, you might as well just rip it in. If you look at the companies that have a need to spend money right now, it's Google, it's Microsoft, it's Meta, it's NVIDIA,

and maybe Broadcom, but let's just keep Broadcom out of it. Apple's there, and Apple.

All of those companies have so much cash.

If you actually look at the DCF of the enterprise value of these businesses, it gets very little credit for that cash almost to the point where it's worthless.

And so, you either need to spend it on MA, spend it on buybacks, or spend it to subsidize a product so that you can maintain your leadership in the broader market.

And so what you're going to see is these big companies do this capital allocation model in a much more aggressive way. So there's only so many share buybacks that these guys can do.

They approve 50, 60, 70, 80 billion dollars in buybacks. It just doesn't lift the stock price the same way.
it does when you actually show leadership in a product category.

So to your point, if you're just going to underwrite a decision, just look at the last three weeks of Google's stock performance. It basically doubled once we thought that Gemini was incredible.

And so if you want to make Gemini even more incredible, just get pour another billion users into it. And if that costs you 50 billion, it's okay because you'll make a trillion in market cap.

It's second no-brainer. Yeah.
And think about all the reinforcement learning that those big players have at scale.

I think it's going to be just- By the way, the other thing is if we're playing conspiracy theorists, I think the reason why Sam did those deals to your point he is a consummate very talented deal maker yes is probably because he needed to continue to generate the type of momentum required to raise the quantum of capital that he needs so if you're silent it's much harder to raise a hundred billion dollars and you're shucking and jiving and you're just putting a lot of things out there that could convince people that there's a level of momentum that's worth underwriting at a much higher valuation.

So you have to keep that in mind, too. Yes.
I think that that is his high-level

4D chess. I think NVIDIA is predicting it now.

I think NVIDIA is not going to take their option to invest in OpenAI or they're going to really downgrade it 70, 80% and they're going to allocate it to other players.

Freeberg, any final thoughts here as we wrap up on this?

What's the basis for that prediction? I think that NVIDIA wants to own more of the other players. I do actually have a basis for this.

I think that they were very pissed off at the other support he gave to their competitors. How do you know to close that deal? I know a lot of people in the industry.

You sound like the New York Times. Okay, well, great segue.
Everybody knows. What's your source? Everybody knows.
Everybody knows. I don't want to reveal what

sources say. Open secret.
Sources say. Sorry, I'll just JK, let me just wrap up on the AI stuff.
I was trying to do that on the other side. And I'll just echo a little bit what Jamov said.

I don't think that the battle is going to be won and lost on LLMs. I think that there's several fronts, and we're so early in AI.

it's not going to necessarily just be about text-based token production.

These non-text-based models, the non-LLM models, the complexity to them and the differentiation is so much wider than it is in LLMs. Kind of think about it.

I think about it in terms of like a hold'em versus Omaha game. Like the difference between the median and the best player.

in an Omaha game is so significant compared to the median and the best player in a holdem game because it's just so much more complex.

I don't know if you remember this guy, Chris Ferguson, he used to win every Omaha tournament back in the day because he was one of the first guys to figure it out.

So everyone that knew Holdham thought that they could just step into Omaha. And because he figured out how to do Omaha, he just wrecked everyone consistently.

Anyway, in video, for example, right, they use diffusion models and then they also use a transformer architecture. And then they use these convolutional neural networks.

to create structure within the frame and continue structure between frames and video. There are multiple models that have to interact and work together to render video.

So you have to have good training. You also have to have unique architecture.

And so the amount of differentiation that's possible in video AI is, I would say, at this point today, so much wider than the differentiation in text-based AI, like what we see with LLMs.

As those things start to become more mainstream, I think that applications that we are not necessarily thinking about today are going to become a bigger use case for how we spend our time.

And that is really when you'll start to see, you know, this horse race start to kind of play out a little bit more differently than it does today, where everything's all about usage on a chat interface.

We're going to look back at that one day. It's going to be the equivalent of everyone on AOL Instant Messenger or Yahoo Instant Messenger.
It's like, who gives a shit?

That's not really where the game's going to be played. While we're speaking, Gemini just released Gemini 3 Deep Think is here.
So the race is continuing even as we're taping the show.

Let me add one more thing, which is, I don't know, just a few months ago on the show, maybe it was three months ago, maybe it was six months ago, we were all like giving eulogies for google i wasn't i was not either well i took the other side i mean i don't know there are a lot of people were and i i was i think the majority of the industry was i did take the other side of it yeah i think brad gurley and uh sorry brad gersner and bill gurley were

definitely were and look and the argument made a lot of sense which was this which is even if you believe that google is going to come back and have a credible ai product remember remember, they were caught completely flat-footed by this.

They figured out the transformer architecture back in 2017, but then they didn't really do anything with it. And then OpenAI grabbed onto that.

And then, like you showed on that chart, they basically had a two-year head start on LLMs.

So a lot of people were basically saying that this was it for Google because obviously LLMs are so much better at web search than the 10 blue links.

And moreover, for monetization, why would you need to have, you know, ad links or paid links in an LLM world?

And I think the point that Brad and Bill were making is, again, even if Google catches up, they'll never have the dominant position in AI that they have in search. It still might be true.
Who knows?

But the point is just everyone was saying that Google was in deep trouble just, I don't know, six months ago.

And then, like you said, I think Sergei came back and that gave them a major shot in the arm and they got more focused. And now they've launched what appears to be the best or one of the best

competitive products. Look, these other companies, there's a lot of leapfrogging going on.
I think really importantly, it's not just about Sergei coming back.

It's about giving themselves permission to take risk.

The reason Google didn't lead into AI for years, even though they had the technology sacks, is because they were nervous about cannibalization to search.

They were nervous about the quality of the product. They didn't want to release things too early.
And then they changed their posture and they became a more risk-taking posture.

And that gave them the permission to run, which by the way, I would argue is the opposite at OpenAI in the last couple of months. I used to use advanced voice on ChatGPT all the time.

I cannot stand it anymore. I do not use it.
It has basically hedged away all of the value because it tries to be polite. It tries to make sure that it's giving you warnings all the time.

It doesn't want to give you data because it's scared that it might give you the wrong data. You can see it used to give you data all the time.
I cannot get it to give me numbers anymore.

I'm like, give me the numbers. And it just says these kind of high level arching statements.
And I'm like, that's not what I want. I went over to Gemini, gave me the numbers.

And I think that Google's willingness to take risk has really kind of highlighted the difference in posture in the last year.

Chat GPT is now acting, and OpenAI has been acting like an incumbent, fearful of losing market share and fearful of getting attacked in the media and attacked by consumers for saying the wrong thing.

And so they've taken this kind of defensive posture that I think has fundamentally damaged the product and the brand. I'm just having a great time thinking about

Freeberg yelling at his AI assistant in his car. It's like, we need to make a short out of that.
Keep going. Well, just Google did one other important thing.

I mean, in addition to Sergei, there was putting Demis Hasabas in charge of all of AI. Because before, I think he was just in charge of Google DeepMind.
It was sort of a subset.

And then they put him in charge of the overall. And I think that made a huge difference as well.
Yeah. And the pie is growing.
So the number of searches, the number of queries is.

increasing dramatically. I think we'll have 20, 30 times the amount of queries being done because the answers are better.
It's not queries.

It's not just queries. This is my point.
It's like more than, you're not using it to do search anymore, right? You're using it to watch video. You're using it to book flight.
Yeah, the agentic stuff.

I'm putting that all together. So the amount of utility that you can get from it is so great that it's going to go 20x.
The same thing's happening with ride sharing.

It's more than just search is the whole point. This has now become such an instrumental part of everything we do in our lives.

And it's going to take over more of how we spend our time in our lives that it's not just about search anymore. It's a whole new paradigm.
The pie will be 20 times bigger.

Let me ask you a bird a question.

Do you think that Open AI's sort of more conservative risk posture, do you think it's a function of the fact that whether by luck or design, they decided that the consumer market was sort of their core market?

Whereas you look at something like Anthropic, right? And they've carved out enterprise. But if you're a consumer product, there's so many more things you have to address.

And you're going to be attacked in so many more different ways. Yeah.

And by being the market incumbent, it actually ended up creating a fantastic foil for Google because they started getting all of the arrows and slings from the media about health advice and suicides and hallucinations and sending wrong information and all the risks and damage that that causes.

Meanwhile, everyone's laughing and joking about Google and ignoring them. It was more than that.

Remember last summer, there was the court case where the judge said that they were guilty of having the monopoly and then he was going to rule on what the remedies were going to be.

And I think that was in, what was it, September?

And the judge said that during the summer and then whenever it was that he ruled on the remedy, that they were existentially threatened in their search business. And so everything had changed.
Yeah.

I mean,

so the company didn't get broken up. Remember, they were thinking about whether to spin out

YouTube. Yeah, all these kind of remedies.
So in a way, no greater blessing has ever happened to Alphabet than OpenAI's rise.

And I think that that rise not only did it create the foil for Google in the monopoly sense, but it also took the attention away from Google, focused it on OpenAI.

And that attention fundamentally damaged OpenAI's strategic product capabilities because they had to start to be so much more careful about what they said, how they said it, and it fundamentally damaged the product.

And the opposite was happening at Google at the same time, which is Larry, Sergei, and Sundar being given permission by the board to take risk, to go hard, to figure this out.

And boom, you know, it's amazing how the horse race has changed. Okay, we had an amazing time in Vegas.
I want to thank our friends at the Venetian.

You guys were the best hosts we could have ever imagined. What VIP treatment you gave the besties and our friends and partners.

And we had a great interview with Molly Bloom from Molly's Game, the movie, et cetera.

Thanks to our partners, Oracle, OKX, and the New York Stock Exchange, for partnering with us on a very successful F1 weekend in Vegas. And we had a great lunch with Oracle.

Congrats to them on Red Bull's big win in Vegas. And an amazing dinner with OKX,

where my new bestie, Jose Andreas, the chef, came from Bazaar Meets and he cooked for us. He hung out with us.
He played a little cards with us. He's just a true gentleman and a mensch.

I'm looking forward to hanging out with Jose Andreas a little more in the future. All right, there's another thing that went on this weekend.
Big tech story.

And at the risk of being a little navel-gazing here, we're going to cover it. The New York Times versus Mr.
David Sachs.

On Sunday, the New York Times published an article titled, Silicon Valley's Man in the White House is benefiting himself and his friends.

Sachs, you're obviously the man they're referring to. Five reporters worked on this story for approximately five months is what we hear.
And the story attempted to frame you, Sachs, as conflicted.

First, that your firm Kraft has investments in companies. New York Times key claim, quote, Mr.
Sachs has positioned himself. to personally benefit.

He has 708 tech investments, including at least 449 stakes in companies with ties to artificial intelligence.

And for background, Sachs, Elon, you all joined as special government employees, SGEs. These are different than cabinet members in a bunch of different ways.

Basically, they can't work more than 130 days. They're allowed to split time between their day jobs in DC.

They don't have to be approved by the Senate and they provide special expertise, as Mr. Sachs is doing as the czar of crypto and AI.
Second major claim, raising the profile of all in. Quote, Mr.

Sachs has raised the profile of his weekly podcast, All In, through his government role and expanded the business, which is super hilarious because I think our traffic peaked right before the election.

But Sachs, obviously you got a ton of air cover. People thought the story was biased and a hit job and it fell pretty flat.
What's your take on this? Maybe take us behind, take us behind the story.

Well, I think maybe a good place to start is with the reaction to it. Like you said, there was this huge outpouring of people in Silicon Valley who reacted

in a way that showed that they understood that this story was a hit piece, that it was biased. And I'd say most importantly, it didn't even live up to its own headline.

It didn't prove the thing that they were asserting in the headline. And so everyone could just see on its face that it was a hatchet job.
And so everyone started reacting that way.

And it was nice to kind of get that outpouring of support from so many different people in Silicon Valley, including many of the companies who we just talked about are so vigorously competing with each other.

I mean, I think this might be the only thing that Sam and Elon have agreed on in the last year.

Yeah. Didn't you tell everyone to put these tweets out? I mean, like, right.

So that was sort of the next, that was the next big lie that the media tried to perpetrate was somehow that this response was coordinated by me.

No, and there, which, by the way, was crazy because you told me explicitly, stand down. I don't need you to do it.
And I was like, Leroy Jenkins.

And I just went in and I was like, I'm tweeting about this bullshit. No, I never told anyone to do anything except for you guys.

And I told you guys not to react to it because I didn't want to stry-sand the story, you know, where you basically draw even more attention to it. That was my media plan.

And then what happened is the story just went viral anyway, because all of Silicon Valley reacted on their own in a grassroots and authentic way, because I think they were actually genuinely offended by how bad the story was, how ridiculous it was on its face.

And so they reacted, and then that became the story.

And so this whole coordinated narrative became, in a way, part of the the media industry's cover up for itself, like their attempt to explain away why everybody thought that the story was so bad.

Let me just say, I do think that this outpouring of support does illustrate something important, which is just how much power and respect the New York Times has lost.

You know, 10 years ago, if the New York Times ran a hit piece on somebody, even if other people didn't like it, they wouldn't want to say anything because they'd be afraid that they would be the next target.

And that mystique and that fear has completely broken down.

People can kind of see the New York Times for what it is, which is basically a bunch of political activists who are pretending to be reporters.

And essentially they just launder the point of view of their anonymous sources who are basically left-wing Democrats and try to portray those viewpoints as somehow being neutral or objective truth, right?

Because they're kind of presenting themselves as these neutral arbiters of the truth. And I think everyone can kind of see through that sham at this point.
Yes.

The thing they started with was the headline. yeah.
And that was the one thing they refused to change, no matter how many times we refuted their narrative.

You know, what they would do is every couple of weeks, they'd send us a new fact check, and we would basically debunk it.

And we can show you some of those fact checks if you want to see them to see where the story started, what they're trying to prove. Yeah, let's do that.
I think audience would really

happen is every time we would debunk one of their accusations, they would just come back to us with a new one every couple of weeks.

The only fixed point in their reporting was this idea that I had to have these conflicts of interest that were benefiting myself. You were self-dealing.
Sachs, let me ask you a question. So

one of the statements that was made, and then Governor Newsom repeated it at Andrew Ross Sorkin's deal book conference yesterday, is that you did not put all of your investments into a blind trust.

You should have done that, is what Newsom said on stage. Can you just address that? Like, and what actions you actually took when you chose to take the office? What were you legally required to take?

And maybe why you didn't do a blind trust, or maybe you did. I don't know.
Well, no, we looked at that. Sorry, Sachs, just give me a second.

I just want to say this because you're not going to say this yourself, but I remember when you were going through this, you were so concerned about the perception of a conflict of interest that you took such extraordinary measures about the degree at which you were selling things and getting rid of things to make sure that you could do the job cleanly and wholly.

I watched you do this and I watched you do something that I thought was so over the top. I'm like, holy shit, you really are doing this for the country.
And I was so shocked and surprised by it.

And I just want to say that because I've observed it and they still came out with this piece, which was so shocking to me given what you did.

So you guys know what I went through because I was LPs in some of your funds and you know that I divested them,

which you could argue was above and beyond the call of duty, but I was just trying to avoid any potential conflict. And that I think is the central lie of this piece.

Not only is the piece not true, it's the anti-truth.

Because the truth is that I divested hundreds of millions of dollars of positions in promising technology ventures at a substantial cost to my net worth.

So, not only is this job not benefiting me, it's actually cost me a lot of money to serve, but I did it because it's an honor to be asked by the president to serve and it's something I wanted to do and I thought I could make a difference.

So, the whole premise here is just false. And the New York Times, through its five months of investigations, knew this, but they just refused to budge on the premise of their story.

Now, to your question here, if you look at one of the key paragraphs that Jason, you mentioned, is when they try to mention that I have 449 investments tied to AI.

And they say their investigation uncovered this. And some of their reporters on podcasts have tried to portray themselves as Woodward and Bernstein here having uncovered.

Yeah, how did they get this crazy list of companies, I wonder? I disclosed them. They didn't uncover them.
I disclosed them. They're in my ethics letter.

They're on the White House website in my ethics letter. So every government employee, whether you're a full-time or SG, files disclosures with with the government.

And my ethics letters basically contained these pages and pages of all these different positions.

Now, in that ethics letter, they said that I had divested, I had initiated or completed divestment of over 99%

of the positions that could pose a conflict for AI.

And it's in there.

And this is where I think, you know, again, they were very deceptive is It was the OGE, the Office of Government Ethics, the career civil servants, the lawyers, the accountants at OGE who approved that letter and all the contents of that letter, who reviewed all those disclosures.

And they're the ones who concluded that I did not have any conflicts. So really, what the New York Times is beef is with the career civil servants at OGE.

Maybe walk us through what you actually did do. Why did you didn't do the blind trust and help us get the context there? So on the blind trust.
So it's kind of funny.

One of the New York Times reporters was talking about this on a podcast, which is where I think Newsom picked it up from.

My ethics lawyer, who teaches a a course on conflicts of interest at Harvard, said that that reporter should really take his course because he would actually learn something about the conflicts laws.

The blind trust idea is rarely used. And in my case, it would not have worked because I have minor children.
You can only use a blind trust to have your kids be beneficiaries if they're adults.

That's the way the conflict laws work. So it just wasn't even applicable in my case.
And what I did instead of creating a blind trust is I divested the positions

that OG

said were a conflict at a discount to their fair market value in the case of my LP interests and all these funds.

I divested almost 100 funds that I had invested in, venture funds, things like that, angel funds at roughly a 50% discount to their fair market value because,

well, they're private investments, right? And you know that selling an LP interest in a fund, there's no liquid market for that.

So in order to even find a buyer, you have to make it super attractive for them.

And then I sold, you know, XAI, I sold my interest in Grok, and those were all at substantial discounts to the next round, which has now taken place.

So joining the government's not a money-making scheme. The simplest way for me to make more money would have just been to keep doing what I was doing.
Yeah. Right.
Just to go back to the 449.

So again, they're kind of pretending like they did this unbelievable investigation and they find the 449. Can you just put up this paragraph on the screen here?

Because really every sentence in this paragraph kind of reveals the sham of this story. Mr.
Sachs has positioned himself to personally benefit. Not true.

I mean, I was already an investor in all of these companies, and I positioned myself to divest. Then it says I had 449 stakes and companies with ties to artificial intelligence.

By the way, that whole phrase ties to is total journalism weasel words because ties to can mean anything. And every company in the economy is going to have ties to artificial intelligence.

And then they said could be aided directly or indirectly. That is not what a conflict of interest is.
The standard is having a direct and predictable effect on an interest, not indirect.

And there's nothing in that story

that shows that I had a direct benefit. This article has nothing to do with everything you guys just spent all this time talking about.
Okay.

There is nothing here. Okay.
There was no crime here. There's no smoke here.
There's no fire here.

What you did get right, though, is the headline, was the goal. And what is the goal of that headline?

The goal of that headline is to insinuate and to pressure Sachs, but subtly it's to pressure everyone else that looks like Sachs. Now, what does it mean to look like Sachs?

It's not just about Republican folks. This could be a Democratic person as well in the future.
You're in industry. You know something very specific.
You've done very well applying that knowledge.

Now all of a sudden you're in a position where you could go and positively impact the trajectory of the United States. You're asked by the then sitting president of the United States to do something.

What this article does is it tries to intimidate those kinds of people to say, wow, this is not worth it. This is just too much of a headache.
The whole point was the headline.

And the whole point was to get enough chatter about the headline so that people like Sachs and then other people in the future just say, you know what,

I'm not going to try this. And what do they want instead? What they want instead are people that they can work with very closely and ultimately co-opt.

If you look at people like Zoran Mamdani, who's beloved by the New York Times, or if you look at Lena Khan, who's beloved by the New York Times as well, what's the through line?

It's a total and complete lack of experience. And so what you're creating is essentially a very simple litmus test.
If you have experience, we're going to paint you as conflicted. So stay away.

But if you're completely inexperienced and have no experience whatsoever, have never done anything, and you're probably going to screw it up, but at least you'll be in our pocket. We'll work with you.

And so we will leave you alone. That is the point of this article.
And that is what is on trial here.

And I think what we all need to do is understand that simple thing and push back on it, not just if you're a Republican, but also if you're a Democrat, because there are tons of really smart people on both sides that will eventually be asked to do something for the United States.

And you need to ignore the idiots at the New York Times and do it. Yeah, this is well said.

And this literally was going to be the point I was going to make as well, which is we're setting up two worlds. Do you want to go to the world? Otherwise,

you will only, exactly, you'll only have inexperienced morons in the government.

It doesn't. And here's

such a good point, Shamab.

We have a choice right now. Do we want to have lawyers and academics with no experience in the real world setting policy in Washington, D.C.? Or do you want to have experts?

Do you want more Mike Bloombergs? Do you want more Jeff Bezos, more David Sachs, more Besant, also a Democrat, Lutnick, also previously a Democrat? We want the smartest people in Washington, D.C.

That's what the founders wanted. The founding fathers of this country wanted people to do short stints.
We want short stints.

We don't want career politicians like Nancy Pelosi or, you know, Mitch McConnell in there for 30, 40, 600 years.

Like literally, these people are like, look like zombies in Washington, D.C. They're glitching out.

We want people in the prime of their careers to go in there, Trumov, like you're saying, and kick ass for us for four or eight years and then come back.

By the way, everybody benefits when you go to Washington, D.C. and you make some connections.
Of course, when the Clintons left office, what did they do?

Clinton Foundation, book deals, Obama's, book deals, Netflix deals. Everybody gets a little shine when they come out.
That's natural when you come out. But we want the best and brightest there.

It's a gift that you went there, Sachs. It's a gift.
I think, yeah, we can debate all these issues. And yes, civil servants should be under scrutiny, whether it's Lenacon or you, Sachs.

People should be held to account for anything they're doing. You did it right.
You went above and beyond. And now they're trying to punish you.

And they're trying to dissuade the next group of great Americans from going there. Yeah, well, thank you.
Yeah, go ahead. There are two quotes from Thomas Jefferson.

I'll just read because I think it's actually very important.

He said in a letter in 1788, I apprehend that the total abandonment of the principle of rotation in the elected offices will end in abuse.

And then he also later said in 1809, Nature intended me for the tranquil pursuits of science, which is what he was into, by rendering them my supreme delight.

But the enormities of the times in which I have lived have forced me to take a part in resisting them and to commit myself on the boisterous ocean of political political passions.

The founding fathers, to your point, J. Cal and Chamoth,

were vehemently committed to the United States being a free market, being a place where people could pursue with absolute liberty their interests in business, in science, in life.

And the action of political office, of getting elected to a political office, was out of a requirement to serve, out of civil service, service to this country, service to the nation, and service to the enablement of the the freedoms that allow us to do the things that we choose and want to do.

And if you look at the wealth that's been accumulated by these career politicians, it is no surprise that they are attacking Sachs and Bessant and Lutnick and Kelly Loeffler and all of these other elected or appointed officials in this government who have had success in private life and who have chosen out of a commitment to patriotism to spend their time rather than making money in private life.

They have enough money, but to try and get the government and the country on the track that they hope it will go on.

And I think that that is the key difference between those who see this article for what it is and those who read it to reaffirm their, I would say, violent opposition to what is this current administration.

and the challenge that's ahead.

So I think it's a real Rorschach test when you read these articles and you look at Sachs and others in this administration and the choices that they've made to say, are they doing it to grift or are they doing it because they don't need to grift?

Let me just also say this. Proof is in the pudding.
If we send experts to Washington, D.C., if you look at Sachs's early track record, you got the stablecoin stuff done.

We just talked about how competitive the AI market is. We talked about building more energy.
This, you know, and again, I disagree with a lot of the things in the Trump administration.

The thing I don't disagree with and I fully endorse is the experts and the great job they're doing. Howard Luttnick's crushing it.

You're crushing it.

All these regulations that you've gotten done early and often are making crypto legal, a legal framework for crypto, which, by the way, the last two administrations, the 45th and the 46th, didn't get done.

You got it done in six months, right? There's already a track record here. If you send experts, they'll get experts done.
on

time, on startup speed. So like, let's talk about the results as well.
Yeah, I mean, look, they don't want the results. I mean, they consider the results to be a negative.

And what they're trying to do is criminalize policy disagreements. That's really what's going on.

Now, at one point, my comms person who is dealing with the New York Times asked them, you know, what friends are you talking about? Like, what friends did he benefit?

And they couldn't name a specific one.

I think this is why you guys, why they mentioned all-in tequila and the all-in summit because I think maybe they're trying to portray you guys as the friends who benefited. That's how we sold myself.

I'm not going to say I summit. Let me just say one thing on all in.
We can't get speakers speakers to come on the show because of the association with the Trump administration.

We lost money on that event in June that I spent 12 days of my life working on. It was a pain in my ass.
There was no personal benefit to us for any of this shit. There's no grifting going on.

It's honestly a pain in the ass. We do it for Sachs because he wanted us to help him out with putting that event on.
So we did it at the end of Sachs. Now you're part-time on the show.
And we lost

time.

From the get-go, it was a non-profit event. We did not sell tickets.
We gave them all away for free. If we wanted to make money, you sell tickets.

We had two sponsors that put money in to help defray the cost because we spent like a million plus dollars on this thing. They got their logo on the video, not even in the live event.

It was just on the video when we put it on YouTube, which was ours. Discatsi odd, let's move on.
Discotsy odd to the New York Times. But there's no benefit to all in.
There's no benefit to all in.

And the fact that they had to throw that in. It's a f so if you ask me, but yeah, I concur.
It's because they kitchen sink this thing to try and create the illusion. that there was something there.

All right. So we knew this would take over the show because we're all hot onto the collar and we all know you're doing a great job there.
We want more experts.

The job description is to have us win AI. Yes.
That's what they're accusing me of: basically, doing my job. Congratulations.
You did a great job.

And now we're going to lie about you in the New York Times. But you're friends with Jensen Huang, and now Jensen can sell chips.
Oh, my God.

Do you want to show the fact check? It's so crazy. It's crazy.
It's crazy.

This guy is the CEO of the largest company in the world. He's been designing these chips for years.
He's been meticulously designing these chips for 30 years for gamers.

Before Sachs could even spell H-100, he had made them for gamers. He was making video game cards

ago. Okay, wait, I got to show this an example of how dishonest they are.
So they would send us these fact checks every couple of weeks. Okay.
Okay, so here's the real email, Sachs.

They were sending you bullet points after bullet points. This section starts at bullet point number 33.
It's obviously one of many emails you got.

What they do in these fact checks is they basically take the story that they're planning to write and just break it up into chunks.

And then they give you like 24 hours to respond to each sentence or paragraph and say whether you agree or disagree with it and give you the chance to make a statement. That's what a fact check is.

So this is the story they were planning on writing, which is in the spring, Sachs had dinner with NVIDIA CEO, Jensen Wong, in Washington. They discussed several foreign export issues.

During the dinner, Sachs heard a convincing counter-argument. that selling American chips to rivals, including China, will get those nations hooked on U.S.
tech.

Sachs then took that argument to the White House and pushed officials to eliminate binary restrictions, et cetera, et cetera. There's just one problem with this narrative.
There was no such dinner.

We checked my schedule. They made up the dinner.
No, we checked everyone's schedules. There is no dinner.
So they've got a source who's just making this up. And how does the New York Times respond?

They just delete the dinner, but they don't delete any other part of this.

But if your source has already been caught fabricating a dinner at which this conversation supposedly took place, it's totally discredited. They're trying trying to intimidate you.

They kind of create this insinuation that somehow I'm being influenced through friendships.

But then it turns out that those friendships don't even exist. I mean, they're just people I met after I joined the administration in a lot of cases.

So in any event, look, I think the audience of the show knows my views on AI because I've been publicly advocating for them for the past year. And you've had scrutiny.

We ask you hard questions every week here. We bust your chops and force you to explain these positions.
And

we stress test them with you and the audience stress tests them. That's, that's like a gift to the American people.

And I think it's very hard for people to contemplate the idea that folks who are significantly wealthy don't actually need to self-deal.

Like,

they just don't need it.

And the truth is, the folks who are trying to build a career in politics are the ones who are necessarily going to self-deal because that's the path to wealth for them.

And if you've already found your path to wealth, you don't need to self-deal. And I think it's just so hard for people to grok that.
Yeah.

It's hard to understand that somebody is losing a massive amount of money serving their country. I, for one, thank you for losing all of his money and going and serving the country.

I'm very proud of you. Even if people don't agree with your politics, even if I don't agree with everything you say or do, Sax, again, I never doubt your integrity and your intentions.

And I never once thought that you would be someone who would ever self-deal or engage in any sort of grift or corruption. And I'll say that just personally, having known you for a very long time.

Great, Ryan. I appreciate that.
Thank you. I'm mad at you because you didn't sell me everything at 50% discount.
Yeah,

that's the first time I heard it.

Oh, my God.

I've been so angry this whole clip thinking, what?

Where was my call? Oh, my God. I would have given you 55%.
Give it to me. I would have bought it.

Another story that's been trending is the new poverty line and some of these incoming tax laws. Mike Greene, an investor and fund manager, went viral last week for claiming the U.S.

poverty line math is very wrong. Historically, the poverty line has been measured as three times the cost of a minimum food diet in 1963 adjusted for inflation.

Based on that measures, the poverty line for a family of four is set at $31,000 in 2025.

Green says the real number is over 4x higher at 140,000. He gets that number by factoring the cost of childcare, which has surpassed housing as the largest average expense.

He says measuring this number for decades has quietly broken America, and it could explain why America's middle class feels poor despite healthy GDP and historically low unemployment, 4.x, which we've talked about here.

Jamaic, your thoughts? I read this. I found his claim to be pretty shocking.
So I just... I wanted to dig into it.
That's why I asked that we talked about it. Nick, you can probably link to it.

But yeah, this thing went viral. And basically, it's exactly what you said, Jason.

Food costs used to be a third of living costs. And so food used to cost 10,000.
You would multiply it by three and say, well, the total cost of living is 33,000. That's the poverty line.

And then what the government did was they created a whole bunch of staircase incentives to get people from about 33,000 to about 2x that number, to about 65,000.

And then after that, you were mostly on your own where there were no real benefits like SNAP or other things.

But what this person was saying is like, hey, hold on a second, food costs are now 5% or 6%.

And so if you gross it up for the other components, shouldn't the poverty line be something closer to 140K? And that's a shocking claim. And so I just spent a little bit of time looking into it.

Now, he has subsequently come back and refined some of the things he said. I think he may have.
written it in a heated moment.

So for example, when he looked at that number, he wasn't looking at national averages. He was looking at a bunch of data from a high-cost suburb of New York City.
I think it was like Essex County.

And so if you look at the food costs plus transportation, plus energy, plus housing, plus childcare in other places that are more

a median American city, the example that I think other people were using was Lynchburg, Virginia, just as an example. It does change pretty drastically.

You can use this thing called the MIT living wage calculator, which we did.

And if you are in Lynchburg, Virginia, the income required for a family of four to meet all expenses there is not 140K, but it's about 93K. That's still quite a big difference.

And when you double-click into where these variances come, a lot of it looks like it's around housing and childcare.

And I didn't depreciate how much and how expensive childcare has actually become from anywhere between $1,000 to $3,000.

per month, which is obviously a lot of money.

The other thing is that his original article was claiming that if you're above 33k but under 65k, you're actually better off staying at 33 because every time you go up, you actually lose a benefit.

So the net effect is that you are becoming poorer. And it turns out that that math was actually false.

When you calculate the net resources, meaning income plus benefits minus taxes and expenses, a family

actually, as they step up the staircase, does earn more in disposable resources than a family that's earning less.

There is a very specific part of the what he said, which I think we should focus on, which is there is an area between $45,000 a year and $63,000 a year, which actually looks like a bit of a stagnation zone.

So to the extent that one is to read this article,

take away the kind of the buzzy title and whatnot.

The thing that is important is to narrowly focus on this one issue, which is that we do have some policy failures in this zone, where earning an extra dollar often results in losing a dollar of benefits like SNAP and other things.

But that's a good thing to know because now we can narrowly say, okay, what are states and what can the federal government do for people in just this part of the valley, this sort of like death valley?

The last thing is

the article was saying, look, there is no real middle class. There are the people that are above 140K and then there's everybody else in poverty.

And if you look at the census data and you look at the percentage of Americans that are struggling, those that earn between 100 and 200% of poverty, that percentage has actually fallen.

So the good news is the American economy seems to be doing a good job of not just getting people out of poverty, but getting people out of that struggling bracket, out of that death valley.

and into a place where they're making 200% of that poverty line. So they're moving up.

So the article is important because I do think it starts to say, look, this affordability thing has become a buzzword.

A lot of people on the left and the right are using it to try to implement and afficiate. It's really important for us to be grounded in the facts of it.

And the facts are that childcare costs have become an overwhelming burden for many families. We probably need to figure out a way to deal with that.
Housing costs are out of control.

For younger people, student debt is problematic.

But on the other side, the American economy still does an incredible job of getting people from those lower rungs to multiple hundred percentages of that poverty line to get them on the way.

And we just need to figure out how to push people up that staircase faster.

And it feels like this dovetails, Chamaf, with a discussion we had a couple of weeks ago when a viral clip of Ben Shapiro talking about, hey, just opt out of New York City, opt out of San Francisco.

And this whole thing looks completely different. You know, the idea of somebody who is up and coming living in Manhattan or San Francisco is a bit crazy.

And in other countries, we don't look at living in Paris or Hong Kong, you know, or Dubai as like that's where you start your career and you live in the city center. Yeah, Freedberg?

You're saying people

like would move? I'm not sure I understand.

The point I'm making is to define a poverty line

in San Francisco versus Austin or Houston is incredibly different because the cost of living is dramatically different.

Two, three, four X, you know, the cost of a nanny in San Francisco or New York is dramatically different than if you live 30 outside of a city center. One of the challenges America faces is

government programs create an anchor. They are a shackle.
They hold people back when there are supposed to be support payments.

And the problem with this, that this article highlights is that the supposed support payments actually create an incentive or a challenge in moving up the wrong or up the ladder.

It's probably the case that it is a lot easier to move up the income ladder if you're in certain parts of the country than if you're in most of the country.

And so most of the country is stagnating wages, but they still feel the effects of inflation. And these government programs keep them stuck in the position that they're in.
This is the spiral

of socialism.

The government programs that are meant to provide support to people require an increase in taxation. That revenue has to come from somewhere.

That taxation ultimately leads to an attrition of economic value in that region. And then you have to increase taxation more, and then you end up in the spiral.

And we're seeing this now, not just in New York, where Momdani is proposing to increase taxes, but across the entire West Coast.

We talked about the 5% billionaire tax that's being proposed as a constitutional amendment to go on the ballot in November.

There's also a major challenge underway in Oregon, where the governor is now trying to figure out how to keep businesses in the state.

The CEO of Columbia Sportswear, one of the biggest employers in the state, came out this week saying that his advisors have recommended that he leave the state.

And in Washington, there is a proposed bill right now to implement a 5% tax on the payroll of employees making over $125,000 per year.

And Microsoft, Amazon, Costco, and some of the other big employers in that state are now trying to figure out what they should do.

And in California, as you guys know, in the last couple of quarters, Tesla, Chevron, McKesson, Oracle, Charles Schwab, C.B. Richard Ellis, Hewlett-Packard have all left the state.

Palantir, SpaceX, I could go down this list. Because as the tax burden becomes too high on those companies and there's an alternative to them in in the country, they'll leave.
And then

you have this spiral that happens where the people that are in that state say, wait a second, there's no jobs, there's no income gain, we need to increase taxation and the tax bills get passed.

Norway 2022 passed a wealth tax. The wealth tax was supposed to raise $146 million of incremental revenue per year.
Instead, what happened?

$54 billion of net worth left the country and they actually had a $448 million tax loss. The taxes declined rather than.

Did they reverse it afterwards or no? I'm actually not sure of the state of Norway.

Microsoft's president Brad Smith has said that tech jobs are going to leave Washington state if this payroll tax gets passed. And this is the cycle that's underway.

And it starts with the government spending.

If we didn't have the government spending the way it does, where the government's running a deficit, California is now expected to have a $50 billion plus dollar deficit.

then they don't need to increase taxes. And this is the core motivation.
Once you're hooked on the government for some sort of benefit, it's very hard to unhook yourself.

It's very hard for a company or a union or an organization to unhook themselves. And it definitionally becomes a spiral.
You will not give up that benefit.

And so you have to spend incrementally more and more and more and more. And as you raise taxes, you end up losing the tax base and it becomes a deficit spiral.
That's what leads to socialism.

And we have seen it time and again, it's not a big revolution.

It's not like we see where you go from socialism to democratic capitalism, where you have a revolution in the streets, socialism emerges slowly.

It's like a quiet sort of hum, and then it becomes a roar, and all of a sudden you're a frog in a pot and you don't realize you're being boiled.

Pull this up, this clip from this is episode seven of All In. I don't think democracies end with a bang, I think they end with a whimper.
And I think that's been the case historically.

And, you know, no democracy has

lasted.

Our democracy in the U.S. has lasted longer than many.
Democracies ultimately enable freedom of operation and free markets that result in greater progress than any other governing system.

The problem with progress is that progress is asymmetric. You have some people who progress at a much greater rate than most, and it is that delta that motivates the end of that system ultimately.

While everyone in the United States or the average and even the bottom quartile of the population in the U.S.

is better off than they were 50 years ago in terms of income and healthcare and shelter and access to food and access to all these things. The top 1% of the U.S.
is further ahead than the median.

And it is that delta that motivates the end of democracy. And it is that which is then perceived to be unfair about this governing system.
And that ultimately results in fascism or socialism.

And then fascism results. Socialism ultimately restricts anyone from progression.
And that's why fascism and socialism ultimately end up in some sort of democratic outcome. And it is a cycle.

And we're kind of in this awkward phase of trying to figure out what the hell we're going to be next.

And I don't think that awkward phase is realized in the next presidential term, but it is going to be realized in our lifetime. And I think that's where we're headed.

Midterm's probably going to go to the Democrats and the House. And I think you're seeing Rokana.
Gavin Newsom yesterday on stage at Deal Book talked about redistributing wealth.

Rokana is talking about redistributing wealth. This is becoming the Democrat Party line.
And they're going to end up trying to seize this moment.

to take these socialist principles because everyone is feeling the burn. They're feeling the loss of benefits.
They're feeling the lack of progress.

They're having a tough time moving up the income ladder and they're having a tough time paying their bills. And so this is the moment where this democratic socialist movement takes foot.

And probably by 2028, the presidential nominee is going to be not necessarily a self-declared, but probably a referenceable

socialist. Democrat socialist.
Yeah. Democrat socialist.
I mean, best advice, have two plans. One, a state that is committed to capitalism.
Texas comes to mind.

And number two, you're going to have to have a country as a backup plan in case this goes across the whole country.

Have you guys been tracking the California wealth tax as a former California resident? I'm curious how you're interpreting these recent moves. I think we're all seriously thinking about moving out.

I mean, it's kind of crazy. But did you see, I think Newsom came out and said that he was going to oppose it.
Is that right?

But it doesn't matter because if the California voters voted in, it goes immediately into

the Let's not look a gift horse in the mouth here. I think this is a moment to thank Governor Newsom for representing the interests of tech oligarchs like us.

We really appreciate you coming out against this wealth tax. Thank you.
So thank you. Thank you, Gavin.

We really appreciate it.

On behalf of all the tech oligarchs, thank you for opposing this wealth tax. In fact.
The All-In Podcast endorses Gavin Newsom's support of billionaires and centimillionaires everywhere.

He supports all of us equally, even the poor centimillionaires and as high as the billionaires and even the deck of billionaires who we have some.

Thank you for standing up against the Bernie Sanders AOC wing of the party. Yes.

Somebody has to stand up against this democratic socialism. And Gavin Newsom is the guy.
What do you think happens if Fitch just taxed 5% of all net worth?

And you have a bunch of illiquid private assets? What are you supposed to do? Chaos. Yeah, it's going to be a mess.
By the way, what that bill Chamoff says is you can have a deferral.

So you can actually defer the tax payment, but you have to have it booked that year. So

you can defer it, but you can defer it into one-fifth payable for a year for five years. So that's not really a deferral.
That's just installments.

I think they said to five to seven percent interest. Let's just say that we could do a financing for something that we've started,

but it just all of a sudden, what is a financing? It's nothing. It's somebody's guess about future value.
It has nothing to do with today's value, right?

But if a financing for a company all of a sudden would trigger a bunch of phantom tax that's due

that I mean, I'll be honest, I don't have money sitting around to pay 5% of an imputed valuation of a company that I'm in the midst of building.

Look at what Sachs just talked about. He had to sell his private assets at a 50% discount.
Oh, I would have to, I would have to,

exactly. So you create this like negative, reflexive downward spiral.
And it doesn't stop there. So think about where this goes.
So yes, that's a problem for rich people. Great.

No one gives a shit about us. No one gives a shit about people that have to sell highly valued private stock.
But where does this go?

In the proposed billionaire tax, it actually gives power and authority to the California state legislature that they can actually redo this wealth tax at a different level and a different rate in the future.

Think about what that does. It now gives property seizure rights to the California state legislature to set a value level.

So anyone now that's got over 100 million net worth, and then it becomes over 10 million, and then anyone with a million dollar net worth, and the state can take 5% of your assets every year.

Very quickly, it becomes the process by which socialism and the socialization of assets that gets seized by the government is realized. So what's the bulwark on this?

This is why I've been saying for years, this is the direction we're headed because the funding is. But

I give you the victory. Congrats.

But the root cause of it is government spending i think it's pretty it's pretty straightforward you just move to a state that is committed to capital capitalism and but then it becomes a federal issue jkel and then if that doesn't work you're going to need to have an escape hatch to dubai we have a we have a problem in this country and the problem is too much progress too much progress too fast has led to a distribution of capital that is so asymmetric that gavin yousome said on stage yesterday 10 of the population own two-thirds of the assets that may or may not seem right to to you, but that is the reality of what happens when you have progress, when you build technology companies, when you build car companies, or when you go, when you build AI.

When America wins globally, you say America, but it's not all Americans. And this is the point.
This is what's going on.

Those of us who are on this Zoom and our cohort of friends are the ones who have mostly benefited from America, quote, winning. The rest of America has been left behind.
True.

And the mechanism, and the mechanism for recapture, the mechanism mechanism for restoration of equality, as everyone views it, is these measures, these voting measures.

These electoral councils. Let me give you two.
I understand that's how people feel. And it is true that we have this disparity of wealth.

I think the counter argument that most people would make is, well, what is our unemployment rate? How many people around the world are trying to get into this country?

And what is the status of folks coming up in this country? If we didn't have the problem with housing and education and healthcare, those are the big three. That's what I think this is really about.

If you solved housing, which was solved in Texas and Florida and Nevada, they let you build supply. People don't feel as bad about their lot in life.
They don't feel as bad about their progress.

If we solved tuition and we paired it, like we've talked about countless times here and the loans matched the outcomes, we would not have this.

And if people felt didn't feel the fear of going bankrupt from healthcare, I think we would have a much different country.

I think that's what the referendum is going to be in 2028 is those three issues. If you're going to be president, you got to solve housing and get people out of the way and build housing stock.

Number two, you got to give some people some basic health care so they don't feel they're going to get bankrupt. Number three, they got to fix education.

Those are the three horsemen of the apocalypse and socialism. In my thing.

I think collectively, we will solve this problem. I think you're too rational.
The way politics works is you find a group to blame and you blame them, and that's how you get elected.

Well, maybe I'll run for fucking president. The group to blame is going to be the tech and the elite.
I'm the only one of the three four of us that can. So we'll.

Well, I got a kitchen cabinet, by the way. We'll just run it as a fantastic four.
I'll be the figurehead and then we'll just sit there. Let's solve these three problems.

If when I run for president, I'm going to start 10 new cities with a million houses in each. That's going to be the number one priority.

Number two priority is universal health care for everybody using technology, GLPs, Daniel X, 3D scanner, Prunovo, whatever. And then number three, I mean, just trade schools.

Let's make trade schools schools free. We just talked about electricians.
We've talked about Generation Tool Belt. Let's make trade schools free or make them $20,000.

You can pay it back over 20 years, $1,000 a year, no interest.

Come up with that. That's the platform that wins versus let's raise taxes to 60%.
Because you raise taxes to 60%. I'll tell you what's going to happen.

People are going to retire and stop investing in companies. It's not worth it to go to work and give 60 or 70% of your outcome to the government.

People will just stop working, which is what happened in Europe. People are just like, screw it.
I'll just be rich. I'll stop investing.
It sucks, man. I think it sucks.

I think there's a clear path out. There is a clear path out.
Solve the three biggest. I think, look, I think AI is a path.

If we get leverage into the hands of every person in the United States, in the world, if we get abundant free energy through new energy systems.

And if we can extend human lifespan and health span, I think those are the three abundant vectors. And if those three vectors hit, I think all bets are off and we we can get out of this nasty spiral.

But I do think we have the choice every day. Do we want to go into the Enlightenment or do we want to go into the Dark Ages? I keep saying that.

Let's solve those three big problems. All right, listen.
Another amazing episode of the All Man Podcast.

I think JKL just announced he's right. I'm going to ask.
PresidentJason.com. Go ahead and say, is Jeff Bezos going to be your running mate, JKL?

He did say. Bezos can be your VP.

Oh, no, wait. Jamie Diamond and Bezos.
Go to boosted.ohollo.com if you want to buy merch. I got this great pink hat on boosted.off.
Pink hat. Oh, man.

And we're, we're also vested in your success when you didn't allow any of us to invest in your company. Thanks, Bestie.
Yeah, we all feel so vested.

I supported Freeberg for the last five years, made him famous, and all I got was an Ohollo hat. How about you, Chamo? You got a quarter of a hat.
The equity. You got a hat?

And I invested in his three companies that failed.

But I have no Oho shift. Can you just give us 10 bips each in Ohalo so we can end this? No, I'll take a hat.
I'll take a free. You'll take the hat or 10 bips.
How about five bips and a hat?

I'll take a hat. I'll take a hat.

Don't tell people you're running for president.

That's my tip for being facetious. Can I get a parking? Do you have a bad gentleman? I got to go.
Love you. Take care.
All right, everybody. Love you, besties.
Bye-bye. Bye-bye.

We'll let your winners ride.

Rainman David Saxon says

we open source it to the fans and they've just gone crazy with it. Love you,

What's going on?

Oh man. My habitasher will meet me at Winnie.
We should all just get a room and just have one big huge orbit because they're all just useless.

It's like this like sexual tension and they just need to release somehow.

Wet your beat beat. Wet your

mirror mirror feet.

We need to get Murphy's army.

I'm going all in.