is chamath in a room with his pr crew right now like rehearsing and practicing and this pod is ruined [Music] rain man david [Music] hey everybody so i just wanted to make sure based on last week's pod it was absolutely clear i care about human rights many of you know my origin story but for those of you that don't i was born in a country that's no stranger to civil war and religious and
political persecution growing up my family and i felt those effects it affected our safety it's in part what led my family to file for refugee status and stay in canada so this is a real part of my lived experience that said you know i realize that what i said last week lacked empathy particularly towards others who are dealing with persecution in this case uh the weakers and based on what i
read this week i think what's happening to them in western china is a terrible situation i also want to talk about this idea about nobody caring look if we take a step back and replace uyghur with other really important issues like the conflict in yemen the potential war in the ukraine gun control school shootings health care equity we're faced with horrible events every day however the unfortunate state of the
world today is that we've also normalized this routine of being confronted with something tragic or horrible or unjust and being allowed to react with thoughts and prayers and this was the real intent of what i was trying to get across so when i talk about my line it's not about whether something matters or not it's about which issues of all the important issues we face every day
where i have the expertise and i believe i have the ability to have a real impact even if just by a little for me those areas happen to be climate change life sciences and deep tech but just because this is where i spend my time it's not to take away from any of the real work any of you are doing in other areas and then lastly i just wanted to explain to people who may be new to the pod
because of last week that this is a place where four of us four friends talk about a whole wide range of things we explore our curiosities we try to learn from each other we challenge each other but we've always done it in a really supportive space and i hope you keep that in mind as you listen and watch going forward and hopefully can you can bring some of that to your own conversations that's
all i have to say well said uh sex i mean i i know you have something to say but i'll say um i got a lot of messages this past week after the show where um which which i felt a little bit hurt by and mischaracterized and maybe it was simply i said the wrong thing at the wrong time um and so i i want to just be very clear about a couple of points if i can take a
minute that's all right with you guys yeah so i said um i just wanted to i was gonna actually send this out on twitter and i decided it was better just to address it on the pod so to be clear i strongly believe in and support absolute freedom of all people and this means de facto i strongly disagree with the suppression of free speech denial of religious freedom imprisonment harm capital punishment
slavery and genocide i thought this was obvious when we were having our conversation i did not be clear you're not in favor of genocide i'm not in favor of genocide i'm not in favor of slavery or capital punishment or suppression of religious freedom i thought this was obvious the conversation i tried to have was the wrong conversation at the wrong time which was to trying to talk about the broader
china v u.s narrative that is swelling and will continue to swell this decade i think that the primary function of civilized society or any advanced social system is to take care of and protect those that cannot take care of or protect themselves and this is usually done by government but when government fails and government is in fact the oppressor i think it is the
responsibility of other governments and other peoples to step in and have a voice and to take action and so that is um that is kind of my moral framework i think it's important i don't deny any of the harm being done to the uyghur population in china i don't agree with it on a principled basis and i don't think that what the chinese government is doing is right um and the point that i was trying to
make during our conversation was a very different one that i think got completely lost in the moment which was really just about what's going on with the china u.s narrative right now i'm not pro-china i'm also not anti-china i am particularly interested in understanding the broader china u.s dynamic and what it means for the world over the coming decade and decades i think it's really important
for us when we evaluate these things and to understand them to not just take sides but to understand the context in the broadest way possible and that's why i'm trying to get both sides and understand the mindset of the people that are involved in running these governments and the way that this of this world is going to evolve as this economic tension continues to mount um and so that that's where i was trying
to go um and i was just trying to highlight where i think everything is headed over the next decade or two independent of what are obvious human rights issues going on so let me just stop there and say thanks for letting me say that but that was important for me to just be really clear on because clearly i wasn't clear last week so well and i i'll i'll just add to what you
said that i also thought it was implied that you care about these things and that you're not in favor of them i didn't think that need to be spoken yeah so i think it's it's nice that you're clarifying it but i think any reasonable person would understand that if you care deeply as a vegan about factory farming that you also care about humans and you know genocide and torture or whatever issues so i
i think it's like a your statement is so obvious that i i wonder if you even had to have made it but i'm glad you did sax okay so uh i guess first i i should say that um you know what's happening to the uyghurs in china is indefensible you've got reports of upwards of a million you know of these people being held in detention camps there's reports of mass sterilization and rape it's like
ethnic cleansing over there so that's absolutely wrong and it's one of a growing list of issues that we have serious problems with china on which include theft over intellectual property cyber espionage the bullying of their neighbors uh their crackdown on dissidents the list goes on and on i mean i think we have to be clear-eyed about the challenge and the threat that china
represents and we've discussed that on this pod many times that being said you know what i think we saw this week was really about cancel culture right you had in response to last week's pod you have this online mob form and uh they want to take what jamaa said and interpret in the worst possible light so they can turn the outrage meter up to 11 and everyone gets to basically go on twitter
and virtue signal and say what great people they are and because chamath is a bad person and i just want to speak to that issue i mean there's a huge amount of hypocrisy going on in that because how many of the people who are tweeting their outrage and their denunciation of chamath are doing it from a device made by forced labor in china wearing their nikes made by forced labor in china on
their way to target to buy cheap goods made in china how many of those people have actually lifted a finger in the real world to help the uyghurs how many of them have sacrificed an economic benefit uh in any way and so when shema said nobody cares i thought it was a really startling statement by him but if you define caring as doing something more than just virtue signaling and expressing your
feelings as actually making a sacrifice or taking a risk in the real world i thought he was frankly telling us a very uncomfortable truth we haven't really most of us done anything and in that sense i think the reason why his comments hit such a nerve i don't think you get the kind of pylon that we got unless he's saying something that's hitting a nerve and i think the nerve the thing
that he exposed is that we're not really doing more than virtue signaling on this issue and then came all the you know all the hypocrites you've got the nba denouncing him issuing a statement when what have they done i mean when daryl mori spoke up uh on behalf of the protesters in hong kong the nba shut down and sanctioned him and uh you know lebron james said he was uneducated actually i think jeremiah
was pretty educated about what's going on so you've got those hypocrites you got the white house issuing a statement disavowing chamoth but hunter biden went over to china to manage billions of dollars for them and profited by his business dealings over there so they're a bunch of hypocrites and the list goes on and on and so you know i think that if in order for the mob to summon the
outrage that it summons it requires them to i would say first put the worst possible light on which moth is saying and to ignore i'd say the fundamental truth of it and second to engage in this massive hypocrisy and that is the way that cancer culture operates and i don't think we should buy into it um so i appreciate what what chama said i think he's clarifying his remarks he's showing
that he does care and he does have empathy as we all should but i think there was a fundamental truth in what shema said last week and that is what people are so uncomfortable with okay well said um i have feelings um and most of all i'm thankful we had the discussion the goal of this pod i think what makes it special and why y'all who are listening come here every
week it's because you know we're going to be honest with you and we're going to tackle these hard discussions and i think friedberg's uh comments and sexist comments uh really uh explain that and what our intent here is and is human rights is one of the hardest issues to discuss that's why you don't hear it being discussed and there are not easy answers and i think you know i was challenged uh by my
besties on the episode and their questions and their challenges were absolutely critical yeah yes how can we care about one group of people when the people in our backyard we're not caring about are we going to invade countries these are very nuanced difficult questions but we must have this discussion and if we try to cancel people with a 20-second clip that looks
completely different if you look at the 2-minute clip or you take the time to have a 40-minute listen of the whole segment you get a totally different picture and i i think it's very important to raise awareness about human rights and it is an issue that i have been passionate about my whole life and i'm not trying to virtue signal or score any points here but i know firsthand that raising awareness and
having the discussions reduces the violations because dictators despots and people doing this kind of stuff do not want the heat of what happened this past week and what happened this past week is that more awareness was raised about the uyghurs and the situation that they're going through i think then you know as somebody who's modded the situation then i've seen in the last couple of years perhaps this
was a tipping point and that is something good that can come out of that discussion now on a personal basis i have uh had some feelings of guilt um because i was very hard for me to watch what happened to chamoth this week and to watch people dunking on him um and then let's face it i brought the topic up and i dug in with my feelings and it got a little heated and and i'm
suddenly being portrayed as you know a hero in this discussion that's not the intent and there's there's no hero or villain in this there is a hard discussion in this and i am extremely proud of my friendship with each of you especially you chamoth i'm extremely proud of your candidness and tackling these issues and making people think about that and you know i'm just so proud to be friends
with each of you and i'm so proud of the work we hear we do here every week and i think it's important work um and i feel like i get smarter every week and and i hope the audience does too and i hope we can keep having these discussions um can we make fun of each other yeah now let's yeah make fun of each other i mean i don't know if we're allowed to laugh this is like so serious and heavy but so
what you're saying is thank you chamath now that's gonna be good for 20 i mean look we've talked about cancel culture a lot on this show you know we've always been i think generally able to be third-party observers so what's happened and it was really interesting to go through the cycle this week where um you know there was just kind of a an echoing narrative uh on one thing that was said with one
direction there were a few pieces though chamath right i mean wasn't there a piece from the atlantic and some other pieces that kind of highlighted that things that you said were things that a lot of people won't say and that's what was really so shocking for so many people what's the peter thiel comment on this whole on all of this stuff yeah he said if if no one's saying it it's probably true or
if you're not allowed to say it it's probably true yeah if you're not allowed to say it yeah but um yeah it was uh well you really think based on the the mob that formed and you know it's already kind of blown over and that's the way this kind of cancer culture starts but for that sort of uh that wide hot really intense day or two you would think that like chamath had practiced genocide himself
you know you know because everybody comes out and the way that they make themselves feel better is by virtue singling on this issue and again i would just say that i think we should be thinking about what do we do um you know how do we actually make a difference because i don't think just virtually on the issue is going to do it um and you know at the same time that this mob was
forming against jamaath we had a two hour biden press conference in which biden never mentioned the uyghurs once the press corps never mentioned the uyghurs ones so does that mean the uyghurs are below their line um you know why wasn't it mentioned you know shouldn't we be ganging up on biden why is you know why is the press ganging up on tremoth when they're not getting up on biden for that so there is a fair
amount of hypocrisy here i actually think jason i think you make an excellent point that by discussing these issues and raising these issues it creates a little bit of a check on the people perpetrating these atrocities because they don't like to be exposed that way and you know maybe we should be boycotting the beijing olympics i mean maybe that should be on the table maybe
we should be boycotting the nba i mean let's have that conversation yeah or maybe everybody who goes there i wouldn't want to see the athletes miss the olympics but maybe they could each just raise their hand and do a you uh or some sort of a signal to show they support the situation or they're aware of it uh with the uyghurs there could be some you know modest
protest or statement they could make without ruining you know their lives work i always hate when the olympics get cancelled for some political reason because i think those people work so hard for it um but racing awareness you know is a noble goal in all of this and then also doing things is a noble goal um and um yeah i mean i i i it was very weird to watch the the mob form and then dissipate
and just who was you know taking the time to actually listen to the full episodes it was clear from that atlantic article and some of the nuance takes that they listened to the full discussion because there are bullet points here like like there was somebody asked me a very challenging question i think it might have been you freeburg like are we going to start invading
countries over human rights and then there's more suffering and death and pain from the wars and and when do you decide as the the democracies of the world to invade the dictatorships of the world to promote human rights like this is a very difficult issue uh that the world has had to deal with sadly before and there is no easy answer there you know right well you're right this is a point that i
also tried to make on the last episode like freeberg did which is um i i think it's i think it's actually great to have these ideals and we should have moral clarity about what's happening and i think it what's happening is wrong it's outrageous it's an atrocity um but but the question is what we do about it and um and the the reality is even though it's important to speak out about
human rights these types of fulminations about human rights when they become this sort of you know when people when we get into this like frenzy it's been the prelude and pretext for every misguided foreign intervention that we've had over the last 20 years and the example the iraq war i mean saddam hussein was suddenly hitler um you know the goals of nation building afghanistan for 20 years our invasion
of uh libya we got rid of gaddafi and we replaced it with chaos for years we were talking about how evil the taliban and their social system was and then we just handed afghanistan back to them a few weeks ago exactly so you know and so these types of um you know when you kind of you whip people up over human rights i mean i agree with the sentiment and i agree with the moral clarity but i also can't
help but recognize that neocons and the military-industrial complex and the washington blob have used this type of rhetoric for decades to corral us and stampede us into wars and foreign interventions that don't make any sense and we all recognize after the whole project has gone wrong like afghanistan we become suddenly more realistic about the whole thing and suddenly you know we're not
talking about you know the the the sort of the moral atrocities of the taliban anymore but the discipline is still there they're still there the discipline though is to be able to check ourselves before we get into these interventions and i don't think we do a good job of that we're whipping ourselves up into these mobs and we're in a frenzy and the the raising awareness is something that
has been lacking you know certain organizations and i think it's very important that we don't take organizations that have engaged with a country let's say china or saudi arabia they may have engaged in good faith with the goal of you know engagement is a positive for humanity in the world okay if we engage with china and we are co-dependent on each other um that will
lead to a better arc for human rights and for humanity and less wars because our economies are entangled and we do business together okay this is a fine premise what the dictators and despots want you to do is to fight each other and not look at the human rights atrocities so it's easier for us to say oh the nba oh apple oh you know pick the uh the the company or
corporate interest or organization that has engaged um but by raising awareness um consistently it gives other people the ability to talk about this some organizations weren't willing to even talk about this or say the name uyghurs and if we keep talking about the uyghurs the chances that that situation improves i think there is a chance it does improve but i do think this like notion that the four
of us can get together on a podcast and not get cancelled because you know we don't collect money from advertisers and we started having these conversations amongst friends and we just put it on the internet um first of all it's a great kind of reflection of what you can do in the united states with the freedom of speech that we have and we can just put this on the internet anyone can watch it around
the world uh i don't know how many people are watching it but mostly freedom of speech mostly freedom of speech um but i do think that it's it's pretty valuable and i do think that that's you know an important point for us is you know as much as chamoth got completely destroyed this week um you know the i gotta i gotta say other than covet i'm uh i'm feeling pretty good you feel better
you're pretty bummed for a day or two i mean i think the the covet thing was scary because four of my five kids got it um so i was just like oh my god how's everyone doing by the way i'll be very honest with you so uh between both houses um you know mine and my ex-wife's four of the five kids got it our nanny got it nat did not and the youngest baby did not uh there's a real difference between in my house
how the boys experienced covid and how the girls experience covet quite honestly it like we ex you know we've expressed certain symptoms specifically a really bad sore throat and a cough that the girls in her house did not the girls had more intestinal issues the boys roughly did not so it all manifested kind of in odd ways uh but oh my god i mean a lot of pain in the ass well to be going through that
and then also like monitoring twitter and inbound your phone must have been blowing up i wasn't doing any of that okay jason start the pod let's go all right well okay everybody welcome to the online podcast with us uh the sultan of science who's got a new startup he launched we'll hear about that later in the show the rain man himself and dare i say the dictatorship i was like it's not like we it's not
like we didn't warn you we had a 63 episodes we called them the dictator this was about to happen let's start the show everybody you guys were like after 20 years of friendship it's like i don't know the list is like 9 000 items long i was like yeah if you're gonna cancel them we got a log list all right uh so first up i think we should start with um a a duo of stories
that relate to each other microsoft announced it's buying activision blizzard for 68 billion dollars of cash microsoft's got a lot of cash um and i think we all understand like why this is a great idea for microsoft with xbox and obviously activision owns call of duty which has a hundred and twenty million or so monthly active users they also own a bunch of nerd stuff uh from blizzard
like diablo world of warcraft my favorite starcraft and those have upwards of 40 million they also had black king if you remember that they make candy crush and those kind of casual games which have a quarter billion users uh but even with all these uh it's a highly fragmented market but in related news alina khan the i believe 32 year old head of the ftc uh who has written a bunch of pieces we
talked about this on all in episode 36 sat down with kara swisher and andrew ross sorkin for an interview and basically we're moving or she intends to move the goal posts on antitrust i want to play three clips and have you each react to them here's the first one and this is her take on changing the antitrust from consumer harm to uh now shift to does this deal and we'll take the
activision deal here as but one example but you could take the instagram and the youtube deals as well do these deals substantially reduce competition in the future let's watch the first clip in certain cases maybe too much success and so the question is when is the regulator supposed to say this could work and if it works it's actually worked too well it's an interesting question and i think
you know for enforcers the the real question is is this the deal that could lessen competition and in high intensity all deals to some degree to some degree substantially less in competition or tend to create a monopoly and there's also indication that congress wanted enforcers not just to act when you know the third and fourth companies are merging are the first and
second but actually in the incipiency when you said see trends towards concentration that those can also be important moments for enforcers to jump in so uh what do we think uh freeberg about this sort of new rubric not consumer harm because obviously if microsoft buys activision and makes those part of game pass then you get call of duty for free with your game pass and the candy crush games and
blizzard games that's good for consumers they get a whole bunch of more games it would be like disney buying star wars you get all the star wars stuff in disney plus for the same low price yeah look sex is our legal eagle here but i'll just say um before uh you know he probably speaks better informed than me um if it's not about consumer harm and it's about decreasing competition in
this broadly i would argue subjective sense then um what's scary is that there are going to be decisions made by interpreters of what is and isn't competitive and ultimately if they're not trying to keep in mind the best interest of the consumer then it is in fact going to cause consumer harm at some point not necessarily in all deals that they block but there will be deals that they may block that may have
benefited consumers meaning prices go down imagine having all of your products integrated in one streaming service instead of having to pay for three streaming services so instead of paying 70 across hbo max and disney plus and netflix you get everything in one but today the regulators would not let those businesses merge because that would be anti-competitive under this context
and so this is going to be a touchy debate and it's going to be difficult i think ultimately to rationalize this if there is going to be a point in the future where we can actually show that consumer harm would be caused by decreasing competition in the marketplace and so i would be nervous about that subjectivity and the slippery slope it enables i think it's a great point think about it if you had to pay
instead of for disney plus you paid for pixar plus disney plus marvel plus and star wars plus would be chaos in your household to manage all those accounts it's a much better offering better consumer experience yeah much better consumer experience and and cheaper and this actually by the way i said sorry i'll say this is why i said in the past it's we use the term monopoly as if it's
de facto evil and bad but not all monopolies or businesses that have very big moats is another way to kind of describe them are necessarily bad for the customer you get cheaper products you get better products you get more of an advantage they may ultimately be yielded to be anti-competitive harmful ones let me not necessarily always but let me explain to you where she's coming from like there's
a fundamental pillar of capitalism that says that excess returns must get competed away so if a capitalist system is to be efficient if a company has profit margins of 99 competitors emerge pushing those profit margins down to something reasonable where you get to some sort of equilibrium and the whole principle of what she's saying is in in the absence of competition we don't really know what
the equilibrium return really looks like and she's not saying that but that is the implicitness of what she's saying and so in the if you allow all of this stuff to aggregate maybe google shouldn't have 45 ebitda margins maybe in a really competitive society they would only have 18 and that's actually better net net for the system the problem is that counter factual to your point free break is
impossible to measure how do you know and how much value do you need to take away of the panoply of things that google does to figure that out and that's i think we're the problem with it but you know let's be clear i in 2019 i wrote in my annual letter there's a section called the the tightening of the regulatory noose and meaning it was a framework for how to basically dismantle big tech
and element number one of that was a changing regulatory landscape and it's really incredible to see it in front of our eyes we got a bill that just left judiciary right that was effectively voted across the aisle that's now going to go to the floor of the senate which is going to rewrite some of these anti-communities it's like 75-25 and it was a 50-50 committee of
democrats and republicans so clearly across the aisle clearly across the aisle uh and i mean the funny thing about that was feinstein and padilla the two democratic senators from california where most of these companies are in in the wall street journal article that i read railed against it but still voted for it to go to the floor so it's i think some version of that is going to
pass she's going to go and scrutinize these companies i still think this microsoft activision deal on balance gets done because if you take the absolute values away from it the reality is that it's an adjacent part of microsoft's core business and there's nothing fundamentally monopolistic about what would happen if you let microsoft and activision come together could it reduce competition in the
future i think would be her new lens and if xbox has call of duty and sony playstation doesn't or the next console doesn't maybe it does uh you could make the argument saks what are your takes on this very hard to apply standard of reducing future competition because as aaron sorkin said very clearly all of these reduced competitions now we got to get into what does the word
substantially mean in this context yeah so my take on on leita khan is that she's got some worthwhile observations on the problems posed by these big tech monopolies but i don't think she's got the right remedies so on the observations i think she's correct broadly speaking that these big tech companies the fangs they have way too much power in the marketplace there are now gatekeepers over the internet that
control all these powerful platforms and broadly speaking it is time i think to uh to basically have some limits on those powers make sure they don't abuse it i think she's also right that the traditional standard of consumer harm doesn't really capture that sort of concept of market power for these free ad based services right because there is no pricing um and furthermore i think she's got a point
when she says that you know when you say no pricing you mean facebook and google the consumer doesn't pay so how can there be consumer harm right so clearly that there's that standard of consumer harm doesn't really capture the market power dynamic and then i think the last observation she makes which i think is pretty pretty valid is this idea that you know when facebook bought instagram at that
time it didn't seem to be a problem but it definitely allowed them to extend their monopoly from the desktop into mobile and it probably should be scrutinized harder my problem is with her remedies i mean what she's basically saying is first of all like you said any deal that could decrease competition in the future is a problem well the whole goal of business and making business moves
like an acquisition is to build your moat is to win create a more competitive offering so there's no limiting factor there's no bright line test there at least with consumer harm there's a bright line test which is about pricing right it's mathematically measurable you could create a model around it here there's absolutely nothing and so what it's going to do is completely politicize the process of
getting a an m a deal approved and you can see this when she's talking about the impact on labor i mean this is a total s uh this is a total sop to the labor constituency in the democratic party because look facebook and google no matter how powerful monopolies they may be they don't have a dominant position in the labor market this is not true they're competing for the same engineers
that every tech company is competing for so she's bringing a purely political consideration in now and so again there's no bright line rule it's gonna be heavily political companies trying to get a merger approval never know whether they're good or not and even after they get approved they'll never know they're good and i have a big problem with her saying that any deal that they approve
can be reopened and reevaluated right a decade into the future and reverse the actions they're taking companies need certainty that's the that's the real issue it's the the rules of capitalism have been that a smarter slash more strategic s you know entity if they can run their plays more efficiently has the right to win um this is almost trying to say actually not really and that is very problematic
yeah so you never know you're good you're never known you never know you're good and then the problem that it'll create in the equity market specifically is how do you actually drive shareholder returns and then what do all these shareholders then do if these companies are rendered to basically stay where they are and you take a snapshot i mean you take a snapshot of the economy and you say
this was what it will be from now on but staks's point is really interesting it's going to require m a to become kind of a political maneuvering process similar you know create sort of these uh you know um obfuscated gates where you don't really know what it's going to take to get through there and then you've got to go do what you do when you try and convince foreign governments to
work with you or allow you to do a transaction in a foreign government in a foreign country where you got to go in and you got to go figure out the politicians who they want who they are what they want and then put together a political consortium that's going to approve the deal given that there's now going to be subjective uh you know validation whereas before i think the
the criteria were much more objective let me play this other clip this is the clip that the sax was referencing alina khan also talks about how labor uh unions are trying to get in on the action slash griff see on the other side some of this research has showed that labor markets are significantly concentrated um and it's led to you know additional thinking at the policy level of how this should
be affecting what anti-trust enforcers are doing so the justice department including in the last administration started looking at no poacher agreements more closely instances in which employers may be colluding to suppress wages both agencies have been looking at the ways in which mergers in particular may lessen competition for labor um and have downstream effects on workers in ways
that are harmful and that also needs to be on our radar so i think this is an ongoing conversation but increasingly the question is you know how we implement some of these priorities and not you know whether they're important but this is the first time you've included labor this is something labor's wanted for a long time the idea of looking at antitrust through the lens of
unemployment essentially yeah there's an interesting history here i mean um you know there were cases in which uh you know unions were supportive of transactions because they thought they would lead to more downstream benefits but i think we started to see uh through retrospective studies instances in which you know mergers actually ended up having a harmful effect and so i think that is what's
significantly contributing to this this is this is also part of what i said in 2019 the third element of that plan was you have to change the rules on stock-based compensation so instead of her talking about it as labor i think the the more accurate way to say it is like there's very valuable human capital in technology business a few people have you know discontinuous impact on these businesses
and it has been a stated strategy of all of big tech to use their balance sheets to buy small companies in their incipiency to use her words not because it helps advantage their monopoly but it prevents the leakage of human capital into other ideas and it prevents those other ideas from literally flourishing that's really what's been happening for years in silicon valley and we all know that you
know all the aqua hiring we see is about hoarding talent and you'd rather pay these people millions of dollars a year if you're a big tech to basically work on next to nothing then take the risk of them going across the street to a competitor and then having them build something that disrupts you yeah and this was such a this is such a no the only way but feel sorry just to finish the old one of the
ways that you can change it is you have to change the way that stock-based compensation works how it's accounted for how you know how you can actually deal with it on a gap basis how uh capitalists then treat that in terms of their earnings if you don't do that none of the models change people look past it people look through it they don't think it's a real cost which it is
and then you're allowed to continue to do it that's really the underlying issue so much so chamath that the human the hoarding of human capital was a reoccurring theme on the silicon valley hbo show where people in huli were getting paid millions of dollars and hanging out on the roof uh freeberg when you look at this uh human capital labor being brought into it isn't the point of a lot of m a
to um eliminate jobs and eliminate redundancy so if you brought in youtube at google i'm not sure if you were there at that time period the distinct concept was hey we already have an advanced ad network we already have accounting and we already have servers around the world and storage you don't need to hire those people we can get rid of them or whatever and we get rid of that redundancy
large-scale consolidation that's certainly true most m a in technology is the opposite where an acquisition takes place and the acquisition gets fueled by further investment after the acquisition is made when youtube was acquired there was a few dozen employees there and then very quickly google scaled that team the engineering team the infrastructure team they even had their own independent ad
sales team um to thousands of employees and without that it would have been very difficult for youtube to achieve that scale both from a product success perspective an infrastructure perspective but also an employee-based perspective with the amount of capital it would have taken to go and raise that from venture capitalists maybe nowadays where there's billions of dollars
floating around it would be different but back then it would have been very hard and so what's the same for whatsapp and instagram yes exactly whatsapp was 19 people when it was acquired and now it's thousands i'm certain and instagram's the same and so what we've seen traditionally or not traditionally but over the last 10 15 years with internet-based acquisitions is not about
consolidation and reduction in costs but about taking and enabling technology and accelerating it on an existing platform now number one it makes that new technology a product far more successful far more far-reaching and more consumers benefit from it number two is it now makes that platform harder to compete with so as a platform it's going to be a lot harder to catch up with the cash flows being generated
at google and facebook given how quickly they reinvest that capital in new technology to further their advancement to your what's been so significant over the past 15 years that people are lifting their head up is that it has been both beneficial to consumers and anti-competitive so that was exactly what i was going to get to here your youtube example is the perfect one because if you look at youtube think
about all the joy education communication it has created on a global basis and it's free and that has helped humanity so much in this new lens but no one else can make a video ad site like this exactly we're now looking at all the benefit that youtube has created for humanity versus the fact that it's going to be impossible to depl displace youtube now to your point sax how do you get past
the bright line do you have a suggestion for a way and would you now look at something like youtube and say we shouldn't have allowed that to happen youtube was on debt store because of the lawsuits and the server bills we all know that right well this is the uncertainty that's going to be created and i think this administration is creating tremendous business uncertainty i think
the reaction of a lot of big tech companies is going to be to stop doing m a until the situation gets clarified because they just don't know um you know targets are target companies are going to want to have huge breakup fees and it's just going to have a chilling effect on the market for m a i mean business needs certainty and they're not giving it in this business environment um
before we get to you just let me kind of make one point about that last clip on on the labor point listen this feels to me just like when the administration uh talked about cleantech and clean energy and electric vehicles but then they only gave the subsidy to the uh car companies that were uh that were basically union shops and so give tesla the same that's right they excluded
tesla they excluded tesla from the eevee somewhere they tried to pretend that ford and gm were the ones driving the eevee revolution in the us it was laughable what they were trying to do there is they were shoehorning a union agenda into clean tech and i think that's what lena horne was doing in that clip she was shoehorning a union agenda into anti-trust law and it's a bit absurd because facebook and google even
though they are very powerful companies when it comes to talent they are in a war for talent just like everybody else they compete these are not facts these are not mistreated employees these are very well paid employees and moreover the market is highly competitive and we don't need them trying to insert this union agenda into anti-trust law you got to think that for example going back to microsoft
activision obviously the bankers would have called apple and facebook and google as well i mean it's absurd that they wouldn't have yeah it has to be at the minute that you think you have a bonafide offer one of the things you have to do is essentially you know get an opinion letter and also to make sure that as a public market shareholder you can justify that you've evaluated all
the other options right sure um but it's really quite telling to david's point i don't think that if you were facebook or google or apple you could have credibly made an offer because the calculus in the back of your head was not whether it had business logic but whether you could actually get it through the ftc but microsoft did because microsoft is no longer seen as a threat and look we said this we said
this in our awards show two or three episodes ago you know they have really been the most untouched uh in the last decade by antitrust scrutiny whether it domestically or internationally they've largely skated under the radar after paying the price for an entire decade i think a lot of that has to do with the fact that microsoft's effectively pivoted with the exception of this
gaming into being an enterprise software company and the politicians just care a lot less about enterprise software it doesn't capture the public's imagination it's the big consumer you know companies that get all of that attention that's the fascinating point like literally the consumer and the bread and circuses of this is what's driving it like people hate big tech and
trump got banned from it yadda yadda but i gotta say you know these um increasing restrictions on big tech and the these prohibitions and the chilling effect the uncertainty it's one thing to do it when the market is just completely ripping and we can sort of afford to run these experiments and tinker with these these rules but i gotta say i'm i'm starting to get pretty worried here
that you know we had jeremy grantham as sort of an old school yeah old school kind of bearish type market commentator he had this expression that the yeah i mean it's more one of these stop clock right twice a day things here jeremy grantham has never found a market he didn't make it yeah yeah exactly but but but a stop clock can be right twice a day and um the line he had today is that
we're seeing the popping of a super bubble and you know we've been talking about bubble yeah exactly basically but that's not that's not true but i mean it's good it's evocative well the the sense of which it might be true is that i mean we've talked about this last few months is that you had the fed and the the the federal government pump a 10 trillion of liquidity into the market over the past
two years because of covet now they're starting to pull that back and there was i think a general asset inflation across asset classes certain types of assets clearly got more inflated than others we've seen a huge correction in growth stocks we've seen a huge correction in uh in crypto basically anything long-dated as the fear of interest rates increasing has gone up they've massively
corrected but so the concern is that you know with the losses we're seeing and i mean every day it just keeps i keep seeing more read that this could turn into a recession you know popping of bubbles is usually followed by uh by recessions or so i think you know the fortunes of the economy could turn really quickly here and that is that is the marginal risk the marginal risk is actually for a
recession we we talked about this before by the way just to your point you're right that we pumped in 10 trillion dollars but over the last three weeks and really over the last two and a half months we have actually eviscerated 10 trillion dollars of value as well so if you want to measure it we put 10 trillion of excess capital in but we've now destroyed 10 trillion
dollars of equity by lowering the prices or pricing stuff yeah we've been pricing the crypto i mean crypto in the last couple of days has just been flat uh growth stocks have been shellacked um biotech stocks have been just absolutely smoked everything is getting crushed uh but david is saying something really important the risk in my opinion is not of runaway inflation anymore and the
reason was what happened this weekend was incredibly important and we have seen this happen just a few years ago so this weekend uh china cut interest rates now as we know we are dealing in the united states with this issue of whether we should raise rates and by how much because we're worried about inflation well if you're cutting rates it's because you're worried about the other
problem which is that the economy is basically turned over and you need to become more accommodating right you need to incentivize businesses to spend by like turned over you mean it's slowed down people are not building companies not doing new projects so you want to inside you want to give them an incentive or maybe some catalyst to start some new company or start some new project because all the real estate
projects have wound down in 2018 here's exactly what happened the setup was the fed we were everybody was worried about what the fed was going to do on interest rates the fed was looking at china as the canary in the coal mine the leading indicator of what we should do and at the end of 2018 jerome powell decided to raise rates and we raised rates and then entered 2019 and the chinese economy turned over and
we realized that their economy was not nearly as strong as we thought it would be and so our reaction was disproportionate to what the actual data on the ground said we entered a recession in 2019 that's when you guys probably saw trump going crazy blaming powell i mean most of us ignored it because you know we were all dealing with you know trump derangement syndrome but the
underlying thing of what he was saying was hey hold on a second uh you just caused the recession in america by raising too quickly the fed is now in this really delicate situation where china cut rates last week we have an fomc meeting the open markets committee that sets rates on wednesday i think of this coming week what is he supposed to do you know bill ackman two weeks ago was
advocating for a 50 basis point raise in this meeting so that's way beyond what people even thought is supposed to we should just remember that bill ackman has bets macroeconomic bets in the market if he's calling for a 50-point raise i guarantee you you're gonna make a lot of money you'll make a lot of money no conflict no interest yeah yeah my my only point is the setup is a very
complicated one for the fed coming into this week and the risk is to a recession because if we over correct yes and the leading indicators all around the world tell us that their economies are weak then inflation may have actually been much more transitory than we thought and right now we have to decide because if we over correct we're going to plunge the united states economy into a recession this is why
i think friedberg when you look at this when you have so many different things happening at once and you're trying to pilot a plane or a car you know in rain on ice going really fast maybe there's something wrong with the brakes and you got to be very delicate with you know how you steer into this what is the right strategy here on a policy basis coming out of omicron um should we just
take a pause on raising rates what what do you think the right situation here obviously putting a bunch of regulation on top of big you know mergers and acquisitions and that's going to create headwinds i i don't know how many different variables we want to add to the mix of an economy that feels like we're in a perfect storm i don't know like a lot of us kind of talk about
the valuation of things in markets as being the economy but it's not the economy is the productivity of businesses that are valued in the market and as long as the productivity of the businesses in the market continues to improve that businesses continue to grow that there's stability to pricing that's not runaway or or declining neither inflationary or too deflationary um you know i think those are the the
indicators that matter most now the reality is over the last couple of years we've had trillions of dollars that have flowed into these markets for free and those trillions of dollars have created lots of mini asset bubbles lots of little new markets have emerged nfts random crypto currencies that don't actually do anything the collectibles market the art market there are lots of
i mean there are and lots of examples of these speculative early stage businesses that have gone public and uh people backed them and they they said look when there's this much money around i'm going to start making more risky bets i'm going to make more speculative bets and uh regardless the money's coming out of the markets the money's going to come out one way or another and as it starts
to come out these little bubbles are the first that are going to pop and that doesn't necessarily mean that the economy is at risk it means that there are valuation bubbles that are going to burst they're going to decline and no interest rate policy is going to change that because the inevitable growth in the underlying economy the inevitable end to the pandemic is what's ultimately
going to drive capital out of these markets and back into ultimately more productive assets and less speculative assets and so this is a transition that i'm not sure you can really kind of manage i think underlying businesses and the growth of the economy and the ability for people to get jobs there's an incredible number of open jobs are in the us right now three million open job listings go apply for a job
eleven million whatever it is go go go sign up for a new job three point what is it sacks three they're very very million three point seven percent unemployment they're not a lot of people yeah they're not a lot of people in the us that don't have an option to go out right now and go improve their their working condition there are a lot of open jobs in the us and salaries have
gone up that's what i mean your working condition you can go make more money and um and so you know the economy underlying there are lots of great businesses that are growing and doing well and there's stability that's emerging and then there's a bunch that aren't and there are a bunch that were always speculative and that they were hyped and overvalued and you know as those assets get
devalued a lot of us that have most of our worth and income coming from capital are uh are going to feel the burn i have two questions by the way that we if we could do if each of you could do one thing to one or two things uh to manage this economic policy in the next year what would it be like what two things do you think we should do david one or two things be the top of this that
regulators should do in terms of managing this seemingly chaotic situation just not due it just feels to me like we're pinballing from one overreaction to another so we overreacted in terms of flooding the zone with liquidity because of covid i mean remember like druckenmiller it was like the one of the only voices about a year ago when they did that to that last two trillion dollar stimulus
bill the covet relief bill yeah and he said look retail is already 15 above trend meaning if you looked at demand the demand side of the economy it had fully recovered and was actually above trend people were spending more money and then we flood the zone with another two trillion and then lo and behold six months later we have this inflation and then in response to that inflation we're
now jacking up rates so quickly that i think we're risking to tomas point a recession so we're pinballing from one over reaction to another and i just the big meta thought i had this week with just how many of our problems are just self-inflicted right now i mean even on covid right we could live with this variant of covet omicron you know chamath and all of our friends we've
everyone i know in the last few weeks basically has had it and it's been very mild it's basically been a cold but in large swaths of the country we're not choosing to live with it we're at each other's throats about these vaccine mandates these other restrictions and okay so your closures and similarly and and the same thing just to make even more local we've got a crime wave in america going on right now why because
we emptied the jails last year and stopped prosecuting totally self-inflicted okay so what things do we need to do just if you had one or two things that you think we should do one you said we're ping-ponging so do you think more consistent policy community i don't i don't i think that you want some neat little answer that's tweetable and there is none no i just i wanted you i mean
let me explain i thought there's no one or two things anybody can do i think there's a collective set of things that we have to do in an organized way so look just to set up right um we have had more activity and hedging than in any other period in recent memory except the great financial crisis just to set the tone of where we are in terms of volatility in the capital markets mutual funds who don't short stocks
right the multi-trillion dollar mutual fund complex whose only job is to buy has been a net seller hasn't even started buying a single thing yet we have an fomc meeting that's going to happen next week where jerome powell and the you know the fed has to decide what to do in the face of incomplete data it's not as if we've even stopped all of the purchasing uh of assets that we've
been doing we're still putting money in the system i just want to be clear we were debating when we stopped the spigot we're not even debating when we shrink our balance sheet as a country so we are in a really complicated moment and i think the risk is that there is an overreaction to incomplete data and we plunge the u.s economy into a recession and i just think that that that has to
be really thoughtfully measured and we guys we've seen this in 2019 2018-19 africa any thoughts uh no i'm not an economist and i'm not a central banker and so i have no clue okay um the next thing but tomas point i mean we are dealing with balancing the risks of inflation against the risk of recession i think that is fundamental and right now all the statements have been so hawkish
that you know the markets have been just flowing red now for months and it's starting i think i think the the balance of risks is starting to make recession possible in a way that didn't seem possible two three months doesn't the repricing of assets though like we look at peloton you know it's down whatever 80 percent you look at zoom is down 78 when you see those things that were obviously mispriced uh
rivian uh which we talked about i wouldn't use the term miss price they were priced i would say they're re-priced they were mispriced they're not and someone said represent sold them for something they were priced against three birds yesterday they paid 25 more and then today they're paying 25 percent less what difference does it make whether it's yesterday an hour ago or a year ago
every day pricing changes well no here's the thing about the pricing the pricing was based on people with a lot of money placing a lot of bets uh maybe whoever okay fine what's the point the market condition changed uh well i think maybe we had enthusiastic people betting things up without looking at fundamentals is my point i think saks agrees with me here on this so i think i think you're right
yeah so now you have market participants who were gambling on like momentum now we're repricing stuff do we think where are we at in this repricing or correct pricing or in the settings we're in the eighth in my opinion i think we're in the eighth inning of of the tech drawdown so got it if you're a high growth tech company you've been smashed for three months in a row as you said
jason we're off some stocks are off 80 you know 50 to 80 percent of their highs that's like dot-com era corrections that's crash that's crash if you're if you're uh if you're in other areas like value you've had a pretty good rally if you're in crypto you're just starting to get smoked now if you're in um why is it crypto this is i want your thoughts on this why isn't crypto getting smoked like
peloton and zoom is because those people are huddlers or something well crypto i think has slightly different dynamics than than individual stocks like a peloton but i think that you're gonna know something's released for one right you're gonna because like you have to understand what all the all that the market is is who's bidding and who's coming into the market i mean there's
still thousands of millions of people from around the world stepping into the crypto markets each day that are putting more money into these markets and that balances out the withdrawals and that's all that crypto is there's no underlying business that you're valuing the peloton release was really bad okay i mean it was very strange yeah they well i think they overcame it was
strange it was just like uh we're just gonna basically stop producing anything because all of our inventory will meet our demand for the foreseeable future that's a that's not a good statement if you're supposed to be a high growth okay so if we're seeing 50 to 80 percent sacks baker had a tweet that's a capital allocator yeah the bottom of the market he and it was a phrase something like when we
shoot the generals and his comment was the generals are big tech when those things trade down 25 the bottom is in and i think that collectively most people think that uh we're a little bit oversold in all areas except big tech i think big tech is down 10 11 12 when you see this thing really get cracked is when those folks you know trade down another 10 or 15 percent and
then i think we're kind of through most of the pain so peloton and zoom were kind of mid-tech i don't know what we call those but i would call them like mid-tech they're obviously not big tech but they're not small either mid-tech gets their asses kicked 50 to 80 percent big tech 15 but if big tech goes down 30 then we start really seeing a bottom and we consider netflix you'll never see that
because i think big tech you have to remember is basically the index and in the last 10 or 20 years you've never seen drawdowns more than 15 to 25 you've never seen it and and when you've ever had a 15 to 25 drawdown meaning the market goes off 15 or 25 you have to remember the thing that we have also done over the last 20 years has created so much money on the sidelines always looking
for a cheap buying opportunity and so the minute that these things so even you know march of 2020 remember when we started to do this pod and it literally looked like the world was ending yeah the bottom existed for a week yep and then within a week the entire 25 loss in the stock market was wiped out and we were back to normal so that's when i sold okay well let's talk specifically about
neff i think it was good that we talked about peloton addict at the lowe's oh my god i did too i remember selling i remember selling slack going this is the dumbest thing but i have no choice because i was how about 15 how about when uber goes to 15 from 45 i was ready to basically curled up in a ball and said i'm not selling but i'm not feeling good right by the way this is why i was saying jason like any
comment you made earlier i think you made a comment about um you know what do you do right now to drive or make change in these markets and i'm not sure that at the end of the day the drive or the change is being made as much as the change that's being made is being driven by the market itself there is just so many dynamics at play that it's very difficult to kind of ascertain where
things are headed next what's going on and we're all going to sit here and we're all going to speculate we're going to flip a coin it's going to come up heads it's going to come up tails we're going to be right we're going to be wrong it's really difficult to kind of put put our foot down and for any of us to put our foot down and say this is what i think needs to happen and this is
what i think should happen or it could happen or will happen half of us will be right half of us will be wrong but man let's take another stock i think it's interesting to talk about this netflix was that seven hundred dollars uh just a couple of months ago it's at 390 today um yeah that's like a real business that you can assess what's going on with the business itself well they think they're
not going to grow uh 20 30 percent a year they think they grow eight nine ten percent a year but a a fabulous business right like uh great business incredible is incredible now the time so is this growing coming so much anytime netflix is so saturated it is it has achieved such incredible market share by growing so quickly every year for years and years on end at some point the growth
was going to slow down they hit their natural audience i think that's right i think netflix is going to be the best example of consumer surplus at scale and what i mean by that is they have given so much value away for an incredibly small amount of money like if you think about the value you get from netflix as compared to what you would get from comcast and you spend ten bucks a month ten dollars or fifteen
dollars for netflix versus a hundred bucks for comcast there was such a huge gap in value um but netflix had to spend so much money to keep people entertained the real question is at what point do they start to sort of like run out of the things that they can do to keep people um engaged and otherwise they jason do what you did which is you have a subscription to hbo max you have a subscription to
disney plus yeah i mean the headwinds are everybody gets in the game the only real winner is the consumer yeah and any individual company i think gets gets into a real tough spot and i think what you saw was their earnings release basically said just that disney's doing a great job competing against us hbo max is doing a great job competing against us so we're not sure what the
incremental dollar that we can give you the growth that we've given you before when we had no competition and that's by the way lena's lena khan's comment which is the other side of the coin which is when you have more competition the consumer does win it contains prices it just doesn't contain asset inflation which does impact the shareholders of these companies uh yeah and still even at this level 172
billion dollars they have a 35 xp one way that to look at this here i think your point is an interesting one chamoth where you talk about how much value they've given away over the years and what they have today you can always look at the balance sheet of a business a public company and in the balance sheet there's this um this line goodwill um no well not even goodwill just the um
uh the accumulated loss um uh the accumulated deficit and if you look at that um on netflix they basically run the business right now at as of their last earnings statement which was december 31st negative 40 million dollars so in terms of the total net cash that they've generated as a business since their founding as a business they've lost 40 million dollars
so you know and meanwhile the question is okay what's the you know so they're not necessarily uh at a stage where they've been generating cash but for many many years amazon had a similar strategy where they were reinvesting all their capital and that capital was going into building the business and growing the platform and adding the next layer of growth the question is has netflix from a
fundamental business perspective not a valuation perspective have they added enough growth platforms into the business have they grow found enough other products services or ways to build things throughout the world everyone has linear video they don't have gaming they don't have anything else right they did start doing sports comedy really they they are dabbling they dabbled with doing a couple of
podcasts they dabbled doing a couple of games and there's rumors that they might try to get the other 20 or 30 percent of people who don't pay by creating a lighter version that was ad supported in other words you're not going to get the new season of ozark but maybe you can get the first two or three uh you're a year behind the production schedule but you can watch it all with
ads so why isn't netflix in video games and sports it's such an obvious one and that's why i think they released a series of games based on their ip so as their ip grows and i think that's what you'll see with disney plus is think about an app store inside of disney plus a merch store inside of disney plus i think there's so many verticals next to them why is there no merch stories
why don't they own spotify or have a spotify competitor well i think spotify sees themselves as a that's a really good point you know when you look at the peloton i was looking at the peloton um earnings when you know this it was down 25 yesterday or the day before and i was like this is an incredible business because they have 2.1 million subscribers that hey 40 bucks a month it's incredible i mean it's a money
printing machine money printing machine i actually have a subscription i don't even have a peloton peloton i don't have anything you just pay 500 a year to use the classes i have the app it's crazy i don't even use the app but i think that's 20 bucks for the just that app yeah but the point i was trying to make is when you look at it you know there's about 30 percent of that revenue that
goes right back to the music labels for the music so you know to your point like uh there's just an enormous value in actually music you know so yeah one of the great flicks built library values and content they could be they could point it to music as well there's all these things they could do to reignite growth a lot of people discount the value of having a subscription consumer business
when you have a consumer's credit card on file and they're paying every month for something it's an incredible point because you don't have the friction of getting the sale done you've already done the sale yep now the question is can you upsell them some new service or some new addition that they're not paying for today so obvious yeah it's so obvious right and so like by the way
i'll say this like for years google struggled with this question which is what is google's consumer subscription business because google did not have consumer credit cards across its platform despite a billion daily users and so google for yours was strategically trying to figure out what business can or should we be in to have a subscription model with consumers because once you have that then you can
charge for all sorts of stuff you can charge for storing photos you can charge for accessing audio you can charge for accessing unlimited imagine i'll be the i'll take the contrarian side of this okay here we go yeah go ahead go ahead peter j well no look i i invest in b2b subscription businesses i hate b2c subscription businesses and the reason is just the churn rates what we
see when we look at bc subscription businesses is five percent monthly churn is not uncommon it's pretty much the standard so call that 50 60 percent churn in the subscription base every year so effectively you're rebuilding the company from scratch every two years i don't see like how you can build a successful business i'll tell you why you're wrong doing contrast that to b2b with b2b
subscription businesses you do lose some customers but the ones who stick with you keep adding seats for more employees usually and so actually your landing expands your courts actually your cohorts are growing 20 every year instead of shrinking 50 now obviously there are some of these b2c subscription businesses like netflix and peloton they are obviously valuable they've defied gravity well netflix
has done it because they spend billions of dollars on content and peloton's got it because they plop a expensive machine in your house so you can't forget about it and that keeps you a little bit more recurring than like a lot of these subscriptions which are just very easy to cancel but so look they've been able to make it work but i'm most excited here's why i think you're wrong it turns
out these are so low priced these subscriptions that you get a lot of consumers trialing them so because it's only five or ten bucks a month to use something like a spotify or a disney um because they're so low priced you do get a little bit of uh sampling and that's why the rate's higher whereas in business there is a massive onboarding of people have to take their time to set up the
software learn how to use it so if you're going to commit to it it does reduce it and you do have land and expand but what we're talking about with product expansion is the equivalent in sas of land and expand so imagine if disney plus or spotify after you listen to an album or it's in your top rotation they showed you the merch for that band or after you completed the season of mandalorian or
book of boba fett they showed you the merchandise and said here's a limited edition of um grogu baby yoda when that we tried to get baby yoda stuff last christmas disney dropped the ball they didn't have any uh and they could have had all that made and they would have sold millions of we were buying stuff on etsy the reason baby yoda works is because it's leveraged off a platform this
massive disney platform of which this b2c subscription service is just one piece i mean look obviously there are valuable consumer subscription businesses so the way i'm approaching it can't be right in all cases however i think people really get themselves in trouble when they start to value these b2c subscription businesses the same as the b2b ones in one case you in the b2c case
churn is the predominant characteristic and it means that you have to spend more on marketing or cogs or content or what have you to keep rebuilding the user base whereas in the b2b context the user base is compounding on its own and that'll that just makes for i think a more finally attractive business option yes but it grows slower again just at the end of the day these are all
variables just the weights just changed i agree with david that consumer churn businesses or consumer businesses have much higher churn than enterprise and enterprises have negative churn which means that they just naturally grow but the reality is consumers just have an unbounded tam that enterprises do not and the way that the way that the ltvs work uh just tend to be different and the cash
flow cycle of these companies tend to be very different and that's why you see netflix get these enormous valuations that enterprise subscription businesses do not what some people are now doing when they look at consume in consumer businesses and look at churn is they take out the ones that are based on credit card to look at like people who actually unsubscribe because they don't
want it but not because their credit cards so basically so if you think about like netflix's business if it's turning two and a half percent per month let's call that 30 percent of the user base is a trading every year they've got to rebuild their user base from scratch every three or four years now they can do that um i guess at some point though they may run out of you know greenfield opportunity to grow
their customer base um but you know it's gonna pressurize their margins because they're gonna have to constantly spend on content original content to retain you that you have to spend on marketing to keep going after the portion you're you're leaving out the archive these archives are going to be super valuable and i don't think we even know how to value these archives yet because if you look
at the marvel archive or the star wars archive these things just keep printing money year after year and then you'll see netflix and hbo max will keep being able to go back to them hbo max being the canonical example now because you didn't think that that business would have you know a lot of ip to build on but suddenly you have the many saints of newark um and the uh sex and the city
reboot i mean they're going right down the line there's going to be an entourage when you own a franchise it has value disney has shown that you own the best franchises hbo max is now showing it and then that means netflix will show it next yeah but how much of a netflix's content do they even own are they licensed no now it's 100 netflix is 100 they stopped and that's why disney started taking it off
their whole spend that i think they're spending 20 billion or something it's all on original content so that that's why they made that move is because they knew they were going to have the disney content the marvel content pulled where do we want to go next guys big world play because i have coveted uh i want to i want i want sax to talk to me about his what's going on with fouchy
oh my gosh this is quite a story this really is um i'm trying to get my head around the story and i'd be totally honest and explain it to us because i think we'll please my head what's going on okay so um a series of emails have come out that were requested of the freedom of information act and what they show is that at the nih um fauci and francis collins who was ahead of it they had a
series of conversations with scientists around january sorry january 31st or february 1st there are emails on february 1st summarizing those conversations and basically what they say is that a group of scientists advise falchi and collins that covet likely came from a lab how they know because it had you know hallmark signatures like the furion sites the same reasons we now believe
uh the the virus came from a lab okay but by february 4th officials at so three days later officials at the nih including falchi had come to the conclusion that the virus must have been passed zoonotically from an animal like a pangolin it didn't come from the lab and furthermore they were starting to use language like conspiracy theory to discredit the the lab leak the lab leak idea
so that within a few days they were all in on this sort of so-called zoonotic theory and they really began a campaign in the words of collins a devastating takedown of scientists who are trying to discuss the lab leak theory that became the official position why well okay so this is where it gets really interesting um obviously i can't speculate to modis but here's what we know the nih falchi's
division years ago there was a debate in the scientific community about how we study viruses vouchers an epidemiologist he wants to study them makes sense the debate is over whether you should enhance the viruses as a way to study them so-called gain of function research their faulcy is on the side of engaging in that kind of research there are other scientists who think it's crazy they lose
the nih then makes grants to a group called the eco health alliance it's run by uh a british scientist named peter dazing okay by the way who doesn't who doesn't support eco health and an alliance branding yes exactly so so eco health alliance which is has neither been good for the ecology for our health or uh online alliances yeah keeping up bad natural alliances everywhere yes so
they then provide funding to the wuhan institute of virology to study bat viruses where you know function research then occurs this lab in wuhan is known to have had leaks in the past so just from a security choice not the best recipient of a grant but that is what happens okay and then we know the history from there it's almost certain that what's the what's the element of the
story that has to deal with the lancet and the yes person that worked for fouchy and then uh and then that person got a grant afterwards what well and then just one other thing i want to point out here um so we're clear this has become a very partisan issue but the original foams were done by buzzfeed and the washington post sorry the foia releases were done by buzzfeed and washington post and now you
have rand paul on the other side of it who seems like really wacky and obviously conspiracy right-wing so you have this like really weird partisanship that's now been embedded in it okay yes so can you explain the partisan nature and then question i almost want to take uh chamas question first about who's this dazed guy what is this lanceletta let me come back to the parts and think
i'm just going to try to establish the facts before we get into the partisan mess of this thing so peter dazek is the guy who made these grants to the wounds of virology okay there is one other interesting fact when the west wanted to come in and investigate what happened in this lab china approved one person from the west to come in and conduct the investigation guess who that was
peter dazek okay he was the only guy the ccp led in to go look at this lab he then comes out of this whatever he did and says it has to be the zoonotic theory he endorsed the wet market idea it cannot be lab leak that is a conspiracy theory and then he rounds up a group of scientists to write a letter to the lancet which is a respected scientific publication which is incredibly respected yes which he
signs in which he basically advocates the zoonotic theory but he goes further and says there is no way that it could be lab leak and anyone who says as a conspiracy theorist and that has an incredibly chilling effect on the scientific community because no scientist wants to be labeled a kook or conspiracy theory or heretical to the lancet exactly and this is a tight-knit ecosystem of um of insiders
insiders and institutions and grants no scientist wants to lose their funding right and then furthermore big tech starts censoring his disinformation the lab leak theory because they say well these officials look at all the scientists we have to follow the science right so the science according to this letter from the lancet is basically on the side of the zoonotic theory so you then have downstream
censorship of this so that is who peter dazuk is and and and in this letter in the lancet he never disclosed his conflict of interest which is the fact that he funded this wuhan institute of irology to conduct the type of research that might have led to the leak of the virus so this guy is hopelessly conflicted and has a reason to want to suppress and cover up a lab leaking never disclosed
it and look so does fouchy i mean because fauci funded dazzac so imagine when in february of 2020 when the lab leak is coming across the desk of fauci does he tell the president mr president he's at the right hand of the president mr president we might have funded this thing we funded dasic who funded the wuhan lab we collectively the united states government might have some
responsibility in this do you think that conversation ever took place when he was making his recommendations he was hopelessly conflicted and if the truth about this had come out and look i'm not saying he had any intentional role i'm not saying he wanted this to happen i'm not even saying that he knew for sure that dasic was funding the wuhan lab okay let's just give fauci the
benefit of the doubt but we all know how politics works if it had come out in february of 2020 that fauci had funded the guy who funded the wuhan lab and that's where the virus likely came from his career would have been finished okay finished we know that as a political reality and so within days of scientists advising fauci hey this thing probably came from the lab the nih is consolidated around
the idea that this is a conspiracy theory and they work to suppress it and they wage a public campaign i got to tell you when i have learned all these facts i got to tell you what i compare it to it's almost like we learned all those revelations about bill cosby that here's this guy on tv for years pretending to be america's dad and then we find out he's a monster fauci has
been on tv for years lecturing us about covet he's been like america's dad america's doctor and lo and behold we find out that he has a role in this whole thing and look i'm not saying his intent was not to uh of course it wasn't anybody's intent has been used to help people so it's a little bit of a part i'm going to give him the benefit of every doubt here i'm going to give him
the benefit of every doubt okay he's called him bill cosby i'm going to give him the benefit of the doubt in the sense that he didn't want this to happen he didn't have any he didn't cause that but we know for a fact that he funded dazak who funded this lab it's where the virus came from come on we know that and he covered it up he engaged in a campaign okay we suppressed the lab leak theory that is a conflict
of interest let's get let's get freebie in on the science what do you think as some a man of science freedberg the sultan of science in fact about uh these emails and the chances that fauci essentially was funding gain of research and then attempting to cover it up which is the accusation that's a question of science look there um i mentioned this in the past jamie science community you know
amy metzel did a um a podcast interview with lex friedman it's worth listening to uh it's a couple hours long if you've got some time to kill um but he does a good job contextualizing these matters and what may have gone on that led ultimately to um the the lab leak and also the lab leak cover-up i don't know what happened with fatching emails i have not read this stuff um so i i
you know i have no reason to believe that thatchy is malintentioned in the sense that he has some reason to harm or hurt um i could see that there is a certain degree of nervousness to accuse the biggest foreign government and potential u.s adversary of causing a global pandemic and not wanting that sort of conflict to arise at a period of time when you really need to take care of your people
and we really need to focus internally as a country on how do we get through this pandemic and making that response to that no i have to respond to that i'm not saying that fauci or anyone involved in that process should have accused china but that's not what was their decision that what was not was made they decided to stop the debate altogether they decided to suppress the debate what would you have done in that
seat sex you're sitting in that seat and the country is potentially facing a pandemic that could wipe out millions of americans where do you prioritize it i'll tell you what if i was sitting at the nih and i wasn't hopelessly conflicted i would probably have just said listen i don't know what the origin of the virus is let that debate continue i would not have tried to wage a public
campaign against the people against the scientists who were honestly pursuing in good faith where this virus might have come from so we can learn things maybe how to avoid something like this from happening again the people at the nih should not have engaged in that type of politically minded pr campaign they just shouldn't that's not their job as scientists and then to find out that
they have a conflict of interest on top of that that might be motivating that desire that is not that's not appropriate i i think it's really important freeburg you can probably agree with this that at some point some journalist should really simplify this for all of us because it's it's a it's an incredibly important topic that we need to look at at the end of all of this assuming that omicron is the end of
this chapter because it's been a horrible chapter for the world um but we do need an accounting of the truth right i think that that's really important there was an episode many ago when i said i don't know and i don't care about whether or not the virus came out of china and um again i was somewhat kind of misstated as the intention of why i said that the reason i said that and
what i really meant was that what happened even if it was a lab leak what happened was really the tip of the iceberg the ability to bio engineer pathogenic organisms is becoming ubiquitous the toolkit to do gain a function research as it's being called in the press is a very simple toolkit the ability to engineer organisms that can cause catastrophic harm to the human species
is becoming available on the internet and with tools that any of us can buy and use in our garage and so what i'm more questioning and what i'm more concerned about and what i care more about is what is our global biodefense strategy how are we getting ahead of the next wave of this happening and it's not about the who said he said she said those things it's really important to understand
we need biodefense when they're saying it came zoonotically they're saying it came from an animal when it actually was created in the lab if you want to have biodefense we got to first say that again whether or not yeah you're right whether it did a separate question to me whether it did or didn't the tooling to do this is absolutely possible and the ability for these sorts of viruses to leak out and be made
and turned into a weapon is significant it's a real risk and so i'm for you guys i think both of you guys just figuring out how do we solve this problem like how do we get right but both of you guys are saying nuanced versions of david is saying we have to have an honest accounting of what happened if we could if we're supposed to actually have an eco-health alliance yeah i'm not
by the way i'm not i'm not you're i'm not you're saying yeah i'm not just making i'm not dismissing that yeah and you're saying we need to actually formalize gain of function research because everybody has it and so it's going to be inappropriate for us to ignore it we need to assume game of the function research leads to dangerous pathogenic bio-organisms and then we need to formula it doesn't
and then we need to formulate a biodefense strategy i'm just saying like we don't the implication the reason why saxis thing is important to me is the implications we have to have an honest accounting of these implications we saw another implication just this week in flint michigan they shut down indefinitely the public school system in flint michigan okay this is a society just to give you
a sense of the facts here 90 percent are minority because of the fear uh of of catching covet and spreading covet uh but and 90 are minority kids 80 are in poverty i don't know how you know 80 of kids who are in poverty are expected to have a laptop and internet access on a consistent basis this is the same place that screwed up the water system so uh i don't i so i think like we have
to have an honest accounting of um of all of these things because the implications are real this is the biggest story of our lifetimes kovid i mean it might be the biggest international incident since world war ii and the fact that the major let's call it prestige publications have not really fully invested hold on conundrum to me because this started with um a massive amount of coverage from
buzzfeed washington post new york times in june of last year 2021 they were covering this like crazy vanity fair did a major investigation and then it seems to have gone silent and then rand paul has been going after this and it all of a sudden became partisan so the only coverage i'm seeing of it is that's independent is the intercept but then everything else is the hill and
you know really weird far right stuff that wanna like you know fauci needs to be whatever and how did it become so partisan if it started with left-leaning publications getting this information sacks like how did this become partisan is because the president changed in the middle of all this like what uh do you have an honest handicapping of why we can't get you know like a consensus on what's
actually happening here from the press is it rand paul's too polarizing well i think what happened is if you go back to february of 2020 if you look i just had this conversation with ashley rinsberg on my call-in show and you know he's not unplugged now available call it can i he he he literally wrote the book on the new york times and i asked him about their coverage of problem
this is the guy who literally this is the guy who literally wrote the book on uh the new york times and i asked him about the new york times coverage of of coven and covet origins he says that on february 17th so basically two weeks after these officials at the nih settle on the conspiracy theory narrative that that narrative is then published almost word for word verbatim using the same
language not just the new york times in the washington post across all these major publications so what you see there is a pr campaign it's a concerted effort you don't get the same words and language being used across all the major publications at the same time unless somebody is pushing that narrative we all know this this is corporations do this right they run pr campaigns that is
what basically happened and so the prestige media got on board this zoonotic theory and this idea look like they've done so many times they got on board wmd in iraq before realizing it was a total farce and a hoax okay they so they got themselves on record behind this conspiracy theory idea and similarly i think the democrats got themselves on record as being pro falci and everything
because of you know tds right anyone who's standing up to trump must be correct and defend it and so all of this happened in 2020 and so by the time we now fast forward to let's call it an honest investigation of the origins of the virus which should be bipartisan this should not be partisan we should all want to know what happened we should all want to take the politics out of it
because without knowing what happened how do we prepare for it in the future everyone's already like hopelessly committed to positions they took in 2020 and i think this was driving the partisanship yeah i think you're right yeah i mean that's the thing i'm trying to get to is like when i saw you wanted to put it on the docket i'm like trying to grok this and i can't find i'm finding all the
left-leaning coverage from june of 2021 none since then and then it's all right coverage now and i think it's something we need to get some independent coverage with so i'll take credit i'll take credit for saying fauci is the biggest political loser at our all-in uh podcast recap thank you i'll take my bow now well i mean and the the other thing that's kind of the way half of our
refrigerations have come true already i mean right now we're so correct on these things um the thing that's i think just infuriating right now is that everybody is trying to manipulate the public and they have not understood that in this media environment the truth comes out kind of not only eventually but pretty quickly so stop trying to game the public either way that the vaccines don't work
they've delayed the public reckoning on this by what like two years well here's the thing there's a so i agree with you on that there's also a forward release that happened in the uk where and it's a little too much to get into right now but this photo release now is looking at all the people who died in the uk of covid uh and it turns out like maybe more people are dying because they didn't get their cancer or
a large number of people died because they didn't go in to get tested for cancer and all of this is going to come out eventually and not putting out every day the ages um and the comorbidities of people who died of kovid just led to this feeling that we're getting gamed and turning on cnn and seeing the case counts in a cumulative chart is like a startup giving me like the cumulative number of
people who registered for their company but for their product we don't care about that we want to know your daily active users what about what about the catastrophic impact of school closures that we've been talking about on the show repeatedly you know everything's being manipulated stop manipulating the public look you have to realize that there is huge political motivations here
because huge cya going on because the heads of the teachers union said there is no learning loss they are the ones who lobby to shut the schools down they sure as hell aren't going to admit their mistake now they're covering it up and so any politician who takes their money is basically they're going to muffle their criticism there's only one really honest like left-wing guy i've seen
acknowledge the school closure issue which was jonathan chait had a great article in new york magazine saying that progressives must acknowledge the mistake of school closures because otherwise we can't learn from it he has been a voice in the wilderness on that side of the aisle we got to wrap up now that uh sax has cracked open the plugs uh what are we all working on because i
want to give a plug to friedberg who uh did a great interview uh on a tech podcast called this week in startups where he announced tana so it's a dual plug here uh friday's episode of this week's startups uh maybe you could tell us a little bit about the launch of of canada your new uh yeah we're applicator we're just announcing the business um which i talk about a lot on jason's pod so definitely worth
hearing but as you guys know i've talked a lot about this concept of decentralized manufacturing where we can kind of move old-school industrial production systems which are super inefficient we use lots of resources move stuff into factories process them and then ship the products back out and um you know technology now allows us to have more distributed or decentralized manufacturing
um potentially so what you know what we've been working on for three years at this point is a company called canna which is really about you know printing beverages in your home so you can use a single device to print uh iced coffee or iced tea cocktail juice wine soda etc um all using a single flavoring system and water from your from your sink we talked more about it on the pod
but i think this is a big theme you know forget about canada for a second but generally like the systems of old like you know the industrial revolution created all these old school systems that are big contributors to carbon emissions and are super resource inefficient and i do think that everything from 3d printing to biomanufacturing to the system that we kind of introduced today with canna
can completely reinvent our global industries in different ways um and ultimately lead to cheaper products better products and products that use much less natural resources and put less carbon out um and so it's been a big thing that we've been working on i'm excited to kind of open it up a little bit and talk more about what we're doing so um thanks for having me on did you hire the mute uh as a
spokesperson he may or may not have his brand on here we'll see there so right now the business is um uh is signing up lots of different folks that can create digital beverage brands and so if any of you guys want to have jake house you know our cider hard cider um here we go we'll uh we'll be launching that but yeah and actually told me his his new um his new soda that he's going to be bringing it's
called muth cola it has five times the sugar of coca-cola other than that it's just like any other colder but you get five times the calories it rips out like maple syrup uh hey i'd like to i'd like to do uh you gotta um in genesee county in michigan flint indefinitely shut down their public schools this week what is going on you have thousands of kids um who at best will have to learn via
zoom and internet access that most of these kids may or may not have because again uh you know they're they're in poverty and and so i just want to make sure that everybody just understands that everybody tweet that and self-inflicted wounds well here's the thing these kids um this is one of eric adams 90 90 minority 80 in poverty um all virtual until further notice well
here's what's going to happen it goes right against the cdc guidelines okay and uh this is really the accounting of the cost and we are as we said before learning loss in our kids is going to be the single biggest thing we look back in 20 years coming out of this pandemic and realize was the the the biggest price we paid for this so and here's the stupidity of it the what the eric adams and the new york
city uh you know sort of uh leadership we're talking about this when these kids are in school okay there's a chance they're gonna get omicron like everybody got omicron like everybody has it now like it's crazy how many people in our circle have it the only person doesn't have is phil hellmuth now um what's gonna happen when they go home or they're not in school and they're
hanging out with their friends or looking for something they're going to get it anyway what eric adams said is that school is the safest place for them to be yes totally and school shutdowns are just so insane to me right now unicef had an article which i'll dig up where they said that the cost in future earnings by this generation of students who suffered learning loss is going to be 17 trillion
worldwide uh that's going to be the economic impact from this thing not to mention the stunt individual and emotional development yeah by locking these kids down for years anxiety ptsd i mean this is going to create depression in kids we need to solve this we got it we got to get the we got to get the schools and flint open all right everybody for the dictator chemo polly hoppetea
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