YouTube Deep Summary

## Bestie intros: The Core Four is back! [00:00] Did you guys see this uh White House video. Oh, is there a White House video. I honestly think that was the funniest post by a White House ever was the Daddy's Home video. I feel like popping bottles to this. Come on now. Up in the club. Oh, in the VIP popping bottle with the rainman. Let's buy two bottles of that all in tequila. If we get a double. That is the best. The backstory to that is that Mark Ruto, who's the secretary general of NATO, called Trump daddy at the Yeah, he called him daddy. Guy got weird. Ragg, you missed it. We were just up in the club. You want to go back to the club for a second. I do. I love the club. You ready. I love the club. Popping some bottles with the NATO summit. We're doing it again. Come on, Freeberg. Let me see you stand up, Freeberg. your Sultan of science. What club are we going to this weekend. Oh, daddy's home. We are going to bring the club to us. I think it's called Club NATO. Sash, can you get the hot pass. You want to come to Vegas this weekend. Uh, maybe we'll talk about it all. JL, come out. Where are you. Pop on a Southwest flight. Meet us in Vegas. [Music] Let your winners ride. Rainman David and we open sourced it to the fans and they've just gone crazy with it. Love you. ## Launching All-In Tequila! [01:38] All right everybody, welcome back to the number one podcast in the world. The AllIn podcast, your favorite podcast. We're back. We got the original quartet here and everybody's really excited because we had a fun time on Saturday night. What a party we had at Delilah. All four besties there. Step and repeat. Freeberg, you lost a bunch of money playing bomb pots with me and Rob Goldberg. You drank a lot. You looked great. Your impressions of this evening. Oh, I loved it. It was great. I think the tequila turned out fantastic. This tequila has been I mean you guys realize when we first started talking about this this was like two and a half almost three years ago when we first started talking about this and it is finally here. It took forever to get through this uh this kind of design development process but man I think it turned out great. I thought it was awesome. Everybody at the Everybody at the party was surprised by how good it was cuz they thought that I don't know, we were just doing this as a gimmick or something, but we actually put in the time to make it great. A lot of time. A lot of time. So, talk a little bit about the sourcing cuz I think that that sourcing was very important. Well, we went down to Tequila, Mexico. There's only one part of Mexico that's even allowed to be called uh tequila. And we found a distillery that had been aging some agave in American oak whiskey barrels for 5 years. And normally extrajo is aged for 3 years. So it was pretty rare to find a cache of 5year aged. And so we basically bought it all. But there's only enough for 7500 bottles. So that's what we did. But you know, this is not about creating some large new tequila label. This is more about creating something that we ourselves like and that's what we did. Sort of a small batch product. I mean, the money is not going to change anyone's life, you know, except maybe yours. Yeah. But I don't know. Uber hit another record today. So, with Uber past 88, you guys are all I don't need to be here anymore. Oh my god. But look, we do things because they're fun. And it was fun to create this. Here, I've got the It is fun. It was really fun. Well, look at this thing. I mean, beautiful box. slides open. It's back lit in the box. So cool. So that out of the box experience is just amazing. Yeah, it's a great unboxing. Steve Jobs would be proud. Tell us about the bottle design. That was a lot of work, Sachs. I think this probably took an extra 6 months to get this right if I'm if I'm recalling correctly on the schedule. This is super complicated to execute. Well, the bottle is designed after a stack of poker chips. And so you can see the chips are stacked and they're a jar. So, it's like highly it's a lot of texture here. It's made with glass and then there's these black chip accents that are actually painted onto the bottle perfectly. So, this took a lot to get right. We went through a lot of prototypes to get this and it just looks amazing. All right, there you have it, folks. The All-In Tequila as promised. It's finally available on our website. So, if you go to tequila.allin.com, you can now buy it. There's only 7,500 bottles. I think we're only going to sell 6,000 because we're going to keep the rest for our own personal stuff. We sold a good chunk already. Like I think we're So they're going really fast. We just opened up the website. Previously, they were only available to people who had attended the All-in Summit. They could pre-order it and reserve, but now the website is open. Oh, wow. Beautiful. There it is. Okay, there you go. Order your bottle, limit to two, and uh go ahead. This is, you know, this is not a a cheap product, but you know, if you look at the the pure competitor for this product is the Clausul Ultra, which I think sells at $1,700 a bottle, although sometimes I've seen it sell for as much as 3,000 a bottle. So, we're priced competitively with that. There you go. And each of the those boxes, and when you open it up, the lights up and you can recharge it. So, it's a keepsake, right. There's a charging port in the box so that it never runs out of a battery to power the So genius. So genius. I love that little touch. All right, folks. There's tons in the new look at this room service coming. I mean, before we get to World War II, let's get some room service at the Peep that out. Do you want a side of caviar with your uh besties all in tequila. Listen, being an elitist, guys, is very hard. That's what I was tweeting how stressful it is. Somebody was saying that we weren't living up to our job as being the elite. Oh. And I was like, man, this is it's really stressful being an elite. You know, we need we need a drink. Absolutely. I'll take a double. You have no idea. So, did you get did you go with the on your eggs Bernese there. Did you go with the truffles or the caviar. What did you do. Well, I I honestly I um I went quite healthy. I have some avocado. Okay. Very nice. I have mango. Mhm. And I have some eggs. Where are my eggs. Up to $72. Okay, David, do you want to see my pillows with my initials on them. Yeah. Oh, lord. Here we go. This is the best thing that the does. Shout out to our friends at Politico. How out of touch we are. Look, Sax, they always put my initials. Oh, they do that for you. They do that for me. Isn't that incredible. Okay, here we go. All right,. ## US negotiates Iran/Israel ceasefire: what it means for the future of the region [07:01] there's lots to discuss in the news. We'll shift from conspicuous consumption and talk about the 12-day war between Israel and Iran. It's two weeks later, obviously a quick recap here and then we'll get the besties take on where we're at today, June 26 when we tape this. Friday, June 13th, Israel launched a surprise attack, took out a bunch of uh Iranian military officials, some folks who work on the nuclear program and they traded missiles for about a week before everybody debating if this was going to be World War II. And on Saturday, June 21st, quite shockingly, the US jumped in and carried out Operation Midnight Hammer. I've had a couple weekends in Vegas that have been called Midnight Hammer. Oh, yes. Midnight Hammer, also known as Wow. There we go, folks. Um, over a dozen bunker buster bombs on two, maybe three of Iran's key nuclear facilities, Fordo and Natans. These bombs weigh 15 tons each. They'll go deep underground. Israel doesn't have them. And that's the reason we're given of why we were pulled into this is because we're the only people in the world who could have taken these out. On Thursday morning, chairman of the Joint Chiefs of Staff, Dan Kaine, showed a video. If you haven't seen it, folks, this came out this morning. Here's the video. It's a video of a of of what they call a massive ordinance penetrator. Yeah. It basically goes through the ground. I think in this case, it's going through a ventilation shaft and it doesn't immediately go off. It basically burrows to its maximum depth and then goes off. This looks like a test to me. This is just demonstrating it. This is a demonstrating how it works. Yeah. And so, uh, here's the before and after photos you've probably seen. Kind of hard to understand what's going on here, except for the discolorization. Obviously, we're going for things underground. And then, shockingly, Iran did a um a I don't know what you'd call this, a ceremonial response sacks, where they send some missiles to one of our bases in Qar. They gave us a ton of notice. None of them landed. And then uh both countries have been bombing each other a little bit after Trump said he negotiated a ceasefire which made our president a little bit upset. Here's the clip of the president not dropping a MOAB but dropping an F-bomb. Israel. As soon as we made the deal, they came out and they dropped a load of bombs the likes of which I've never seen before. The biggest load that we've seen. I'm not happy with Israel. You know, when when I say, "Okay, now you have 12 hours. You don't go out in the first hour and just drop everything you have on them. So, I'm not happy with them. I'm not happy with Iran either. We basically have two countries that have been fighting so long and so hard that they don't know what the they're doing. Do you understand that. You had Trump is not happy he did the lean in. Did you notice the lean in there, Saxs, when he dropped the fbomb. Well, in in fairness, President Trump's not the first president to drop an F-bomb in frustration with Netanyahu. It was reported back in the '9s that Bill Clinton, when he had to deal with Netanyahu as being very obsinate and was basically rejecting all of Clinton's entreaties and plans, Clinton is reported to have said, "Who's the [ __ ] superpower here?" you know, in frustration. So this is not the first time that an American president has gotten frustrated with Netanyahu. But I think people reacted quite well to that on the whole because it showed that President Trump was willing to well first first of all he negotiated this ceasefire which was amazing. Then what happens is that you know there was this deadline and it was like in a in a fight where they ring the bell and the fighters keep slugging with each other. Yeah. It's like they both want to get a few extra hits in. Mhm. And uh that's licks that's yeah that they got some last licks in but President Trump negotiated the ceasefire which was extraordinary and then he's willing to reprimand Israel for basically violating the ceasefire too which you have to do if you want to enforce it. So I think that's basically what happened there. Now you sax I'm sure the audience wants to challenge you on this. You were hey Trump is a never get involved in forever wars. Obviously it looks like this might not be a forever war which would be fantastic if that turns out to be the case. and um you were saying, "Hey, the reason to vote for Trump is he won't get us into another war and here we go." Uh and obviously Tucker, Tulsi, there's a number of people who are did not want to do this and you were one of them. So, how do you reconcile all of this as somebody who did not want to see us do this. President Trump accomplished that. We're not in a forever war. We're not in a war with Iran. You look at Mark Levin today, he's apoplelectic because he and people like him were advocating for a regime change war and they felt like this was the perfect opportunity to drag the United States into such a war and President Trump resisted that and instead negotiated a ceasefire. So it seems to me that he lived up to exactly his promises on this. Look, I think President Trump had to thread a very difficult needle here. If you look at polling, the vast majorities of the American population believe in two things. Number one, they don't want Iran getting a nuclear weapon by like 80 something%. They also by 80 something% don't want to get dragged into a new forever war in the Middle East, right. They don't want to be in a long protracted war with Iran. President Trump managed to accomplish both those objectives. He took out the Iranian nuclear sites in these highly precise targeted strikes, but he did not get dragged into a new Middle Eastern war. In fact, he negotiated a ceasefire and at least an end to the war right now between Israel and Iran. I think there's very few leaders who could have threaded this needle. Imagine if Kla Harris were president. Just do the counterfactual. Would she have had the situational awareness to realize that when the Iranians struck at our base in Qatar that it was performative, that it was telegraphed and that it was meant to basically be for domestic consumption and end the war. She might have escalated it. Certainly, you know, a lot of the neocons who were on social media were saying, "This is our chance, right?" When when the Iranians engaged in that performative hit on on Qatar, they were saying, "We got to escalate. We got to basically bomb all of Iran now and get into a big war." And Trump, he had the overall awareness of the situation to avoid that. And this goes back to his experience with Solommani back in the first Trump administration. The Iranians did the same thing where they fired some missiles at American bases, but they were telegraphed. We were told in advance they were coming. They were easy to avoid. No Americans got harmed. And then Trump ended the conflict there. And I think that a lot of presidents might have gotten sucked in to a new Middle Eastern war. Chimath, let me pull you in here. Uh, obviously little cognitive dissonance. Folks didn't want to go to war, but we don't want WMDs in the hands of Iran. How do you reconcile all of this. Does the outcome make it okay uh in your mind or would you rather have seen we not get involved in this. Can I uplevel this slightly. I think that this has been probably the most important week and I would almost say most important few months in US politics in 30 or 40 years. And the reason is that it starts to converge a bunch of things together that I think are really worth putting on the table. So from my perspective, I think what President Trump has done is almost single-handedly bring back the United States as the global superpower. And I would put that in all caps. So what does it mean to be a superpower. I've said this several times, but just to be slightly redundant. In order to be a superpower, I think you need to have three things, but they work in a hierarchy. The first is that you need to have technical supremacy. And then from that technological supremacy, you need to establish and project economic supremacy and military supremacy. So if you look at the first one, you saw a tactical demonstration of technological supremacy with the B2 bombers. But taking a more general step back, if you look at the largest companies in the world, who are the ones that are actually driving the world forward, these are all American companies. I think these last few months you've seen America firing on all cylinders technologically economically. At the same time, you now have the stock market back at all-time highs. You have interest rates incredibly starting to compress even in the absence of the Federal Reserve willing to act on data. So, you're projecting economic supremacy. And then these last few weeks, frankly, have been a pretty clear-cut case of military supremacy. And so I think what's pretty simple now is like the US is essentially telling the world our words carry weight again. We're going to shape the global order. Countries will now have to calibrate their actions around what the US is willing to tolerate and what it isn't willing to tolerate. And in the case of Iran, the president made those lines, I think, really crystal clear. He warned them a 100 times where the line was. And he was clear, you cannot build nuclear weapons. And when the line was crossed, and look, I think the the CNN's of the world want to debate that the line wasn't crossed. All I can tell you is I don't know because I don't have access to the intel. I believe what he and Tulsi Gabbard and JD Vance and Marco Rubio and Pete Hexith are saying is that they crossed the line and then he showed that he will use decisive military force when that happens. But then here's what's crazy, and this is where I think you become a real superpower. It's what happens after once you cross the line, you notice that he doesn't try to humiliate or dominate Iran. He tells Iran that he wants them to stabilize themselves. He told them that he wants to see them trading oil with China. He wants to see them improving the lives of their people because he realizes that a stable Iran is a stable Middle East. So, I think it's really amazing. And then the the fact that he was able to bring Israel and Iran, who's been on the verge of some kind of conflict for decades, and broker a ceasefire, it's a really important moment, I think, in American history. I really do think that if you look at my little framework, it is the closest thing for us to being able to say that we are truly a clearcut singular hegeimon global superpower again. And that's really exciting. Well, he did he definitely did provide that golden bridge for Iran to to cross over to and maybe move into another phase. But Freeberg, maybe you could steal me the other side of this just for the discussion here. This could have gone another direction. We could be sitting here and there could be terrorist attacks or sleeper cells, you know, in the United States. It could turn out when we do the postmortem here that they weren't close to having a nuclear bomb and we did this and we got goated into it. So maybe obviously things have gone well to date, but things might not have. So maybe you could steal man the other side of this. What's the argument for not having done this. And uh what if things had gone another way. How bad could this be. Um I don't know if this is over and so well that's my point. Yeah. I mean, we're kind of in the middle of a choose your own adventure book here, and I've got to imagine that the Israelis and Netanyahu, who's been pretty vocal about this regime that's been shouting for decades now, death to Israel, death to the USA, needs to change, is going to suddenly say, hey, let's take a beat and walk away from this, and we'll all kind of have peace in the Middle At least I think we've got to expect that there is another page to turn that's coming. And I don't know if you guys heard I don't know if it's genuine or if it's authentic or not. Did you hear that audio of one of the kind of Mossad or IDF people calling an IRGC commander and telling him that he has 24 hours to leave Iran with his wife and child. Did you guys hear that. Yeah. I have not. I saw it. Yeah. I mean, I heard it. It's pretty incredible. And I've got to imagine that there's going to continue to be effort to destabilize whatever regime remains in Iran by Israel, Mossad, and this isn't going to be kind of a a quiet peaceful transition. There's going to continue to be more conflict. Whether these guys are going to be trading missiles back and forth tomorrow, I think, you know, we don't really know. But this isn't over. And I do think that the next set of actions is going to be critical. But what I was pretty surprised by, I did not like everyone was saying, "Hey, we're on the brink of World War II." I mean, there was some serious statesmanship that must have gone on to keep China. And I have no idea. I've had no insight or conversations with anyone to give me any sort of proprietary access to knowledge about what's going on here. But I've got to imagine there were calls to China and Russia that kept them in the loop and kept them in play on how this all played out. because China and Russia, the whole fear was this was going to create this magnet in the Middle East that everything was going to rush in and we're going to catalyze World War II and it didn't happen. So, I do think that, you know, first of all, nothing that folks predicted actually happened and no one predicted what did happen. So, I I'm not going to sit here and try and I'm not going to sit here and try and predict what happened next. And I will say if I'm thinking about like, you know, game theory optimal poker play, I got to give credit to this president because it was completely unpredictable what was coming next. And I don't think that there was a really clear path on what he was going to do. Just like was what has happened repeatedly. Everyone always slams a table and says he's starting World War II. He's driving economic collapse. Everything's about to end. And then it turns out he kind of ducks and weaves and finds his way through. And everyone's like, "Holy [ __ ] I didn't expect that to happen." And that was it's very unpredictable what's going to happen next. So I am not going to sit here and try and estimate what's going to happen next. I can tell you I don't think the Israelis are going to sit by quietly and allow this Iranian regime to continue to go out and build up a military that's constantly shouting death to Israel, death to the USA. And I think that they've taken their first shot and I don't think it's their last. So we'll see how this all plays out. I really don't know. Well, I'm sure I'm sure that's right. Let me just tee up one person who did get it right. Here's John Mirshimer at the All-In Summit just nine months ago. Let me play this clip here and get your reaction. Saxs, to counter the Iranian escalation scenario, the fact is Iran does not want a war with the United States and the United States does not want a war with Iran. And it's the Israelis, especially Benjamin Netanyahu, who has been trying to sort of suck us into a war because he wants us, the United States, to really whack Iran, weaken it militarily, and especially to go after its nuclear capabilities because, as you well know, they are close to the point where they can develop nuclear weapons. So, the Israelis are the ones who want us to get involved in a big war with Iran. That's the escalation flash point. And the $64,000 question is whether you think the United States and Iran kind of colluding can work together to prevent the Israelis from getting a that that question will be answered based on the next who who who leads the next administration. Well, if you believe that it matters who leads the next administration, that's true. And there's Saxs, there's you laughing for this incredible insight, which is as you were saying last year and and Mir Shimemer's been saying this was manifest destiny. This was going to happen no matter who was president and here we are. So your thoughts on Mir Shimer sort of I mean wow he just nailed it there. And that was to your question Freedberg by the way. So well done uh to Freedberg. We didn't put your question at the beginning because he he went on for five or 10 minutes there. But go ahead, your reaction to Mir Shimemer's incredible prediction. That's Professor Mir Shammer being prophetic as as usual. But let me go back to a point that Freeberg was making to Freeberg's point here. This is not over. Iran and Israel are mortal enemies and we have a ceasefire here. We have a pause in the action, but it's going to flare up again at some point. The question is what US policy is going to be. And I think that what President Trump did over the past two weeks is make it clear that number one, the United States does not want to see Iran get a nuclear bomb and that we are willing to take military action to prevent that, but that that action would be narrowly targeted as narrowly targeted as possible to achieve that objective. Number two, that the United States does not have an interest in going to war to basically achieve a regime change. If the people of Iran want to make Iran great again by, you know, rising up and toppling the government, then that's up to them. Certainly, I think we would welcome that. But the Trump administration rejected all of the calls over the past week or so for the United States to plunge into a regime change war in Iran. And that's why the neocons right now are not happy at all. So that's point number two. Look, I think Trump found the right balance here, which is we are going to be narrowly focused on preventing a threat to the United States, which is Iran having a nuclear bomb. But we're not going to go plunging into another forever war, another regime change operation. We've had plenty of experience with that in the Middle East. None of it worked. Every time we went for regime change, it backfired. Backfired in Iraq, Afghanistan, Libya, and on and on. So, there's no reason to believe regime change would work. And by the way, there's no way to get regime change in a country unless you send in American GIS to basically keep that government propped up in in power because it's almost certainly going to be perceived as a puppet of the United States. I mean, if you put, you know, Raza Palavi or something, the Shaw's son in power in Iran, he's going to face an insurgency right away, and there's no way that his government's going to stay in power without the American military protecting him and keeping him in power at the end of a rifle barrel. So this whole idea that you can achieve regime change without its evil twin, which is nation building, is a total fantasy. You can't do it. You would need an American occupation going on for decades. And I think that the Trump administration wisely rejected all of this giddy talk. Remember, in the first couple of days of that Israeli surprise attack where it was Israel who hit Iran and there was all this talk about decapitation, that the Iranian regime was about to collapse. It just needed a little bit of a push. Lindsey Graham. Lindsey Gra. That's what Lindsey Graham said. That was all heady talk that turned out not to be true. There's no question that the Iranian regime took some damage, but they did not collapse. And in fact, if you look at history, one of the things Mir Shmer's pointed out is that you don't get regime change just through air power alone. It takes boots on the ground. And most Americans are not willing to put boots on the ground in Iran to change the regime there. We believe that is sufficient just to keep Iran from having a nuclear weapon. And that's what American policy should focus on. Yeah, I really fell for this. What do you think. Well, I really fell for this check raise from Trump who was like, "Yeah, no, we're not doing this. We're not doing this." And all of a sudden, he does it, right. Nobody expected him to do it. Everybody thought he was going to not intervene. And um I as a Gen Xer like you, Saxs and and I guess Freeberg and Shimath as well. When I saw them building the case here, the Lindsey Grahams, you know, the Hawks, etc. reports of WMDs that were imminent. Who knows if that's true. These people support terrorists. They're trying to assassinate the president became part of this. Uh remember that for last time with Bush Senior spreading democracy in the Middle East, the regime changed stuff. That made me all very nervous. And I think the most important next step here is that this administration explain in detail to the American people so we don't have another dem WMD situation. Just honestly the truth like did we hit them. Did we hit some of them. Was there imminent. Was it sort of imminent. We just need to have full disclosure here. I don't like the attacking the press for a leak inside of the administration. It's the administration's, you know, responsibility to not have leaks. And it's the press and the opposing party, whoever opposes this action to really vet this. And we need that part of the democratic process. I hope we don't shut that down and we just blindly follow, you know, uh, the leader because it went well. Because this isn't over, number one. Number two, it did go well. Huge credit to Trump for that. If it does go well and he ends the war in Russia's invasion of Ukraine, like, give him the peace prize. I'm all for it. Fantastic. But let's get the disclosures here and let's not blame the press for getting a leak. Let's actually look at this and explain to the American people what we accomplished, what didn't get accomplished, and what the realistic next step is. And I I give him a lot of credit for telling Israel where the line is and giving the golden bridge to Iran. They will have a revolution on their own timeline, but we should not be part of that. Right. That's the lesson we learned to your point, Saxs. We can't be the revolution in Iran. They have to come from the bottom up. Absolutely. Let me Let me also disagree with one other thing you said, which is you you said you were starting to get nervous about the the the stampede towards war. I think you were correctly perceiving what was happening in the media. I mean, and this includes Fox News, especially Fox News. There was all this talk about how easy it would be. It' be a cakewalk, that the government was on its last legs, that it was weak, that it was basically almost toppled. We just need to push it over. You're right about the WMD talk, the talk about the assassination. This is all like a literally like a carbon copy of the arguments that were made back in 2003. It's the playbook to get us into the Iraq war. But look, I think two things are different now. Number one is President Trump is not George W. Bush. I mean, that was made abundantly clear. Number two is we now have alternative media that even though the mainstream media and Fox News was basically acting like this was 2003. You had alternative media and you had people like Tucker Carlson speaking out and Steve Bannon, I have to give him credit on this and others who are who are pointing this out and making the case that this would not go well. And I do think that it's been very helpful to have those chorus of voices as a rebuttal. Yes. You know, you correctly felt that we were being pushed into war, but I think this was different now because 20 years later, people remember what happened, at least enough do, that they're able to make the counter case. And I think that fortunately, we have a decision maker and chief who also remembers and listens to those arguments. All right, I think we've made some good progress here. ## How markets digested the last few weeks in the Middle East, crucial role of energy independence [29:48] Let's move on in the docket. We've got a lot of other uh topics to talk about. Obviously oil prices, Chimap, you had talked about those in relation to this action. You said, "Hey, if this goes poorly, we could be looking at a $100 a barrel oil." Quite um interestingly, while it did spike a little bit up to $74, almost hit your $100 chimoth, racing up from the $60 mark, you know, we come back down now. And I think people our energy independence here in the United States makes us not immune to this, but we're somewhat protected. And I think that's the great thing about energy independence. But here we are. The markets have digested this, priced it in, processed it in a way that I think maybe none of us thought it would. So maybe you could unpack your thinking now on the market's reaction to the war. The fear that I had was that if there was um protracted conflict, what you effectively would see is a bunch of supply go offline. And if that supply went offline and as long as the demand stayed even roughly the same, you would see prices go up. My thought was that the price of oil could double. I think Goldman had it slightly under a doubling. So that was definitely the the fear what folks had going into that weekend. But coming out of it, this is where I think you have to be very respectful of the fact that the market is really the sum of many, many, many millions of informed opinions. And I think what they saw was that Iran was not really in a position to do anything but capitulate and give up. And I think that what they also saw, whether you agree with the Israeli policy or not, was that they had systematically gone from where they are and marched eastward. Essentially, they effectively decapitated Hamas. They effectively decapitated Hezbollah. They effectively decapitated the Houthis. I think finally putting a nail in the coffin of this Iran nuclear ambition program was not just important for them but it's critical for Saudi and the UAE. You know MBS had an incredibly powerful quote which was if Iran gets a nuclear weapon we will have no choice but to get our own. Right. So by taking all of that risk off the table, what you're now talking about is an enormous supply that could essentially service world productivity needs unhindered because it's not just Iranian supply. You're talking about Emirati supply and you're talking about Qatari supply and you're talking about Saudi supply. So, I think what the market realized was, okay, now the Middle East is the closest it's ever been to fully monetizing the oil that they have and to invest aggressively into their own people. The second thing is that Steve Witco spoke about the fact that you should expect the Abraham Accords to expand. So if you think about that one-two punch, not necessarily from a geopolitical lens, but from an economic lens, the first punch is neutering the Iranians ability to be chaos monkeys in the region. But the second punch is the one that then now creates normalization across the region with Israel. It double and triples down the ability to monetize oil and start to invest those returns in future projects that have a much better ROI. All of that leads to cheaper energy and Iran becomes the odd person out here in this new, you know, federation of people in the Middle East who want peace and normal relations. I think it's a phenomenal question, Jason, but I think that's what the market sniffed out and I think that's what the market is now saying like that this is a chapter that we can close and move on. This could be a big paradigm shift and framework, the major part of this paradigm shift that we're seeing here comes from an investment in energy in the United States since the Iraq war, since the Afghanistan war. We now are energy independent. We're a net exporter. We've invested in solar. We've invested in wind. We are doing more drilling, nat gas. And this week, uh I think we saw some new starts for nuclear as well. So this time around when we look at our Middle East policy, it is not informed by our need for that oil. Is that correct Fber. In your mind. Well, I think you have to look at it on a global basis. Iran exports $60 billion a year and about 55 billion of that goes to China and that number is up from I believe sub 30% just a few years ago or sub 20%. So the relationship between Iran and China and the importance of that relationship to China's economy and productivity I think cannot be understated. So independent of the United States on a global stage, the situation with the supply of energy and the partnership on energy with what is effectively the US's largest rival now is critical to take into account when doing the calculus on how to resolve forward here. Which is also why and I don't think that we have perfect information. I don't think the public has been given perfect information about the statesmanship that's gone on between the United States and China or the conversations that gone on at a high level between the US and China or at a high level between the US and Russia regarding what is the right way to transition the region. When I look at the region and when you'd hear about other leaders in that region speaking publicly, the King of Jordan, MBS from Saudi, the Omanis from Bahrain, all of the other leaders in that region, even the Qataris who seem to kind of try to straddle both sides here, they all seem to have a very strong imperative and incentive to modernize the Middle East, to bring those economies into the global stage, to bring them into kind of a modern economy. Well, Jason, I know you've talked about this and you've visited and the rest of us obviously have relationships there, but there's a strong demand and a strong interest in this region and modernizing. And that modernization is going to benefit the world because they will ultimately be net exporters. They will ultimately net net producers of things that everyone else will buy and participate in. And they will also be very big consumers. They are already very big buyers of American technology and American businesses and also big financiers of global capitalism. So in that context, I don't think it's just about, hey, we got to go get the oil, or hey, we got to go get the energy. It's about how do you balance China's need for energy, how do you balance the Russian incentives, and how do you help the rest of that region modernize. And I think that's where there's a very complex dance underway that we have very little insight into the details of those conversations. And I'm not going to just sit here and be like very flippant about, oh, we should do this or we should do that because there's a lot at play. And I think that that is in my opinion the net calculus, the bigger picture calculus that's underway in trying to transition the region. Sax, let me ask you a question here. Leveling it up pretty well known. The Israelis have nuclear weapons and many of them and they have for some time even though they're not part of any of the treaties and they will claim they don't or or be a little koi about it. What is the argument for nobody else in the region being allowed to have one if the Israelis have many. And would you be okay with Saudi having nuclear bombs. And what is the argument we would make to them as the West, Americans, people who have nuclear weapons, Russia, China have them. Why can't Saudi have them. What's your best argument to them of not acquiring them. If is the Israelis have dozens to hundreds. Well, nuclear proliferation is not in our interest. We don't want more countries getting nuclear weapons. Obviously, some countries have them, but if you use that as the rationalization for everyone being able to have them, then you're going to end up with 200 countries have nuclear weapons. So, I think the nuclear non-prololiferation regime is in the interest of the United States. We all understand the danger of these weapons. The more countries that have them, the more dangerous the world becomes. Now, it is true that unofficially the Israelis have nuclear weapons, but like you were saying before, if Iran gets nukes, then Saudi Arabia will be forced to get nukes and so on down the line. And so there will be a domino effect with each country that gets nuclear weapons. More countries around them will feel the need that are threatened to have their own deterrent. And the question is just where you stop this. And I think we just want to stop it here. We don't want more countries getting nuclear weapons, particularly ones that we have hostile relations with. Yeah. And the the last country to give up their nuclear weapons, Ukraine. Really bad decision perhaps, I think. Well, that was in the '90s, actually. Yeah. Another country gave up their nuclear weapons program, which was Libya. Y and what happened to Gaddafi. He got killed by rebels who were being backed by the United States after he gave up his nuclear weapons program. Yeah, I think that was a really they had them though. They actually had the weapons, not just a program, right. But there's some there's some truth to that, but that's a little bit simplifying the situation because what happened is at the end of the Soviet Union, there were a bunch of Soviet nukes that were in Ukraine. But as I understand it, the launch codes were in Moscow. So these were Soviet nuclear weapons that happened to be on Ukrainian soil and then when the Soviet Union came apart they were there but they were always under the control of Moscow. And so I don't think that the Ukrainians gave up much because they were never their nukes. It's not clear they could have used them. And one final point on this is that it was the Russian government and the American government that pressured Ukraine to comply because we don't want more countries having nuclear weapons. Okay, let's um get on. ## Democratic Socialist Zohran Mamdani upsets Andrew Cuomo in the Democratic Primary for NYC Mayor [39:58] to this Democratic socialist who's on the verge of becoming New York City's mayor, littleknown New York State Assemblyman, Zoron Mam Donnie, took the internet by storm this week. Shocked the world, beating out Andrew Cuomo for the Democratic nomination. Here's the poly market chart. Just crazy. One month ago, Cuomo was at 93%. Zoron had a 6% chance. My lord, what a flip. A couple of things happened that led to this. Obviously, a bunch of viral moments. He's a great speaker. Reminds me of Vake in in that regard. Really good uh you know, in debates and and speaking publicly. Started rising in the polls. Got a ton of endorsements from millennials, Gen Z, AOC, endorsed him as well. And uh now he is mom Donnie is the 75% favorite to beat Eric Adams. But looks like Eric Adams is gonna get a shocking amount of support because people don't want a democratic socialist who's got some really unique and colorful history of becoming the mayor of one of the greatest cities in the world, my hometown. He wants to have free buses. Doesn't sound like that big of a deal. He wants to freeze rent and triple the development of affordable housing. City-owned government grocery stores. That sounds crazy. a $30 minimum wage. New York's at$,650, by the way. Uh he wants to defund the police, replace the cops with social workers in high crime areas. A bunch of really wacky, interesting proposals. And uh you were, I think, on to this early. Freedberg, in your predictions last year, you saw this coming. Again, if you listen to the number one podcast in the world, you're gonna get this information a year earlier than everybody else. That's why we are the number one podcast in the world. Freeberg, maybe you talk a little bit about your prediction last year and uh where we are right now and your reaction for this. I don't know, perplexing, shocking. Is this perplexing, shocking, or obvious to you. For me, it feels like actually a little bit of a beginning of a wave that's going to continue to sweep over this country starting in cities. And I think that we're at the very early stages. I think we'll look back and I jokingly say that Kla Harris is going to look like a conservative candidate pretty soon. And I do think that this is a broad kind of reaction to the economic condition of the United States. And I've talked a lot of people don't quite recognize and see how important the debt and the deficit is with respect to how it's ultimately going to lead to socialism as it has every single time in history when you've had a free voting democracy, a representative democracy that becomes encumbered with too much debt. So Nick, if you'll pull up this chart, it'll just show you a microcosm of it and specifically how it played out in New York and how it will continue to play out in cities. This is the total amount of student loan debt in the last 20 years. is the student loan debt has ballooned from 500 billion to 2 trillion. 4 million college graduates per year in the United States. About 40% of them have student loan debt that they leave. That means that in the last 20 years, 80 million people, young people have graduated from college. And they've accured $ 1.5 trillion of new debt. And based on the percentage and the distribution, that means the average debt for these individuals is sitting around $60,000. So you're a young person. Where do those young people go. Where do they live. And remember, there's about 32 million of them. They live in cities. They don't go back to rural towns. Most of that population sits in cities. It sits in New York, sits in Los Angeles, sits in Seattle, sits in San Francisco, sits in Portland, and sit in Chicago. And what we're seeing in those cities is a massive political shift. People call it left, but it's actually quite different than just being more traditionally left. It's really a revolution against the system that brought them to this moment because the promise that we gave in America, the American dream was if you will go to college, you will graduate, you will have income, you will have stability, you will be able to buy a home. And what we did is we increased the government's role in making that dream possible. And in doing so, we created effectively a system where we gave unrestricted access to capital which inflated the cost of education. People could go to school like Zoran and major in African studies at Bowden College. They could get a a loan and graduate with 200 $300,000 of debt and then never get a job. The guy has not had a real job. And this is the truth for 32 million young Americans. They find themselves living in places where they cannot afford to pay their bills every month and they will never get out of the debt cycle that they were thrust into and believe that they were going to be able to graduate from and excel in the world and increase. They all have what is called negative capital. They have debt and they will never be able to get out of that cycle. So where do you turn in that moment. You don't go turn to corporations to solve your problems. You don't go turn to your friends and your siblings and your family. They're not going to bail you out. You turn to the voting booth and you hear a guy like Zoran show up and say there can be a better path forward. The better path forward is the government can and should do more to help. And in doing more to help, we will increase government. We will tax the rich. We will tax the corporations. We will take all of that capital and we will redistribute it in the form of services and checks and support for all of the people that find themselves unable to take care of themselves. And this becomes a tipping point when the majority of the voter base ends up in that situation where they're that deeply in need where they have negative capital. And that is the situation America finds itself in today. There is no easy answer and there is no easy solution out of this. But I can tell you one thing for sure that in historical perspective we have seen it time and time again across dozens of countries that have embraced socialism to get out of the debt cycle that ultimately absorbs and and swallows up the young. It swallows up every family. It swallows up every person in the working class with debt. They're swaddled with it. And they all try and get out of it by increasing government and embracing these socialist concepts. And it has never ever worked. More government is not the answer. Less government is. We can get into that. But if you look at the results, Zoran won 61 to 39 with college educated. Young people voted for him. Old people did not as much. White people voted for him because they went to college. Non-white people did not as much. At the end of the day, young collegeed educated white people elected this guy and that is the beginning of a wave that will sweep over America. And I really do worry about where this takes us. So way to go for dummies. Yeah. I mean the you're correct. He won amongst Asians why it's college educated. And to put a finer point on it, Freeberg, it really isn't just college. It's the cost of college. Increases in the cost of college degrees have outpaced the wage growth of entry-level salaries by 10x over the last 20 years. You could go 300,000 400,000 not in debt, but that might be what you paid for those degrees in those major cities and you don't believe in capitalism anymore and you believe that you need to tax the rich. Just one warning for people in these states, in these cities. We saw this sachs in San Francisco. We saw the the the doom spiral. You and I worked on the Ches Bodin recall and now they have Dan Lori there and things are starting to slowly turn around a bit in Los Angeles. We saw this with Karen Bass. They didn't vote for Rick Caruso. He would have been an amazing mayor. They voted for incompetence. And these people are voting for incompetence and a plan that will not work because twothirds of the tax base in New York is paid for by the top 10% who are leaving. People will leave. They will see that Austin and Miami are fantastic cities to live in at half the price, a third of the price, and you get a tax break, and you can always go back to New York and California and hang out for a month and get whatever values left in those cities that hasn't been destroyed by these socialists and the incompetent people running them. Saxs, what are your thoughts on what's happening in New York City specifically. Well, you're right that every generation seems to need to learn this lesson for themselves because they don't study history and they they don't see that socialism always fails wherever it's tried. San Francisco went through this. I mean, it was a doom spiral. Uh now, I think we've turned the corner. LA is in the midst of going through it and a large portion of LA just burned down because there's no water in the fire hydrants. Basically, all the public services have been looted and New York is about to learn this for themselves. So it just seems like every generation just has to learn this. There's no way to teach them. So I do think that that is one thing that's going on. I I do agree with Freeberg that a big underlying root cause here is the student debt is the fact that these kids have negative capital. They've got no skin in the game. They graduate from college with worthless degrees and massive amounts of debt. That debt was not used to make their education better. Universities have been using the spiraling tuitions to fund massive amounts of bureaucracy, you know, for DEI and woke and all sorts of stuff like that. And these kids have no prospect of getting out of debt or being able to buy a home. So, they just have no skin in the game. And so, this is part of why they're they're turning against capitalism. One thing we need to do, by the way, is we need to make the student debt dischargeable in bankruptcy. is one of the only it's the only kind of debt that you can't get out of through bankruptcy. And if we were to make that change, at least these kids would have a way out. They have no skin in the game. The universities have absolutely no incentive to keep prices down and create a competitive or economic incentive for making sure that their degrees work. The only group that possibly could would be true capital lenders. People like banks or underwriters that are saying, "Here's a loan because I expect you to be able to pay it back." There's no underwriting in student loans today. There's no underwriting. The student loan program, the federal student loan program needs to go away because when it goes away, if it goes to zero and people might say, "Oh, that's awful. You're taking away education." What will happen is the capital markets will flood to fill that hole. Banks and lenders will show up and they will say, "You know what. We'll underwrite the loans." But they'll underwrite it by saying good colleges get the get get loans and bad colleges don't. Good degrees get the loans, bad degrees don't. And people that are expected to pay back the loans will now get loans. and all of the rest of the money that's caused everyone to end up in this debt spiral will stop and we'll be able to kind of recover from it. It's ironic that a problem that is being caused by government is going to lead to socialism. It's going to lead to maximum government which will then create the next spiral of problems. But I agree with you. I think this is very sad. But let me let me me also say I think there's one other thing going on here which is beyond just sort of the lack of skin of the game here which is the failure of the Democratic establishment. It's basically completely antiquated, desiccated and out of touch. And who was Mam Donnie running against. Andrew Cuomo who is really a perfect avatar for this establishment. He's a retread. He's been around for decades. He'd probably be finishing his fourth term as governor except for a harassment scandal that forces resignation. He's 67, which is something of a spring chicken by the standards of Democrat gerontocracy, but he's twice the age of my dami, who's 33. And Cuomo hasn't even lived in New York City for three decades. He wanted to mount a political comeback that no one was asking for. And the Democratic establishment just fell in line rather than having a proper contest to choose a less damaged, more dynamic candidate. He's a Nepo baby too, right. So, you know, does this sound familiar. I mean, this is exactly what happened with Biden is that no one wanted him to run again. He was obviously a a very weak candidate, but the Democratic establishment just fell in line and covered up his weaknesses and they use lawfare to take out his opponents totally rather than trying to find a more dynamic candidate. And by the way, one of the reasons why Maami is set to become mayor is because the Democratic establishment used lawfare against Eric Adams to basically weaken him and take him out over some plane tickets. I thought this was a very weak corruption. There were upgrades. There were upgrades even like it was so insane. It's it's a pretty crazy pretty crazy by political scandals. This is a really lame one. Yeah. And it was done because Eric Adams stepped out of line and was willing to criticize unions and buck unions and he was for the police. He was basically a Democrat who was willing to take contrarian positions on a lot of things and they took him out with lawfare and that is now they got something much worse. Did you see Chuck Schumer and Bill Clinton put out ringing endorsements and congratulations to Mandi this morning which you know I think the Overton windows blown open on this. Now, I do think that the Democrats, to your point, Saxs, are embracing the socialist agenda as the new agenda that is clearly going to win the youthful vote for them. At a 70 rating, they finally woken up to the fact that they can't have no agenda. They can't have nothing that they stand for, which is effectively my read on what's been the case for the last year and a half, two years for the Democratic Party. They now have something to stand for, which is these principles of socialism, which they call justice and equity and fairness and redistribution of capital and all these other features that were kind of rung out at the Mandani campaign and everyone embraced and ran to. The Democratic leadership perked up like a bunch of prairie dogs popping out of the ground like this is now going to be the way we're going to win. Great. We're all over it. Let's do it. They're accepting the inevitable. Look, the Democratic party right now is the Democratic establishment is in the process of being remade now the way that the Republican establishment was remade a decade ago. So remember a decade ago the Republican party was dominated by people like Dole and McCain and Romney and various Bush retreads and it was antiquated and out of touch and Trump came in there and remade it as a nationalist populist Republican party. And I think in a similar way, you now have these socialists who've come in in the Democratic party and they are remaking the Democratic party in the same way that that Trump replaced neoonservatism with populist nationalism. They are replacing neoliberalism with you could call it populist socialism. Yes. And those are the choices for the future. Let me tell you, you can basically go with you're going to have a a populist socialism in the Democratic party or you're going to have a populist nationalism in the Republican party. And to all my friends on the tech right, your choices in the future are not going to be neoliberalism or neoconservatism. It's going to be do you want republican nationalism or do you want democrat socialism. Those are going to be your choices. So I would get with the program here because your choices are MAGA or socialism. Which one do you want. I there is a third way. But Chimath, what are your thoughts here in terms of there is since we're here, there is actually a path out of here which is telling the truth to young people. Your college degree is not going to get you an amazingly high-paying job. What will get you an amazingly high-paying job is excellence, learning skills, and having radical self-reliance. Being reliant on the state, being reliant on the government is a path to nowhere. It's a path to pain and suffering. to constantly be looking for this guy to create a bread line in his own series of Costos, which is the stupidest thing I've ever heard. That he thinks that you're going to be able to create in New York City a series of government-run stores. Does anybody have any sense to the arc of history that he wants to create breadlines and and literally have the state provide you with food at this promised discount. It's absurd. Leave the state. Vote with your feet. go to Austin, go to Miami, go to another state where radical self-reliance and your ability to create your own opportunities and not get suckered into this debt spiral. That is the path out and that will be a new party that will emerge at some point. Some rational group of people are going to say get skills, don't get debt. Shimoth, what are your thoughts on all this. And then we'll move on to the next subject. I think the three of you guys are a little exaggerated to be quite honest. I mean, all the rhetoric sounds very clever, but I don't think it's accurate. I think the way that I see it is more nuanced than this. I think what's happened is that Zoron Mdani is very smart and is running a playbook to win like all politicians do based on a formula that has been winning in large cities for the past decade. And so I don't know if he really believes in this rhetoric or not, but it's worth noting that most of his platform is copied and pasted from London and Chicago. So the things that he's talked about, universal basic free meals, affordable housing, freezing the cost of transportation, public grocery stores, all three of you are reacting like these things were pulled out of thin air. They're not. These were the public platforms of the mayors who have won in London in Vienna in Havana, Cuba and in Chicago. So I think the reason why this works is that these are small pockets in the end of a large political spectrum. Even though New York feels big, it isn't that big in the context of the United States. And what you see is that when you try to take those policies in a city, take London, and then level it up at the national level, there's a quick schism that happens. So if you look at labor and labor trying to scale up the policies of a Sadi Khan in London throughout the country, Labor is now at the absolute the Labor Party the absolute lowest approval ratings in the UK of any party ever in this moment in time after an election. So I think what you're probably seeing is quite a sophisticated AB test. And I think that the political wingmen and the money people that want to be in control know how to run candidates on platforms that can win. And this is a clear winning strategy in left-leaning major metropolitan centers. So what I would say just to refine what you guys are saying is that this platform is not new. I've seen it for the last decade. I think you're going to see it for the next few decades. it doesn't work. And so you're going to see the same results in New York City that you've already seen in London, which has become unlivable sadly. One of my favorite cities in the world. If you don't believe it, go visit there. Chicago, which I haven't been to in 15 years and will never go to. It's a disaster. So my my point is it just doesn't work. So you can win. It actually isn't very effective and it doesn't scale to the national level. When do you think it returns, Jimat. Like what's the reversal. Like do you think the reversal is everyone has some experience with crime. Is the reversal like the city's bankrupt. Is the reversal your house is burning. You don't have you're unemployed. Unemployment hits with water in the pipes. I'll tell you something which is my view. My view is much more basic. It's it's much less sophisticated than I think what you're saying. My extremely simpleton view of things is that humans swing in a pendulum-like fashion between poles and over multi-deade arcs you go between the thing that works to the thing that should work now because it's not the thing before. So, I suspect what happens is that New York takes a 40 or 50-year journey and at some point it will look like New York of the 80s. And at that point, you'll have an Ed Cook-l like figure. You'll have a David Dinkens-like figure. You'll have a Michael Bloomberg like figure. You'll have the broken windows theory of policing reemerge as the cause celeb and the cycle will repeat itself. So, I tend to think that these things are just between two poles. We've spent a lot of time in this more independent self-reliance poll. A lot of people will want to experiment with this other thing. It just doesn't prove to work. And in the absence of something cataclysmically bad, I don't think it's going to change. Having lived there and experienced Dinkens and, you know, Cotch to Dinkens and then Giuliani to Bloomberg, I can tell you it's going to be reallying miserable to be in a Dinkens era. The city was chaos. It was dangerous. If you got off the wrong subway stop, it was going to result in you getting robbed at gun. They're gonna have to go through They're gonna have to go through that. That's London today. The the London subway cost $35 to go from the suburbs of London into the center of London. $35. Okay, that is ridiculous, right. You can't walk with your cell phone in central London anymore cuz there are more cell phone thefts than anything. There's knife attacks everywhere. Why is that. Well, you've had an agenda that was meant to be this socialist left-leaning let's resolve all these problems for everybody and it turns out to not work at a very basic factual level and every time it's been repeated over the last 15 years, it still hasn't worked. So, if you think that this guy is going to be the exception that proves the rule in New York, I wish him the best of luck. But I would be short New York real estate. I think it's going to crash and burn and then we'll pick up the pieces and we'll reset. All right, let me pick up on on something Jamal said about U M what's his name. Zoran say the Zoron. Do you guys remember that movie Big and he would go to the arcade and wasn't it called Ask Zoron and you and Zoron. Ask Zoron, can I have free pizza. I'm going to run for New York mayor and I'm offering everybody free pizza and bagels. I'm going to win. Let me let me let me pick up on on what said about Zoran running an effective campaign because it is true. And I think one of his best moments was during a debate where the moderator asked the candidates, "Which foreign country would you visit first as mayor of New York City?" And the other candidates said, "Ukraine or Israel?" They're basically virtue signaling. And then they get to Mamani and he said, "Nowhere. I wouldn't go anywhere. I would stay in New York City. I would work for the people here. I wouldn't be going to foreign capitals. And he just crushed that answer. Now, his political solutions, his programs are not going to work. But the reason why he's catching fire is partly because he is putting New York first. The same way that President Trump is putting America first. The American people are sick and tired of the politicians focusing on far away places instead of their problems at home. Yes, it's like the Biden administration going off and defending the border of Ukraine while leaving the border of the United States wide open. And I think that even, you know, over the last couple weeks, you saw that substantial majorities of the American people did not want to get into a new Middle Eastern war. And I think this is the failure of both the neoliberals and the neoconservatives, which aren't that far apart. They are clinging to this postw World War II fantasy of America being this global empire where we have to be the global policeman while America back home is collapsing or at least rotting suffering and they suffering they want the politicians to be focusing on our problems back 100% and Karen Bass is that moment like if you need to understand that moment she's in Ghana she knew this place was going to go on fire she extends her trip she doesn't come back like just to the highest degree all All right. There's a lot of other stuff on um the docket. I I we could go two ways, but I I think Freeberg, I want to get you involved since I know you got to get to a meeting. Can we go to the AI story, which I think you would care most about, or you want to go Marcus Freeberg. Lady's choice. Freeberg, you choose. Or do you want me to do Science Corner real quick cuz then you guys can keep going. I love Science Corner. Absolutely. Uh ready guys, it's time for a bathroom break. I'm sorry. Science corner. Uh for It's time for Sax. Is that funny. Here we go. I don't get why that's funny. Two. One. Science. He's taking a leap. I think he's taking a leap in a bottle. Did he finish the tequila bottle. Sacks. Get back on camera. I don't get it. I need the head of science. He's drinking. That's it. When Science Corner starts, we all do a double of that allin premia premium tequila tequila. So smooth. It makes you forget about science corner, right. It even makes Science Corner less sufferable. I'm not feeling any pain. No pain. No pain. Zach, you know you're in charge of science for the government, right. I am. Under duress. Under duress. No, that's that's Michael Pratzios. I just do my two issues. I've got AI and crypto. All right. Listen. Shout out to our sponsor this week. Nicotine Chilled Mint. The reason my moderation is so on point. Are we doing Are we doing one of those with with I I'm doing it twice a day. I did two. So far in this episode, you're hooked on app now. Are we getting paid for that or are you getting paid for that. No, I thought use the promo code JCAL and get two extra free of the Nick. We're not doing any private promos on this show. We are. I have a private editor. He's got his own side deals. He's got his own side deals. Exactly. He's doing a side deal right now. He's doing his deal. It's called Wet Your Beak. If you want to make money, you share with the group. That's how it works. I'm just giving a shout out to my guy who drives our ratings. He's like the guy at the valet stand who's putting the tips in his own pocket instead of putting them in the kitty. It's called entrepreneurship. It's called entrepreneurship. You want your car out front. Nick, I want I want to bleep. I want to bleep and blur out all of that stuff. Yeah. Pixelate this. Just pixelate it. You guys want to talk about. ## Science Corner: Stem cell-driven aging reversal out of China [01:06:02] age reversal. Okay. Yeah, let's talk about age reversal while I hit this. As is the case with most cutting edge science nowadays, it is coming out of China, not out of the United States. So this research study was done on age reversal. We've talked about using these Yamanaka factors to change the epigenome of cells and make them youthful again. In this particular case, the study was done on engineering stem cells that were then placed into the bodies of monkeys and reverse the age of these monkeys on the order of what would be the equivalent in humans of several decades of age reversal. It's a pretty amazing and astounding result. So cell therapy is the modality that would be kind of employed at scale for humans to utilize this tool. There's a lot of work that's been done in age reversal in mice, some work in primates, some work in humans now, and there's obviously a few startups doing this based on the studies and research around Yamanaka factors. So kind of changing the epigenome and effectively getting cells to act youthful again. In this particular case, this team focused on a specific gene that it is known that when this gene is expressed or overexpressed, meaning the gene is turned on, it actually creates a whole bunch of signaling molecules, little tiny molecules that then get absorbed by other cells and tell those cells to start to act young again and reset those cells. And that gene is called FOX03. So what this research team did is they took stem cells And they engineered them using crisper to get them to overexpress FOX3. And so now these cells start making this FOX3 protein. And when that cell starts making that FOX3 protein, it actually makes a whole bunch of other molecules, little small proteins, little molecules. They then get packaged up into what are called exoomes. These are like little packets that get spun out of the cell and they get absorbed by other cells and trigger those cells, we don't know how, we don't know why necessarily to start acting young again. So they engineered these stem cells, overexpressed FOX03 and then put these stem cells in these monkeys. And these monkeys were kind of the equivalent of being 60 years old. And then they looked at what happened. So what happened. Well, they looked at tissue, they looked at blood, and they did MRIs and scans of the brain. And what they found is that the monkeykey's brains effectively started to get completely rewired and act like young brains again. They were able to increase their memory, increase their responsiveness. Their age related atrophy reversed. So their brains actually grew. Uh their bone started to grow, their muscle started to grow, their blood cells started to reverse aging signals. So across bone degeneration reversed. They looked at 61 different tissues from 10 distinct systems in the uh the bodies of these monkeys after they received the stem cell treatment and uh 54% of the tissue examined showed reversal of age. In the case of lungs they saw in monkeys it was a four-year age reversal which is 12 years in humans. Skin reversed by 6 years which is the equivalent of 18 years in humans. So imagine a 60-year-old person taking this suddenly they're 40 years old in their skin. skeletal muscle went by 5 years in the monkeys, which is the equivalent of 15 years in humans. So imagine going from being 60 years old to having the body of a 45year-old in terms of muscles, the spleen, the brain, all across these different systems. They saw significant signals of age reversal. And then they identified these little exosomes. These are like little sacks that are spun out of the cell and then they go into other cells and they start to trigger all of this age reversal cascade that happens. And by the way, they saw no side effects. They saw no negative health effect. There was no increase in cancer. These are the sorts of things you typically look for. And in tissue, in uh blood cells, in MRI, across the board, they saw age reversal. So, it was a really kind of incredible result. And I think that it opens up the door for this idea of using cell therapy based on stem cells that are engineered to be injected into blood to actually reverse aging in humans. And I think that we should expect over the next couple of years these sorts of trials to kind of begin to see if we can see similar results. There's a lot of background work by the way in FOX3 in this particular gene. A lot of background work in engineering stem cells. A lot of background work obviously in Yamanaka factor and other age reversal that predicated this. But this particular paper, I think, put a lot of things together and showed some some pretty nice results. Do you think Yamanaka factors are the thing still, or do you think that there's going to be a lot of other genetic manipulations that advance age reversal before Yamanaka factors do. The latter is more of this what we call like a complex cascade of proteins and molecules that we haven't identified yet, that we don't know how or why they do what they do. That's what we just saw with this study. We don't know what's in those exosome sacks and we don't know why they cause other cells to reverse their age. We don't quite understand the mechanism. It's really hard. So I think that this becomes sort of call it an easier path. Whereas with the Yamanaka factors, if you apply too much, the cells don't just rejuvenate, they can become, you know, cancerous. Let me let me ask it more directly. Other than the novelty of all of this, do you think there will be something in the market, some injectable or something that's average people like us can take in the next 5 or 10 years to solve a problem that we have or to live longer with higher health. Yes, there are clinicals underway right now and I know of the clinical trials that are underway like in stage three, you're saying phase three clinical trials early stage one in humans like 1A. Yeah, very early. So maybe a decade from now. I think that's right. Well, look, I mean, let's see what the FDA does, but the FDA is trying to accelerate outcomes here, as you know. Blake Buyers came to my house for poker. He's sponsoring a study at UCSF, which I thought was incredible. You know, the gene that allows Donald Trump to sleep four hours. Yeah, they've isolated that gene. Yeah. Clinton had that gene, too. and Blake is sponsoring a trial to basically edit a handful of subjects who want that gene to see if they can sleep 4 hours and be rested. So, I don't know if you guys know this and he explained this to me and it makes so much sense, but I didn't realize it. We sleep 20 years of our life we're sleeping. Yeah. And so, if you can cut it in half, you get an extra 10 years of living. If you think about it like that way, that is an incredible reason to, you know, do the gene editing to get the Trump gene. But the the thing that nobody knows what the Well, this is all day and play poker all night. The thing that they don't know is, you know, Trump and Clinton were born with that gene from day one. And what they don't know is what could go wrong if you injected and manipulated yourself in the at the age of 30 or 40 or 50. Yeah, of course. But wouldn't it be incredible if you could all of a sudden only sleep four or five hours and be completely rested. Well, do you remember at the All-In Summit Vicky Pollock. She gave a talk on this gene. That was her opening piece. I mean, that's definitely in site lab. I know there's a bunch of labs working on that exact gene target, but this this was just amazing because this is a cell therapy. So, you can kind of think about getting an injection done. You get an infusion done of these stem cells and all of a sudden your skin is 20 years younger. It's incredible. Like my actually plays out your foreskin. Yeah, if you have it. I kept it cuz it's like it's like a sheath. It's like a sheath for the anaconda. Like a sleeping bag. It's a It's like a sleeping bag. Free. Okay. Very good. It's like a man sleeping in a sleeping bag. Sleeping with like a little hood. We're back, folks. We're back. It's been a strange six months, but the pot is officially backed. We are so back. The NASDAQ's at an alltime high. We've got IPOs. The wrath of Lena's over. He's pandering with his dog. Science Corn is back. Sachs is double fisting. I'm double fisting. I mean, tequila is so good. We got to get some bottles for Vegas this weekend. We got to get you a double straw. Hey, David, can you send somebody to the order to my plane with some bottles or no. Yeah, please. Do you have an extra few. I I only have this one at home, but we have some. We have them here. Actually, Freeberg, I I brought two bottles to the Bay Area, so I can take them from my house. I'll bring them. Yeah. Also, uh Nick, just take a note. Can I get one of those bottles just deliver it to United Flight 376 uh to Vegas from I'll be in C2C terminal 2. If you could send it to the Centurion Lounge. I just got upgraded to the Centurion Lounge. Um, also, [ __ ] the Centurion. Did you get the Did you Did you follow up with the guys from Robin Hood to get the gold card. You didn't get a gold card yet. Well, he was the only one. Vlad texted me and said, "Hey, Freeberg's the only He's the only best without it." So, the only get one. Absolutely. Your invite got lost in the mail. Gold card. Oh, look. I have mine here. Here I have mine. But you know where this came from. This came from the startup that I funded that got acquired by Robin Hood. So, those guys did a great job. So, now you got double Robin Hood shares. You got it from that from Launchp and Sid. Great job. Great job. It's it's an it's a great app by the way. And if you move your money into there, they give you and your crypto, they give you like 102%. And shout out to shout out to Brian Armstrong. I'm getting my Coinbase Bitcoin card. Oh, they have a coin. Oh, I thought you were saying you were watching the all You get 4% You get 4% cash back in Bitcoin. I mean, wow. I'm I'm going to buy a another Global 7500. Like $7 million. You're now happy. I mean, that was the saddest day of your life. You got rid of the 7500. I mean, that plane is expensive. So, it's not like Jamat, when are you going back from Italy. He's like, I'm coming back on this date. I was like, okay, I'm coming out 10 days before that. I'm flying home with you. I booked my trip on Jamat's return flight on the 7500. That is a beautiful plane. So, I I actually flew on that recently cuz my plane broke down and I charged a 7500 and man, that is a gorgeous plane. It's a great plane. Did you see the It's a little overkill to be quite honest with you. It was It was a little overkill. My favorite was that, you know, you have two tables for dinner and there's a leaf that goes in between the two and you make a full table for six. My lord. By the way, you guys, do you know how good Starlink is on these airplanes now. Incredible. I flew to Toronto and then Toronto back to LA. I didn't miss a beat. I had Starlink. I was doing Zooms. I was making phone calls. I have never been more productive. And then I was just watching YouTube. And it's like I was on the ground in my living room. It's crazy. I think the only thing that you should be searching for when you're flying is is it Argus Platinum. Yes. And does it have Starlink. I It's the only thing I I was on the first one. I was on Elon's playing with it when he first put it on and it was nuts. He was playing Diablo and I'm watching Netflix at the same time. No latency. I'm watching 4K Netflix. I was streaming. It was bonkers. And United, the entire fleet's going to have my preferred airline. Uh I think it's like this could change productivity. You think about the flight to the Middle East or Singapore, Asia, Japan, when I go skiing in January with Tucker, all that is now going to be productive hours and then we're not going to sleep. So, it's like you get two careers. You could be a podcaster and a venture capitalist. That's it. That's crazy. All right. The stock. ## Market at all-time highs after huge turnaround: bull and bear cases; Next Fed chair? [01:18:09] market is nearing a record high. In fact, Uber hit a record high today, just two months after the big uh Trump tariff chaos and the market going down 15 30%. We've had a full recovery from Trump's liberation day tariff announcement. Yeah, market might even be up 1 2 3 4%. Since then, they called it a stunning turnaround at your favorite network. Sachs CNN called it a stunning turnaround. Lots of different things are contributing to this. Obviously, you got the ceasefire in the Middle East. You've got the trade deals with UK and a truce with China. NASDAQ 100 is at an all-time high. You know, there's there's also with these tech companies the perfect storm. M&A is back on the menu. People are buying companies again. That equals growth. People are continuing to lay off the dead weight. So, you're having earnings rise. And then the product announcements coming out of big tech which I think you sort of alluded to that American companies are firing on all cylinders earlier in the program. Chimath all of this is amazing. The AI trade is on. So this all equals though. However, big controversy Freedberg. What's the point of cutting rates if we're at an all-time high and uh employment is somewhat full. There are some um concerns there. We'll get into it, but what are your thoughts here on the market and then you know Trump is going hard at pal saying he's going to fire him saying he's an idiot he's stupid blah blah blah this is the guy he placed by the way so freeber what are your thoughts here and then we'll go to you I'm not sure that equity market prices going up is necessarily the best indicator of where we are because we did have negative GDP growth in Q1 arguably there was a lot of tariff blipping happening in Q1 one, but there's a real question on this GDP growth outlook for the rest of this year, and we're still running a modest inflation. When you combine those two, and you combine the government deficit right now, there's an argument to be made that we're actually seeing assets inflate, not necessarily. So, multiples are going up. M I think that may actually be a result of kind of an indication that we expect rates to cut that we expect to increase the money supply and um again remember when you end up in this debt death spiral all assets go up in value they all increase because you start to flood things with cash and as you flood things with printed money when you start to print more money everything goes up in price. So, one argument here might be that we're actually not necessarily seeing an improvement in the fundamental business environment. We're not seeing record revenue across the board. As we talked about last week, the S&P 493 are really struggling relative to the uh MAG 7 and there's a really kind of questionable outlook ahead for the vast majority of equity cap out there. So I I would say that there might be a bit of an inflationary aspect to this, not necessarily just a pure like business performance upgrade that that we're saying. All right, we got Dr. Doom's position. I mean that respectfully. Uh but give us the other side, Shimoth, if you have one. Yeah. I mean, look, if I was a betting man, which I am, you are. I think the the free money trade here is to be levered long, I think you can make a lot of money right now. Why is that. The first chart I want to show you is the velocity of money. So what is this. This is the M2 money supply. It's a measure of how much money is circulating in the economy. What this shows is the impact of rates where we were able to start to slow down and contract the money supply. But then as you saw as the economy stabilized and people started to project was possible in 18 to 24 months, you started to see money coming back into the system. That's what has given a bid to the equity markets. That's great because a percentage of this capital gets allocated into things that can generate a superior return to money markets. And that's where the bid to the equity market came from. So you would say, well, where does it go from here. The next chart, Nick, if you just give the second one, is look at how much money, and again, you can just look at the last five years. Look at how much money is sitting in money market funds. And what this starts to show you is you have trillions and trillions of dollars of dry powder on the sidelines that will need to find a home. I think that Jerome Powell is in an increasingly untenuous situation because he will be looked at as politicizing the office of the Federal Reserve. There is enough data that can justify cutting rates. If you cut rates, and we've talked about this before, two things will happen. Number one is people will take some amount of money out of the money market funds because they will want to go and seek superior returns somewhere else. It will increase the velocity of money at the same time. You put those two things together, that is a bid to the equity markets. And so if we're at an all-time high today with rates at 4 and a.5% and Powell back against the wall to cut, the only road from here is probably up. And so you could see this thing get rerated quite aggressively. And then the question is, do you do it where you manage your risk and you're short some stuff or do you just say, you know what, I'm just going to take it all up and take most of my shorts off and let the thing go. I think that if Powell starts an aggressive cutting program, either because he has to or because he's trying to keep his job, I mean, man, you could see the S&P at 7,000 very quickly. Sachs, uh, yeah, obviously you're a member of the administration, so I don't want to make sure people know you're not speaking for the administration, but um, I guess your personal thoughts on the markets here and what the right thing for Powell to do is because he does seem to be in an untenable position. He's being criticized super heavily. He might even have his replacement announced, you know, before his term is even up in the spring. And gosh, you know what. What is the reason for Powell to cut rates if everything's going so well and then he would look like maybe he poured gasoline on what appears to be, you know, a pretty robust economic fire right now. That's not the right way to look at it. The question is just what's the inflation rate relative to interest rates. And inflation has come down all the way to I think 2.4%. So it's way down. We're back to a two handle. I think inflation has largely been licked and it's time to start lowering interest rates and that will be good for the economy. There's no reason for rates to be as high as they are. It'll also be good in terms of financing our debt. So, I think that it is time for Pal to act and I think he's being overly cautious here. He's being slow here. Just like he was slow to raise at the beginning of the cycle, he's being slow to cut at the end of the cycle. And again, I think he's just afraid of being proven wrong here. But I think that the timing is right to start the cuts. Now to go back to the question of how do you trade this market. I mean I have a very simple idea which is anytime that the media tries to sew doom or spread panic about the Trump administration's policies that's a good time to buy. We saw this when Jim Kramer started touting the Black Monday that was coming and Larry Summers has been out there constantly with his TDS. Whenever the media puts these experts on to tell you that there's chaos and doom, that has proven to be an excellent time to buy the dip. So, I think this is a very easy way to trade the Trump presidency. I mean, the conspiracy corner folks are like, Trump's doing this on purpose. You know, the volatility in the market is helpful in some way, but it does seem to be the playbook. I'm calling this I don't mean this in a derogatory way. Again, I don't like the term taco because I think that's trying to go Trump into or or frame what he's doing as not thoughtful. I think it is thoughtful. I think he does shock and bore. He does something shocking. He pins his negotiation to that. Whether it's what's happening in Iran, whether it's what's happening with immigration or what happened with tariffs, he starts with a bang and then he falls back to a reasonable position that the markets can digest. So, you just have to take a 90-day view of everything he's doing and then you'll be fine. When he says, you know, we're going to give people 150% tariff, just cut it by 2/3 or make it reciprocal, fine. When he says he's going to deport 20 million people, cut it to 500 to a million, whatever Obama did, and that's where it's going to wind up. And he says we're going to smash Iran, it's going to be like very strategic, and then he's going to give them the path off. So he he's actually playing a very interesting perhaps dare I say sophisticated approach this time which seems chaotic but it might there might be a method to the madness. Yeah. Well I think the media has an incentive to spread this ide they have an incentive to hype the chaos basically. They're the ones who are creating the panic and they bring on all these fake networks who've got TDS to basically hype this narrative. So my point is just that when the media is spreading this this narrative, that's a great time to buy because it's an opportunity for those of us who don't have TDS. It's not even TDS, it's ratings. I'll just tell you right there, being a media executive, you know, for most of my life, if you want to work the left, you say Trump's out of control, look at this chaos, he's a dictator, yada yada, ratings go up. If you're Fox, you take the other side, you get ratings, it equals advertising. You don't really have to think about it. want to talk to independent media like all in podcast Tucker people on the left people on the right who are actually having first principal discussions about this I think it is TDS though I mean there are some members no but like just as we were taping there's just a whole deluge of economic data that came out the GDP print for Q1 came in at minus.5%. I mean, so how could anybody interpret for Q1. So, how could anybody at the Fed or in the media covering the Fed not understand that, by the way, and we were talking about this just like I said that we're probably going to print like a threehandle on GDP in Q2, we also talked about the fact that we were probably going to have a negative GDP print in Q1. So, we've been knowing it for months. We've basically been calling it right. So why is there an inability to just look at the data and just say the obvious truthful thing. So I think I think whether whether whatever you think of Trump, it doesn't really matter. Rates should not be where they are today. They should be 50 to 100 basis points lower. Period. It's categorical. He'll do it in September. He's going to do a 25 in September. It's obvious. There's no logical explanation for it. There is a subjective explanation and that's political. I I think he just after the tariff stuff he said let's just push it out two month two two two months get some more data and then we'll cut it in September. What's the difference between a sepy August cut or a September. It's probably not going to be meaningful in the arc of history. But if you're if you're against the tariffs and you're buying into, you know, Jim Kramer's doom narrative or Larry Summer's doom narrative, that's more of a reason to cut. If you believe the doom narrative that he's not going to relent, yes. But if he does relent and he negotiates it, I think you would say stay the course and see what happens. Anyway, all of this is on the margins. The truth is these companies are very strong. Entrepreneurship is strong and the debt's the issue. So we we still got to address the debt. We'll see if he does that in. But to Sha's point, the the last year of the Biden economy was very weak, especially the last six months of the Biden economy, such that Q1 was negative GDP growth. So, President Trump came into office inheriting a very weak economy. Since then, he's done a bunch of things to turn it around. Yeah. But there's obviously there's no reason to have interest rates at What are interest rates at right now. It's five still at 5%. Let's pull up the poly market just for real quick guide where he uh I think the the market thinks 2550 bips is like the 80%. I haven't looked at it in a week. Here's September. What are we seeing here. 59% 25 bips 8% 50 bips. So you put those together, it's two3 chance he's going to cut in September, obviously. And what does October say. Yeah. So is there a poly market on who replaces Powell, Nick. Is there anything in there about who replaces Powell. He's going to announce it. I mean, I I think he'll just announce it and he'll make Bessant. People seem to like Bessant. He feels like a steady hand. He feels like he's got experience. It's obvious who's who is the most likely new Fed chair or something like that. I think it's best. Here we go. Oh, there it is. Chris Waller. Really. Huh. Best only 14%. I think that's your sleeper right there. But it's it's Listen, there's one, two, three, four, five, six people with 14 to 22%. So, this is a Bess only at 14%. Yeah, I agree. That seems low. Hasset's at 18. I mean, I work with both Bess and Hasset and I know them both well and they both be great. They both would be great, right. They both have a ton of experience, a lot of time in the game, which is what you Worsh has been in the game for a long time. He really knows how the markets work. He He I mean this Yeah. Chop. Is this a case of or Sachs is this a case of picking you you have a bench. Do you want to move Bessant out of where he's doing a good job. I think I think Bessant's crushing at Treasury. I would love to keep him in the job. So yeah, I think that's the decision, right. I think I think the thing is elevating Waller has that's an interesting set of implications. Worsh is, you know, very consumate and capable of doing the job. The question is, does Trump believe he's MAGA or does Trump believe he's more established Republican. Sorry, there's another name on the list that we forgot. You want Musk or Trump. Oh, Sumat is in there. Oh, okay. Let's see. Okay. Well, let's get those numbers up. Those are rookie numbers. You can make 99.8. I think I think that I'm I'm part of a cascade that happens if something else happens. But you put $1,000 in and uh you'll make three bucks. Yeah. All. ## AI Copyright: Anthropic and Meta receive favorable rulings [01:32:49] right. Let's end on this uh AI training. This is a super important story. we talked about here. Anthropic received a favorable ruling in an AI copyright case. Bunch of caveats here. Federal judge out of San Francisco ruled Anthropic use of copyrighted books and AI training was legal if if the company had purchased or licensed the books through legal means. However, the ruling doesn't apply to more than 7 million books that Enthropic allegedly to put that in there obtained through quote unquote pirated means. People obviously have been training data off of a lot of what's on the web and a lot of that stuff might have not been officially licensed. Author's guild is going to appeal the decision uh which came out of the district court in Northern California. Interestingly, a day after this ruling, Microsoft was sued by a group of authors alleging it used a collection of over 200,000 pirated books uh in its Megatron AI model. Interestingly, on top of that, I did a licensing deal. Harper's business did a deal or Harper's with Microsoft and I got paid 2500 bucks to license Angel for their model. So, there are also legal routes. No, literally for the whole book. Uh, and I did it I know it's crazy. No, everybody got the same deal. They licensed like I don't know 5,000 books or something per word. Per word. Well, I used to get $3 a word back in the day, but actually for that book, what did I get. got $25 a word, I guess, um, with a million-dollar deal. So, Meta also prevailed against a group of notable authors, including Sarah Silverman. Now, we know why he's so long-winded. He gets paid by the word. Absolutely. Now, you know, that's actually my Now, we know why he never wants to cut anything. This goes on and on and on. On and on and on. Absolutely. That's why we're the number one podcast in the world. Uh, you guys can send me my flowers. You know, the address of the ranch. Okay. So, there was another one with Meta. And uh although the judge ultimately sided with Meta, he had a mixed ruling. Basically said that copyright protected works without permission is generally illegal. But the plaint plaintiffs in that case failed to present any compelling arguments that there were actual market harm. That's a key one. You have to have uh some harm in these cases in order for it to play. Ton of other cases still in play. The big one is the New York Times versus OpenAI and Getty Images versus Stable uh Diffusion. We'll follow those as they make their way through the courts. But here you are, Sax, you are the ZAR of AI. So I I don't know if we're getting an official position here or just your personal thoughts on this, but what's the um interpretation of these two early cases by bizarre data. Well, I'll tell you my my point of view. I don't know that I can speak for everybody, but I'll give you my point of view, which actually is the same point of view I gave on this podcast a year or two ago because we had this debate over fair use and me and Freeberg were on one side and you were on another side. Yes. This judge in the anthropic case, I mean, the the the reasoning that he gave was almost identical to what Freeberg and I were arguing Yeah. a year ago. And the distinction he made is between input and output. If an AI model outputs some text that is basically a ripoff of of someone else's uh copyright, then of course it's it's guilty of copyright violation. But in the inputs or pre-training is something different. And what AI models do in pre-training is they take millions of text, millions of documents, and they understand the positional relationship of the words and they translate that into um into math into a vector space called positional encoding. That is a transformation of the underlying work. And in the same way that a human can read a a body of works and then come up with their own point of view, that is basically what AI models are doing. So if AI models violate someone's copyright by outputting something that's identical, then obviously that's a violation. But if all they're doing is transforming the work, they're doing positional encoding and then coming up with their own unique work product. This judge said that that is not a violation of copyright. I completely agree with that. One other point, one other distinction this judge made that I think is very important is the difference between pirating and copyright. What the judge said is, "Look, you have to buy the book if you're going to basically do pre-training on it. You can't rip it off. That would be piracy, but that's different than copyright." And so, I agree with that, too. Now, just one final point on this. How would you uh Sax on that point. How would you propose a large language model, take a million books and put it in. Would they buy the physical books, scan them in if you buy the book. So what Anthropic did is they created this large repository of books and unfortunately some of them weren't paid for they were pirated material and so anthropic allegedly by the way allegedly is in some hot water and then I think there is some case that's going to move forward about that but the judge distinguished again between piracy and copyright. So the point is what anthropic should have done apparently is buy each copy of the book that they put in their repository. If they had done that, scan them in, scan them in, they wouldn't have had this piracy uh uh claim against them. But again, that is separate from copyright. Just one final point on this is I think it's very important that we end up with a sensible fair use definition like the one that judges come up with in the synthropic case because otherwise we will lose the AI race to China. The fact of the matter is China's not going to care about American copyright policy. they are going to train on every scrap of data that's available to them on the internet. Uh apparently they use a pirated book archive called libgen. And so you know they're not going to abide by copyright laws at all. And if we don't allow our AI models to again have a sensible fair use definition that allows them to train but not violate an output then we will lose to to Chinese AI models because they'll have more data. And the fact is that the more data that you have, the better your AI model. So I do think it's very important for the US to consolidate around a fair use definition that makes sense. I'm not saying that this anthropic case will be the final word. I think there will be other cases that come up with other definitions. There may be other judges that disagree. Ultimately, I think this is going to the Supreme Court. But where we need to end up is with some sort of fair use definition that makes sense. Otherwise, we will lose AI race to China. Your view Jal. Yeah, obviously as a content creator, uh, I'll take the other side of this. There is a nuance between training and there is a nuance between the output. Uh, I like to look at this as an opportunity. YouTube really did a great job with their content ID system of navigating this. Google has the most experience here uh, with Google images and Google News. The one box where you get a little snippet uh, up top and the output is where this is really going to favor the content holders because these will be competitive products in the marketplace. The need to buy a New York Times subscription is no longer necessary. You can go onto a language model and ask them to give you wire cutter as one example I like to cite. What are their best picks for these uh you know air conditioners or or microphones for podcasting. And they will give it to you. And when they started doing that, that was my main reason to subscribe to the New York Times. And I no longer subscribe to it. I subscribe to Open Eye because I can get the same information there. These cases will be very easy to win. Uh and so I'm going to explain two things. is one how you can win this case as a content company and then two I'm going to give uh how the large language models can importantly win the AI race and actually not destroy the business on which they are built on. These language models have nothing without the content creators and the authors of these books of which I am one. They need us and so they should want to pay us. They should want us to be compensated because that will keep us more competitive than China, which will just steal it one time. So, here's how you win if you're a publisher. Uh, all you have to do is Disney, which is suing um MidJourney right now for obvious copyright violations on the output in my interpretation. All you have to do is do a a Marvel Me, make yourself into a Marvel character, Disney me, or choose your own adventure Star Wars, and allow consumers to pay for that product. And any author right now that pops up a website that says subscribe to uh the angel book and ask questions of it, $10 for life, a dollar per year, whatever it is, they will be able to prove damages very easily and they will be able to prove that these language models are competitive. When they do that, then all of the output will need to uh be scrubbed or contained in some way. You can see this today if you ask Chat GPT which is you know the main target since they're making $10 billion a year off of in many ways uh content creators work that's why they're the big target because they have the most money uh they will not let you make certain images copyrighted images specifically the Disney ones go ahead and try go try to make a Darth Vader image and they will stop you so they know they're doing it wrong and they've already put the controls in place you need to show that this is your opportunity as a content creator and now to my second point Zach which is the very easy. So that's how you can prove your case and win hands down versus all language models. Put a competitive product in the market, you will win. Then the second piece that'll make this tenable is you know Chetchip is making $10 billion a year according to reports. They should give 30% of their revenue a small amount the minority of their revenue to the top 10,000 newspapers, publications, podcasts, books, etc. And they should do that programmatically. And then they should hope that those companies double their revenue and increase their investment. And then Chat GPT and the New York Times should do a deal and I predict they will do this or with another language model that's smart enough to do it where when you go to Chat GPT and you do a search from the New York Times, you say, "What does the New York Times say about Iran or what do they say about you know uh the wire cutters say about cameras?" It should say authenticate with your New York Times subscription to have access to this. And on the New York Times website, they should say authenticate with chat GPT. This would allow them to have a competitive advantage versus Anthropic and you know Apples and whoevers and this will become a massive competitive advantage for the language models just like cable channels might or Hulu might feature Disney Plus or you know FX or or whatever stations or content it is. Whoever does this first on the other side will make a tremendous amount of money because they will have access to all that data and the output. So you can make your kids a t-shirt or a birthday invitation, you know, using the Star Wars characters. That's the easy way for us to win as Americans by respecting content creators and paying the money so they can reinvest. The amount of money we're talking about here is dimminimous for the tech industry. These companies are going to be worth 30% of revenue and the company's losing tons of money. Yeah, that's their problem. That's not there's no legal basis for that such a specific proposal. There's only basis for well I mean there is the music industry if you want to play music in your restaurant you have to pay. If you want to cover somebody's song you got to pay. If you want to perform it you have to pay. So there is tons of precedent for it. If you want to play a Disney film at your kid's birthday party yeah you can get away with it. But if you do it in people you're going to guarantee that Chinese models like Deep Seek are better than American models cuz they're not going to go through any of that. So that's your reason of why people because they're just going to train on No, not steal. I don't think it's stealing the output. I'm talking about specifically the output stealing or not. You can't cop No, no, no. You can't copy the output. I fully agree there. And that is what the Disney case is about. No, I'm talking about free training. I'm talking about the latter. So, let's talk about the latter here. I'm talking specifically on the output. No one disagrees on output. Okay. So, that's the licensing deal I'm talking about. Don't you think it would be worth it to give Disney $und00 million a year to have access to all that. You and I have different definitions of output. Okay. I think it's reasonable to pay Disney for pre-training, and I think that they do. I told you though this like we did a licensing deal with open AAI we meaning you know beast they paid us and they're using it for pre-training it's quite reasonable is it the right price we have no idea but we did it so that we could be a part of the conversation and shape how these deals get done for content creators but Sax is right like if you think about like what is the ultimate output the output if you look at how a transformer behaves it's it's almost it's impossible simple to say that it's copying the input just not how it works. And so I I don't get turned into math what gets recorded is vector math on the relationship between the words. This is all a very and then somehow when you feed that into a neural net with billions and billions of documents, it somehow has an understanding and produces new content and that new content is not a copyright violation. So I just think that like copyright's the wrong way to look at this. This is a new technology. is transformational. And then finally, we have the national security concern. All right, so this is a topic we will monitor. Thanks again for listening to the number one podcast in the world. If you want to hang out with the besties and hear more prophetic interviews and discussions, go to the All-In Summit now in its fourth year, September 7th to 9th in Los Angeles every year. We try to oneup the last year and we will do it again this year. Apply for tickets. allin.com/summit or ballin.com/yattada yada yada. See you next time, besties. Love you. I love you. I got to go. Bye. We'll let your winners ride. 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