Anthropic's Fable Backlash, Nationalizing AI, Inflation Heats Up & California's Broken Elections

“Well, look, 8 months ago I said that Anthropic was engaged in a very sophisticated regulatory capture campaign based on fearmongering, and people at the time thought that was a very spicy take. But 8 months later, I think you're hearing a lot of people say it. In fact, I think it's almost now becoming a new consensus. And one of the things I think your summary didn't quite capture, J Cal, —is the sense of the violation of trust and how much outrage there is in the developer community over this latest Claude release. It's not just the fact that they're doing mandatory surveillance. Remember, this is a company that said that it was against government surveillance. They are now retaining for 30 days every prompt and every output you send to one of these Claude class models. There are no exceptions, even enterprise customers who had signed zero data retention agreements, they do not have a choice, or I guess they can just not use the new Claude or Claude class models, but they retain all of your data for 30 days. And it's not just the prompts and the output. Remember, it's all the context you share with them. So, you know, all these agent platforms are basically storing all of your memories, all of your files, all of your data, and they're passing them to the model in these giant context windows to get better Responses. Anthropic is saying it will keep all of that, and it does it to build a profile on you, to classify you, and then to determine what capabilities it then unlocks. And the thing that created the most outrage, in addition to the surveillance, is the fact that they would degrade the product. They would degrade what they show you. They would nerf their models if it decided in Anthropic's sole discretion that you are not worthy of having access to that level of information. So they're creating a new level of AI haves and have-nots. And what they did is, there's a narrow piece where they walk back, which is they said that when it came to things like machine learning, AI research, chip design research, those types of areas, they would kick you to a lesser model but not tell you that.”

“Well, look, 8 months ago I said that Anthropic was engaged in a very sophisticated regulatory capture campaign based on fearmongering, and people at the time thought that was a very spicy take. But 8 months later, I think you're hearing a lot of people say it. In fact, I think it's almost now becoming a new consensus. And one of the things I think your summary didn't quite capture, J Cal, —is the sense of the violation of trust and how much outrage there is in the developer community over this latest Claude release. It's not just the fact that they're doing mandatory surveillance. Remember, this is a company that said that it was against government surveillance. They are now retaining for 30 days every prompt and every output you send to one of these Claude class models. There are no exceptions, even enterprise customers who had signed zero data retention agreements, they do not have a choice, or I guess they can just not use the new Claude or Claude class models, but they retain all of your data for 30 days. And it's not just the prompts and the output. Remember, it's all the context you share with them. So, you know, all these agent platforms are basically storing all of your memories, all of your files, all of your data, and they're passing them to the model in these giant context windows to get better Responses. Anthropic is saying it will keep all of that, and it does it to build a profile on you, to classify you, and then to determine what capabilities it then unlocks. And the thing that created the most outrage, in addition to the surveillance, is the fact that they would degrade the product. They would degrade what they show you. They would nerf their models if it decided in Anthropic's sole discretion that you are not worthy of having access to that level of information. So they're creating a new level of AI haves and have-nots. And what they did is, there's a narrow piece where they walk back, which is they said that when it came to things like machine learning, AI research, chip design research, those types of areas, they would kick you to a lesser model but not tell you that.”

“Well, look, 8 months ago I said that Anthropic was engaged in a very sophisticated regulatory capture campaign based on fearmongering, and people at the time thought that was a very spicy take. But 8 months later, I think you're hearing a lot of people say it. In fact, I think it's almost now becoming a new consensus. And one of the things I think your summary didn't quite capture, J Cal, —is the sense of the violation of trust and how much outrage there is in the developer community over this latest Claude release. It's not just the fact that they're doing mandatory surveillance. Remember, this is a company that said that it was against government surveillance. They are now retaining for 30 days every prompt and every output you send to one of these Claude class models. There are no exceptions, even enterprise customers who had signed zero data retention agreements, they do not have a choice, or I guess they can just not use the new Claude or Claude class models, but they retain all of your data for 30 days. And it's not just the prompts and the output. Remember, it's all the context you share with them. So, you know, all these agent platforms are basically storing all of your memories, all of your files, all of your data, and they're passing them to the model in these giant context windows to get better Responses. Anthropic is saying it will keep all of that, and it does it to build a profile on you, to classify you, and then to determine what capabilities it then unlocks. And the thing that created the most outrage, in addition to the surveillance, is the fact that they would degrade the product. They would degrade what they show you. They would nerf their models if it decided in Anthropic's sole discretion that you are not worthy of having access to that level of information. So they're creating a new level of AI haves and have-nots. And what they did is, there's a narrow piece where they walk back, which is they said that when it came to things like machine learning, AI research, chip design research, those types of areas, they would kick you to a lesser model but not tell you that.”

“And I think if you were a person, you should generally now think there's a risk of censorship. If you're a company, I think it's almost a non-starter. And the reason is because you could accidentally trip one of these things without even knowing it. A downstream scientist using the cloud APIs could trip it. A business executive inside your corporation could trip it. A person doing scientific molecular research could trip it. All of a sudden, you'll get cut off from a very important source of business differentiation for yourself. I think if you take both of those two things together, we're at this very unique moment in time where I think companies need to start underwriting this next phase of AI, which is how do I have control? Who am I allowing to learn off of all of this information? Do I want to have single point of failure risk with respect to AI? And I think the answer is that you need broad diversity and a governance approach that's better managed. Mm-hmm. One thing I'll say about Anthropic is They tell the truth. Yes. It's just that the truth sucks when you actually take it and you eat it and you're like, it's in your tummy and you're like, no, this is not good. I don't like this. And so there's the censorship risk on the one hand, and then there's just the governance business risk for enterprises on the other. Both are not good.”

“I think there's that, and, and I think that there's the risk of something that's more subtle but equally insidious, which is that they will start to pick which corporations they want to benefit. So for example, right, if Novartis has a competitive GLP-1 drug, to Lilly and they have a strategic deal with Novartis and not one with Lilly, now there's an impetus to shape how people get information, right? If they have a deal with JP Morgan but not with Citibank, you'll just never know. And so you'll ask a question, something about mortgage rates or interest rates, and you'll get all kinds of stuff that you don't understand. And then The downstream part of this, which is even more problematic, is it's not clear to me that they're going to capture the actual fingerprint of what they did. So if you believe that something was done in a shady way, you're supposed to be able to go to them, or regulators should be able to go to them and say, "Show me the trace of that model run in that exact moment that generated that output." Convince me why that wasn't nerfed on purpose or manipulated. And there's all kinds of ways in which they can hide the cheese on that. So I think that all of that body of stuff, Sacks, happens now because if you're an emergent company, what you should be doing is knocking on Anthropic's door saying, let's do a deal. I'll give you half the equity and why don't you just direct people to me? And they'll say, well, economics are not what I care about. What is your philosophy on life, on morality, on all of these social issues? And one company will say it's A, another company will say it's B. They'll favor A over B, and then all kinds of stuff can happen underneath the hood. That's what's scary.”

“Well, no, no, it's— I, I'll get explain to you. It's— you're, you're absolutely correct. If you're a, a regular company, you have to do what's in the best interest of shareholders. When you're public benefit companies, you have to balance the shareholders with the stated mission of the public benefit corporation. So if you say the public benefit corporation's reason to exist is to in— share the world's knowledge or provide free intelligence to everyone, whatever you make that statement to be, the board has to have a dual mandate for both of those things. That's what a public benefit corporation is.”

“You're missing one piece of it, which is at the same time that Anthropic was engaging in mandatory surveillance and nerfing its models. Dario wrote a new blog post. Oh God. Saying that transparency was no longer good enough, that we needed to have a new regulatory agency like an FAA or maybe an FDA to approve all models. So your presumption there is correct. Yes. If you could go somewhere else, to get your questions answered, then you would have alternatives. But at the same time that Anthropic is engaging in this potentially anti-competitive behavior, they want to restrict your options. It's not good enough for them just to win in the free market. They're calling on the government to regulate and stop potential competitors and limit the number of models that you have access to.”

“And why would they do that? Why would they want to get regulated? The answer Super simple. They want to apply that regulation to open source, which is impossible, but this would be a great way to scuttle and sandbag open source models because they don't have the ability to be regulated. So it's like a preemptive strike against token maxing on your local machine.”

“It's here today. I think Sacks is right. I think Sacks is right. And I think the lack of KYC is the tell. If you, if you did not have that agenda, you would have implemented KYC yesterday. Don't—”

“What is it, dog? It's ridiculous. I mean, it doesn't stand to logic. You know, last week they published this blog saying that recursive self-improvement could end the world. Therefore, we need a pause. What did they do the previous month? They hired Andrej Karpathy to run Recursive Self-Improvement at Anthropic. They're complete hypocrites. The message is nuts. Yes. And I think Ben Thompson made an excellent point that one of the reasons he thinks that they put out that blog post on the pause was to justify the anti-competitive step they took this week of depriving users of the ability to research AI, machine learning, and chip design using Claude. Okay, so interesting. Look, these guys are deeply hypocritical. I don't think they can be trusted on their own terms. They can't be trusted because what they're saying is contradictory and self-indicting. And so when Bernie comes along and says, hey, let's take their shit— I mean, as a capitalist, I'm against it, but I, but I kind of like understand where he's coming from.”

“yes, yes, he was afraid that Google was going to monopolize it, and he thought that the only antidote for that was for it to be open. Yes. And I still think that instinct is completely true. It's just that It's not Google who's the gatekeeping monopolist, it's now Anthropic. They're not a monopolist yet, but if they get the right capture they're looking for, they will be either a monopolist or a duopoly. It'll be a duopoly.”

“They're here. Oh, my Lord. I really think that conservatives and libertarians are mortgaging their futures if they go along with this red capture safety agenda without really realizing that there's so much more to it at stake. We saw what happened during the social media wars in the early 2020s, right? The definition of safety was expanded to include things like microaggressions, safe space, psychological safety. If you basically conveyed an idea that somebody else that, you know, marginalized person thought was hurtful, then you could be censored. Okay, you were depersoned. Your right to have bank accounts or to engage in payments was taken. You get debanked. Your right to engage in payments or payroll could be taken away. We're headed down this path with AI, but it's going to be infinitely more powerful, right?”

“I'm not sure, to be honest. There are things I'm concerned about, but we've decided to throw caution to the wind because we do a lot of proprietary work in genomics. What that means is we're looking at different genes or gene variants, trying to estimate the impact that that gene or gene variant might have on a living organism. Like, we work in plants, obviously, in agriculture. And we will do things like RNA guide design. For gene editing-based tools. We will do predictions on what gene may or may not have some phenotype. So there's a lot of genomic modeling work that we have found these models to be incredibly valuable at supporting us with over the last couple of years. So going back about 6 months, we were able to very simply and cleanly do things like design a genetic construct that you would then use to make a specific protein And the, the tools was very easy to use to do that sort of research and extremely valuable. This is the kind of work that many scientists would spend a lot of time doing, and these models were very good at doing very quickly. Over the last couple of weeks, they've begun to restrict the ability to use the models to do that work. And the premise is that there's some sort of bioweapon, uh, type risk that folks have theorized could happen using these tools.. And as a result, we're losing the capacity to use these models for this very important scientific development work. As a result, we are likely going to end up needing to use open source models and run them locally ourselves. So I, the reason I walk through all of that is so people can really understand the context of what's gonna happen here. As folks like Anthropic say, hey, we're going to restrict access or censor the output of these models, it is going to force companies like ourselves who still want to take advantage of the capability of these LLMs to go and get open source tools and run them. And what are the best open source models today? They're Chinese. Yeah, they are. And that is a major concern. The, the American open source models are not as good as the Chinese open source models. So the restrictions that Anthropic and others are putting upon themselves and upon the industry is forcing a lot of companies to go and get open source Chinese models and run them. We're seeing this across the landscape with startups, with large-scale enterprises. Everyone's making that move.”

“I'm not sure, to be honest. There are things I'm concerned about, but we've decided to throw caution to the wind because we do a lot of proprietary work in genomics. What that means is we're looking at different genes or gene variants, trying to estimate the impact that that gene or gene variant might have on a living organism. Like, we work in plants, obviously, in agriculture. And we will do things like RNA guide design. For gene editing-based tools. We will do predictions on what gene may or may not have some phenotype. So there's a lot of genomic modeling work that we have found these models to be incredibly valuable at supporting us with over the last couple of years. So going back about 6 months, we were able to very simply and cleanly do things like design a genetic construct that you would then use to make a specific protein And the, the tools was very easy to use to do that sort of research and extremely valuable. This is the kind of work that many scientists would spend a lot of time doing, and these models were very good at doing very quickly. Over the last couple of weeks, they've begun to restrict the ability to use the models to do that work. And the premise is that there's some sort of bioweapon, uh, type risk that folks have theorized could happen using these tools.. And as a result, we're losing the capacity to use these models for this very important scientific development work. As a result, we are likely going to end up needing to use open source models and run them locally ourselves. So I, the reason I walk through all of that is so people can really understand the context of what's gonna happen here. As folks like Anthropic say, hey, we're going to restrict access or censor the output of these models, it is going to force companies like ourselves who still want to take advantage of the capability of these LLMs to go and get open source tools and run them. And what are the best open source models today? They're Chinese. Yeah, they are. And that is a major concern. The, the American open source models are not as good as the Chinese open source models. So the restrictions that Anthropic and others are putting upon themselves and upon the industry is forcing a lot of companies to go and get open source Chinese models and run them. We're seeing this across the landscape with startups, with large-scale enterprises. Everyone's making that move.”

“Why, why not? Everyone's copied it. So everyone's got a copy of them. Like these models exist. And this is a big part that I think people need to understand. The idea that you can quote regulate or downscale or turn off AI is not a realistic idea. The models have been put out in the world. It's like publishing a book. Once the book has been printed, anyone can use their own Xerox machine at home to make copies of it and use it. So we have crossed the Rubicon in terms of the potential of language models. The models that are open source are already fully available, fully published, and anyone can access and use them. And then people can take them and they can evolve them and they can use their own data. It's out there. You can't stop that capability, which is going to be extraordinarily beneficial for the world. So we really do have to kind of rethink how we're planning to step in and ensure that nefarious, negative, unemployment, all the things that we're worried about are addressed downstream from the technology capability. You can't just turn off the internet and you can't just turn off the typewriter and you can't turn off the Gutenberg press.”

“Think sometimes. Well, there's— by the way, there are things you can do on the safety side. So, Friedberg, you didn't mention this, but I'd be curious to get your, your take. So the major AI labs, along with lots of other signatories, sent this letter recently in support of— it's called In Support of Mandatory Nucleic Acid Synthetic Screening and Record Keeping. And basically what it, what it says is that if you make an order to go to a lab to manufacture a sequence synthetic DNA or RNA, they already have to check it against a database to make sure that, you know, they're not creating a bioweapon, a bioweapon, Ebola, whatever. Yeah. That is based on an agreement called the International Gene Synthesis Consortium of 2009, in which all the major labs agree to develop and implement voluntary safeguards against misuse. That makes sense to me. And now what they want to do is codify that. So They've had, you know, over 15 years to dial in the system and make it work. Almost everyone abides by it voluntarily. Now they're saying we should make it mandatory. Okay, that seems reasonable to me. So to Friedberg's point about at what stage do you intervene, maybe it's not at the level of who gets to use the model, but if you try to turn it into output in the physical world.”

“Meta really fumbled this with Llama. I mean, if they had landed a really good— Big time. —working open source model, we talked about this as well and we said, "Zuck needs to view this through the lens of game theory. How do you scorch the earth and how do you make a viable open source model available and make it neck and neck?" And this was 2 years ago. Right. What a fumble. Take the margin out for everybody else.”

“Interesting. This is gonna chase people off of this platform. I'm telling you, we are gonna downgrade our use because of these, these blockages, and we're gonna switch to other models. It's a simple manifestation of the market. Like, this is what we're gonna end up doing.”

“It's definitely something we have to flag. I guess adjacent to all of this is the public's, at least America's, distrust of AI and their concerns around wealth disparity and their concerns about how these models were trained. Bernie Sanders wants a percentage of these AI companies. The percentage he thinks is right is 50%. Last Monday, June 1st, Senator Sanders published an op-ed in The New York Times titled, "AI is a public resource. You should own half of it." In it, he announced the American AI Sovereign Wealth Fund Act. Sovereign wealth fund, one of Trump's favorite things. A one-time 50% tax on stock, not profits, of the largest AI companies, including OpenAI, Anthropic, and xAI. The shares go into a government sovereign wealth fund and would give the public voting rights and equal board representation at each company. Sanders said, quote, The foundation of AI is our collective and human intelligence. The books, the songs, the journalism, scientific research code, essentially stolen by some of the wealthiest people in the world. I'll stop there. That's good. It's a brilliant— it's a brilliant— it's very good pitch unifying Sacks. This pitch unifies Bernie, even Steve Bannon, people in the administration. Trump himself loves the sovereign wealth fund. He wants to own part of companies. And Bernie Sanders— I think the, the horseshoe theories manifest Sacks. What's your take on Bernie's proposal?”

“They own 10% AMD. Could you add Anthropic and OpenAI? Yes. Now, there is something very important we need to observe about the economics of AI, and I think you can understand it best if you compare it to the economics of the internet. The crazy thing about the internet, the reason why the Facebooks and the Googles massively over-earned for decades is the marginal cost of production for a new user on the internet is effectively zero. The incremental search user costs nothing. The incremental social networking user costs nothing, but you're able to use them as part of a network effect to sell ads against, make infinite money. It's like a money glitch. AI is completely different. There is a real cost for every marginal user. Everyone you stand up is taxing a GPU. Everyone you stand up needs electrons. Everything needs memory. And so you get into this situation where there needs to be this downstream ROI, but there also needs to be all this critical infrastructure that even enables you to be on the field. That's probably the single best argument that if I were sitting in government, I would make as to why I should own a percentage of these companies. It is not dissimilar to having the first set of transportation companies that run on the interstate highway. And if the interstate highways were built by the federal government writ large, and now you had two companies that transported all the goods a logical question at that time could have been, how much of that should I own? Because you're riding on my rails. And if you look at it through that lens, there is critical infrastructure and national resilience that the AI labs profoundly need. Otherwise, they're not in a position to be in business. Yet even still, the marginal cost of production is incredibly high. So I think that if you were going to go and take a piece of these companies, you have incredible leverage. You have to construct this case precisely. But if it were me running the sovereign wealth fund, yeah, I'd probably own 75% of these companies when I was done. But that's me, because I can negotiate. Yeah. And I don't think Bernie can negotiate out of a paper bag, so he'll just throw this out there and it'll go nowhere. But that is the, that is the key observation that I hope everybody listening in a position of power understands. The incremental cost of performing AI is excessive and large. That contrasts and compares to the incremental cost before AI, which was zero. Do with that information what you will.”

“They own 10% AMD. Could you add Anthropic and OpenAI? Yes. Now, there is something very important we need to observe about the economics of AI, and I think you can understand it best if you compare it to the economics of the internet. The crazy thing about the internet, the reason why the Facebooks and the Googles massively over-earned for decades is the marginal cost of production for a new user on the internet is effectively zero. The incremental search user costs nothing. The incremental social networking user costs nothing, but you're able to use them as part of a network effect to sell ads against, make infinite money. It's like a money glitch. AI is completely different. There is a real cost for every marginal user. Everyone you stand up is taxing a GPU. Everyone you stand up needs electrons. Everything needs memory. And so you get into this situation where there needs to be this downstream ROI, but there also needs to be all this critical infrastructure that even enables you to be on the field. That's probably the single best argument that if I were sitting in government, I would make as to why I should own a percentage of these companies. It is not dissimilar to having the first set of transportation companies that run on the interstate highway. And if the interstate highways were built by the federal government writ large, and now you had two companies that transported all the goods a logical question at that time could have been, how much of that should I own? Because you're riding on my rails. And if you look at it through that lens, there is critical infrastructure and national resilience that the AI labs profoundly need. Otherwise, they're not in a position to be in business. Yet even still, the marginal cost of production is incredibly high. So I think that if you were going to go and take a piece of these companies, you have incredible leverage. You have to construct this case precisely. But if it were me running the sovereign wealth fund, yeah, I'd probably own 75% of these companies when I was done. But that's me, because I can negotiate. Yeah. And I don't think Bernie can negotiate out of a paper bag, so he'll just throw this out there and it'll go nowhere. But that is the, that is the key observation that I hope everybody listening in a position of power understands. The incremental cost of performing AI is excessive and large. That contrasts and compares to the incremental cost before AI, which was zero. Do with that information what you will.”

“the ship has sailed in terms of the United States government, uh, providing a social safety net to its citizens. We've formed the Social Security Trust Fund decades ago, and tens of millions of Americans depend on it for their retirement benefits and to survive. It is one of the last few defined benefit programs left in America. Pretty much all the rest of them are also government retirement programs. All of us private citizens and private companies have defined contribution programs. You put in $10 every week. That $10 sits in an account, you, it gets invested and it grows over time. And when you retire, you see exactly how much money you individually have, as opposed to a guaranteed benefit coming out from the collective. This presents a great opportunity, and I will repeat this every couple months when another opportunity presents itself, to restructure our broken, bankrupt Social Security system. I've said it in the past, I will restate it. There is a great moment right now to take the Social Security Trust Fund, which currently has one certificate in it. It is a certificate that is a very unique US Treasury certificate. The US government owes the Social Security Trust Fund $4 trillion. That's all it is. It's a bond. They're only allowed to own treasuries. We should revamp that. We should change the system so that the Social Security Trust Fund can own equities. That should then turn into an account-based system. So every individual has an account rather than a benefit. And then we should use that capital to go and buy stocks. We should buy great stocks in great American companies that are going to reinvent the world. And I believe that this, this opportunity to build a sovereign wealth fund for the United States is actually a very smart idea. I think to Sacks's point, they should be investing, generally speaking, across the landscape of businesses, including AI. They should not be seizures. They should be investments. That capital goes into that enterprise. They earn share certificates. Those share certificates sit in the accounts of American citizens. So now everyone will be an owner in these businesses. Social Security should be reformed into a sovereign wealth fund. It should be actively managed. It should make investments in AI companies, and everyone should participate that way. And I will say one more thing. There is no job loss. With AI. I will say it again, and I've said it a thousand times, and I will say it again and again and again. What I see on the ground and what I've seen at dozens of companies, and you guys can share your experiences, including my company that I run, there are two sides to a business. There's revenue and there's costs. On the cost side of the equation, AI can be used to reduce humans doing things that cost money to some extent. The effect there I would argue is nominal. The real opportunity with AI is on the revenue side, where suddenly one engineer can do 100 times or 1,000 times what they used to be able to do, meaning you can make more products at your company, whether those are agricultural seed products or boats and ships or software for companies or clothing or what have you. Because of AI, everyone has the ability to expand their revenue base to create more products. And that is the foundation of good economic prosperity. It is called productivity. We can grow productivity in this country with AI. So where I see AI being used is on the revenue side, 100 times more than the cost side. And in that equation, people are hiring like crazy. We cannot hire enough people. I just had a review meeting with my product and engineering team 2 days ago, and they're like, we wanna add an extra 15 headcount to our engineering squads because we have all this opportunity to do stuff that we couldn't otherwise do. So we are going to hire more people. And to Sacks's point, we are seeing that show up in the jobs numbers. The idea that AI is going to destroy jobs is a Luddite idea that is being disproven every single day. And I see it on the ground. It is only a matter of time before people wake up to this and they realize that this narrative that they've all been sold is a crock of shit. So it's coming. I'm telling you, everyone's gonna realize soon that this is a boom, not a bust.”

“Elon said it, but at least what Elon said is we're going to create such abundance with AI and with robots that no one's going to need to work. Yes. And the media just picks up on that last part and they— it's a more nuanced point. Yeah. Whereas Dario actually has said we're going to have very high GDP but very high unemployment. So in other words, we're going to create economic growth, but you, the average American, are not going to participate in this. So I understand where the politics are coming from. And as long as that is their position, you could justify a big chunk of it. Yeah. And one last point about—”

“Look, yes, that's right. The odds of a unicorn getting to decacorn was 8%. The odds of a decacorn getting to a centacorn was about double that, was 13%. And then the odds of it going from centacorn to a trillion-dollar market cap was 31%, so double again. And I, I asked him, you know, could you extrapolate this on $1 trillion getting to $10 trillion? My guess is that it would follow, and we'll see about 60% of trillion-dollar market cap companies getting to $10 trillion in the next few years.”

“No, there are so many. There are many. There's a whole bunch of them, Jayco. It's not the labs that's the problem, Jason. In the absence of power, this is all a moot conversation. And if you can't deliver power, to hundreds and hundreds of megawatts and line of sight to gigawatts. It's all meaningless bullshit. It's all—”

“Chamath, 2 years ago I bought 2,000 acres in Arizona with a partner. We got it zoned, we got it approved, so we're allowed to build a 2-gigawatt data center. I thought that this was the moment where you just turn around and you flip it to the Blackstones, the Brookfields of the world, to the Googles of the world, let them develop it. I've come to the conclusion that I don't think I can. The reason is because I think that unless we direct large swaths of compute exactly at the direction that Friedberg says, what Sacks says and what Jason just said will happen and we won't have open source. So just to make it very clear, when you look at the long tail of access to open source models, it's relatively minuscule. Most of the megawatts are still directed to the big models. Yeah. Most of them, the overwhelming majority still goes to the big guys. And so I'm coming to the conclusion that I think we may just be dragged into having to build 2 gigawatts. And I just put in an offer for another gig in in a different place because I'm like, if you could take 3 gigawatts and now actually create a deep liquid access to open source, we're going to have to do it. We as a community. Now, I don't have the money to do that because just to put it out on the table, a gigawatt now costs $100 billion, guys. Okay? So there's a huge capital moat that's a problem here as well, Sacks, which even if we wanted to go and endorse and breathe life into the open source model community, Where the hell am I going to come up with $100 billion? Now, when I started this project, it was like $4 or $5 billion and it's increased by 20x. So if you want to get all 3 gigawatts developed, I have to come up with $300 billion. I don't have— obviously I don't have $300 billion. So what are we all supposed to do? And then if you get the rug pull and the ladder pull on the regulatory side, we are going to be stuck with one class of models and one set of rules and we won't understand how to operate.”

“Chamath, 2 years ago I bought 2,000 acres in Arizona with a partner. We got it zoned, we got it approved, so we're allowed to build a 2-gigawatt data center. I thought that this was the moment where you just turn around and you flip it to the Blackstones, the Brookfields of the world, to the Googles of the world, let them develop it. I've come to the conclusion that I don't think I can. The reason is because I think that unless we direct large swaths of compute exactly at the direction that Friedberg says, what Sacks says and what Jason just said will happen and we won't have open source. So just to make it very clear, when you look at the long tail of access to open source models, it's relatively minuscule. Most of the megawatts are still directed to the big models. Yeah. Most of them, the overwhelming majority still goes to the big guys. And so I'm coming to the conclusion that I think we may just be dragged into having to build 2 gigawatts. And I just put in an offer for another gig in in a different place because I'm like, if you could take 3 gigawatts and now actually create a deep liquid access to open source, we're going to have to do it. We as a community. Now, I don't have the money to do that because just to put it out on the table, a gigawatt now costs $100 billion, guys. Okay? So there's a huge capital moat that's a problem here as well, Sacks, which even if we wanted to go and endorse and breathe life into the open source model community, Where the hell am I going to come up with $100 billion? Now, when I started this project, it was like $4 or $5 billion and it's increased by 20x. So if you want to get all 3 gigawatts developed, I have to come up with $300 billion. I don't have— obviously I don't have $300 billion. So what are we all supposed to do? And then if you get the rug pull and the ladder pull on the regulatory side, we are going to be stuck with one class of models and one set of rules and we won't understand how to operate.”

“the ship has sailed in terms of the United States government, uh, providing a social safety net to its citizens. We've formed the Social Security Trust Fund decades ago, and tens of millions of Americans depend on it for their retirement benefits and to survive. It is one of the last few defined benefit programs left in America. Pretty much all the rest of them are also government retirement programs. All of us private citizens and private companies have defined contribution programs. You put in $10 every week. That $10 sits in an account, you, it gets invested and it grows over time. And when you retire, you see exactly how much money you individually have, as opposed to a guaranteed benefit coming out from the collective. This presents a great opportunity, and I will repeat this every couple months when another opportunity presents itself, to restructure our broken, bankrupt Social Security system. I've said it in the past, I will restate it. There is a great moment right now to take the Social Security Trust Fund, which currently has one certificate in it. It is a certificate that is a very unique US Treasury certificate. The US government owes the Social Security Trust Fund $4 trillion. That's all it is. It's a bond. They're only allowed to own treasuries. We should revamp that. We should change the system so that the Social Security Trust Fund can own equities. That should then turn into an account-based system. So every individual has an account rather than a benefit. And then we should use that capital to go and buy stocks. We should buy great stocks in great American companies that are going to reinvent the world. And I believe that this, this opportunity to build a sovereign wealth fund for the United States is actually a very smart idea. I think to Sacks's point, they should be investing, generally speaking, across the landscape of businesses, including AI. They should not be seizures. They should be investments. That capital goes into that enterprise. They earn share certificates. Those share certificates sit in the accounts of American citizens. So now everyone will be an owner in these businesses. Social Security should be reformed into a sovereign wealth fund. It should be actively managed. It should make investments in AI companies, and everyone should participate that way. And I will say one more thing. There is no job loss. With AI. I will say it again, and I've said it a thousand times, and I will say it again and again and again. What I see on the ground and what I've seen at dozens of companies, and you guys can share your experiences, including my company that I run, there are two sides to a business. There's revenue and there's costs. On the cost side of the equation, AI can be used to reduce humans doing things that cost money to some extent. The effect there I would argue is nominal. The real opportunity with AI is on the revenue side, where suddenly one engineer can do 100 times or 1,000 times what they used to be able to do, meaning you can make more products at your company, whether those are agricultural seed products or boats and ships or software for companies or clothing or what have you. Because of AI, everyone has the ability to expand their revenue base to create more products. And that is the foundation of good economic prosperity. It is called productivity. We can grow productivity in this country with AI. So where I see AI being used is on the revenue side, 100 times more than the cost side. And in that equation, people are hiring like crazy. We cannot hire enough people. I just had a review meeting with my product and engineering team 2 days ago, and they're like, we wanna add an extra 15 headcount to our engineering squads because we have all this opportunity to do stuff that we couldn't otherwise do. So we are going to hire more people. And to Sacks's point, we are seeing that show up in the jobs numbers. The idea that AI is going to destroy jobs is a Luddite idea that is being disproven every single day. And I see it on the ground. It is only a matter of time before people wake up to this and they realize that this narrative that they've all been sold is a crock of shit. So it's coming. I'm telling you, everyone's gonna realize soon that this is a boom, not a bust.”

“the ship has sailed in terms of the United States government, uh, providing a social safety net to its citizens. We've formed the Social Security Trust Fund decades ago, and tens of millions of Americans depend on it for their retirement benefits and to survive. It is one of the last few defined benefit programs left in America. Pretty much all the rest of them are also government retirement programs. All of us private citizens and private companies have defined contribution programs. You put in $10 every week. That $10 sits in an account, you, it gets invested and it grows over time. And when you retire, you see exactly how much money you individually have, as opposed to a guaranteed benefit coming out from the collective. This presents a great opportunity, and I will repeat this every couple months when another opportunity presents itself, to restructure our broken, bankrupt Social Security system. I've said it in the past, I will restate it. There is a great moment right now to take the Social Security Trust Fund, which currently has one certificate in it. It is a certificate that is a very unique US Treasury certificate. The US government owes the Social Security Trust Fund $4 trillion. That's all it is. It's a bond. They're only allowed to own treasuries. We should revamp that. We should change the system so that the Social Security Trust Fund can own equities. That should then turn into an account-based system. So every individual has an account rather than a benefit. And then we should use that capital to go and buy stocks. We should buy great stocks in great American companies that are going to reinvent the world. And I believe that this, this opportunity to build a sovereign wealth fund for the United States is actually a very smart idea. I think to Sacks's point, they should be investing, generally speaking, across the landscape of businesses, including AI. They should not be seizures. They should be investments. That capital goes into that enterprise. They earn share certificates. Those share certificates sit in the accounts of American citizens. So now everyone will be an owner in these businesses. Social Security should be reformed into a sovereign wealth fund. It should be actively managed. It should make investments in AI companies, and everyone should participate that way. And I will say one more thing. There is no job loss. With AI. I will say it again, and I've said it a thousand times, and I will say it again and again and again. What I see on the ground and what I've seen at dozens of companies, and you guys can share your experiences, including my company that I run, there are two sides to a business. There's revenue and there's costs. On the cost side of the equation, AI can be used to reduce humans doing things that cost money to some extent. The effect there I would argue is nominal. The real opportunity with AI is on the revenue side, where suddenly one engineer can do 100 times or 1,000 times what they used to be able to do, meaning you can make more products at your company, whether those are agricultural seed products or boats and ships or software for companies or clothing or what have you. Because of AI, everyone has the ability to expand their revenue base to create more products. And that is the foundation of good economic prosperity. It is called productivity. We can grow productivity in this country with AI. So where I see AI being used is on the revenue side, 100 times more than the cost side. And in that equation, people are hiring like crazy. We cannot hire enough people. I just had a review meeting with my product and engineering team 2 days ago, and they're like, we wanna add an extra 15 headcount to our engineering squads because we have all this opportunity to do stuff that we couldn't otherwise do. So we are going to hire more people. And to Sacks's point, we are seeing that show up in the jobs numbers. The idea that AI is going to destroy jobs is a Luddite idea that is being disproven every single day. And I see it on the ground. It is only a matter of time before people wake up to this and they realize that this narrative that they've all been sold is a crock of shit. So it's coming. I'm telling you, everyone's gonna realize soon that this is a boom, not a bust.”

“yeah. I, I mean, it's almost utopian. And the question is maybe that could be 100 years away. He might think it's quicker, but that to me sounds like a very far off end state. Dario said specifically 50% job loss for entry-level knowledge workers in the next 1 to 5 years. And he said that one year ago.”

“Yeah, I think that's already been refuted. Sam has— they're all new. Yeah, Sam has said that he basically— I don't think he quantified, but he said that job loss was coming. But he said more recently that he was wrong because they're not seeing that in the numbers. Yeah. So these guys are not telling the same story. However, that's all the public has heard. The public has been taught that AI means job loss and there's nothing in it for them. So no wonder politicians like Bernie are saying, hey, let's take half the wealth.”

“And you're gonna learn a lot and have a good time. You'll be entertained. Yeah. All that great stuff. All right, let's keep going. Breaking topic this morning, CPI and PPI for May came in hot. Inflation is ripping. Here we go. CPI is obviously the Consumer Price Index that tracks inflation from the buyer side— rent, groceries, gas, healthcare, all that stuff. PPI is the Producer Price Index that tracks inflation from the seller side— wholesale goods, raw materials, yada yada. CPI came in at 4.2% year over year, highest since April 2023. There's your chart. PPI came in at 6.5% year over year, highest since the end of 2022. Here's your Poly Market: 21% chance inflation hits 5% in 2026. Uh, and then an adjacent Poly Market: chances of the Fed hiking this year at 49%. It was under 10% before the Iran War started. By the way, European Central Bank just raised rates a quarter point on Thursday. This was their first rate hike since September 2023. What do we take from this, Friedberg? It's all related to the Iran war. Yeah, that's the—”

“And you're gonna learn a lot and have a good time. You'll be entertained. Yeah. All that great stuff. All right, let's keep going. Breaking topic this morning, CPI and PPI for May came in hot. Inflation is ripping. Here we go. CPI is obviously the Consumer Price Index that tracks inflation from the buyer side— rent, groceries, gas, healthcare, all that stuff. PPI is the Producer Price Index that tracks inflation from the seller side— wholesale goods, raw materials, yada yada. CPI came in at 4.2% year over year, highest since April 2023. There's your chart. PPI came in at 6.5% year over year, highest since the end of 2022. Here's your Poly Market: 21% chance inflation hits 5% in 2026. Uh, and then an adjacent Poly Market: chances of the Fed hiking this year at 49%. It was under 10% before the Iran War started. By the way, European Central Bank just raised rates a quarter point on Thursday. This was their first rate hike since September 2023. What do we take from this, Friedberg? It's all related to the Iran war. Yeah, that's the—”

“there's definitely an energy blip from the Iran war that drove the core index up, but there's also the macro point, which is government spending out of control, inflation out of control, and fundamentally as things unravel, you have rising rates. So I think we should kind of expect, especially with a Kevin Warsh Fed, I think we could see north of 5.5, 6% overnight rates. It's not unforeseeable. So this is just the nature of our monetary policy and our fiscal policy with our congressional members that vote all of our future earnings away. Into bullshit. But here we are.”

“Well, look, it's concerning. I don't think that I expected the print to be this hot. Now, what's keeping things in line? There's still a chance that we're not going to see CPI go absolutely crazy, and part of that is because China has been smoothing the energy consumption globally, worldwide. And so we've kind of kept a damper on $200 a barrel oil. In fact, we're sub-$100. At the same time, I think it's pulled forward a lot of more practical sources of energy production, not just in the United States, but abroad. Specifically what I mean is solar, just because it's simple, it's passive, and— It works. You don't need a lot of permitting and you don't need clean air permits and the like. So all of these things have been able to keep a lid on it. If China somehow runs out of reserves and they need to go back into the spot market to buy an extra 3 million barrels a day, there's a very big risk that oil gets into the— well past the $100 and maybe between $150 and $200 a barrel. That has a lot of downstream problems with respect to CPI, not even because US energy supply, but really because the inputs that oil feeds all around the world that then get absorbed by the cost that people pay for everyday things. Could go up. So I think the PPI number should be an alarm that we use to off-ramp this around situation sooner rather than later. I just— unless, again, because we don't know what happened in China because none of us were there— unless there's an understanding that the president has with Xi about how much actual supply and slack is in the Chinese system And that may allow him to take a much longer road to get a conclusive and decisive win in Iran. But I, I don't know.”

“Like, honestly, like, what else is there to say? I've said it like 100 times. It's just idiotic. The, the core problem with wealth inequality in this country, the core problem with inflation in this country, the core problem, all of it roots back to excess government spending. End of story. All of this full stop. We're all talking about machinations at the edge of the network. The core of the network is overspending by the government because in order to get elected, you need someone to give you something more than you have today. That's how people get elected. And here we are 250 years later. I don't know if there's the will or the way to get out of it, but one of the manifestations of it will be in this late stage, higher rates. And as a response to inflation.”

“There is no spoon. Agent Smith and all the Agent Smiths are in charge. So here's some statistics for you. In-person voting the day of the election in Los Angeles County. For mayor: Spencer Pratt, 35%; Karen Bass, 29%; Nithya Raman, 26%. Mail-in ballots received before Election Day: 38% for Bass, 28% for Pratt, 20% for Raman. And then all these ballots that arrive after Election Day: 37% for Raman, 35% for Bass, 19% for Pratt. So Pratt's post-election mail-in ballots declined by one-third. So statistically, the population of people that send in their ballots late reduced for Pratt by a third, increased for Nithya Raman by 80%, and Karen Bass 10% less. If you just look at the mail-in ballots before and after Election Day as a comparison, I don't know if there's a socio-political way that you can assess those statistics. And assume that these are individuals casting their individual vote for who they think should be mayor of LA. And Nick, if you'll just pull up the map, which I think is worth taking a look at, basically the concentration of incremental votes that Nithya Raman got came around the Skid Row area in Los Angeles. And look, I'm not an election denier. I'm not someone who's historically believed the idea that elections are fraud and people have stolen votes. But when you look at the basic statistics of what happened in person mail-in before, mail-in after Election Day. It becomes a real statistical quagmire on how did this sort of a sociopolitical shift happen in such a way that it did. Now, there was a report published— Nick, if you could pull this up— by the U.S. House of Representatives Committee on House Administration. This was published in May of 2020, and they highlighted the 2018 California midterm elections and the challenges they saw arise in that midterm elections because of some of the legislative changes that were made First, California Assembly Bill 1921 legalized the practice of unlimited ballot harvesting in the state. This was passed around 2018, around the midterms. What that means is that any individual in the state of California has the right to go and collect ballots from any other individuals regardless of relationship, fill them out, and send them in. California, 2 years later, 18 months later, also passed a law that made it permanent that every person registered in the state of California would get a ballot. So tens of millions of ballots then get mailed out. Then there was another series of laws that were passed that said anyone can register to vote. You don't need to prove your citizenship. You can use a gym membership card as an example. So anyone can register to vote. There is no proof of ID when you get a ballot. There is no demonstration that the person who fills out the ballot has anything to do with the individual who's supposed to be voting that ballot., and it is legal for an individual to go out and collect hundreds or thousands of ballots, ship them in, and they will all qualify in these kind of mail-in ballot voting processes. So there is nothing illegal or fraudulent going on. In fact, the system is operating exactly as intended. It has been set up and structured in a way that with the right construct, you can get an individual appointed— not elected, but appointed— to a particular role in government under a quote free election in California. This is a foundational destruction of our rights to vote for people in a free democracy. I feel it's been eroded slowly over time to such an extent now, and I'm not some crazy MAGA motherfucker or whatever people want to classify me as for pointing this out, but you can go down this list. They are all written out in this document. Every one of these laws that were passed in California over time that in aggregate create the environment and the construction for elections to become appointments and no longer free democratic elections, where the principle— very importantly, the principle should be one individual, one vote. And if you opt to not vote, your vote should not be counted. So I think that there's no fraud. I don't think there's anything—”

“There is no spoon. Agent Smith and all the Agent Smiths are in charge. So here's some statistics for you. In-person voting the day of the election in Los Angeles County. For mayor: Spencer Pratt, 35%; Karen Bass, 29%; Nithya Raman, 26%. Mail-in ballots received before Election Day: 38% for Bass, 28% for Pratt, 20% for Raman. And then all these ballots that arrive after Election Day: 37% for Raman, 35% for Bass, 19% for Pratt. So Pratt's post-election mail-in ballots declined by one-third. So statistically, the population of people that send in their ballots late reduced for Pratt by a third, increased for Nithya Raman by 80%, and Karen Bass 10% less. If you just look at the mail-in ballots before and after Election Day as a comparison, I don't know if there's a socio-political way that you can assess those statistics. And assume that these are individuals casting their individual vote for who they think should be mayor of LA. And Nick, if you'll just pull up the map, which I think is worth taking a look at, basically the concentration of incremental votes that Nithya Raman got came around the Skid Row area in Los Angeles. And look, I'm not an election denier. I'm not someone who's historically believed the idea that elections are fraud and people have stolen votes. But when you look at the basic statistics of what happened in person mail-in before, mail-in after Election Day. It becomes a real statistical quagmire on how did this sort of a sociopolitical shift happen in such a way that it did. Now, there was a report published— Nick, if you could pull this up— by the U.S. House of Representatives Committee on House Administration. This was published in May of 2020, and they highlighted the 2018 California midterm elections and the challenges they saw arise in that midterm elections because of some of the legislative changes that were made First, California Assembly Bill 1921 legalized the practice of unlimited ballot harvesting in the state. This was passed around 2018, around the midterms. What that means is that any individual in the state of California has the right to go and collect ballots from any other individuals regardless of relationship, fill them out, and send them in. California, 2 years later, 18 months later, also passed a law that made it permanent that every person registered in the state of California would get a ballot. So tens of millions of ballots then get mailed out. Then there was another series of laws that were passed that said anyone can register to vote. You don't need to prove your citizenship. You can use a gym membership card as an example. So anyone can register to vote. There is no proof of ID when you get a ballot. There is no demonstration that the person who fills out the ballot has anything to do with the individual who's supposed to be voting that ballot., and it is legal for an individual to go out and collect hundreds or thousands of ballots, ship them in, and they will all qualify in these kind of mail-in ballot voting processes. So there is nothing illegal or fraudulent going on. In fact, the system is operating exactly as intended. It has been set up and structured in a way that with the right construct, you can get an individual appointed— not elected, but appointed— to a particular role in government under a quote free election in California. This is a foundational destruction of our rights to vote for people in a free democracy. I feel it's been eroded slowly over time to such an extent now, and I'm not some crazy MAGA motherfucker or whatever people want to classify me as for pointing this out, but you can go down this list. They are all written out in this document. Every one of these laws that were passed in California over time that in aggregate create the environment and the construction for elections to become appointments and no longer free democratic elections, where the principle— very importantly, the principle should be one individual, one vote. And if you opt to not vote, your vote should not be counted. So I think that there's no fraud. I don't think there's anything—”

“There is no spoon. Agent Smith and all the Agent Smiths are in charge. So here's some statistics for you. In-person voting the day of the election in Los Angeles County. For mayor: Spencer Pratt, 35%; Karen Bass, 29%; Nithya Raman, 26%. Mail-in ballots received before Election Day: 38% for Bass, 28% for Pratt, 20% for Raman. And then all these ballots that arrive after Election Day: 37% for Raman, 35% for Bass, 19% for Pratt. So Pratt's post-election mail-in ballots declined by one-third. So statistically, the population of people that send in their ballots late reduced for Pratt by a third, increased for Nithya Raman by 80%, and Karen Bass 10% less. If you just look at the mail-in ballots before and after Election Day as a comparison, I don't know if there's a socio-political way that you can assess those statistics. And assume that these are individuals casting their individual vote for who they think should be mayor of LA. And Nick, if you'll just pull up the map, which I think is worth taking a look at, basically the concentration of incremental votes that Nithya Raman got came around the Skid Row area in Los Angeles. And look, I'm not an election denier. I'm not someone who's historically believed the idea that elections are fraud and people have stolen votes. But when you look at the basic statistics of what happened in person mail-in before, mail-in after Election Day. It becomes a real statistical quagmire on how did this sort of a sociopolitical shift happen in such a way that it did. Now, there was a report published— Nick, if you could pull this up— by the U.S. House of Representatives Committee on House Administration. This was published in May of 2020, and they highlighted the 2018 California midterm elections and the challenges they saw arise in that midterm elections because of some of the legislative changes that were made First, California Assembly Bill 1921 legalized the practice of unlimited ballot harvesting in the state. This was passed around 2018, around the midterms. What that means is that any individual in the state of California has the right to go and collect ballots from any other individuals regardless of relationship, fill them out, and send them in. California, 2 years later, 18 months later, also passed a law that made it permanent that every person registered in the state of California would get a ballot. So tens of millions of ballots then get mailed out. Then there was another series of laws that were passed that said anyone can register to vote. You don't need to prove your citizenship. You can use a gym membership card as an example. So anyone can register to vote. There is no proof of ID when you get a ballot. There is no demonstration that the person who fills out the ballot has anything to do with the individual who's supposed to be voting that ballot., and it is legal for an individual to go out and collect hundreds or thousands of ballots, ship them in, and they will all qualify in these kind of mail-in ballot voting processes. So there is nothing illegal or fraudulent going on. In fact, the system is operating exactly as intended. It has been set up and structured in a way that with the right construct, you can get an individual appointed— not elected, but appointed— to a particular role in government under a quote free election in California. This is a foundational destruction of our rights to vote for people in a free democracy. I feel it's been eroded slowly over time to such an extent now, and I'm not some crazy MAGA motherfucker or whatever people want to classify me as for pointing this out, but you can go down this list. They are all written out in this document. Every one of these laws that were passed in California over time that in aggregate create the environment and the construction for elections to become appointments and no longer free democratic elections, where the principle— very importantly, the principle should be one individual, one vote. And if you opt to not vote, your vote should not be counted. So I think that there's no fraud. I don't think there's anything—”

“I'll explain it to you. I'll explain to you. And if I, if I misstate a fact, then let me know. So first of all, California sends out ballots to every registered voters. It's something like 23, 24 million people. Only 9.5 million people vote. So what happens to the other 14 million ballots? I have a friend who lives in LA. He manages apartment buildings. He says that the ballots just pile up, you know, at the mailboxes. Yes. That everybody has in the buildings. There's like loose ballots everywhere. Oh, they're sent to people who don't even live there anymore. He like recognizes that the names, they're people who haven't lived there in years. So the voter rolls are dirty. They haven't been cleaned up in years. Okay. Then you have the issue that there's no voter ID on Election Day. There's no voter ID to even get registered. When you sign your ballot, they run it through a machine. As long as the signature matches 40%, I don't even know what 40% means. It's like less than half accurate. The machine says it's fine, okay? And then it doesn't even check the signature of the voter if you have a supposed witness. So the voter can just put like a little X on their signature as long as the witness says and they sign. But there's no registration of witnesses. Anybody can be a witness. There's no database of witnesses. And so the witness just puts a squiggle. So what is to stop the so-called ballot harvester from going, filling out these ballots, putting a little X on the voter, putting a little squiggle on, on the, the witness, and then dumping these ballots. There's no chain of custody. So the risk would be they would be arrested and, and then Gavin, that's right. Yeah, well, what is their expectation getting caught? Gavin Newsom just signed a law making it virtually impossible to audit any of this stuff. So now, even if they thought maybe they could get caught, let's just take a look at all the other types of fraud happening in California right now that we know about. We know that there's billions of dollars in fraud in California for things like Medicaid fraud, unemployment fraud, EBT fraud, hospice fraud, fraud related to the homeless industrial complex, and on and on. That's all been proven. Okay. Is it really so hard to believe that some of the same groups the same interest groups, the same NGOs, would be willing to exploit these loopholes in the dirty voter rolls, in the millions of ballots that go to incorrect or nonexistent addresses, the nonexistent chain of custody, the nonexistent signature verification, the no ID not only to vote but to register, counting ballots without postmarks if received 7 days later, registering thousands of ballots from homeless shelters that don't even have any beds. These are all known things. So when you say that there's no fraud, it's like, come on, there's loopholes. And all you got to do is look at the results and see that there's something crooked going on here.”

“And Roman won by 43,000 votes to— guys, We live in a autocracy in California where one political machine has shaped the laws so inexorably that whether it's a mayor or it's a state legislator or it's a state senator or it's the governor, it's a one-way door. There is only one party that can win., and we are slowly seeing that that party increasingly does not have the ability to govern a state this dynamic and this complicated. They've changed the rules to make sure that that monopoly is enforced. We have all tacitly approved it by supporting or voting or not saying anything, and the end result has yet to be unveiled because it's going to take another couple of decades for all of this rot to really destroy these places. The reality is the voters probably should be given a chance to have Spencer Pratt push back on what is the machine so that at a minimum, what they learn is that the machine wasn't working nearly anywhere close to the way it is intended. Instead, what will happen is two people that are in various shapes and forms pretty deeply unqualified and very similar now essentially get to give you not much of a choice at all. So I think the, the sad thing is Freeberg is right and Sachs is right. Freeberg is right, the laws have been shaped this way to make legal what would otherwise be an illegality. And Sachs is right, which is that any rational person should look at these laws and say this is fraudulent. The unfortunate situation is, unless there's a— some cataclysmic decision in California, this is what we're stuck with. It is time to vote all of these people out.”

“But you are allowed to go out and get anyone to register. You're allowed to go out and collect all the ballots and the people that are doing it. As long as you're not getting paid per ballot, you're legally allowed to do it. Let me pause for one second. When you look at any one of these laws in isolation, you can understand that there is some altruistic intention, or there can be framed to be an altruistic intention behind it. Increase voter activity, give everyone the right to vote, give more people access, more channels to vote, etc., etc. And you can rationalize away how every one of these laws makes it easier and adds lubrication to the system. And now we've got a quote, more accessible democracy for everyone. But the truth is that there is a concept in insurance called adverse selection, which is if there is a moment to exploit something, the criminals will exploit it to the extent that it will become asymmetric. The criminals, or the, or the do-badders, not the do-gooders, will find a way to take advantage of a hole in a system, just like hackers do to break into a network. And that's what you believe, system. Let me tell you how Spencer Pratt did this set of mechanisms, this set of construction has allowed for a system that now has evolved into an appointment system.”