A small group of politicians are forming a 'Great American Politburo' that is seizing control of the economy, education, and media, eroding individual liberty and private property.

(00:00:00) All right, everybody, welcome back to the number one podcast in the world. It's the All-In Podcast. The Original Quartet is here. Bizarre David Sachs. How you doing, brother? I'm good. You had a busy week. A lot of long posts from you on X. We'll get into it. Wait, a lot of what? Long posting. A lot of long posts. I had like 1 long post. Yeah, how's the carpal tunnel going over there? I had two. Yeah, that carpal tunnel flaring up. (00:00:28) I got a third one teed up. I might use one in the chamber. I got one in the chamber, but I was going to save it for the pod. It's a good one. All right. coming in hot. I wonder who's going to get this bullet. Let your winners ride. Rain Man David Simon. And it said we open sourced it to the fans and they've just gone crazy with it. Love you, Wes. (00:00:58) Cackling, of course. That's the dick in dictator. He's my best teacher mother. Holly Hoppatia. How you doing, brother? Getting ready for summer? Summer gilets have been laid on the bed. You're ready to pack it up? Opposite. I got a lot of travel. Grinding. Oh, I forgot. You're doing founder-led sales. So the summer of relaxation is over. Now he's in the CEO slot. Got to get out there and do those enterprise sales. (00:01:27) And of course, coming off a pretty hot week, comments section was on fire. Very pro-Friedberg. Very. Very. Freeberg had perhaps his greatest performance. Also the first performance when he said more than three sentences. What's going on, Freeberg? You went off last episode. And then I think you also with the long posts. You know what's so funny? As the valuation of Ohalo ticks up, he gets more and more based. I love it. He is getting. (00:01:57) Welcome to the club. Welcome to the club. He's got trace commas based. Unleash the beast. When you're just a mere singleton, you kind of just keep it to yourself and then all of a sudden it starts to stop and then you're like. Nine figure Friedberg. He's like, I got something to lose. Wait for 10 figure Friedberg. Ten figure Friedberg's like YOLO. (00:02:18) You also with the long posts, you and Nancy Pelosi making sweet sweet. Here's what's happening. Here's what's happening. Let him go. What is being formed in the United States right now is the Great American Politboro. OK, the Great American Politboro that's formed and you all the guards are taking their seats. The Great American Politboro is being formed. (00:02:45) The new oligarchs are taking their seats. They're arranging the chairs. They're determining who will be chairman of the Pollockboro, who will assign what workforce to do what efforts for them, which $600 million stock trades their families will make to benefit and enrich themselves as they fly around in their private jets on the taxpayers' money. And we are watching it all before our very eyes as individual liberties are eroded. I am fired up about it. I see it happening. You know, Sachs is on the show this week. You can't just take straight (00:03:15) like that. Friedberg, expand on who the Politburo is. Yeah, so basically the Politburo is the leaders who elect themselves to dictate the flow of the economy, the allocation of capital, what work individuals they're allowed to do, and what activities they're allowed to do in an unfree society, which is what they're creating. They are the true oligarchs. And this is Elizabeth Warren, Bernie Sanders, Ro Khanna. This is the group that is trying to (00:03:45) less power and create for themselves a system whereby they have greater influence, greater control over aspects of the economy. They want to seize the means of production. They want to control education. They want to control media. And anytime there's an effort by an individual enterprise or an individual themselves to go out and build a business and succeed and do something that's outside of their scope and their span of control, they lose their minds over it. And that's what we're seeing. So I react to their tweeting and their bull (00:04:15) where they're basically trying to contort things about inequality and fairness and justice, when the truth is they are the rising empire, the evil empire in Star Wars. They are... (00:04:26) the folks who want to take from all of us what we were endowed with when this nation was started and what many people came to this country for, which is individual freedom and liberty, the ability to build a business in peace, the ability to make decisions, to do what you want with your own assets, and to have functionally private property. And they're taking it all away and they're trying to take it all away. And we're watching piece by piece, step by step. So they are forming a polit borough where they can effectively control the economy, control education, control the media, and tell us all what we can and can't do and say. And it's frustrating (00:04:56) to me to watch it because it's masqueraded as bullshit virtue, as justice, as equity. It's a bunch of nonsense words that they use to try and make themselves seem virtuous when in the end of the day, they are fundamentally evil and I hate watching it. So that's why I react so aggressively to it. Friedberg, I think you said something that's really important, which is they present it as virtue. That's right. Put yourself in the body (00:05:25) of a person that's probably middle of the road-ish, but is falling for it. Why do you think they're falling for it? Because they have needs and wants and desires individually that this person is saying, this system, this evil empire will give to you. If you take the knee, we will give you (00:05:46) the education for free. We will give you the childcare for free. We will give you the food for free. We will give you the paycheck every week. We will give you, we will give you, we will give you. Those promises in a democratic system like this or in a fake democratic system like this are what make people feel like the virtuous (00:06:06) offerings will align with their individual needs and wants. And I think that that's why people say like, okay, that's good. Free childcare for all. There is inequality in the world. There is disparity in wealth. There is disparity in asset ownership. And your solution, despite the loss of liberty along the way and the loss of economic mobility that arises from what you're offering, and this is really key, people don't realize the value of the United States, (00:06:32) The power of this nation was to give people individual liberty, which unlocks agency to progress yourself, to educate yourself, to make money, to give yourself more assets and more freedom and more flexibility than you had. Economic mobility is the key to the United States. (00:06:50) You do not get economic mobility if the government is giving you a job or giving you money. You lose economic mobility. You become indentured to the government. Everyone wants more. Everyone wants something that they don't have. But the truth is that the more the government is giving it to you, the less you have mobility, the more you are indentured, the more you are enslaved, and the more we are limiting people's ability to protect. (00:07:11) to progress. And I think that that's what's really so frustrating for me, is that people sign up to this to your point, and they're like, okay, that's great. I get to have this, and I get to have that, and I get to have that. But at the end of the day, you're giving all of your liberties up. You're giving all of your progress up. You're becoming all of your mobility. is what you're saying. And you're looking for them, and you don't have agency to pursue your own personal freedom. Yeah. (00:07:32) One thing I believe to be 100% true is that no human being that's ever been alive has ever lived up to their true capacity as a human. I agree. Like human agency is limitless. Limitless. Limitless. And the truth is, like any time that you create a system with the government that's giving people stuff, you are taking away people's agency. (00:07:52) And so that is what is so sad about the whole thing is like human agency is the one thing that we have unlimited capacity, unlimited, infinite upside, every human does. And to enshroud yourself in this government burden, thinking that it is a relief. Well, then that creates what's so sad about it. Because you're always looking to the government to solve your problems. The threshold for learned helplessness is (00:08:20) far, far lower than one may think. I grew up on welfare, and my mother was initially A housekeeper, and then she was a nurse's aide. She was probably making 8, 9, 10 bucks an hour. My father couldn't get a job. So we were on welfare, and welfare was probably 17, 18, $19,000 a year at the time in Canada. And it's a family of five. (00:08:50) But it was just enough that my dad just spent this cycle between drinking and not working, drinking and not working. And he would try in bursts. And I think that it must have been deeply frustrating for him, obviously. So I want to be compassionate to the struggle that he went through. But man, I would have thought that 17,000 is not nearly enough support. And so it would animate you to try to do whatever it took. But (00:09:19) Could he have gotten a job making 8, 9, 10 bucks an hour at a store? He could have, he chose not to. And so my recollection of being a ward of the state is that the threshold for that helplessness is far lower than one may think. And then if you actually stack all these other things, people will just fall into their worst proclivities. (00:09:44) And they will be a shell and a shadow of what they could be. My dad was, in my mind, the giant who had all this potential unfulfilled. And I keep that because I want a positive sense of who he was to me, despite all of the ups and downs and the stuff that he went through and how it negatively affected me at times. But man, if you want a whole country of those people, what happens when you're giving people 30, 40, 50, 60, 70, $80,000 a year of stuff? One, (00:10:14) At some point, you're not gonna be able to pay for it, but two, you're gonna reduce people to a shell of what their potential is. And that is not good. I have lived it, and I am warning all of you, be careful what you wish for. The flip side of it, by the way, as you point out, you can't pay for it. What ends up happening is the moment that we find ourselves in today, and we see it in, and we'll talk about Pritzker's law in Illinois that passed this week. (00:10:39) But we are now at a moment where we are saying there is no longer private property in the United States. This is one of the foundational rights that the founders of the United States tried to create a distinction between these other. (00:10:53) nations that everyone flees from where a monarchy or a totalitarian government or some communist system says everyone owns everything together or some small number of people own and control everything. And that's what this always comes down to, whether it's a socialist state or a communist state or a monarchy or some other totalitarian regime, there's a small number of people that own and control everything. And that is the brink that we're on because they are trying to say for the first time ever, there is no longer private property in the United States. (00:11:23) that if the government can say everything that you've already paid your income tax on, and then you've bought, and you now own, the government can take a piece of it every year based on the vote and the budgetary needs of an irresponsible fiscal legislature, we've lost it all. And that's where we are. And we see this just passed in Illinois. People think it's just crypto, just like they think that billionaire tax is just billionaires. (00:11:46) But anytime the government can take your private property after you've paid your taxes, bought something, and put it in your garage, we are done for it. Yeah, we're going to get into it. That is when the Polletboro has unlimited capacity to tax and take and do what they want. That's the moment we're at. Well, and the super sinister part to dovetail what both of you are saying and to give some grace to your dad, Chamath, in the studies of learned helplessness for people who (00:12:13) are trying to guess what that term is, who haven't heard it before, a psychological condition. If you give people a hard problem to solve, like an impossible problem to solve, they don't solve it. Then you give them easy problems to solve. They don't solve the easy ones, and they become depressed. And then they attribute their depression to themselves. They internalize it, in other words. If you give people easier problems to solve, (00:12:33) and make them increasingly harder as you go, they become empowered. They have agency. They feel like they can solve problems. And then when they get stuck on something, they don't attribute it internally. And this is why alcoholism is so pernicious in our society as well, is because when you start attributing it to yourself and then you start self-medicating, you try to dull these feelings because you're depressed. And I've had many friends who've gone through it and family members. And this is why having agency is so important. This is why endless unemployment is so dangerous. (00:13:03) And you need to taper people off and you need to give them a chance to be successful. If your dad had taken that $10, $12 an hour job, he would have become the manager. Then he would have become the owner of the place. So the coda to your story is, at some point, I think, and I don't know because my mom doesn't share this with me, there was some kind of breaking point because it was a really violent household. And then, (00:13:27) Near the end of my high school career, when I left, things got, I think, materially better. And part of it was because he got a job. And ultimately, he got a job, pretty low-level clerical work at the government, but we were so proud of him. And he did that until he passed away. But it changed. (00:13:50) him completely. Now, it could also have been because he had gotten older, but drank a lot less and was much more regulated. Yeah. So I completely agree with what you're saying. It's a really sad phenomenon. And you see it sometimes in successful people. They get successful very quick. They don't attribute each to their own success. They get up out of bed in the morning. They don't have to get out. They start drinking. They don't take a job. And they're affluent, but they're just not motivated. They don't have purpose. All right, let's get started. We got a huge docket to get through today. SpaceX had a record (00:14:20) breaking IPO and $60 billion cursor deal was quickly consummated as predicted. Friend of the pot, Elon Musk took space at ex-public last Thursday, $135 a share. A lot of people got to participate. Robin Hood, Charles Schwab, everybody talking about they got an allocation, one share, 10 shares, and they filled the green shoe, 85 billion raise. That's three times what Saudi Aramco raised back in 2019. Stock closed up 19% to 161, market cap above 2 trillion. (00:14:51) And at the taping of this pod, $177, not too shabby. On Tuesday, SpaceX exercised its option to acquire Cursor. That's the coding agent that got shipped by, speaking of Anthropic and Claude. They originally used Claude to be the back end of Cursor. And then Claude and Anthropic had an internal Skunk Works project. They told Cursor, allegedly, they were never going to release it to the public. They would never have a coding agent, and they did. (00:15:18) And that led to this incredible opportunity for Cursor to make their own model and use Elon's hardware at Colossus. They're doing 4 billion in revenue. So they got bought for 15 times revenue, SpaceX trading, I don't know, 60, 70 times revenue. So a great deal for everybody. SpaceX briefly passed Amazon and Microsoft, which is mind-blowing to be the 4th most valuable company. Amazon's revenue in 25, 717 billion, Microsoft's 2025, 282 billion, SpaceX's 25 only. (00:15:47) $19 billion. So that's corrected a bit. And now SpaceX is sitting at 7th largest company right behind TSMC. That's the Taiwan Semiconductor Corporation. So let's just go around the horn here. Congratulations to Elon and the team over there. Elon exercised his Tesla shares that he had coming from his employment there. I think he's done a pretty good job as CEO. He got a little bonus. (00:16:13) So that sets up potentially Chamath, the merger of the two big companies. Just broad strokes, what's your takeaway from the SpaceX IPO? Seems to have been executed flawlessly. It's an incredible company. It's a one of one. It's just a unique, unique animal. I think that the highest price to sales (00:16:39) was essentially these last few days. And now it's just going to grow into its valuation and generally just grow valuation. Nick, play the clip. The acquisition was essentially negotiated and the way that it's structured is so that the S1 doesn't go stale. So I think the way that it was (00:17:00) announced has more to do with the fact that they don't want to slow down and have to rewrite parts of the S1, have to redo the disclosures, have to redo the risks. The deal is effectively done. But what's so smart is that where is SpaceX today? Let's call it a trillion. Where could it be, just for the purpose of this argument, let's say 2 trillion. So when the deal gets done on a stock for stock basis, it's going to be, again, if it's 60 billion in (00:17:27) tomorrow dollars, effectively Elon's gotten a 50% discount. All right. Nailed it. We'll give that an, okay, sure enough. What I didn't factor as well is that the revenue run rate would essentially double on top of that. So he essentially got cursor for 15 billion. He got a good deal. Which is unbelievable. His business intellect is off the charts. That is an incredible deal. And now the consolidation phase will begin and we're going to see Tesla and SpaceX merge. (00:17:55) And it's going to be glorious. Sachs, you can also take a little bit of a victory lap here. You've been friends with Elon since PayPal days, obviously. And you obviously were an investor in SpaceX for a long time. Your thoughts on what this means for the company? Obviously, it's an incredible milestone, but what does it mean for the company going forward? Obviously, champagne bottles, yada, yada, but what does it practically mean for SpaceX and Elon going forward? (00:18:19) in a certain sense, as we all know, this was the biggest IPO of all time. And so in that sense, it was a huge milestone for this company that Elon and many other people have been working on for a very long time. I mean, this has been 25 years in the making. When people turn on the TV and they see this, they think that this is just some sort of overnight success. It's not. A lot of people have to work very hard to get to this point. But at the same time that it was this historic IPO, it's also the case that in a certain sense, (00:18:46) This didn't change anything for Elon. I think when people read that he's the world's first trillionaire, they start to think that he must have gobs of money, a trillion dollars sitting in a bank account. And that's not true. That's not how it works. That's not how wealth is created. He doesn't have one more dollar in the bank than he did the day before the IPO. He doesn't have more stuff, doesn't have more houses or anything that you could buy with money. Literally, his balance sheet is exactly the same. It consists of the same (00:19:16) thing. It's just that the public is putting a higher value on the shares of stock in SpaceX that he already owned. And he's not selling. He's under a one-year lockup, and I predict that he'll hold on for much longer than that, because creating SpaceX is his life's work. (00:19:34) So, you see all these people reacting with tremendous animosity and basically saying that, we can't allow the world's first trillionaire, stuff like that. Look, he doesn't have more cash than he did the day before they acted. It's paper wealth, clearly. It's that other people are placing a greater value on what he's built. And I think this is very important for people to understand is that there's a big difference between stuff and then the (00:20:00) machines that make this stuff. And I think, again, this is where wealth comes from, is the machines that make this stuff. So you go all the way back to hunter-gatherer days, right? The only wealth was in what you could collect, hunt, gather, whatever. It's basically the collection of stuff. Then humans develop the ability to create tools and then very sophisticated tools. And then some of those tools are corporations, which are almost like cybernetic organisms or combinations. (00:20:27) of tools, workflows, humans work in them. And it's those corporations that make the stuff. And the way that people get wealthy is that if you create a machine that makes more stuff, then there's a discounted present value for all the stuff in the future that machine might create. And that's where the wealth comes from. It's in the discounted present value. It's not in the stuff. It's in creating a machine (00:20:55) that will create stuff for humanity for a long time. And people will put a value on it today. That's really awesome. Because of all the stuff that it'll create in the future. And so just out of nowhere, it will appear that all of a sudden you have all this wealth created. But again, that wealth is a reflection. (00:21:11) of all the stuff that this machine will now create in the future. And people need to understand that process is a good thing, because when you think about all the progress that humanity has made, it's not in having more stuff, because again, that stuff, it all goes away, right? Whether it's food or shelter or whatever. It depreciates. It's a wasting asset. The reason why humans (00:21:36) are more prosperous is because of all the machinery we've created to make stuff well into the future. And again, some of that stuff can be things like shelter or clothes. It can also be medicines and cures and entertainment and all the things, electricity, all the things that make your life better. We need those machines. (00:21:55) And someone has got to own the machines, and the people who own it are the ones who create it. And the thing that Karl Marx never understood is that it's not this sharp delineation between capital and labor, because you can take people who start with nothing. Elon start with nothing. I mean, he was an immigrant to the United States. Yeah, slept on the floor, I'd zip too. Yeah, slept on the floor. He created these companies, he created these machines from nothing with his own vision and hard work, and he included thousands of other people. (00:22:25) So here's the other thing is just because you're quote unquote labor doesn't mean that you're not also an owner of capital. There's a great story about how there's a welder who worked at SpaceX who I think has made $1,000,000 in SpaceX stock transformational. But everybody who's part of these companies, and I think this is the magic of the tech industry, it is much more inclusive (00:22:47) in terms of ownership than any other industry. It's the magic of capitalism in free markets where anyone can participate in that market, anyone can enter that market, and ultimately anyone can transition from being labor to capital. Yes, it's fluid. It's back and forth. If you buy shares in a company and you have the ability to buy shares, you just vest them in sweat equity. (00:23:08) Or you start a business and you basically do work, save money, invest your capital, and continue to compound the capital until you get to a point that your labor is worth less than your capital. And that's what ultimately allows this economic mobility, this transition for people. And when you take that away, you destroy that capacity for mobility. That's why capitalism. That's right. And that's why we started today with agency. That's why it's so frustrating to me to watch people denounce (00:23:39) Elon's success and denounce the value that the world is putting on this business and on the success. Because what they're saying is that no future human, no kid that's sitting on a floor right now, sleeping on a floor that's poor, should have the capacity to achieve what Elon achieved. No one should be allowed that capacity to transition, to progress, to mobilize themselves. They're saying you should hate him. (00:24:03) By denouncing him and by denouncing that, you are basically taking that ability away and you're saying that this is evil. And you're telling all these young kids around the world that are thinking about their future, that they are now indentured to a government or to a fixed income for the rest of their lives to perform labor for a fee for the rest of their lives, as opposed to having the opportunity to transition, which is what Elon has done and what millions of others have done because of the freedoms (00:24:31) in the United States and other free markets that have allowed this to happen for people. And that is why it's not just about getting wealthy. It's not just about getting rich. It's about having agency to transition yourself and inspiring young people. And inspiring young people. Yeah, it's a different kind of transition. It's transitioning. No, you're transitioning from labor to capital by virtue of sweat equity. You have skills that are valuable that you can then translate into creating something that's valuable. And just to underscore that point, I mean, you think about SpaceX, (00:25:00) It's a machine that makes satellites. It's a machine that makes broadband connections from space. It's a machine that creates launch vehicles. AI software. AI software and so forth and so on. So it's a machine that makes things that people want and that therefore enhances people's lives. And it's only the market, the public's value that it places on those things. (00:25:25) that creates the net worth, that creates the value of SpaceX's stock and therefore the net worth of someone like Elon. But again, he doesn't have one more dollar than he had before. Well, and to put a finer point on it, you have to earn that. (00:25:40) by continuing to make the best product in your class. The second Elon satellite, Starlink, is not as good as the next two or three competitors. And there are two or three of them coming right behind him. And there's other people doing rockets. And obviously he's in a heated competition for LLMs and with cursor versus claw code. He's not guaranteed. He has to fight. And he's had to fight to win each of those categories. And the second he stops fighting in those categories, he loses and all that equity gets cut like we see with stock. (00:26:10) tank because they cannot keep up. So he's had to fight for every inch by making the best product. Nothing was given to him. Everything was earned and earned by his team. This idea that like he won the lottery. (00:26:25) is farcical. It's A 25-year overnight success story that had three or four distinct points where it was going out of business and he had to scramble. I've always thought that the people that rail on wealth are actually secretly incredibly jealous and want to be extremely rich. Of course. Because I've never heard a coherent argument about why when somebody achieves something that you should dismantle the things that they're building. (00:26:54) And what both of you said are so right. The vicissitudes of the market can make that number fluctuate wildly. There is a version of the market that has nothing to do with him that judges his stuff in the future as half of what they're judging it today. Nothing stops us from doing that. And all of a sudden, everybody who's breathlessly mad that he's a trillionaire, what do they say now? Because he wouldn't be a trillionaire. He's some version of what he was the Thursday of last week. Right? And you know, (00:27:24) to a semi-analogy, the machines become obsolete very quickly. in a capitalist society, you can get disrupted. And companies get disrupted all the time. If they become stale or calcified, if they don't invest in maintaining and upgrading their machine, they will become obsolete. Improving value. And you know what can't get disrupted? You know what can't get disrupted? The one unobstructable monopoly? Government. (00:27:51) And that's the problem. Government is competing for capital and it's competing for markets and it's competing for all these things. And that's why I talk about these people as being evil. They're a politburo. They're basically trying to take away capacity for value creation to make things better. Every generation for society, better medicine, better education, better livelihoods, better homes, everything gets better. But when the government monopolizes it, doesn't. And that's the competing force that we're up against. Yeah, and (00:28:21) I want to just add one thing to this, which is there is a piece of this that needs to be solved, which is people wanted to participate in the success of these companies earlier. And Tramath and I interviewed the head of the SEC and he's working on this, but the amount of demand from retail, and it was a very innovative thing that Elon did and the team over at SpaceX, they gave 20 or 30% of the IPO to retail investors. When you opened up your Robinhood account, I don't know if you guys have one, (00:28:48) or a Charles Schwab account, it gave you a little interface that said, hey, would you like to participate in the IPO of SpaceX? And you could put in your request. I think 6 or 7, I was talking to Vlad, maybe 6 or 700,000 Robinhood users got an allocation. It might have been one share, it could have been 50. That democratization needs to continue because the real, back to Freeberg's points about being a wage slave or an equity holder and trying to make that transition, (00:29:18) people being able to open up Robinhood and just buy one or two shares and vote with their dollars for 150 bucks that they want this future as opposed to other versions of the future, that's what gives them that empowerment. That's what gives them that agency. Well, what if they could do that earlier? And I've beaten this drum on this podcast and my other podcast for a decade on this, but people knew SpaceX, they were watching these rockets launch for a long time. And they would have placed that bet 10 years ago when the company was worth 100 billion or 10 billion or (00:29:48) 500 billion, but they weren't allowed to because we have a corrupt system in our government that says rich people, the top four or 5% of this country are smart enough to buy private company stocks and the 95% are too stupid to. And it's antiquated and it has to change and you should be able to buy whatever you want. If you want to buy crypto, you can. If you want to buy a private company, you can. If you want to play cards with your friends and play bomb pots and watch Dave Freeberg's (00:30:17) rage quit because he keeps losing at bomb pots when we play. That's Friedberg's right. Let people buy private company stock. It's crazy that we still have this rule, keeping poor people poor. Thanks for coming on my TED talk. Can I take a shot at answering Jamas' question? Why are there so many people who are influential, who are resentful of what Elon's done or what other capitalists do? I think it was (00:30:41) Joseph Schumpeter, who explained this, that basically you've got this intelligentsia in a society like ours where they don't make things, they don't make the machines that make things. They just make words and, you know, I guess ideas, and most of those ideas are just wrong, right? They're just made up. And they become resentful of the fact that there are all these people who are able to create, not just stuff, but the machines that make the stuff, right? And that in (00:31:10) our society, that is the thing that creates the greatest reward financially. Why? Because it actually aligns with what's in the greatest value for society, whereas they produce a bunch of hot air. So it's natural for that class of intelligentsia to become resentful and hostile towards the people who are able to amass this great wealth. I think that the great lie is that there are two sides to the society, that is the rich and the poor. And the great truth (00:31:40) is that there are two sides that are the makers and the takers. The lie is that the rich are unfairly rich and the poor are unfairly poor, and therefore the poor must take from the rich. But the truth is that it's the takers that tell you that lie. That the real truth is that artists, plumbers, electricians, woodworkers, computer scientists, people that build, people that make shit from all walks of life, all income levels, (00:32:09) all wealth brackets are the makers. And the takers are what Sachs calls this intelligentsia, the analysts, the espousers, the armchair mechanics, the critics, the commentators, the politicians. They are the takers. They are the people that watch the rest of society make stuff, build stuff, specifically doing things that create value for other people in society. That's what a maker is. Tell my kids this lesson all the time. I say, (00:32:39) What did you guys make today? They tell me something they made and I'm like, did someone else value it or did you make it just for yourself? At the end of the day, if you made something and someone else valued it, you were a maker. That was an amazing achievement. That is a great day. Whether you make a piece of art, whether you build a house, whether you write a piece of software, whether you build a business, whatever you make, if you're a maker and someone else values it, they become your customer in some way, they become your partner in some way, you've done something valuable. Those are the true engines of progress for humanity. And the takers (00:33:09) are the ones that tell the lie that it's rich versus poor. Because what they want to do is rip apart the makers. And they want to tell everyone, you've got to be on one side or the other. And they use that lie to get everyone to line up against each other and to give themselves ultimately the control to form the great American politburo, which is what they're trying to create. That is what's underway right now. And that is the fundamental great truth and great lie that we're kind of fighting against at this moment. (00:33:34) All right, this broke shortly after we taped our episode last week. We tape on Thursdays, we drop on Fridays as fans of the show know. Well, the US government has pulled the plug on Anthropic's latest model. You've heard us talk about that as Mythos. They released it as a controlled version called Fable 5. So there was Mythos. That was the one they held for 30 days while they were doing security, cybersecurity testing. Then they released it as Fable in a bit of a (00:34:02) guardrailed version of it. Commerce Secretary Howard Lutnick told Anthropic to restrict that model to US citizens last week, last Friday, in fact. Anthropic couldn't implement those restrictions or wouldn't in that granular of a way, so they just decided to do something more conservative and shut it down for everybody. This, of course, created a lot of hand-wringing in the industry, rug pulling, oh my God, we lost this great model, and what does that mean if I build my models on top of Anthropic, can I trust them, yada, yada. (00:34:31) And this was just days after the model was launched on June 9th. How this all started, it seems to be that Amazon CEO, Andy Jassy, who owns a large, Amazon is an early investor in Anthropic and they own a large portion of it. He had told the administration that there was a security vulnerability in Fable 5, that they were able to bypass, to jailbreak the guardrails that Anthropic put on it. Dario said the jailbreak wasn't serious. There seems to be some finger pointing it back and forth. And Dario said it was narrow. (00:35:01) Separately, Semaphore, a publication, like an email publication, reported that the White House acted partially over suspicion that a China-linked group had access to Mythos and they weren't supposed to. Why it reported that this group was South Korea's SK Telecom. Now you're saying, hey, how does South Korea have anything to do with China? Well, they have a longstanding (00:35:22) Or there are longstanding allegations that SK has a relationship with China. The White House previously ordered Anthropic to revoke SK Telecom's access to Mythos. They're kind of like the Verizon 70% market share for telecom in South Korea. According to the Washington Post, Anthropic did not initially disclose it had given Mythos to SK Telecom. And this happened before all the export controls, quote, badly damaged officials' confidence in the company's ability to safeguard sensitive technology. (00:35:51) Anthropic says the White House never raised the Chinese access in the fabled jailbreak conversations. There's a lot of finger pointing and perhaps nobody is closer to this except the principles and you, David Sacks. So tell us what is going on here. Is this politics and political between Anthropic and the administration? Is this a misunderstanding or is this, you know, the future of what's to come as these models become more powerful? (00:36:21) let me give you an update based on what I learned. This would have been last Friday and Saturday. So by that point, I got a readout from various folks at the White House about what happened around the time that letter was sent to Anthropic. And I then summarized what I learned in that long post on X. And no one told me what to say. (00:36:43) I just listened to these various officials explain themselves. I also heard from, let's say, some of the private companies who were involved in this. And all I asked was, listen, I think this context would be helpful to provide. They said, sure, you can publish it. So I posted my summary of what was happening. And whether you agree with the decisions of those officials or not, I do think that my post provides a window into exactly what they were thinking at that time. And what this comes down to is a couple of things. So first of all, like you said, Dario came to (00:37:13) to Washington a few months ago, this was back in April, and basically said that he had created a cyber weapon called Mythos. And he spiked the cortisol level, got everyone really worried. And there was some truth to it in terms of the sense that this model had advanced cyber capabilities, but he got everybody very focused on this problem. So mission accomplished. (00:37:37) They then had this pilot program for Mythos, this trusted partners program. And as the Washington Post reported, Anthropic expanded the program to something like 50 companies or more without consulting the White House. And according to the Washington Post, I can't confirm, I don't have any firsthand knowledge of this, but I don't have any reason to question the Washington Post's reporting on this. They did share Mythos with a company that (00:38:04) the White House believes it should not have been shared with. So think about that. They're sharing these capabilities that Dario himself has said is a cyber weapon with parties that the White House, and really we're talking about the national security officials believe might have connections to China. (00:38:22) That's SK Telecom according to these reports. I'm not going to say who it was. I know that's been reported. I don't have any firsthand knowledge of that. Okay. I'm just reporting what was in the Washington Post. But you have to understand that that's the context. So first of all, you got Anthropic effectively conducting its own foreign policy here, expanding the Mythos preview to groups that the White House didn't have any knowledge of. And then once they found out, the White House, you know, this is really the role of what the White House wanted is, look, we have classified information that you don't have. We know (00:38:52) that there are certain groups that shouldn't be getting this. And Anthropic expanded the pilot without consulting, which is, again, sort of bewildering because the whole point of what they were supposedly doing by trying to get this pre-approval regime was to consult with the government. So really, that was the predicate for this. And apparently, again, this is according to the Washington Post, that's when conversation started about whether a model like Mythos needed to be export controlled. Then you have the launch of Fable, which is basically (00:39:22) mythos with guardrails. Again, if those guardrails fail, then you have a cyber weapon being released to the public. And it wasn't the White House who came to the conclusion that the guardrails failed. It was private companies who were testing Fable, testing those guardrails. And as has been publicly reported, one of them was Anthropic's largest shareholder and cloud partner. And so- Amazon. (00:39:51) again, I'm not going to confirm, but I think we all can read the publications, okay? Yeah. So again, normally I wouldn't mention the names at all, but this is all widely reported, okay?