February 11 2023
- Chamath - gave his son grief about answering the phone
- JCal - Sacks balloon disagreement
- Media is reflexively hawkish
- Nordstream
- Balloon got more attention
- Made for TV (news) moment
- Why is the Nordstream story not being covered?
- Its not made for TV
- Or has news media already picked a side?
- When it happened, US state said Russia did it - and media raced so quickly to the conclusion
- But it was Russia’s main leverage over Europe
- Seymoure Hersh story is very detailed
- Legendary pulitzer prize winning journalist - 85+ years old
- Broke Vietnam war story - that military denied until he was proven right
- Broke Abu Ghraib prison abuses - military denied it again
- Now here he is with another report of covert military action
- Does Europe know?
- Military/authorities/CIA spokesman have said this is a fiction?
- Ukraine don’t have this capability
- But probably Norway and US and UK have the capability
- Before war, Biden said if Russia invades, Nordstream will be no more
- Victoria Nuland said same thing
- Blinken said also benefits of getting rid of it
- At a hearing Nuland also affirmed how beneficial it is
- Now US has Eu natural gas
- Who had motive, means and opportunity?
- If US did it, its an incredibly provocative act - against a country armed with nuclear weapons
- So potentially scary situation
- CIA knew how to do it, Biden wanted it, Republicans wanted it
- Maybe someone was enabled how to do it
- But those theories don’t have the same level of detail or reporting that Hersh’s story did
- Seymour Hersh story has a lot of incredible detail - 1 main source - provided a ton of detail
- Media ran with govt narrative and when Jeffrey Sachs from the left and Tucker Carlson from the right questioned this, they were called Putin stooges
- Radek Sikorski - Polish diplomat - when it blew up, he tweeted a photo - Thank you USA
- Who was conducting naval exercises in the region for 3 months
- Biden’s statement is true no matter who did it
- This affects Germany so maybe they should have got a heads up - if this was planned?
- Media seems to be coordinating their responses
- Germany might pay a very high price forever - Schultz might be in trouble because of his US support - they have an industrialized economy - which needs a lot of energy - so what is their interest in this?
- Everyone is looking for external conflict - there are a lot of interested parties in war and conflict - if you’re not happy at home, you look externally for conflict
- Foreign policy establishment is funded by these interests
- Relatively harmless thing like a balloon also gets people amped up reflexively
- Eisenhower warned against this in his farewell address
- He knew of which he spoke
- Friedberg did a podcast with Brian Keating - cosmologist
- Chamath did a photoshoot a long time ago - new establishment summit
- Search Wars - Microsoft vs Google
- Both companies did live demos
- Satya is calling on Google to demo
- Rumors that they fired the failed demo people
- Google has been using DeepMind quite well - like for Youtube, Ads, etc
- Larry and Sergey read Information Retrieval textbook
- Google makes ~$3/click
- 5c-10c revenue per search done on Google
- ~50% margin
- 50% COGs (cost of goods)
- So google search costs them 2.5c per search
- ChatGPT each result takes ~30c of compute - so order of magnitude higher cost
- Lot of work to go before it becomes truly economically competitive with Google
- So maybe $80B per quarter to do this for ChatGPT to serve Google level of search
- If you were sitting on something as foundational as Google Search in 1999 would you have sold 49% of it for $10B? HARD NO
- Microsoft bought ~50% of a tool for ~$10B - Google will be forced to decay their business model to compete
- This will flow into P&L
- So business quality will degrade
- Thats why bad Bard demo snafu caused $100B market cap hit
- Google is the best business model in history
- They have to find ways to spend money - else 50-60% EBITDA margins
- So they try to do a lot more things to try to make the core treasure not look as incredible as it is
- Incredible juggernaut
- They have $100B FCF this year
- Business will get worse if Microsoft, Meta, Quora, Tencent come out with competitors
- So Google will be hit
- What is the countermeasure from Sundar?
- He should go to Board and say we will double TAC
- Apple could be paid $25B this year for google search default
- How will AI companies pay publishers?
- Google is best monetizing because it gives best search and you get links to things directly
- Hard to get advertising right when people just want the answer?
- Am I getting the best answer or am I getting the answer you were willing to pay for?
- 3/4th of Google’s TAC goes to publishers through AdSense
- Better for you to spend money to degrade your business than have a competitor do it for you
- Google pays 70c per dollar to publishers - bid on everything and always win because they pay the most for every dollar
- Neeva.com shoutout
- Will these AI products be hit by fair use rights issues?
- Take any business that is a middle man business - compete away the margins which is all the input costs that are human capital and put that in customer acquisition
- Andrej Karpathy and a few engineers can just copy Stripe
- Result is economic productivity
- So technology is more important than debt for improving the world
- Galileo.ai shoutout - design pages using AI
- This + Github Copilot means you don’t need specialized developers for your startup
- Actual result will be programmers become more productive
- Video Game industry will be disrupted - just publisher not producing games, but now tools to produce your own game
- NYT throws shade at Goldman CEO’s side gig as DJ - NYT is just offended that people are happy
- Friedberg and Chamath both played violin for many years
- Technology is fundamentally deflationary
- Google should cannibalize their own business before it is cannibalized for them
- 95% of content websites will just go away (how to do this, how to do that, etc)
- Best thing for Google to get FTC off their back is if Microsoft steals some market share
- State of the Union
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Biden articulation wasn’t very good
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Shared on social media by Lyn Alden - debt held by the Public is runaway - this is crazy
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So have to cutback on payments in the future OR you tax a lot more and economic growth gets hit 😟
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In France riots because they pushed back retirement age by 2 years
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Real cost that is coming to bear for the US
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If they can’t grow the economy fast enough they HAVE to raise taxes
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Government is a far worse investor in economic growth than free markets
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Read Ray Dalio’s book on economic cycle
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Biden is doing same as Clinton in 1994 when he lost midterms - become champion of smallball
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They are getting ready for DeSantis on this
- Way back when he voted for entitlement reform
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There is no appetite for entitlement reform - unless its bipartisan
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Republicans don’t seem to have any impulse control
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American people won’t stomach entitlement reform when government has spent trillions on military wars, special interests
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China is deploying solar on every rooftop in China
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US also needs to do it
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We are not lacking generation capability - its scalable storage
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France had exodus of 42000 millionaires between 2000 and 2012 - same will happen in CA - already happening without wealth tax
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5-10 year look forward
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PJ Rourke: x - y = big stink
- x = what people want govt to pay
- y = what people will pay to govt
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SF $13B budget - $18K per citizen per year
- 35% goes to public health care
- This is more than every single state of the union except Oregon and South Dakota
- Spends more than 15 states put together
- Spends more than Federal govt ($15K)
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Miami FL has no income tax - income tax and capital gains tax of 0 in florida and they make it work
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If they don’t bring the budget in line then they can’t just tax people forever
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