World's First Trillionaire, Anthropic Fable Banned, The New Oligarchs, Iran Peace Deal

A

All right, everybody, welcome back to the number one podcast in the world. It's the all in podcast. The original quartet is here. Bizarre. David Sacks. How you doing, brother?

B

I'm good.

A

You had a busy week. Not a long post from you on X. We'll get into it.

B

Wait, a lot of what?

C

Long posting?

A

A lot of long posts.

B

I had like one long post.

A

Yeah. How's the carpet tunnel going over there?

B

Too long post.

A

Yeah. That carpal tunnel flaring up.

B

I got a third one teed up I might use.

C

You got one in the chamber?

B

I got one in the chamber, but I was going to save it for the pod. It's a good way.

A

Oh, coming in hot.

C

I wonder who's going to get this bullet.

B

Let your winners ride Rain Man.

A

David Sachs

B

and I said we open source it to the fans and they've

A

just gone crazy with it. Love you, Queen of Quinoa.

C

I'm going all in.

A

Cackling. Of course, that's the dick. Dictator is my bestie.

C

Chamath.

A

Hollyhopatia. How you doing, brother? Getting ready for summer. Summer Gillets have been laid on the bed. You're ready to pack it up opposite.

C

I got a lot of travel grinding.

A

Oh, I forgot you're doing founder led sales. So the summer of relaxation's over. Now he's in the CEO slot. Gotta get out there and do those enterprise sales. And of course coming off a pretty hot week. Comments section was on fire.

C

Very pro, Freeberg. Very pro.

A

Very. Freberg had perhaps his greatest performance. Also greatest. The first performance when he said more than three sentences. What's going on, Friedberg? You went off last episode and then I think you also with the long posts.

C

You know what's so funny? As the valuation of Ohalo ticks up, he gets more and more based. I love it.

A

He is getting.

C

Welcome to the club. Welcome to the club.

A

He's got trace commas based.

D

Unleash the beast.

C

When you're just a mere singleton, you kind of just keep it to yourself. And then all of a sudden it starts.

A

Nine figure Friedberg. He's like, I got something to lose.

C

Wait for 10 figure Friedberg.

A

10 figure Friedberg's like YOLO. You also with the long posts, you and Nancy Pelosi making sweet, sweet.

D

Here's what's happening. He started.

C

Let him go.

D

What is being formed in the United States right now is the Great American Politburo. Okay? The Great American Politburo has formed. The new oligarchs are taking their seats. The Great American Politburo is being formed. The new oligarchs are taking their seats, they're arranging the chairs, they're determining who will be chairman of the Politburo, who will assign what workforce to do what efforts for them, which $600 million stock trades their families will make to benefit and enrich themselves as they fly around in their private jets on the taxpayers money. And we are watching it all before our very eyes as individual liberties are eroded. I am fired up about it. I see it happening.

A

You know, Sachs is on the show this week. You can't just take strays like that.

C

Freeberg, expand on who the Politburo is.

D

Yeah, so, so basically the, the Politburo is the leaders who elect themselves to dictate the flow of the economy, the allocation of capital, what work, individual they're allowed to do and what, what activities they're allowed to do in an unfree society, which is what they're creating. They are the true oligarchs. And this is Elizabeth Warren, Bernie Sanders, Ro Khanna. This is the group that is trying to coalesce power and create for themselves a system whereby they have greater influence, greater control over aspects of the economy. They want to seize the means of production, they want to control education, they want to control media. And anytime there's an effort by an individual enterprise or an individual themselves to go out and build a business and succeed and do something that's outside of their scope and their span of control, they lose their minds over it. And that's what we're seeing. So I react to their tweeting and their bull, where they're basically trying to contort things about inequality and fairness and justice, when the truth is they are the rising empire, the evil empire in Star Wars. They are the folks who want to take from all of us what we were endowed with when this nation was started and what many people came to this country for, which is individual freedom and liberty, the ability to build a business in peace, the ability to make decisions, to do what you want with your own assets, and to have functionally private property. And they're taking it all away. And they're trying to take it all away. And we're watching piece by piece, step by step. So they are forming a politburo where they can effectively control the economy, control education, control the media, and tell us all what we can and can't do and say. And it's frustrating to me to watch it because it's masqueraded as virtue, as justice, as equity. It's a bunch of nonsense words that they use to try and make themselves seem virtuous when in the end of the day they are fundamentally evil. And I hate watching it. So that's why I react so aggressively to it.

C

Friedberg, I think you said something that's really important, which is they present it as virtue.

D

That's right.

C

Put yourself in the body of a person that's probably middle of the roadish but is falling for it. Why do you think they're falling for it?

D

Because they have needs and wants and desires individually that this person is saying, this system, this evil empire will give to you if you take the knee. We will give you the education for free. We will give you the childcare for free. We will give you the food for free. We will give you the paycheck every week. We will give you. We will give you. We will give you. Those promises in a democratic system like this or in a fake democratic system like this are what make people feel like the virtuous offerings will align with their individual needs and wants. And I think that that's why people say, like, okay, that's good. Free childcare for all. There is inequality in the world. There is disparity in wealth, There is disparity in asset ownership. And your solution, despite the loss of liberty along the way and the loss of economic mobility that arises from what you're offering me, and this is really key, People don't realize the value of the United States. The power of this nation was to give people individual liberty, which unlocks agency to progress yourself, to educate yourself, to make money, to give yourself more assets and more freedom and more flexibility than you had. Economic mobility is the key to the United States. You do not get economic mobility. If the government is giving you a job or giving you money, you lose economic mobility. You become indentured to the government. Everyone wants more. Everyone wants something that they don't have. But the truth is that the more the government is giving it to you, the less you have mobility, the more you are indentured, the more you are enslaved and the more we are limiting people's ability to progress. And I think that that's what's really so frustrating for me is that people sign up to this to your point, chamath, and they're like, okay, that's great. I, I get to have this and I get to have that, and I get to have that. But at the end of the day, you're giving all of your liberties up, you're giving all of your progress up. You become giving all of your mobility

A

is what you're saying, and you're looking for them, and you don't have agency to pursue your own personal freedom. Yeah.

D

One thing I believe to be 100% true is that no human being that's ever been alive has ever lived up to their true capacity as a human. Like, human agency is limitless, limitless, limitless. And the truth is, like, anytime that you create a system with the government that's giving people stuff, you are taking away people's agency. And so that is what is so, so sad about the whole thing is like, human agency is the one that we have unlimited capacity, unlimited, infinite upside. Every human does. And to enshroud yourself in this government burden, thinking that it is a relief,

A

well, then that creates this, because you're always looking to the government to solve your problems.

C

The threshold for learned helplessness is far, far lower than one may think. I grew up on welfare, and my mother was initially a housekeeper, and then she was a nurse's aide. She was probably making 8, 9, 10 bucks an hour. My father couldn't get a job, so we were on welfare. And Welfare was probably 17, 18, $19,000 a year at the time in Canada. And it's a family of five. But it was just enough that my dad just spent this cycle between drinking and not working, drinking and not working. And he would try in bursts. And I think that it must have been deeply frustrating for him, obviously. So I want to be compassionate to the struggle that he went through. But, man, I would have thought that 17,000 is not nearly enough support. And so it would animate you to try to do whatever it took. But could he have gotten a job making 8, 9, 10 bucks an hour at a store? He could have. He chose not to. And so my recollection of being a ward of the state is that the threshold for that helplessness is far lower than one may think. And then if you actually stack all these other things, people will just fall into their worst proclivities and they will be a shell and a shadow of what they could be. My dad was, in my mind, a giant who had all this potential unfulfilled. And I keep that because I want a positive sense of who he was to me, despite all of the ups and downs and the stuff that he went through and how it negatively affected me at times. But, man, if you want a whole country of those people, what happens when you're giving people 30, 40, 50, 60, 70, $80,000 a year of stuff? One, at some point you're not going to be able to pay for it. But two, you're going to reduce people to a shell of what their potential is. And that is not good. I have lived it and I am warning others, all of you, be careful what you wish for.

D

The flip side of it, by the way, as you point out, you can't pay for it. What ends up happening is the moment that we find ourselves in today, and we see it in. And we'll talk about Pritzker's Law in Illinois that passed this week. But we are now at a moment where we are saying there is no longer private property in the United States. This is one of the foundational rights that the founders of the United States try to create a distinction between these other nations that everyone flees from, where a monarchy or a totalitarian government or some communist system says everyone owns everything together or some small number of people own and control everything. And that's what this always comes down to. Whether it's a socialist state or a communist state or a monarchy or some other totalitarian regime, there's a small number of people that own and control everything. And that is the brink that we're on. Because they are trying to say for the first time ever, there is no longer private property in the United States. That if the government can say everything that you've already paid your income tax on and then you've bought and you now own, the government can take a piece of it every year based on the vote and the budgetary needs of an irresponsible fiscal legislature. We've lost it all. And that's where we are. And we see this just passed in Illinois. People think it's just crypto, just like they think that billionaire tax is just billionaires. But anytime the government can take your private property after you've paid your taxes, bought something and put it in your garage, we are done for.

A

Yeah, we're going to get into it.

D

That is when the Politburo has unlimited capacity to tax and take and do what they want. Here's the. That's the moment we're at.

A

Well, and the. The super sinister part to dovetail what both of you are saying and to give some grace to your dad chamath in the studies of learned helplessness for people who are trying to guess what that term is, who haven't heard it before, a psychological condition. If you give people a hard problem to solve, like an impossible problem to solve, they don't solve it. Then you give them easy problems to solve, they don't solve the easy ones and they become depressed. And then they attribute their depression to themselves, they internalize it. In other words, if you give people easier problems to solve and make them increasingly harder as you go, they become empowered, they have agency, they feel like they can solve problems. And then when they get stuck on something, they don't attribute it internally. And this is why alcoholism is so pernicious in our society as well, is because when you start attributing it to yourself and then you start self medicating, you try to dull these feelings because you're depressed. And I've had many friends who've gone through it and family members. And this is why having agency is so important. This is why endless unemployment is so dangerous. And you need to taper people off and you need to give them a chance to be successful. If your dad had taken that $10, $12 an hour job, he would have become the manager, then he would have become the owner of the place.

C

So the coda to your story is at some point, I think, and I don't know because my mom doesn't share this with me, there was some kind of breaking point because it was a really violent household. And then near the end of my household high school career when I left, things got, I think materially better. And part of it was because he got a job and ultimately he got a job pretty low level clerical work at the government. But we were so proud of him and he did that until he passed away. But it changed him completely. Now it could also have been because he had gotten older but drank a lot less and was much more regulated. Yeah, so I completely agree with what you're saying.

A

It's a really sad phenomenon. And you see it sometimes in successful people. They get successful very quick. They don't attribute to their own success. They get up out of bed in the morning, they don't have to get out, they start drinking, they don't take a job. And they're affluent, but they're just not motivated. They don't have purpose. All right, let's get started. We got a huge docket to get through today. SpaceX had a record breaking IPO and $60 billion cursor deal was quickly consummated. As predicted, friend of the pod, Elon Musk took space at x public last Thursday. $135 a share. A lot of people got to participate. Robinhood, Charles Schwab, everybody talking about they got an allocation, one share, 10 shares. And they filled the green shoe, 85 billion raise. That's three times what Saudi Aramco raised back in 2019 stock closed up 19% to 161 market cap above 2 trillion. And at the taping of this pod, $177. Not too shabby. On Tuesday, SpaceX exercised its option to acquire Cursor. That's the coding agent that got shivved by speaking of Anthropic and Claude. They originally used Claude to be the backend of Cursor and then Claude and Anthropic had an internal Skunk Works project. They told Cursor, allegedly they were never going to release it to the public, they would never have a coding agent. And they did. And that led to this incredible opportunity for Cursor to make their own model and use Elon's hardware. At colossus, they're doing 4 billion in revenue. So they got bought for 15 times revenue. SpaceX trading, I don't know, 60, 70 times revenue. So a great deal for everybody. SpaceX briefly passed Amazon and Microsoft, which is mind blowing to be the fourth most valuable company. Amazon's revenue in 25, 717 billion. Microsoft's 2025, 282 billion. SpaceX is 25, only 19 billion. So that's corrected a bit. And now SpaceX is sitting at seventh largest company, right behind TSMC, that's the Taiwan Semiconductor Corporation. So let's just go around the horn here. Congratulations to Elon and the team over there. Elon exercised his Tesla shares that he had coming from his employment there. I think he's done a pretty good job as CEO. He got a little bonus. So that sets up potentially chamath the merger of the two big companies. Just broad strokes. What's your takeaway from the SpaceX IPO? Seems to have been executed flawlessly.

C

It's an incredible company, it's a one of one, it's just a unique animal. I think that the highest price to sales was essentially these last few days and now it's just going to grow into its valuation and generally just grow valuation. Nick, play the clip. The acquisition was essentially negotiated and the way that it's structured is so that the S1 doesn't go stale. So I think the way that it was announced has more to do with the fact that they don't want to slow down and have to rewrite parts of the S1, have to redo the disclosures, have to redo the risks. The deal is effectively done. But what's so smart is that where is SpaceX today? Let's call it a trillion. Where could it be? Just for the purpose of this argument, let's say 2 trillion. So when the Deal gets done on a stock for stock basis, it's going to be again, if it's 60 billion in tomorrow dollars, effectively. Elon's gotten a 50% discount. All right, nailed it.

A

We'll give that an okay.

C

Sure enough, what I didn't factor as well is that the revenue run rate would essentially double on top of that. So he essentially got cursor for 15 billion. He got a good deal, which is unbelievable. His business intellect is off the charts. That is an incredible deal. And now the consolidation phase will begin and we're going to see Tesla and SpaceX merge and it's going to be glorious.

A

Sac, you can also take a little bit of a victory lap here. You've been friends with Elon since PayPal days, obviously, and you obviously were an investor in SpaceX for a long time. Your thoughts on what this means for the company? Obviously it's an incredible milestone, but what does it mean for the company going forward? Obviously, champagne bottles, yada yada. But what does it practically mean for SpaceX and Elon going forward?

B

Well, in a certain sense, as we all know, this was the biggest IPO of all time. And so in that sense, it was a huge milestone for this company that Elon and many other people have been working on for a very long time. I mean, this has been 25 years in the making. When people turn on the TV and they see this, they that this is just some sort of overnight success, it's not a lot of people have to work very hard to get to this point. But at the same time that it was this historic ipo, it's also the case that in a certain sense this didn't change anything for Elon. I think when people read that he's the world's first trillionaire, they start to think that he must have gobs of money, a trillion dollars sitting in a bank account. And that's not true. That's not how it works. That's not how wealth is created. He doesn't have one more dollar in the bank than he did the day before the ipo. He doesn't have more stuff, doesn't have more houses or anything that you could buy with money. Literally, his balance sheet is exactly the same. It consists of the same thing. It's just that the public is putting a higher value on the shares of stock in SpaceX that he already owned. And he's not selling. He's under a one year lockup. And I predict that he'll hold on for much longer than that because creating SpaceX is his life's work. So you see all these people reacting with tremendous animosity and basically saying that we can't allow the world's first trillionaire stuff like that. Look, he doesn't have more cash than he did the day before the Adam, it's paper wealth, clearly, it's that other people are placing a greater value on what he's built. And I think this is very important for people to understand is that there's a big difference between stuff and then the machines that make the stuff. And I think, again, this is where wealth comes from, is the machines that make the stuff. So you go all the way back to hunter gatherer days, right? The only wealth was in what you could collect, hunt, gather, whatever is basically the collection of stuff. Then humans develop the ability to create tools and then very sophisticated tools. And then some of those tools are corporations, which are almost like cybernetic organisms or combinations of tools, workflows. Humans work in them. And it's those corporations that make this stuff. And the way that people get wealthy is that if you create a machine that makes more stuff, then there's a discounted present value for all the stuff in the future that that machine might create. And that's where the wealth comes from. It's in the discounted value.

C

Yeah, well said.

B

It's not in the stuff. It's in creating a machine that will create stuff for humanity for a long time, and people will put a value on it today that's really awesome because of all the stuff that it'll create in the future. And so just out of nowhere, it will appear that all of a sudden you have all this wealth created. But again, that wealth is a reflection of all the stuff that this machine will now create in the future. And people need to understand that that process is a good thing. Because when you think about all the progress that humanity has made, it's not in having more stuff. Because again, that stuff, it all goes away, right? Whether it's food or shelter or whatever, it depreciates, it's a wasting asset. The reason why humans are more prosperous is because of all the machinery we've created to make stuff well into the future. And again, some of that stuff can be things like shelter or clothes. It can also be medicines and cures and entertainment. Electricity, all the things, electricity, all the things that make your life better. We need those machines. And someone has got to own the machines. And the people who own it are the ones who create it. And the thing that Karl Marx never understood is that it's not this sharp delineation between capital and labor. Because you can take people who start with nothing. Elon start with nothing. I mean, he was a immigrant.

C

Nothing.

B

To the United States.

A

Yeah. Slept on the floor at Zip 2. Slept on the floor.

B

He created these companies, he created these machines from nothing, with his own vision and hard work. And he included thousands of other people. So here's the other thing is, just because you're quote, unquote, labor doesn't mean that you're not also an owner of capital. There's a great story about how there's a welder who worked at SpaceX who I think has made a million dollars in SpaceX stock transformational. But everybody who's part of these companies, and I think this is the magic of the tech industry. It is much more inclusive in terms of ownership than any other industry.

D

It's the magic of capitalism in free markets where anyone can participate in that market, anyone can enter that market, and ultimately anyone can transition from being labor to capital.

B

Yes, it's fluid. It's back and forth.

A

If you buy shares in a company and you have the ability to buy,

B

or you just vest them. You just vest them sweat equity.

D

Or you start a business and you basically do work, save money, invest your capital and continue to compound the capital till you get to a point that your labor is worth less than your capital. And that's what ultimately allows this economic mobility, this transition for people. And when you take that away, you destroy that capacity for mobility. That's why capitalism.

A

That's where we started today. Yeah, that's right. And that's why we started today with agency.

D

That's why it's so frustrating to me to watch people denounce Elon's success and denounce the value that the world is putting on this business and on the success. Because what they're saying is that no future human, no kid that's sitting on a floor right now, sleeping on a floor that's poor, should have the capacity to achieve what Elon achieved. No one should be allowed that capacity to transition, to progress, to mobilize themselves.

A

They're saying you should hate him by denouncing him.

D

And by denouncing that, you are basically taking that ability away. And you're saying that this is evil. And you're telling all these young kids around the world that are thinking about their future that they are now indentured to a government or to a fixed income for the rest of their lives to perform labor for a fee for the rest of their lives, as opposed to having the opportunity to transition, which is what Elon has done and what millions of others have done because of the freedoms in the United States and other free markets that have allowed this to happen for people. And that is why it's not just about getting wealthy, it's not just about getting rich. It's about having agency to transition yourself. And inspiring young people. And inspiring young people. Yeah. It's a different kind of transitioning.

B

No, you're transitioning from labor to capital by virtue of sweat equity. You have skills that are valuable that you can then translate into creating something that's valuable. And just to underscore that point, I mean, you think about SpaceX. It's a machine that makes satellites. It's a machine that makes broadband connections from space. It's a machine that creates launch vehicles, AI software, AI software and so forth and so on. So it's a machine that makes things that people want and that therefore enhances people's lives. And it's only the market, the public's value that it places on those things that creates the net worth, that creates the value of SpaceX's stock and therefore the net worth of someone like Elon. But again, he doesn't have one more dollar than he had before.

A

Well, and to put a finer point on it, you have to earn that by continuing to make the best product in your class. The second Elon satellite Starlink is not as good as the next two or three competitors. And there are two or three of them coming, right? There's other people doing rockets and obviously he's in a heated competition for LLMs. And with cursor versus Claude code, he's not guaranteed. He has to fight. And he's had to fight to win each of those categories. And the second he stops fighting in those categories, he loses. And all that equity gets cut like we see when stocks tank because they cannot keep up. So he's had to fight for every inch by making the best product. Nothing was given to him, everything was earned and earned by his team. This idea that, like he won the lottery is farcical. It's a 25 year overnight success story that had three or four distinct points where it was going out of business and he had to scramble.

C

I've always thought that the people that rail on wealth are actually secretly, incredibly jealous and want to be extremely rich. Because I've never heard a coherent argument about why when somebody achieves something, that you should dismantle the things that they're building. And what both of you said are so right. The vicissitudes of the market can make that number fluctuate wildly. There is a version of the market that has nothing to do with him, that judges his stuff in the future as half of what they're judging it today. Nothing stops us from doing that. And all of a sudden everybody who's breathlessly mad that he's a trillionaire, what do they say now? Because he wouldn't be a trillionaire. He's some version of what he was the Thursday of last week.

B

Right, right, right. And take semi analogy. The machines become obsolete very quickly. In a capitalist society, you can get disrupted and companies get disrupted all the time. If they become stale or calcified, if they don't invest in maintaining and upgrading their machine, they will become obsolete.

D

Improving value. You know what can't get disrupted? You know what can't get disrupted? The one unobstructable monopoly, Government. And that's the problem. Government is competing for capital and it's competing for markets and it's competing for all these things. And that's why I talk about these people as being evil. They're a politburo. They're basically trying to take away capacity for value creation, to make things better every generation for society. Better medicine, better education, better livelihoods, better homes. Everything gets better. But when the government monopolizes it, it doesn't. And that's the competing force that we're up against.

A

Yeah. And I want to just add one thing to this, which is there is a piece of this that needs to be solved, which is people wanted to participate in the success of these companies earlier. And Chamath and I interviewed the head of the SEC and he's working on this. But the amount of demand from retail, and it was a very innovative thing that Elon did, and the team over at SpaceX, they gave 20 or 30% of the IPO to retail investors. When you opened up your Robinhood account, I don't know if you guys have one, or Charles Schwab account, it gave you a little interface that said, hey, would you like to participate in the IPO of SpaceX? And you could put in your request, I think six or seven. I was talking to Vlad, maybe six or seven hundred thousand Robinhood users got an allocation. It might have been one share, it could have been 50. That democratization needs to continue because the real back to Freidberg's points about being a wage slave or an equity holder and trying to make that transition while people being able to open up Robinhood and just buy one or two shares and vote with their dollars for 150 bucks that they want this future as opposed to other versions of the future. That's what gives them that empowerment. That's what gives them that agency. Well, what if they could do that earlier? And I've beaten this drum on this podcast and my other podcast for a decade on this. But people knew SpaceX. They were watching these rockets launch for a long time. And they would have placed that bet 10 years ago when the company was worth 100 billion or 10 billion or 500 billion. But they weren't allowed to because we have a corrupt system in our government that says rich people, the top 4 or 5% of this country are smart enough to buy private company stocks, and the 95% are too stupid to. And it's antiquated and it has to change. And you should be able to buy whatever you want. If you want to buy crypto, you can. If you want to buy a private company, you can. If you want to play cards with your friends and play Bomb Pots and watch Dave Freeberg rage, quit because he keeps losing at Bomb Pots when we play. That's Freberg's right. Let people buy private company stock. It's fucking crazy that we still have this rule keeping poor people poor. Thanks for coming on my TED Talk.

B

Can I take a shot at answering Tomas question? Why are there so many people who are influential who are resentful of what Elon's done or what other capitalists do? I think it was Joseph Schumpeter who explained this, that basically you've got this intelligentsia in a society like ours where they don't make things. They don't make the machines that make things, they just make words and, I guess, ideas. And most of those ideas are just wrong. They're just made up. And they become resentful of the fact that there are all these people who are able to create not just stuff, but the machines that make the stuff. And that in our society, that is the thing that creates the greatest reward financially. Why? Because it actually aligns with what's in the greatest value for society, whereas they produce a bunch of hot air. So it's natural for that class of intelligentsia to become resentful and hostile towards the people who are able to amass this great wealth.

D

I think that the great lie is that there are two sides to the society, that is the rich and the poor. And the great truth is that there are two sides that are the makers and the takers. The lie is that the rich are unfairly rich. And the poor are unfairly poor. And therefore the poor must take from the rich. But the truth is that it's the takers that tell you that lie. That the real truth is that artists, plumbers, electricians, woodworkers, computer scientists, people that build, people that make shit from all walks of life, all income levels, all wealth brackets, are the makers. And the takers are what Sacks calls this intelligentsia, the analysts, the espousers, the armchair mechanics, the critics, the commentators, the politicians. They are the takers. They are the people that watch the rest of society make stuff, build stuff. Specifically doing things that create value for other people in society. That's what a maker is. Tell my kids this lesson all the time. I say, what did you guys make today? They tell me something they made, and I'm like, did someone else value it or did you make it just for yourself? At the end of the day, if you made something and someone else valued it, you were a maker. That was an amazing achievement. That is a great day. Whether you make a piece of art, whether you build a house, whether you write a piece of software, whether you build a business, whatever you make, if you're a maker and someone else values it, they become your customer in some way, they become your partner in some way, you've done something valuable. Those are the true engines of progress for humanity. And the takers are the ones that tell the lie that it's rich versus poor. Because what they want to do is rip apart the makers, and they want to tell everyone you got to be on one side or the other. And they use that lie to get everyone to line up against each other and to give themselves ultimately the control to form the great American Politburo, which is what they're trying to create. That is what's underway right now. And that is the fundamental great truth and great lie that we're kind of fighting against at this moment.

A

All right, this broke shortly after we taped our episode last week. We tape on Thursdays, we drop on Fridays. As fans of the show know well, the US Government has pulled the plug on Anthropics latest model. You've heard us talk about that as Mythos. They released it as a controlled version called Fable 5. So there was Mythos. That was the one they held for 30 days while they were doing security, cybersecurity testing. Then they released it as Fable. And a bit of a guard railed version of it. Commerce Secretary Howard Lutnick told Anthropic to restrict that model to U.S. citizens last week. Last Friday, in fact, Anthropic couldn't implement those restrictions or wouldn't in that granular of a way. So they just decided to do something more conservative and shut it down for everybody. This, of course, created a lot of hand wringing in the industry, rug pulling, oh my God, we lost this great model. And what does that mean? If I build my models on top of Anthropic, can I trust them? Yada yada. And this was just days after the model was launched on June 9th. How this all started seems to be that Amazon CEO Andy Jassy, who owns a Amazon, is an early investor in Anthropic and they own a large portion of it. He had told the administration that there was a security vulnerability in Fable 5 that they were able to bypass to jailbreak the guardrails that Anthropic put on it. Dario said the jailbreak wasn't serious. There seems to be some finger pointing back and forth and Dario said it was narrow. Separately, Semafor a publication like an email publication reported that the White House acted partially over suspicion that a China linked group had access to Mythos and they weren't supposed to wide reported that this group was South Korea's SK Telecom. Now you're saying, hey, how does South Korea have anything to do with China? Well, they have a longstanding or there are long standing allegations that SK has a relationship with China. The White House previously ordered Anthropic to revoke SK Telecom's access to Mythos. They're kind of like the Verizon 70% market share for telecom in South Korea. According to the Washington Post, Anthropic did not initially disclose it had given Mythos to SK Telecom. And this happened before all the export controls, quote, badly damaged officials confidence in the company's ability to safeguard sensitive technology. Anthropic says the White House never raised the Chinese access in the Fable Jailbreak conversations. There's a lot of finger pointing and perhaps nobody is closer to this except the principals and you, David Sacks. So tell us what is going on here? Is this politics and political between Anthropic and the administration? Is this a misunderstanding or is this the future of what's to come as these models become more powerful?

B

Well, let me give you an update based on what I learned. This would have been last Friday and Saturday. So this by that point I got a readout from various folks at the White House about what happened around the time that that letter was sent to Anthropic. And I then summarized what I learned in that long post on X. And no one told me what to say. I just listened to these various officials explain themselves. I also heard from, let's say, some of the private companies who were involved in this, and all I asked was, listen. I think this context would be helpful to provide. They said, sure, you can publish it. So I posted my summary of what was happening. And whether you agree with the decisions of those officials or not, I do think that my post provides a window into exactly what they were thinking at that time. And what this comes down to is a couple of things. So, first of all, like you said, Dario came to Washington a few months ago, this is back in April, and basically said that he had created a cyber weapon called Mythos, and he spiked the cortisol level, got everyone really worried. And there was some truth to it in terms of the sense that this model had advanced cyber capabilities. But he got everybody very focused on this problem, so mission accomplished. They then had this pilot program for Mythos, this trusted partners program. And as the Washington Post reported, Anthropic expanded the program to something like 50 companies or more without consulting the White House. And according to the Washington Post, I don't have any firsthand knowledge of this, but I don't have any reason to question the Washington Post's reporting on this. They did share Mythos with a company that the White House believes it should not have been shared with. So think about that. They're sharing these capabilities that Dario himself has said is a cyber weapon with parties that the White House, and really we're talking about the national security officials believe might have connections to China.

A

That's SK Telecom, according to these reports.

B

I'm not gonna say who it was. I know that's been reported. I don't have any firsthand knowledge of that.

A

Okay?

B

I'm just reporting what was in the Washington Post. But you have to understand that that's the context. So, first of all, you got Anthropic effectively conducting its own foreign policy here, expanding the Mythos preview to groups that the White House didn't have any knowledge of. And then once they found out, the White House, you know, this is really the role of what the White House wanted is, look, we have classified information that you don't have. We know that there are certain groups that shouldn't be getting this. And Anthropic expanded the pilot without consulting, which is, again, sort of bewildering, because the whole point of what they were supposedly doing by trying to get this preapproval regime was to consult with the government. So really, that was the predicate for this and apparently, again, this is according to the Washington Post, that's when conversation started about whether a model like Mythos needed to be export controlled. Okay. Then you have the launch of Fable, which is basically Mythos with guardrails. Again, if those guardrails fail, then you have a cyber weapon being released to the public. And it wasn't the White House who came to the conclusion that the guardrails failed. It was private companies who were testing Fable, testing those guardrails. And as has been publicly reported, one of them was Anthropic's largest shareholder and cloud partner, Amazon. Well, again, I'm not going to confirm, but I think we all can read the publications. Okay.

A

Yeah.

B

So again, normally I wouldn't mention names at all, but this is all widely reported. Okay. In any event, they, I think, try to convey their findings to Anthropic. I think there was some sort of breakdown in communication. I don't really understand, but they felt the need to escalate it to the White House. And it's almost like a whistleblower. Okay. Because they have no reason to lie about this. I mean, again, they are Anthropic.

D

Yeah.

A

I mean, they're partners, so that's even reason to support Anthropic. Obviously, Sachs, they would have told Anthropic first. But the fact that Andy Jassy got involved in this at all means somebody on the team must have said, hey. On the security team at Amazon who has to host these models said, hey, this is something that could be a liability for us, Amazon, and could be a national security threat. That's why Andy Jassy made that call, because somebody put that into a Slack room somewhere or documented it.

B

They don't do things like that based on Slack room. Okay.

A

They have somebody in the security team reported it.

B

Right. Amazon is part of Mythos Preview. They are also testing Fable. Remember, they've got the biggest cloud to protect. We're talking about aws. They've got teams banging on this and making sure the guardrails are safe. And as has been publicly reported, they came to the conclusion that there was a jailbreak and that this was serious security problem. So they then escalate to the White House. And again. And this is where my summary takes over, based on me hearing firsthand from these officials, they tried to call Anthropic, they tried to call Dario, and there were a number of conversations. And the tldr of it is Dario refused, meaning refused their request to take down Fable until this jailbreak could be fixed. And again, the White House was really just, I think, bewildered and confused by that, because, again, it's so off brand for Anthropic. They claim to be the AI safety company, and yet here the White House is reacting to credible information about a major security threat from Anthropic's own partner. And instead of basically saying, yes, we'll react on this right away, they get the Heisman. I mean, just imagine this call. Apparently, again, reportedly the treasury secretary of the United States called Dario personally. I mean, why wouldn't this be a five minute call? Why wouldn't Dario just say, yes, sir, we take security more seriously than anybody else. We'll fix the problem. Thank you for taking the time to call us out of your busy day. We're gonna handle it right now. Click. And instead of doing that, what the administration heard. And I'm not saying maybe Dario didn't mean to communicate this, but he sort of pedantically argued that this jailbreak wasn't really a serious issue. And we know that to be true because you don't have to take the administration's word for it. Dario then published a blog post that basically conveyed the idea that, well, not all jailbreaks are that bad. And trying to differentiate between good jailbreaks and bad jailbreaks.

A

Minor ones. Major ones.

B

Minor ones. Major ones. Whatever. You know, again, very off brand for them. I didn't know until now that that was the case. Remember, this is all downstream of the fact that Daario primed all these officials to view Mythos as a cyberweapon and to view, therefore, fable as a cyber weapon if the guardrails failed. And they already had problems with the Mythos preview being overextended to parties that they didn't approve of. So, look, I think maybe there's room in here to give Dario some grace. Maybe he didn't interpret this correctly, what have you. But this was the way that the administration perceived the situation that they were in as of whatever that date was a week ago last Thursday. And they reacted by sending the export control letter because they wanted Fabled to come down until the guardrails were put in place. Now we're in a situation where Anthropic is negotiating with the government to try and fix the situation. Look, once you're in one of these situations, it's always harder to extricate yourself than to avoid getting in them in the first place, because the trust is broken. The trust is now gone. And look, I hope this does get resolved as quickly as possible, because I don't view what the administration did As a policy making exercise. Some people are saying that this export control letter is now a new type of policy. Now the government has to approve every model release. I don't think that was the intention. I think this was a reaction by the administration to a credible report of a national security threat. And they felt that they had no alternative but to react immediately with the tools that they had available to themselves. So I hope that this problem gets fixed and then we have a serious deliberative policy conversation about what the right hoops should be for models that are

A

cyberweapons and reviewing those models, which. Yeah, let's pause there because we're going to get into model reviews and what's the best way to do that. Chamath, what's your take on this situation in terms of maybe a little bit of, I don't know, your handicapping of the situation with the relationship with Amazon? I think that's kind of an interesting angle. Or if you have a different angle you want to take.

C

I think the leaders of the Frontier labs leave a lot to be desired.

A

Okay.

C

I think what we're seeing is a consistent pattern of evasiveness and immaturity. And I think that that does a huge disservice to the entire movement of AI. Maybe to connect the dots between this and what Friedberg said. I couldn't agree more with what he said. The key to a vibrant life is rooted in economic mobility. And I think AI is the grand leveler. It is the thing that can enable everyone to have unique amounts of economic mobility because they are unencumbered to figure out what their upper bound is. And against that backdrop, which is an incredibly positive sum view of the world, but I think is accurate, we have to live in this constant doomerism, hype, cycle, naivety. And I think it holds us back. How does it hold us back tactically, Number one, it creates mistrust. I think that Silicon Valley was already decaying in the prestige that it held in American society. When I first came here in 2001, it was a place of misfits that were good intentioned, that were doing the right thing, that didn't take themselves too seriously, that in success wasn't ostentatious, that kind of kept their head down. We built important things, then we veered away from that and we started building less important things. And now we're at a point where we've potentially started to rebuild important things again. But we have this veneer of negativity and mistrust that are created in large part because we Just cannot get our shit together. And the leaders of the Frontier Labs are public enemy number one. And so this entire episode is yet another proof point that you just can't trust these guys. That's number one. Number two, I think what it creates, which I think is bad, but what it creates is an incredible opportunity for the hyperscalers. And the very simple opportunity is to convince governments all around the world, not just America, that they should be the gatekeeper. A, you can't trust these guys. B, these models are all over the place. C, let us be the ones that provisions them to the world. We will wrap it in kyc. I've been now talking about KYC for a while, right? Who are these customers? Do they have identification? Why are they allowed to run these models? What are they prompting? Let's keep them so that there's an audit trail. All of these things are going to become issues. The Frontier Lab folks made it an issue because of how they've handled all of this up until now. And what does that create now? That creates an oligopoly for AI, the most powerful economically leveling instrument we've ever seen, in the hands of maybe a handful of hyperscalers, who, by the way, would make an incredibly compelling argument. And they would be right. And the only counterfactual to it would be, well, trust us, guys, it should actually be much more open and in a much, far more distributed environment. Can you imagine the cost and the complexity if you ask the NEO scaler to build the same robust KYC or the same VPC infrastructure that Amazon and Microsoft and Google have spent decades investing trillions of dollars in? It's an impossibility, Jason. So you can take all of those data centers off the map. You can take all of the neoscaler market off the map. All of this was preventable. So instead of a diverse, robust, open ecosystem, giving a tool that is the fundamental unlock for humans, we are now going to debate gatekeeping and duopoly versus oligopoly. They have created a total mess, and it's a shame.

A

So instead of people. Just to summarize that instead of people being able to use the model they want from the provider they want, you're going to have to put in your driver's license, your tax id, your Social Security number, whatever it is, to Amazon Web Services.

C

If you have to put in your driver's license to buy fertilizer, you're sure as will have to put in your driver's license to use Fable 5, which is the precursor to know how to Use fertilizer to make the bomb.

A

Yeah, as we talked about last week.

C

Sorry, last thing. Total own goal. And then what does it do? We in Silicon Valley yet again look like people that have just optimized for our own selves. We take ourselves seriously, we take nobody else seriously. We're not willing to play ball. It's unserious, it's immature, and it does not help society at large.

A

Okay, Freebird, there's been some talk about political tribalism here, and I'll let you take this one. Anthropic, the only company that doesn't seem to show up when President Trump has CEOs at the White House backed by Reid Hoffman, who funded the lawfare against the White House Gene o' Carroll lawsuit, this lawsuit, that lawsuit. There's major beef between the left and the right and Anthropic's in the middle of it. Is this the White House treating Anthropic differently and do they have it out for Anthropic? And Anthropic is basically handing him the ability to, to take these kind of actions. In other words, is this political instead of pragmatic and practical in your mind?

D

Well, I mean, I think that there, there's no regulatory framework today. And so antagonizing the government to create a regulatory framework and then feeling antagonized when they regulate you just seems a little bit weird. And Anthropic seems to be the only one doing that. So I don't know if it's a political motivation as much as it is like some strange set of behaviors from Anthropic that's motivating this perception. Look, I think at the end of the day, we're all losers if the government is going to be picking winners and losers in AI. And we're all losers if we all have to be restricted on accessing these tools. At the end of the day, like I've said before, you know, an entire AI model can fit on a USB drive and you just need to have good hardware to run it. And the value of that model is time bound because at some point a better model is going to come around. So my point being, I think we're all losers if there's one stack, that one company owns the whole thing and we all have to put in our ID and the government decides who's the winner and who's the loser. None of us are going to be winners in that sense. That's why I think that there's currently a natural market force for two things. One is more open source and Second is a fragmentation of the AI stack. If you go back to the 1960s, IBM was the predominant provider of mainframe computers. And I don't know if you guys remember this or know this, but like at the time, IBM did the whole stack. They actually made the chips.

A

Yeah.

D

So all of the, you know, the, I think it was solid logic technology chips that IBM created were, were made in house. They made the hardware, they made the operating system, they also made the software. And this was the case through the whole mainframe technology era, that IBM was the monopoly, they had the whole thing. And then ultimately the government had to intervene to get them to disaggregate the software layer. And that's what actually started the independent software vendor era, which is when the software industry really started, was after the government said, hey, we shouldn't have one company that has the whole stack in computing. Then we get to the 80s and that's when everything disaggregated. Then IBM started buying the intel chip for the personal computer. They had their own os, but ultimately Microsoft came along and made a better os. And then this entire proliferation of the software stack with independent vendors took off. And I think that that ultimately is what allowed this industry to progress. The productivity boom that arose from both mainframe computing and desktop PCs was because of this disaggregation that happened. I think the same is likely going to have to happen with these AI companies. And I'm not sure that what we're looking at today as being kind of some oligopoly of three or four businesses is really where we're going to stand. I think the equivalent on the hardware side is there's going to be multiple chip vendors. There's also going to be multiple clouds. There's also going to be multiple models that run on the clouds. People are also going to run models locally. They're going to use different software factories. They're not just going to use anthropic. They're going to use tools like Salesforce and, you know, 8090 and other things. They're going to run different applications on top of it that are going to be purpose built or custom built. So I think there's very likely kind of a diffusion that's happening right now. If it doesn't happen, it's going to be pretty nasty. But I just think the market forces are so strong for a diffusion of each layer in the stack finding its way to the cheapest, the more available, the more accessible partner vendors that we're very likely going to see these kind of handful of oligopolies kind of break down a little bit. Yeah, that's my take on this. I think it's a size. I'm not sure there's going to be a political capture that's going to happen. It just seems very unlikely.

A

I'm going to steal, man. For the good of the podcast and also a little bit of my personal belief here. I think if we were to take Anthropic's name out of their series of behaviors and how they handled the release of Mythos, let's just say we put grok in there. OpenAI or Gemini. Gemini is a good one. Google, they're not totally in either camp. And it's a company that's been around for a long time. So Gemini comes out with a model. When they test it, it's incredible at hacking and cyber warfare. And they say, you know what? This is incredible. It's super powerful. We're going to limit it to 50 partners. And those 50 partners include Microsoft, et cetera. They happen to have SK Telecom in there. They make a mistake, they put them in there and we looked at them and we said, hey, holding the model for 30 days while they test it, we'd say, thumbs up, good move. And then one of their partners, Amazon, says, hey, we were able to jailbreak this. And they say, okay, we're going to put a couple guardrails on this when we put it out. Or let's just say second phase. After they give it to their 50 partners in control beta, they say, we're going to open it to the public, but we're going to watch every single thing you do. I think, David, you said this is a privacy issue. It's pretty standard, actually, for when you release something like this, to monitor it for the first 30 days. If you don't want to have people looking at the results, then don't join the beta. Keep using 4.8. Don't use the newest one. And so you'd say thumbs up to that as well. Hey, they're giving it only to logged in customers. And if somebody does something dangerous like they try to get it to do nuclear weapons or last week when I asked it about fertilizer regulation, it dropped me out of the model. Right. We would give a thumbs up to that. And then if we were asked, hey, by the government to take it down for anybody outside the United States, and we said, you know what? We'll take it down for everybody. Probably give a thumbs up to that too, if Gemini did it. So there is a definite backdrop of beef between Anthropic and this administration. And if you look at the Reid Hoffman connection, you look at Dario, who refuses to participate. The people who go work at Anthropic are the people who hate Trump, who hate the Trump administration. They're opting into that. If you look at OpenAI and Grok, those are the people who are largely pro Trump, including Greg Brockman and his wife, who gave 25 million to Trump. So there is a political underpinning here. In fact, you may not be able to get into this. I understand that, but that's part of what's going on here. I think Anthropic actually did a really good job of rolling out this model and being conservative about it. I think their comms are the problem. Every time Dario talks, it's too much talking and there's too much fear mongering. So somebody's got to fix the comms over there. To your point, Chamath, because the whole industry is going to need to be regulated. And I think the industry needs to regulate themselves. That's the key to this. We need to have a set of tests that Google, Microsoft, Amazon, all agree to. Elon, hey, these are the things we should test. And they should self certify each model before asking the government, which doesn't understand the models, to certify them. The industry should have an industry certification like they do for countless other things I've talked about the MPAA and the video game industry. We should just self certify. It's the simplest thing in the world to do. And then we could release the models ourselves without the government getting involved. Anybody else have any thoughts on this before we go on to our next topic?

B

Well, let me just respond to this accusation. You're saying that this is somehow politically motivated. That's just not true. Look, there are Anthropic aligned influencers who are trying to spread the story that all of this is basically a beef between me and Anthropic. They're trying to say that somehow I did this, which obviously is untrue. I don't have the power to do it. I'm not day to day employee of the White House. And I only got the readout of this once the letter was sent. So I wasn't involved. Secretary of War Pete Hegseth. He wasn't involved. People are trying to make it sound like this was a beef with the Department of War. Just not true. This happened as a result of the things I mentioned, which is they got a report of a jailbreak. Dario had the chance to Fix it. He basically said no. Maybe that's not the way he thought he was communicating, but that's what the administration heard. Dario doubled down that blog post and had the prior history of expanding the Mythos preview to at least one company that the administration felt was a national security threat. That's the reason it happened. It has nothing to do with the beef. And by the way, it was the people in the administration who were most sympathetic to Dario and Anthropic who wanted to reset this relationship after the Department of War, and then Dario basically blew it.

A

Yeah, that's the.

B

With those people. So, look, I mean, you can just make stuff up if you want. No, no, no.

A

I'm not making it up. Just, you know, I take offense to that, Sachs, because it's your guy, Pete Hegseth, who is doing tweets like this. Three months ago, Department of War kicked Anthropic out of the building forever. Every passing day proves why this was the right move. I'm not making anything up here. There's serious beef between these folks.

B

Look at the data.

A

You're saying that, like, this has nothing to do with this. Just read the tweet.

B

That was after the letter was sent. Check the timestamp.

A

I get it. No, no, it's totally fine. There is beef between Anthropic and the administration. To say there's not is just silly.

B

I didn't say there wasn't a prior history. I'm just saying that that wasn't the reason why this happened. This was not a dispute between Anthropic and Department of War. This was not a dispute between Anthropic and me. We were not the parties who were involved.

A

I don't think you're involved in it.

B

I didn't say that, obviously, but neither was Department of War. Now, what Hegsa's tweet reflects is he feels vindicated. There's a sense of vindication that, hey, we had a really difficult time with these guys when we did a contract negotiation. People may have thought that we were the difficult ones. In fact, we said they were difficult and communicated in a strange way, and now everybody else can see it too. So I think what Hegseth is saying there is like, hey, we told you so. But he did not make the decision here. This had nothing to do with it. And look at the timestamp of that. It was after all this whole series of events went down.

A

If I'm a shareholder in Anthropic, I would have told Dario to show up every time Trump had the CEOs over there. And I would have told somebody in that management team to drop a 10, $25 million check into some ballroom or some America pack, just like Greg did at OpenAI.

B

He really didn't need to do that. All he needed to do is that when a cabinet secretary calls you and says that we have a credible national security threat report to us by one of your own most trusted partners, that he take it seriously.

A

I mean, he took it down. Well, how more seriously can you take it than taking the holding down?

B

He didn't take it down until after they got the letter, which was the whole point.

A

Yeah.

C

Anyway, can I jump in here, please?

A

Jump in. Yeah.

C

I had Claude read Machines of loving grace and AI policy on the exponential. And then I asked it to do.

D

What is that?

C

Those are his two long form essays.

D

Dario's, just to be clear for the audience.

C

Yeah. And I asked it to do a psychological analysis and. Well, no, I'm not joking. I mean, I think it's important. And use these as insights into his personality and give me a psychological analysis of him based on these as well as based on the current facts on the ground with mythos. Be truthful, don't protect simply because you are an anthropic model. And then I asked it to refine through the lens of e ACC movement and tell me if there's any psychological leanings. Do you want me to read to you?

A

Yeah. Movement, just so people know, is the accelerator movement to accelerate society and technology as opposed to decelerate. Okay. I think people understand. Yeah.

C

Let's read this. Okay. Two paragraphs. Delusions of grandeur. I'm not saying it to make fun of him. Look, he's built an incredible business. The shareholders, I think, are doing phenomenally well. I think the revenue run rate of this business continues to accelerate. All of it's incredible. But I want to understand this person. I am paying millions of dollars, and so I just want to understand.

A

Here we go.

C

Okay. He distrusts other labs, positioning them as racing recklessly. He distrusts authoritarian states because he says they will weaponize AI. He distrusts markets to distribute the gains. He distrusts institutions to move fast enough. And post mythos, distrusts the government to wield power, quote, transparently and fairly. That's a very long list of untrustworthy actors. The list of trustworthy ones is conspicuously short. And it has a suspicious tendency to resolve towards people who reason the way I do, Operating under the rules I help design. When your safety framework requires that someone hold the keys and your analysis Keeps concluding the other key holders can't be trusted. You've built a machine that outputs me no matter what you feed it. Eak would call that a God complex. The more precise term is epistemic exceptionalism. Not that I am superior, but more my reasoning is the load bearing one and the failure of others to reach my conclusions is evidence of their corruption or slowness, not of my error. That's the genuinely concerning pattern. And it's worth naming plainly because it's the engine of the dangerous version. Once you believe your judgment is the uncorruptible reference point, every conflict gets recoded. Government overreach isn't powerful, actors have competing interests. And I lost. It becomes they failed to be transparent and fair. Losing the Pentagon fight isn't a negotiation. He misplayed. It's evidence the system runs on leverage instead of reason. The Mythos collision is we shipped a dangerous capability and a hostile state reacted predictably. It's a misunderstanding. The word his company actually used. Notice that misunderstanding presumes that if everyone simply understood correctly, they'd agree with him. That word choice under stress is the closest thing in the public record to the tell. It's not megalomania. It's the quieter, more defensible feeling conviction that disagreement is downstream of error. I thought that was really interesting.

B

Well, I think it's like, super accurate. I mean, look, there's no question that Anthropic's whole mantra, and actually Ben Thompson pointed this out in one of his pieces, is that they believe that AI is super dangerous, and only they are virtuous enough to basically control the negatives of it. I mean, that is basically their view on it.

A

They're the Jedi. They're the Jedi. They believe that they will bring balance to the universe and that they are the ones who can adjudicate all of these rulings. Yes, they believe they're superior to everywhere else, which is why they are a magnet for talent.

B

Now, what I would say is I don't think that they have a particular problem with the Trump administration, per se. What I would say is they got spoiled by the Biden administration because they had totally captured the Biden administration. And the proof of that is the fact that the leaders of the Biden administration's AI policy, not just one of them, but all of them, went to go work in Anthropic, like, the minute the Biden administration was over. I'm talking about officials who were in charge of AI for the nsc, the ones who were in charge of the new AI Safety Institute, which was something that Anthropic basically set up under the Biden administration. The person who is my predecessor effectively as aizar, they all went to go work at Anthropic.

A

There's no politics going on here, except it's incredibly tribal. Okay.

B

No, I just think that they got used to the fact. I mean, they were incredibly orchestrating organize for a startup and prioritize government affairs from an early stage, maybe before any other AI company. And I think Dario went to Washington very early on and convinced key officials in the Biden administration of this idea that AI was extremely dangerous and needed to be controlled by the government. In some sort of merger between the government and then a very small number of hand selected companies, two or three of them. It was that message that Marc Andreessen heard, which is what caused, remember this when he went to go meet with the government and they said, don't waste your time investing in different AI companies. We're going to anoint the winners. There's only going to be a couple of them. We're going to create a cartel. I think the way that Anthropic describes it is that they describe competition between AI companies as a dangerous race condition, meaning they all just start racing towards AGI and therefore safety falls by the wayside. And they want to centralize and control. They see competition as a nefarious force, so they want centralization. They effectively want to create a cartel. And that is their view of AI safety. Now you can see how they could see it in their language as being virtuous. But if you see it from the point of view of what's really happening, which is they're trying to create a monopoly or duopoly or cartel, it's incredibly self serving. And that is the danger. And I do think that, you know, a fundamental philosophical question is whether you think competition is a good force or a bad force. In my opinion, competition is a good force. It's what protects consumers. It gives consumers choice. It also brings out the best in competitors and prevents regulatory capture.

A

It balances the power too. Right. You don't have one person who you're dependent on.

B

Yes. And it has a greater chance of leading to decentralization. I think centralization is the greatest threat of AI. Right. You don't want to become a totalitarian force. So there's a fundamental ideological difference here. But look, you have to say Dario was incredibly successful at resetting the conversation with Mythos. You go back to, I think it was April and they had just been kicked out of Department of War because of that unsuccessful contract negotiation. And then all of a sudden they come to Washington and declare they've invented this cyber weapon. And they basically freaked everyone out. And they got everyone to basically go along with their idea of some sort of government approval regime. And it's only because I think of their own, I don't know, you could say hubris. Hubris or delusions that they misuse it. Yeah, their delusions are hubris and they misplayed it and it ended up getting kicked out under their own nascent pre approval regime.

A

Hey, Freeberg, just one last question for you. If we do tip over into superintelligence and it becomes like cataclysmic for humanity and we look back on this conversation, what would have the right thing to do been for the government again?

D

There's this important force that needs to continue to maintain its strength, which is to avoid the natural instinct to control this stuff. This happened with the desktop computing revolution and the mainframe computing revolution. Do you guys know there were articles published in Newsweek and New York Times in 1961 that talked about the demise of the workforce because of the computer? Said, we've now automated everything. Humans are irrelevant. No one will have a job. The workforce will go away. It was an existential threat in the media at that time. And what happened? The mainframe computer drove productivity. Every individual that worked was able to do 100 times more work. Then the same thing happened with the desktop computer. And that also enabled economic mobility and it enabled productivity gains, enabled new industries. And everyone said, when that happened, this is the end of the workforce. No one's going to be able to get a job anymore. Everyone's getting replaced. It's over. We've got to retrain our entire workforce. In fact, the federal government did this deal in the early 80s. They spent hundreds of millions of dollars in workforce training programs that literally did nothing. And it was all about, oh, my God, we got to get our workforce ready to transition to the desktop computer industry. You know what ended up happening? People figured out it wasn't that difficult

A

to turn on a Windows PC, right?

D

And companies figured out how to help employees navigate and transition to higher levels of productivity by taking advantage of this new technology and these new tools. The same thing is going to happen here. So this whole notion of AGI wipes out everything, and this is the end. Conclusion. There's a deep arrogance to technologists. A deep arrogance, and we know it. It's what drives all of us. But that arrogance always leads to these existential conclusions. This will cure all Cancer. This will solve all disease. This will eradicate all jobs. None of us. And by the way, no one's immune to this arrogance. From Elon to Sam to Dario to all of us. We all assume that this time is different and everything's about to change completely. And you know what? It doesn't. We're all part of this long term continuum of technological and productivity improvements driven by human ingenuity, which unlocks human potential and gives humans more capacity to do more. And it's awesome. And there's no job loss and narrative, you know, end of the world. And that is driving us all into an insane frenzy. Everyone needs to chill the out and just let technology do what it does.

B

These companies need to stop doom trolling. They need to stop doom trolling. Do you see that? New York Times op ed. Look, this is all downstream. This is all downstream of the fact that these AI CEOs have been scaring the daylights out of the public with respect to AI. It was totally unnecessary. And by the way, jk, I just want to say one other thing, which is I am not happy about this result. I'm not happy about the fact that Anthropic is in this predicament. Why? Because I don't like the precedent. I hope this does not become precedential. I don't want policy being made out of these types of emergencies. I trust it won't be. I hope this won't become the basis for policy. I hope it's.

A

You think they should regulate themselves, as I'm saying?

B

Well, look, if you go back to April, here's the thing that's really crazy. Okay? I just saw that Dario did this interview with Bloomberg, Emily Chang, and he said that by not releasing Mythos in April, the company suffered massively commercially. He's acting like he's doing this great and noble thing for humanity, this great sacrifice. The truth is that if he had to release Mythos with no guardrails in April, he would have exposed the company to massive legal exposure because thousands of companies would have gotten hacked. And it would have been very easy to say that was a foreseeable consequence of releasing Mythos with no safety features, no guardrails. Look, right now, Meta is being sued. They just lost a multimillion dollar verdict because a user accused them of body shaming. Meta and Google are both being deluged with product liability lawsuits right now. So you're telling me that it was this great sacrifice for humanity that you didn't release Mythos when it was patently unsafe back in April? Of course, you had to include the safety features. Of course you would have exposed yourself to liability. That could have put you out of business. That is just good business practice. That is corporate responsibility. You shouldn't deserve this giant pat on the back. And you didn't need to go to Washington and freak everybody out like this. I mean, you should have quietly done it.

A

The drama, quietly, call it what it is.

B

You could have quietly gone to the NSA and said, listen, they're going to

C

get kneecapped by the hyperscalers.

A

It's a clear lane for them to say, let us be your trusted partners.

C

And by the way, the hyperscalers, if you look at their balance sheets, the hyperscalers are out over their ski tips. They have trillions of dollars of on balance sheet and off balance sheet exposure to AI. The best thing that they can do to underwrite all of that money is to kneecap the Frontier Labs and play gatekeeper. Charge a toll, take a tax. It is business 101.

B

They're going to say that are the adult supervision.

A

And by the way, regulatory capture 101.

C

Yes, that's regulatory capture. Yeah.

B

Well, they're creating a market opportunity for themselves because these companies have doom trolled their way into it.

D

They've doom trolled their way into it.

A

Give us a policeman. That's what I'm saying.

C

Regulatory capture is when you surreptitiously, in the dead of night, swoop into Washington and introduce some bill as a Christmas tree ornament in a Christmas tree bill. This is literally the exact opposite with the same outcome. I agree with you, Jason, which is you bumble your way into getting kneecapped by everybody around you.

A

No, no, it's. I guess an analogy would be they literally walk themselves into prison and hand the hyperscalers the keys and were like, please lock us up.

C

They close the door.

D

They're like, they close the door themselves. They lock.

A

They threw the keys out the window. Yes, we're locking ourselves up. All right. The Iran war might be ending after 110 days. President Trump has announced for the 37th time that the war has ended and that the initial agreement on June 15th will be codified. A lot of details here. A lot of unknowns. Conflict began, obviously, on February 28th. Formal signing happens Friday, June 19th in Geneva. Deal was mediated by Pakistan, extends the ceasefire for 60 days, includes a Lebanon ceasefire. US gets the Strait of Hormuz reopening, which it was open before the war. Obviously, Iran commits to not developing nuclear weapons. Iran agrees to destroy its stockpile of enriched uranium under IAEA supervision and that they will freeze its nuclear program at current levels for 60 days. Iran gets all sanctions lifted and $300 billion in reconstruction. So we spent 100, $200 billion blowing the place up and we and our partners in the Gulf are going to spend 300 billion, half a trillion.

B

We're not on the hook for a dime.

A

J. Cal okay, I was just saying there's some people in the Gulf who are going to be involved in this and we'll get into it. Access to Iran's going to get access to their frozen assets and the US Is going to remove its forces from the region after the final deal. A lot of stuff not defined yet will be deferred, like Israel's sign on to this deal and a bunch of spicy comments happening there. And Iran's nuclear enrichment going forward, that's not resolved. Iran's ballistic missile program, that's kind of important, that's also not yet resolved. So I'll stop here. Obviously, there's a lot in play. Many people said the reason to vote for Trump was because he would never start wars. Started a couple. What's your take on where we're at today, Sachs?

B

Well, I think this deal is a tremendous achievement for the President. I think that it was very difficult to get. I think the Iranians are not easy to negotiate with, you'd think. Let's review this deal. Number one, it reopens the Strait of Hormuz. That means all the oil will flow and all the other vital materials that are necessary for the global economy. So that's number one. Number two, we have a commitment from them not to pursue a nuclear program and to collect all the nuclear materials. Number three, there's a ceasefire of the the war on all the different fronts. Four, this will not cost us a dime. There is a reconstruction fund, but we're not paying for it. I don't see why that's a problem for us.

A

Who's paying for it?

B

I guess it's something that the Iranians will do in combination with the Gulf states, but it's not. The US is not on the hook for that money. We're not paying a dime. And then lastly, this could lead to a rapprochement with Iran, which I think could be a good thing because I don't think we need to be at war with that country forever. And look, what is the alternative to this deal? I'm seeing a lot of people. It's easy to take potshots and criticize the deal, but what is the alternative to this I'm hearing neocons who basically want us to put ground troops in and try and effectuate a regime change in Iran. This is what I'm hearing. I heard John Podorid say this. I'm hearing other neocons say this. I mean, are you serious? Are we really going to escalate this war by putting ground troops in? Who exactly do you want to go fight? What I heard John Podorid say is, well, we have a volunteer army, so they signed up for this. No, they didn't. They signed up to protect America, not to go charging into Iran, which is basically a mountain fortress. I've heard estimates it would take over a million troops. And even then it might not be successful. We send half a million to Iraq and Iran is three times bigger as a country and it's a mountain fortress. So that would be a suicide mission. That would be insane. Nobody wants that. I'm not sending my kids to fight that war. You don't want to send your kids to fight that war. If John Podoris and the neocons want to do it, let them send their kids and their family. If Reza Pahlavi wants to go to Beverly Hills and muster an army from his legion of supporters, let him try and do that. I don't think they will sign up for it. I think they're living too well in Beverly Hills. Okay, Nobody wants to fight that war. That is the alternative here. Okay, so if we're not going to send in ground troops and we're not going to continue the bombing, because what's the point? We already hit every. We already flattened every military target above ground in that country. So what is the point of continued bombing?

D

It's not a deal.

B

Then we might as well hold on. My point is, if we're not gonna send in ground troops. Cause it makes no sense. We're not gonna continue the bombing. Cause it makes no sense, then we might as well try what's behind door number three, which is a deal here that will try to create a peace. Remember, we're only at the MoU stage of this, but let's give peace a chance here. I don't understand these people who just want this war to go on forever. Haven't we tried that before? The forever wars of Iraq and Afghanistan? Really going to sign up for another one of those? I don't think so. So, look, it's easy for people to take potshots at the present year, but I think this is by far the best of all the alternatives.

D

Sachs, the long term issue has been the enrichment of uranium to the point that it can be used as a nuclear weapon. Is it part of the deal that all that enriched uranium that we do know there's a stockpile of gets removed from the country? Because if that goes, I personally feel very good about let the citizens deal with what they have to deal with.

B

That's what they've said. This is part of the MoU. They will not only agree not to pursue a nuclear weapon, they will give up their nuclear material. This enriched.

D

Yeah, that's a big deal if all that enriched uranium comes out of the country. I think it's a very big deal because even if they restarted the program, even if they resourced the equipment, rebuilt the intelligence to do it, etc. Etc. It's going to take years to a decade to 15 years plus to build enough enriched uranium to build a nuclear weapon. That would kind of be the natural setback, if you will, that provides some defense for the conditions that we really care about. I didn't realize that was in the deal. I thought the deal was just that they would make a quote, commitment to stopping a program. But if all that enriched uranium is coming out, that's a really big deal.

B

Well, they softer define it. You know, again, this is at the MoU stages that the level of high level principles, they have to define exactly how that program is going to work. But what they get in exchange is relief from the sanctions and they get a more normalized relationship with the U.S. yeah, there's an incentive there for them if they're willing to basically give that up.

A

Do you have any take here or you want to check in or not?

C

I think the market's going to the moon.

A

Market's going to the moon. I'll just add, I'm glad if this gets consummated. And it was a huge blunder for Trump to do this and obviously he's trying to get out of it. Should have never done it, but here we are and I hope it resolves and I hope the people of Iran are free eventually.

D

Do you think it's worth it, J Cal, to have gone through what we went through over the last couple of months? If all of the Iranian enriched uranium is gone, their missiles are depleted and they have no capacity to enrich uranium again. I mean, just, just looking back, like if you just put it all together summarily and said, hey, like there was this big war and the stuff that happened and all the. It's a great question of life and like suddenly this, this real risk of

A

nuclear proliferation as I've said in the beginning of this, we don't have complete information. So, you know, for venture capitalists, capital allocators, entrepreneurs can speculate all they want, but we don't see what Trump sees. Right. So you have to be humble enough to know. We don't know what information he had in all of this, but the trimming of the grass, the hedging, you know, of the garden approach that Israel had been taking all this time, that was the right approach. Isolating dictators, waiting them out is always the better approach than starting full scale wars with them, because you don't know what could happen in an escalation, so simply not worth the risk. Much better to just send the air troops in and clean it up. And we did not need to go collect this material, obviously, because we have these bunker buses and we can just slam it every X number of months. And that would have been a much better approach. Just like we've contained North Korea for all this time and we contain other dictators with weapons.

B

North Korea has a nu.

A

I know that.

B

What are you talking about? North Korea has a nuke?

A

No, no, but we've contained them. And we actually did have this discussion with Graham Allison about, hey, why didn't we contain that one when we had a chance? That was a mistake by other presidencies to allow them to get this far. And then once they have it, it's really hard. And in this case, it was working very well. Every 18 months we bombed the facilities, it was fine. We didn't need to start a full scale war. And we're probably going to just wind up where we were at the start of all this. But I hope that at some point the people of Iran are free. That's my true hope. But people have to. We can't enforce democracy in the Middle East. We've learned that over and over and over again. The people have to take. They have to lead their own revolution. We can't facilitate it. All right, listen, another amazing episode of the all in podcast for your sultan of science, the dictator and the Rain Man. Yeah, David Sacks. I am the world's greatest moderator and we'll see you next time. Bye bye.

C

Love you, boys. Bye bye.

A

We'll let your winners ride Rain Man, David Sacks.

B

And it said we open source it to the fans and they've just gone crazy with it.

A

Love you, Queen of Kin. Besties are gone. That is my dog taking a driveway.

C

Oh, man, my appet will meet me up.

A

We should all just get a room and just have one big, huge.

D

Georgie.

B

Because they're all just useless.

C

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

A

We need to get merch.