All-In with Chamath, Jason, Sacks & Friedberg
00:53:13 · Jason Calacanis
[00:53:13] S0: Right. We we we dipped our toe into data centers. Let's go do a double click here and dive right in. Stocks got killed earlier this week. Nvidia, SpaceX, Tesla, AMD, Micron, everything across the board took a massive haircut. Close to $4,000,000,000,000 in market cap wiped out. Now, again, Trump has overseen the top ticking of the market for the last two years. So, overall, I think the market is still up during his second term. But this was the second... This was the worst single day in the history of the stock market by total dollars, not percentage, obviously, and and it's the worst day for a little while. This puts a bit of a dark cloud over Anthropic's IPO, and, of course, after that, OpenAI's Polymarket, our great partner in Polymarket, thanks for Shane for coming on on Tuesday, says that they're gonna have a 71% chance of going public this year. It was 95% before the midterms, and The Wall Street Journal reported today that the haircut could be baked in now. Instead of 1.5 to 2,000,000,000,000 and then going to 3 or 4,000,000,000,000 as Gavin Baker said on this podcast, we could be looking at a 1,000,000,000,000, 1 point low x trillion. Today, markets have rebounded a bit, and all of this is based upon Chamath, are these data centers gonna go forward or not? Are they gonna be stopped? And then what is going on with governor, specifically Sacks evoked what happened here with Abbott losing to Gina Hinojosa, who took the time to do a a little presser last night and give her position, went on all the top shows. She's being pretty clear. She wants a great deal, and, it doesn't seem like she's against them. She's gonna let people build them out until 2028. But it's unclear what happens after that point. You're obviously connected, connected, I I think, think, Chamath, Chamath, to a lot of the major players in the AI space. What... What's gonna happen with data centers? Can the Democrats afford to pop the AI bubble by then putting cold water and slowing down data centers? Because that will tank the economy. I think we all understand that. So is that in their best interest, and is this posturing and positioning to get better deals for their local communities as is their job?
00:55:38 · Chamath Palihapitiya
[00:55:38] S2: There's an incredible video where the SpaceX team went to Cochise County in Arizona to present their plans for this new six gigawatt data center. And if I had to characterize that video, it's on X if you wanna find it, but it's these two very bright earnest people from SpaceX trying to explain how they're going to reduce electricity costs by 40%. They don't use water. They'll reduce property taxes by 20%. They will be able to fund enough revenues to pay off a bond in the county. It's just a litany of things. Yeah? Meanwhile, the audience is just screaming. And what you see, the two people were very poised. Riley and Katie, those are their names. Good SpaceX employees. They should be proud of how they conducted themselves. But they were getting run over, if you listen to this video. And my takeaway is, Jason, that this is an emotional issue that is not tethered to the facts, as Friedberg says. It represents a totem around the oligarchy and the, economic fissure that exists in The US economy. But it also represents that the deals that have happened are a little gratuitous, meaning should it really be the case that the most powerful seven or eight companies need a tax break to invest $30.50, $80,000,000,000 to then generate $3.04, $500,000,000,000? Probably not. Now they're doing smart deals because that's what made sense. But I think what the incoming governors are going to say is these things are off the table and instead we want to have directly measurable economic impacts before we even entertain this. I think what it means is we're gonna see a slowdown. And I think what that does is it benefits the hyperscalers because they have existing capacity. I think it's very bad for the neo clouds because they're renters. And it's pretty bad for the foundational models because they are so short of this capacity and they need it to grow. So to the extent that these frontier models are so much better than everybody else's product, they are the ones that need this capacity. It sets the hyperscalers to be a kingmaker. And they have this interesting game theory now. You just
00:57:51 · Jason Calacanis
[00:57:51] S0: say who the hyperscalers are just so people understand the difference between them?
00:57:54 · Chamath Palihapitiya
[00:57:54] S2: Yeah. Amazon, Meta, Microsoft, Google, SpaceX. Yeah. And what they'll be able to do is make a decision. Path number one is continue to rent in the way that you're doing it today. So the status quo. Rent to some customers, large corporates. Right? Rent to the neo clouds, rent to the foundational models. That's what they're doing today. Everybody does that. But then there's the path less traveled, which all of a sudden becomes really interesting. You could decide to take all of the incremental compute and advantage your own products. So Google has a ton of capacity coming online. They could say, I'm gonna give it to Gemini. What does that do? It actually allows Gemini to catch up in quality relative to the foundational models. Why? Because if you constrain the amount of assets that can actually generate compute and a smaller surface area of it is available to the leading companies, those leading companies will have to pay more, the user experience will decay, and then other products can have time to catch up. And now that is important because Anthropic and OpenAI are in a very fast recursive loop. They're on a sixty to ninety day loop in improving their models. So now all of a sudden, without an infinite amount of supply coming online, you can slow these folks down. That's that's the path less traveled. Then there is the crazy path. Crazy path. You should look for this one very narrow thing. You and I talked about this before on the pod, but SpaceX and Anthropic's compute deal has a mutual ninety day out. Anthropic can term in ninety days, SpaceX can term in ninety days, terminate. If SpaceX says I'm gonna terminate this compute in ninety days, That is the king making move. Why? It's a disproportionate amount of the compute that Anthropic needs. It allows SpaceX to reprice that compute at the spot rate, which is probably double. The market rate.
01:00:05 · Jason Calacanis, Chamath Palihapitiya
[01:00:05] S0: Right? Anyway. [01:00:06] S2: The market rate. [01:00:06] S0: The market rate. [01:00:07] S2: And it... And it's probably not just double. It could probably triple. So whatever revenue you see on SpaceX's balance sheet from Ant could two to three x, And Ant would have no choice except to immediately capitulate and take the higher price. It would also show all of the other hyperscalers that they are very far away from having economic yield that is optimized. And so then it forces them to consider, should I be giving it to myself? Should I be selling it to the other people? It then forces the neo clouds to take all of this money that they've raised, whether it's debt or equity, and say, have two choices, which is to buy as much compute today as I can at whatever price it's available because the other path is assured destruction and bankruptcy for me because I am just out of the game. And so what will they do? They will take the last gasp and do whatever they have. So I think all the game theory, Jason, literally comes down to this one deal and whether Elon decides to rip it. Because if he rips it, watch out.
01:01:15 · Jason Calacanis, David Friedberg
[01:01:15] S0: Yeah. And the the other two factors here, Friedberg, and just some predictions. Right now, we have the tokens here in The United States. If the governors decide they want to put the screws tight on big tech hyperscalers and neo clouds and they wanna slow this down, they will need to understand that these data centers could be put in Canada, in Mexico, in Singapore, in Malaysia, and many other locations. The Middle East is a little bit off the table because of the war. War ends. You start putting these data centers in The Middle East. Then the job of doing the next large model will not occur, Friedberg, on US soil. It might occur in Saudi Arabia, UAE, Qatar, Malaysia, Singapore. We're going to be a net importer of tokens, and this will be the biggest cell phone ever because all those $304,100,000 dollar jobs building these data centers are gonna go away. All of that tax will be collected locally in Malaysia where Google is putting a huge data center. And the data can make it around the world quite quickly. It doesn't need to be in The United States, which these governors are gonna learn a very hard lesson in globalization. What are your thoughts here on the data centers being banned or if it is just posturing? And then, Friedberg, could we see The United States become a net importer of tokens as opposed to a net exporter? [01:02:41] S3: Well, they might ban the use of AI too. Okay. [01:02:44] S0: Well, now we're going to... Yeah. A very far out [01:02:47] S3: prediction. Yeah. Floated. I mean, they're... That's the conversation right now.