AI Doom vs Boom, EA Cult Returns, BBB Upside, US Steel and Golden Votes

0:00 All right, everybody. Welcome back to the AllIn podcast. The number one podcast in the world. You got what you wanted, folks. The original Quartet is here live from DC with a great shirt. Is that is your habitasher making that shirt or is that a Tom Ford? That white shirt is so crisp, so perfect. David Sachs, you're talking about me. You're Zar. You're Zary. I'll tell you exactly what it is. I'll tell you what it is. You can tell me if it's right. Brioni. Yes, of course it's Brioni. Briion spread car. Look at that. How many years have I spent being rich? When a man turns 50, the only thing he should wear is broni. The stitching is Looks very luxurious. That's how Chimath knew, right, Jimoth? How'd you figure it out? The stitching? It's just how it lays with the collar. To be honest with you, it's the button catch. The Brion has a

0:46 very specific style of button catches. If you don't know what that means, it's because you're [ __ ] ignorant, malcontent yourself. I'm looking it up right now. Right. Yeah. I just asked you to continue. We'll let your winners ride. [Music] We open source it to the fans and they've just gone crazy with it. All right, everybody. The All-In Summit is going into its fourth year September 7th through 9th and the goal is of course to have the world's most important conversations. Go to allin.com yada yada yada to join us at the summit. All right. It's a lot in the docket, but there's kind of a very unique thing going on in the world. David, everybody knows about AI doomerism. Basically,

1:33 people who are concerned uh rightfully so that AI could have some, you know, significant impacts on the world. Dario Amod said he could see employment spike to 10 to 20% in the next couple years. They're 4% now as we've always talked about here. He told Axio that AI companies and government needs to stop sugar coating what's coming. He expects a mass elimination of jobs across tech, finance, legal, and consulting. Okay, that's a debate we've had here. And entrylevel workers will be hit the hardest. He wants law makers to take action and more CEOs to speak out. Poly market thinks regulatory capture via this AI safety bill is very unlikely. US enacts AI safety bill in 2025 currently stands at a 13% chance. But uh Sax, you wanted to discuss this because it seems like there is more at work than just a

2:20 couple of technologists with I think we'd all agree there are legitimate concerns about job destruction or job and employment displacement that could occur with AI. We all agree on that where we're seeing robo taxis start to hit the streets and I don't think anybody believes that being a cab driver is going to exist as a job 10 years from now. So there seems to be something here about AI dumerism but it's being taken to a different level by a group of people maybe uh with a different agenda. Yeah. Well, first of all, let's just acknowledge that there are concerns and risks associated with AI. It is a profound and transformative technology and there are legitimate concerns about where it might lead. I mean the future is unknown and that can be kind of

3:06 scary. Now, that being said, I think that when somebody makes a pronouncement that says something like 50% of white collar jobs are going to be lost within 2 years, that's a level of specificity that I think is just unknowable and is more associated with an attempt to grab headlines. And to be frank, if you go back and look at Anthropic's announcement or Daario's announcement, there is a pattern of trying to grab headlines by making the most sensationalist version of what could be a legitimate concern. If you go back three years ago, they created this concern that AI models could be used to create bioweapons. And they showed what was supposedly a

3:52 sample I think of claw generating an output that can be used by a bioteterrorist or something like that. And on the basis of that it actually got a lot of play and in the UK Rishiun got very interested in this cause and that led to the first AI safety summit at Bletchley Park. So that sort of concern really drove some of the initial AI safety concerns. But it turns out that that particular output was discredited. It wasn't true. I'm not saying that AI couldn't be used or misused to maybe create a boweapon one day, but it was not an imminent threat in the way that it was portrayed. There have been other examples of this. You know, obviously people are concerned about could the AI develop into a super intelligence that grows beyond our control. Could it lead

4:39 to widespread job loss? I mean, these are legitimate things to worry about, but I think these concerns are being hyped up to a level that there's simply no evidence for. And the question is why? And I think that there is an agenda here that people should be concerned about. So, let's start with maybe Freeberg things that we all agree on here. There are millions of people who drive trucks and Ubers and lifts and door dashes. You would, I think, agree the majority of that work in but 5 to 10 years, just to put a number on it, will be done by self-driving, robots, cars, etc., trucks. Yeah, Dave, I think it's that might be the wrong way to look at it or

5:26 I wouldn't look at it that way. And maybe I'll just give frame it a different way, please. If I'm deploying capital, let's say I'm a CEO of a company and I can now have software that's written by AI. Does that mean that I'm going to fire 80% of my software engineers? Basically, it means one software engineer can output, call it 20, 50 times as much software as they previously could by using that software generation tool. So the return on the invested capital, the money I'm spending to pay the salary of that software engineer is now much much higher. I'm getting much more out of that person because of the unlocking of the productivity because of the AI

6:12 tool than I previously could. So when you have a higher ROI on deployed capital, do you deploy more capital or less capital? Suddenly you have this opportunity to make 20 times on your money versus two times on your money. If you have a chance to make 20 times on your money, you're going to deploy a lot more capital. And this is the story of technology going back to the first invention of the first technology of the caveman. When we have this ability to create leverage, humans have a tendency to do more and invest more, not less. And I think that's what's about to happen. I think we see this across the spectrum. People assumed, "Oh my gosh, software can now be written with one person. You can create a whole startup. You don't need to have venture capital

6:58 anymore. In fact, what I think we're going to see is much more venture capital flowing into new tech startups. Much more capital being deployed because the return on the invested capital is so so so much higher because of AI." So generally speaking, I think that the the premise that AI destroys jobs is wrong because it doesn't take into account the significantly higher return on invested capital, which means more capital is going to be deployed, which means actually far more jobs are going to be created, far more work is going to get done. And so I think that the counterbalancing effect is really hard to see without taking that zoomed out perspective. To to to respond to Sax's point, I do think anytime you see a major change socially, society, there's a vacuum. How's the system going to operate in the future? And anytime there's a vacuum in the system, a bunch of people will rush in and say, I know

7:45 how to fill that vacuum. I know what to do because I am smarter, more educated, more experienced, more knowledgeable, more moral. I have some superiority over everyone else. And therefore, I should be in a position to define how the new system should operate. And so, there's a natural kind of power vacuum that emerges anytime there's a major transition like this. and there will be a scrambling and a fighting and a whole bunch of different representation. Typically fear is a great way of getting into power and people are going to try and create new control systems because of the transition that's underway. Okay. You're going to see this around the world. Yeah. I mean, uh, so Chimath, it's pretty clear, you know, Freeberg didn't answer this question specifically, so I'm going to give it to you again. You would agree jobs like driving things are going to go away. If

8:30 we had to pick a number somewhere between 5 and 10 years, the majority of those would go away. he's positioning, hey, a lot more jobs will be created because there'll be all these extra venture capital and opportunities, etc. But job displacement will be very real and we're seeing, I think, job displacement. Now, you had a tweet recently, you know, you were talking about entry level jobs and how that seems to be going away in the white collar space. So, where do you land on job displacement? Freeberg's already kind of given the big picture here, but let's step back to for people who are listening who have relatives who drive Uber or a truck or are graduating from college and want to go work at a, you know, I don't know, the Magnificent 7 or in tech and they're not hiring and and we know the reason they're not hiring because they're leaning into AI. So,

9:17 let's talk about the job displacement in the medium term. I'm going to ignore your question and I'm going to Why should you be any different than the other? So I now content on this podcast. There's two people not wanting to answer the question about job displacement. Interesting trend. No, no. We'll go back to that. Let me start by just saying that it seems that these safety warnings tend to be pretty coincidental with key fundraising moments in anthropic journey. So let's just start with that. And if you put that into an LLM and try to figure out if what I just said was true, it's interesting, but you find it's relatively accurate. I think that there is a very smart business strategy here. And I've said a version of this about the other companies at the foundational model layer that aren't

10:04 Meta and Google because Meta and Google frankly sit on these money gushers where they just generate so much capital that they can fund these things to infinity. But if you're not them, so if you're OpenAI or if you're anthropic, you have to find an angle. And I think the angles are slightly different for both. But I think what this suggests is that there's a pattern that exists and I think that that explains some of the framing of what we see in the press, Jason, and why we get these exaggerated claims. Perfect. So there are people who are doing this for nefarious reasons is I I guess where you're sort of getting at here. It's a way to market. It's smart. It's smart. If you fall, it's up to you. Yeah. Okay.

10:50 Well, there's also an industrial complex according to some folks that are backing this. If you've heard of effective altruism, that was like this uh movement of a bunch of I don't know, I guess they consider themselves intellectual sachs and they uh were kind of backing a large swath of organizations that I guess we would call in the industry astroturfing or what do they call it when you make so many of these organizations that they're not real in politics and flooding the zone perhaps. So if you were to look at this article here, Nick, I think you have the AI existential risk um industrial complex graphic there. It seems like a

11:36 group of people according to this article have backed to the tune of 1.6 billion, a large number of organizations to scare the be Jesus out of everybody and make YouTube videos, Tik Toks, and they've they've made a map of it. There's some key takeaways here from that article where it says here that it's an inflated ecosystem. There's a great deal of redundancy. Same names, acronyms, logos with only minor changes. Same extreme talking points. Same group of people just with different titles. Same funding source. There's a funding source called Open Philanthropy which was funded by Dustin Moskovitz who is one of the Facebook billionaires. Jim, you worked with him, right? I mean he was wasn't he like Zuck's roommate at Harvard or something and one of the first engineers made a lot of money so

12:21 he funded this he he's he's an EA and he funded this group called Open Philanthropy which then has become the feeder for essentially all these other organizations which are almost different fronts to basically the same underlying EA ideology and what's interesting is that the guy who set this up for Dustin Holden Karnovski who is a major effective altruist and was doing out all the money. He's married to Daario's sister and she she's I guess associated with EA and she was one of the co-founders of Anthropic. So these are not coincidences. I mean the reality is there's a very specific ideological and political agenda here. Now what is that agenda? It's basically global AI governance if you will. They want AI to

13:07 be highly regulated but not just at the level of the nation state but let's say internationally supernationally to well if you just do a quick search on global compute governance it'll tell you what the key aspects are so number one they want regulation of computational resources this includes access to GPUs they want AI safety and security regulation they want international you call from globalist agreements and they want ethical and societal considerations or policy built into this. Now, what does that sound like? That sounds a lot to me like what the Biden administration was pursuing. Specifically, we had that Biden executive order on AI, which was 100 pages of Bernson regulation that was

13:54 designed to promote AI safety, but had all these DEI requirements. So, you know, it led to woke AI. You remember when Google launched Black George Washington and so forth, they had the Biden diffusion rule which created this global licensing framework to sell GPUs all over the world. So extreme restrictions on proliferation of servers of computing power. They created what's called the AI safety institute and they again fostered these international AI summits. So if you actually look at what the Biden administration was tangibly doing in terms of policy and you look at what EA's agenda is with respect to global compute governance, they were pushing hard on these fronts. And now if

14:40 you look at the level of personnel, there were very very powerful Biden staffers who now all work in anthropic. So probably the most powerful Biden staffer on AI over the past four years was a lawyer named Tun Chabra and he now works at Anthropic for Daario. Elizabeth Kelly who was the founding director of the AI safety institute in the government now works at Anthropic. Like I mentioned Daario's sister is married to Holden Karnnowski who dos out all the money to these EA organizations. So if you were to do something like create a network map, you would see very quickly that there's three key nodes here. There's the effective altruist movement of which Sam Bankman Freed's the most notable member

15:26 but which I think Dustin Mos is now the main funer. There's the Biden administration and like the key staffers and then you've got anthropic and it's a very tightly wound network. Now why does this matter? Let's get Yeah. Also the goals I think is Yes. Well, the the goal, like I said, is is global compute governance. It's basically establishing national and then international regulations of AI. Now, but they would claim, let's just pause here for a minute. They would claim the reason they're doing it. And so, we we'll we'll save if we believe this or not, but they are concerned about job destruction in the short term. They're also concerned as science fiction as it is that the AI when we get to like a sort of generalized super intelligence is going

16:12 to kill humanity. That this is a nonzero chance. Elon has said this before. They've sort of taken it to a almost like a certainty. Yes, we're going to have so many of these general intelligences. But they only believe that when they're raising money. Well, that's what I'm sort of getting at. Like, so I think they believe it all the time, but maybe maybe the press releases are time for for the fun building. But let me let me answer that. Right. Yeah. Yeah. Look, I mean, it is a great product. Claude kicks ass. I'm more interested in the political dimension of this. I'm not bashing a specific product or company. But look, I think that there is some nonzero risk of AI growing into a super intelligence that's beyond our control. They have a name for that. They call it X risk or existential risk. I think it's very hard to put a percentage on that. I'm willing to acknowledge that

16:59 is a risk. You know, I think about that all the time and I do think we should be concerned about it. But there's two problems I think with this approach. Number one is X-Risk is not the only kind of risk. I would say that China winning the AI race is a huge risk. I don't really want to see a CCP AI running the world. And if you hobble our own innovation, our own AI efforts in the name of stomping out every possibility of X-risk, then you probably end up losing the AI race to China because they're not going to abide by those same regulations. So again, you can't optimize for solving only one risk while ignoring all the others. And I would say the risk of China winning the AI race is, you know, it might be like 30%. Whereas I think X risk is probably a much lower percentage. So there are

17:47 there are other risks to to worry about. And I I do think that they are single-mindedly focused on scaring people with some of these headlines around first it was the bioweapons then it was the super intelligence now it's the job loss and I think it's a tried andrue tactic of people who want to give more power to the government to scare the population right because if you can scare the population and make them fearful then they will cry out for the government to solve the problem and that's what I see here is that you've got this elaborate network of front organizations which are all motivated by this EA ideology. They're funded by a hardcore leftist. And by the way, I became aware of Dustin's politics because of the Chase Bodin recall. I

18:33 found out that he was a big funer of Chase Bodin. Remember this? Yeah. Dustin Mossmus and Carrie Tuna, his wife. Also, Reed Hastings just joined the board of of Anthropic. remember when he back in 2016 to tried to drive Peter Teal off of the board of Facebook for supporting Trump. So, you know, these are like committed leftists. They're Trump haters. But the point is that these are people who fundamentally believe in empowering government to the maximum more government and empowering government to the maximum extent. Now my problem with that is I actually think that probably the single greatest dystopian risk associated with AI is the risk that government uses it to control

19:18 all of us. To me like you end up in some sort of Orwellian future where AI is controlled by the government and out of all the risks we've talked about that's the only one for which I've seen tangible evidence. So in other words, if you go back to last year when we had the whole woke AI, there was plenty of evidence that the people who were creating these products were infusing their left-wing or woke values into the product to the point where it was lying to all of us and it was rewriting history. And there was plenty of evidence that the Biden EO was trying to enshrine that idea. Was basically trying to require DEI be infused into AI models. and it wanted to anoint two or three winners in this AI race. So, I'm

20:04 quite convinced that prior to Donald Trump winning the election, we were on a path of global compute governance where two or three big AI companies are going to be anointed as the winners. And the quid proquo is that they were going to infuse those AI models with woke values. And there was plenty of evidence for that. You look at the policies, you look at the models. This was not a theoretical concern. This was real. And I think the only reason why we've moved off of that trajectory is because of Trump's election. But we could very easily be moved back onto that trajectory. If you were to look at all three opinions here and and put them together, they could all be true at the same time. You've got a a number of people, some might call useful idiots, some might call just, you know, people with god complexes who believe they know how the world should operate. Effective altruism kind of falls into that. Oh, we can make a formula that that's their

20:51 kind of idea where we can tell you where to put your money, rich people, in order to create the most good and you know, we're these enlightened individuals with the best view of the world. They might be, who knows, maybe they're the smartest kids in the room, but they're kind of delusional. The second piece I'll do here is I think you're absolutely correct, Chimat, that there are people who have economic interests who are then using those useful idiots andor delusional people with god complexes to serve their need, which is to be one of the three winners. And then sack Inherent to all of that is they have a political ideology. So why not use these people with delusions of grandeur in order to secure the bag for their companies for their investments and secure their candidates into office so that they can block further people from

21:36 getting H100s cuz they literally want to. By the way, that's the part that's very smart about what they're doing because you know it's not like they're illquid. They're full of liquidity in the sense that you're bringing in people that are very technically capable and you're setting up these funding rounds where a large portion goes right back out the door via secondaries and so there's all these people that are making money having this worldview and so to your point Jason it's going to cement that worldview and then they are going to propagate it even more aggressively into the world. So I think the threshold question is should you fear government overregulation or should you fear autocomplete and I would say you should not be so afraid of the autocomplete right now it may get so good that it's an AGI but right now it's an

22:23 exceptionally good autocomplete. Yeah. And I just think that again it's a tried and trueue tactic of people who want to give immeasurably more power to the government to try and make people afraid and they stampede people into these policies. Right. And it gives them power. Exactly. Now, why do I think this is important to talk about? On last week's show, I talked about the trip to the Middle East and how we started doing these AI acceleration partnerships with the Gulf States who have a lot of resources, a lot of money, and they're intensely interested in AI. and the Biden administration was pushing them away. It basically said, "You can't have the chips. You can't build data centers." And it was pushing them into the arms of China. The thing that I thought was so bizarre is that the various groups and organizations and former Biden staffers who wrote this policy have been agitating in Washington

23:09 and they've been trying to portray themselves as China hawks. And I'm like, wait, this doesn't make any sense because this policy again, there's there's basically two camps in this new cold war. It's US versus China. you can pull the Gulf States into our orbit or you can drive them into China's orbit. So, this to me just didn't make any sense. And what's happened is that frankly, you've got this EA ideology that's really motivating things, which is a desire to lock down compute, right? They're afraid of proliferation. They're afraid of diffusion. That's really their motivation. and they're trying to rebrand themselves as China hawks because they know that in the Trump administration that idea is just not going to get much purchase. Right. And your position as ZAR is a level playing field. People compete and the good guys,

23:58 you know, the West should be supported to hit artificial general intelligence as fast as possible. So the bad guys, China, don't get it first. That that's a well open competition. I don't know if I would frame it around AGI specifically, but what I would say is that look, I think our policy should be to win the AI race because the alternative is that China wins it. And that would be very bad for our economy and our military. How do you win the AI race? You got to out innovate. You got to have innovation. That means we can't have overregulation and red tape. We got to build out the most AI infrastructure, data centers, energy, which includes our partners. And then third, I think it means AI diplomacy because we want to build out the biggest ecosystem. We know that biggest app store wins, biggest ecosystem wins, right? And the policies under the Biden administration were

24:43 doing the opposite of all those things. But again, you have to go back to what was driving that. And it was not driven by this China hawk mentality. That is now a convenient rebranding. It was driven by this EA ideology, this doomerism. And so this is why I'm talking about it is I want to expose it because I think a lot of people on the Republican side don't realize where the ideology is really coming from and who's funding it. They're obviously Trump haters and they need to be lumored quite frankly when we look at they do they need to be lumored. I mean, you know, Freberg, I want I want to come back around again cuz I respect your opinion on, you know, how close we are to turning certain corners, especially in science. So, I

25:29 understand big picture you believe that the opportunity will be there. Hey, we got people out of fields, you know, in the agricultural revolution, we put them into factories, industrial revolution, then we went to this information revolution. So, your position is we will have a similar transition and it'll be okay. But do you not believe that the speed because we've talked about this privately and and publicly on the pod that this speed the velocity at which these changes are occurring you would agree are faster than the industrial revolution much faster than the information revolution. So let's one more time talk about job displacement and I think the real concern here for a group of people who are buying into this ideology is specifically unions job displacement. This is something the EU cares about. This is something the Biden

26:16 administration cares about. If truck drivers lose their jobs, just like we went to bat previously for coal miners, and there were only 75,000 or 150,000 in the country at the time, but it became the national dialogue. Oh my god, the the the coal miners. How fast is this going to happen? One more time on drivers specifically. Okay, coders, you think there'll be more code to write, but driving, there's not going to be more driving to be done. So is this time different in terms of the velocity of the change and the job displacement in your mind? Freedber the velocity is greater but the benefit will be faster. So the benefit of the industrial revolution which ultimately drove lower price products and broader availability of products through manufacturing was one of the key outputs of that

27:01 revolution. Meaning that we created a consumer market that largely didn't exist prior. Remember prior to the industrial revolution, if you wanted to buy a table or some clothes, they were handmade. They were kind of artisal. Suddenly, the industrial revolution unlocked the ability to massproduce things in factories. And that dropped the cost and the availability and the abundance of things that everyone wanted to have access to, but they otherwise wouldn't have been able to afford. So suddenly everyone could go and buy blankets and clothes and canned food and all of these incredible things that started to come out of this industrial revolution that happened at the time. And I think that folks are underestimating and underrealizing the benefits at this stage of what's going to come out of the AI revolution and how it's ultimately going to benefit people's um availability of products,

27:48 cost of goods, access to things. So the counterbalancing force Jcal is deflationary which is um let's assume that the cost of everything comes down by half. That's a huge relief on people's need to work 60 hours a week. Suddenly you only need to work 30 hours a week and you can have the same lifestyle or perhaps even a better lifestyle than you have today. So the counterargument to your point, and I'll talk about the pace of change in specific jobs in a moment, but the counterargument to your point is that there's going to be this cost reduction and abundance that doesn't exist today. Give an example. Let's give like some examples that we could see automation and food prep. So we're seeing a lot of restaurants install robotic systems to

28:34 make food and people are like, "Oh, job loss, job loss." But let me just give you the counter side. The counter side is that the cost of your food drops in half. So suddenly, you know, all the labor cost that's built into making the stuff you want to pick up, everyone's freaking out right now about inflation. Oh my god, it's $8 for a cup of coffee. It's $8 for a latte. This is crazy, crazy, crazy. What if that dropped down to two bucks? You're going to be like, man, this is pretty awesome with good service and good experience. And don't make it all dystopian, but suddenly there's going to be this like incredible reduction or deflationary effect in the cost of food. And we're already starting to see automation play it way in the food system to bring inflation down. And that's going to be very powerful for people. Shout out to uh ita cloud cushions and cafe X. We all took swings at the bat at that exact concept is that it could be done better, cheaper, faster. One of the amazing things of these vision action models that are now

29:21 being employed is you can rapidly learn using vision systems and then deploy automation systems in those sorts of environments where you have a lot of kind of repetitive tasks that the system can be trained and installed in a matter of weeks. And historically that would have been a whole startup that it would have taken years to figure out how to get all these things together and custom program it, custom code it. So the flip side is like when Uber hit those people were not drivers. Think about the jobs that all those people had prior to Uber coming to market. And then the reason they drove for Uber is they could make more money driving for Uber or now driving or Door Dash and the flexibility. So their lifestyle got better. They had all of this more control in their life. Their incomes went up. And so there's a series of things that you are correct won't make sense in the future from a kind of

30:07 standard of work perspective. But the right way to think about it is opportunity gets created. New jobs emerge, new industry, new income, costs go down. And so I keep harping on this that it's really hard today to be very prescriptive to Sax's point about what exactly is around the corner. But it is an almost certainty that what is around the corner is more capital will be deployed. That means the economy grows. That means there's a faster deployment of growth of new jobs, new opportunities for people to make more money, to be happier in the work that they do. And the flip side being things are going to get cheaper. So, I mean, I know we're waxing philosophical here, but I think it's really key because you can focus on the one side of the coin and miss the whole other. And that's what a lot of journalist commentators and fearongerers do is they miss that other side. Got it.

30:53 Well said, Freeberg. Well said. I think I've heard Satcha turn this question around about job loss saying well do you believe that GDP is going to grow by 10% a year because what are we talking about here I in order to have the kind of disruption that you're talking about where I don't know 10 to 20% of knowledge workers end up losing their jobs AI is going to have to be such a profound force that it's going to have to create GDP growth like we've never seen before. That's right. So, it's easier for people to say, "Oh, well, 20% of people are going to lose their jobs." But wait, are we we're talking about a world in where the economy is growing 10% every year. Like, do do you actually believe that's more income? That's more income for everyone. That's new jobs being created. It's an inevitability. We've seen this in every revolution. You know, prior to the industrial revolution, 60% of Americans worked in

31:39 agriculture. And when the tractor came around and factories came around, those folks got to get out of doing manual labor in the fields where they were literally, you know, tilling the fields by hand. and they got to go work in a factory where they didn't have to do manual labor to move things. Yeah, they did things in the factory with their hands, but it wasn't about grunt work in the field all day in the sun. And it became a better standard of living. It became new jobs. And today, it became a 5day work week. It went from a 7day 7day work week to five, 100 hours a week to 45, 50 hours a week. And now I think the next phase is we're going to end up in less than 30 hours a week with people making more money and having more abundance for every dollar that they earn with respect to what they can purchase and the lives they can live. That means more time with your family, more time with your friends, more time

32:24 to explore interesting opportunities. So, you know, we've been through this conversation a number of times. I I know I'm not No, it's important to bring it up, I think, and and really unpack it because the fear is peing now, Sachs. People are using this moment in time to scare people that hey the jobs are going to go away and they won't come back. But what we're seeing on the ground saxs is I'm seeing many more startups getting created and able to accomplish more tasks and hit a higher revenue per employee than they did in the last two cycles. So it used to be you know you try to get to a quarter million in revenue per employee than 500. Now we're regularly seeing startups hit a million dollars in revenue per employee, something that was rarified air previously, which then speaks to your point, Freeberg, that there'll be more abundance. There'll be more capital generated, more more capital deployed,

33:10 with more capital deployed for more opportunities, but you're going to need to be more resilient. I think yeah, I think it's actually very hard to completely eliminate a human job. the the ones that you cited and JK you keep citing the same ones because I actually don't think there's that many that fit in this category the drivers and maybe level one customer support because those jobs are so monolithic but when you think about even like what a salesperson does right it's like yes they spend a lot of time with prospects but they also spend time negotiating contracts and they spend time doing postale implementation and follow-up and they spend time learning the product and giving feedback I mean it's a multifaceted job and you can use AI I to automate pieces of it, but to eliminate the whole job is actually very hard. And

33:56 so I just think this idea that boom, 20% of the workforce is going to be unemployed in two years. I just don't think that it's going to work that way. But look, if there is widespread job disruption, then obviously the government's going to have to react and we're going to be in a very different societal order. But my point is, you want the government to start reacting now before this actually happens. We don't need to be precogs and predict it. Yeah. It's a total power grab. It's a total power grab to give the government and these organizations more power before the risk is even manifested. And let me say this as well with respect to all these regulations that were created, the 100page by NEO and the 200page diffusion rule, none of these regulations solve the excess problem. None of these things actually would prevent the most existential risk that

34:41 we're talking about. They don't solve for alignment. They don't sign for the kill switch. None of that. Yeah. If someone actually figures out how to solve that problem, I'm all ears. You know, look, I'm not cavalier about these risks. I understand that they exist, but I'm not in favor of the fear-mongering. I'm not in favor of giving all this power to the government before you even know how to solve these problems. Shimath, you did a tweet about entry-level jobs being toast. So, I think there is a nuance here. Uh, and both parties could be correct. I think the job destruction is happening as we speak. I'll just give what one example and then drop to you, Chimath. One job in startups that's not driving a car or you know super entry level was people would hire consultants to do recruitment and to write job descriptions. Now I was at a journal last night talking to a bunch of founders here in Singapore and

35:27 I said how many people have used AI to write a job description? Everybody's hand went up. I said how many of you with that job description was that job description better than you could have written or any consultant? And they they all said yes 100% AI is better at that job. That was a job a highlevel HR recruitment job or an aspect of it sack. So that was half the job, a third of the job. To your point, the chores are being automated. So I do think we're going to see entrylevel jobs. Shimoth, the ones that get people into an organization, maybe they're going away. And that was that your point of your tweet, which we'll pull up right here. If a GPT is a glorified autocomplete, how did we used to do glorified autocomplete in the past? It was with new grads. New grads were our

36:12 autocomplete. And to your point, the models are good enough that it effectively allows a person to rise in their career without the need of new grad grist for the mill, so to speak. So, I think the reason why companies aren't hiring nearly as many new grads is that the the folks that are already in a company can do more work with these tools. And and I think that that's a very good thing. So you're generally going to see OPEX as a percentage of revenue shrink naturally and you're going to generally see revenue per employee go up naturally but it's going to create a tough job market for new grads in the established organizations. And so what should new grads do? They

36:58 should probably steep themselves in the tools and go to younger companies or start a company. I think that's the only solution for them. Bingo. The most important thing for whether there are jobs available for new grads or not is whether the economy is booming. So obviously in the wake of a financial crisis, the jobs dry up because everyone's cost cutting and those jobs are the first ones to get cut. But if the economy is booming, then there's going to be a lot more job creation. And so again, if AI is this driver and enabler of tremendous productivity, that's going to be good for economic growth. And I think that that will lead to more company formation, more company expansion at the same time that you're getting more productivity. Now, to give an example, one of the things I see a lot discussed

37:43 online about these coding assistants is that they make junior programmers much better because, you know, if you're already like a 10x programmer, very experienced, you already knew how to do everything. And you could argue that the people who benefit the most are the entry-level coders who are willing to now embrace the new technology and it makes them much more productive. So in other words, it's a huge leveler and it takes an entry-level coder and makes them 5x or 10x better. So look, this is an argument I see online. The point is just I don't think we know how this cuts yet. I agree. And I just think there's like this this dumerism is premature and it's not a coincidence that it's being funded and motivated by this hardcore

38:29 ideological element. I'll tell you my hiring experience. We have about 30 people at 8090 and the way that I have found it to work the best is you have senior people act as mentors and then you have an overwhelming corpus of young very talented people who are AI native. And if you don't find that mix, what you have instead are L7s from Google and Amazon and Meta who come to you with extremely high salary demands and stock demands and they just don't thrive. And part of why they don't thrive is that they push back on the tools and how you use them. They push back on all these things that the tools help you get to it faster. M this is why I think it's so important for the young folks to just jump in with two feet and be AI native

39:14 from the jump because you're much more hirable frankly to the to the emergent company and the bigger companies you'll have a lot of these folks that see the writing on the wall may not want to adapt as fast as otherwise. Another way for example that you can measure this is if you look inside your company on the productivity lift of some of these coding assistants for people as a distribution of age. What you'll see is the younger people leverage it way more and have way more productivity than older folks. And I'm not saying that as an aegis comment. I'm saying that it's an actual reflection of how people are reacting to these tools. What you're describing is a paradigm shift. It is a big leap. Is you know it's like when I went to college, when I took computer science, it was object-oriented programming. It was like C++. It was

40:00 compiled languages. It was gnarly. It was nasty work. And then you had these highle abstracted languages. And I used to remember at Facebook, I would just get so annoyed because I was like, why is everybody using PHP and Python? This is like not even real. But I was one of these old lights who didn't understand that I just had to take the leap. And what it did was it grew the top of the funnel of the number of developers by 10x. And as a result, what you had were all of these advancements for the internet. And I think what's happening right now is akin to the same thing where you're going to grow the number of developers upstream by 10x. But in order to embrace that, you just have to jump in with two feet. And if you're very rigid in how you think the job should be done technically, I think you're just going to get left behind. Just a little interesting statistic there. Microsoft

40:46 announced 6,000 job layoffs, about 3% of their workforce, while putting up record profits while being in incredible cash position. Total confirmation bias. It's like now every time there's a layoff announcement, people try to tie it to AI to feed this doomer story. I don't think that's an AI story. I well I actually think it I don't think it's an AI story. I think it is because the people they're eliminating are management and I think the the management layer becomes less you're saying it was it was entry level employees. Now you're saying it's management. This is total confirmation. I think those are no no I think those are two areas that specifically get eliminated. Entry level it's too hard. It it's too hard to give them the grunt work. And then for the managers who are old and I've been there for 20 years. Hold on. Let me finish. Th for those people I think they are unnecessary in this new AI management. What are you

41:33 talking about? What what is the AI agent that's doing management right now in companies? Oh theory doesn't even make sense. Oh no it it totally does. There are tools now that are telling you this is these are the most productive people in the organization. Shath just outlined who's shipping the most etc. who's using the tools. And then people are saying, well, why do we have all these highly priced people who are not actually shipping code who are LSAs? You're totally falling for some sort of narrative here. This makes no sense. I don't think I am. Yeah, let me be very clear what I'm saying. What I am saying is AI natives are extremely productive. They use these tools. They're very fil with them. I think it's very reductive, but what you see is the older or more established in your career you are in technical roles, what I see is that it's

42:19 harder and harder for folks like that to embrace these tools in the same way. Now, how does it play out in terms of jobs? I think that just these tools are good enough where the net new incremental taskoriented role that would typically go to a new grad, a lot of that can be defayed by these models. That's what I'm saying very clear specifically and I don't think that speaks to management. I agree with Sax. It doesn't do Sergey said Freeberg when he came to uh our F1 that management would be the first thing to go. I was talking to some entrepreneurs last night again here in Singapore and they are taking all the GitHub and and Jira cards and and things that have been submitted plus all the Slack messages in their organization and they're putting them into an LLM and having it write management reports of who is the most

43:06 productive in the organization. And in the new version of Windows, it's monitoring your entire desktop. Freeberg management is going to know who in the organization is actually doing work, what work they're doing, and what the uh result of that work is through AI. That is the future of management. And you take out all bias, all you know, loyalty, and the AI is going to do that. Couldn't disagree with you more saxs on that, but Freeberg, you wanted to wrap somewhere on this point. My point is that AI managers are not losing their job because AI is replacing them. I didn't say that AI wouldn't be a valuable tool for managers to use. Sure, AI would be a great tool for managers, but we're not anywhere near the point where managerial jobs are being eliminated because they're getting replaced by AI agents. We're still at

43:52 the chatbot stage of this. Literally, Sergey said he took their internal Slack, went into like a dev conversation, and said, "Who are the underrated people in this organization who deserve a raise?" and it gave him the right answer. So, wait, that doesn't allow you to cut 6,000 people. I think it's happening as we speak. It's just not over. You You fell for this narrative. You grasped onto this Microsoft restructuring where they eliminated 6,000 roles and you're trying to attribute that to AI now. I think it has to do with AI. I think management is looking at it saying, "We are going to replace these positions with AI. We might as well get rid of them now." It is in flux. We'll see who's right in the coming months. Can I make another comment, Freick? wrap this up here so we can get on to the next topic. This is a great topic. This is I want to make one last point which I think and Sax you may not appreciate this so we can have a a

44:39 healthy argument about this. I think in the same way that all of this jobs are going to get lost to AI fear-mongering. There's a similar narrative that I think is a false narrative around there's a race in AI that's underway between nation states. And the reason I think it's false is if I asked you guys the question, who won the industrial revolution? The industrial revolution benefited everyone around the world. There are factories and there's a continuous effort and continuous improvements in manufacturing processes worldwide. That is a continuation of that revolution. Similar if I asked who won the internet race, there were businesses built out of the US, businesses built out of China, businesses built out of India and Europe that have all created value for shareholders, created value for consumers, changed the world, etc. And I

45:25 think the same is going to happen in AI. I don't think that there's a finish line in AI. I think AI is a new paradigm of work, a new paradigm of productivity, a new paradigm of business, of the economy, of livelihoods, of pretty much everything uh every interaction humans have with ourselves and the world around us will have in its substrate AI and as a result, I think it's going to be this continuous process of improvement. So, I'm not sure. Look, there there are different models and you can look at the performance metrics of models, but you can get yourself spun up into a tizzy over which model is ahead of the others. Which one's going to quote get to the finish line first? But I think at the end of the day, the abundance and the economic prosperity that will arise from the continuous performance improvements that come out of AI and AI development will benefit all nation states and

46:11 actually could lead to a little bit more of a less resource constrained world where we're all fighting over limited resources and there's nation state definitions around who has access to what and perhaps more abundance which means more peace and uh less of this kind of resourced world. your thought on the kumbaya theory exposed by Freeberg. Yeah, exactly. Um I I'll partially agree in the sense that I don't think the AI race is a finite game. It's an infinite game. I I agree that there's no finish line, but that doesn't mean there's not a race going on. So for example, an arms race would be a classic example of a competition between countries to see who is stronger to basically amass power and they might be neutralizing each other.

46:57 The balance of power may stay in equilibrium even though both sides feel the need to constantly uplevel their arms, their power. Yeah. And so I think that to use the the term that Mir Shimemer used at the all-in summit, we are in an iron cage. The US and China are the two leading countries in the world economically, militarily, technologically. They both care about their survival. The best way to ensure your survival in a self-help world is by being the most powerful. And so these are great powers who care a lot about the balance of power. And they will compete vigorously with each other to maintain the greatest balance of power between them. and high-tech is a major dimension of that competition and within high-tech AI is the most important

47:43 field. So look, there is going to be an intense competition around AI. Now the question is how does that end up? I mean it could end up in a tie or in it could end up in a situation where both countries benefit. Maybe open source wins. Maybe neither side gains a decisive advantage. that they're absolutely going to compete because neither one can afford to take the risk that the other one will develop a decisive advantage. Prisoners dilemma. Nuclear proliferation is a good analogy. I would argue nuclear deterrence led to a more peaceful world in the 20th century. I mean is that fair to say Sax that ultimately what happened with nuclear is that the actual underlying technology hit you know an asmtote right it plateaued right and so we ended up in a situation where in the case of the United States versus Soviet Union where

48:30 both sides had enough nukes to blow up the world many times over and there wasn't really that much more to innovate so you know the the the underlying technological competition had ended the the dynamic was more stable and they were able to reach an arms control framework to sort of control the arms race, right? I think AI is a little different. We're in a situation right now where the technology is changing very very rapidly and it's potentially on some sort of exponential curve and so therefore being a year ahead even 6 months ahead could result in a major advantage. I think under those conditions both sides are going to feel the need to compete very vigorously. I don't think they can sign up. This is a system of productivity right for an agreement to slow each other down. I just don't nuclear was not a system of productivity. It was not a system of

49:15 economic growth. It was a system of literally destruction. And this is quite different. This is a system of making more with less which unleashes benefits to everyone in a way that perhaps should be calming down the conflict in the potential. You got to admit that there's a there is a potential dual use here. There's no question that the armies of the future are going to be drones and robots and they're going to be AI powered. Yeah. And as long as that's the case, these countries are going to compete vigorously to have the best AI and they're going to want their leaders or national champions or startups and so forth to win the race. What's the worst case, Saxs, if if China wins the AI race? What is the worst case scenario? Ask what it means first. Ask Sax. That's literally what I'm asking. Like what would that scenario be? Would they invade America and they dominate us

50:01 forever? What does it mean to citizen? Yeah. What does it mean to win? Yeah. To me, it would mean that they achieve a decisive advantage in AI such that we can't leaprog them back. And an example of this might be something like 5G where Huawei somehow leaprogged us, got to 5G first and disseminated it through the world. They weren't concerned about diffusion. They were interested in promulgating their technology throughout the world. If the Chinese win AI, they will sell more products and services around the globe than the US. This is where we have to change our mindset towards diffusion. I would define winning as the whole world consolidates around the American tech stack. They use American hardware in data centers that again are are fundamentally powered by

50:47 American technology. And you know just look at market share. Okay? If we have like 80 to 90% market share that's winning. If they have 80% market share then we're in big trouble. So it's very simple. It means like yeah but if the market grows up by 10x it doesn't matter because the world will have every individual in every country will now have more they will have a more prosperous life and as a result it's not necessarily the framing about if we don't get there first we are necessarily going to lose I get that there's an edge case of conflict or what have you but I do think that there's a net benefit where the whole world suddenly is in this more prosperous state and this is a classic example of a dual use technology where there are both economic benefits and there are military benefits. Yes, GPS would come to mind in this example,

51:33 right? Like my summary point is just that it's not all about a losing game with respect to this quote race with other nation states. But at the end of the day, yes, there is risk, but I do think that if the the pace of improvement stays on track like it is right now, holy [ __ ] I think we're in a pretty good place. That's just my point. Okay. Some positivity. Okay. Look, I I hope that the AI race stays entirely positive and it's a healthy competition between nations and the competition spurs them on to develop more prosperity for their citizens. But as we talked about in the AI summit, there's two ways of looking at the world. There's kind of the economist way that Jeffrey Saxs was talking about and then there's the balance of power way or realist way which Mir Shmer was talking about. And when economic prosperity and survival or

52:21 balance of power come into conflict, it's the realest view of the world that it's the balance of power that gets privileged. And I just think that's the way that governments operate is that prosperity is incredibly important. We want economic success, but power is ultimately privileged over that. And this is why we're going to compete vigorously in high-tech. That's why there is going to be an AI race. Okay, perfect segue. We should talk a little bit about what was the topic of discussion yesterday. I had a lunch with a bunch of family offices and capital allocators uh government folks here in Singapore and they were talking about our discussion last week about the big beautiful bill and the debt here in the United States. It's permeating everywhere. The two conversations at every stop I've made here is the big

53:09 beautiful bill and the balance sheet of the United States as well as tariffs. So, we need to maybe revisit our discussion last week. Chimath, you had uh and Freeberg did a an impromptu call with Ron Johnson over the weekend, which then spurred him going on 20 other podcasts to talk about this. Steven Miller from the administration has been tweeting some corrections or his perceived corrections about the bill. And Sax, uh, I think you've also started tweeting this. Where do we want to start? Maybe. Well, I think there are just a couple of facts that should be cleaned up because Okay, so facts from the administration, their view of our discussion. Well, even though I was defending the bill last week on the whole, I wasn't saying it was perfect. I was just saying it was better than the

53:54 status quo. Yeah, you were clear about that. Yeah. Yeah. But even even I in doing that was conceding some points that I think were just factually wrong. And the big one was that I said I was disappointed that Doge the Doge cuts weren't included in the big beautiful bill. What Steven Miller has pointed out is that reconciliation bills can only deal with what's called mandatory spending. They can't deal with what's called discretionary spending. And since the Doge cuts apply to discretionary spending, they just can't be dealt with in a reconciliation bill. They have to be dealt with separately. There can be a separate recision bill that comes up, but it can't be dealt with in this bill. And just to be very clear, look, if the Doge cuts don't happen through recision, I'm going to be very disappointed in that. I really want the Doge cuts to happen, but it's just a fact that the

54:40 Doge cuts cannot happen in the big beautiful bill. It's not that kind of bill. And I think it's therefore wrong to blame big beautiful bill for not containing Doge cuts when the Senate rules don't allow that. You know, it all goes back to the the Bird rules. There are only specific things that can be dealt with through reconciliation, which is this 50 vote threshold, and it has to be quote unquote mandatory spending. discretionary cuts are dealt with in annual appropriations bills that require 60 votes. Now look, this is kind of a crazy system. I don't know exactly how it evolved. I guess Robert Bird is the one who came up with all this stuff and maybe they need to change the system, but it's just wrong to blame the big beautiful bill for not containing the Doge cuts. That's just a fact. Okay, so the other thing is that the BBB does actually cut spending. It's just not

55:26 scored that way because when the bill removes the sunset provision from the 2017 tax cuts, the CBO ends up scoring that as effectively a spending increase. But tax rates are simply continuing at their current level. In other words, at this year's level. So if you used the current year as your baseline, okay, and then compared it to spending next year, it would score as a cut in spending. So it's just not it's not correct to say this bill increases spending. It does actually result in a mandatory spending cut, but it's not getting credit for that because we're continuing the tax rates at the current year's rates. Do you believe Sachs that

56:12 this administration which you are part of in four years will have spent will have balanced the budget. Will it have reduced the deficit or will the deficit continue to grow at 2 trillion a year? What is your belief because there's a lot of strategies going on here. Yeah. My my belief is that President Trump came into office inheriting a terrible fiscal situation. I mean basically that he created and that Biden created. They both put 8 trillion. They both put 8 trillion on the debt. It's a big difference. It's a big difference to add to the deficit when you're in the emergency phase of CO for that. Sure. It's emergency spending. It was never supposed to be permanent and then somehow Biden made it permanent and he wanted a lot more. Remember build back better? He wanted a lot more. So, you know, it's it's tough when you come into office with a what is

56:59 $2 trillion annual deficit. So, to my original question, now look, hold on. Would I like to see the deficit eliminated in one year? Yeah, absolutely. But there's just not the votes for that. Well, I asked you for there's a one vote margin here in the House and the Democrats aren't cooperating in any way. So, I think that the administration is getting the most done that it can. This is a mandatory spending cut and I think the Doge cuts will be dealt with hopefully through recision in a subsequent bill. I'm asking you about four years from now. Will we be sitting here in four years? Will Trump have cut spending by the end of this term? In another three and a half years, will we be looking at a balanced budget? potentially is that the goal of the administration or will we be at 42 44 45 trillion at the end of

57:45 Trump's second term? David said, listen, if you want that level of specificity, you're going to have to get Scott Besson on. Okay, this is just not my area. I'm not going to pretend to have that level of detailed answers. But what I believe is that the Trump administration's policy is to spur growth. I think that these tax policies will spur growth. I think that AI will also be a huge tailwind. It'll be a productivity boost. I think let's stop being doomers about it. We need that productivity boost and I think that the net result of those things will be to improve the fiscal situation. Do I want more spending cuts? Yeah, but look, we're getting more than was represented last week. Let's put it

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