Speaker 1It's inevitable that socialism will happen in America, but I don't want to lose my agency, my liberty, my freedom.
Speaker 2Do you think the U.S. as an empire is in decline? The answer is yes.
Speaker 1I was appointed to President Trump's Council of Advisors in Science and Technology. And one of the great lies is that the government will save you. But the more government has tried to create services for people and help bring them up the ladder, the more expensive those things get. 63% of Americans live paycheck to paycheck. People can't afford to pay their bills, and it needs to be fixed. What will ultimately happen? So all my politician friends are about to chop my head off about this, but...
Speaker 2David Freeberg, what is the most important subject of our time?
Speaker 1AI. We're entering this golden age, and people don't realize we're in it. And I don't buy into the narrative that Dario, Elon, and Sam end up having all the value in AI. Because in the next 10 years, there will be a billionaire that will emerge that has zero net worth today, downloaded open-sourced AI, and built a company that made them a billionaire. And they're going to be someone that's going to come from nowhere. And there's going to be a lot of these sorts of stories.
Speaker 2But this narrative that AI will take jobs away, you don't believe it.
Speaker 1So from... From data, from evidence, over all periods of technological revolution like this, we've never seen jobs decline. And the average person doesn't see it. But, oh my God, the stuff we can do is unbelievable. Right now, we have a billion people in the world that are starving. We have hundreds of millions dying from curable disease. These are the sorts of things that are going to get resolved. Because AI unleashes this capacity for human advancement. And it's transforming every aspect of biology and our understanding of life sciences.
Speaker 2So I wanted to ask you, do you think we're going to be able to live forever soon? The truth is... Guys, I've got a favour to ask before this episode begins. The algorithm, if you follow a show, will deliver you the best episodes from that show very prominently in your feed. So when we have our best episodes on this show, the most shared episodes, the most rated episodes, I would love you to know. And the simple way for you to know that is to hit that follow button. But also, it's the simple, easy, free thing that you can do to help us make this show better. And I would be hugely grateful if you could take a minute on the app you're listening to this on right now and hit that follow button. Thank you so much. So, so, so much. David Freeberg, you're someone that graces lots of different subjects. If you were to sort of self-define who you are and what you do, now this is difficult because you've got to kind of put yourself on a label here. What would that label be? How would you self-categorise yourself?
Speaker 1I would say I'm deeply curious about the world and the universe and how it works and why it works the way it does. And I'm a big believer in human agency. To affect the universe around us. And that's kind of my core kind of driving motivation. A lot of the other stuff ancillary is about how do you enable that? And I think that that's sort of probably where I also spend some time is in the enablement of those things.
Speaker 2Got a nice cute photo here of that kid that wanted to be Einstein.
Speaker 1Yeah.
Speaker 2And then as it relates to how that manifested into like a professional journey. What's your professional journey been for anyone that might not know?
Speaker 1I started in college majoring in math and physics. And then I changed my major to astrophysics. And it was during the time I was in college is when the dot-com boom happened. In the heart of Silicon Valley, there was a kid in my dorm room who started a website selling DVDs online. And he sold it for a million dollars in our junior year of college. That was like an unbelievable, unfathomable amount of money. And so there was this change that was happening in the world. And I got enamoured with this idea of businesses and how do you use businesses to change the world, not just use scientific discovery as a method to change the world. So I decided to go work in Silicon Valley. I interviewed for jobs. I didn't get a lot of offers, but I played a lot of poker during my college days. That's how I was able to make money. I read all the strategy books on playing poker. I actually spent a year working in a pool hall and the manager of the pool hall and the bookie invited me to their home poker game. Took all my money that I made at the pool hall. I was making four bucks an hour, $4.25 an hour. And so I was like, I'm going to learn poker. So I learned it. That's how I made money. And I put that on my resume when I applied for jobs after college. And I got interviews with investment banks and the investment banks were like, oh, we want to talk to a kid that knows how to play poker. Because this was before internet poker, before ESPN poker. So it was like an interesting thing. And so I ended up getting a job working in investment banking and then worked on tech companies. So then I got to learn business, finance, accounting, mergers and acquisitions, all this sort of stuff. And then I ended up working at Google. I worked at Google when it was started when it was just under a thousand employees. And I left a couple of years later, started a business called the Climate Corporation. And so I've been in Silicon Valley my whole career.
Speaker 2And that company you end up starting does pretty well? The Climate Corporation.
Speaker 1That one we sold in 2013. So we sold it for a little over a billion dollars, which was a great outcome for investors and shareholders. And today, you know, it's software for farmers. And today that software is now owned by Bayer, which is the big kind of pharma slash ag company. It's used across 200 million acres every year. That's a pretty sizable amount of farmland that uses that software still. So, yeah, it's done fairly well.
Speaker 2So I'm 33 now. You were 33 when you sold that? I was 33. 33. A lot of money, $1.1 billion. And you've done lots of other things since then, which we can go into. But you've also, I think from March this year, you were appointed as an advisor to Donald Trump?
Speaker 1Yeah, I was appointed to President Trump's Council of Advisors in Science and Technology.
Speaker 2What does that mean in reality?
Speaker 1So if you look back in the last couple administrations, there have been different themes over time on who is appointed to PCAST. In historical context, like Bill Clinton had a PCAST that was set up just for the Internet.
Speaker 2PCAST.
Speaker 1President's Council of Advisors in Science and Technology. And so he set one up focused on the Internet. And this current PCAST under this administration is heavy in AI. So it's like Mark Zuckerberg, Mark Andreessen, Sergey Brin. That's kind of the cohort that's on this advisory council. But it's always included folks that are involved in things like biotechnology, sciences, and to help guide science policy for the administration. So it involves having conversations with people in the administration on things that are happening in industry, things that are happening. On the frontiers of science and technology to help guide some of the policy decisions that the administration is trying to create or enforce.
Speaker 2And what is the most important subject of our time?
Speaker 1AI. And right now, the big question in the United States from a policy perspective seems to be the regulation of AI. What role should the government play in determining where AI goes, how it gets built, how it gets deployed, who gets to use it, who owns it? Where the value lies. A lot of these factions that emerge inside a government, even today on the same political party, on whether or not, for example, to allow Chinese open source models to be used by American businesses. You know, these Chinese models are as good as, or in many cases, better than private American models. And because they're open weights, you can download them and run them on any computer you want that works. A lot of companies want to use those because they're cheap. You can pay effectively 50 cents for a million tokens of output. Which is a measure of how productive the model is. You know, this is a token. It's kind of like a word. Versus $50 from Anthropic, which is a private model. So the question is, do we allow these Chinese models to kind of become ubiquitous in industry? And if so, what does that do to American AI? What does that do to our capacity to compete? Is there security risk? So there's a lot of this kind of debate underway. And that, I think, is probably the hot topic du jour. I don't know if it's the hot topic tomorrow, but today that's kind of the big thing. But all of this administration, I think, from a science and technology policy perspective, will probably be viewed as, on the one hand, what's the enablement, acceleration, regulation of AI? And on the other hand, you know, there's this question still on what is science today? In an era of AI, science is also changing. And so there's this kind of, I think, big shift underway.
Speaker 2We'll go into those subjects, specifically the subjects. On AI and everything that it interfaces with. But I think it's important also to get kind of like a backdrop of the economic state and like the social state of the nation. Because all of these things feed into these big questions on AI. And they also inform everyone's biases on this subject. Because if you're at a different sort of socioeconomic position, or if you're feeling a different thing, your perspective on AI is going to be radically different. So if we started then first on like, if we just focus on the United States, which in some respects is a little bit of a proxy for the rest of the Western world, where is the United States at this moment in time, in terms of is it on the rise, inequality? What are the sort of pertinent factors here that help us understand the backdrop of this nation?
Speaker 1The biggest drivers for this nation at the moment, in terms of what public policy and private markets will do, is number one, the unaffordability crisis. What does that mean? 63% of Americans live paycheck to paycheck. They don't have enough savings to pay for a fiscal emergency in their household. 63% of Americans. And the cost of things is rising faster than wages are increasing. So things feel less affordable to most Americans. And then there's this wealth inequality concern, which I would say is both kind of a perception issue. There's definitely policy issues that has allowed it to happen. And we can talk about those. But I think America is in this kind of crisis of classism, this crisis of us versus them, and it manifests in a lot of different ways. So, you know, you had Ray Dalio on. And if you think about Ray Dalio's kind of like cycle of empires, you know, this is this idea that there's been six empires in the last 500 years, and the United States is on the decline and China's on the rise. And it can be measured across a number of different dimensions, one of which is this crisis of internal struggle, which manifests often with external struggle, the Iran war. Like, why can't we stop having external wars? Well, you know, a nation that's happy with itself generally doesn't go to war. A nation that's not happy generally does go to war. go to war. And so a lot of this stuff gets tied up, I think, in this economic distress that the United States is feeling. My contention, which may not be very popular, is that the more government has tried to create services for people and help bring them up the ladder, the more expensive those things get. Are you socialism? Policy in the United States, and this is one of the great lies, and I think there's a series of great lies in US policy over the last half century. But one of the great lies is that the government will save you, the government will help you by giving you these essential services that you want more of. Education, healthcare, housing. And as the government has entered into those markets, because remember, there are people making those things, offering those services, and there's someone paying for it. So as the government enables more money to flow into those markets, the cost of those things has just gone up. And you can see how this plays out, for example, in education. So higher education. If you want to go to college in the United States, and I'll just give you a statistic, 30 years ago, administrative staff were like 10% of colleges. Today, they're like 60%. In just 30 years. Give me a rational reason why we should have 6x the administrative staffing at colleges and universities. There isn't a good reason why. The real reason is that because the federal student loan program doesn't discriminate against the university on how well they do with their graduating students, or the degree, or the individual they're studying, or the degree they're studying, or the degree they're studying. It's taking out the loan. The federal student loan program has just allowed more money to flow in to universities. Now, if you're a university administrator, there's no constraint on how much you can charge for tuition. So, hey, we'll raise tuition 5% this year. We'll raise it 8%. We'll raise it 10%. And we'll hire more people. And if people hire more people, they get a higher salary. If you think about the individual, I don't get to make more salary until I'm a manager. Now I want to be a director. Now I want to be a senior director. And the organization grows. That's very natural for any organization, whether it's a nonprofit, a university, or a private company. You want to grow, and people want to make more money year after year. So they, because they can collect more money, can charge more for tuition. There isn't a natural market force that says your tuition is too high now, because the government has provided unlimited funding to higher education through the federal student loan program. So as a result, education has gotten so vastly expensive that everyone now looks at it and says, we got to do something about this. And both parties seem to say, well, here's what the government's going to do to do more. And it's like putting fuel on the fire. So the challenge right now is people are feeling left behind. There's massive wealth inequality. Things are extremely unaffordable. And the solution that's being embraced is for the government to do more, which de facto leads to socialism. What is wrong with socialism? I would argue that the key measure of a country's success is how many people are transitioning from labor to capital each year.
Speaker 2What does that mean?
Speaker 1That means every year I'm working paycheck to paycheck. I'm collecting check. I graduated college. I had $19,000 in debt. I went and worked. I got paid. I saved up. I paid down my debt. I was able to get out of it. Then I worked at Google. We had an IPO. Suddenly, I had assets. I had stuff. I had money in the bank account. And it was like an incredible moment for me. And I said, I could live off that money. I don't need to live off a paycheck every month. I now have savings. I have assets. That is capital. And everyone talks about capital versus labor. But the real advantage of America is enabling people to go for it. And that's what I'm talking about. I'm talking about capital versus labor. I don't need to live off of it. I don't need to live off of it. I don't need to live off of it. Every individual that works, saves, invests, does whatever they need to do to accumulate enough capital ends up in the capital bucket. And then you're no longer stuck needing to go paycheck to paycheck to pay your bills. That's the dream. That's the real American dream. It's not just about owning a house. If you own a house and you have a bunch of debt, and you got insurance payments to make, and you still got to work every month to make those payments, you're not necessarily living the American dream yet. The American dream is being freed of that burden.
Speaker 2Because you can live off the interest of your assets.
Speaker 1That's right. And so you're earning income. Let's say you have $100,000 saved, and you can make 10% a year on that. That's $10,000. Suddenly, if you get to a million dollars saved, you can make $100,000 a year, and you can live on that. That's economic security. That's financial security. That's what we should give to every American, is the ability to own assets that give them freedom to choose what they want to do in their life, rather than be stuck in work. And the problem with socialism is it takes away that transition moment. It eliminates it because it says everyone has to be labor all the time for the rest of their lives. And then no one has freedom. And that's what America was founded on, was this ability to find, through freedom of choice, through agency, the ability to transition from labor to capital. And I think our goal as a country should be get 2% of Americans across that line every year. Then I think we'll be successful going forward. But if everything's all about, like, give people more stuff and have the government do it, we're just going to keep raising the debt, making things more expensive, inflating the costs away. And it's inevitable that socialism will happen in America. It's absolutely inevitable.
Speaker 2Do you think the US as an empire is in decline?
Speaker 1In terms of the power of the dollar, in terms of prosperity of Americans, the average American, a majority of Americans, the answer is yes. But the potential hasn't been deleted. Meaning decline is not inevitable. To be very clear, like, we are not yet at a point where it's a runaway train. In the history of democracies, there's never been a place like this. There's never been a place like this. There's never been a place like America, where an individual like myself, you know, moving here from South Africa, going to public college, graduating with debt, and then being able to work my way out of the debt and find myself in the position I'm in today, with no nepotism, with no handouts, with, I mean, you could argue about privilege and all these other sorts of things that I was vested over my life. But, like, it's an amazing place that that sort of story can be told a million times over, that there's not just one or two people that this has happened to, but there's millions of people. The problem is, it's all the other hundreds of millions that didn't get to live that opportunity. And if we can fix that, America is not in decline. America is a prosperous nation and has centuries ahead of it. When you look at this, you're talking about
Speaker 2runaway trains. When you look at the national debt, though, it does look very much like a
Speaker 1runaway train. That's inflation. Want to know where inflation comes from? That's where inflation comes from. By printing more dollars to pay for that debt, which is what happens, the Federal Reserve buys the debt, and they issue dollars to the bank system to buy the debt from the government. Remember, the Federal Reserve is separate from the government. The Federal Reserve can print dollars. They can send dollars to banks, and now the banks can loan money out, and it makes its way into the economy. Now there's more dollars in the economy. And that money was, you know, owed back to the government at some point, but the Federal Reserve may never get paid back. They may just keep adding and adding and adding and adding. And they're just printing more and more dollars.
Speaker 2Is that sustainable? No. So I don't understand the force that's going to intervene to stop this sort of compounding debt.
Speaker 1The outcome of this is socialism. That's the moment we're in right now. That's why we're seeing this wave of socialism. I've been saying for five years, we're going to face a wave of socialism. And after Donald Trump was elected, my prediction for the next year was that the next wave in politics in America will be socialism, and people thought I was crazy. And I'm like, it is absolutely inevitable if you look at this. This is where we're headed. It is de facto socialism when the government employs roughly one half of the people of the United States. Right now, if you look at all the federal, state, local agencies, so the people that are employed, the people that are contractors of those agencies, and then the people that live off of the federal government, the people that live off of the federal some sort of government pension or social security system, the total amount is close to 50% of Americans. So we're getting to a point where people are like, the only place I can go is more money from the government. And then eventually the government becomes the whole economy.
Speaker 2If the outcome is socialism, was the cause capitalism?
Speaker 1It's a great question. I think it was capitalism plus policies. Let's say you have a million dollars. You're making, say, 10% a year. Next year, you have 1.1 million. The next year, you have 1.21 million dollars or whatever, and you keep adding it up. That's called compounding. After a couple of years, your million dollars turns into $10 million. And you never have to sell shares along the way. You can just own the shares and whatever's going up. Your value just keeps going up. You've never paid taxes along the way. Boom, boom, boom, boom, boom. And suddenly, fast forward a couple of years, instead of having a million, you've now got 10. That's capital compounding over time. Meanwhile, if you're working, every paycheck, taxes are taken out. Every time you get a check, every time you get more money, more capital, taxes are taken out. So if you don't get capital, if you don't get enough savings to allow you to compound, you are never going to get there. So from a tax policy perspective, labor working for your money should have never been taxed higher than earning returns on your capital. So you're saying tax the rich? I'm saying tax capital at a rate that's equivalent to labor. Wealth taxes? Wealth taxes are asset seizures. Definitely no. So one of the principles of the United States and the principle of what this country wants to do is tax the rich. And the principle of what this country was founded on is private property rights. If you go back to England, right, like 500 years, or let's just talk Europe broadly. There were very few places where you as an individual citizen had rights to own private property. There were very few places where you could say, I have this thing and it doesn't belong to the king or it doesn't belong to whatever the local lord is. Everything was the property of the lords, of the higher class, of the upper class. It was endowed to them, it was vested to them by birthright. For centuries. Same in Asia, same in the Middle East, same in Africa. I mean, like every nation started out with the system where people didn't have rights to private property. Those who had kind of these systems above could decide who got what. So the United States was founded on one of the principles of private property for an individual that you, you know, I think when they were drafting the Declaration of Independence, it was about life, liberty, and the pursuit of property. And they later changed it to pursuit of happiness. And the pursuit of property was really the measure of what you've accumulated as an individual. And that's what we're talking about. And that's what we're talking about. You now have a right to accumulate things. You now have a right to build value, to build wealth, to build a house and have your family in your house and have all these things. That was a principle of the United States. I'm all for taxes when people transact, when they turn their stock that they've held for a couple years into cash and buy something with it. Boom, tax. You get taxed on that. If that's the right model, that's when you should get taxed, right then when you're able to turn that asset that you own into another asset. So that's what we do today. That's an income tax or a capital gains tax, like when you realize that gain. But if I go into your shares and I'm like, hey, I'm going to take 5% of your shares, what are you losing? Well, you can't use those shares to buy anything because as soon as you try and buy something, you owe tax on those shares. So by taking away your shares before you've actually transacted with them, before you've actually sold them, or taking away your private property, your home, or giving the government the right to come in your garage and audit everything you own and say, hey, this year we're doing a 2% tax, that is antithetical to what the United States was founded on, which was a founding principle of private property. Now, if your property goes up in value and then you eventually turn it into some other property, that's a transaction and that's when you get taxed. That's how the system's set up. So if we have an issue, we're going to have to do something about it. We're going to have to issue with people having too much wealth. That's the moment to increase the tax rate. That's capital gains tax, income tax on high earners. Those two things can get you 97% of the way there. And you're not really going to gain much. Separately, we can kind of talk about the numbers on this, but tax the rich, all for it, but tax the rich when they transact, when they sell, when they have a capital gain, if they borrow against their assets. This is another thing that's wrong about our system today. If I'm very wealthy, I own a bunch of stock and I've never sold any of the stock. If I'm very wealthy, I own a bunch of stock and I've never sold any of the stock. If I borrow against my stock to go buy a yacht, I don't pay taxes. That should be a taxable event. We should fix that. That's an easy fix in the tax system. I'm not taking away your private property, but as soon as you borrow against that, it's effectively like transacting on that property. So that's a moment to pay a tax. And if we think that the rich aren't paying enough taxes, you can raise income tax or capital gains taxes to get them to pay more.
Speaker 2This is what I was going to say, but you arrived at it, was most people that own stock in big companies will just borrow against their stock and they never pay a tax. I didn't know this until I was, I'm going to say 26 and my company had gone public and this bank in Europe approached me and said, by the way, we'll give you 20% of whatever your, your, the value of the stock you have in my company called Social Chain AG is a tax-free loan. I was like, explain this to me. So you'll just send me millions of pounds and I don't have to pay tax. You don't have to sell your shares. I don't have to sell anything. I said, well, look at the rest of my portfolio. And I had some Facebook stock at the time. They're like, well, we'll give you 50% to 60% loan to value on that. IE, if you have a million dollars of Facebook stock, we will transfer you today 700 grand tax-free and I can do with that whatever I want. And I thought, fucking hell, this is what the rich
Speaker 1do. That's exactly right. And the truth is that no one talks about behind closed doors. Everyone
Speaker 2knows that it needs to change, but no one wants to say it because I'm saying it. Yeah. Got to change. What's interesting about that is say that I have 10 million of Facebook stock and I, I take a loan. And they give me 5 million in cash. What a rich person then does is they take that 5 million and then they go and buy other assets. Exactly right. And then they start acquiring more and more
Speaker 1assets. That's what's unfair about the system because then when you have capital, you're accumulating more capital while labor, if you haven't made that cross that chasm from labor to capital, you're still here grinding every month, grinding every week, trying to pay your frigging bills. And then these guys have all these shenanigans that are going on. Yeah. It is wrong and it needs to be fixed. The answer though, is not taking private property. Yeah. As soon as you start taking private property, you're not going to be able to take private property. You're not going to be able to take public property. You're not going to be able to take public property. Those gates are open. By the way, it's not even going to be constitutional in the United States. The fifth amendment has this taker clause. You know, it's not, it's legally like not going to win in federal court. It could work in some states, some states, there's seven states that actually have a constitutional ban on private property tax like this. There's, uh, you know, 43 states where it's game on and we'll see how they play out in the courts as they try to pass these wealth taxes as well. But these are assets seizure taxes. You can have a wealth tax by raising capital gains, make high income or high asset. People pay more. Taxes or whatever, when they sell stuff or when they buy stuff, there's a lot of ways to tax wealth, but taking assets from people after they've paid their taxes or before they've paid their taxes is not the right way to do it. What will ultimately happen? So the ultimate outcome will be that 51% of people will say, Hey, give me all the stuff that the 49% have. What would stop them from doing that? Because ultimately you can take as much as you want from a minority of people and distribute it to the majority. And that minority starts out with a few billionaires, then a couple more 50 millionaires, then a couple more 10 millionaires and millionaires than a hundred thousandaires. And there's no limit to where
Speaker 2this thing goes. And that is socialism. And what does that do in terms of how talent moves and how people, you know, move to different places? I know billionaires. Yeah. Many of them have
Speaker 1moved or are planning to move out of California just on the threat of this. And people say, F them, good riddance, get rid of them. You know, the top 1% of taxpayers in California pay the majority of taxes in the state. I think it's probably, it's definitely north of 40%, but it's probably the majority.
Speaker 2The top 1% of earners pay 40 to 50% of California's total personal income tax, depending on stock market capital gains performance.
Speaker 1There you go. So that 1% are the people I'm talking about that are leaving the state because they see where this is headed. I don't think California wants that. Those are very productive people for the state. They're people that create companies, that hire people, that pay well, go to fancy restaurants, pay for cars. I mean, they support the economy. It's not just the taxes, but they're a big part of capital flowing through the economy. We saw this happen in France. You know, France had this wealth tax, and then their total tax revenue declined by more than they were making on the wealth tax because everyone left France. Then they stopped doing the wealth tax and everyone came back and the income came back. So this is a well-studied kind of case. So I don't think that a wealth tax or an asset seizure tax is the solution. I think we've got to fix all the other stuff that we've talked about. And we've got to fix the government spending problem. And if we can do those two things, then I think we can bring inflation down. We can bring the wealth inequality down and give more people the ability to make that transition. But I do think every politician should be talking about the focus on what percent of people in the United States every year are moving from labor to capital. How many people can say, hey, I've got enough cash to retire if I wanted to. That's what we want to try and get everyone towards, not just convincing people. And this is one of the great lies, convincing everyone that the great American dream is to own a house. When owning a house, it's not just convincing people, it's convincing everyone for a lot of Americans ends up putting all your capital in one asset. And you've got to basically get the price of housing to go up every year to keep everyone moving up the ladder. So now fast forward 30, 40, 50 years, young people can't afford to buy a house anymore because we've pushed the asset value up so much to try and make sure that everyone's got good, good, good household
Speaker 2wealth. We are told that. I mean, that was the sort of central idea once you leave university is to figure out how quickly you can get a mortgage or buy a house. Great lie. It's one
Speaker 1of the great lies. And there's a lot of countries where people have been able to accumulate capital jump that, that ravine from labor to capital much more quickly when they don't buy a house because they can invest in stuff. They can buy, you know, the S and P 500, which you can just buy on an E-Trade or Robinhood account, and you can just own it on average will make you 10, 11% a year. You just put your money in that you're making 10, 11% a year, and it can go up every year. And you don't have to pay taxes. You don't have to pay property tax. You don't have to pay insurance. You don't have to deal with repairs and maintenance, all that sort of stuff. So a lot of people would have been better off depending on the markets that they're in. There are some markets that, that ballooned, but a lot of people would have been better off over the last 30, 40 years, actually owning the S and P 500 than owning their home and paying for the rent on a
Speaker 2home. One of the things I see in the comment section, whenever someone makes that point is you'll have someone who bought a house 20 years ago saying, well, listen, I bought a house 20 years ago for this amount. And now it's worth this. And this is every single time that I see this, this argument being made from financial advisors or investors, that is always the top comment is, well, I bought one and I did good. Yep. It actually indicates a problem, which
Speaker 1is if your house went up in price so much, that house is much less affordable to a young person that's going to buy it next. And that's what we fundamentally done with this asset class, residential real estate. We've created a system whereby residential real estate prices go up so much. And there's a whole bunch of policies around making this happen.
Speaker 2It's got a graph here showing all the things that have gone up and you can see housing is one of
Speaker 1them. Yeah. The stuff on the bottom, the government doesn't touch the stuff on the top, the government touches. And so the more the government's involved, the more expensive these things get. And so the more the government's involved, the more expensive these things get. But all of the policy around residential real estate has allowed the middle class in America, which has the majority of wealth, and I'll give you the statistics in a minute, to grow their asset base, to accumulate more assets, to become wealthier. All the boomers, they're so wealthy because they owned all these houses. And now young people graduating college can't afford a house. It is a bad fact that a lot of people got very wealthy by owning a home because it means that the next generation is going to say, I want socialism because I can't afford a home. That's the moment we're in. 40 million Americans graduated from colleges in the United States in the last 10 years. 45 million. So if you do the math on this, that's a large number of people that are now, on average, encumbered with some amount of student debt, facing a challenging job market. And then the only way to buy a home is you got to come up with a million bucks. And it leads to this problem
Speaker 2where everyone's like, man, I need mom Donnie. So what would you say then to people that are in that 62%? Was it? 63. 63% of people.
Speaker 1And that statistic changes year to year, but that's roughly the number. 63% of Americans, you know, less than $500 of savings and working paycheck to paycheck and can't pay for a fiscal emergency.
Speaker 2So for those people, the 63% who you're telling them that buying a house is now like unaffordable, it's, and also it's potentially not a good investment. If they're trying to sort of cross that cousin and get over to the side where they have assets, what would your prescription be for them? What should they do?
Speaker 1Man, that's a great question. People will challenge it, but I would have never thought that podcasting would be such a massive business. I would have never thought that being an Instagram influencer would be such a massive business or a TikTok influencer. I would have never thought that individual artists could publish online and make money without getting a record deal. I would have never thought that individual artists would be able to sell their work and make a living on eBay and Etsy. I would have never thought that craftspeople would be able to find jobs through the internet. I think the internet has been this incredible enabler of millions of new ways to work, of new ways to earn an income. And a lot of people will roll their eyes and say, but that's not what the system was supposed to have set me up for. The system failed us. Maybe the system did fail you. And maybe the government solution wasn't the right solution, but human agency is what got all these people there. They all got to this place. Did the government give you your job as a podcaster? Did the government teach you how to podcast and build this incredible media empire that you've built? I don't know if the government played much of a role in it. I think you played the role in it. I don't know. You tell me. But I think that this is really important for a lot of people to observe firstly, which is the government isn't going to save individuals. The government's going to make things harder for individuals to find their path. If I have to go and start a barbershop, I got to go get all these cosmetology licenses. I got to go figure out a way to go to school, pay thousands of dollars, get health inspections done. There's a lot of government layers that stop me from doing that work. There's a lot of ways that the government actually inhibits people's agency and makes it harder for them to do the things that they want to do. I think that's just a fundamental for me, one of the observable truths. But I think the second thing is, I never discount human agency. There was this great podcast done years ago by those guys at the Hoover Institute, where they talked about the success of China. And a lot of people, you know, where China grew GDP per capita from like 3000 to 30,000 or whatever it was. And they're like, man, Chinese central planning is brilliant. They're so good at this. And these guys made the argument, which I discounted at the time. But I often say, I don't know, I don't know, I don't even think about nowadays, that it was actually the agency of the individual choice, the entrepreneurship, the drive, the motivation of the population of the individuals in China, not central planning. But basically, the government enabled free markets, they allowed people to work, they allowed people to trade, they allowed people to create value for each other, to do something that someone else might want. They looked around and they said, I think you want this, and they started making it. And when the government loosened the shackles on individuals, that population grew the economy. And the government still has a big role in central planning in China. But it was a really important point. If you think about all the success that's come from the United States, it's not a central message that the government said, let's do this, and then we're going to do this, and we're going to do this. It's individuals making their own choices. You've seen what people want to learn, what people want to watch, what they're interested in, and you give it to them, you create value for them, you deliver that value, and you've earned something from that. People are willing to pay for that. And I think that that's core to kind of where we can go from here. And I don't think we teach it in schools. I don't think we teach it as a value. We've lost that value of agency, the importance of the individual taking their own action. Every conversation we have in every frigging context is all about the frigging government. Government this, do this, do this, do this, do this for me. What individuals can do is limitless. And that's where I think we fall short. Every day, someone should ask themselves, I tell my kids this, but what did you do today that someone else valued? And if you focus on figuring out how to do that, you're going to something that you can do that someone else can value. And you do that over and over again, rinse and repeat. I think there's paths for people. So a couple of counter arguments here.
Speaker 2Yeah. So we can stress test this thinking. You pointed at me and said, I was, you know, I started podcasts, I started businesses, those businesses grew. And it was, you know, you were very generous in giving me probably more credit than I deserve there. But if I was to rebuttal that, I would say, I was born in Africa. Would that have been possible in Africa? Would that have been possible in like Nigeria? Would that have been possible in Africa? Would that have been where my mother's from? Or would it have been possible in Botswana, where I was born? Is it the fact that I moved to the UK, where I had this sort of foundation of stability because of the government, where school was free for us, healthcare is taken care of. So I never had to think about those things, which allowed me at 18 years old to like not go to university, take a risk, drop out, be in that room. No, when I was sat in that room in Manchester, I actually at one point printed off the job seekers allowance forms, which are basically the government will give me free money. If I, if I get to the point where my shoplifting of pizzas is no longer a reliable way to feed myself. But I had that form on my desk and it was there. And there's maybe something psychological about knowing that I had this sort of like underlying safety net where I could rush back a 300 mile round trip to my parents in Plymouth and I could like live in the house or I could fill out this form, this job seekers allowance form. And they would like pay me money that allowed me maybe at some deeper level to go and take that risk. And I never even realized the privilege of There's like healthcare and there's laws and there's roads and there's like this Wi-Fi thing that allows me with this laptop in my room to like build this website that I built. So that's the government's involvement in my success. They gave me this great foundation of stability and infrastructure. Great, great role for government to play. But the problem is that's a slippery slope, right? That's right. And so there's balance here. There's nuance of like personal agency, but then also the government do need to give me a good foundation. That's right. And it starts to-
Speaker 1But the government shouldn't employ you. And that's the slippery slope that we end up on. And that's where I worry about our ability to come back from that. Because if you do end up with 40, 50% of Americans getting paid some check from the government, it becomes very hard to get off of that check.
Speaker 2And then people vote for that check to get bigger and bigger. The other point I wanted to point out of maybe a counterpoint is just like, and you know this because I've heard you say this before, but like there is a privilege that we both have in terms of our just nature. Yeah. Nature, nurture, whatever it might be. Yeah. And I said nature because upbringing implies that our parents were great to us. And that's what made us whatever. But also the opposite can be true. If you think about someone like Elon Musk, you go, his dad wasn't that nice to him. So not necessarily a lovely upbringing, but the circumstances-
Speaker 1Well, he was never without a meal and neither was I. And I mean, you know, those are important facts of privilege.
Speaker 2The circumstances of our upbringing and maybe our nature, maybe our biology, maybe set us up to be the certain type of person where agency, however that's defined. And again, I pause there because-
Speaker 1I think you're exactly right. And I think that that's what education should be teaching. That value. That's where I think this role of like, what's the role of a public school? What's the role of this infrastructure that government's building around us? If it's teaching you that your next job is to come and work for the city or come and work for the state, it's not teaching you that you have agency. It's not telling you, if it's telling you that the only path you're going to have coming out of this rural school is to go work in the military, it's not teaching you about your agency. And I'm not saying it's wrong to do civil service or to do military service. I think those are very important parts of what all of us should. Let's strive to do is to support the government that makes our society possible. But I think that this idea that we should all be proposed as like the government role, the government path, the government work is what we should all be stuck doing for the rest of our lives is the wrong setup.
Speaker 2The opposite is though also probably the wrong setup, which is that we should all start a business or become a creator.
Speaker 1I think that's a mistake too. But I think that this idea that you can find a path where you can provide value to someone as part of an organization, as an individual, as a leader. You can choose your path. But the idea that you should be accessing your capacity, that you can create value for someone else should be the objective. Do you think there's always going to be inequality? Yes. I mean, it's either inequality or it's lack of progress. I think those are the... That's the dance. That's the dance. So China is very good at this. If you watch their policy, they just recently shifted to a free market policy. They literally just have like a throttle. I always vision Xi has this lever in his big room. Where he goes like free market, not free market. Like he's just kind of like rolling it back and forth. When you have a free market, people push the frontier. They discover new things. They make new things that have never been done before. They create new value. And the economy grows. The problem is it doesn't grow evenly initially. So like let's say that you came up with a goose that lays golden eggs. AI. AI. And you've got this technology. And this technology is making golden eggs. And you're getting very wealthy with these golden eggs. And then that goes on. And then that goose makes two geese and three geese and four. It starts breeding. And you start selling the goose. And it takes a number of years before everyone has a golden goose. During that time, you've raced ahead. Because you've got now dozens of geese making lots of golden eggs for you. And a lot of people are like, I want a golden goose. By the time they get a golden goose, you've now got a million golden geese. And it feels like inequality. But the truth is now everyone here has a golden goose. And if you told them 30 years ago you would have a golden goose, they'd be like, no way. That'd be amazing. So every day they're making the golden goose. They're printing. They're spending the money. They're buying stuff with it. That's the problem with progress. Whether it's medicine. You know, a lot of medicines today are a million dollars a dose. For like CAR-T therapies, for example. These can save you from cancer. Only 50,000 people in the U.S. can get them every year. And there's hundreds of thousands of people that die because they don't have access to these therapies. So it's limited in terms of its availability. There's technology like AI. Not everyone has access to it. Not everyone owns a piece of a model, etc. Not everyone's using it. And the people that are using it are getting ahead faster than the people behind.
Speaker 2In your golden goose analogy, by the time that the golden geese get down to the sort of lower end of the socioeconomic ladder. Or I would use the word diffuse. Yeah. Those golden eggs or whatever buy less. Because something happens along the way.
Speaker 1That's right. So along the way, the government says, let's give everyone that. Let's give everyone access to more stuff to make up for that difference. And then things get more expensive.
Speaker 2Is this in part because when the nation becomes prosperous, because the GDP is high, when you have four-year election cycles, politicians, get in by offering you lots of free stuff. And that is the nature of the four year
Speaker 1election cycle. I always said the kid that got elected president in middle school was the kid who said he's going to make the vending machines free. That's always going to be true in any election. And at the end of the day, that's how the system grows. We don't talk about this for
Speaker 2your election thing enough as maybe it's being a bit of a causal factor that's causing short termism amongst these leaders where they're all just spending more money to... I cannot tell you
Speaker 1how much it drives me nuts when I go to Washington, D.C. And I go to Washington, D.C. every couple weeks or whatever. And I meet with Congress people, senators and representatives. Literally all of them just talk about getting stuff for their constituents. That's all that they're there to do. Just get stuff for their people. That's their job. And that's how they get elected. And the incentive is, I'm going to get you something, vote for me. Now, the founding fathers kind of had this idea that they would rotate into public service and rotate out and go back to private life. There's a lot of writings about this. In the early days of the formation of this republic. And it was like, we should all go do our tour of duty. We should go in. There was never this belief that America would evolve to a world where you have career politicians. People that are just constantly trying to get elected. And their job is to be a politician. It's just such a mind-numbingly crazy idea to think about. And all my politician friends are about to chop my head off about this. But I think it's nuts. I don't think a person should be a politician. I don't think that job title should exist. And I'm sorry to all the politicians out there. I think the people that... ...represent the people should have the best long-term interests of the people in mind because they should be constrained to serving for a limited period of time. And then they go back to private life. That means that we should have term limits. So you should never be able to be elected more than two terms as a senator or four terms as a representative or whatever it is. And it should be the case that if you're in one public office, maybe you shouldn't go transition to other public offices under those same limits. Because at the end of the day, you have created a system whereby you've proven that you can get stuff done. And that's what I'm talking about. And your job is to go get stuff for people. And that causes the government to inflate, be mismanaged. And then there's all the waste, fraud, and abuse stuff that happens along
Speaker 2the way. Everything is a trade-off, right? Even in that example, if some people did eight years in government, and they know they're going back to private life, they could be dealing their friends. I'm going to do eight years in government. I'm going to run the transportation division. I'm going to serve some nice benefits to my friend who runs Boeing. And then when I step back in, I'm going to step in as the...
Speaker 1That's a lot to make sure that doesn't happen. And he goes to jail if that happens. That's a pretty easy fix. You can't buy stocks. You can't own stuff. You can't trade. I mean, there's just so many obvious things. If you're going to go serve in government, you can't do stuff that you can do as a private citizen. And you shouldn't be able to enrich yourself as a private citizen. And if you do, you should go to jail. But we should also make sure that the incentive structure is set up right so that good people come and work in government, and that we have good rotation between public and private life.
Speaker 2It's a hard problem, though, this problem of how you fix this incentive structure so that you don't just get... I mean, this stuff inevitably happens because we hand out lots of free things and we don't think about the long-term consequences. Has anyone fixed it globally? Is there any nation you look at as a model for a better...
Speaker 1A lot of people will point to Denmark. They'll point to places like that and say, hey, these guys do a great job. And there's a lot of public services and people pay high taxes. But there's not a lot of great progress. There's no entrepreneurial success coming out of those places. What happens in America, the freedoms that were afforded, the individual agency and liberty and rights to private property, creates an incentive structure that says, go try and do crazy stuff that could work. And if it works, there's tremendous return. So it's worth taking the risk. And that level of risk is what pushes the boundaries. It's what discovered CAR-T therapy, what discovered gene editing that can lead to curing human diseases. It's what's discovered new advances in agriculture, new physics, new engineering, AI. All of these things came from this risk-taking system that we've set up in the United States that's built up in the United States. That's built around these individual incentives. And it works. So you can have great comfort for great many people in Denmark. And people will be very happy living there. And they will have a good life. But you will not have progress like you have in the United States. And we push the frontier because we create this incentive structure. And that's where progress comes from.
Speaker 2Would you say the vast majority would choose to live in a place like Denmark if it, you know, I'm looking at some of the stats here, they have higher societal trust in government, police institutions, and strangers. They have standard 37-hour work weeks, five to six weeks of paid vacation and cultural emphasis on balance. They have lower ceiling of extreme wealth, but a higher floor, so less poverty and financial ruin. And according to global happiness metrics, Denmark consistently ranks significantly higher than the United States. Most people would choose that, right? Absolutely. So central planning, it might stop a few, you know, very high agency, ambitious people, but the vast majority would theoretically be happier with a Denmark model. The vast majority maybe. And do you think the vast majority in this country actually would, if there was two buttons, and they had to press, they'd press Denmark?
Speaker 1One of the things that I think makes American culture different from Denmark is this idea of individual progress. So I think if you ask the majority of people, you can have that. But you don't get to progress, meaning you don't get to earn more next year, and you don't get to earn more next year, you don't have a shot at becoming a millionaire. You don't have a shot at building something great. You don't have a shot. At buying a second home, you're limited, but you get that. Over here, you don't get anything guaranteed here. You get some stuff guaranteed to you, but you don't get much more guaranteed to you. But you could have the world. You could make a million dollars. You could own a second home. You could buy a second car. You could pay off your kid's college tuition debt if you earn well. There's more options here. There's more guaranteed here.
Speaker 2You think the 63% would pick?
Speaker 1I think even within the 63%, there would be some percent that would say this. But I do think this is why we're headed the way we're headed in the United States. People want more of a guarantee. The question is, do you want to maximize the number of people that are happy? Or do you want to maximize the number of people that are truly free? And by being truly free, increases the rate of progress across the whole population. And that rate of progress may be asymmetric. It may be diffuse. Starts with some, makes its way to others over time. I think that that's what America's chosen to be for the last 250 years. I'm not sure we're choosing to be that for the next 250 based on what's going on
Speaker 2across the country right now. Maybe because people aren't happy. And actually, maybe that was always the more important thing versus progress. Important in an aggregate way. Again, I'll
Speaker 1come back to the individual. We choose to live in a society because it gives us that foundation that you described, that ability to have the safety, the security to take risk, to make our own decisions, and potentially build a media empire, as you have done. And maybe you would have been happy in the other context where you didn't have that. But would you have reached your
Speaker 2potential as a human? I'll be honest. I'm not sure I would have been happy. Because again, that goes back to my own nature. It's just the way that I am. If you put me in a room, I'll try and create something and build something. But I've come to learn with time that not everybody has that bias or those desires. Not everybody has that lower T trauma from their childhood of being the only black kid in all white area and thinking money was really important and it was freedom and it was self-assertion. Like not everybody has that. So I realized that when I designed the solution, they shouldn't probably be designed for me. It's taken me a long time to get to that place because I kind of, I was very much... The challenge with America in this moment is can you give
Speaker 1what you're describing, the Denmark answer, to enough Americans without taking away the liberty that the Americans that want to have that liberty have today? And I'm not sure the answer is yes. As soon as you start taking private property from these people, the ones that are successful in this bucket, then you're sort of taking away the incentive for them to be in this bucket in America. And I'm seeing that. Yeah. I see people want to leave. And so you're not going to solve for everyone. But if you solve for this Denmark solution, I think you lose a lot of this.
Speaker 2Well, the UK is quite an interesting example here for this very reason. I mean, one of the big subjects of conversation in the UK is that the millionaires are all leaving, or at least in high volume, and they're coming to other places. If you look at the millionaire access maps that they publish often, they're going to Dubai or they're coming to America. A lot of my friends that are building technical companies in particular have come over to America
Speaker 1for this reason.
Speaker 2And I do think we might have a little bit of a, we have a bit of a spending problem, it seems, but also I think we might have a bit of a productivity problem.
Speaker 1In the UK.
Speaker 2In the UK.
Speaker 1Yeah. Well, do you think the productivity problem is related to the spending problem? Oh, yes, of course. Right. If you're collecting checks or getting services provided to you, the incentive to be more productive as an individual goes away. But also as a system, it becomes a lot harder to create economic incentives for productivity gains when tax rates are very high. And you don't have to worry about that. You don't actually get to reap the benefits of the risk you take and so on. That's the economic argument.
Speaker 2Listen, I've been catfished by furniture my whole life, where something has looked fantastic in the picture, whether it's a sofa, whatever it might be. And I order it and I get so excited. And then it comes and it's something entirely different. The quality was significantly different to what it said or looks like online, or the texture was different, or it didn't hold up in the same way. And so one of the things that I love about our sponsor, Wayfair, who helped us fit out our green room, is that it's not just about the quality of the furniture. It's about the quality of the furniture. And one of the things that I love about Wayfair, which is in the room behind me, is they have this system called Wayfair Verified. Wayfair Verified takes away all of that second guessing. Products are hand vetted by Wayfair specialists for quality. So you can feel more confident when you found the thing that you love. So if you're looking for furniture for your house, whatever it might be, any room of your house, go to wayfair.com to start your home refresh today and make sure you use Wayfair Verified. It is amazing. Hello, I wasn't able to make that finance meeting. Can you tell me what I missed? What I have in front of me is Whisperflow's new note taker. And for me, it's been an absolute game changer. I spent most of my life sat in very very long meetings with lots of different teams and lots of different departments in any given week i could have 40 50 meetings and sometimes more but also i sit in podcasts where lots of very interesting things get said and i need to focus on the conversation what whisper flows note taker does for me is it captures the entire context of everything that's happened throughout my entire week it labels who the people are that said what and i can ask it for things that i might have forgotten for actions things that i said i would do that i haven't yet done it's building this sort of broader context of everything that's happening in my life and it's incredible incredible superpower i love the fact that so many of you come up to me in the street because you know i'm an investor in whisper flow and tell me how much it's changed your life it is the worst kept secret in productivity if you want to give it a go head to whisperflow.ai slash steven to download it right now and give it a try and once you try it i think you'll realize where we let them sponsor this podcast it's amazing i mean this kind of does tie into the subject of artificial intelligence and where it all fits in part because the narrative of artificial intelligence is that it's about to take our jobs and you think about that that's why i wanted to start with the backdrop think about that backdrop of i'm already struggling i'm i'm in the 63 and now you're telling me i'm gonna lose this fucking job that's paying me and i'm already living hand to mouth and what's the offer we might get ubi we might be sent checks in the post at some point well actually i like my job it's a community a sense of purpose it gives me something to do and that's the narrative yes that is the narrative you don't believe the narrative i believe what everyone's feeling but this narrative that ai will take jobs away no you don't believe it i recently pulled up and you you guys can go to
Speaker 1archive.org there's a newsweek article about computers will take all the jobs from 1963 so the mainframes are what got put in the basement in the 60s and everyone like had to walk past the scary mainframe on the right it's like blinking lights and buzzing and making sounds and it's like the mainframe is going to destroy it and it's going to destroy it and it's going to destroy all the accountant jobs all the typing jobs all these things that we all do that we get paid to do and i like working in my office i like my colleagues i like coming in every day having lunch that's a good life this mainframe is going to ruin my life and so there was this effort to legislate against these things at the time that didn't get through in congress and then in the 80s there was another wave on computing where it was like hey now we're all getting desktop computers it's going to replace the workers and it's going to be a desktop computer and a worker and like 50 people disappear out of the the workforce so empirically meaning from data from evidence over all periods of technological revolution like this we've never seen jobs decline we've always seen jobs go up and we've seen demand go up and therefore incomes rise when new technology enters the workforce that's because the new technology makes an individual more productive so they can do more per hour with their time and as a result they can get paid more for doing that work so imagine instead of having a painter painting a wall what if he was in charge of the five robots that are painting the wall okay great now he's going to get paid more because you you know get so many more homes painted in a day he's going to get paid more to do that work people are going to be like well there's only so many homes that's always the argument is you always think about the fixed pie argument that the pie doesn't grow but what always happens is that the pie grows the economy grows is the way to think about it and so as automation or technology is used to give individuals more leverage to do more things with their time then more things get done people come up with these new product ideas with hey we've got excess capital let's build new homes
Speaker 2let's build a building but who gets who benefits from the expansion of that pie in all cases it's
Speaker 1been there's been deep economic value created for the entire workforce all the way down to the lowest level it doesn't happen overnight and that's where during that period of time when you see the new technology oh the mainframe's in the basement or the desktop computer is on my uh my colleague's desk and you're like oh my god i'm gonna lose my job to the time that your company is growing considerably their revenue and giving everyone raises and everyone bonuses and adding more product lines and doing more stuff you're like oh man okay i feel better and and i think that would be the argument from the 60s and 80s and even back in the industrial revolution but the question today is how does work change because remember in the industrial revolution people moved from farms 60 percent of labor was in farming today it's like two percent into factories and they got paid a lot more and they lived a better life they actually were able to afford health care yada yada yada and the the transition in any sort of like technological revolution is net beneficial for all parties involved but there is a transition so what's it going to look like are we all going to lose our jobs ai is definitely different but i don't think that ai is this world where humans are going to look around and be like none of us have anything to do anymore like i don't believe in that narrative and the reason is i already see extraordinary creative things being done with ai that were not possible years ago people are creating tv shows one way or the other and they're not going to be able to do that anymore one person that they would have needed a staff of 20 people to do and they can use ai to create ai generated content and put these shows out on on youtube or tiktok or instagram i mean look you may not like how it looks today there may be a lot of ai slop out there but as this stuff gets better and better the creative output of people using ai on creative channels where we're all consuming media is only going to go up and people are going to make money that they weren't able to make before from that output as other people consume it my ability to do work i don't have to you know think about my you know four hours a day that i'm writing documents today i can get all that work done in 10 minutes or 15 minutes and then i can spend the other three and a half hours doing other things
Speaker 2that create new value for my company if we go back to the top of this um the robot painter analogy yes you said a guy might have had five people painting now they can have five robots painting
Speaker 1no i was saying the guy instead of painting on his own he can now have five robots painting yeah and then he can now produce five times as much with his time think about what we saw with the desktop computer revolution right adobe photoshop came around and everyone was like oh my god like photographers are out of work because a big part of being a photographer was all the post editing and cleaning up of your and airbrushing and all this sort of stuff and they're like that whole industry is destroyed with photoshop what ended up happening is a ton more media was created and print media was created because photoshop created leverage to create many more beautiful images and then all these magazines took off and like if you look at magazine circulation they grew considerably as photoshop came out because it allowed much more production on you know high value photography i think the reason why it feels different is
Speaker 2because that's i mean the industrial revolution example is kind of like physical work moving to cognitive work that was cognitive work creating a new type of cognitive work the the adobe analogy if ai takes the cognitive work and from what you said about robotics robotics takes a lot of the physical work what is this third type of work i think it's cognitive and physical it's it's it's
Speaker 1no different than what we've seen in the past but it doesn't mean that there isn't an individual who's going to program the robot on what rooms to paint how to paint them how to do the detailing correct the homeowner doesn't have the level of detail that they need to be able to paint the robot the level of skill that the painter does right so the painter and i couldn't do that maybe at some point i mean you could make this argument on a continuum where eventually everything nothing exists but along the way there are new things that are emerging think about going back 50 years there was no yoga instructor there was no dog walker there was no instagram influencer there was no podcaster i mean there's a million versions of new work that emerged along the way as the internet took hold and people could start to spend their time or market themselves or market their in other ways so i think it's a pessimistic view to assume that robots replace all humans and then humans have no logic no agency no capacity for creative work anymore i have an optimistic view on this which is that ai and robotics enables individuals to do far more things than they ever could have contemplated and that's going to give everyone much more ability to realize their
Speaker 2potential with their agency i mean even the podcast i think game is going to be significantly disrupted yeah some some part we ran a test a couple years ago to figure out if a synthesized voice of me could have the same average view duration um as me and uh it was just me reading out the stories of founders through history so i do i did like a steve jobs episode where it was my voice ai had written the script ai had synthesized my voice so i had no involvement and the amount of people that got to the end was 40 to 50 percent of an hour and they knew it was ai because it said at the top this is an air podcast and so i thought okay there is a lot of informational part of what we mean you do where we're sharing just in pure play information that will be taken away however what i hear through listening to your answer about creators and art you're saying that there will be this human sort of irreplaceably human component yoga teachers yoga teachers aren't telling you yoga it's also community and gathering in real life and being
Speaker 1there amongst other people i think the irl job world is going to explode and i think it's going to be extremely valuable i always had this view like oh coffee shops will be automated but i actually think the opposite is probably true i think there will be a premium on coffee shops i'll get to go to a workout class with humans i get to go spend time at a concert i get to go spend time at dinners i think this like event live space experiential part of our world that we kind of think about as luxury today maybe it becomes more core like maybe it becomes more of how we spend our time maybe we spend 30 40 percent of our time you know in these sorts of spaces and automation is generating income for us and supporting us and you know whatever pursuit we're in in work and we spend far less time doing work and far more time paying a premium in the economy
Speaker 2in the live space economy it's hard isn't it because we don't know what these jobs are we
Speaker 1just don't and that's i mean imagine telling someone that worked in a factory in 1923 that fast forward 100 years there's going to be people making x dollars as personal trainers or there's someone that has a job dog walking in their neighborhood i don't know if that would
Speaker 2have been like grok fully but the pace of disruption here seems to be different than like the industrial revolution it's targeting cognitive work it's built on
Speaker 1this platform called the internet which has this i'm telling you i just don't see it i like at my work everyone's using ai and everyone's just doing more and then they ask for more employees you can kind of think about a business having two sides revenue and costs revenues i'm making stuff and people are paying me for the things i'm making or doing cost is how am i operating the business like what am i spending and the argument has always been like okay you're gonna lose customer service reps you're gonna lose all the cost side of the equation no one ever says you're gonna lose the revenue side the truth is on the revenue side what ends up happening is you create new products that you couldn't create before because of ai the technology enables so much advancement in your business let's say you're a material science company this is totally esoteric but like let's say your job as a company is to discover new materials new plot new synthetics that can be used to make microchips or be used for computing or be used for travel or for airplanes the material science work is going to be so much more expensive than the cost side of the equation world has been challenged by its experimental cycle you got to create an experiment make a product test it do it all manually it's all creative ideas it's all human potential ai can now screen through millions of material science ideas in a computer print them out test them and you can automate that throughput therefore that materials company can now have more revenue they
Speaker 2can make more products do you not think that maybe there's a possibility that people like me and you exist in this particular band where because we're both founders and we have capital and we're thinking about how to really push intelligence to create new things that maybe we because what you're saying i can relate to i can relate to the fact that ai has made me actually quite it's probably made me more ambitious about hiring especially in the near term i would caveat it by saying that there's a certain type of role that i'm now hiring much less and as especially when you think about entry-level roles i have to pause a lot more now because a lot of the agents and some tooling can do some of those things that i would have otherwise hired for but generally i feel like i'm hiring as fast as i possibly can but would you not say that for like the 21 year old that's graduated from university or the door dash driver or those types of individuals where the leap from where they currently are on a factory floor assembling a part or flipping packages the leap from where they are to this new world is so great that there's going to be
Speaker 1this messy middle yeah what i'm saying is as new products are created new revenue comes in you don't cut costs you grow costs and you hire more people and you up level and you train people that is what i'm seeing on the ground you know we just published i think one of the lowest unemployment rates in the u.s and i think that this idea that your current job is going to get disrupted and you're going to lose your job i don't think it's how the enterprise transitions the enterprise transitions meaning companies by doing more things and bringing people up the ladder hiring more people and that's just what i'm seeing on the ground i think that there's a media narrative on like oh my god there was a layoff at so-and-so company because it underlines what they've been promoting to everyone which is ai is going to cause job loss
Speaker 2the interesting thing is it's it didn't come from the media it came from the ai guys yeah yeah this is the for the biggest because i listen to all in podcasts by the way it's one of my favorite podcasts i don't think i've ever missed an episode so i very much understand your perspective in all
Speaker 1of your i had no idea you were a fan no no i do i've listened to i've gone on people shows or they're like i don't know who you are and i'm like it's good to meet you no no i don't think
Speaker 2i've ever missed an episode so i don't think i've ever missed an episode so i don't think i've ever since the beginning so i think i understand you've been through you've heard all this i've heard all of this and i've heard like jason's opinion weirdly i tend to side a little bit more with jason yeah on this because i think jason i don't know why his arguments seem to present the most nuance and and also i would say when we think about different people's incentives yeah you're right often on that show that it's framed as a media narrative whereas it's actually all your
Speaker 1friends yeah no so first of all none of them are my friends but he loves your friend okay so what i like i've said this on the show i'll say it again i think there is a deep arrogance in making these sorts of proclamations which proclamations that we're not going to work anymore it effectively discounts the human it's like what you do today is your limit but i think that this idea that like these jobs will go away is sourced by people that are seeing the crazy stuff that they're doing and they're like oh my god this is amazing i'm responsible for this we are going to change the world we are going to take all jobs and they're all going to sit in my computer i don't think that that's what happens because i think that humans have a profound capacity for doing things that you know these technologists don't necessarily see the great technologists see technology they don't see people i think you have to see people meaning the potential of people of individuals and you have to believe in that they believe in technology the engineer technology but i i am not gonna like be pessimistic about people like i think that people have capacity in any environment i mean the amazing thing about humans is our adaptability we can live in any climate we can eat any kind of food i mean that's all this like we can work all these different jobs i mean we're amazing humans are amazing and arguably many humans have been limited in their potential and i think that ai enables more capacity for those individuals to realize more of their potential much of the conversation
Speaker 2we've had about the u.s economy has centered around incentive structures leading to inevitable outcomes yeah you know the older i've gotten the more i just try and look at incentives yeah to figure out behavior and also to figure out who to trust so when i look at the incentives of the people that are building the ai companies andy jassy has said that there's going to be fewer people doing some of the jobs that are being done today um then they cut you know tens of thousands of jobs mark benioff who i know he's been on your show cut 4 000 jobs and said i need less heads because of ai and i thought okay maybe they're saying that because they want their share price to go up because it's a good you know we're going to reduce costs as a good narrative but then i look at the other the ai ceos dario elon sam altman and i go their incentives i'd say other other than the exception of elon um have just kind of changed with whatever's good for them at that moment oftentimes i actually i think dario might be the exception a little bit because he seems to be a bit more nuanced if i go back through the quotes of these individuals you have sam altman in february 2015 saying development of super machine intelligence is probably the greatest and the greatest and the greatest and the greatest and the greatest and the greatest threat to the continued existence of humanity you have elon in 2014 saying with artificial intelligence we are summoning the demon it's far more dangerous than nukes mitigating the risk of extinction from ai should be a global priority alongside societal scale risks such as pandemics and nuclear wars and that was signed by sam altman demis dario bill gates amongst many hundreds of others sam altman in the senate in 2023 i think if this technology goes wrong it can go very wrong open ai super intelligence letter they wrote the disempowerment of humanity or even human extinction could be caused by super intelligence again in the athletic sam altman jobs are definitely going to go away full stop darryl armaday may 2025 he predicted a white collar bloodbath half of entry level white collar jobs gone unemployment at 10 to 20 percent within one
Speaker 1to five years 10 to 20 unemployment in one to five years it's pretty high and altman at the federal
Speaker 2reserve in july 2025 said um whole job categories will disappear customer support first that one is quote totally totally gone and then suddenly the message changed before his sort of pre-ipo discussions he said things could go pretty wrong and then he says that he now has changed his mind and he's delighted that he feels like he was wrong and suddenly he's talking about how opening ai and chat gpt will benefit all of humanity and that's their goal should we trust the same people that told us to be scared when they say don't be scared first of all i think
Speaker 1there was a bunch of companies that said early on that they were like cutting all their customer service reps which was the big company starts with a k cloner but i did call the founder and
Speaker 2what do you find out he said that he's been misinterpreted in the press i heard you guys talk about this in the all-in podcast but i've actually called him live on this show and did he hire or like what did he do he said that the miss the media just completely misconstrued what he said or later he said he had 7 000 employees by the end of last summer he said he'd be on 3 000 but the media framed it as i had 7 000 employees and then i tried to cut some i realized i couldn't and i went back that's not what happened and it's just i see it on all these podcasts i'm just repeating it i heard it repeat on your show like but he said we are cutting because of ai yeah and he's confirmed that he's doing yes he's dm'd me on on x i've got the dm and live on this show he confirmed it to all of our listeners his business still growing the business is growing what he did say and this is a point of nuance is with the cost savings he's able to offer better white glove services to his highest ticket clients right
Speaker 1which makes a lot of sense yes so you and you could think about that analogy being in like another business where they would take that capital invest in offering new products new services but then you need employees to offer those new products and new services and so you do actually hire up and i think that is what i am actually seeing on the ground and while he may have this acute restructuring he's doing on the ground i just see people hiring more because they can do more with ai it's counterintuitive but if you're a business manager you can invest 10 000 dollars in a business and you can do more with ai and you can do more with 10 and make one product a year or you can invest 20 and make five products a year you're going to invest the 20 to make five products a year you're going to spend more and i think that's what ai does as soon as you have the ability to get leverage on how much more productive people are you'll put more capital towards hiring more people and scale up that's just what i'm seeing and look i could be wrong and all jobs go away in five years and we have 20 unemployment i don't think that that's the case i think that again like we can go back to this like where people are going to be spending their time i do think that there's going to be a big growth in media i think there's going to be a big growth in um and media encompassing everything digital content creation etc i think there's gonna be a big growth in entrepreneurship and i think there's gonna be a big growth in irl stuff i'll play this interviews and um clan has always mentioned
Speaker 2because i think the media has said that you like double down on air then you reversed because it didn't work out so i know i spoke to you a while ago and we exchanged a couple of dms about it but that was more than it was almost a year ago now so i just wanted to get an update on clan as business ai agents and all of that if possible this was five months ago first and foremost we were early
Speaker 3on uh released um ai to support our customer service which had that uh initial uh benefit of more calls being dealt with by ai which customers liked because those calls or chat messages were much much faster and more qualitative but then since then that has actually expanded slightly um what we did however try to communicate as well is that we believed in a world of where ai is cheap and available the value of human interaction will be you regardless higher so the future of customer service vip is a human um we have then hence doubled down on providing more of that but at the same point of time the efficiency gains within the company has continued i mean we used to be about 6 000 people and and now we are less than 3 000 which is two three years since we stopped recruiting and at the same point of time our revenue has doubled right so no this is a startup just to be clear
Speaker 1i don't know if we can and again i'm not going to like sit here and concede or argue jobs aren't going to change but a startup that grew very quickly and then to cut heads is a pretty common phenomenon um so i don't know how much restructuring he was doing in his ai effication of his business that's totally fine and totally fair but the question is what are the people that were doing customer service calls and sitting you know how many of them were actually fully occupied on the phone i don't know like were they on the phone for four hours a day two hours a day or eight hours a day were they actually fully employed really were they truly
Speaker 2fully employed i don't know and what are they doing now and is whatever they're doing now is that defensible again from the spread of intelligence yeah because they could be door dash i don't know they could be lawyers but they could also be doing door dash and dara sat here and said that the 9 000 people that are riders won't have jobs the ones that are driving food around yeah and drivers yeah yeah that's obviously all their big investments i was with him the other day and he was talking about their autonomous vehicle investments yeah and how i mean that's the big what does he what does he think he thinks that those drivers will have to go we'll do something else what does he think think that something else is he loosely
Speaker 1hypothesized what it might be it could be data labeling now let me just go back because your whole point about like ai is going to destroy us all these guys were making all these claims and then they all kind of backtracked i think there's an important question to ask which is like should we stop ai development and can we meaning can we really affect what china does can we really affect what europe does can we really affect what some of the other countries are doing and i think that's what some lab in indonesia does if they get a group of people together there are moments in human history when technology advances and it's not like you can just put the catapult away and be like let's like no one can develop the catapult anymore like once the catapult's out there the catapult's out there we're just there so the the question is like it's what is going to enable the most kind of productive path forward for you know u.s policy for u.s citizens and china's asking themselves the same question what's the most productive path forward china policy for china citizens china's answer i think is to make models free and ubiquitous which by the way benefits a large part of the global economy but it doesn't do very well with sam altman dario google or others that have invested billions or hundreds of billions of dollars in model development and now those those investments that they've made have been reduced to to rubble because china's got a model that's as good or cheaper so i think the more important question is like what does the u.s do to navigate if we stop data centers those data centers are going to be built somewhere else they'll be built in iceland they'll be built in china they'll be built in indonesia they'll be built in places where you can get access to energy and plug them into the internet now they're on the internet so do we want those data centers to exist in the u.s because they're going to create jobs and create economic value or do we want them to be built offshore do we want to have the ai models built in the u.s or do we want to have them built by china those are the i think the important policy decisions the idea that you can slow or stop ai development unfortunately think at this moment it's too far too late like the ai is out there the framing on is it bad or is it good um i think requires an observation on what's going on on the ground and i do think there's a ton of stories i mean look at the number of companies that are doing stuff that you could never do before because of ai i mean just just to get into your point about delivery i mean there are delivery companies delivering robots on the ground robotic cars drones those companies aren't employee lists there's now 15 000 new jobs being created at the factory that's making the robots or 15 000 jobs to service the robots because they're breaking down all the time or 15 000 jobs to get the food made that goes into the robots or maybe that gets automated but like as you kind of think about the impact the economy doesn't just shrink in terms of jobs we're just not seeing it in the data it's not happening and when it does happen i think that's a good time to have a conversation about ai taxes and all this sort of stuff okay so let's
Speaker 2let's ask that question and what would have to happen what sort of metrical piece of evidence
Speaker 1job loss yeah and wage growth right so if wages are declining and um uh unemployment is climbing that's a red flag i mean that's an alert moment and that's when we have to address this from policy but it's very speculative right now and if you get in the way and you stop it and you stop advancement or like the ability to create higher paying jobs the ability to create new jobs and you turn it you turn all of that off it's going to happen in china it's going to happen in europe it's going to happen in south america and the u.s gets left behind maybe that's the decision that you know we decide to make but i would argue that this kind of tracking of what's the consequence that we're worried about is the most important thing to be
Speaker 2doing at the moment you might have heard about the study that i think it was stanford that did it and they showed that there was a 13 relative decline in employment for workers age 22 to 25 in roles most exposed to generative ai could it be that by the time we start seeing significant job loss and we start seeing significant job loss and we start seeing significant job loss and we start seeing significant job loss it's a little bit too late to be having the conversation because it could be quite a rapid decline if you think about the nature of this technology and the adoption of it
Speaker 1no no i think what you're describing is exactly the right time when we see the the first yeah so what are those changes that are happening now the question is if you dig into that and i do understand this like in in software engineering what's happening right now is young people are not getting hired you can use ai to write a lot of code but in order to be really good at using ai to write a lot of code you got to have experience writing code yeah and so there's a fight for senior experienced software engineers and there's disinterest in junior software engineers because you're not just putting a junior software engineer in a seat to have them write their first line of code which is what you used to do with ai you can turn one engineer into a hundred but the junior guy is not going to do that the senior person is so you want to hire more senior people and that's what's happening in software across the board
Speaker 2right now but more of the operational functions that used to be done by people are also just being done by software so if i think about you might have had a pa whose job was to respond to your emails and check your emails and organize them and put them in your monday board now with agents i have an agent that goes across all of my inboxes every single day pulls everything into this central system and i would have i used to have someone doing that kind of work now it's a software job now
Speaker 1it's claude doing it now the pa can use claude to do it i don't need the pa i can just do it myself okay what else could you use that pa for in your life that you couldn't even contemplate using that pa for in the past at the moment it's real world stuff i probably would have continued to
Speaker 2more in that team but now i don't need to because i've got you know this agent that does my scheduling can help me with my schedule what are you going to do with the money you have the extra
Speaker 1money you have that you're not this is a good point and then that money you're investing you're not going to just put that money in the bank and leave it as cash you're going to invest it in something i can invest it in assets and what's an asset it's either productive or non-productive asset if it's productive it's employing someone it's doing stuff i could i could theoretically go buy the s&p 500 and when you buy the s&p 500 that money goes to individuals that are now going to be able to employ more people that capital finds a way to get spent it goes into the economy and that's my point this is why economies grow when technology shows up the leverage you got gave you more capital you could either build a new product and hire more people to do it here or you could choose to go buy the s&p but when you buy the s&p that money ends up in other people's coffers and they're using that money to hire people and do new stuff they're at some point the whole point of the economy is that money flows and that money is going to ultimately flow into individuals that
Speaker 2are productive do you not think a lot of it's going to flow disproportionately into the billionaires and the most wealthy that are building the robots and that i'm a huge advocate for open source for this reason open source what does that mean for janet and dave who might not
Speaker 1know what that term means so open source just means that the software is free for anyone to use if you go back to the early days of the internet netscape made server software and netscape made a browser so in order to produce a website you needed to pay for netscape software and you installed it on a server and you pay netscape a fee for that software and then you could create a website okay and then if you want to browse the internet you got to pay for netscape navigator and then you use that navigator to browse the internet so charge chart gatekeeper gatekeeper and guess what came along the mozilla foundation made an open source browser called firefox and the apache foundation came along and made an open source web server and now anyone could download apache and make their own website and plug it into the internet and it would be available to everyone in the world for free and anyone could download firefox go on their computer and browse the internet for free open source then enabled all the entrepreneurs that built websites that made money to proliferate, they weren't gatekept. In the idea of AI, open weight models, open source models are free. So now you don't have to go pay Anthropic or Claude or Gemini or ChatGPT for AI. You can actually use this AI model for free. And no one's making money off of you using it. There's no one getting paid. The only cost is the cost of finding a computer to run that model. So you could have your own computer, you could rent one, but that cost is coming down like crazy now too. So this is the benefit of, this is why technology without government intervention is so amazing. It always gets cheaper and then everyone
Speaker 2benefits. There could be a risk. Is that one of the key arguments of the open source idea, which is if anybody can download these AIs onto their computer, they can jailbreak them, they can use
Speaker 1them as... So there's two things that people are fighting about. Number one, government people are saying, hey, that's coming from China. We don't know if there's backdoors. That's not how open weight models work, by the way. So people that are technically deficient, don't fully grok what the open weight model really is. It's not like some backdoor program that you're running. It's literally just a list of numbers in a document. It's just, you know, trillions of numbers. That's all it is. And then some people are arguing like, okay, so now that AI is everywhere, everyone has access to it. You can use it to design a cyber weapon. You can use it to design a bioweapon. You can use it to design a physical weapon. There's all these things that you can now do. You know, the same is true with DNA printing and DNA sequencing. Everyone can buy a DNA sequencer and a DNA printer, and they could theoretically make a virus. That exists today. We haven't stopped DNA sequencing. We haven't stopped DNA printing. We don't have like constraints around it. Similarly, we haven't stopped people from buying guns. We haven't stopped people, you know, in the US. I mean, we can roll our eyes at this one. Right. Yeah. But I mean, look, there's a very good argument to be made that you could say that any sort of technology that theoretically could be used to cause harm should be banned, or the government should control who gets access to it. And the flip side is that if it's allowed to proliferate, there's far more benefit than risk. And the risk side needs to be mitigated. And that's where you build good defense systems and so on. So we've got all these technologies for monitoring for cyber defense, for biodefense, and all these sorts of things that are critical for, you know, especially in a post AI era, like what are the big attack factors. So I think that's probably the way to
Speaker 2think about this. And that might help the sort of inevitable inequality, golden gooses, or collecting
Speaker 1insight. I will bet you anything that in the next 10 years, there will be a billionaire that will emerge that has absolutely zero net worth today, downloaded open source AI, and built a company that made them a billionaire five years from now, seven years from now. And they're going to be someone that's going to come from nowhere. And everyone's going to be like, wow, look at that. And there's going to be a lot of these sorts of stories. And that's what we saw with the internet.
Speaker 2This is something that I've made for you. I realized that the Diversio audience are strivers, we all have big goals that we want to accomplish. And one of the things I've learned is that when you aim at the big, big, big goal, it can feel incredibly psychologically uncomfortable, because it's kind of like being stood at the foot of Mount Everest and looking upwards. The way to accomplish your goals is by breaking them down into tiny, small steps. And we call this in our team, the 1%. And actually, this philosophy is highly responsible for much of our success here. So what we've done is that you at home can accomplish any big goal that you have, is we've made these 1% diaries. And we released these last year, and they all sold out. So I asked my team over and over again to bring the diaries back, but also to introduce some new colors and to make some minor tweaks to the diary. So now we have a better range for you. So if you have a big goal in mind, and you need a framework and a process and some motivation, then I highly recommend you get one of these diaries before they all sell out once again. And you can get yours at thediary.com. If you want the link, the link is in the description below. So when Elon says that working will be a choice, you think he's wrong?
Speaker 1He's selling robots, but I do think he's right in a sense. And what I mean by that is, think about how many hours a week you work. Do you have a sense?
Speaker 2Just, I work all the time when my fiance is not around. So she's not around at the moment.
Speaker 1Well, you and I are similar in a sense. So every moment I can, I work. But we're more entrepreneurial. I would say that, like, you know, look at Denmark, for example, 37 hours a week. What was the average number of hours worked 50 years ago, 60 years ago, 100 years ago? In the US, when you did farm labor, and you were managing your own farm, and that was your whole business, or you worked in a factory, I mean, there was 12 hour shifts. There was a lot more work per week being done. Going from 100 hours a week to 80 to 60 to 40. I mean, that is part of the progress of humanity, is that we're no longer encumbered by this labor category being told what to do and how to do it and when to do it in order to get money to pay our bills. But we get to this world where we have more capital. That capital is also time. And I've now accumulated the ability to make a choice on what do I do with 40 hours of my, my week?
Speaker 2You know, we all have a hypothesis about how AI is going to play out. And I've heard many different hypotheses here. Which is the part of your hypothesis, like the principle within it, that could quite easily be a miscalculation? And how could you be wrong? Mass unemployment. But, but where in your hypothesis, your current hypothesis? Would you have been, do you think is the weakest part of your sort of first principles that could result in that?
Speaker 1The choice that people will make to go to higher paying jobs to different jobs that they see an opportunity and they make a choice to change. Because I think that that's the key to this whole thing. Like, if you were a taxi driver in New York, and you were paying rent on a medallion, what's a medallion? So medallion is a right to drive a cab in New York. Okay. So there was a limited number of them. And so the medallions were restricted. The New York City said we'll only allow so many cabs. on the streets. So the price of medallions went up and up and up. So then your cab drivers would trade the medallions and the price of medallions got up to 500 grand and Citigroup was a big lender on medallions. So they would loan you 500 grand to go buy a medallion. Then Uber came along. And this was one of the big battles around Uber at the time. You could get paid more. And there's more rides with Uber. Uber grew the number of people taking car transportation around New York considerably. And when Uber demand shot up, a lot of these guys said, I'm not gonna be a cab driver anymore. I'm not gonna be a cab driver anymore. I'm gonna be a cab driver. I'm gonna be a cab driver. And the number of Uber drivers grew. And look, there's a lot of regulation that's happened in New York since then with respect to Uber and whatnot. But everyone made the choice. They moved. They found the market found its way. Individuals said, Oh, my God, I can make more money doing that. I could pick my own hours. I don't have to rent the medallion. It's a very similar
Speaker 2sidestep. Yes. Going from being a taxi driver to a taxi driver for a different firm using an app
Speaker 1is quite a... So I could sit here and pontificate all day with you on this. And we'd both be wrong. I'm sure. I don't know what the leap is going to be for an individual. I think we have to start to pull these stories out of the economy, what's going on. Palantir put out this promotional video, which I thought was quite good, where they interviewed a hospital administrator. And she's like, Well, I've got the AI doing all my paperwork, so I get to spend more time with patients now. Sorry, it was a nurse, not an administrator. She was a nurse. So she's like, I normally spend most of my time filling out paperwork on the computer. But Palantir, the software takes care of all that for me. So now I can spend more time doing rounds face to face with patients. It's a better job. And it's better for her. And so she, you know, I think it was a very poignant story about kind of what AI actually does on the ground. So, you know, look, I mean, I think there's a lot of these sorts of examples, we could we could counter argue back and forth about them all day long, and probably both be wrong. But this is what I would kind of observe on the ground on
Speaker 2what's actually happening. I think we agree on the fact that jobs are going to get more human in every sense of the word. That was your yoga teacher example. That was the nurse that can spend more time with her patients. And actually, that'll become even more valuable, it'll become more scarce. I think that's a good example. I think my my concerns to the gap that I have in my head is like that how that transition looks, especially at speed, retraining, you know, you talked about the human agency point. And should we be preparing for such a transition? Because I do also believe that we'll we'll we'll get to a providing there's no existential issues, I do think we'll net out in a better place. But the journey to that better place, I still is just this big question mark.
Speaker 1I think that's right. And I'm not trying to defend it and say it's going to be a clean, smooth line. I'm just trying to say like, we are going to get to a better place. You know, we could argue all day long about displacing or dysfunction along the way. Or maybe a lot of people are smiling as they jump to new jobs and trying new stuff out. And they're like, Oh, my God, my life's better. I'm optimistic in that sense. I think you're right, we have to track it. And if people are out of work and can't find work, and they're challenged in paying their bills, we have a friggin problem.
Speaker 2And what's the solution to that problem? Is it UBI?
Speaker 1Well, that's gonna be socialism.
Speaker 2So in that in that messy middle, you think we'll adopt socialism if that messy middle does occur? And what does that look like? In reality? Is it just giving money and free food? And I saw the
Speaker 1stores? Well, that's not going to work. But that'll take time to not work. But in the meantime, it'll look great. But yeah, it'll be more more checks, more government employees. It's like the government creates jobs to pay people. They're not productive jobs. Meaning if you get paid $100, do you create $120 of value? No, you're getting paid $100. Maybe you're creating $60 or $80 of value. But, you know, that's just, there's gonna be more government payments, whether it takes the money, whether it takes the money, whether it takes the budget, whether it takes the financial support.
Speaker 2I mean, that's the direction of travel at the moment. Yeah. All directions point to a more socialistic America. How do you feel about that?
Speaker 1I'm actually, I don't want to lose my agency. I don't want to lose my capacity, my liberty, my freedom. And I feel sad for people that embrace it, because I think that they don't realize that they're losing their freedom in that process, too. I think they're losing their agency.
Speaker 2But it's offering them a solution where there is no other solution being offered. That they feel there's no other solution being offered. That's right. But it's also logical to say, if we do that, we're going to lose our freedom. talk about incentives that billionaires want to stay billionaires. And billionaires aren't actually that philanthropic as they claim to be. And actually what billionaires are protecting are their interests. They want to remain free.
Speaker 1I had a call with Ro Khanna about this.
Speaker 2Can you give context on who he is for a moment?
Speaker 1Ro Khanna is a congressman from California who's been, he used to be a moderate Democrat and he's kind of pivoted to becoming a hard left true socialist in Silicon Valley is his district, California 17. He was asking me, why are people so outraged at my support for a wealth tax? He means billionaires being outraged. No, it's not billionaires. It's anyone that has built something and created value. And it's just entrepreneurs, people that have had success. And he's like, I don't get it. It's just 5% or 2% a year or 1% a year. Like, why do people care? And I'm like, Ro, it's the first time in American history that you're talking about taking something from someone after they've paid their taxes and it's now their private property and the property they get to keep. It doesn't matter that it's 1% or 5% or they'll be fine. And Bernie Sanders, like the billionaires will be fine. It's fundamental to private property rights. It makes me feel like, and everyone can think about this. It's not just rich people. Anyone can think about what does it mean to list out everything you own and send it to the government every year and they decide what you get to keep. That's what it feels like to everyone. Also, financially, it doesn't solve a problem. And I'll just give you the statistics. Total net worth of people in the US is 183 trillion. Billionaires' total net worth is 8 trillion. And even if you take it from billionaire down to 50 millionaire, so people that have 50 million or more, the total assets, the total net worth is 23 trillion. 160 trillion is everyone else. The problem is that the bottom 50% of Americans only have 6 trillion. And the middle, that kind of 50% up to the 50 millionaire, you know, they've got 160 trillion. That's a lot. That's where the net worth is in the United States. It's in that kind of population that people call boomers or Gen X or whatever. The bottom 50% have nothing. And so if you taxed 100% of the billionaire's net worth, that's $8 trillion. That's one year of the government spending. One year. It doesn't stop fundamentally a wealth tax. It doesn't actually solve a fiscal problem. It creates a system where you're like, everyone feels better about taking money from the billionaires. Are the billionaires paying their fair share of taxes? This is the politicians. Trick. The politicians trick is they say, how much tax did you pay as a percent of your assets versus how much tax did you pay as a percent of your income? Your income is when you sell stocks or when you make money for services you provide. And every year, if you're wealthy in the United States, in California, I pay a 53% tax. I pay like 14% in California plus 39% federal. But you must try and avoid that.
Speaker 2No, I just pay it. But I mean, in terms of when I say avoid that, I mean, you would rather take it like a capital gains tax, which is lower.
Speaker 1California, there's no difference.
Speaker 2Oh, there's no difference.
Speaker 1Yeah. In California, capital gains or income is the same, which, by the way, should be the case at the federal level if you want to solve this compounding problem. So can we lower income tax in the United States and raise capital gains tax? Absolutely. Can we make income tax lower for people that are working for their money versus people that are earning gains on their capital assets? Absolutely. And we can solve the problem that way. But by taking their assets, even if you took 100% of the billionaires assets, that's one year of spending. It doesn't actually solve a fiscal problem. The tax rate. The tax rate is the fiscal problem.
Speaker 2So for these people, the 63% that are potentially championing socialism because they need a solution, and it sounds like a solution, make my bills cheaper. What they don't hear from other politicians is a better solution. And this one sounds great.
Speaker 1This is what's crazy to me. I don't get why all the politicians are fighting against a wealth tax or for a wealth tax when there's like literally 15 other things you could do to make this better. Like, this is crazy. Make the capital gains and income tax the same. Cut stupid spending at the federal level. And all of a sudden, things become more affordable. People have more take-home pay. They can afford more stuff.
Speaker 2But let's be honest. You're not going to be able to cut the spending at the federal level. They've tried that. And because of this whole thing we just talked about, the four-year election cycles, Elon went in, he tried to cut it. He bounced straight back out.
Speaker 1Yeah. And I think that that, to me, was the most depressing piece because I was like, oh my God, Elon's going to go in. He's going to blow up spending. We're finally going to cut all the nonsense out of the spending. And if Elon can't, no human can. Yeah. And then I went and visited DC and I went to all these Congress meetings and sat with senators and I was like... Oh my God, none of them want to cut it. Like, they're all on board with it. This isn't even a party thing. This is just like, everyone's doing it. And I'm like, this is the system. This is how it's set up. Holy shit.
Speaker 2We've had Brian slightly change direction, but linked to AI. I know you work in the life sciences. So I wanted to ask you, do you think we're going to be able to live forever soon or at least extend life significantly within the next couple of decades?
Speaker 1I do. And I think the reason is we've discovered the mechanism of aging, which is the most fundamental of human diseases. We have 10 trillion cells in our body. Every one of those cells has a copy of our DNA in the nucleus of the cell. That DNA, segments of it are called a gene. A, C, T, and G make up the little nucleotides and you put a bunch of them together and that's a gene. What is a gene? Well, a copy of that comes over to a protein printer in the cell called the ribosome. And the A, C, T, and G is the programming for which of 20 amino acids, three letters is one amino acid. That ribosome takes a segment of the DNA copied as RNA and it prints out amino acids. And a sequence of amino acids from that gene, which is defined by that gene, makes a protein. So all a protein is, is a chain of amino acids. As soon as it's done printing, those amino acids collapse into a three-dimensional machine called a protein. So proteins are three-dimensional machines and they do crazy shit. Like there is a protein in your mitochondria that spins. It spins 6,000 times a second as hydrogen protons go through it and that's what makes energy in your cells. That's what makes ATP. It's literally like a propeller, like a turbine in your mitochondria in your cell. It's an incredible machine. There's machines that carry oxygen from your lungs into your cells in your body to give them oxygen that they need to work. I mean, there are proteins that do all sorts of crazy stuff. So all the genes are, are the programming for making proteins in your cell. Now, your DNA is not a strand like this. It's actually kind of... It's a small clustered thing and there are little molecules that sit on top of the DNA that turn a gene on or off. So if the molecule is sitting on top of a certain gene, that gene is off.
Speaker 2Like a little switch? Like a switch. What's it called? Someone used the name before.
Speaker 1Histones. Histones, okay. Or acetyl markers. I thought it was epigenetics, but maybe not. So this is all epigenetics. Okay. So for a given cell, there are genes that are on or off. The genes that are on, those proteins are being made in that cell and the genes that are off, those proteins are not being made in that cell. And that's what makes all of our cells in our body different. Every one of our cells has the same DNA, but our eye cell and our brain cell and our heart cell and our skin cell just have different genes that are on or off. Okay. So those markers that sit on the genes, those little switches, every time you drink a glass of alcohol or you go in the sun and get hit by the sunlight or smoke a cigarette or eat some bad food that's burnt, all of these things can cut DNA. And when DNA gets cut, your cell is really good at fixing it. Puts it right back together. Happening millions of times a second in your body, literally all over your body. And your DNA is breaking and your cell is fixing it. But every time your cell fixes it, there's a chance that that switch moves a little bit. And if the switch moves to the wrong place, suddenly that cell starts making the wrong protein or stops making the right protein. So statistically, over time, when you're a baby, everything is tuned great, working right. All the right proteins are being made in every cell. You're young, your skin is not wrinkly. You can run, you can breathe, you can see perfectly. As you're a young person, suddenly you turn 30 and you're like, wait, my vision's kind of fading a little bit. I can't run as fast. I can't breathe as deep. Oh my God, I'm getting wrinkles around my eyes. 40, 50. What happens as we get older is those switches kind of move around to the wrong places. And as those switches move around, that cell stops making the right protein and starts making the wrong protein and it becomes dysfunctional. And if that happens in a normal way, it's going to make the right protein. And enough cells, then that tissue starts to misbehave. You get wrinkles. Your heart can't beat quite right. Your retina doesn't pick up light as well and transmit the signal of the light and things get blurry. Your hearing starts to lose. You can't think as quickly. You can't respond as quickly. That's what aging is. Aging is the core human disease. And as epigenetics, which is where the switches are on a cell, start to get moved around to the wrong place and that tissue starts to misbehave, we get all these diseases. That could be what we're talking about. That could be one of the core drivers of cancer.
Speaker 2Why is aging so even across my body then?
Speaker 1Because all these cells are suffering the same statistical effect of time as DNA breaks happen in every cell in your body. And as those DNA breaks happen, those switches are moving around the same rate in all parts of your body. And that's why parts of your body start to suffer kind of, it's like, oh my God, my hip hurts, my eye, my brain. Your young viewers may not appreciate this, but being 46, I'm starting to appreciate it. And it's becoming more of an issue now. In 2006, a guy named Shinya Yamanaka discovered four proteins that you could put into a cell or apply to a cell, and it would basically take all the switches in that cell and move them to the place that a stem cell has, which is basically an embryo in a human. And now that cell operates like an embryonic cell. And you can take that embryo cell and you can put other proteins on to move the switches around even more to turn. that stem cell into an eye cell, into a skin cell, into a heart cell, into a lung cell, into a brain cell. So we suddenly developed this technology in the mid-2000s to take any cell and turn it into a stem cell, re-differentiate it, it's called differentiation, from one cell type to another. But then years later, another guy said, well, what if instead of putting a lot of that protein on the cell, we just put a little bit? So they took the Yamanaka factors, which are just four proteins, and they put a microdose of them on a couple cells. And the switches started to move around, but they didn't move back to being a stem cell. What happened is they moved back to being a young version of that cell type. So the I cell basically became a young I cell. The skin cell became a young skin cell. The heart cell became a young heart cell by putting a small dose of these proteins. So it turns out that these proteins kind of move the switches around. And if you put just a small amount of them on, you can move the switches just back to the right position. That's now called epigenetic reprogramming. That's this new area of science that seems to indicate, and they've now done it in mice, where the mice can live to the equivalent of 100 plus years old. They've put it on the tissue of monkeys and gotten rid of the wrinkles. We now have just David Sinclair, just one of his companies, did the dosing in the retina to reverse blindness in people with a retinopathy. So this epigenetic reprogramming is an entirely new lane of medicine that says not just can we address all of the downstream effects of aging. We can address all of the downstream effects of aging. We can address all of the downstream effects of aging. But can we go to the core? Can we reset aging in all these cells in the body? And the answer so far is yes. The risk is if you reset it too much, it becomes an embryo and it turns into cancer. So that's what everyone's been working against in the last couple of years, is how do you put the right dose of the right proteins in the right cells to get them to reverse their age and become young again? And the path, it's really just an engineering exercise at this point, as opposed to a biological proof of concept. The science is there. The foundation is there. We're just doing the engineering. We're just doing the engineering. We're just doing the engineering. So I am extremely excited and optimistic about this work. It seems very likely that in the next couple of years, we're going to have more human therapy trials that are going to not just address the core of aging, but they'll start to put it in like, you know, like they did with the eye cell, maybe reverse wrinkles, maybe improve cardiomyocytes, improve the heart tissue. So I think there'll be a lot more of this sort of thing coming to market over the next few years.
Speaker 2And AI is going to play a role, I assume, in accelerating this because you can perform, I mean, you can theoretically do it, but you can't do it. You can't practically make new discoveries, but you can run the tests faster, right?
Speaker 1You know, just to help provide some context on like what goes on in a cell, you can kind of think about a cell has about 10 billion proteins interacting with each other, building things, breaking things, creating new molecules, creating new proteins, interacting, interacting. So the proteins are these machines, 10 billion of them in a cell. So if you assume each protein is the size of a human, the cell would be the size of Manhattan. So now imagine a city, a Manhattan with 500 story tall skyscrapers in the Manhattan skyline, and 10 billion people living in these buildings, going back and forth, building stuff together, talking, making babies, and assume they just do this for 80 years, all these humans interacting, 10 billion humans in Manhattan for 80 years, nonstop, they don't sleep, and they just keep working. That entire set of interactions is one second in one cell. That's how complicated biology is. And we have 10 trillion cells in our body. And those cells are all shooting at us. And we have 10 trillion cells in our body. And those cells are all shooting out proteins and messages to each other all the time. To answer the question, AI allows us to build models to better understand what the heck is going on and to make predictions about proteins we could put into the cells that can affect the outcome of changing the epigenome on that DNA without us having a deterministic understanding of what's going on. So with AI, I can come up with a million different ideas for a new protein. I can test it in silicon, how it would interact with other stuff, meaning on computers, I could see what happens, I could see if it actually has the same sort of effect as the other protein, would it be more efficacious. And then I reduce my candidate list down. And I take that candidate list, and I put it in a lab. And now the labs are being automated. And I can test it on cells and see if it's actually reversing aging. I can test it in models. And then I take that candidate. And now I've got a probability of success in 10 years, that instead of being 1% is now like 75%. And so that's the way AI plays a role in life science as discovery. And it's transforming not just epigenetic reprogramming, which is this whole big avenue of medicine now. But it's transforming every aspect of biology and our understanding of life sciences, where we can use AI to make these simulations and have a better understanding of what these complicated, incredibly immense interaction sets look like or drive at the end state versus me needing to kind of be a scientist being like, Oh, I got a good idea. Let's try that. Okay, five weeks later, okay, another good idea. Let's try that. And that all gets reduced to
Speaker 2silicon. And are you using your own model? Are you training your own AI? Are you using some of the publicly available frontier models? In my world, we use both.
Speaker 1So we take our own data, and then we build our own predictive models from it. And then separately, we use off the shelf life sciences models. And then we also use some of the general models. So it's a great combination. And to your questions and talking about AI earlier, oh my god, the stuff we can do is unbelievable. And it's mind blowing. And we're hiring more people because of it. And so like, it's not like AI got me to get rid of jobs. It's like the frontier has gotten so much wider. That's why I'm so optimistic about AI not destroying jobs. Because all I see is opportunity with new companies, new ideas, new pathways, new things, new breakthroughs in sciences, in materials, in engineering, things that we could have never ever tackled, we can now tackle with AI. It is a persuasive argument. Okay,
Speaker 2so what are the great lies in America in your view? If you go to any college with any degree,
Speaker 1you're going to have a great job waiting for you at the end. Okay, number one, if you buy a home, you've achieved the American dream, and all of your assets should be in that home. Okay. Social Security will take care of you when you get old. And it's a fair system. Everyone should have ownership in stocks is the truth about that lie. Because all the money that went into Social Security went out to the government to pay bills, and it wasn't actually kept in the trust. And so as a result, Social Security is going to go bankrupt. So Social Security was one of the great lies on, you know, you'll be safe and protected when you retire.
Speaker 2Those are three great lies. Is there any more that come to mind?
Speaker 1I don't know about public. I don't know about pensions. And it's the same as the Social Security lie. When you put money into a pension plan, and that's called a defined benefit plan. When you retire, you're going to get $1,000 a week or whatever it is. And every paycheck, some money is taken out. And the idea is that the accountants and the investors will do a good job investing that money for you, and you'll get your benefit at the end. If they don't do a good job, then the pension plan is bankrupt, and you don't get your retirement check. And if they do too good a job, or you put too much money in, then the pension plan is overfunded, and you should be getting more money out than you're actually getting. So what companies realized was that pension plans are unfair. They either go bankrupt or they're overfunded. So that's when everyone moved to 401ks. And that middle class that we talked about earlier, those people that have $160 trillion of assets, the reason they have $160 trillion of assets is because a lot of them had 401ks. Meanwhile, the bottom 50% of people that are just relying on Social Security, they were making less than 3.5% a year on their money. So that's the great lie, is that these public retirement funds would take care of their people.
Speaker 2Is there a fifth great lie that comes to mind?
Speaker 1I actually don't have a great answer for you on healthcare. I think that there's a moral obligation on healthcare. So I do buy into this. In a civil society, I could make the libertarian argument, but I won't. Because I do think it's probably the right thing to say, in a civil society, no one should be without healthcare. How do you make that? Where the government's paying bills, and the costs don't go through the roof. That's a long, probably six hour conversation. And it's very technical, I think, on what you have to do to make healthcare accessible. And it's definitely got to be a multi-tiered system.
Speaker 2I guess one of the things that I was curious to get your take on, because I've not really heard you talk about this a lot on the All In podcast, is your view on everything that's going on with this bloody war. And the situation there. I'm not sure if this is within your area of expertise,
Speaker 1but it appears that the US is now stuck. It's a quandary. I read that Ray Dolly O's piece a few weeks ago, which I thought was exactly right. The Chinese make their influence known in the same way that you would kind of read about it in Sun Tzu's Art of War. If you have to go to war, you've already lost. And that's a big difference between how the US behaves and how China behaves. If you look back on the track record of presidents' decisions as it relates to foreign policy in the United States over the last couple decades, there have not been a lot of good actions that have ended up happening. And I think that's a good thing. I think China has this capacity for influence without action, which is a really interesting model to observe. And the US has this kind of, I don't want to say incentive, but when you go to a general and say, hey, should we go attack these guys? The general spends the whole time training to attack the guys. And then you have a National Security Council and you have advisors and all of that. And then you have the United States out in a way that maybe we take action when we shouldn't
Speaker 2always be taking action. China's position there, only possible because there is a dominant force that is running around trying to police everything. So they can kind of chill and let the US go police
Speaker 1all the problems and wars. Their military capacity is pretty impressive, but it's untested at scale, I guess, is one argument you can make against that point. I mean, China's got a lot of economic gamesmanship that they do. We'll give you cheap stuff if we can get these things from you. you if you need help i mean there's like a lot of stuff that doesn't require direct
Speaker 2action that they can kind of get things done in terms of the u.s's position in iran right now there is um it appears an a threat to oil in terms of like the price at the pump and the i think it's the u.s oil reserve is down to a couple of weeks i want to say that's on the order of 24 million barrels in the spr so at the g7 summit in france president donald trump addressed the precocious state of global oil inventories following supply disruption he said we run out of reserves at about four weeks you know there are reserves all over the world and we would really run out and there'll be a time when you wouldn't be able to get it it would be bedlam and this was just as i think this was the explanation as to why he signed that mou with iran so i mean if this is true then something needs to happen but again it doesn't appear that iran have much of an incentive now you've decapitated the leader for to do really anything they can kind of wait the game theory
Speaker 1is iran knows that the u.s can't do much more yeah we're gonna drop more bombs right and well i mean iran's now threatened uh arab neighbors with retaliation against their energy infrastructure which would be devastating to saudi qatar uae so at this point it seems like a bit of a stalemate that the u.s can't act for fear of the retaliation and the impact it would have on america's actual
Speaker 2allies in the region what do you think happens here trump straight of all moves iran now have this sort of chokehold
Speaker 1in the world it seems i mean the biggest driver also is the election cycle we're in the midterms the midterms so going into november this war is deeply unpopular on both sides and so trying to get rid of the war is the incentive at the moment it's a tough situation you seem um hesitant yeah no i just i'm not a i'm not a great guy to opine on this i just i don't know what to do but just
Speaker 2when you look at it from the outside you see a president that says he's gonna bomb he's not gonna he's calling off he's bombing he's not bombing he's calling it off we've got a deal there's no deal and you're flopping around and i think even that as a behavior to observe from the outside you go oh okay um well let me ask you one question it kind of makes him unpredictable right
Speaker 1and that unpredictability can can in some cases be an advantage i do think people have made this case that the president's unpredictability makes it hard for people to have a clear path on how to attack like my poker player buddies their whole poker strategy the guys who are the best in the world who i'm friends with their whole strategy is like create randomness in your gamesmanship so that it's very hard for someone to exploit your gameplay and um you know i just don't know if you know what you're gonna get with president trump you could meet with him and hear him say one thing
Speaker 2and then he'll do something different later i understand the merit of that argument in this situation what i'm observing now is he's become predictable yeah in in terms of in terms of not being able to do anything like not not not taking action not taking action threat post biggest strike coming since world war ii call it off what would you do if you were him what would i do yeah uh there's only bad outcomes so it's which bad out honestly i think which bad outcome am i willing to accept the most and i guess for someone like trump i don't know him but i i guess he's probably thinking which one would save the most face that's probably the right kind
Speaker 1of you know objective function for him i think the worst thing is all outcomes in my view lead
Speaker 2to the straight of hormones being now basically uh i don't know i don't know i don't know i don't a tool of iranian negotiation and it wasn't before new point of leverage yeah new point of leverage in that region which is a powerful point of leverage yeah yeah but it may create
Speaker 1um alternatives there's conversation about creating other pipelines out to israel oh yeah and so on so maybe at the end of the day it creates incentive for other channels to be opened uh tbd i do think the um it's not just about the iranian program but it's like where's all the enriched uranium that's probably if you're kind of asking a military advisor i would say that's probably what they're thinking about it's the core because it takes a long time to enrich uranium to use for nuclear fuel like this so getting the enriched uranium
Speaker 2is probably a key objective the next election 2028 for the president presidential office do you think a republican's going to win in the course of how things are going for 28 yeah no
Speaker 1i think it's going to be aoc you think it's going to be aoc yeah really at this point why that's all the stuff we've talked about i just think that that's the the state of the nation i think that's where people are at they want to be able to do that they want to be able to do that they want to help people feel desperate and they want a candidate that can promise to help make their life better i think they're less concerned about you know freedom of movement the kind of stuff we talked about i think they're much more concerned about paying their bills and getting health care and getting child care and i think she's gonna run i think she'll run i think she'll beat buddhij and uh kamala kamala newsome newsome i don't think newsome's gonna have like a great presence on a national stage i think he he he looks and acts the part but it's going to be hard for him to sell the rest of america and i think kamala is just like it's just no one wants to take the risk aoc is just like mom donnie in the sense that she brings a very different voice you know and i think this dsa movement has real legs to it because i don't see a lot of young people speaking out against the dsa movement i see a lot of old democrats speaking out against the dsa movement you see kamala harris
Speaker 2being perceived as more of a risk than aoc yeah
Speaker 1because she's lost before and they've seen though oh okay yeah she's lost before yeah
Speaker 2but look what do i know it's interesting to you i've heard you i think i've heard you guys on the all-in podcast say before that you think in 2028 it will be a democrat or a socialist that wins so
Speaker 1i mean there's a lot of runway between here and there and look i mean i want to talk about the the profound frontiers in front of us because i think that there really is this idea and you know there's a lot of my friends who have this idea of this golden age hypothesis that we're entering this golden age and people don't realize we're in it that ai unleashes this capacity for human advancement so the the age reversal stuff right now we have a billion people in the world that are starving we have hundreds of millions of people dying from curable disease i think these are the sorts of things that are going to get resolved more quickly than we realize i think that the productivity gains that are going to arise from ai are not just going to kind of you know be a battle on does the painter have a robot or not but i think it's going to be about all this new stuff that's starting to be realized material science it's going to have a profound revolution right now traveling to the moon which might seem like a billionaire's fantasy but ends up becoming kind of a real true industrial frontier that everyone's going to participate in there's just extraordinary abundance that arises from this stuff not in the sense that oh we're just making everything that we've had in the past cheaper but the stuff that's in front of us the frontier is that all of the entrepreneurs want to pursue that all of the dreamers see as the opportunity and the hope for tomorrow that all of the pragmatists are kind of acknowledging is like legit for the first time in our history that's where i think there's a light kind of rising off this horizon i feel very good about that maybe aoc gets elected that's just my view on timing where we sit today socio-politically but i do think that the light is rising in a way that like everyone's going to be able to do what they want to do and i think that's going to be a very good thing to be able to do and i think that's going to have a profound change to their lives in the next couple of years so i am profoundly optimistic we kind of talked a lot about socialism and government spending and all this shit today but my experience on the ground is just like holy shit and there's no stopping it like this this amazing these amazing breakthroughs are here
Speaker 2one of the things you learn when you hire lots of people is that um in every change or every announcement you make in your company or we've raised money or whatever it might be there's an there's a second question which is what everyone all of your team members are asking what does it mean for me what does it mean for me and actually on the ground talking about being on the ground it's the 63 percent yeah they can't they all they look up and they see a hundred
Speaker 1percent trillionaire world's first trillionaire they see ai katie perry with the flower out the
Speaker 2window they see a job displacement coming and then they go well listen can't can't pay the bills so what's the mechanism for doing that right now for helping the people on the ground to benefit from the advances in this technology what would the mechanism be 401k is to own this stuff
Speaker 1would be what we need to change from a public policy perspective so that they all have direct
Speaker 2ownership in these things and they can look on their phone and see how they're benefiting from
Speaker 1i'll tell you everyone thinks that ai is going to accumulate to two or three companies i don't think that's how it's going to play out everyone's using ai and everyone's using open source ai now meaning every company is going to benefit from ai which means every company is going to have more money to pay their employees hire more people train them up do other things with them so i'm like i don't buy into the narrative that dario elon and sam end up having all the value in ai i think the chinese blew that up i think the open source stuff is the best thing to
Speaker 2happen doesn't that mean there's going to be a bit of an economic collapse here those data centers
Speaker 1still need to exist to run the models are we in an ai bubble in that no if this this capex on ai if the cost to run a chinese model comes down by some number of fold over the cost to run a proprietary model i'm going to run more models i'm going to do it more and as i do it more i'm i'm going to do it more and as i do it more i'm going to do it more and as i do it more i'm going to i totally buy into people's concerns about data centers driving up the cost of energy i the water thing is i think bs but um the cost of energy thing every data center should be on its own grid and every data center should make enough power not just to be on their own grid but to pump energy back into the grid if you set that as a standard for every data center project in the u.s going forward you've solved the data center problem because now you're dropping the price of electricity for everyone in america and these data centers are all off the grid and then everyone can own those they can all be in reits and people can buy stock and and many of those are publicly traded so they should be in your 401k and everyone can own a piece. David, we have a closing
Speaker 2tradition on this podcast where the last guest leaves a question for the next guest not knowing who they're leaving it for. And the question left for you is what is one idea you have that is uncomfortable for people to hear that you don't typically say out loud?
Speaker 1I think we should end the federal student loan program in the United States. And I think education costs will come way down and the private market will still provide all the student loans that people need. I think if the federal student loan program, because it doesn't discern colleges, degrees, individual performance, I think that by ending that federal student loan program, the quality of education in the U.S. will improve dramatically and the price will drop dramatically. And more people will have access to higher quality education. I know it's counterintuitive, but that's what will happen. It's sort of like, you know, Malay removed rent control in Argentina and rents declined. We've propped up the price of education in the U.S. with the federal student loan program. And so the federal student loan program was replaced by a program that is accountable, meaning the person that's underwriting the loan knows that that loan has to perform, meaning that that school has to be good or that individual has to be doing a good degree. The market will correct itself and people will end up getting a loan if they get one degree versus another. So if you get a bad degree, you know, pick your basket weaving major, there's no loan available. But if you get a degree and something that might be useful and you're likely to get a job, there's a loan available.
Speaker 2But for those people that can't get a loan because they want to do basket weaving, they're going to have to go find something else to do. So they might have to go work somewhere else.
Speaker 1Because the alternative was we put them in $200,000 of debt and then they didn't have a job afterwards.
Speaker 2Is the counter argument also that the most privileged will get the best education? And a privilege can be intellectual privilege or it can be financial privilege. But there'll be a divide between, okay, you guys are all going to Harvard.
Speaker 1You still have a scholarship system. Scholarship system doesn't change. You still have scholarships and it's all for that.
Speaker 2And education with AI is changing as well.
Speaker 1I'll just say there's a lot of these universities that get accredited and they provide terrible education.
Speaker 2Yeah, that's true. And just give you debt.
Speaker 1And then they give you debt. And so you graduate with a degree from whatever crappy university or college, but you assumed that because the government gave you the loan, you were going to have a job at the end. Yeah, it's a scam. It's a scam. It's one of the great lies. Imagine if it was all privately funded. There's plenty of lenders. I mean, the amount of money that's going into student loans is actually a small percentage of what's going into home loans. So there's plenty of bank capital out there to fund student loans. So the student loan debt would suddenly become, hey, if you go to this crappy university, we're not giving you $200,000 of debt. True.
Speaker 2I see what you're saying. It would also force people to pick things that were linked to the employment market versus say like basket weaving use as an example. But maybe if, you know, maybe I'd be forced more into things that had a higher guarantee of return because of the private markets. And it doesn't mean... It's a retraining mechanism in that regard.
Speaker 1It is. And I think this is a great reset that's needed. If we got rid of the federal student... Because I don't think you can reform federal student loans. It's just too complicated. But if you shut it down or you transition it over time and let the private market underwrite it, you'd have a better path.
Speaker 2David, thank you. Thank you. Thank you to you and all your co-hosts on the All In podcast. It's one of my favorite podcasts. So I highly recommend everybody goes and listens to that. I listen to it all the time and it really helps me develop my own perspective on the world. So I really appreciate the fact that you guys take the time to do that. It marks your very busy schedules. Well, thank you for having me. And yeah, appreciate you coming here today. And hopefully we can continue this conversation once we get more of these answers and the fog clears a little bit. Absolutely. Thank you so much. And I'll link all of your links below for people to go read your stuff. Is there anywhere else in particular people can get more of your content?
Speaker 1All In's really where I'm at.
Speaker 2Okay. Yeah. Anywhere else? Follow you on social media? Follow me on
Speaker 1Twitter at Friedberg. I don't post very much but that's it. I mean, that's where I'm at. Great. We'll see you then. Thank you. Thank you, David. Thank you.
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