Taiwan will become strategically irrelevant to the US and China within 18 months as mainland chip fabrication scales and orthogonal technologies emerge.

(00:00:00) All right, everybody, welcome back to the number one podcast in the world, the All In Podcast, episode 273. (00:00:07) It's a huge week. (00:00:08) Sachs is out. (00:00:09) So we got to get Marc Benioff, CEO of Salesforce. (00:00:12) I'm the only one left here. (00:00:13) You're the only one left. (00:00:14) That's how I made it on. (00:00:16) No software CEOs, right? (00:00:17) To China? (00:00:18) There's no software CEOs in China. (00:00:21) Interesting. (00:00:22) But did you get the invite? (00:00:23) What's your status with this administration? (00:00:25) Because you were obviously very famous for being a Democrat on the left. (00:00:31) I'm not a Democrat on the left. (00:00:32) I never have been. (00:00:33) Jason, what are you talking about? (00:00:36) You're donating to all these folks and now you're kind of in Trump's camp. (00:00:39) What is it? (00:00:40) Listen, the number one thing is, hey, I'm here to support the country. (00:00:46) That's what I do. (00:00:46) Okay. (00:00:47) Yeah. (00:00:47) So you're right in the middle. (00:00:48) You have an allegiance to America. (00:00:51) I hope so. (00:00:52) Yeah. (00:00:52) I'm not a Democrat or a Republican. (00:00:55) I am an American. (00:00:56) Okay. (00:00:57) I like it. (00:00:58) Benioff got the invite to the two hottest tickets. (00:01:00) He got the invite to Windsor Castle in Tails, and then he got the invite when Prince Charles came here too, I saw. (00:01:06) He was in Tails then too. (00:01:07) And also we were at that Saudi dinner too. (00:01:09) Weren't you there, Chamath? (00:01:10) I did not go to that one. (00:01:12) All right. (00:01:12) Well, we have a big docket here. (00:01:14) The Trump-Xi summit has begun. (00:01:17) That is the number one story right now after a two-month delay because of the war in Iran. (00:01:22) This is the first visit to China since 2017. (00:01:28) 7th face-to-face meeting for Trump and President Xi. (00:01:31) There are 12 hours, 15 hours ahead of us. (00:01:33) Today, Thursday was officially day one. (00:01:37) Here's what happened. (00:01:38) China agreed that the Strait of Hormuz should remain open with no military commitment and that Iran should not have a nuclear weapon. (00:01:48) So we're in sync on that. (00:01:50) On Taiwan, this is a little spicy. (00:01:52) She warned that, quote, if handled poorly, the two countries will collide or even clash, putting the entire US-China relationship in an extremely dangerous situation. (00:02:03) Polymarket says Taiwan is safe for 2026, only 6% chance China invades this year. (00:02:10) On 23 million in volume, which is a lot of volume, 17% chance, roughly triple. (00:02:17) that something happens by the end of 2027. (00:02:20) There's been a lot of debate. (00:02:21) Some people say it will happen after. (00:02:24) Trump is out of office. (00:02:25) Some people think it's going to happen while he's in office on trade. (00:02:29) She committed to buy more soybeans, U.S. (00:02:32) oil, LNG, and 200 Boeing jets. (00:02:37) She said the talks laid out a vision for constructive, strategic, and stable ties. (00:02:43) Trump was effusive in his praise for his friendship. (00:02:47) giving the disclaimer that people don't like it when he praises Xi. (00:02:51) Let's stop here and have a bit of a discussion. (00:02:54) Friedberg, you have been a bit obsessed with this relationship and the bipolar nature of it. (00:03:04) What are your thoughts here and what is the goal for Trump? (00:03:06) What is winning for Trump coming out of this? (00:03:08) What is winning for Xi? (00:03:12) I mean, Xi made comments in his opening remarks. (00:03:17) that it would be ideal if the United States and China could avoid the Thucydides trap, which as you'll recall, we talked about with Graham Allison and we've talked about several times over the last few years that as a rising power meets a kind of declining power, there's always some (00:03:36) moment where you end up in this kind of state of conflict. (00:03:39) And the question is, can the US and China avoid conflict and find a path to cooperation, which has happened a few times in history when we found ourselves in this moment, but doesn't often happen. (00:03:50) And I think the way to kind of think about the opportunity is if you're in a resource expansive world where you are increasing productivity and increasing production globally at an accelerating pace, perhaps there's less of a reason to have conflict. (00:04:04) Perhaps there's a way that (00:04:06) both societies, both countries, can increase the quality of life for their people without taking it away from the other side. (00:04:15) And in a world where you're more resource constrained or resource static, that becomes less possible. (00:04:21) You have to fight and grab land and grab territory and grab resources from the other side. (00:04:27) And it seems like in this moment when we are seeing these extraordinary technology shifts unlocked by AI and automation and biotech, (00:04:35) and all of these kind of moments of which could be true abundance ahead of us, it seems like the perfect moment to say, hey, maybe the world can be more multipolar, it doesn't need to be unipolar, it doesn't need to be bipolar, but everyone can participate in the expansion of the pie. (00:04:52) And I think that that's kind of the idealistic way to look at the opportunity in front of the administration and Chinese leadership right now. (00:04:59) Is there a way to kind of look at the next 30 years? (00:05:03) and ask the question, how do we all share proportionally in growing the pie and not find ourselves in a moment of conflict where you assume the pie is static? (00:05:11) That's, I think, hopefully the message that comes out of this. (00:05:13) From an administration political perspective, it just seems like this is going to be a major coup for the president if he can walk away with a series of trade deals with China that increase job security, increase prosperity, increase income levels, increase investment in America and American jobs. (00:05:30) it would be a huge win. (00:05:31) And I think that's the tactical stuff that people will be truly looking for. (00:05:35) And I think the big strategic question, which I care most about, which is avoiding conflict, is there a way we can chart an economic and cooperative path that doesn't involve eating each other and involves sharing in a bigger pie? (00:05:46) Tramath, why is Trump bringing all of these CEOs with him? (00:05:49) And what does success look like coming out of (00:05:53) this meeting? (00:05:54) I think that you find a resolution and a path forward with China through economic cooperation. (00:06:00) It's the largest consumer economy in the world. (00:06:03) It's still largely closed off. (00:06:05) And so I think what this is was about bringing some amount of financial firepower with them so that they could start to penetrate that market. (00:06:14) Planes, cars, chips, you know, very much hard equipment type stuff. (00:06:19) I've said this before, but I think the Chinese are very much a top-down Confucian societal philosophy, whereas Americans are much more bottoms-up, kind of an individualist construction. (00:06:32) The fact that we're so different actually gives us a lot of room to find cooperation and not find conflict. (00:06:38) And I think at the center of that is economic cooperation. (00:06:41) I had a friend call me this morning, very prominent Democrat, (00:06:45) And he was the one that called out the media, which I was surprised by. (00:06:49) And he said, the media gets it all wrong because they're talking about why is he bringing these CEOs? (00:06:54) And instead, the reality is that the simplest and surest path to a no conflict detente with China is economic entanglement. (00:07:03) And it has to be bi-directional because really for so many years, it's been one way where they're sending us the cheap goods that they've wanted. (00:07:11) So I think strategically it's good. (00:07:13) And I think, I'll just take a slightly different take on what Friedberg said. (00:07:16) I think behind closed doors, they're probably just figuring out how to divide the pie. (00:07:21) Unpack that for a second. (00:07:22) Divide which pie? (00:07:24) The globe, the economy, the Western hemisphere versus the Pacific? (00:07:28) Look, China still needs a lot of energy. (00:07:31) They also need a lot of critical technologies that America provides. (00:07:34) And so I think that there is a trade there. (00:07:36) And the quid pro quo is there are certain regions of the world where we want them to de-escalate their participation in. (00:07:43) Central South America being probably the most important. (00:07:46) And then the second is probably in the Middle East. (00:07:47) And then maybe the third is just to find some reasonable view of the Asia-Pac region together. (00:07:52) And I think there's a trade there to be done. (00:07:54) And in that, you kind of start to carve up the world into a pretty easily identifiable bipolar construction. (00:08:02) They also, Mark, need customers to buy their goods. (00:08:07) And we've had a bit of a (00:08:09) Mixed signals there, tariffs obviously last year, sticking it to China in a pretty hard way. (00:08:14) The decoupling after COVID, hey, we need to be independent energy, PPE, drugs, chips from China. (00:08:24) Now we're kind of saying, hey, let's come to the table and build connective tissue. (00:08:29) So sort that out for us on a business level. (00:08:33) Should the two countries be deeply entwined? (00:08:35) And then how do we manage (00:08:37) having too much dependency on China? (00:08:40) Well, you heard it today from President Xi when he said he wants a wider door. (00:08:46) And that means that he wants the door of business to open even wider between the two countries. (00:08:52) We have our absolute best salespeople there, not just our president, who has to be one of the best salespeople I've ever met, but also we've got Elon, (00:09:02) We've got Jensen selling chips. (00:09:05) Kelly Ortberg selling planes. (00:09:06) Kelly is selling planes. (00:09:08) He's already sold 200. (00:09:09) He wants to sell 5. (00:09:09) Financial services. (00:09:11) Brian is selling soybeans. (00:09:12) Brian Sykes, the CEO of Cargill. (00:09:14) You know, Cargill is the world's largest private company based in Minneapolis. (00:09:19) and he is going to come away selling a lot of soybeans. (00:09:22) So you go through the list of the CEOs, each one is our best salesperson in this category. (00:09:29) And they're going to come back with orders, and it's going to be amazing. (00:09:32) And by the way, I think you said it very well, this idea of business is this kind of greatest platform for change. (00:09:40) They are working together like never before. (00:09:42) Don't forget, this isn't Trump's (00:09:44) and Xi's first meeting. (00:09:45) These guys really like each other. (00:09:47) They are very connected together. (00:09:50) You can see they're smiling with each other. (00:09:51) They're very, they have a sales orientation. (00:09:54) So I expect a lot of order books to come back. (00:09:57) I have a question for you. (00:09:58) Are you allowed to sell software in China? (00:10:00) We, well, with the right, the Chinese have a lot of data residency laws. (00:10:05) So, you know, we do it as we don't have any offices or employees in China. (00:10:10) We never have. (00:10:11) The only time we end up with any residue in China is when we buy a company, and they have a presence over there, and then we have to divest from it. (00:10:20) We have an exclusive partnership with Alibaba. (00:10:22) Everything just goes through them, and we don't do anything in China. (00:10:27) Is it significant growing? (00:10:29) What percentage of your revenue is it? (00:10:31) Yeah, it's great. (00:10:32) We have a great partnership. (00:10:34) Key customers are Salesforce like Louis Vuitton, or Laura Piana, I know Chamath loves Laura Piana. (00:10:43) Same old. (00:10:43) And then, in all the other stores all over the world, they use Salesforce, but in China, it's Salesforce on Alibaba. (00:10:53) It's still your code, but then it resides in their servers for data residency stuff. (00:10:58) Their data residency, their partnership. (00:11:01) It's a totally unique relationship. (00:11:03) It's the only place in the world that we do such a thing. (00:11:06) Yeah, and it has to be, all the data has to be kept in China. (00:11:08) All the data has to be accessible by the CCP. (00:11:12) That's why it's so extraordinary, by the way, what Elon has. (00:11:15) You know, Elon has Tesla in China, no partnership. (00:11:19) He's the only one. (00:11:20) He has a phenomenal relationship with Xi. (00:11:23) When you look at Xi and Elon together, notice how deferential and respectful they are of each other. (00:11:31) And here is these AI cars with all these cameras. (00:11:35) American-made Chinese factories driving around China. (00:11:40) That is pretty incredible. (00:11:42) How do you think he pulled that off? (00:11:45) Is that just a one-off exception? (00:11:47) I think Elon's the greatest salesman in the world. (00:11:50) That's how. (00:11:51) I mean, the cynical take on Ichimov would be they wanted him there, and they wanted to study the company and the innovation. (00:11:56) And they have now become the biggest competitor with their EVs. (00:12:01) And so it is a pretty-- (00:12:04) coopetition, I guess. (00:12:06) It would be the cynical way to look at it. (00:12:08) I want one of those new BYD golf-- what do you call those with the doors that flip up? (00:12:14) Gullwing. (00:12:15) Gullwing. (00:12:16) I want one of those Gullwing BYDs. (00:12:18) They have some cool cars. (00:12:19) Have you seen those? (00:12:20) They're cool, but they're not safe. (00:12:21) They're incredible. (00:12:22) Yeah. (00:12:22) They're talking in this-- they said they're talking about bringing some of those cars to the US. (00:12:28) That would be incredible. (00:12:29) I would hollow out the entire automotive industry here if we had $20,000 (00:12:35) $30,000 cars from China. (00:12:36) It would be the end of the US automotive industry overnight. (00:12:39) And Tim Cook's there. (00:12:41) He has to store all his data there. (00:12:43) That's been a pretty controversial issue for him because Friedberg, if anybody has private information or is a dissident, Tim Cook has to give that data over to the Chinese Communist Party. (00:12:58) How do you think this plays in America vis-a-vis the midterms, Friedberg? (00:13:02) Americans feel ignored, inflation over 3%, and they look at the Iran war as a betrayal by President Trump, and they look at China as not material to their well-being. (00:13:18) So when you look at (00:13:21) Trump being on a six-month timeline for the midterms, and he's only got two more years in office after that. (00:13:26) You got Xi, who's working off of a 100-year playbook. (00:13:30) How does that dynamic play out with Trump and the midterms and his core constituency, MAGA, which is now evolving into America First, America Only, and this kind of is rubbing that group of people the wrong way? (00:13:45) I think the 2nd and 3rd order effects of anything that comes out of China is what's going to be most consequential to the average voter, which is job security and income security and income growth, and then cost of living impact. (00:13:57) The cost of living impact would be if there can be some deflationary effect from a trade deal that makes access to goods lower price for Americans, and then anything that America is exporting, there's increased demand. (00:14:09) Like there's a follow-on effect to the soybean export market. (00:14:14) There's A follow-on effect, obviously, to the oil export market. (00:14:18) There's A follow-on effect to, for example, technology and software being exported. (00:14:25) So that increases economic productivity in the US and increases job security income. (00:14:30) And then the other side of the trade deal is, can we get stuff that Americans really care about and make it cheaper? (00:14:35) Can people now buy stuff at the store that drops in price by 30, 40%, where we've kind of tariffed and reduced trade, that increases the price of things. (00:14:42) So if those deals kind of get worse, (00:14:44) worked out. (00:14:45) People will see things get cheaper at the store, and they'll feel good about kind of their income security, and I think that could be positive. (00:14:52) I think that's what's ultimately going to make people make the blue-red decision when they go to the polls in November. (00:14:57) That's the schizophrenic nature of this, Chamath. (00:14:59) We have Americans who very much want cheap goods from China, and then we have last year all these tariffs being put on, and we have this great decoupling. (00:15:08) So (00:15:09) How do you handicap the midterms, Trump's timeline, and Xi's timeline, and what their goals are? (00:15:17) And then I guess we'll get to Taiwan after that. (00:15:20) I don't know. (00:15:21) I think it's a little bit above my pay grade. (00:15:22) But what I will say is that the midterms, I think, are probably going to swing more based on these recent gerrymandering rulings from the Supreme Court and what happened in the Virginia Supreme Court and what's going to happen in the state legislatures of these red states. (00:15:39) and some of these blue states more than what's going to come out of this summit with President Xi. (00:15:46) So let me just put that over here. (00:15:48) And I think that money is getting organized. (00:15:50) There was an article in the New York Times this week, which really surprised me, but the largest donor in this election cycle is Andreessen Horowitz. (00:15:58) Yeah, what is that about? (00:16:00) Yeah. (00:16:00) I think it's because they're trying to establish themselves as part of the financial firmament of America, which I think strategically as a business makes a lot of sense. (00:16:08) Like they're in the AUM business, right? (00:16:10) So they can't stop at 100 billion of AUM. (00:16:14) They're marching towards a trillion. (00:16:16) They're going to be the next Blackstone, which I think is an incredible feat. (00:16:20) And they're building a juggernaut of a business. (00:16:24) But I think they also realize that politics is now a permanent part of that if they're going to be investing in higher quantum, more geopolitically influenced parts of the capital cycle and parts of the economy. (00:16:36) So I think the midterms are largely that. (00:16:39) The money that's going to be raised, plus the gerrymandering that will get done and undone over the next few months. (00:16:46) Again, I think the Chinese and the Americans have a very strong incentive to kind of divide up the world. (00:16:53) Like I think the future (00:16:54) At this point, you have these critical resource inputs. (00:16:57) China has a stranglehold. (00:16:59) You have energy and intelligence, AI, where America has a stranglehold on one and an effective stranglehold on the other, which is energy. (00:17:10) And I think there's a trade there to be done. (00:17:12) And as long as you can negotiate what a reasonable give and take is, (00:17:18) I think they're just going to find common ground. (00:17:19) Like, does China really need to be in Chile and Venezuela and Panama? (00:17:24) Probably not. (00:17:25) Does America have to have an incredibly strong point of view about the Strait of Malacca? (00:17:30) Probably not. (00:17:31) And so there's probably a trade to be done so that we can get their rare earths, they can get some more oil, everybody can be happy and we can all find abundance. (00:17:40) Yeah, the key issue here is China is, and most people are, you know, China phobic, but China has serious (00:17:48) systematic issues with population, with their real estate, with their GDP. (00:17:53) All of this is in decline. (00:17:55) And I think Xi most of all is concerned about another Tiananmen Square. (00:18:00) If he doesn't get more people working, they've had the largest growth of any middle class. (00:18:06) In history, they have the largest middle class in the world. (00:18:09) I think you were sort of referencing that, Mark, with luxury goods and luxury goods providers are going there, but it's tenuous. (00:18:16) And that's the number one, by the way, that is the number one point of focus of President Xi. (00:18:22) President Xi's focus has been getting 500 million people from poverty into the middle class. (00:18:28) It's not exactly how we think about the world and the United States. (00:18:32) That's the main focus of the political leader, and he's achieved that. (00:18:37) has been an incredible accomplishment. (00:18:39) But it's at risk right now because their GDP is falling. (00:18:42) They need their factories to operate. (00:18:44) They're being undercut by other regions. (00:18:47) And then, of course, Taiwan is what they want most of all and supremacy in their part of the world. (00:18:53) I'm not convinced of that, actually. (00:18:56) I think what they want. (00:18:57) I mean, I think we just kind of said it to summarize. (00:19:00) They want to have (00:19:03) economic success. (00:19:04) They want to continue to grow their middle class. (00:19:06) They want to continue to have a healthy economy. (00:19:08) They want more trade. (00:19:10) I thought it was interesting that they're talking about Trump is talking about not only having the board of peace now, he wants a board of trade. (00:19:17) That was a discussion we've never heard before today. (00:19:20) Then we have Xi saying, I want the wider door. (00:19:23) Then we have all these folks there selling their products. (00:19:26) Two people we didn't mention, the CEO of Visa and the CEO of MasterCard are on the trip. (00:19:32) Now, why is that? (00:19:33) Because if you look at commerce in China, it is dominated by companies like Alibaba and these organizations who use these super apps. (00:19:42) It's not really... (00:19:43) all the way open for a Visa and a MasterCard, that would be incredible for those executives. (00:19:48) So in the same way that we want to sell airplanes, we want to sell chips, Nvidia, the Qualcomm CEO, Cristiano is also there. (00:19:55) We want to sell soybeans. (00:19:57) We want to sell payment services. (00:19:58) We want to sell everything. (00:20:00) The more economic collaboration and cooperation you can get between the two countries, the more peace you're going to have. (00:20:06) 100%, I agree. (00:20:09) Three hard questions, Mark. (00:20:11) Should we be selling them the latest chips, yes or no, in your mind? (00:20:16) I think it's irrelevant at this point. (00:20:18) I think that the Chinese models are as competitive as these US models, and they've learned to make these models without having the highest end chips. (00:20:26) I think the highest end chips is kind of more of an ego gratification for us. (00:20:30) We have Blackwell, we have this, we have that. (00:20:33) But when you look at their models, their models are excellent. (00:20:36) They fast follow us, you know, the best models we've had. (00:20:39) So if it's that way of now, should we just sell it to them since they're figuring it out anyway, Mark? (00:20:45) We probably should just sell whatever we can at this point. (00:20:48) Got it. (00:20:49) And I think that, as I said, I think the more economic cooperation and collaboration is better. (00:20:54) And if you want peace, I think that this, I think Taiwan, it's kind of a... (00:21:00) Well, I'll sort of go back around to that. (00:21:01) Yeah. (00:21:02) Freeberg, your take on chips. (00:21:04) Should we sell them the latest chips? (00:21:05) And then Chamath. (00:21:06) I want to get the answer to that question from each of you. (00:21:08) I think it's inevitable that they get there. (00:21:10) By the way, I do think this is one of the key aspects of this deal. (00:21:14) I've said this before, but maybe Taiwan becomes less relevant to the US and to China as both China and the US mainland fabs. (00:21:22) So as we build out our own manufacturing capacity here in the US, and I know we've struggled and there are fits and starts and issues with it and whatnot, but the TSMC facility in Arizona is running. (00:21:34) their printing. (00:21:35) And if it works and they figure out how to scale it, there'll be other facilities in the US. (00:21:40) And then China's mainlanding with Huawei standing up a lot of facilities. (00:21:43) They've got a multi, I think I talked about this on one of the shows, a multi-decabillion dollar government investment in ensuring competitiveness, not just with fabs, but also with semiconductor manufacturing equipment so that they don't get cut off on the supply chain with companies like ASML blocking sales into mainland. (00:22:01) So as they build out their own semiconductor capital equipment, (00:22:05) systems and their own fabs, does Taiwan really matter? (00:22:09) Is there really that much of A security risk to the United States and to China in that sense? (00:22:13) And perhaps what everyone's focused on, which is this pivot point around Taiwan, maybe it's not that the US is selling Taiwan down the river, but it's just that no one gives a shit anymore. (00:22:23) So, you know, there may be this kind of cultural moment for China where they want to at some point say, hey, by 2040, which I think is what I've heard, they want to be able to kind of, you know, bring Taiwan fully into the sphere. (00:22:34) Maybe the US shouldn't care that much at that point from an economic and security perspective. (00:22:40) So I think that's one of the things that's happening that people are. (00:22:42) So you're in the camp of sell the chips to them and it will demotivate the TSMC or the capture of those fans by the Chinese. (00:22:51) Put it this way. (00:22:52) I think the more the global productivity index can climb, the better off all humans will be. (00:23:00) So the question is, do you really want the West to see their productivity index climb and then you're effectively forcing conflict and forcing issues with the East? (00:23:09) Or if we all grow our productivity index, we all make more stuff. (00:23:13) Everyone benefits. (00:23:14) Everyone has better jobs. (00:23:15) Everyone makes more money. (00:23:16) Everyone has access to more stuff. (00:23:18) The cost of goods comes down for everyone. (00:23:20) Doesn't that make the world a safer and more secure place? (00:23:22) Sure. (00:23:23) So I think this idea that like technology should be held to one side of the world and not given to the other side of the world is inevitable. (00:23:30) inevitably going to lead to conflict or increase the probability of conflict. (00:23:34) Whereas if you let technology diffuse and proliferate, everyone benefits and conflict indices go down. (00:23:40) It becomes commoditized, you know, and everybody has access to it, so then it becomes... (00:23:45) You give everyone a higher standard of living, and you give everyone's economy a boost, and you give everyone less reason to fight with each other. (00:23:50) So since you went there with Taiwan, should we take our arm sales off of the table, Friedberg, and should we ask China to not sell arms to Iran? (00:24:01) Yes, we should ask China to not sell arms to Iran. (00:24:04) Yeah. (00:24:05) Okay. (00:24:05) I don't know what there is. (00:24:06) What is there to talk about there? (00:24:08) Well, because I think what she wants is for us to not sell arms to Taiwan. (00:24:13) So would you make that trade, I guess, is what I'm saying. (00:24:16) Oh, yeah. (00:24:16) I mean, that's a good question. (00:24:17) I think in that context, that's a nuanced one. (00:24:20) I don't. (00:24:21) That's why I bring it up, because that seems to be. (00:24:23) Generally, you're right. (00:24:24) Yeah. (00:24:24) I mean, generally, that's probably a trade that. (00:24:28) Make the trade, do the deal. (00:24:31) So you say make the trade. (00:24:32) Chamath, I mean, I kind of know. (00:24:34) We're 18 months from Taiwan not being an important moment of conversation the way it is today. (00:24:42) Why 18 months? (00:24:43) Because we are at a point where we're probably one to two nanometers away from being able to do what we need Taiwan to strategically do for us. (00:24:52) And so as we scale up our chip fabs, as we get more capacity, and interestingly, there are these orthogonal technologies being developed. (00:25:01) I don't know if you guys saw, but Neuralink was showcasing now a machine that is literally operating at the (00:25:09) almost nanometer scale to do the brain operations for the implantation all automatically. (00:25:14) So when you have the dexterity and the capability mechanically to make these things, the real reason then is a very different one than what it is today. (00:25:22) it's economic. (00:25:23) And if you take that off the table, I think we'll have a very different attitude to Taiwan. (00:25:26) That's #1. (00:25:27) Number 2, sell the chips. (00:25:29) And the reason we should sell the chips is we want Nvidia to win. (00:25:32) We do not want to give enough oxygen for Huawei to then all of a sudden emerge and have a version of a chip that works. (00:25:38) And what Mark said is totally right. (00:25:41) These models are catching up. (00:25:43) They're almost at the same pace. (00:25:44) So the more important thing, Jason, is probably, we should all agree, is just like, let's have a reasonable KYC for how the models get used so that, you know, somebody in a basement doesn't cook up some bioweapon. (00:25:56) Meanwhile, sell the chips. (00:25:58) Proliferate, let Jensen win. (00:26:00) I'd rather he win than Huawei win. (00:26:02) Mark, I'm going to give you the last word, but I'm going to force you to answer a hard question. (00:26:05) China sets up a blockade around Taiwan, and they decide they're taking it. (00:26:09) Should the US defend it, yes or no? (00:26:11) I've said this for years. (00:26:12) I don't agree with Neil Ferguson on that point. (00:26:14) I think that this is a nonsense issue. (00:26:16) I think China and Taiwan will reconcile. (00:26:20) I think that, first of all, I do want to schedule, though, Chamath for that Neuralink. (00:26:25) Next Tuesday, 5 o'clock, we can drill your brain, Chamath. (00:26:29) Can I get you in? (00:26:30) What are you trying to do? (00:26:31) Put some empathy into Chamath? (00:26:33) I talked to Elon. (00:26:34) He said it doesn't give you people. (00:26:37) And boom, and then you can get hooked up. (00:26:40) It is the craziest thing. (00:26:42) I know. (00:26:42) I got you scheduled at 5:00 on Tuesday, Chamath. (00:26:45) So hold your hand if you're too nervous. (00:26:47) Yes, sure. (00:26:48) And by the way, empathy, empathy insult. (00:26:50) We had a heart. (00:26:52) Literally like, if we want to work at the Chamath, it's going to make for an even better show. (00:26:57) Absolutely. (00:26:58) It would be incredible. (00:27:00) Yes. (00:27:00) And I would laugh and I would giggle. (00:27:05) We could get into show tunes here. (00:27:07) Friedberg, I know you're big on the show tunes. (00:27:10) If I only had a heart. (00:27:12) If I only had a brain. (00:27:13) A heart, a brain, and what's the third one? (00:27:16) If I only had a neuralink. (00:27:19) You got to give you courage, Friedberg. (00:27:25) OK, move on. (00:27:26) All right, let's move on here. (00:27:28) By the way, I think it's most kids. (00:27:31) Chamath stayed home. (00:27:32) I took his kids to the Wizard of Oz at the Sphere. (00:27:34) It was incredible. (00:27:35) If you haven't tried it. (00:27:36) Chamath was like, to do something enriching with my kids or hit the craps table. (00:27:43) No, I'll be honest with you. (00:27:44) I get a little freaked out in large... (00:27:50) Like groups of people. (00:27:52) Yeah, I get, I get a, no, just, like when there's a lot of people, I get very nervous. (00:27:57) Is this because of your newfound celebrity? (00:27:59) Is that the issue or is it just always been the same? (00:28:01) No, I don't even want to go there. (00:28:02) I just have these bad thoughts of like, oh my God, what if something happens? (00:28:05) How do we get out in like a terrorist attack? (00:28:08) How do you get out to the exit? (00:28:10) I don't know. (00:28:10) Yeah, exactly. (00:28:11) You have panic disorder. (00:28:12) Panic disorder. (00:28:13) I don't like these large spaces with lots of people. (00:28:15) I get a little whinged out. (00:28:17) Anyway, your kids had a great time. (00:28:18) Great show. (00:28:19) Tony Robbins lives very near you, Shamath. (00:28:21) Don't you think we can get that to happen? (00:28:23) Yeah, let's get Tony Robbins in there to clear that blockage. (00:28:26) I love Tony Robbins. (00:28:29) I had him at my conference this week. (00:28:31) It was incredible, actually. (00:28:32) He did an incredible presentation for an hour. (00:28:34) Did he unlock for you your success? (00:28:36) He claims to, that he has you on the roster of $50,000 a year CEOs. (00:28:40) I am the number one fan of Tony Robbins. (00:28:43) So I mean, what percentage of your success is attributed to Tony's mentorship? (00:28:47) Hey, if it wasn't for Tony Robbins, I don't think there would be a Salesforce. (00:28:51) So there you go. (00:28:52) Well, actually, no jokes aside. (00:28:53) Can you tell us like what? (00:28:56) Like what were those big kind of blockages and how did he help you or how did you work through it? (00:29:00) Just focusing on, hey, the quality of your questions is the quality of your life. (00:29:05) It's that insight. (00:29:06) And just, are you asking yourself the right questions? (00:29:08) What do you want? (00:29:09) What's important to you? (00:29:10) How are you getting it? (00:29:11) What is preventing you from having it? (00:29:13) How will you know that you have it? (00:29:15) Just no one had ever said that to me. (00:29:16) And then it was just clear to me, wait, I need to write that down. (00:29:20) What do I really want right now? (00:29:22) What is my point of focus? (00:29:24) And that is what gave me motivation as soon as I got that clarity. (00:29:28) I mean, a lot of us do it automatically, but that's not where I was when I was a kid. (00:29:32) That's for sure. (00:29:33) Did you run across the coals? (00:29:34) Did you do any of that kind of stuff? (00:29:35) Oh, many times. (00:29:37) Really? (00:29:37) Yeah, of course. (00:29:38) Okay, there it is, folks. (00:29:40) Hey, we can go together. (00:29:42) Absolutely. (00:29:43) We had Tony on the show. (00:29:44) I tried to. (00:29:45) get in there and understand his psychology, but he just had us do breathing exercises. (00:29:49) All right. (00:29:49) The All In Summit is happening again. (00:29:53) Fifth year in a row. (00:29:54) Wow. (00:29:54) We've been doing this for a while. (00:29:56) Allin.com slash events. (00:29:57) September 13th, 14th, and 15th. (00:30:00) We'll have you back, Mark, in year 6, but when you score so highly on a keynote, we give you two years off so that we can build up the anticipation. (00:30:09) So coming in 2027, our guy, Mark Benioff, but for this year, (00:30:13) By the way, real quick, can I just do a quick PSA? (00:30:20) A public service announcement coming. (00:30:21) Public service announcement. (00:30:22) Yes. (00:30:23) Nick, just pull up this link. (00:30:25) This dog named Scooter needs a home. (00:30:28) I promised my wife I'd do this. (00:30:29) Don't get mad at me. (00:30:30) This dog named Scooter needs a home. (00:30:32) He's in Baldwin Park. (00:30:33) This dog's about to die. (00:30:35) Lives in Baldwin Park at the Animal Care and Control. (00:30:37) They're overwhelmed in LA. (00:30:39) There are so many homeless St. (00:30:40) dogs that are being collected. (00:30:41) They're all being put to sleep. (00:30:42) Someone give this dog a home. (00:30:44) Gorgeous dog. (00:30:44) His name is Scooter. (00:30:46) Link will be on the YouTube channel. (00:30:48) Thank you very much. (00:30:48) Are you getting a little emotional, Friedberg, about this dog being put down? (00:30:52) I just don't like these, all these street dogs. (00:30:55) Like they didn't choose that situation they were in and then they all end up kind of getting pulled in by animal care and control and they all get put to sleep. (00:31:02) Kind of sucks. (00:31:03) You're a dog guy. (00:31:04) Come on. (00:31:04) You got to have a heart. (00:31:05) No, I have a big heart. (00:31:06) Chamath gets $10,000 to keep these dogs alive for another week. (00:31:09) Can we count on you for that donation? (00:31:12) Any purebred white golden retrievers in that bunch? (00:31:15) No, they're just mutts. (00:31:16) Just mutts. (00:31:17) We have a cat that we got at the shelter, actually. (00:31:20) Kind of heard the story. (00:31:21) You walked into the shelter, looking for a cat. (00:31:24) All of a sudden we're in the shelter. (00:31:26) This cat's like coming at, you know, my kids. (00:31:28) And all of a sudden they're, okay, we'll take this cat. (00:31:30) What is this cat's name? (00:31:32) This cat's name is Cloud. (00:31:34) Cloud. (00:31:35) That's our cat. (00:31:36) Wow. (00:31:36) Absolutely. (00:31:37) Kind of a wild cloud. (00:31:38) Yeah. (00:31:38) Then we have Cloud the cat. (00:31:40) All right. (00:31:40) I like it. (00:31:41) That's awesome. (00:31:41) All right. (00:31:42) AI's impact on software rippling through the market. (00:31:45) Mark, you're on the front lines here. (00:31:47) Thank you for reminding me. (00:31:48) Yeah. (00:31:49) I mean, in pain and suffering are lessons, right? (00:31:52) I think the Buddha and Tony Robbins both taught us that. (00:31:55) And the only way to the other side is through, as you know, Mark. (00:31:58) So Salesforce down a whopping 37%, 90 billion in losses for you. (00:32:04) ServiceNow, 42% Workday, 45%, 180 billion in market caps been lost. (00:32:08) And the assumption, Mark, is that AI, (00:32:13) is going to make it unnecessary for you to use Slack or Salesforce or HubSpot, whatever it happens to be, that you'll just ask your AI to solve this for you. (00:32:21) And we'll all look at a piece of glass and have no actual software. (00:32:27) The AI will just tell us what to do. (00:32:29) What's your response to the fear, the criticism, and how are you managing this massive change internally? (00:32:35) You're right. (00:32:36) It's the SaaSpocalypse. (00:32:38) I mean, it's not my first Saspocalypse, honestly, but it's the current Saspocalypse. (00:32:42) So we are all now drinking the Salesforce Esperillas. (00:32:45) And we actually have a pet Sasquatch as well. (00:32:49) Yeah, we're all a little more sassy. (00:32:51) That's what I would say. (00:32:52) That's number one. (00:32:53) You bring the SAS to SAS. (00:32:55) We got to bring the SAS to SAS. (00:32:58) You've always been a sassy guy. (00:33:00) And then #2 is, look, the market is re-rated. (00:33:03) It's not a mystery. (00:33:04) Everybody knows. (00:33:05) You guys have been talking about it for a while. (00:33:07) I've been living it. (00:33:08) So, the software market's rerated. (00:33:10) It happens every now and then. (00:33:12) There are cycles. (00:33:13) I've been doing Salesforce for 27 years, enterprise software for 40, and the market's rerated. (00:33:19) So, you mentioned HubSpot. (00:33:21) They're trading at two times sales. (00:33:23) I've never seen that before. (00:33:25) They just had a great quarter. (00:33:26) We saw a lot of great quarters. (00:33:28) I looked at the top 10 major enterprise software companies. (00:33:31) They all had great quarters, and they're all trading at two times sales. (00:33:35) So, (00:33:36) Why? (00:33:37) Because of everything you just said, there's like a hypnosis around AI and we haven't seen it show up in the numbers yet. (00:33:44) If it shows up in the numbers, maybe people will be right. (00:33:47) Right now, all we know is there's still a lot of enterprise software being sold in the world. (00:33:52) So you've been through this, it's not your first time. (00:33:55) This is not my first SASpocalypse. (00:33:57) I mean, I remember the SASpocalypse of 2020 when COVID happened and all of a , everything collapsed. (00:34:05) What's your strategy? (00:34:09) In all sincerity, what's your strategy and how do you deal with your internal team? (00:34:14) Obviously, they are compensated through stock, and this is headwind, and you have competition for employees from OpenAI, Anthropic, and SpaceX. (00:34:23) So how do you deal with rallying the troops, and then how do you develop a strategy? (00:34:30) Well, you're right. (00:34:31) It's a lot easier to be a private company right now where you don't have to be rationalized by the public markets. (00:34:36) If you're in the public markets and you get rerated, that's the reality of being in the public markets. (00:34:41) I think that for what I tell my employees, what I just told my employees is, look, you can't get drunk on the stock price. (00:34:48) If you are focused on today all the time, and that is how you're getting your emotional state, it's not going to work for you. (00:34:55) You have to find a different anchor. (00:34:58) I try not to pay really a lot of attention to it. (00:35:01) I'm focused on my customer success. (00:35:03) How is our revenue? (00:35:04) Look, we'll do over $46 billion this year, more than $16 billion in cash flow. (00:35:08) We have more than 83,000 employees. (00:35:10) These are the things that I'm focused on. (00:35:12) What is the level of customer success that we're delivering? (00:35:16) That's a really important, I can't control the stock price. (00:35:19) There's nothing I can do. (00:35:21) And for our employees, they can't control it either. (00:35:24) They need to believe in the company and the quality of the success they're delivering to the customers in the long term. (00:35:30) And then you look at the market, you look at these other companies, not just us, they're doing great. (00:35:35) And I mean, I saw some great numbers, but it doesn't really matter. (00:35:38) The market's re-rated. (00:35:40) you've got all that free cash flow. (00:35:42) You've been great at acquisition, so I'm sure you're... (00:35:45) I've bought some great companies, by the way. (00:35:47) Everything's a little cheaper. (00:35:48) I like that. (00:35:49) Yeah. (00:35:49) Chamath, what's your take on this? (00:35:51) You've been pretty critical of the SaaS space in previous episodes, pointing out, hey, how durable are these revenues? (00:36:00) So what's your take? (00:36:02) I think the low end of the market is basically finished. (00:36:05) I think there is no safe space. (00:36:09) I think the high end of the market where Mark operates, where the large monoliths operate, is quite safe. (00:36:16) And the tell was this week. (00:36:18) The deployment company deal basically shows you what OpenAI is running into. (00:36:26) So you have to put in $4 billion. (00:36:28) You get all of these folks. (00:36:30) You gave them a 17.5% preferred guaranteed return. (00:36:35) For what? (00:36:37) essentially to stand up a competitor to Ernst & Young, Anderson, Deloitte, PWC, Cognizant, et cetera. (00:36:43) If you just look at that, doesn't actually mathematically make that much sense if you look at what those companies are actually trading at. (00:36:51) But why is OpenAI doing this? (00:36:53) I think why is because at the high end of the market, where all the action is, what people are finding is, hey, hold on a second, this is a lot harder than we thought. (00:37:03) It's not like boop, boop, boop, put in a prompt and beep, bap, boop, it all works. (00:37:08) It's not how it works. (00:37:10) And so I think we're a little oversold. (00:37:15) And now I think this consolidation and the re-rating can happen in the opposite direction. (00:37:19) So what is the opposite trade? (00:37:21) The opposite trade is who has constructive net dollar retention, who has negative churn that's been really predictable, which is a way of saying who has the best relationships. (00:37:32) Meaning they're inside the CXOs and the C-suite. (00:37:36) They have relationships with the CEOs and they're trusted. (00:37:39) And they've been around for 20 years. (00:37:42) Those guys, I think, are positioned to crush. (00:37:44) Because eventually, Jason, the next trade that has to happen is when the public markets become a little bit less breathless about AI, and they ask one simple question. (00:37:54) Okay, guys, you've spent $3 trillion in the last four years. (00:37:59) What is the ROI of these tokens? (00:38:02) And what's going to happen is they're going to have to go to guys like Mark and other people and say, please sell my tokens. (00:38:10) And that's the next shoe to drop. (00:38:11) If you had to ask me. (00:38:13) So I think you're going to see these revenues, which are like way out of whack, like the multiples on revenue, multiples on assets, multiples of, they're not even multiples of EBITDA yet. (00:38:22) Those will come way back down. (00:38:24) And I think these go back up and you'll find a balance. (00:38:27) Yeah, and you've initiated. (00:38:29) what could only be described as an unprecedented massive stock buyback mark, 50 billion? (00:38:35) I think it's one of the largest in history. (00:38:38) Yeah, we wanna buy back as much as we can. (00:38:43) And I would just say that, look, at a high level, look, there's awesome new capabilities. (00:38:50) Like these coding agents are awesome, Anthropic is awesome. (00:38:54) Like I am gonna probably use $300 million of Anthropic this year at Salesforce, (00:38:59) coding, everything's gonna be cheaper to make. (00:39:02) It's more efficient. (00:39:03) I can do things that I just could not do before. (00:39:05) I can go faster than ever before. (00:39:07) I can implement my software and sell it at the same time. (00:39:11) I've never been able to do that before. (00:39:13) I can break through obstacles that I've had just by focusing because I have coding agents and humans together, working together. (00:39:23) Today, I have humans, agents, and headless platforms all interoperating. (00:39:27) never before. (00:39:28) So the opportunity for my own company and the efficiency that I have in my own company in service and support, in distribution, in marketing across the board is unprecedented. (00:39:41) What I can do for our customers, unprecedented. (00:39:44) And to that point, my gosh, have you seen Anthropic? (00:39:47) I mean, it is a rocket ship that will not stop because (00:39:52) You can use this product to do these incredible, amazing things. (00:39:56) And then in complement it with platforms like ours, it's, you know, it's.