All-In with Chamath, Jason, Sacks & Friedberg
00:01:32 · David Friedberg, Jason Calacanis, Chamath Palihapitiya, David Sacks
[00:01:32] S3: You guys wanna talk about exponential time hypothesis? [00:01:34] S0: Think that's what the audience wants. They want the the SAS update from Sacks and the science update, and then we can get our market review and we'll wrap the show up. No. In all seriousness, there was an election this week. We had an amazing livestream over a million views so far. Crazy, Chamath. I don't know if you knew this, but 400,000 people tuned in live making us, I believe, the number one election night livestream. [00:01:59] S2: Not true. It was 500,000. And just to put it in perspective, the far right streamers got about 87,000. The far left streamers got 250,000. We got 500,000. [00:02:11] S3: Okay. [00:02:11] S2: Which was bigger than most cable as well. So we were the biggest and bigger than, I think, most, if not all cable as well. [00:02:17] S1: Apparently, America wants hot takes from tech bros. I don't Here we go. Who would have thought? [00:02:23] S0: Who would have thunk it? And by the way, that was with only three of our all stars on the court. Sacks had a board meeting Thursday night and couldn't make it... Tuesday night. He was busy. [00:02:31] S1: Yeah. I was busy that night. I was I think I was passed out in a bar.
00:02:35 · Jason Calacanis
[00:02:35] S0: You passed out? Was treating the... Sacks is the only guy who goes to the bar with his own bottle of tequila. He's like, can you put this behind the bar and serve it to me on $50 a glass? Special thanks to Ted Cruz, Rahm Emanuel, Shayne Coplan of Polymarket. Man, did he have a great night. I think Polymarket nailed it, 99% of their prediction markets turned out to have it perfectly. The hilarious fifth bestie Tim Dillon, Taylor Lorenz based. Taylor Lorenz was fantastic and insightful. Brad Gerstner did a solid job, brought some charts, and Ben Shapiro from the right. So it was a really great great panel. And today, we're gonna take a a pretty systematic approach to what happened this week. We're gonna start with a postmortem on the midterms. And then second, we're gonna talk about the second half of Trump's term the next two years. So I'm sure data centers will come up in our in our recap postmortem, etcetera. But we're gonna do a deep dive into the AI trade potentially cracking. So let's start with our postmortem on what just happened in the midterms. Obviously, the Democrats sweeped both chambers of Congress and they won at least 29 governor races. Dems will wind up with 54, 55, or 56 seats depending on how Alaska and Mississippi wind up. They have a lot of votes still coming in in the house. Dems will have at least 250 seats, maybe even 260. The bigger story is where the Republicans lost deeply red states that haven't gone blue in generations went blue, including the great state of Texas. Please don't blame me. I've only been here for three years, and you might be surprised that what my voting ticket looked like. Kansas, Iowa, South Carolina for the first time in decades, Trump won all of those states by double digits just two years ago. Compared to 2024, the GOP lost ground in every voter group, even white men. So let's go around the horn, Sacks. People wanna hear from you most of all, I guess. So what went wrong here? What are the lessons the Republican Party can learn? And and what did the Democrats do right in the last eighteen months leading up to the midterms?
00:04:53 · David Sacks, Jason Calacanis
[00:04:53] S1: This was a shalking. This was a blowout. It was, I believe, the biggest midterm loss since the Watergate midterm loss. So this was obviously a big defeat for the Republicans. There's no sugarcoating it. What's the reason for that? I believe the vice president, J. D. Vance, explained it very well. It was this war. And I... The only thing I would add to that is it was this war and the economic consequences that follow from the war. So what am I talking about? Price of gas, it was around $3 before the war went over 4 and higher, price of diesel even higher and then that factors into the cost of food, all the goods that have to be transported, also fertilizer costs went up. And so you saw the inflation rate at the beginning of the year back in January before the war, it was down to 2.4%. We finally had that problem licked just about. Remember, was 9% under Biden And in the first year of the Trump administration, we brought it down to 2.4. The market was expecting multiple rate cuts this year. And we were forecasting 5% GDP growth, which I don't think was too overly ebullient based on what we were seeing at that time combined with the expectation of rate cuts. [00:06:05] S0: Aggressive but not unbelievable. Unrealistic. Not unrealistic. Yes.
00:06:05 · Jason Calacanis, David Sacks
[00:06:05] S0: Aggressive but not unbelievable. Unrealistic. Not unrealistic. Yes. [00:06:08] S1: Okay. And by the way, the prediction markets back in January were showing a 70% chance of Republicans holding the Senate, and then the House was perceived to be a toss-up. I think that if this election had happened back in January, it would have been a pretty successful one for the Republicans. What happened since then? Well, you got inflation going from 2.4 to 3.7%. Again, mostly driven by the cost of gas and diesel and all these other products where you have to pay a higher cost of transportation. And you end up not having any rate cuts, you end up getting a rate hike that brought the cost of mortgages to roughly seven and a half percent. And that overall fed this narrative around affordability. So it's the war plus the perception of the lack of affordability is what really created this tidal wave. Now, you know, I I have to admit, I thought that... I mean, look, I didn't think this would be a great election for Republicans, but I thought that it wouldn't be this bad. I I I was wrong [00:07:12] S0: about [00:07:12] S1: You [00:07:12] S0: said it was a spritz. It would be a spritz.
00:07:13 · David Sacks
[00:07:13] S1: I thought it could be a spritz. That was based on a couple of things. Number one is that the last few elections, the pollsters have all been wrong and and Trump has always managed to defy the odds and I thought that this polling data must fall into that pattern. And then the second thing is that the economy is not that bad. I mean, in fact, it's quite good. So just today, we had a new jobs report. It was a very robust jobs report. The number of new jobs created is being revised up. You've got unemployment tick down to almost record low, 4.1%. You've got still pretty healthy GDP growth. In the first half of the year, it was around 2.1 to 2.5%. And then third quarter, the tracking by GDP now is 3.7%. So I thought given the fact that you got great employment, you got solid GDP growth, I thought the fact that inflation was too high would not result in this type of tidal wave. I thought it'd be more like the Biden midterms where he had extremely high inflation, but the economy itself was still pretty decent and it ended up being more of a red spritz as opposed to a red wave. So that was my pattern recognition. It was wrong and I think one of the reasons why it was wrong here is because I think the public is in a pretty ordinary mood. They're very concerned about affordability. It doesn't matter how good the economy actually is, it matters how good people perceive it to be for them. And in the first year of the Trump administration, we made enormous progress in delivering real post tax household income. It rose by like 3.1%. But because of the inflation numbers over the last six months, you're starting to chip away at that, right? Because again, as long as inflation is growing faster than your wages, you're losing purchasing power in real terms. I think the electorate is getting ornery about that. And just one other thing I wanna say about it, which is there's one other piece of why the war I think was so bad, which is it fractured the Republican coalition and the Republican base. J. Cal, you've pointed this out. We lost all the podcast bros. I mean, obviously, was Tucker Carlson and Joe Rogan and Theo Von and and that whole set Megyn Kelly. Megan Kelly. So, you know, a house divided against itself cannot stand. I mean, we lost a huge part of our base. And I would say that the Republicans in particular are dependent on the podcast circuit.
00:09:43 · David Sacks, Jason Calacanis
Let's call it alternative media. Why? Because the mainstream media hates us. Legacy media hates us. They will never give [00:09:51] S0: us their percent left. So it is Yeah. What it [00:09:54] S1: And I think one of the reasons why Trump produced such a resounding victory in 2024 is he appealed to that whole podcasting circuit. And and frankly, we should have done a better job giving them all front row seats in the White House press room. We should have stayed connected to all of all of them because they are our media. By the way, they don't, you know, they don't work for us. They're willing to defect, obviously. [00:10:15] S0: They have their own opinions. They have [00:10:16] S1: their own opinions, but we have to pay attention. I think our side has to pay a lot of attention to them because without them, we don't have any media that supports us. So I think that losing them was a big deal. It fueled Yeah. The sense. And I think that a lot of those people showed up and then did a protest vote. Cause they wanted to send the message that they want out of this war.