Chamath Palihapitiya on Pain, Success, AI, Investing & Indian Social Media

We spoke about pain. I wouldn't like to say a prerequisite to success in the capitalistic world, but

it helps if you've been pained. What is your story? Where did the hunger come from?

>> Well, the hunger and the pain are two different things. I've been fascinated with the idea of

building a social media outfit out of India. Give me advice from your experience of building allin being at

Facebook and also having a personal brand which is quite big now. What should I look for? Is there a

opportunity to build a social media outfit that could appeal to young people in India?

This is a tough question. When do we start recording? >> Oh, it's on.

>> Okay, perfect. >> Do you monetize your pod? >> No.

>> No ads, no nothing. >> No ads, no sponsorship, nothing. In fact, I make my guests give money to a

charity I like and I donate with them and we match it. Yeah. >> So we have a grant program.

>> I'll tell you what kind of charity. >> I don't care. >> It is

>> not doing it. >> It is giving money directly to young kids in India who want to start a

business but don't have startup capital. You know there are that initial capital even if it's like 50 grand or 100 grand

in India. >> Mhm. >> Is very very hard to

>> how do you choose though who to give it to? That seems like a complicated problem.

>> We have a >> because if you just give it >> Yeah. you know, you're making it harder

for that person that actually shouldn't probably have it, >> but nobody has it there. I mean, you're

talking a different ecosystem with no risk capital whatsoever available. >> And do you do like YC? You take 7%.

>> No, no equity, nothing. It's just a grant. >> Oh, it's just a grant. And then and they

don't have to pay you back. >> They don't have to pay us back. >> Wow.

>> But that's great that you do that. How many people do you put through this program?

>> A dozen kids every couple of months. And anything interesting come out of it like commercially successful?

>> Yes, couple like there's a pet protein company called Posible which is now worth maybe 40 50 million. There have

been like three four 50 million kind of outcomes which is not bad. >> And does it kind of pay itself back so

that you can kind of make it or no it's just you funding it? >> Yeah

me and then whenever my friends want to join they come along. Does it make does it give you a sense of fulfillment?

>> Uh not particularly. I think it gives me access to a lot of talent that I work

with in other ways in the future. >> Yeah. Cuz even when things don't work out and they shut down, it's tough to

find these people with >> I to I agree with that. And are they generally technical or No.

>> Yeah. >> They're generally technical >> and they're all under the age of 25.

Yeah, that's the key. >> Yeah, >> that's like honestly probably my my

single biggest filter. >> Yeah, >> if you're young, it's great. If you're

not, >> yeah, >> it's harder.

>> You know, another thing I found with these young kids are the docsile. Yes. Subservient people never turn out

to be good. The arrogant pricks are the ones who do better. >> I totally agree with that too,

>> right? >> Yeah. I think you need to have some kind of like grit or pain in your past. Pain

is a fantastic amplifier of capability. Some sort of like grudge, pain, anger. But you know the the child that had a

wonderful upbringing is a wonderful human being and not a great entrepreneur in many cases at least at scale at mega

scale because it just requires a level of self flagagillation almost you know and

pain and uh people who aren't used to pain don't want to incur pain. People who are used to pain don't think

anything of it and they just keep going through it. People who are used to pain almost want pain.

>> I think it's like a weird way in which uh we feel

normal. >> I find that when somebody's used to drama growing up, they seek out drama

later in life as well. >> I think that I can see that. >> Yeah,

>> I can see that. Maybe we should start today with telling our audience who Chamat is in Shamat's words.

>> Uh yeah, I am a >> This is a tough question. >> I'm just a guy. Um and uh I like games.

>> I like risk. I like learning. Uh and I like um growing. Um,

and uh, none of it matters. None of it. >> What you like is part of who you are.

Maybe what you dislike is the other half. What do you dislike? >> Honestly, not much of anything. I don't

like staying still. And um, uh, actually, yeah, I I probably dislike that the most. I I I don't think there's

much value in just kind of like the status quo of anything. >> Now, that's not always a good thing, but

um I think the status quo in many cases is actually quite structurally important, but generally it's better to

try things and change things. We spoke about pain. I wouldn't like to say a prerequisite to

success in the capitalistic world, but it helps if you've been pained. What is your story?

Where did the hunger come from? >> Well, the hunger and the pain are two different things. The the pain came from

my parents >> and just, you know, I think it's just the the neglect that comes from a

>> a home in crisis. And I don't think that that's a particularly unique story to me. And I've and I think I've learned to

forgive my parents, but that's what it is. You know, there was alcoholism, there's abuse, there's all of these

things that are the byproduct of just dealing with a life unfulfilled in at least, you

know, from my from my dad's side. And then there was a lot of codependency and complacency

that my mom lived out. And then the byproduct of that was, you know, I was a a curious,

loud, sometimes and generally overachieving kid, not in school, but in every other realm. And I

think that it um I think it touched a lot of my father's insecurities. And so, you know, the way that he dealt with it

was painful um for me, but also for him probably. And then, you know, my mom

just kind of didn't really do much to intervene. So that's where it all started.

>> What in the eyes of a young Chamath would make it look like your parents had a life that was fulfilled?

Is it just the absence of conflict? >> I think my father was an incredibly smart, capable man who just didn't get a

chance to live out his potential. And then he made, you know, the greatest sacrifice possible. I can say this now

as aif, you know, almost 50-year-old, which is he just gave everything up. And could you imagine that, you know, your

life isn't going the way that you thought it would? You feel you have this potential, so you're frustrated. And

then you say, you know what? I'm just going to completely give up on my life and I'm going to live it through these

three kids. How do you do that? Because you have no idea what these kids are capable of.

These kids could be idiots. um he did that and so you know when you what by immigrating to Canada he did

that you know you give up everything and uh so I I I gave him a lot of respect and um obviously appreciation um

but that that's that's probably the memory that I hold the strongest because it forgives all the other stuff. All the

other stuff is kind of just noise. It's all just kind of gets in the way because again I go back to none of it really

matters >> like um let's pick a random year. Pick any year.

>> 2020 2020. >> Who was the 87th richest person in the

world in 2020? >> No idea. >> Okay. Pick another random year.

>> 2010. >> Who was the 14th richest person then? >> No idea.

>> Okay. Pick a different year. >> 205. Who is the ninth most followed human being then?

>> No idea. >> Okay, this is just to point out that none of it matters.

>> It's all contrived and in your own mind. And in that moment, it feels like it's like it's a matter of life and death.

External validation becomes this thing that is like the it's it's the crucible. Um but I try to remind myself none of it

matters. It's just a complete game. And uh if you can do that, you can have a very interesting life.

>> It's interesting that the parameters you used to form your questions were the richest and the most influential.

>> Is that what matters today? >> No, but I think that that's what we are conditioned to think matters

>> by society. >> By society. And I think the overwhelming majority of people will use that as the

two simplest ways of determining the value of a human being, which is wrong. I I would say that the real thing is

from where you started to where you are, how have you evolved as a human being. There's no quantity or metric that you

can share and it's your own internal sense of whether that journey has been well-lived. Unfortunately, most people

don't appreciate that because you can't share that in a language that's easily understood by everybody else. So,

society has developed simple frameworks to say whether you've you've had a life that has been well-lived and it reduces

down to these two things. some combination of fame, influence, and capital.

>> No proximity to power. >> Fame, influence, and capital. All all of those things are sort of like byproducts

of those things >> because it allows society to organize itself.

Um, the problem is that it it kind of misses the point. But that's why I try to

remind myself well okay if those are the external validated measures of success the true reality though is it doesn't

matter. >> Um and so it takes a lot of courage to decide that it doesn't matter.

>> So what matters outside of change or the rate of change. >> I think that that's for me that's

probably the thing that matters the most. And then after that um how that manifests for me is my

relationship with my wife >> my relationship with my children. and then my relationship with my friends.

Um, what gets cluttered along the way is all of the things that I do in business and then all of these other ways that

people try to tell me that things are going well if I don't feel that it is or they try to tell me

that things aren't going well when I think that they actually are. And the way that they do that is again they go

back to these externally validated but very fragile and brittle measures. And the the the whole goal that I try to do

for myself is to break that chain of dependency where I hear it and it just kind of dings off me. And that's a very

liberating thing. I don't get that all the time, but when I can do it, I feel very very grounded and happy. Like a

like it's not like an affusive happy. It's just like a kind of a warm grounded sense that that I'm right where I need

to be. Procreation and legacy have always mattered for centuries. Maybe

capitalism defined that winning this game helps in order to achieve that end. The wealthier you are, more people want

to have children with you. So in a way they're both the same thing or one is a conduit to the other. Well,

I can tell you that having kids for me is a completely selfless desire to be around

these little humans that I just like love. I have five kids. If I could have had five more, I would have had five.

>> Uh, >> do you think it could also be ego? Like when you see a child, you see a

reflection of yourself? >> No, my kids are my kids are well, my boys are pretty stupid, so no. Uh, my

girls are just superb. Oh my god. No, I'm just kidding. I mean, >> they're all great and I love them

equally, >> right? >> Um, mostly. Uh, but yeah, kids are just

they're just amazing. They're um they're a really great way of reminding me that these external measures are

these traps that society lays for you. They don't have a perception of how many followers you have or how much money you

have, whether you won or you lost, whether you had a good deal or a bad deal.

>> Maybe not yet, but soon they will cuz they live in the same world that we do. >> But then they're not children anymore.

>> When does that >> and they're adults, >> you know? I I can see my oldest child

getting into that transitionary phase. >> Um then it's less about me being a parent and them being a child. It's less

about being peers. And there's a good chance that, you know, like with all things,

I don't know what the relationship will be like in the future. You know, it's not the case that all siblings are

really close. You know, you don't choose those people, right? Um it's not the case that you're close to your parents.

You you don't choose that relationship. It's given to you and then it's it's your choice how you deal with it. Um,

so and I would hope that they are less reductive than everybody else, but you're right, there is that risk and

then I think our relationship may suffer, but hopefully it doesn't. >> Why would it suffer?

>> Uh, I mean, I think I've tried to I've tried to surround myself with the kind of influence that makes me feel

like I'm on a good path. And so if my children it would have if my children

>> can you elaborate on that when you say you've surrounded yourself with influence that makes you think you're on

a good path the good path to change the good path to capitalistic success the good path to influence

>> the good path to a structural sense of being an evolved human being.

It's independent of >> you mean emotionally? Yeah, being reliable, being thoughtful,

>> being a self-aware. I think maybe that's the key word. Being very self-aware, like where am I

in my evolution? Where am I in this moment? Am I grounded? Am I insecure? Am I egotistical?

>> Are you able to catch that? >> Yeah. A lot more than I used to. Not all the time, but a lot more than I used to.

Why? Because of the influence of my wife predominantly. But then the reaction of my children and my friends and I've been

able. So this is what I mean. I don't they don't treat me better or worse because of something that happens

in the traditional way in which society tells you you had a good day. >> Mhm.

>> They treat me better or worse based on how I'm treating them and how I am treating myself.

And that's very powerful if you listen to that signal. And it takes a lot of time to sort that out. But then if you

can do that and you can foster that, it's a superpower. It's a huge unlock. I'm trying to learn how to do this

myself. Is can you give me an example of how you've caught yourself changing in say the last 5 years?

>> Well, I was still, you know, uh I was >> What did you believe in 5 years ago that you think now was a stupid thing to

believe in? Don't say socialism or the Democrats because I think that's too binary. Something more evolved than

that. I don't know. I don't want to give you some try to answer what what do I what

what have I changed my mind about? I'm just much I think I'm much more circumspect about

the games that I play and that they are games. meaning I thought that business success

was a matter of life and death. And so the the whole goal was you run up the score and you get the highest score

and you have the most chips. And now I see it just as a game. It's like playing poker. There's like

hands you win, there's hands you lose. Sometimes you have you're on a heater and you're just like everything works.

And sometimes, no matter lawless execution, nothing works. And I can step away from it now

and be normal. I can also be around my friends and not be it. It doesn't like I I'm not

a different person based on that. Not all the time, but most of the time. That's been a huge change in the last

five years. Five years ago, I was still so much part of like I was just grist for the mill. I was like everybody else

just kind of walking around, you know, trying to get the attabo, trying to get this tap on the shoulder, saying you did

a great job. Um, and the problem is again, other people are telling you superficial stuff when they tell you

that. >> Nobody sits you down and says, "You know what, Nicola, you just seem so

self-aware. I really," and it's really changed over the last years. Who's ever told you that? Whoever that person is

has ever told you that don't ever lose that person. Everybody else is like, "Wow, dude, great investment. Oh my

gosh, you're so great. Wow, look at how many views you got for this video. Wow, you must feel so awesome."

>> And I'm like, "No, I feel nothing. >> Nothing. Nothing." Do you understand like what it means? Like I I told you

this story last night. I did a deal at the end of the at the end of 2025. >> Mhm.

>> Helped start this business 10 years ago. Chip company, AI chip company. We sold it to Nvidia for $20 billion. Huge win

for me. >> Mh. and uh you know woke up on a th Tuesday

and uh I remember getting a screenshot >> and Nvidia had wired you know the first big payment 13 billion in the account

>> in the company's account not >> and I was just like okay and I thought to myself

this has like zero impact like I I almost feel like a little depressed because I was like now I'm going to have

to spend the next three weeks weeks with all these people giving you these attabo and I haven't thought about this in

years because it's been a 10-year journey and I've already moved on to other problems that I'm working on that

captivate my energy that people probably think is a stupid waste of time now. And so now I'm going to have to fight all

these people telling me, "Oh, why are you doing it? What's the point? You've already just take a break, relax." And

they don't get it. Uh and so I was like, "Gh, these next two months are just going to be a pain.

All prophecies are self-fulfilling in a way because you said what you said now. People will say you're selfaware a lot

more than they did up until now cuz you put it out there, right? >> Yeah. I mean, I hope so. I launched a I

I started a company 18 months ago and we launched a product these last couple of days that I've been here in Dubai. And

so I'm I'm with the team and we're like just working on it. And >> what is this? Andy was telling me about

this last night that you're busy in the product launch before you came for dinner. What was it?

>> I think the the best way to describe it is in the industrial revolution, what was

the key unit of change? It was a factory, right? So what >> assembly line

>> assembly line? What did Henry Ford really bring to the world? >> Assembly line,

>> not a car. M >> but the assembly line, it's the machine that makes the machine. I've been

obsessed with that idea. 9 years ago or 10 years ago, uh Elon sent an email to a bunch of us

and said, "Hey, I'm opening the Gigafactory. Let's have a party." >> So, we all go to Nevada, like somewhere

outside of Reno, Nevada. >> And uh it's it's an incredible I just remembered I still have the video on my

phone. You start to drive and you you turn the corner and it's the beginning of the Gigafactory and you just keep

driving and driving and driving and driving and this building is there and it just keeps

going and going and going forever and then you pull in and literally raw material was coming in the front and

like the Model 3 was coming out the back and he said, "Timoth, I want to show you something." And he shows me this like

schematic and I'm like, "Wow, what is this? Is this is this like your next

chip or something? He's like, "No, dummy. This is the machine that makes the machine." And it just seared in my

mind. The machine that makes the machine. So when this AI thing started and you

know, I had been kind of more toiling around in the silicon layer. This is in mid 2024. I was like, "Okay,

well, if all of this is stuff is real and we have silicon and we have models, what is the machine that makes the

machines? What is that?" Well, it's a software factory. It's a factory, but that can make the software because

software is what runs the world. It runs everything. And so, we made one. Not sure it's the

right one. Not sure it'll be the ultimate one. Not sure if it's a good one,

>> but we made one. And so, what does a software factory do? It gives and imparts control to humans to be able to

be a part of whatever this productivity loop is that we're about to embark on. So it allows people to collaborate in an

assembly line to make software, whatever software you want. You want it to run a plane, great. You want it to operate a

hospital, fantastic. You want it to use it for accounting, sure. But you don't need to

care about the intent. We can build tooling that allows all of that intent to manifest. I think it's a

very potentially big idea. So, we built it. We launched it. We've using it. We've been deploying it with a

lot of customers. So, I know that it works. Uh, but I launch it. And the first

comment is, "Hey, goofball. Why are you wasting your time?" The guy said it in a really

condescending way, too. Honest question. But as a billionaire, why would you be doing this? And I'm like, first of all,

that's a stupid label. Second of all, you know, this is not how I measure myself. And third of all, I'm there to

make things. >> Mhm. Why do you care? >> Cuz I was annoyed.

>> Why? >> Because it makes me feel like I have to justify myself. Now, the reason is that

>> even if you care, >> the re the reason is that I have this duality in my personality. The thing

that drives me to work 20 hours a day sometimes is this deep sense of something is

unaccomplished. And then the other part of my life is to try to put that at rest so that I can be

aware enough and enjoy this moment and say, "Wow, what a fun game and this is great and this is awesome. My wife's

awesome. My kids are awesome. My friends are awesome." But for me, it is a challenge. It is the structural

challenge of my personality is to balance that duality. This gives me an enormous well of

creativity and energy to work. This gives me enjoyment and fulfillment. But I vacasillate between the two. And

so when I read it, my instinctual reaction is I'm worthless and I'm wasting my time. I need to justify to

this random person why it's not a waste of time. Then I try to catch myself and I compose myself and I go back to work

because I actually believe in the work. >> But it is a challenge for me. >> I'm self-aware about it. It doesn't mean

I've solved it. Uh but that's the back and forth. >> It's a big contradiction to kind of live

with. No. >> Huge. >> Probably makes you less productive than

you could be >> if you didn't care at all. >> Oh yeah. I mean, if I had a little touch

of autism or asperers, I'd be 10 times more successful. >> Like some friends of yours.

>> I mean, my friends have the tism in just the right quantity to be unstoppable. >> Are you talking about the older friend

or the younger friend? >> I have a few friends with tism and they are all off the charts productive.

>> Yeah, we were planning to play poker last night >> and um we didn't and we had dinner. But

>> you know game theory, there's something called prisoners dilemma. It teaches you through a lot of back testing what is a

good way to negotiate. It talks about tit fortat works as long as you're willing to reprimand

the person quickly enough in a clear concise nice manner.

The direction in which the politics of the country where you reside is moving. Don't you think you as a country are

allowing or fostering a lot of tats for the tits of today? >> It's a little too abstract for me to

answer that question. Um, love tits, love tats, don't exactly know. Um, here's what I'll say.

I think that CO was a real wakeup call for me and a lot of others in America. Mhm.

>> What was that wakeup call? I think there are two dimensions of it. At a conceptual level,

I think it exposed that there is an externally validated way of organizing the world based on this notion of

expertise and credential that was a lot more brittle and fragile than we gave it credit for.

In the end, what do we know about CO? None of us knew what was going on. Everything was a guess. Most of the

guesses were shoddy even by the quote unquote experts. >> But the downstream implications to those

are severe and have been severe. So that's number one. We exposed the fragility of these externally validated

systems. And the second is that we demonstrated our economic and national sovereignty fragility.

There was nothing that we could do to take control of our own destiny. We needed

almost the charity of others. I think from that what I would say is we needed somebody a

vessel that allowed us to make the structural change which is hard.

I think it can be very bursty but necessary. And I've said this before. I think the best way to think about our

current political climate in the United States is we are led by a transcendent political athlete.

>> Transcendent how >> he Donald Trump is the most effective and capable political

athlete we have ever seen. Why? He understands how to connect at the one-on-one level. He understands retail

politics better than frankly anybody. And you can just see this if you go to a

rally. The way that he can connect with individual people. He has an affability that's very disarming.

And yet because of his business acumen, he has a way of negotiating that I think is just very hard for the

learned non-b businessiness person to compete with. You know, there's that very famous

Mike Tyson quote, "Everybody's got a plan until they get punched in the face."

>> I think the president has an incredible ability to negotiate. Howard Lutnik has an incredible ability to negotiate.

Scott Besson um has an ability to negotiate because of their grounding in business and when

you apply it to the realm of politics, I think it has some very consequential outcomes. And in this specific case,

what they are doing is they are allowing us to question these two sets of beliefs.

What should the organizational model of the world be? Is it a bunch of

>> the world or America? >> Well, it's of the world because the consequences of America are for the

world. >> Is it a bunch of >> What if the world doesn't believe that

America has that right to decide? >> I think America only has the right to decide for itself.

>> Yeah. >> And I think that that is what it does. But the ripple effects of that are very

clear. And I think that that's a very important decision that other countries can make like like AI is actually a

perfect and emblematic example of this decision. And I think in the microcosm of AI, you

can see this this this kind of duality. There's open source, mostly Chinese,

>> some American alternatives, Nvidia being the biggest one, and then there's closed source, which is like, you know, these

large foundational models. If you believe that AI is the cornerstone of productivity and GDP,

there is an argument to be made that every country has a sovereign responsibility to determine

what they should do. There is no path dependency where the only path is America.

>> And I think that that and I think that that's true militarily. I think that that's true in every which way. So I

think what America has done has said here are the boundary conditions that we are going to now change in order

to partner with us. Historic trade deficits are no more. The sovereignty of our supply chain is now a

critical dependency. We will make sure American resilience is the number one focus of the administration. Those are

huge changes and it has broad ramifications. But we needed somebody who was willing to break the norms

in order to say that. And I personally believe that America needed that wakeup call because we it was we were all

subsuming ourselves to a monocultural global elite that wasn't necessarily making decisions

from first principles anymore. And I think it's important to have an opportunity to rewrite those decisions

every few decades. >> I hear you. Uh I don't know how far I can

debate this line of politics without getting into trouble. But sure the deficit numbers are down. The

debt is not going to go down. It's only going to increase with time. Sure, maybe you depreciate the currency to a point

where it becomes more feasible or you grow your way out of it or you have an alternate

currency of exchange which helps you pay for it. All of that could happen. But when I look from the outside, uh

like I was telling you last night at Davos, I was seeing how the Europeans were reacting to what the Americans were

saying. It feels like you are in a way creating a block. The world had many

blocks. I wouldn't be it wouldn't be too far far-fetched today to extrapolate that

there might be one block which is America and another block which is the rest of the world which I don't think

would be a good thing for America. >> I don't think it's going to be uh like that. Um, and the reason is that at the

end of the day, America is still the heartbeat of so many really important innovative technologies, medicines,

capabilities, culture, and I don't think any of that changes. Um, will there be other forms of it over time? Yeah. And I

think that that's okay. Um, so I don't think that this is something where, you know, should look should the should the

what should have the Europeans done? I I suspect if I was a European leader and I was sitting there in Davos,

I would be really upset with some of the decisions that I have made. I would think to myself, hm, was it smart of me

to have turned off all my nuclear generation because a 16-year-old girl told me to? Probably not. Was it smart

of me to have a single source supply of an overwhelming supply of energy from two pipelines that could, you know,

that don't have redundancy? >> Probably not. Should I have maybe reconsidered how I think

about um migration and immigration and how do I balance asylum versus

relocation versus, you know, productivity based immigration. And I think that if I was in Europe, I

would be like, man, I think I made a couple of these decisions really wrong. But again, if you're being really

intellectually honest, then why don't we go back and ask why were those decisions made?

>> No, I agree with you 100%. I don't think they >> I think it's hard to litigate the fact

that they may not be self-aware enough to actually be honest. >> I agree. They might not have been, but

them not having been might have been beneficial to another state because they weren't, but now they seem to be coming

together. >> Again, I think the Europeans are brilliant

people. They're smart. They're thoughtful. They're capable. If from here in first principles, one cannot

underwrite, who to be long-term partners with, I think that we should hold out some

small amount of percentage percent that they could just be emotionally overreacting.

>> Yeah. You know what they were telling me >> and and again, so that's them repeating the same mistakes over again.

>> Yeah. As soon as we walked out of the room after I can't remember which speech, I was talking to a bunch of the

politicians from Europe and they were like, "America is 27 trillion GDP, 350 million people. Europe together is 500

million people but 22 23 trillion GDP. The the distance is not very far. I have not heard Europeans speak like

that as one country or one nation but not individualistic for their own regions in a long long time.

>> Let's just be really honest like Europe is going to come to a crossroads. >> Mhm.

>> Italy is doing incredibly well. >> Yeah. Because of taxation, you think? >> Because the economy works and they have

a stable government. They have sensible laws on a bunch of things that have allowed them to retain

a sense of national identity and maintain reasonable growth. What do we think happens when the

Italians wake up one day and say, you know, should I secure, you know, all of that gold that I have that's in

Brussels? >> Should maybe I should send some of that back and keep it in vaults in Rome,

>> which is >> dollars dollars to dollars to donuts. when that question really comes up and

we start to think about you know real assets devaluation of currencies.

>> Mhm. >> This is going to create some really really interesting conversations

>> that is happening in the US now. People are bringing gold back from the Federal Reserve into individualistic countries

in in a big proportion actually. So Chamat to my audience which are largely entrepreneurs and people who want to

start a business in India I think something that you have accomplished along the many things that you have done

in life from starting at Facebook which is now Meta to uh running funds managing money. The thing I find most interesting

because I'm in that profession is the investing bit. You seem to have gotten so many calls right over the tenure of

your career. Uh give us some lessons from that which are non-obvious.

To be a very successful investor, you have to be extremely extremely single-minded.

You need to come to your own conclusions. Uh

you cannot have others help you. Uh it is not a team sport. That is

probably the single most important thing. Whenever I see teams of investors, I think these idiots are

going to lose money or they're going to make a lot of noise and spend a lot of time and waste a bunch of people's money

just returning the market beta. I don't find that interesting. That's not being a good investor.

You have to be really, really, really curious. And people say that a lot. The sensation

that I can put my finger on is when I feel like I'm embarrassed to tell somebody that I'm in this new thing.

Um, I remember when I invested in an NBA team in 2011, the people around me were up in arms. My

family office was up in arms. My best friends were up in arms. My wife at the time up in arms. Why are you doing this?

This makes no sense. And I said, here's what. And you know, it's almost as if what I've learned actually in my career

is when people around you have that reaction, it's almost the best signal. >> I agree with you 100%.

>> Um, and I had been reading a lot and I've been reading about how to actually be a tech investor.

>> Mhm. >> And the conclusion that I came to was, wow, the approach that I want to do is

so unconventional. The the the risk of ruin was very high. So then I was like, well, let me just

find the most totally uncorrelated asset and park I can't remember it was like 25 or 40 million bucks or something so that

if I lose everything, I still have this little thing and I can take care of myself.

And uh that ended up being the investment in the Warriors, which ended up doing financially quite well.

Um but it repeated itself with Bitcoin in 2012. I did the same thing. People got they were just so upset. And I

remember, you know, I I I would appear every now and then on like CNBC and just the vitriol and the hatred. Um and I was

like you. So if you can wither the negative reactions of others, where is that coming from? It has nothing to do

with you, right? People are living their own journey. But what is happening in that moment? What what is happening is

something you are saying is attacking a core foundational belief that they have and it is touching such a nerve that

they are just reflexively reacting. That is an incredible signal >> because what it tells you is you're on

to something. It could still be a huge zero but you now can bucket it into that there's a there's the potential for a

massive asymmetric outcome. So when when when I'm investing initially what I was thinking about was

how do I put myself in a position once I've so I spend like still two three hours reading a day.

>> Mhm. >> Okay. It I would develop views. I would write

notes. I would think about it and then I would come up with these ideas and then I would just test them out.

>> And man people would just when when people reacted like hoham I was like okay this is a nothing burger. not

interesting. But when people had like this visceral reaction, I was like, I'm on to something. Doesn't mean I'm right,

but it's something that triggers people. And I would use that as a way to amplify and spend more time. Since then, I've

added one more thing to this, which is now I have a different way of investing for

large quantums of money like super large quantums, hundreds of millions plus plus. there. I actually want consensus.

>> Mhm. >> Because this should not be about any sort of existential risk or product risk

of any kind. So when you're investing tens of millions of dollars, who cares? You can lose the money. It's not a big

deal. When you're investing hundreds of millions or billions, you cannot afford to lose it. Risk of ruin goes up.

>> So now I try to like context switch here. I want you to just be I want you to just hate it. I want you to just be

gh this so gross. It's rat poison. Oh, really? Okay, great. I'm now I'm going to spend more time

over here. Oh, that makes Yeah. Okay, that I understand. >> Which portfolio did better?

>> Gross tonnage of dollars, this one. Sheer alpha, this one. Uh, now it's hard to say an individual position like look,

>> did you get out of your crypto? >> I don't talk about my crypto. Okay. Uh, but crypto transitioned, you know,

Bitcoin transitioned from being this bucket to being this bucket. So >> you think

>> volatility would suggest otherwise? No. >> Yeah. But you know I think the reality is that Bitcoin for the most part at

this point is there's a structural failing in Bitcoin that I think people will need to come and wrap their heads

around. The structural failing is that it is not so if you think about like what is the value maximizing function

right now for for a crypto asset to be broadly adopted it needs to have the the the features that allow uh a central

bank to adopt it. And there are two things that it lacks. You know, one is fungeability and two is privacy. And so,

Bitcoin fails on those two dimensions. So, it can never be a structural holding of a central bank.

>> And that simple thing will keep it in the realm of ETFs and humans. And >> does gold satisfy those conditions?

>> Yeah. >> Funibility easily. >> Both. You have no idea how much the Bank

of China owns. You don't know how many ounces they own. You don't know how many ounces I own. when there's a public

ledger that says this address has this much >> and you can't really trade it because

you know the history and the provenence of that exact token. It's been used to buy this. It was transacted over here.

It went to this wallet. >> That lack of funibility and privacy >> is a huge deterrent for broad structural

adoption. That's what you need to then add another 10x of market cap. Mhm. >> So, is there room for a different crypto

asset that solves for the privacy and fungeability? Yeah. And are there projects right now? Yes. But they're

very small scale. There's huge issues with them. Those are even more volatile. >> Um, so Bitcoin's interesting.

>> I think of it each time I think of Bitcoin exchanges and stable coins. I'm like why have the use case of moving

away from central bank and then have tether or USDT something which is backed by the US dollar or for an exchange why

decentralize if you have to centralize again on a crypto exchange inherently fundamentally I don't get that argument

>> yeah I'm not sure I understand the argument either to be honest but I but I believe in stable coins I think those

are like a structural innovation that makes a lot of sense it decreases friction and it allows transaction rails

to kind of proliferate. I love that >> with you if you're trying to like >> bring efficiency into bank transfers and

Swift is failing and all of that with you 100%. >> But why it should be backed by a

currency which is regulated by a central bank, I don't know. >> Well, I think that that's going to just

be um a philosophical decision at some point. You'll have gold backstable coins. You'll have all these other, you

know, real world asset backstable coins. Anyways, my my my point of view just getting back to the original framing is

so the non-obvious thing is it's a you thing. Investing is all about you and you only. All this nonsense of like

teams is nonsense. >> Teams, >> how big is your investment team? Your

family office. uh it is one person that makes the investment decisions which is me and

then there's a very trusted team of people that help me with all of the infrastructure of that the complexity of

that. >> Okay. So you think number one then >> so you

>> I'm just summarizing yeah >> yeah you nobody else no team >> nobody in the front office other than

>> two have a very thoughtful understanding of what you're looking for when you're constructing a portfolio

>> how do I arrive at that >> I think it's you can start by just having a very coarse definition of

there's small and then there's medium and large small should be about massive Massive

alpha. Massive alpha is generated typically in controversy.

How do you arrive at controversy? By testing out these ideas and getting and just getting a sense of people's

reactions to it. >> Mhm. So for example like you know going back to this crypto example there are

crypto projects right now that are completely fungeible totally private and if you ask people they will have wildly

divergent views. >> Mhm. >> That is a great setup for some of those

crypto projects again could go to zero but could go to infinity. >> Yeah.

>> So this bucket is always about just swinging for the fences. this bucket,

>> the medium, >> medium and large is you can never be wrong

>> because I would rather take a billion dollars and generate a 2x then go to a and then risk then have a

chance at a 5x but there's also a chance of a zero. >> This is your data center energy and all

of that. >> Well, so so this is about portfolio construction. Then you have to have a

view of like what do you like and what do you want to see in the world because the dollars that you have are really an

amplification method to the point of view. So in my point of view I have a very specific view on AI. I've been at

it now for a decade. I have a decent sense of it and I want to >> what is your view on AI overall if you

had to summarize? >> I think it's a massive accelerant on productivity. I think it will create

levels of progress that are unimaginable and I think we now need to build the tooling that allows people to

participate in all of those gains and if >> UBI

>> no like you know be able to actually like work in it and be productive and allocate one's time to pursuits that

these things >> how can billions of people when the productivity goes up in that manner what

will be the use case for billions millions of people in the world. >> Well, I think that was the same argument

at the agrarian revolution >> and we found things and again I I just think that the the odds are if you look

at the last two or three meaningful evolutions of humanity through technology every single time if you

dropped yourself in that moment you would have not had a precise way to answer that question. Yet if you took

the pessimistic view you would have been wrong. >> Mhm. I think that this is still one of

those moments and so I suspect that again today we don't have a good language to talk about how we will all

participate but I suspect that if you take a pessimistic view of the answer to this question you will turn out to be

wrong. So, so anyways, back so back to so my my point is that in in all of this I have some specific views on energy and

energy policy and national security and and so that's where I choose to allocate >> right

>> the smalls and the mediums and right >> but for somebody else it could be biotech it could be you know cancer

research it could be enterprise SAS it doesn't it doesn't matter at that point >> right how would you play AI you know

>> so here's the framework that I use Um, if you go back to the first generation of the internet, we had a conceptual

framework called the OSI stack. And the OSI stack was very powerful because it allowed companies to demarcate

what the boundaries were. Where did they start and where did uh they end? And then where did the next company start?

And when you got those boundaries right, you had great companies get built from Intel to Cisco to Broadcom to Oracle to,

you know, all of these things, right? The question is what is the conceptual stack for AI?

Why? Well, if it maps back to history, again, it's not going to be exact, but it's going to rhyme, there will be a

conceptual stack that we will look back on and say, uh, had we seen these boundaries,

it would have explained all of the company formation and what needed to get built. So, we already know what some of

these boundaries look like. There's a silicon layer. Now inside of silicon there's a huge paniply of different

things that one can do then above it are the foundational models quite obvious open source closed source world models

you know and then above it I think it forks and this is where I diverge from a lot of people so these two layers of the

stack are the same then when it diverges it diverges into software AI and then physical AI and in physical AI I think

the two things that I believe is that it's all about being able to store energy

and then actuation and locomotion because you could have the greatest robot in the world but if the robot runs

out of batteries and it just kind of hangs on a you know you're dead and similarly if you can't actually pass you

know the numb match test which is you know what we call in robotics pointless.

So there's all kinds of really interesting things that then pulled you into the physical world. Batteries, rare

earths, specialty chemicals, processing, and I've gotten very interested in it. I find it very fascinating. And again, why

it allows me to make medium and large size investments. Risk of capital loss is relatively low. These aren't like

gargantuan returns, but they're fulcrum assets, >> right? fullcrumb assets meaning like

these are things that if they exist will be pivotal and with that will come the ability to

find other next new things and on the software side my big bet is this idea that I don't know what the machine is

but I would like to make the machine that makes the machine >> if you had three binary dollars to

invest today and you have to make the decision right now in this ecosystem where would $1 go second

>> $1 would go to silicon $1 would go to making the machine that makes the machines and $1 would go to uh actuation

and energy storage. >> Do you want to name companies? >> I mean these are all businesses that

I've started >> right >> so uh

>> if not yours and others >> I don't well let's see I mean I think in energy storage

>> would you play physical through Tesla? >> Yeah I mean I was a very large early um supporter of Tesla. It was kind of

one of the first moments where I had like a real breakthrough in, you know, uh, picking public market stocks. You

know, I was I was always kind of a private investor and then I said, you know, we can translate this into the

public markets and, you know, I had this three-year run where like it was like Tesla, Amazon, I mean, I just bagged and

tagged like elephants. Uh, and it was incredible. And then at one point, you know, I had a financial downturn. I had

a big draw down. the spack phase. >> Uh right before the spec phase, the spack phase I torched like four or five

billion dollars. That was brutal. But before that, >> I had another draw down.

>> Uh and um I had to sell my Tesla then because I had to cover like a bunch of liquidity. I mean I've gone through this

twice. You think I would have learned my lesson. >> I did not learn my lesson. Well,

>> what was the lesson you learned? >> Now what I learned this risk model is sort of refined for this. Before I

didn't have small, medium, and large. I didn't believe that I was I believed that I should be shooting. I be I should

be swinging for the fences with everything, even medium and large. And so then what happened was I just

misallocated. So I would be making like multiund million dollar investments into things that had risk of ruin. And guess

what? They did. They went to zero. And then, you know, I I levered up. So I took some money. I had a big loan with

Credit Swiss at the time, you know, and so then I was like, okay, I'm going to press and uh it just created an

illquidity cycle and and uh it was very difficult to navigate that. Um, so I've learned to have a little bit

more disciplined and, you know, be be a lot more methodical and sober about this, but it only comes from feeling it

um on your skin or at least in my case, I needed to touch the stove and get burned. I didn't learn the first time

and then I really learned the second time. Uh, now hopefully I won't learn a third Don't you think the AI thing is I

mean I can't call it AI thing anymore considering the impact of it but I was recently watching Demis and Dario

actually I'm interviewing Daario next week I was watching them have a debate about

how they need to come together to make sure the world survives it seemed really far-fetched every time

>> I find it farfetched too >> every time I've heard this in the past >> I think the catastrophizing typic

typically tends to be tied to um fundraising. >> Yeah,

>> I think you could take anybody who catastrophizes in AI is probably at the moment where they're telling an

investor, my gosh, this could be the end of the world. >> It's getting harder though, right? I

think people are coming to terms with the fact that the revenues are not keeping up with valuations in the AI

world and the catastrophizing might be synonymous with how it has gotten harder to raise money. Well, there's been

something that's been very structural that's changed in venture capital which I think is is not

I think we are going to grapple with the implications of which is that this investment cycle has nothing to do with

scaling IP. This investment cycle is about capital investments. It's about buying powered

shells of data centers. It's installing liquid cooling. It's buying GPUs at scale. Um, it's about doing behind the

meter power. It's by buying massive ESS racks of energy storage. I mean, that's infrastructure investing.

>> But the money for >> the problem is the capital is coming from venture investors that are supposed

to generate 30% irr. >> But even the money for the infra is getting funneled down by these

hyperscalers who are raising that capital initially for something else and that money is trickling down to the data

center. So if the funnel tightens there, it will also tighten here. I I'll give you an example in India when our private

equity fund when I look at companies, data centers have gotten to such a point that most old school real estate

companies in India today have begun to claim they are data center companies and not real estate companies. Again, a sign

of worrying times ahead in my opinion. >> I agree with you.

>> Yeah, >> I agree with you. Yeah, because there's no innovation or IP there. It's

replication. >> It's trying to arbitrage people's desire to be in a market.

>> Yeah. >> That's never a good sign. >> Yeah. Yeah. So AI will be an interesting

story to watch. But from that same vein, if AI were to increase productivity, forget

valuations, forget energy, forget where the money comes from. I think it's fair to say productivity

will go up to what factor none of us can determine if the productivity really goes up and

what happened with the agrarian or the industrial revolution were not to happen here and as many people don't have jobs

or things to contribute or means to do things. Uh where does the world go? We were speaking about this last night, but

to me some form of socialism or pseudosocialist thinking seems inevitable. I am a capitalist and a

beneficiary of capitalism. So I will fight it as might you. But do you do you see a world where in 50 years from now

you don't see some version of pseudo socialist thinking? >> I think there will always be veins of

it. Um yeah and I think that we have a responsibility to make sure that the

boundary conditions don't allow it to be anything more than a fringe belief. >> The thing is our generation has

maybe not experienced socialism but we've heard the stories from our parents. India had 90% taxation

at one point. Uh the Russian story is not too old. What happened to China under Mao is not particularly too long

ago. Like we've heard these stories, but your kids, the ones who are 10 years old who won't read history will not know

that socialism did not work in the past or why it did not work. It's a sign. >> I think it's even more simple than that.

>> They'll be like, "Oh, that was a past. Don't worry, I know better." >> Yeah. And that's the world that's going

to determine where the world goes in 20 years from now. I think that we have a responsibility to acknowledge that

there's a set of boundary conditions that we have created for young people that make them much more prone to

believe that that system is a solution. >> Mhm. >> We have, at least in the United States,

um we have created an enormous student debt industrial complex. We've saddled these young people with

just so much debt that there is just absolutely no path out.

um we don't allow them to have these externally validated demarcations of success. Look, it's one thing for me to

sit here and, you know, talk about being self-aware, >> but that's kind of smug. You know, the

more practical thing is I also was chasing a better car and being able to buy a home in my 20s and 30s. That's a

very reasonable path before you get into your 50s and care about self-awareness. Fair. And so I was also able to pay off

my student debt because I was, you know, I only had 20 or 30,000 of it, not two or 300,000 of it. My home, my first home

cost 400,000, not 4 million. So what are we going to do? >> Um, you know, I've become quite

sympathetic to this idea of doing something in student loans, potentially even, you know, some form of like

forgiveness. >> Yeah. >> Um, because it's become completely

completely broken. It is a noose on the necks of of of these young people. Um, and then also just the the the

structural nimism that exists in most North American cities is is tragic. It

is creating such a der of housing that then the housing costs are just they're just unaffordable. I suspect

that at the core root of socialism are those two very specific things. And if we fix those two things, I suspect most

of the people would say, you know what, the system works for me. And then what's left over

are the fringe people that will always want to believe in something because it's different than what the, you know,

the majority or the plurality. And that's fine. That's always been there. Um, but I think we are losing ground

to people who would otherwise vote for capitalism, but for these two things that have really worked against him. So

I just think we should fix these two things. And you know, we we need to be very courageous in doing it. But if we

did it, I think that most of this socialism nonsense would stop. This morning, I woke up and I saw that Manny

has canled gifted education in New York. And I said, "Prove to me you're an adversary of America without saying

you're an adversary of America." In what world does that make any sense? >> Explain what is gifted education. If you

are an outlier, a right tail outlier intellectually >> in America, you have the ability to take

what's called gifted classes. >> It's for the smart. I wasn't a gifted kid, but I went to school with gifted

kids. They're really smart kids. >> We should have a world that embraces those kids. Instead, canceled all that

off. You're just going to let them sit and stew in the same classes as the rest of us. We know how that goes. They get

frustrated. They misbehave. They don't really achieve anything. And that's not what we should be doing.

We should be unlocking these kids to to achieve their potential. You know, you don't take an extremely good athlete and

say, "You know what? I'm going to make you play with the two grades beneath you."

>> Right? >> It's the opposite. You take the best athlete, you say, "Why don't you play

two grades above and test yourself, go to the limit, right?" You don't take an incredible musician and say, "You know

what? Only play these four notes in this composition." It doesn't m it none of it makes any sense. Yet we're doing that

with core structural intellectual development. Now in what world does that make sense? So I think we just got to

fix the boundary conditions so that when people see these things they're shocked and then they say this is not right and