October 29 2022
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Sacks is back!
- Went to Dave Rubin on Ukraine
- Megyn Kelly didn’t invite JCal back - called him a prick in 45 minutes
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Last week was one of the highest rated shows ever - second only after Elon episode
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Elon finalizes Twitter deal
- Parag made it happen - $54.20/share - deserves a statue in front of market street
- Best tech CEO of the year - Parag Agrawal
- Turns out contract laws still matters in the US - Twitter got good representation
- Leadership and board didn’t capitulate - shareholders got paid - sold the company at a premium - represented shareholder interests very well
- Elon seems excited about this
- Stock price has been sideways for a long time
- He bought 250M MAUs for $44B - might turn out to be very cheap - value of those MAUs could double or triple pretty quickly
- Twitter bought for $172/MAU vs $81/MAU for Meta (though that has been a dumpster fire of its own)
- Better verification and payments could make Twitter much more
- Cannot use Twitter as a coping mechanism
- Better to have this be on 4Chan, 8Chan or Reddit - than have this spread on rest of social media
- Elon is an amazing entrepreneur - finds a mission and figures out how to make it a business to get there - for space - SpaceX and Starlink
- For emissions, Tesla and batteries
- Twitter he think its supposed to be free speech platform and town square - but could figure out how to make it profitable
- 20 years after Paypal still leveling up - now he’s a level 99 mage
- Tough decisions to make when operating social media platforms
- Happened with Google and YouTube - Larry Sergey were flouting DMCA, then pivoted to take down notices
- Ellen Pao cleaned up reddit against bullying, etc
- Evan Williams and Jack did this for Twitter
- Google turned off porn indexing - get free pizza on weekends and tag porn
- volunteering
- Have to figure out a way to use AI to tag content
- Seems people can be banned temporarily - you can be banned but there has to be a way to get back on - its a private company
- Chamath’s relative just emails/texts him 100/60/70 times during an episode
- Social networks shouldn’t determine who gets to participate in our political process
- Ye is more complicated - not sure if he’s having an episode or not
- Social networks should look to Supreme Court for guidance which has been dealing with this a long time
- 9 kinds of language that is not protected - like fighting words that in common knowledge would provoke violent reaction
- Slurs can be banned or out but arguments - not sure if those can be banned
- If you ban him, people are not hearing the other side of the argument
- Lex episode with Ye
- pushed back hard on anti-semitism
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Meta stock price
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Brad Gerstner open letter to Facebook about righting the ship
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Stock has plummeted
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Apple vs Meta
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In 2016 Apple stock couldn’t be given away - Tim Cook, Carl Icahn and Luca Maestri the CFO met for dinner - they have spent $396B since buying back their stock
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Facebook spent $100B
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Since September 2021 Facebook started falling off a cliff
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They were buying back a lot of shares and leaking shares to so many employees they hired
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Spending $25B in 10 years on reality labs and will keep spending going forward - so will have spent a $250B
- Apple spent $3.6B on first iPhone
- every subsequent version would only come from cash flow profits of previous one
- Manhattan project $23B in today’s dollars
- Tesla $25B - to get to FCF profitability - coupe/roadster, model S, model X
- Boeing - $32B
- Google “other bets” $40B
- Apollo program 1960-1973 $253B was the only comparable thing
- rockets, lower earth orbit, then moon
- Is Reality Labs going to become something so fundamental?
- Problem is this - the investment is so outsized and so abnormal that it could sink the business
- There is a future in Oculus VR/AR and its magical but there’s no ongoing use case seems like
- Training could be a huge use case
- These are not video game flight simulator programs but in real cockpits using professional grade VR headsets, cockpit is on gyros so it moves around
- So even if the experience is going to be amazing - but it seems the magnitude of spending relative to product that is being demonstrated publicly seems out of whack
- Trying to build a moonshot that you’ll only get to see when he’s done
- Consumer products you want to see in the market and iterate to success
- $2B or even $5B a year would not have been such a problem
- Elon’s twitter deal - he has no dual class - had the choice but didn’t - same as Tesla/SpaceX
- Apple spent $3.6B on first iPhone
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Governance issue - Google got dual class when they were going public from Morgan Stanley and chose Credit Suisse also
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Their letter from Sergey and Larry said they want to invest in long term direction and didn’t want to get stuck in short term, resonated in Silicon Valley
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They were building their own datacenters, chips, switches and investors were not sure about all these bets
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They had incredible margins and so made big bets
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Google struggled to figure out ways to spend money
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Great leaps in humanity are not correlated to crazy capital allocation
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Alphabet is spending 1/10th of dollars earned vs Meta
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250M shares of Meta that exchanged hands
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Big Tech is in trouble
- These companies are only 20% of market
- Bottom is kind of in for the short term
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Ukraine update
- Progressives urge Biden to push harder for Ukraine peace talks
- Got such a reaction that all but 1 recanted their position
- Ro Khanna maintained his position - approves aid but asking why can’t we pursue diplomacy
- Sacks will donate to members of both parties that will pursue better foreign policy
- AOC recanted
- Pramila Jayapal who led the effort threw her own staff under the bus
- A lot of people start with end result of what they want - that Putin leaves Ukraine with tail between their legs and not get a square inch of Ukraine
- They are afraid that diplomacy might result in something less than that
- New Republic hit piece on Sacks, Thiel, Elon
- You’re not allowed to have an opinion - is nonsense
- People want to deny that the war was ever predicted, they memory hole it, if they can deny that it was ever predicted, it means they can deny that it could have been ever prevented
- China is in a very interesting situation itself
- Massive demographic headwinds that are building
- Need to see what CHIPS act will do for China technology development
- Americans are essentially cutting off China from building advanced chips - chips are new oil, so its like an oil embargo of China - recalling engineers, etc
- Want to essentially prevent development in China
- China always plans ahead
- This is an attempt to slow down Chinese economy
- Seems like moving from economic logic to geopolitical - its trying to increase balance of power over them - might be overdue
- Do our leaders have the bandwidth to deal with Ukraine Russia on 1 side and China on the other side?
- Have they thought through second order effects of these decisions?
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Human Gut Biome
- 10T bacterial cells living in our human gut
- Human immune cells can see bacteria outside of your cells and attack it - can be bad if its proteins that look like human proteins - so you get auto immune disease
- Recent paper found a gut bacteria that looks like protein that triggers rheumatoid arthritis - never knew where it came from
- so now maybe we can figure out how to prevent its spread
- Protein mimicry
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