check out you have a really long nose hair thank you on your on your left this one here this side yeah yeah okay hold on one side you see it Nick you see it see that you can see it take care of it every show we have this issue every show he's got all this like I'm getting old man here so I feel like sex oh you gotta get a grooming tool I am tired of treasure hunting
a lawn mower manscape makes one I'm gonna get it yeah just look in the mirror bro can you come over on the way to Parker Freeburg and help me manscape yeah you're not coming to Poker don't come to Poker if I manscape can I come to poke foreign [Music] okay so jaycal you're gonna be a participant today the world's greatest moderator is taking a week off to allow his voice to recoup
to recover to heal so he can come back blaring with his usual mid-sentence interruptions and excellent moderating tactics next week we with his Foghorn Leghorn moderation we are gonna We Are Gonna Miss You at the moderation welcome to the top 20. sax you're welcome welcome to the top 20 podcast in the world okay well hold on who should be thinking whom I mean you've been doing
this for 10 years I walk in here off the street all of a sudden we're top 20. yeah let me explain something to you number one blog in the world I created it with my guys Engadget okay top five magazine in the world then I do a podcast with you three idiots and all of a sudden I drop down to top 20 in this medium so drop what are you talking about yeah exactly I drop this has been
a b tested no I mean this week it started I don't want to embarrass you but look at twist ratings compared to ours this weekend startups is about startups it is a niche Audience by Design and it's the number one startup podcast in the world that's what you wanted this show to be the show is about all topics every time we try to talk politics
you're like it's too much politic sex I think you're talking about free bird I think you're talking about Freeburg let's focus on narrow legalistic technicians that's true you we had this discussion sax and I said we should always do the top story of the week even if it's politics and now it's taking credit for my insight about McLaughlin group I saw you on some pod who was it I
absolutely designed this pod around McLaughlin group everybody said McLaughlin group okay it's possible for two people to have the same idea sex we both grew up on McLaughlin group that's why we're both cantankerous [ __ ] moderator intervention cut it out no one is individually responsible for this podcast it was Tim Ferriss Yeah Tim Ferriss here's what happened so I was on
YouTube and um you know I'm not gonna watch some two-hour like podcasts with Jay Cal of course but for some reason for some reason Tim Ferris 10 minutes of Jacob the video is called the origin of the all-in podcast I can't stand what he does oh God here we go I can't stand what he does that yeah so I'm like okay so I gotta watch this it's in the partnership agreement he said
here's the the party line and jaycal will not stick with it because we're going to recreate and watch this I got to see this alternative reality that Jacob's trying to create about the origin of the ball excuse me I wrote I wrote in our leadership history yes and I changed no yeah the origin story that you signed up to are you saying you changed the origin story
Remains the Same no it doesn't you call me after CNBC the origin story that he told Tim Ferriss which is like a 10-minute story of how he created the whole thing the concept was his it was based on McLaughlin Group which I'm the one creation concept is mine obviously by default how I moderate the program is by my design yes you didn't come up with this concept especially your Chagrin of
course I did no of course I designed my moderation I was the first one who said we should record us having conversations at the poker table no that idea came from him right that's why it's called the all in pod no I came up with the name all in number one number two was his idea to tape a pod because he came out to see me anyway who cares the pod's here it's successful
why do you keep going on podcasts telling everyone that you're the Mastermind of the all in pod people are saying out the game other podcasters I'll explain to you other podcasters are in awe of my ability to moderate you three mile contents you did not have the idea for the foursome based on McLaughlin group that happened that happened spontaneously as a result of
the fact that no Freeburg was I think the first guest I was the second guest then we did the four of us together okay it was a jam session that worked out that's okay fine the way that the way I moderate this is of note to the world's greatest podcasters they want to know Jake out how do you take three misanthropic malcontents and make them actually palatable to the world and I
say you know what because I am the world's greatest moderator and someone like Tim Ferriss wants to know excuse me excuse me what makes me a misanthropic male content exactly just your behavior in world view and what does my world view your absolute contempt for Humanity no you're amazing it's a joke it's called a joke it's called a joke oh now you set them off jaycal you really that
that hurt you should apologize it's called a joke I think you guys are wonderful I think you guys were wondering well I mean I may be misanthropic but malcontent I'm not no Saxon freebing are the mountain that's for sure I'm not content I'm pretty damn happy you're happy the last descriptor anybody who knows you would ascribe to Friedberg was happy no I would say no I think he's
happy he's anxious but he's happy yeah he's anxious but happy did you see the roast that was not a happy man that was tearing you up that was funny yeah that was okay yeah that was venting yeah that was rage no I think I think when Freebird tries to be funny it comes out kind of mean yeah maybe that's true it's been a rage the only person that sets me off into
making me unhappy is you Jay Cal I mean like the four of us could go to therapy or we could keep recording this podcast every week which is cheaper I think it's cheaper for us to just record the Pod you know what I for one am thankful to whoever gave you whatever sickness you have that causes you to not be able to talk this week okay great you're talking
a lot for a guy who can't talk cause you're coming at me be nice to me while we're talking about all kinds of random stuff the number two thing that I see in the what's happening tab on Twitter right now is how Ron DeSantis is getting blasted for Banning AP African-American studies because he thinks it falls under the stop woke act that's this the headlines it's going absolutely nuclear
on Twitter right now here are some of the quotes shocking Ron DeSantis has banned all caps the teaching of AP African American studies in Florida Florida has gone from don't say gay to don't say black next tweet claiming it violates the stop book act and has no educational value Florida Governor Ron DeSantis has banned AP African American studies from schools let me make a
prediction right now this will all red down to his advantage the same people who said that he was death scientists for basically not instituting coveted lockdowns he was proven correct then they said that this bill that prohibited the teaching of gender fluidity to five-year-olds they quite try to claim that was a don't say gay Bill 70 of Florida supports that that went down to his Advantage I don't
know the story behind this particular course but if the question is whether CRT is going to be funded by the state and he's preventing that again I think that'll be a 70 popular issue so let's just wait and see how this plays out fair enough I just want to claim that my spread trade maybe it's tough to be the leader in the Republican nomination process in January of 2022. it's
starting yeah the front runner in either party but I'd say the bigger threat to the santis is there's a new poll where Trump came out on top so Trump's still his biggest threat yeah so unfortunately jaycal may be right that the Republicans may do something stupid here and a nominate a candidate who's I think less electable than DeSantis I actually don't take any joy in it I
actually I think Nikki Haley's going to come out of nowhere and win this thing well it's possible I you know I I really would like to see some non-political non-career politicians run for office the Bloomberg you know sort of category it feels like these career politicians are just really really bad at executing his scumbags you know you know who likes Nikki Haley who
Democrats Democrats why you guys why why do we like her obviously polarizing she's polarized so she's a safe establishment Republican who basically is not going to put up any Fierce resistance to what the Davos crowd wants to do I don't think that's true I think she was pretty she liked another Republican nomination I don't think she cares about Davos people to save her
life I think that she is a moderate reasonable person who had to govern in a Southern state and got everybody on board that's that's pretty crazy she's a pro-life person who negotiated a 20-week support for abortion in 2014. so this is a person that knows how to get stuff done South Carolina happens to be the state that's actually at the Leading Edge of climate transition she's had
more jobs and more money coming into a southern red state of people and companies willing to build for climate change than any other state in the country so you like her I don't know she's just she's so I just think that she's actually like normal and sane and not an idiot would you vote for her absolutely over Biden absolutely absolutely interesting 100
so yeah look if you're really willing to vote for then that's interesting absolutely I would she's you know she's young her parents had a small business she was a small business person it's tough to be a winner at all of those levels and she managed to do it I mean how do you as a brown woman get elected to governor of South Carolina and do a lot of really good stuff that's kind of
tough yeah so I don't know I think she deserves a close look and she's the only one that didn't kowtow to Trump she was able to play the game manipulate him get him to be on her side and then still told him to go pounce in that's pretty cool well a lot of a lot of Governors managed to do that I don't know what I'm saying I'm saying she got she she went to the United Nations she did what she
needed to do there that's an important role at that time actually Nikki Haley expressly has said she will not run if Trump runs so she's kowtowed to Trump too she wanted to be his VP right like she was trying to shank uh Pence right that was her plan maybe it's a smart strategy but she said she will not run against Trump the main alternative to Trump in the Republican
party is DeSantis and then I'd say the number three in the Republican party after Trump into census Glenn young right now huh based on what metrics based on interest in the party and you know I've talked to people and I think the polling will eventually reflect this he's very talented Jake how you talk about appealing to Independence he was able to win a blue State remember
Virginia went for Biden by 10 points and Yanko was able to win that state if you ever listen to any game campaign he's a very talented campaigner I think yonkin is very very talented don't get me wrong and I think that he would be an extremely credible candidate for president here's the thing that yonkin will get destroyed on is he's literally not been in the job for but for a few
you know 18 months so he hasn't done anything and I think that if it does boil down now it may not matter right because look Obama was a senator for two years or whatever right so it may not matter but to the extent that Republicans demand some Bona fides I think that you'll see Trump and DeSantis attack yankin more viciously in a presidential primary then they
attack Haley on that dimension of you have no experience and it'll be hard for him to back it up just one final point you know forget the Steel Man the other side so final point we got it we got to get started final Point Virginia has this wonky one-term term limit on Governors so you know he's got no choice but to make a play in 20 uh 24. because he's gonna be termed out anyway okay Jay
Cal has a lifelong independent who's only ever voted Democrat which of these Republicans Republican to be clear so which of these candidates for Republican one time when he was 12. yeah no no I voted it three times young kid three times I would like somebody who's younger and actually I've been quite influenced by your framing of a person who can control
the budget and reduce spending because I do think it's kind of the most existential risk we have right now so I might be moving to more of a single issue uh Vote for This presidential election I love that issue I love that about you I just think like we we have to have somebody younger who is not going to bankrupt the company and the more these candidates talk about social issues and not
economic ones I think it's a tell that they're not the right person for the job that's where I'm personally at is like this country has a serious Financial existential crisis on its hands and we have to get off social issues and we have to get on to financial standpoint so I assume then you support the Republicans in this looming budget Showdown I actually do yes I do think we should
hold the line on spending so you support the Republicans voting no on raising the debt ceiling yeah I actually do I think we should start pumping the brakes on spending and I do think the Tea Party no that doesn't mean I like those candidates they're kind of whack jobs actually but you think George Santos is a whack job listen it's the whack pack
the Republican party has turned into some crazy Howard Stern whack pack sax is appalled by it he just can't some elements of both parties look exactly would you ever invite to Mark Santos to your house who would you invite okay actually are you kidding me who would you be willing to hold a dinner it's not a fundraising dinner but just invite to the house you can pick between two
people oh no Alexandro ocasio-cortez or George Campos who would you pick for I'd rather probably meet and talk to AOC of course because it would be interesting do I want a fundraise for her no but no no I'm not asking fundraising who just let in the door front door unlock the front door for me to AOC yeah what would you do to George would you not even return the email if
he said David I'm in town I wouldn't let him in the house for dinner don't let him know him yeah he might he might steal the silverware or something it's so crazy I mean it's so nuts Listen Hold on hold on hold on we gotta get started um as your moderator I'm gonna try and keep us on track good luck uh yeah no look it's a it's an energetic day I appreciate I appreciate my co-hosts and their
enthusiasm enough recognition for supporting the Republicans in this budget Showdown I mean I'm like blown away by this I think it's great I think it's great as you guys know just to restate it's my number one concern on Earth today yep and I I think that the importance of this topic really needs to kind of Rise Above politics of all the things you've said Freeburg in the last
like six months on this program it's the one thing that stuck with me and it's one thing that has like actually now I realize is the most important thing for this country is fiscal responsibility austerity measures and looking at how we're spending money and looking at immigration and looking at economic velocity and employment and competing on the world stage with a
solid balance sheet is the balance sheet is how you compete the balance sheet is how you compete I think it rises above social issues and it rises above climate change cannot you you cannot address climate change or social issues or infrastructure or unemployment unless we have the ability to operate as a country over the long term and have the ability to have for the continuing credit of the
United States dollar and that's why I think it's so important free break I'm dealing this with with startups I have right now and I tell them the balance sheet is how you compete if your balance sheet is flipped upside down and you're going to be out of business in nine months you're not competing with these two other companies in your sector you have to have a strong
balance sheet take the austerity measures make the cuts and then compete with a strong balance sheet it's just so obvious this country's balance sheet is getting flipped upside down and we are going to have so many yeah very complex second and third order effects with the interest payments if you value austerity if you value austerity if you look back
in history and you actually ask of the prime ministers or presidents of various countries particularly First World countries that have actually had an impact in implementing austerity you know what the unifying thing that I can say is women do a much better job than men okay you want austerity you're better off with with Margaret Thatcher with then with a dude AKA Nikki Haley enter station
it's a very hard position to be in as a politician because you have to position your objective as one of taking things away and the primary way to get elected in a democracy just like in junior high when you run for president of the junior high class is I'm going to make the vending machines free you get elected and when you run in politics you always
promise your constituents what they're gonna get that they don't have today and that's the model for getting elected whatever the issue is of the day whatever the issue deserved a decade whatever it's all about what I'm going to give you that you don't have today and so to flip that conversation around we all have to sacrifice together for the long-term viability of our economic
Prosperity we need to do we need to give up the following things that is a very hard platform to run on when someone on the other side of the podium on the other side of the stage is saying I'm going to give you these 10 things and it's very hard to get elected and that's why democracies ultimately eat themselves and I forgot who said it but ultimately all democracies end up
realizing they can vote themselves all the money and then you have this big cycle applicants did the most brilliant thing ever recently they moved from stop to steal to stop the spend this is a genius they may stumbled into nobody wants to hear them talking about the election being stolen that's complete nonsense but stop the span everybody is seeing in their own
personal balance sheets they're seeing it in their companies they're seeing it in their families they're seeing it with their mortgage payment they're looking at their you know uh College tuition bills they're looking at their car payments going from 400 to 700 and they're seeing what variable interest does we have variable interest debt this stuff is going to Skyrocket whether it's
elon's payments for Twitter or your payments for your mortgage or our country's payments for our debt we have to stop the spend effective interest rates yes yeah but guys let's just continue the conversation and talk a little bit about this world economic Forum Gathering that that took place in Douglas I know you guys wanted to talk about it this week intellectual honesty I'm like blown away
right now because he's sick okay so look um no it's because I'm not moderating when I moderate I'm always trying to get the best out of you sex the as it relates also to the global economy and growth so Davos took place uh you know over this past week just so everyone knows and I remember you know working at Google 2004 I remember like how exciting it was for
the executives to kind of start to transition into the davo stage it became this moment where you're kind of finally on the world stage it's an exciting moment for CEOs for world leaders for Global economists to get together talk about the state of the global economy where the world is headed what we can and should be doing about it and Davos is also this this place of Pride and
Prestige for being invited and being a part of the party the global Elite party as some people are now calling it and that's what I think is the important conversation is that the world economic Forum gathering in Davos has recently been cast as this Gathering of the global Elites those who are trying to take control and run the world as they see fit and sax I'd love your point of view
on how that transition has happened because one of the important ways that the Davos Gathering has been cast in the world economic Forum has been cast is in the negative light of being globalists and globalism has had a really important role in driving global economic growth and prosperity and it has had these adverse effects in the US as we've seen with wealth inequality loss of jobs
offshoring gutting of Industries and so on I think that there's a really important way that Davos has been politicized but the risk of that is significant because if we do lean into this globalist notion and say it's all about Elites trying to take control of our world and we all become isolationists that countries around the world can suffer deeply from The
Economic Consequences of that shift so maybe tax you can kick this off and especially in light of our conversation today about the need for economic growth and the reduction of global debt to support you know a more prosperous world in the future this idea that right now we're talking about Davos and the world economic Forum as a gathering of global Elites and maybe sax you can kind of
give us the history and the point of view on how that positioning has come about well it's a meeting of of global business and government leaders so they are the elites I mean you add them all together and they do control a substantial portion of the world economy and most of the you know nations with the biggest economies so there's no question these are some of the most
important people in the world the bunch of the Articles coming out of Davos reported the somber mood and tone of the conference the level of anxiety and worry was very high and I think that for a brief moment it looked like these people were staring in the mirror and realizing that their management of the global economy over the last couple of decades has been a bit of a disaster I
mean you do have ruinous deficits and debts piling up in the U.S and across the world something like 350 percent debt to GDP globally so we've talked about that you've got this war in Ukraine that I and many people around the world think was easily avoidable and was a diplomatic failure you're coming off of two years of badly botched covid mismanagement where the governments of
the world pursued a horrible policy on covet and made everything worse you've got Decades of energy policy promoted by the world economic Forum where they want to get people off fossil fuels and natural gas and get them onto less dense less reliable energy including promoting things like organic farming in Sri Lanka which we talked about on the show cause
their economy to collapse you've got the world economic on promoting ideas like you're going to own nothing in the year 2030 and you're going to be eating insects because no one should be eating meat so you've got these like wacky extreme you know environmentalist ideas and anti-capitalist anti-property ideas coming out of Davos so I think the whole thing's been a bit of a disaster and for
a brief moment it looked like these people again were self-reflecting on their role in creating these disasters but of course the tone quickly shifted to blaming disinformation on social media as the root cause of all these problems as opposed to their Decades of decision making running you know the leading nations of the world and the leading companies of the world and I
think that the blame is properly put not on social media but on these leaders for making you know bad decisions do you believe in the benefits of global trade where countries trade with one another and shift the sourcing of supply and labor to the cheaper source so that that the buyer can benefit from having things at a lower price and ultimately the global economy grows
as kind of being beneficial to the us over the last 30 years or net negative because we talked you know about the the obvious consequences of global trade where we've had Industries gutted in the United States and now we're trying to onshore them again and build redundancy and so on but that's becoming very expensive and ultimately leads to the inflation of goods and services
and so as you look at kind of the yeah the positive agenda of the world economic Forum over the last 30 years being about improving global trade and Global relations to enable global trade are you an anti-globalist and you know do you start to see yourself falling more in that camp as you see and hear more of what comes out of Davos and from these organizations like them well look all
economic Prosperity comes from trade if we didn't have trade then we would all be subsistence farmers and hundreds and gatherers so we basically specialize in something and then create an over a bunch of that and trade it for the rest of our Necessities the issue is that trade not only creates Prosperity it creates dependencies because you're dependent on
the people you're trading with and also it has distributional effects in terms of geopolitical consequences so trade with China has created some Prosperity but it's also hollowed out the American Manufacturing sector while also making China very rich which has basically turned China into a major geopolitical competitor for the United States so I'm not like a free
trade fanatic I mean I understand the ways that trade creates wealth but I think it can also create these downsides that have to be managed and the fact of the matter is that this unfettered free trade ideology contained the seats of its own destruction because all the revisionist powers who are seeking to revise the U.S led Global Order they were basically enriched
and built up by the very free trade ideology that neoliberals were promoting so this neoliberal world order has kind of created the seeds of its own destruction I think that it would have been much smarter for us two decades ago to be much more restrained in the China trade and to not throw up in our markets to Chinese products we basically gave them mfn status this is back in the
early 2000s and it was a bipartisan project a bipartisan decision but the result of that has been the rapid rise of China at the expense of our manufacturing sectors and to the benefit of our consumer class right I mean we do you have 600 iPhones because of it and we do have cheap TVs and there has been a consumer Market that's demanded these low price Goods to live a better life
right like so yeah but so so everyone gets cheap Goods at Target but in exchange for that we now have a real peer competitor to the United States which is capable of disrupting let's say our Primacy in East Asia and you know is creating a much more challenging world so look I I can understand the reasons why people bought into this two decades ago but I think
that if we had it to do all over again I think most people would recognize that we should not have given China permanent mfn status and we should have been more temperate in our willingness to throw up in our markets to these countries do you think that the world economic Forum has kind of transitioned into this kind of neoliberal organization now that's promoting these neoliberal beliefs that
aren't really tied to the original construct of Global enabling and supporting global trade and supporting the global economy and creating more prosperity and security around the world I think it appeals to the insecure overachiever Elite yeah and nobody building anything really gives a [ __ ] about Davos nobody is thinking what's going on nobody even knows when it happens right
so who cares about it people who like status and went to fancy schools and wants to feel like they're in the club and that's how they've made it is going to this place which underneath is a membership organization where people pay based on the number of people that get to go so is it really that important substantively no but overachieving Surplus Elites in the
west really valued the signal that it represents to other overachieving Surplus Elites in the West so that's what Davos is that's what the Allen and Company conference has become a lot of these things started off much purer than what they are today but these are all membership driven Revenue generating efforts in 30 or 40 years the all-in summit will probably become that too
it's just the nature of things so I wouldn't spend so much time focused on a group of people getting together the funniest thing about Davos that I saw was Zero Hedge which said that the amount of prostitution is at record levels in Davos and so it just kind of boils down to what it is which is like any other conference it just happens to be with more security guards and less
security guards and the same stupid stuff happens at Davos that happens in Vegas at name your conference CES it's just a different kind of attendee so I think the bigger thing is that we are learning that the world tends to have these policy perspectives that swing in a pendulum and the problem with the pendulum is that it it is at extremes and sax is right we went from
an extreme where we were very closed off and we were essentially subsistence Farmers all of us were and then the pendulum has essentially peaked probably in the mid teens of this decade or of this Century where we realized too much globalization actually Hollows out local economies so we need to find the equilibrium point and that inherently has more inflation that inherently has higher prices
and that inherently has slower progress but more consistent progress that benefits more people and this is what is so ideologically disruptive to again Surplus Elites because they need the 600 iPhone the idea that they can't upgrade every year drives them into such a tizzy that they need to export all the jobs whereas a thousand dollar iPhone or a fifteen
hundred dollar iPhone may just mean that your upgrade cycle is two years and just ask yourself how many times have you upgraded as soon as the phone came out to realize man this phone is actually worse than the previous version and I probably could have just waited and there's a lot of work that actually goes into building these things to actually make them better so all you're
doing is you're giving up optionality you're allowing your brothers and sisters to struggle to basically Feed The Profit motives of one company that in hindsight doesn't need to happen so there's an equilibrium and I think that these next few decades will be about finding it we have decided it's categorical that that level of globalization that we have had this unitary singular
monocultural way of thinking about things is over and David's right it's because that system has created too many threats to the hegemony that brought us there Jacob and you that's a good thing I think in general it'll be it'll be more prosperity for more people but it'll be slower and it will create points of friction that are represented in inflation in higher prices right that's
right so as jaycal as you know chamoth points out like if you're upgrading every two years instead of one year your economy doesn't grow as fast you have less spending yeah if the price of things go up you have inflation the net cost of de-globalization is higher prices and lower economic growth that's just fundamental kind of macroeconomics no that's not true that's not true
because the deglobalization in an individual economy will actually create GDP because you'll have to rebuild the things that are used to import that's right yeah and over a period of time theoretically you could catch up and accelerate but jaycal like when you weigh this conversation about Davos and globalization and U.S security against the one we just had which is why
I wanted to talk about this we're running into a debt crisis we have limited spending capacity we have a significant amount of investment needed if we are going to cut global trade ties that we've depended on historically and start to build redundancy can we afford this as a country can the West afford this given the economic slowdowns and inflation right now and you know how do we balance
kind of these conversations against our domestic challenges economic Davos has a pretty serious PR problem they have dubbed themselves like essentially a self-appointed illuminati for the rest of us and that they're going to set some Global agenda I think this year's agenda was like finding the future or defining the future nobody asked these people to be in
charge and if you look at what's happened in the world the chaos of covid and you look at what's happened in terms of energy policy in Europe and then this obsession with social issues and being told you know these Farmers these truckers you're bad people you're not woke whatever it is I think the public looks at Davos as the manifestation of these Global Elites who
are lording over them some master plan whether it's real or not that they're not part of and that doesn't take them into consideration and that takes into consideration only their profits and when you actually peel it back as chimoff correctly pointed out Dolphus is a huge grift they they recruited me to be part of their world leaders 15 years ago after I had sold did you go
to Second company and I met Claus the guy who runs it uh some New York Four Seasons event and uh then I got the bill and to be a world leader was 40 [ __ ] thousand dollars and I was like what a global future leader I don't know what that means uh but I'm not giving you forty thousand dollars you had to pay you had to pay to be a global what future leader and you didn't
have to pay for a six thousand dollar Ted ticket at the time this was 40 large and uh I just thought you know this is not for me uh and what a joke I think people would much rather see some resiliency in the supply chain and they would rather see the origins of kovid and why we spent two years in a lockdown and was that a cover-up of the United States funding gain of research
you know being done in Wuhan like and and why are we shutting down nuclear power plants and what exactly is the energy policy in Germany people are looking at incompetent Elites going to Davos having a big party and then setting an agenda for them that they don't understand or want and I think this is where you know the the the contempt for Davos is peaking this year and it should if you're being
invited to Davos and other people are not being invited and they don't have a seat at the table and a voice at the table you can tell that all the journalists there are on an access journalism pass what does that mean access journalism they get to come there and they get to hang out with Elites if and only if their coverage fits a certain profile and if you find me the
top 10 most critical anti-globalization journalists in the world I can guarantee you that they don't have credentials I think it's like a bankrupt organization that should just be shut down and the people who are going there are involved no I think it's culturally bad you guys have so much disdain it's interesting no idea not what the world wants right now the
world wants transparency and the world wants ownership of all the screw-ups you know from kovid yeah to energy policy we want ownership of those issues not a bunch of Elites drinking champagne I'd rather spend a week with entrepreneurs or frankly spend a week with my kids or Frank yeah spend a week playing poker with my friends of course let's do it they're they're like umpteen
things that are above the list so it's kind of like let them get together I think it's fine for them to get together they should do it I just think that if you're not there I would not weigh these things so heavily because it speaks more to your own insecurity than it does to their actual influence on things yeah the term Elite is an interesting one you
you could companies need a CEO to run the company it's not run by 10 000 employees and governments need a president to oversee the government and I think the idea that some small number of people that are in charge getting together is now being cast as an elite Gathering and elitism in itself is the failure I think it's very important to get this nuanced rights it's a gathering of
Elites and that's very different than an elite Gathering an elite Gathering is when like Michael Jordan and LeBron James and Steph Curry get together and work on their basketball game that's an elite Gathering a gathering of Elites is what's happening in Davos but they are the presidents of their companies and the presidents of their countries so I would differentiate between the people who are merely
attending who are paying the Forty thousand dollars you know probably a bunch of hangers on it's now 250 by the way 250 000 250 yeah anyone willing to pay that is like you know totally an insecure you know Surplus Elite by the way I just got back from Davos oh you did okay well congratulations looks good on you though go ahead what's good on you did you spend your own money
or your LP's money no I didn't get it down oh my Lord if I mean one person that went to Davos and spent their own money that's like probably not right exactly so then there's the hangers on you're spraying 250 000 to feel important but then there's the people who are invited who probably don't spend any money who are basically speaking right and you got to
say that the the group of people who are speaking at Davos individually and collectively are quite influential they are the leaders of countries and and Fortune 500 companies sure but you can agree that they literally don't say anything that's noteworthy because they're not allowed to they're not saying anything that's that different of what they would say the previous week or
the following week so but it's it's a forum it's a platform for yeah it's a 44. yeah to get together look in terms of the critique of it Freebird you asked how far back does this go it's this is not like a new thing the the term Davos man was coined back in 2004 by a Harvard Professor Named Sam Huntington who wrote a book called class civilizations he's the
Press of international relations at Harvard and he coined the term Davos man to refer to a globalist Who quote had little need for National loyalty who viewed National boundaries as obstacles that are thankfully uh Vanishing that's how Huntington defined Davos man and there's been a reaction to these Thomas men that's been growing for a couple of decades I mean obviously the election of
trump was a reaction to that brexit was a huge reaction to that and I think that the resistance to the imposition of their again their globalist policies which I guess you could Define as believing in this like borderless world you know economically and politically I think that's been receding in favor of more nationalist leaders who want to promote their own
country's interests and I think that that trend is going to continue let's let's transition this to the the broader question that I think we got into it a couple episodes ago on how can we afford this transition if there is this mounting kind of trend against globalization that's mounting deglobalization movement and effort particularly in the U.S and again as sax pointed out Global debt to
GDP is something like 300 to 350 depending on how you count and we're running into a debt ceiling here in the U.S I guess the question is how do we afford to build the infrastructure redundancy and make the Investments at home to replace global trade can we afford to do it and how's this going to play out as we run into this you know debt ceiling vote I don't think that's the right
question I think it's the inverse of that question how can we afford not to with the amount of discontent and the amount of economic strain that people feel if you want to really call populism you're going to have to create economic vibrancy at home when people are making money and they find purpose they're less agitated they're not storming the capital they're not
electing Fringe candidates they're not doing domestic terrorism they're just going to work and building a life right we know that so how can we afford not to how can we afford not to like bring back jobs to the heartland of America so the reality that I have and I think a lot of people have is that this debt to GDP thing is a bit of an intellectual red herring and the reason is people talk
about this thing constantly in these absolute terms with no historical precedent that relates well to our current moment there is no magic number at which thing this experiment that's called America fails so I think that you have to be a little bit more intellectually honest and say that at best it's a relative problem and it's relative to the countries that
have already established dominance of which there are eight or nine and then the emerging economies and then thinking about what critical things will they bring to the table in 15 or 20 years from now and in that context I think that people will him and ha But ultimately they'll capitulate they will raise the debt ceiling and they'll continue to fund this transition away from globalism and
I think that's the argument that we'll get the Republicans over the line because it's going to bring a lot of spending and stimulus and jobs to frankly a lot of red states that would otherwise kind of continue to wither and die on the vine I think here's my biggest concern we're either trying to walk a tightrope or there's no tightrope to walk and if we make these Investments and they're
not economically viable Investments it's a path to ruin and what I mean by that is if we're building factories manufacturing facilities infrastructure that relies on yesteryear's technology and systems of production and Glo and and kind of economic systems and there are alternatives that are competing on a global stage that are better more productive more advanced then we lose
and we've made an investment in a negative Roi way can I ask you a question yeah see when you say that though you're making a very basic assumption which I think you can question which is you are underpinning that on fundamental economics that can change if we choose to for example let's take like natural resources okay every time you do a plan the industry and I
Define the industry as every for-profit company and Wall Street and the debt markets they refuse to underwrite this thing at a higher cost of capital they use a whack of six or seven or eight and they will fight tooth and nail to use the smallest discount rate possible because it allows them to capture more of the profit dollars but if you actually had a realistic whack of like
10 percent on an on a massive infrastructure project guess what you're actually pretty equivalent to a government and in fact in many cases a government becomes cheaper so I think the thing that is worth debating and I'd like your reaction to this it's not that what you're saying it's we refuse to change the guard rails on our profit-making ability and if you extended the window if you change a
discount rate if you said PES can be different you would have a very different economic justification for what you just said it completely changes a hundred basis points changes everything you're saying by tens of years one way to describe that yeah is another way to reframe what you just said is that the youthful lifespan of an investment isn't 40 years or 50 years
but it may be 12 years and if you if you recast the investment decision as this has to be a 12-year return instead of allowing it to be modeled as a 40-year return then you start to really filter out a lot of the nonsense and you can actually see real payback it doesn't make sense to spend a hundred billion dollars on a train to take people from LA to Fresno or whatever craziness the
the California High-Speed Rail program has turned into it was originally like a billion dollars to go from LA to San Francisco there was economic justification to get payback on 100 billion dollars or whatever it's ballooned into the whole system should be shut down so I guess there's a from a policy perspective an accountability framing that's missing but also bringing in the
time Horizon on which we need to get paid back for these things my point was that in China and I've made this point many times but I just think it's a really important one that'll play out over the next couple of years they're building 450 nuclear power plants they're going to get the cost of industrial power below five cents or four cents a kilowatt hour and they're
electrifying all their factories as they do that it's no longer a unit of human labor that's needed to produce Goods it's a unit of electricity and if they're driving down the cost of electricity and all products can be made using electricity you have a huge economic Advantage it's not the cure-all that you think that is even if you have free energy you have to think about the
inputs and the thing about China but no sorry I'm not talking about energy I'm just saying a general framing like no no I understand my point being like the Investments we should be making are where is the puck headed not where has the puck been no no so I just I just wanted to comment on where the setting even if energy is zero in China you have
to think about inputs meaning factories make things with inputs and if you look for example in natural resources the inputs by and large don't exist in China and so all I'm saying is that all of these inputs whether again you can take natural resources that proliferate massively in the United States it turns out that India is utterly utterly utterly poorly addressed in a
geographical survey perspective and we're finding that India's raw resources are off the charts okay there are certain places in Africa tons of stuff in Indonesia and Australia all of those things may not have to go to China because there are subsidies or there are equivalently cheaper decisions that governments can make so that they choose not to send it and all of a sudden all
of that spending doesn't matter as much because the Australian government makes a trade-off that says you know what I'd rather have these jobs here and I'm willing to have a longer payback cycle for these jobs to be here then instead of ship it to China and he they tell that they tell the Australian citizens I'm sorry guys but you're gonna have to replace your car
every seven years as opposed to every five I hope you're okay with that but that'll mean full employment and it'll prevent Fringe candidates and populism and let's go forward where do you invest ing I am investing a lot of money in those places that control the natural resources that are poorly understood meaning there are places like India where our Geological Survey capacity is
relatively naive and it turns out that in critical parts of the energy supply chain or other places they can play a huge role and the Indian government's cost of capital has an element they're sophisticated enough to add a an element to the formula that accounts for Full Employment if I build it in this state and if I try to get this many jobs created the full circle feedback of that allows
me to actually transfer price it into the Indian Market at this price which is cheaper than anything that China can do even at zero energy that's the kind of sophisticated decision making that is emerging because of this deglobalization trend and it's happening everywhere so the Indians are doing it the Germans are doing it and then the US is doing it and then on top
of that what they're what they're doing in terms of Game Theory which I think is even more sophisticated is they're not letting China be alone they're actually now slowing China down because China turns out actually needs inputs from these Western economies and they're like we're just not going to give them to you anymore so do the best you can for example in semiconductors
the Dutch the Germans the Americans we've now essentially embargoed all of our most sophisticated equipment from ever getting in there that will increase even with zero energy the cost of what comes out of there and that will balance the playing field so that the Germans the Dutch the Americans can bring other partners in at a different cost of capital to make it economically neutral
in that parity and the reason they'll do it is to create jobs for Americans or the Dutch or for the Germans okay I think the most yeah go ahead Jacob freeberg I I just I I think the most important thing here isn't like energy I don't think it's infrastructure I don't think it's natural resources at least for America it's entrepreneurs and that's what it's always been for this
country and it's immigration is the Silver Bullet here and inspiration and the freedom that this country has for entrepreneurs and Founders to pursue a vision to start a company that's why we've won so big historically is the the combination of immigration and the inspiration that these entrepreneurs do on a global basis to get more entrepreneurs to come to this country to
go to Stanford to start companies and that's why China is now losing they cribed this incredible formula we had of letting Jack ma do Alibaba and then they decided to for whatever you know insecure or stupid reason or pragmatic reason to consolidate power and that's what will push the world forward and and make our country Thrive we have to fix immigration we have to keep letting
entrepreneurs Define the future because the government can do so much they can underwrite a couple of Chip factories here or there sure we could put money into nuclear or fission or fusion and whatever the next technology is but you need a singular person who wants to make it their life's mission who wants to have their sense of Pride and Innovation push
the world forward and those people are rare and we are in a competition globally that we are not focused on that we need to get refocused on to recruit the greatest Minds in the world who want to change the world to do it on American soil I do not disagree with you jaycal I think you know to my earlier comment about how do we walk the tightrope of the debt
burden the deglobalization and populism movements and the and the challenges and opportunities ahead it has to come through Innovation I think that's how you you have to invent a new tightrope basically I think the challenge though is Freeburg that it takes a recognition that there are singular individuals in the world one in a million one in ten million one in a hundred thousand whatever it is
who can just drive an entire economy forward whether it's gates with Microsoft or Steve Jobs with apple there are singular individuals who come to this country Bam Bam Brogan with uh the tunneling company nobody knows what you're talking about except for me there are people who will push these things forward and and take risks and we have to yeah recognize that it's a small
number of individuals backed by a large amount of capital that create massive jobs and great prosperity it's an uncomfortable conversation for people to realize that it might just be a couple of dozen people a year immigrating to this country that change the fate of this country yeah why do you need to allow three million migrants to stream across the Sun border every year
because you don't know which one it's going to be that's why really you know that's that's your immigration policy is open border so that one is a millionaire I said recruitment so you're immigration yeah explain that it's a great question sex there are there are two things to look at here there is Jason let me finish my sentence no I'm just going to ask you to just
verify as you say it's you're are you saying that the PHD student that starts Google is streaming across the border or actually applying for no absolutely notified for you there's immigration and then there's Recruitment and if we frame this process with those two different words there are people who are yes immigrating streaming across the border however you want to frame it sax I don't look at it
in a political way and then there's recruiting the most elite talents in the world we can do both of these things one of them you know uh helps Farmers have people to work the fields to have people take entry-level jobs to work in the service industry we should bring in two or three million of those people per year we should make it legal and we should celebrate it because we
have so many of those positions open that Americans don't want to take we should then also in parallel and without confusing the issue for political reasons recruit people to come to our universities and when they graduate have their citizenship staple to that diploma and not let them leave the company country and let them start companies here instead what we do is we make them
fight to stay here we should be recruiting the smartest most talented people that will be hundreds of thousands of people per year low hundreds of thousands okay Millions coming across the border sick J Cal is very reasonable no yeah it's great yeah I think he's so much better when he doesn't moderate yeah yeah go ahead sex you know I'm an immigrant you know my dad came over yeah my dad
came over in 1977 when I was five years old of course he had an MD he was a doctor he actually had like skills and wasn't immediately can become a net government dependent so I think that it makes sense to allow immigrants who can actually add something to our economy and bring skills and all the rest of it but the problem we have is that if you want to
take that reasonable position you're told that you basically have to accept a situation of de facto open borders which is ridiculous no you don't these are two separate things and they've become inflated it's the number one party that conflates these two issues you know they're two separates Democratic party is conflated these issues okay both parties are conflating them here at the
all-in podcast can we agree that yeah a group of people could recruit people for PHD programs more than one group of people allows across the border to take service jobs is the way to go but but look let me tie this back to Davos man what was the definition of Davos man it was somebody who is pushing this ideology of free trade and open borders to such an extent
that it creates a nationalist backlash or populist backlash fair enough yeah that's exactly what's happened at our Southern border is you have the people who believe in Immigration push that ideology to such an extent that they won't create a rational sensible Southern border and process in our Southern border it's chaos down there I'm in favor of bringing in the Dream
Team yeah in favor of bringing the Dream Team but the response of open borders is the creation of this nationalist movement right the Nationalist movement only exists in the face of open borders I think that's that's the point right like the extreme there's the extreme I think the immigration system should be based on points just like Canada Davos men don't if the Davos men don't start taking in
start taking into account these National considerations around the defense of their borders and these issues around trade hollowing out the middle class then there's going to be an intense backlash and I don't think those Elites have been managing the situation very well it would have been better for them to pursue the more nuanced policy you're talking about why
are we conflating the issue then why do the Democrats and the Republicans sacks make this such a polarizing issue instead of stating it the way I did recruitment because it's so busy you know when you when you conflate them you can incite an emotional response from your voting base that's it that's 100 of these issues that's why all of these issues get based out they get
spaced out to the point that then you can drive someone to vote for you because you've now framed the other side as this extreme side and yeah you earlier said hold on before you got suddenly very reasonable you said that we have it's always where you haven't listened I'm in a quote something you just said a minute ago you said that we had to allow two to three million two to three
million completely destitute practically illiterate migrants to stream across our border because one in a million of them might be an Elon Musk no no this could be no no hold on I was talking about you can take it back immigration typically includes when you say that word the Corpus of people coming in for education and the people coming across the southern border so if you were to
say immigration most people would recently say that's both of those buckets I separated them out here so we could have a reasonable discussion recruitment of higher education talented people with low education migrant workers they are two different buckets and you have to be able to say these are two different buckets and that we should have a point based system if
and this is the conversation that doesn't happen amongst politicians but can happen here look at Canada look at Australia they have what's called a point-based immigration system they give you points for everything that you bring to the country if you bring money if you speak the native language if you have a degree if you have a higher education degree or you have skills that that
country needs our country needs to move to a point-based system if you're coming across the board and you don't speak the language and you don't have an education you have zero points if you have a master's degree two or three points and you can let in buckets of people based on compassion based on meeting service workers and based on needing the next Elon Musk or
the next David sacks or Shabbat polyhapatia I think the the argument jaycal is that the compassion argument falls on deaf ears in a time where people feel we cannot afford it and it's a luxury to embrace that's the level of immigration right now just pick a number we can reasonably absorb this is what finally look at the southern border and see chaos obviously they want to get
that under control before they're going to adopt your you know point-based system we can do two things at once we could do another point-based systems I like the idea of I don't know if my point was your points but in concept I like to find your points no no we don't need to I like the idea of admitting immigrants based on skills the country actually needs and a simple
recognition that's better to bring in people who are neatly productive hold on they could add to our economy as opposed to being net government recipients dependents we're done we're done there are countries I just want to make a point there are countries the Scandinavian country specifically that have said we can accept up to this many folks who are uneducated who don't speak
the language because we have this many teachers and this many slots in school and so I think it was Finland and Sweden they said we can accept 50 000 per year of this type of immigration based on compassion that's the reasonable discussion that has to happen here did you just say that we have to do these two things at the same time meaning that until we impose a an
overhaul of our entire immigration system to be based on skills and points that we can't enforce the southern border no I think you can enforce the southern border and do it at the same time let me just tell you there's going to be Canada and Australia are already doing it let me just tell you there's not going to be a broad-based constituency in this country for the type of
immigration reform you're talking about until you get the southern border under control because people look at that on the news and see chaos and there's no excuse me they should be thoughtful they should be thoughtful and they should just look at what Canada and Australia have done those countries have actually controlled this and it's not a polarizing issue there it's a pragmatic
issue okay guys I'm going to move us forward to the uh the Banning of tick tock so I want to kind of change the the tone a little bit this uh story recently is that Tick Tock has been banned for use on the campus Wi-Fi network let's go at a number of universities including UT Austin Auburn Boise State the University of Oklahoma so college students can't
access the app when they're on the campus Network this is following 19 states that recently banned Tick-Tock and government devices as everyone knows Tick Tock is a product from bike dance which is a chinese-based company and there's been quite a lot of political and Regulatory Huffs and Gruffs about bike dance having this level of insight and access to users in the United States with the
Assumption being that much of the data that they're pulling out of the app is available to the Chinese Communist party which creates a security threat to the United States that's one argument I think there is also a significant tie-in to bike dance there's over eight billion dollars of capital invested in bike Dance by firms that we know well like Sequoia Capital tiger Global kotu
Susquehanna and others they're trying to find a way to monetize their investment in what is truly the most viral fastest growing highest revenue growing biggest startup in the world right now in bike dance so there's a restructuring proposal apparently underway that's being discussed in Washington DC right now to try and restructure the organization and the ownership structure
and the oversight of tick tock and bike dance such that U.S regulators and U.S companies can oversee the data the use of the data the algorithms underlying Tick Tock and monitor them from within the United States question for this group here on the McLaughlin group of 2023 is does that do enough for you McLaughlin do you guys think that that's enough
first up is uh chamoth who's been silenced for a bit I think this is really bad news for bite dense basically what's happening is that and tick tock all the frustration that all these legislature legislators and politicians have had over Facebook and Google and other sort of big tech companies is going to get focused on bite dance because you have this common enemy that
you can point to as a boogeyman of sorts and I'm not saying that it's right but I think that what you're starting to see is it's much easier to pick a fight with the Chinese company and win and get broad-based support than it is to pick a fight against an American company with a bunch of American employees and American market cap and American know-how and American IP that gets impacted so
I don't think this is going to end well for tick tock and I think the goal if I were any of these people on the cap table would be to sell it in secondary to somebody else and get out I think the next big shoe to drop is going to be advertisers who come under a lot of pressure so for example think of all the advertisers that have left Twitter there is a point of efficiency where you
can live with all of the mess that Twitter has because it comes with a lot less scrutiny and oversight and political pressure than advertising on tick tock and that I think is the next kind of like big wave here so I think it's very very bad I think the Enterprise value of this company is quite challenged and these guys should try to sell and get up who are the buyers in that
secondary Market though I mean that's a lot of capital the thing is the cap tables haven't been segregated so what you own is equity and bite dance right but the problem is the look through ownership would will discount a lot of tick tock if they see a lot more of this stuff happening you guys have to remember this is the first three or four weeks of 2023. wait till we're here in
September and October or November wait till the election year starts it's not good so it's a discount on bike dance that probably takes bike dance down by 70 or 80 billion so that's a 35 40 discount to their last mark so you know if somebody can sell in the high 100 billions of dollars I think you should I think they should probably they should consider it there's
it's worth it I think Jacob I know you've got strong opinions I think you have to be incredibly pragmatic here this is the same as the 5G issue you cannot trust the Chinese government to not steal intellectual property or to put back doors into the software it is common business practice there Huawei was banned they basically stole the source code from Cisco that was proven
and it was proven that they were spying on people Canada the UK the United States Vietnam everybody has banned using 5G technology from China for a reason because they will use it to spy on you this is uh the nature of an authoritarian government it is far too powerful to have a not only the surveillance capabilities that are built into owning Tick Tock in
the hands of the Chinese Communist Party to have the ability to very in a very nuanced fashion Trends certain videos that would steer the United States in a certain direction yeah stupidity is one of course right they're letting their you need 16 minutes that 60 Minutes clip is incredible right they're showing science videos to the kids in China exactly and they're
showing stupid nonsense to the kids in America what do you think over they're trying videos our children versus their children you can be 100 certain they're doing psyops on our children as we speak they are trying to make us dumb and distracted while they get smart and sharp by the way it's very simple if you're a Zucker so this is not the choices of our kids the algorithm just gives you more what
you want exactly of course but that that's like saying if you gave kids a choice between broccoli and chocolate bars of course chocolate bars if you put this on the supermarket and say eat they're gonna go right to the cereal the job of a parent tax is number one know their name and then number two differentiate genetic pen and Pad sex good things and that's your questions
the future is not bright for tick tock here because it's gotten caught up in the geopolitical Rivalry between China and the United States and that's only going to keep getting more and more intense the US and China are headed for a big security competition and by dance is caught in the middle so I agree with Jamal about the future but you know this claim is made that
Tick Tock is spyware and you know it's listening to you it's surveilling you it's keeping track of you like what is the evidence for that claim I just want to understand that a little better like has anyone ever proven that like Tick Tock is spyware and if it is why doesn't Apple stop it can you just explain that to me yeah I think apple has a complicated relationship with China so the claim
that they're not going to believe all right so Jake your claim is let me I just want to pin Jake out down on the first section your claim is that 100 Tick Tock is spyware and apple is letting it happen because their relationship with the CCP I do not have the evidence of specific instances of them spying but I do know that this is what the Chinese government uh
aspiration is is to be able to have back doors to spy on all Americans that's why they you know are trying to get wow away well you don't even need to know that because you can just open your eyes and look at and I mean that's an insult but you can just look at what Tick Tock has the access to it has access to your location has access to your camera roll and it knows
you know uh everybody in your Social Circle because it has your address book so by having your address book having your location and having access to your photo role they have you compromised by default the default settings when you install Tick Tock it turns on local network turns on microphone turns on camera turns on background app refresh and turns on cell data so
tick knock is no worse than anybody else in that because a lot of other apps are very aggressively trying to harvest all that data as well sucks like it's like Alexa's always listening to you right but you feel but you feel safer with Alexa because it's a it's an American company or the perception of safety is there so I don't think there's a huge thing to prove other than yeah there's a
setting that allows you to turn on the microphone and it's a default and they do it but they were caught I just want to make sure you guys understand this according to the New York Times by dance the Chinese parent company of tick tock said on Thursday that an internal investigation found that employees had inappropriately obtained the data of U.S Tick Tock users including that of two
reporters over the summer a few employees on a bite dance team responsible for monitoring employee conduct tried to find the source of suspected leaks of internal conversation and business documents to journalists in doing so the employees gained access to the IP addresses and other data of two reporters and a small number of people connected with reporters via their Tick
Tock accounts they were trying to determine if those individuals were within the proximity of by dance employees according to this company so there's an example of them using the technology to try to track down leaks hold on a second that's exactly what any app a company can do the photos the screenshots we got from Twitter that were shared in all those files or
whatever that happened a few weeks ago showed that that many Twitter employees were able to log in and just view the direct messages between Twitter users and that there's no necessarily blogging or access privileges required to have access to that information there are these holes in all of these social networking and consumer uh digital consumer product companies that allow
individuals to go in and do things it's a feature sure but it doesn't reference like some systematic um yeah but those aren't controlled by a government agency no that's that's the key thing what Jay Cal just said is a key thing everybody tries to get these things turned default on every app tries to get access to your camera roll to your contacts to turn on the microphone
the problem isn't that those settings exist because Apple created them and Apple created a privacy framework where you have to opt out of it okay the issue is that that data instead of going to an American company with American on a with American data centers and American Service it's going to somebody in China or it's the perception that that's happening that I think is a Death Note
and this is also excluding all of the work that every single big tech company must be doing to point the finger away from them and this is something they can all agree on if yeah if you got Andy jassy and Zuck and Sundar and Satya Nadella in a room what do you think they could all agree on hey guys are we better off pointing the fingers at each other or
should we just point it over there to a company based in China so do you think do you think that Tick Tock in a way is being scapegoated here or do you think it's a real security threat both both yeah that's yes to both and you know what I think what we saw with the the Twitter files for me personally the one that uh was most concerning was the fact that the FBI was being treated they didn't have
control of it like the Chinese government has control over by dance at a wholesale level but they were being given you know pretty um close to giving God privileges but they had more influence than they should have and they should have gotten subpoenas right so even in a democracy like the United States you can see the FBI using techniques to get employees on their side
to get information on specific users imagine if the FBI just had God Mode for Twitter or Facebook like what would happen even in a democracy we see it happen we see abuse the Chinese government is a Communist party they have no problem sucking the data down of every single person and using it however they want I think the the problematic thing is that when you look at the capital
structure of these Chinese companies post now XI being ruler for life is the Chinese government has typically a seat on all of these boards they also typically have a golden vote and so when you think about the governance the governance of these companies has tilted far away from a normal cap table where it's one shareholder one vote two you are allowed
to exist on this cap table at the benevolence of the government and so I think that you have to factor that in as well Sac so you know is it Amplified probably but is there also non-trivial risk that we would never give to any other company absolutely like you know take the opposite example how would we react if the government had a golden vote and a board seat on meta
going into an election I mean one party would be crazy and the other party would stay mum's the word that's what would happen well I mean let's talk about but let's let's be pragmatic the news reports that came out this week indicate that they're talking about restructuring bike dance so let me propose this to you guys if Tick Tock us were set up as Tick Tock us Inc it's its
own C Corp it's based in the U.S and bite dance owns passive non-voting shares in Texas all the software all the services the algorithms are all run in the US the data is only sitting on servers and the Chinese have an economic interest ultimately and what happens with that asset but that asset is entirely managed right that's totally fine that should be a goal in the US shut it down or do that
and if that happens you trigger cepheus so you'd have to then make an exception that sounds like it's part of the discussion that's underway right now is how do we get past this regulatory hurdle because I don't know guys I don't know how you turn off Tick Tock for 100 million people that are using it for two hours a day guys we're rejecting deals left right and
Center at much much smaller thresholds because of cepheus because it's we're not and we're not even dealing with China assume you get past if yes assume that there's no that thing that's right away it's a bad assumption right but like that's obviously there's eight billion dollars a capital that's right the minute that if you at the Chinese government around and do an end around on cepheus
to own 30 passively then everybody who's had a deal rejected for a much smaller threshold for a much more benign issue will sue except that they started with this asset versus buying into it right that's the difference and what they're doing is they're seeding that the difference here is their seeding control of the asset to U.S investors and oversight by the US
government versus the reverse which is trying to come in and buy an economics that's not what cepheus adjudicates it doesn't adjudicate where was this originated adjudicates in this cap table does this person exist should they exist at what threshold what do they know and are we giving something that we shouldn't give and I'm saying yeah let me give you another um interesting if
the pragmatic answer is you can't just make up a bunch of stuff that blows up a bunch of others though let me frame it differently what if bike dance sold Tick Tock us to a U.S owned private Equity Consortium I'm a U.S private Equity Consortium that effectively bought Tick Tock us and operated it here in the US but that's exactly what should happen
but my point is those people are smart enough to not pay full price they'll say you're [ __ ] that asset is worth zero I will buy it for 10 billion dollars take it or leave it and you know what they'll have to do they'll have to take it so my point is the equity value is so impaired in this thing would you buy that for 10 billion of course I'm a buyer but these
guys are smart enough to drive a huge barg a hard bargain so if you're existing on the cap table and you've marked it at 320 I would be [ __ ] selling it okay well look something like this is gonna happen so it'll be interesting to watch and if any group of people got together and tried to actually buy it for what the fair market value is worth via a spreadsheet is a horrible investor In This Moment
if you should hold a gun to their head and you should extract a massive pound of Flesh that gives you a huge margin of safety and makes you money good we know people who are shareholders if they could have sold it at 320 or 120 they would have sold already well no there are there are people that will buy this thing in the hundreds that's in size then sell everything you can and then
put it into another company now the problem is you have to show a markdown because you've already marked it at 320 so I got to take a 65 discount yeah if you're if if you're underwater you're underwater but for anybody who got into the sub 1 billion round you can't eat irr and you can't eat paper markups you can only eat the distribution so get the DPI and move on as well get the DPI and
move on it's another bet you could place Why Try to okay be greedy and get the last 3x out of this investment I want to move away from software meets Leisure to software meets human health and productivity a couple weeks ago we were going to talk about this last week it was announced that bio and Tech was buying insta-deep insta-deep is a broad horizontal AI or
machine learning tools company services business they partner with big businesses to help them build out ml driven infrastructure to improve their products and their operations and their businesses one of their customers was bioentech the company that designed and owned VIP for the original Pfizer covid vaccine one of the original Originators of mrna-based technology bioentec doesn't
just focus on mRNA technology they also focus on cell and Gene therapies the the novel new kind of modalities that are emerging in in Therapeutics and you know it was a really interesting acquisition it was a 250 I think person team that they bought the company for about 600 million dollars specifically to improve how AI can be used to accelerate drug discovery I'll just make a comment on this and
then sax I'd love to kind of hear your point of view on these types of businesses broadly the capabilities of machine learning when applied to a particular vertical are quite profound I you know I've certainly been involved in this space in agriculture and increasingly doing more of this work in Pharmaceuticals and and biotech and you know when you can have large
unique data sets that you can then model using these tools and these capabilities and be predictive about what the next product iteration should be it can really change the value and the trajectory of your business one of the big trends in Pharma right now is to move from in vitro testing meaning you're running biochemical experiments in labs in assays iterating testing
experimenting to see what molecules work or what protein does what and if it binds to the Target and doing more of this in silica as it's being called which is in software and rather than just doing testing and software you can actually use tools like Alpha fold that can be predictive of large molecules and how they can drive outcomes to make decisions about what to put in
your pipeline so if you take 99 of the junk out of the top of your pipeline and you only focus on the one percent that the software predicts will be more successful you much more quickly get drug Discovery through the pipeline and you have a much higher hit rate so the ROI is extraordinary particularly when you're talking about multi-billion dollar revenue streams coming out the
other end of that pipeline and so I think you know the way this reads these guys raised 100 million dollars in a round last year sold the company for 600 million it seems very similar to deepmind being bought by alphabet a few years ago where the application of the the team is pretty broad across a number of opportunities but bioentec bought them to focus on the kind of Pharma
space so I guess tax you know in in the earlier stage and you know I see a lot of teams now that are like Hey we're AI for this or ml for that a lot of Pharma and biotech deals have to have the catchphrase ml or AI in their writing now because of the economic Improvement of those businesses are you looking at Enterprise software businesses that aren't necessarily about
the typical subscription model where you sell a seat license and people pay for that but have this broad tool set and toolkit where these folks are earning Revenue share or participating in a Services Revenue stream for enhancing the value of their their their partner in the AI or ml space and what's the Better Business model because I think this is where so many new teams
are starting out is what's the business model and what should we be focused on with our ml toolkit I mean the short answer is no we're having done any deals like that uh I mean we're not Pharma investors so I don't know how I would be able to evaluate even if it is a software product I don't know how to evaluate its um effect on Pharma outcomes so I mean we haven't done any deals other
verticals I mean like do you look at ML and AI companies that are more services or partner oriented versus just selling seat licenses to a software tool I mean is that a big Trend you're seeing I don't think we have enough data to tell you what the trend is we did a deal called Pearl which is creating an AI for Dentistry so what it'll do is it scans in all of
the x-rays and you know down records from from Dental practices and it gives a kind of a second opinion it can spot things like cavities and things like that or just changes in the condition where it's really powerful is over time right if it's got your last six sets of x-rays over uh whatever six year period it can detect changes that are probably you know hard for a human to see
so they think they can get to like better than human sort of diagnosis by using computer vision and then we invested in sort of after that where we realized okay this is kind of like a powerful application so we invested in a company called Robo flow which creates tools for computer vision so Pearl created its own tools for taking a large number of you
know X-rays and classifying them and then creating their own AI tools roboflow gives you that same tool set but you can run it on any computer vision project and they seem to be building a pretty big universe of software developers who are using their tools and in this case this was a team that was bought they bought a 250 person team for 600 million dollars that just
had this capability set really and a toolkit does that change your outlook for investing in mlai companies when you see a 600 million dollar exit for effectively a capability they didn't have you know a core product that was in Market they were doing kind of these co-development deals but I mean how much does this already yeah ai's already the hot thing and everyone's kind of looking at this
now I don't know like you know ever want to base an investment decision on the fact that some acquirer might come in and buy you for a large amount of money when you have no revenue or business model I just think like that's not really a sustainable although it does seem that AI Engineers go for 2 million each I think is kind of your point Dave on an m
a basis yeah I mean your Deep Mind got bought for what 600 by Google and I think they had 200 people I think it was like 400 yeah it was like was it 400 yeah so yeah it does seem like and I think deepmind did not have a business Concept in mind when they were funded they just wanted to do research right that was kind of thing about that company platform capability similar to instant deep I
mean there's a lot of these that's what I'm pointing out is like some of these platform capabilities end up just getting fought for you know huge Psalms yeah the amount you can't invest in a company hoping for an unreasonable acquisition meaning unreasonable meaning that unreasonable acquire yeah yeah like unreasonable meaning that your own metrics don't reflect that valuation as
a business you might be worth it as a strategic acquisition of somebody else but you you actually raise interesting question which is is a seat model the right way for one of these companies to price the product and you may be right that that the seat license model doesn't really work because like how many seats do you really need to buy for these companies look I mean
one of my like one product engineer yeah like I mean we've seen this we've even seen we've had these debates inside the companies I mentioned where like you know charging a 10 or even 100 a month seat doesn't doesn't really reflect the value of the insights that are being created and so yeah there are like you know they're I don't think this has been figured out yet but this is the big
question in ml and AI when I was at Monsanto you know we had all this IP licensing deals we do or um new products would come to Market and it was never Cost Plus or simple pricing it was always about value capture it's in an Enterprise setting you know because we sold to Farmers it's like how much value Are you delivering for the farmers if it's a hundred dollars a profit an acre
you try and charge an incremental thirty dollars an acre for that product and it was always a one-third value capture model and the same is true in biotech and Pharma the producer of the product or the co-developer of the product is often front of value capture and it's not a site seat license and it's not a service fee it's more ultimately we want
to get a royalty on the outcome on the Improvement that we can deliver to you and so there's all these novel business models that are emerging at least that I'm seeing in Pharma and biotech to participate more meaningfully ultimately in the drug development outcome versus just getting charged a fee for doing a service or a fee for a license to a software packet the value of these
companies has gone down I was a early investor series a investor in a company called Flatiron Health we sold it for 1.9 billion dollars to Roche that's the biggest exit in this space for this machine learning enabled stuff it happened in 2018 and so what's really happened is the value of acquisition in M A has gone down even as a technology capability has gone way way up and why is that it's
because this stuff has yet to be proven to actually meaningfully improve the hit rate for these drug companies so whether it's biotech or Roche or anybody else the biggest problem we still have is getting the design space guessing that better and these machines are better at doing raw calculations but they're not necessarily better at veering towards this design space over
this design space and so as a result you're not improving the the either the slugging percentage or the batting average of these Pharma companies and that's why they're paying less and less so everybody will have this capability as an adjunct the thing that you have to do is sort of what what you guys have said which is if there's a company that can actually do
better guessing at the top of the funnel the thing that you should probably do is just give it away in return for a back-end rev share and a royalty and that business also exists so you know the best performing company in Pharma is a company called royalty Pharma it's a 22.5 billion dollar company that has 90 ebitda margins it exists in Ireland it's run in New York by this wonderful
entrepreneur Pablo lagaretta but that's what he does he buys small pieces of royalties and his whole thing is like the Paul Graham thing at YC I'll give you just that little amount of support and all you need is a little lift in valuation to justify giving me the six percent and the tooling company the AI company that does that could win who would go to
Roche and buy on Tech or lily or somebody else and just say look use my tools and whatever drug you generate off of me I just want a three percent royalty and all you need to do is just show a three percent lift across a portfolio of assets that would be a killer business model because if you look at what Pablo's done over a large number of successes that's a ginormous company
Jacob I mean are you investing in the seed stage mlai companies and are there novel business models that you're seeing we're not sensors yet to be honest we are seeing people play with chat GPT and kind of do you know experiments but you know the more I've used chat GPT we've connected it to our slack so you can actually ask a question in our slack in a channel called AI
testing and it will give the answer and everybody can see people like playing with it he you know it's kind of like a parlor trick now I'm in like that phase where I'm like yeah this is impressive but it didn't actually solve my problem and it's slightly faster than doing a Google search so I am thinking there's going to be a really good business uh created in taking
the open source projects and forking them and verticalizing them like you know saxes one that's doing dental work you know like this makes sense to me somebody should do it in accounting somebody should learn all of Gap accounting which is pretty simple because it's published fasbi all of this nonsensical accounting rules and give you a hundred percent guarantee of no malfeasance so for
example you guys saw this Brazilian company you want AI accounting that's your that's your look at this company Logistics look at this company americanas in Brazil which just torched 20 billion dollars of Enterprise Value why because these guys were using Excel to do a bunch of complicated capitalization and cost accounting made two or three years of mistakes it added up to two or three
billion dollars and they're basically going to file bankruptcy in the next few days that's completely avoidable human error that should never happen and an AI would be perfect for that like this is not super controversial to just follow Gap accounting right yeah I don't know if you need AI for that I think you just need software like a database would be good but no the problem is the
database exists today like everybody sits on top of Oracle GL or workday it doesn't prevent these errors so my point is you got to get humans out of the system and the AI should be the accountant the AI knows the rules generates the p l and says this is it and by the way that's way better risk management for the CEO and the CFO because as you guys know if you're the CEO of a public
company you have to sign your signature that these things are legitimate and how do you know right I would way better know that a computer did it like an open AI algorithm tells me Tremont this p l is perfect then some dude I don't know at Ernst Young okay I have a question for socks saxypoo can you please explain to me why Alec Baldwin is going to get charged
with manslaughter for this rust thing that seems really crazy can you just say could you explain what happens on a set with guns and how the hell did this happen like what the hell is going on well I've produced two movies but neither one of them involved you know guns or shootouts or anything like that so I haven't had like first-hand experience with this I have you're a gun
owner so you're an intersection of movie producer and gun owner so it's a good yeah I understand the rules of gun safety and and that kind of stuff look Alec Baldwin did not follow the rules of gun safety the first thing I would do if I was ever handed a gun would be to clear it I'd like check to see if it was loaded and clear it I mean you never pointed at you at
somebody you always treat a gun as if it's loaded even if you think it's not but he was in a very specific situation which is he's on a movie set and the person who's handing him the gun is the armorer and someone whose job it is and said Colt gun yeah exactly it's somebody whose job it is to make sure that the gun is handled properly and unloaded and all that kind of stuff and they're using
it on a set so I agree with you I don't quite understand why Alec Baldwin is liable in that situation for the gun going off the person who screwed up here the person who screwed up is the armor the armor I have a question a person whose job it was to never allow live ammunition on the set but to handle the guns properly this person movies was that they were flying blanks
yeah they were so you're in blanks but they had blanks and regular ones in their kit for whatever reason because they were shooting real ones as well but this is involuntary manslaughter and I think Baldwin is also the producer of the film so I don't know it has to do with his hiring of the armorer you know what I'm saying that I can that I can speak to listen yeah you you frequently
give stars in an independent movie a producer title he's not responsible for the physical production of the movie I bet anything he's not there's a guy called the line producer who's responsible for the physical production and my guess is he wasn't even responsible for the business side of the production they've got other producers for that so it doesn't make sense to me
if they're going to charge him for having some sort of overall liability as a producer to then not charge the other producers that just doesn't make any sense so I think this producer credit thing's probably a red herring like I said I think the armorer is the person who is seriously responsible for this situation there are the ones who screwed up they're the ones who had a
responsibility to make sure that the gun handed to an actor I mean Alec Baldwin's an actor yeah look conservatives in social media are dragging the guy because they think he's a douchebag and he doesn't know how to handle guns but that's not his job he doesn't he's asking questions in movies why would you ever have live ammunition on a movie set you shouldn't
they shouldn't have you shouldn't it's a mistake so so it's not as if like the scene is different if you have a real Bullet versus a blank if I remember right there was a story about how the gun Armory people were taking members of the cast and crew and they were shooting guns for fun in the distance they were doing like targets and messing around and teaching people gun stuff and
just playing around but using live ammunition and that that led into an accident that there wasn't good kind of transition that's really bad that sounds like the kind of negligence that caused this but unless there are facts we don't know about I don't know why being charged by the way the armor that sounds totally legit to me so guys listen I need to run another
call I was going to talk about this really fantastic paper on the one of the driving forces of Aging as demonstrated by a team from Harvard in in collaboration with many others on epigenetics and the loss of data integrity and epigenetics really being the core driver of Aging in mammalian cells it's an incredible paper it speaks a lot to what we talked about last year
yamanaka factors and partial epigenetic reprogramming of cells how they can reverse aging these guys have demonstrated it in a really powerful way I'd love to spend some time on it maybe we pump that science corner to next week wrap up for today I think we've talked about all sorts of fun stuff it's been a real pleasure and an honor to be in the seat of the world's greatest moderator
we missed him today we honor him we look forward to having his return next week chatting with you gentlemen and on behalf of the all-in Pod and my co-hostia David sacks Jason callicanus thank you for listening bye bye love you boys your Winner's ride rain man [Music] we open source it to the fans and they've just gone crazy [Music] besties [Music] we need to get Mercies [Music]