# Anthropic S-1 Shocker, Greatest Business Ever? Google’s $500B Wipeout, Midterm Predictions

Markdown copy of https://realalpha.app/v/p1Dy4e4ff0s/ on Real Alpha, the best minutes from long interviews with the people building AI. Cite and link the page, not this copy.

Chamath Palihapitiya, Jason Calacanis, David Sacks and David Friedberg debate Anthropic’s growth and whether AI’s compute buildout creates systemic risks.

- Show: All-In
- Hosts: [Chamath Palihapitiya](https://realalpha.app/people/chamath-palihapitiya/) & [Jason Calacanis](https://realalpha.app/people/jason-calacanis/) & [David Sacks](https://realalpha.app/people/david-sacks/) & [David Friedberg](https://realalpha.app/people/david-friedberg/)
- Published: Oct 30, 2026
- Length: 1 h 26 m

## The best minutes

- [26:18](https://realalpha.app/v/p1Dy4e4ff0s/?t=1578) [Anthropic’s enterprise revenue still has room to scale](https://realalpha.app/s/anthropics-enterprise-revenue-still-has-room-to-scale/) (6 min)
- [46:42](https://realalpha.app/v/p1Dy4e4ff0s/?t=2802) [AI borrowing could create risk across the whole economy](https://realalpha.app/s/ai-borrowing-could-create-risk-across-the-whole-economy/) (4 min)
- [1:03:31](https://realalpha.app/v/p1Dy4e4ff0s/?t=3811) [Google’s cloud growth offsets uncertainty in search](https://realalpha.app/s/googles-cloud-growth-offsets-uncertainty-in-search/) (4 min)

## Also worth watching

- [6:40](https://realalpha.app/v/p1Dy4e4ff0s/?t=400) [Anthropic’s reported $80B loss was not cash burn](https://realalpha.app/s/anthropics-reported-80b-loss-was-not-cash-burn/) (4 min)
- [11:15](https://realalpha.app/v/p1Dy4e4ff0s/?t=675) [AI customers may earn multiples of their model spend](https://realalpha.app/s/ai-customers-may-earn-multiples-of-their-model-spend/) (4 min)
- [1:07:54](https://realalpha.app/v/p1Dy4e4ff0s/?t=4074) [Google’s ad auction may be overcharging advertisers](https://realalpha.app/s/googles-ad-auction-may-be-overcharging-advertisers/) (3 min)
- [43:17](https://realalpha.app/v/p1Dy4e4ff0s/?t=2597) [Anthropic’s RSI push may split its safety allies](https://realalpha.app/s/anthropics-rsi-push-may-split-its-safety-allies/) (3 min)
- [36:44](https://realalpha.app/v/p1Dy4e4ff0s/?t=2204) [Governments may regulate access to compute rather than chips](https://realalpha.app/s/governments-may-regulate-access-to-compute-rather-than-chips/) (4 min)

Skip three-minute intros, five minutes on AI infrastructure politics, Anthropic lobbying, and the ten-minute midterms discussion.

## Summary

Jason Calacanis and David Sacks treated Anthropic’s S-1 as evidence of unusually fast growth, high margins and major room for enterprise expansion, while Chamath Palihapitiya focused on the AI buildout’s capital needs and systemic market risks. David Friedberg argued that AI is creating value across the stack, while the hosts debated whether data-center limits, open models, regulation and recursive self-improvement could constrain Anthropic. On Google, Friedberg saw a difficult transition for search advertising, while Sacks stressed that search revenue was still growing and Cloud was diversifying Alphabet. Their midterm forecasts ranged from a divided Congress to a Democratic sweep.

### Minute by minute

- [3:18](https://realalpha.app/v/p1Dy4e4ff0s/?t=198) **Anthropic’s IPO could reset venture returns.** Calacanis said Anthropic was targeting a $100 billion IPO at a $1.5–$2 trillion valuation, with first-half 2026 revenue of $16.3 billion, up 14x year over year, and projected ARR of $100 billion by year-end. Sacks called it a potential record venture outcome, citing the company’s six-year age and the scale of employee wealth creation.
- [6:56](https://realalpha.app/v/p1Dy4e4ff0s/?t=416) **Efficiency is improving Anthropic’s margins.** Sacks said the reported $80 billion loss was not a cash loss: convertible notes issued to infrastructure partners produced an accounting loss as Anthropic’s valuation rose. He said the company had raised roughly $110 billion, spent about $9–$10 billion and still held about $100 billion in cash or equivalents. He also cited gross margins of about 85% and said algorithmic improvements were making tasks roughly 10x cheaper year over year.
- [11:15](https://realalpha.app/v/p1Dy4e4ff0s/?t=675) **Enterprise demand points to a broad AI market.** Friedberg said Anthropic’s customers spending at least $100,000 rose from 200 at the end of 2024 to 11,900 by September 2026, and estimated about 1 million firms could potentially afford that level. He argued the AI value chain was generating economic value, though Calacanis cautioned that the claimed 2–10x customer return was an assumption. Calacanis also cited Microsoft revenue rising from $198 billion to $332 billion in four years with only 2,000 more staff.
- [17:59](https://realalpha.app/v/p1Dy4e4ff0s/?t=1079) **Compute tops Anthropic’s risk list.** Palihapitiya said Anthropic’s S-1 most often cited compute risks, especially data centers, financing commitments and power, followed by regulation, privacy and intellectual property, and AI safety. He argued that limits on power and data-center construction could constrain growth and become a political lever. Sacks said Democratic leaders might favor bans or strict pre-release model approval, while Calacanis challenged that framing.
- [26:18](https://realalpha.app/v/p1Dy4e4ff0s/?t=1578) **Enterprise growth still needs proof of ROI.** Palihapitiya divided Anthropic’s customers into about 40 million individuals and small businesses spending under $100,000, 10,000 spending $100,000–$1 million, 1,650 spending $1–$10 million and 250 spending more than $10 million. He said larger contracts require clear returns and estimated the business could reach hundreds of billions in revenue within three to seven years. He revised his IPO valuation estimate to about $1.5 trillion and said an $80–$120 billion raise could bring Anthropic’s capital toward $250 billion.
- [32:47](https://realalpha.app/v/p1Dy4e4ff0s/?t=1967) **AI financing could compete with Treasuries.** Palihapitiya said the AI complex owed roughly $340–$400 billion and that its funding needs through the end of 2027 could equal 30% of planned Treasury issuance. Calacanis argued that expected returns justified the spending but warned that power, permitting and equipment shortages could slow the buildout. Friedberg said AI firms and governments could increasingly compete for capital and resources.
- [37:53](https://realalpha.app/v/p1Dy4e4ff0s/?t=2273) **Governments may seek control over compute.** Friedberg argued that governments may try to control compute as AI firms compete with them for capital and influence. Sacks described Anthropic as a politically active and increasingly powerful company, and argued its rapid pursuit of recursive self-improvement could put it at odds with safety advocates who want development to slow.
- [46:21](https://realalpha.app/v/p1Dy4e4ff0s/?t=2781) **Anthropic’s valuation leaves little margin for error.** Palihapitiya said a $1.4–$1.6 trillion valuation would be fair rather than a bargain, and investors should track whether larger customers can document returns. He warned that AI firms’ borrowing could push up rates for either the companies or the U.S. Treasury, with higher rates spreading across the economy. He described the resulting exposure as a systemic risk.
- [51:00](https://realalpha.app/v/p1Dy4e4ff0s/?t=3060) **Cheaper models could expand token demand.** Calacanis argued that, if its targets hold, Anthropic’s first seven years could produce more revenue than the early franchises of Amazon, Google search and the iPhone combined. Sacks identified open models as a risk, while the hosts argued that cheaper tokens and new agent applications could drive greater usage. Sacks also questioned whether Anthropic could sustain its use of recursive self-improvement without alienating safety advocates.
- [58:47](https://realalpha.app/v/p1Dy4e4ff0s/?t=3527) **Enterprise AI adoption remains early.** Calacanis cited Gallup figures showing that daily and frequent AI use at work remained around 10% and 20%, respectively. He said large companies still restrict access to email and internal knowledge bases over cybersecurity concerns, and predicted much higher adoption if those risks eased. Sacks argued that Anthropic’s IPO could clarify its power as a major company and strengthen the case for competition rather than regulatory protection.
- [1:01:54](https://realalpha.app/v/p1Dy4e4ff0s/?t=3714) **Google’s search transition remains uncertain.** Calacanis said Alphabet lost about $500 billion in market value after its shares fell 10–15%, as search revenue growth slowed from 17% to 12% and investors questioned whether AI answers would weaken ad clicks. Friedberg saw Google Cloud’s doubled revenue to $30.7 billion as a strength, but said Google needed a consumer AI business to replace search advertising if that core revenue weakened. He also described internal tension over allocating resources to models versus renting out compute.
- [1:07:31](https://realalpha.app/v/p1Dy4e4ff0s/?t=4051) **Google faces scrutiny over ad auctions.** Calacanis cited claims by advertiser Max Anderson that changes to Google’s ad auction may overcharge advertisers, and said Google should address the allegations. Friedberg said that if the change was causing Google to earn more from each click, advertisers might reduce spending. Sacks countered that search revenue still rose 12%, from $56 billion to $63 billion, and that Cloud’s growth had reduced search’s share of Alphabet revenue; Calacanis said he had bought shares.
- [1:14:16](https://realalpha.app/v/p1Dy4e4ff0s/?t=4456) **Midterm forecasts diverge.** Palihapitiya predicted Republicans would hold the Senate while Democrats won a narrow House majority, and argued Democrats could use oversight and permitting to affect AI development. Sacks said polls were unreliable and expected a more ordinary midterm result, urging voters not to be swayed by predictions of a Republican bloodbath.
- [1:17:56](https://realalpha.app/v/p1Dy4e4ff0s/?t=4676) **Hosts expect a contentious post-election period.** Calacanis predicted Democrats would win both chambers, citing Polymarket odds of 68% for the Senate and 92% for the House, and forecast impeachment efforts and a chaotic two years. Palihapitiya agreed that Democrats would investigate the administration, while Sacks warned that their agenda could energize Republican opposition. The hosts also discussed the possibility of new political leaders emerging after the midterms.

## Transcript

All-In, hosted by Chamath Palihapitiya, Jason Calacanis, David Sacks and David Friedberg.

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

[0:00](https://realalpha.app/v/p1Dy4e4ff0s/?t=0) All right, everybody, welcome back to what is, of course, the number one podcast in the world, tweaking all the mid-podcasters out there for five years running the All-In Podcast. It's episode 295, and Sax is back. Sax is back. Sax is back. How you doing, brother? Good, good. I saw some fake news that you guys had stopped using the term superintelligence. You're getting some shade for that. Oh, listen, we're here for this week in superintelligence right now. I mean, the whole document is superintelligence. It was kind of ridiculous. Oh, are they? Maybe I shouldn't Streisand it, but they were trying to say that we were using the term AI still instead of SI.

[0:45](https://realalpha.app/v/p1Dy4e4ff0s/?t=45) Who was saying that? This is literally what the press is spending their time on. This is why it's such fake news. They have a photo of me. I wasn't even on the October 23rd episode. You do look great, though. You do look very presidential there. man if only look at this fake news i mean the u.s's most influential tech podcast well that's good but actually we're not just a tech podcast we're the number one podcast in the world give us has cooled on the use of the term super intelligence and then they try to say that i somehow was defying the president's instructions all right but i but i want to clarify i was not on the october 23rd episode so gotcha i'll be keeping you guys in line on this from now on absolutely well we will get focused on super intelligence uh with us again this week your favorite organic farmer david freeberg how's ohalo doing you've been pretty busy yourself ohalo in kenya this week lots of excitement lines of farmers trying out true potato seed your energy looks pretty good you look like you got some good energy and um speaking of good energy man we had a fun time playing cards last week that was a blast a great dinner you didn't stop talking for seven hours it's sort of like the podcast yeah it's like the podcast it's

[2:03](https://realalpha.app/v/p1Dy4e4ff0s/?t=123) unbelievable it's unbelievable we had a fun time come on that was a lot of time no affleck texted me after i'd never want jay cal in the game again you gotta get out affleck as a member of the group it's gonna be ben affleck or you and we pick him so you're out that's fine you're never getting That's fine with me. I mean, it's an upgrade. I mean, you just kept chirping for eight hours straight. It's unbelievable. He could not stop talking. I haven't been at the game for a long time. I had a lot of material. I had stored up. It was really fun, though. We had so much fun. And Chamath Palihapitiya, everybody's favorite enterprise sales executive from the 8090 Corporation.

[2:37](https://realalpha.app/v/p1Dy4e4ff0s/?t=157) How'd you do this week? Did you hit? Did you ring the gong? Did you hit your quota? Or are you going to have to work this weekend? Q4 is off to a good start, but I never want to count the chickens. Okay, that's good, considering you whiffed Q3. No, no, no. Q3 was okay. We whiffed Q2. Butchered it. Butchered it. That's why when I invested. All my fault too, because I forced these poor salespeople. I forced these three poor salespeople to just only focus on the gigantic deals. You're learning. You're learning. I had to learn the hard way. You want to get those singles and doubles and the people who pay on time and who start the projects on time.

[3:15](https://realalpha.app/v/p1Dy4e4ff0s/?t=195) We'll see in Ant's S1, but you can build a ginormous business with singles and doubles. Absolutely, you can. Speaking of gigantic businesses, Anthropic Ant dropped their S1. That's the document that outlines the nature of the business for an IPL, an initial public offering. and got to ask the question this seems to be the greatest business in the history of entrepreneurship goldman and morgan stanley are going to lead the round and they are targeting november 16th right before thanksgiving for this ipo we've been waiting for a long time it's been delayed. The ticker will be ANT-A-N-T. and they're aiming to raise wait for it 100 billion dollars in other words like three months of compute and that would make it the largest ipo ever surpassing spacex they raised 85 billion back in june if you remember and polymarket says our great partners at polymarket say 78 chance anthropic raises at least 95 billion the valuation 1.5 to 2 trillion here's your polymarket right now it's saying between 1.75 and 2 trillion market cap 31 percent so yeah assume it's going to be slightly under 2 trillion the revenue is the story sacks 16.3 billion in the first half of 2026 that is 14x year over year so in other words the first six months of 2025 1 14th of what they did in the

[4:54](https://realalpha.app/v/p1Dy4e4ff0s/?t=294) first six months of this year q2 is going to be a whopping 11.6 billion a 30x jump over the last five quarters and almost as much as they made in the first half of the year they say the tam the total addressable market for their tokens and services is 40 trillion that's extraordinary i don't know how they backed into that but we'll talk about it and they're projecting 100 billion of ARR by the end of the year. Now, unspecified if that's annual reoccurring revenue or their annual revenue run rate, which is ARRR, like a pirate, they've got $112 billion in cash and a very unique ownership structure. Seven founders, yes, they have seven, are going to hold 50.1% of the voting power through a single class F share.

[5:47](https://realalpha.app/v/p1Dy4e4ff0s/?t=347) Saks, is this the greatest business in the history of capitalism? It could very well be. I mean, I think this is probably going to be the biggest venture outcome of all time, especially given the time in which this was created. I mean, this is only a six-year-old company. I think the exit here is going to be on par with SpaceX's IPO, but SpaceX has been around for like 20-something years. So this is probably the fastest value creation of any venture-backed company in history. And I don't know if you saw, but there was a tweet this morning about the distribution of wealth this is going to create among the employees.

[6:23](https://realalpha.app/v/p1Dy4e4ff0s/?t=383) Hundreds and hundreds of employees are going to be making hundreds of millions of dollars, and then thousands of employees are going to be making $10 million plus. I mean, this is going to be an enormous wealth creation event like San Francisco and maybe all of Silicon Valley has never seen before. Now, there's a few other data points in this S1 that I think reflected the strength here. So number one is that this $80 billion loss number that we've heard so much about, the media has constantly been pumping and harping on as proof that Anthropic was either a fake business or that we were in this sort of whole bubble.

[7:00](https://realalpha.app/v/p1Dy4e4ff0s/?t=420) That narrative basically just got completely refuted because it turns out that that $80 billion loss is a phantom number. It resulted from the fact that Anthropic had issued convertible notes to basically their infrastructure partners like Amazon and so forth. And as Anthropic's valuation increased, those convertible notes got recorded as a loss on the balance sheet and that flowed through into the income statement, but it's not a real loss. If they had just issued equity, that loss wouldn't be there. So it was not a cash loss. It's basically a fake number.

[7:33](https://realalpha.app/v/p1Dy4e4ff0s/?t=453) **David Sacks:** And in fact, what was revealed in this S1 is that Anthropic has been an extraordinarily capital-efficient business.

[7:42](https://realalpha.app/v/p1Dy4e4ff0s/?t=462) So they've raised something like, I think it was around $110 billion, roughly. And they've only spent about $9 or $10 billion throughout the entire course of this business. And they still have, like you said, J. Cal, about $100 billion left of cash or cash equivalents on the balance sheet. Everyone thought, based on the previous reporting, that this was a huge loss-making business. In fact, it ended up being a very capital-efficient business. And then the other thing that you saw was that their margins have been improving. I think their gross margin is now something like 85%. And what you see is that for a given task or capability, they're showing roughly 10x improvement year over year in their ability to deliver that task.

[8:28](https://realalpha.app/v/p1Dy4e4ff0s/?t=508) the cost effectiveness of that task. It gets 10x cheaper year over year. And that allows them to cut the cost of that model or that task by, let's call it 50%. And so the consumer recognizes a huge cost savings, but they are able to realize an even greater savings because they're able to capture the rest of that efficiency in their margin. And that's what we basically saw is that, again, they're cutting the cost of their tokens significantly, but their margins are going up even faster because they're able to produce these models that are more and more efficient. And they call them compute multipliers. It's very interesting the way that Anthropik sees their business. The framework that Dario has is that there's raw compute, which are scaling very rapidly as well as a result of better and better chips and more and more of those chips. And then there's the compute multipliers, which are things like algorithmic improvements or better curation of the data, or it can be things like better architectures, more MOE architectures, things that make all these models more efficient. So they're able to give you the same answer for one-tenth the cost, or they can take those efficiencies and create

[9:47](https://realalpha.app/v/p1Dy4e4ff0s/?t=587) greater capabilities. So this is what we're seeing is that that business is actually improving. And I think it is a little bit of a refutation to all the people who've been saying over the past year that they're getting commoditized away, that open models are basically putting them on a hamster wheel where they're basically going to zero on gross margin, or that it's a business that only works because it's heavily subsidized by venture capital. In fact, I think there's a lot of reasons to believe that Anthropic has a pretty big lead. And if you believe that recursive self-improvement has kicked in, as they are claiming it has, then their elite could actually grow. Freeberg, your thoughts on the impact of this massive deluge of capital coming in to Silicon Valley, and then this corporate structure, 51% ownership, and what impact this might have on the technology industry, the venture capital industry, and then on democracy here in the united states we've never seen this much capital flow through to a non-profit organization um or whatever they're calling this anthropic uh non-profit entity but 80 percent of the seven founder shares are going into this non-profit entity of some type benefit corporation who

[11:03](https://realalpha.app/v/p1Dy4e4ff0s/?t=663) knows what it's going to be structured as it's optional but that's another interesting uh shoe to drop so take it whichever way you like in whichever order you like can i just comment on the the economic value that's arising from AI? Of course, sure. That's kind of perhaps revealed a little bit in this. So in the S1, Anthropic shows how many customers they have that are spending 100K or more. If we take a look at the image here, it's a pretty remarkable ramp in customers spending 100K or more, 200 customers in 2024, end of year, 1,500 end of 2025, and at the end of September, 11,900 customers spending 100k or more so i asked the question you know how many customers are there for which a hundred thousand dollar annual spend is less than one percent of their total annual spend and the answer is in the u.s it's about 200 to 300 thousand businesses globally it's a bit over a million so you know if you just say hey look anthropics customers that could spend 100k or more and have it be less than one percent of their total spend the addressable customer base is about a million customers so they're only at call it one percent of total customer penetration potential now the question is is there real money

[12:26](https://realalpha.app/v/p1Dy4e4ff0s/?t=746) to be made here. So I took a look at the kind of AI value stack to try and identify who's making money where. And it turns out everyone's making money. So and I think we've talked about this quite a bit. And I know Jamal's got some views on this as it relates to the neoclouds. What is a shard? Is this like AI output? Or that or I had I had Claude make this for me as an image. Cool. Or I should just say my analyst made this for me in my shop. You're a bot. And so, you know, I basically said, like, start with NVIDIA. How much does NVIDIA spend to make the chips? And then how much do they sell the chips for?

[13:00](https://realalpha.app/v/p1Dy4e4ff0s/?t=780) So for every dollar of COGS, every dollar that NVIDIA spends, that turns into $4 of revenue for NVIDIA, 75% margin. And then that gets sold to SpaceX, and then SpaceX turns around, and they're making, you know, an 83% margin on that chip spend because they're kind of looking at a five-year depreciation. So they spent $10 billion on Colossus I, five-year life, $2 billion a year depreciation. And so that's kind of the cost per year, but then they're making $1.25 billion a month on Colossus. And then Anthropic is showing in this S1, pretty remarkably to Sachs' point, that they're making about 85% incremental gross margin on every incremental dollar coming in.

[13:45](https://realalpha.app/v/p1Dy4e4ff0s/?t=825) It's obviously a baseline of compute spend, but 85% is kind of the incremental gross margin. So at the end of the day, a dollar that NVIDIA spends turns into $18 that Anthropic is making selling to customers. And the question is, are customers making money? So we're seeing the customer ramp as it is and the spend ramp as it is.

[14:05](https://realalpha.app/v/p1Dy4e4ff0s/?t=845) **David Friedberg:** And the customers are making call it on the order of two to 10 times the money they're spending because otherwise, there would be probably a retention issue and a decline in

[14:13](https://realalpha.app/v/p1Dy4e4ff0s/?t=853) spend. Maybe I'm wrong. Maybe it's early days of exuberance and people are losing money and we could debate that point a bit. But generally speaking, if AI is delivering value to the customers, I think this shows that there really is true productivity arising from AI that across the whole value chain, there is such margin to be had, there's so much value being created all the way through to the customers. And we're only 1% or Anthropic is only 1% penetrated on their customer potential, and probably less than 10% of the spend potential per customer. That this really is what I think Eric Schmidt a long time ago in the early days of Google used to say Google's total addressable market is global commerce.

[14:52](https://realalpha.app/v/p1Dy4e4ff0s/?t=892) And I think for the first time ever, we're seeing a business actually potentially starting to realize that theory that if you can create enough productivity gain for your customers, that your TAM is commerce. And it really highlights that maybe, you know, we're almost growing the equivalency of the human working population by 100x or 1000x or a million x with this technology stack. So I just thought, like, to me, it was so striking how early we are, but also how incredibly profitable everyone is, which indicates there's quite a bit of productivity being produced across the whole value stack. Those were my biggest takeaways kind of from the S1.

[15:29](https://realalpha.app/v/p1Dy4e4ff0s/?t=929) I don't know if you guys agree with this, but, you know, it all felt pretty remarkable to me. I'd be curious to know if you guys think I'm a little loopy on being too exuberant in my reading of this stuff. I think the thing that is probably the most important is the last box that you said where you wrote an assumption where you said assumptions right well how do they measure that but by the way i agree with you but the last box i made up i said assume two to ten x so i'm just i have no idea but i'm a user of claude i think we get a lot of value for claude i think our people are able to do more because of Claude than they would otherwise be able to do.

[16:04](https://realalpha.app/v/p1Dy4e4ff0s/?t=964) So our business grows faster, we can get more done in a shorter period of time. I think I tangibly experienced that pretty regularly. I've talked a lot about moving to open source and we have our own cluster installed with our own kind of open source now. But I think what Claude is showing is that they have such a high margin, they actually have good elasticity on pricing. So they could push price down and you could start to see them start to segment the market a little bit where they could start to be more competitive. perhaps, with cheaper tokens for cheaper, easier tasks, and then premium tasks charge a higher price for intelligence and start to stratify the value of the intelligence that they're providing by changing the price points. And I envision that's where everyone's going to go.

[16:45](https://realalpha.app/v/p1Dy4e4ff0s/?t=1005) Nick, I'm going to show you, this is to Friedberg's point about what is the potential downstream productivity gains that everybody can have theoretically with AI. Just put that on the screen. This is from Microsoft's earnings. My research team put this together. It's really quite incredible. What this shows you is that Microsoft's revenue went from $198 billion to $332 billion in the last four years, while staff only increased by 2,000 people. I mean, isn't that stunning? You would have thought before AI that if somebody said, great we're gonna you know get close to doubling revenues at this kind of scale right you probably would have thought that headcount would have doubled too and the reality is headcount stayed flat and we don't know how many people will take this offer that microsoft just gave for you know to leave because i think they offered it up to 60 000 people but this number could be under 200 000 depending on how many take it and so just the scale and the impact on the productivity to your point this idea that it creates job loss i don't think it's true it's more that you're seeing productivity gains at the same number of human input and i think that's interesting i went

[18:02](https://realalpha.app/v/p1Dy4e4ff0s/?t=1082) through the s1 you know i'm going to give you my little s1 breakdown this is the most incredible business i've ever seen i hope that they go public after november 11th because it will force them to update with Q3. And then we'll get even more insight into this is like some contraption that I've never seen before. I've never seen a business like this. It's really, really, really incredible. So let's cross our fingers because post November 11, you'll see Q3 drop, what people have been whispering is that the revenue growth kind of moderated to sort of like the 50% range. Q4 is TBD. But let's break this down in a bunch of charts, because I think it's interesting okay so nick start with chart number one and we'll just go through them one by one okay so the first thing that i always read in an s1 is what are the risk factors and what i had my team do is i said go put together a word cloud first tell me this is really cool first tell me what are they afraid of okay and when you look at it the share of words in the risk factors that are allocated to different risks are very important. And what this tells you is the single biggest risk to the ant business is compute. They mention it more than anything else. And specifically inside

[19:25](https://realalpha.app/v/p1Dy4e4ff0s/?t=1165) of compute, they talk about data centers, power, chips, grid, electricity, hardware, etc. Then a close second, but still second is regulation. Okay. They care about government policy, they care about sanctions, they care about export controls. Then it's this idea of zero data retention and privacy and IP. Then it's AI safety. Then it's just, you know, making money. It's then there's their competitors, then there's governance. What you notice is, what are they not afraid of? They're not afraid of How are you doing? customer traction, because they rarely mention. They're not really afraid of employees leaving because you'd be an idiot to leave if you're inside. And they don't really care about taxes and any of these other things. So this is a business that is very much on the forward foot that understands the binding constraint. So now, if you know that the compute is their biggest risk factor, then you double click into that. And I had my team run a further analysis, which is to say, okay, how do they describe these risks, right? How many times do they mention them? How many words are you spilling talking about this? And what you find is that inside of the compute problem, their biggest issue is really data centers. And then further, it's the financing commitments that

[20:46](https://realalpha.app/v/p1Dy4e4ff0s/?t=1246) they have, and it's the power. All of these are really important because again, it helps us highlight what the binding constraint is to this business. So as goes data centers, as goes power, and by the way, this is a great setup for the politicians, because it's very obvious if you're a Democrat, as you read this, and I'll speak about it in a second, what you should be trying to do to win in 28 versus what Republicans have to do in 28, right? Basically, the takeaway from all of this is, I think ant is emblematic of the entire AI complex, which is to say, it's all about data centers, which means it's all about power. If you're a Democrat, the best thing you want to do is slow all of this down so that there's a recession going into 28. The only thing you need to do is slow down power and slow down data centers. On the other side, if you're a Republican and you want to have the best chance of winning in 28, this is the one thing that must be done right. You must get the power, electricity, data center thing right. Okay. So based on this, your premise is they need data centers. If they don't get data centers, it can't keep growing.

[21:47](https://realalpha.app/v/p1Dy4e4ff0s/?t=1307) However, Sachs, the truth is these are the liberal of all liberals in Silicon Valley. It is the largest amount of money that has ever been made by founders outside of Elon Musk. uh it would make sense to me perhaps the opposite of what chamat saying shouldn't the democrats come in and say we are pro data center and energy because this is going to help society because they want to see dario and his group win because they are going to be the equivalent on the left of elon musk on the right wouldn't it be better for them to steal the um the data center charge and make Anthropic even more profitable so that that 51% of all of their, or 80% of all their money just flows into Democratic super PACs? Maybe, but I don't think that's the Democratic Party that we have today. I mean, the old Clinton Democrats, I mean, Bill Clinton Democrats are long gone. I don't think the abundance Democrats are picking up a lot of momentum. I mean, the Democrat Party, as Gavin Newsom said, is becoming DSA-dominated. So what is their agenda with respect to superintelligence? Either to ban it outright, as Bernie Sanders and Elizabeth Warren and AOC want to do. They basically want 20-year jail sentences for developers of superintelligence,

[23:14](https://realalpha.app/v/p1Dy4e4ff0s/?t=1394) and they want corporate death penalty for companies that build superintelligence. Or they want to have some extremely draconian regulatory regime that would feature a federal department of AI or federal department of SI, I guess, that would review and approve every single model before its release. Basically, they want to have a DMV for models. Let me challenge you. That is the Democrat agenda on this. Now, could that be shifted through oligarchs like, I don't know, Reid Hoffman, or maybe some of these new anthropic oligarchs, like maybe at Dustin Moskowitz, something like that. Maybe they can, through their massive influence in Democrat circles, could effectuate a change. But I tend to think that...

[24:00](https://realalpha.app/v/p1Dy4e4ff0s/?t=1440) Chamath is right that Democrats want to do anything they can to sabotage the Trump economy, and this whole SI boom is what is driving the Trump economy right now. So I tend to think that's going to be the partisan impetus. So you don't need to do much, I think, Freeberg to scuttle the Trump economy since the war tariffs and all that other stuff have driven inflation and all those problems. Wouldn't it be smarter for the Democrats to – Well, hold on. I mean, just hold on a second. My opinion, yeah. Jake, I think the latest numbers from like Fed GDP now, I think it was 3.7% in Q3 and it was 2.5% in the first half of the year.

[24:47](https://realalpha.app/v/p1Dy4e4ff0s/?t=1487) And you could also look at all the capex that's being spent right now on this buildout, and it's roughly 3% of GDP. So you could say that all of the economic growth in the United States right now is coming from this superintelligence buildout. Concur with that. We can have fun with numbers. But the Trump economy is a disaster, according to Trump's own supporters. So let's just call balls and strikes here. His own voters, the independents who flipped over and voted for him, they are very displeased with the economy. And that can be seen very clearly in him having the worst approval rating of his entire career. And there's been some doozies in that career. Friedberg, what should the Democrats?

[25:29](https://realalpha.app/v/p1Dy4e4ff0s/?t=1529) I don't think, even those critics, first of all, I don't know what Trump supporters you're talking about. I'm talking about the America First people who feel that he didn't deport the 20 million people, that they still have inflation. I'm just talking about that cohort. You could put Tucker in there. You could put Megan in there. You know, all that sphere. Yes, there are definitely people who don't like the war, and they recognize that there is some inflation being caused by the war. But I don't think they've said the economy is a disaster. Anyway, whatever. If you're not an equity holder, I think you look at this economy and say both parties, Biden and this Trump 2.0, I think that the bottom half of the economy believes that both parties don't care about them.

[26:11](https://realalpha.app/v/p1Dy4e4ff0s/?t=1571) That's what all the feedback that you're getting. And we'll confirm it all next Tuesday and see what happens with the actual voting. Chamath, let's continue your teardown. So that was section one, which is you always read the risk factors first. Get a sense of what is management concerned about. So again, the takeaway is management is concerned really only about compute. This is a compute problem. Okay, the next thing that I always look at is I look at the revenue side of the ledger and I try to understand what kind of business they have. And this is an incredible, incredible business. Exactly what Freeberg said. Why? Because at the growth that they have and the revenue that they have, they have barely scratched the surface of the commercial working world.

[26:55](https://realalpha.app/v/p1Dy4e4ff0s/?t=1615) And so this is a little bit more of a nuanced chart, because what it does, it starts to really break down what we think the revenue stratification is by customers inside of Anthropic. So there's about 40 million individuals and small businesses that are spending under 100k, 40 million. Then there's about 10,000 that spend between 100 and a million. There's about 1650 that spend between one and 10 million, and only 250 customers spend 10 million and more. So to your point, I think what Freebrook said is right, the setup is, is that these folks can negatively churn into these existing customers and grow and attract new customers at an incredible rate, which I think is just crazy and so this allows me to think about what is the upper bound of revenue and you know you don't need to get to 100% of what's possible you need to get to 25 or 30% and then you need to have a reasonable distribution of negative churn assumptions. And what you start to see is that this can be a very large revenue business in the hundreds of billions of dollars in sort of this three to seven year timeframe. Now, what slows that down? As far as I can tell, and this is more me putting the 80-90 hat on, the reason why you

[28:17](https://realalpha.app/v/p1Dy4e4ff0s/?t=1697) have so much traction in the million and under is when a company gets large enough, they allocate responsibility and budgets down. And at the director, manager, VP level, there are millions of humans running around with kind of million dollar budgets. And so there's a lot of experimentation that can happen inside of that bucket. They're willing to sign up for three, four, five, six,

[28:41](https://realalpha.app/v/p1Dy4e4ff0s/?t=1721) **Chamath Palihapitiya:** seven, eight, nine things. The minute you sort of transition from a million to like multi-million dollar deals, and this data sort of confirms it, it's a much more thoughtful pitch. It's much more

[28:52](https://realalpha.app/v/p1Dy4e4ff0s/?t=1732) cross-functional inside of a company. And you have to show some form of ROI or total cost of ownership advantage, right? So what's interesting about this, Jason, is 1,900 companies have been able to make the case. That's what I would say. I think there's a ton of experimentation. And I think about 1,900 companies can clearly see an ROI where they can now start to rip in big checks. Now of that 1900, a big portion of those are going to be AI natives, right? Folks that are venture funded. So you have to strip those folks away. And then what's left over is probably a couple of hundred global 2000 type companies. So I think the ROI case is still a little speculative, but the potential is there. And as long as the potential is there, I think the market's going to kind of price it up. So now that's revenue composition. So then the next thing I think about is capitalization. And I said this before, I said, Ant needs to have 200 billion.

[29:49](https://realalpha.app/v/p1Dy4e4ff0s/?t=1789) And I really hope that they actually get close to 250. First of all, let me just say, the CFO of Ant, Krishna Rao, has done an unbelievable job. The fact that he entering June already had $125 billion is unbelievable. And there's a chart I didn't include, but their total net burn to get there has been like $9 billion or $10 billion. It's just infinitesimally low relative to the market cap. So I thought that they had a lot less cash than this. So when I said they need to raise between 200 to 250 and they need to price closer to a trillion, I was assuming they had 30, 40, 50 billion on the balance sheet. I was wrong. So these guys need to raise between, I would say, $80 to $120 billion to get to that quarter trillion.

[30:41](https://realalpha.app/v/p1Dy4e4ff0s/?t=1841) And I think in order to do that, the price is probably now going to come in between $1.3 on the low end to $1.7 on the high end. So call $1.5 the midpoint. So if I had to price the IPO just eyeballing this, I kind of think it'll come in around $1.5 if I had to just kind of guess. And the other thing that I noticed is how much cash Alphabet has and also how much cash meta does not have i was shocked to see that had negative 1.2 billion of cash this must be a mistake but if you look at the 10 q's as of the end of september this is what it shows which net cash net cash maybe it doesn't include short-term investments or something i'm going to take a look at meta's numbers it doesn't make sense yeah i'll tell you in one second your larger point is is right that anthropic like you said over 100 billion of cash they're sitting on they've burnt very little of the money that they've raised again their company's been a model of capital efficiency. They're about to raise $100 billion in this IPO. I think they've got about a debt facility with another $80 billion. You add it all up, and this is a company with over $300 billion of dry powder, or it will soon have that. Then you've got all these anthropic bears who are

[31:46](https://realalpha.app/v/p1Dy4e4ff0s/?t=1906) saying they've made all these CapEx commitments in the future that they're never going to be able to live up to. Actually, this secures those commitments because they've got the capital now to basically back up all of those compute orders, all the forecasted CapEx spending till, I don't know, 2030? You're exactly right. And because they only have to raise 80, right, or 90 or 100, that's a lot different than trying to raise 150 or 175 or 200, which is where I thought they needed to be. And so the demands they're going to put on the capital markets into the IPO are going to be less, which means that they'll have more pricing power, they'll be able to manage of the float better. All of these dynamics, I think, give you a constructive read going into the IPO. Okay, now let's move on. Because I think here's my biggest takeaway. Meta's net cash is negative two. It is 80 billion of cash and short turns and 82 billion of debt.

[32:46](https://realalpha.app/v/p1Dy4e4ff0s/?t=1966) Okay, now go back to this. What is my biggest takeaway? It's bigger than ant. I'm going to build on what Sack said, the entire United States economy is levered to the AI complex. So very narrowly, we're talking about seven or eight companies that sets the tone for the entire country. And whether we like it or not, that is where we are. Why do I say that? One, the most important companies in the world are in a massive spending binge, right? These were highly profitable, highly cash accretive, highly cash flow generative businesses that have said, we're going to put the foot down on spending because we believe in what's coming into the future.

[33:27](https://realalpha.app/v/p1Dy4e4ff0s/?t=2007) That's what drives GDP and it's what drives growth. Okay, next chart. Now, as they do that, though, they deplete their cash, and they have to raise debt. Okay, and this is what you see, all but Microsoft, by the way, what an incredible job Satya's done. He's halved his debt, while everybody else has, you know, just gone to an unbelievably crazy high number. So the AI complex now owes $340, $400 billion to the market. And you'd say, okay, why is that important? The problem is this. these companies are raising so much money, it starts to crowd out the capital markets. And the most important part of the capital market that it starts to crowd out is the appetite for government treasuries. And what you can see here is that when you look at these AI firms, the amount of money that they need to raise through the end of 27th, it's 30% of all of what treasury is about to issue in that same period. So there, whether we like it or not, they are going to start competing for demand. Isn't this nuts? It's like you have seven companies that are crowding up the treasury market. You know, Chamath, a lot of people are looking at that number and they're trading these stocks down based on that. I kind of view it the opposite,

[34:50](https://realalpha.app/v/p1Dy4e4ff0s/?t=2090) which is I don't, these are smart companies. I don't think they'd be making those kinds of investments unless they thought there was ROI there. And so there obviously is ROI based on the token usage and the fact that only one or two percent of people in corporate america are even using these tools we are greatly underestimating the uptick here claude hasn't even launched a bot yet a grok bot and open ai just launched theirs and it's in like a small use case when a hundred million or 200 million white collar workers who subscribe to say the office suite right the similar office 365 thing happens in corporate america everybody's got five agents running, I think the utilization of these things is going 500x. The token usage is 500x. That means we're going to have not enough compute, and everybody's got the buildout completely wrong.

[35:40](https://realalpha.app/v/p1Dy4e4ff0s/?t=2140) There won't be enough, and people are going to look back on this moment and say, why didn't you build more compute? Why didn't you spend more on CapEx? You're absolutely right, Jason. The problem is the regulatory pushback. The amount of approvals and the ability for utilities to find the staff and the ability to actually turn these things on. And then the ability to get the capital equipment you need, it just isn't there right now. So we as a country are sort of clogged up. We can't do it even if we wanted to do it. freeberg you know the the other issue here is if we are not spending enough building this out and the country a large percent of the of the country believes in socialism and is against the oligarchs both republican independent and democratic oligarchs this is a this is what they think of us and of the leaders in our industry and other industries this is really dangerous because we're not going to be able to to build out the compute we need and what does that do to the entire industry in the next three to five years if we if we can't build out this and how do we turn that narrative around so people are like yeah we should have data centers i have a view that humans try to organize into groups organizations to try and

[36:59](https://realalpha.app/v/p1Dy4e4ff0s/?t=2219) create power that benefits the members of that group so you know we form tribes we form communities. And in a sense, governments are a form of an organization. It's an organizational coalition of individuals to achieve an objective for, in the case of a democracy, the majority of the voters. And as a result, organizations in a world of, you know, call it pseudo-limited resources compete with each other for those resources. Nonprofits, for-profits, governments, they're all effectively competing for resources because the individuals that they represent the interests of are going to be served if they get more resources, get more power, get more influence. So to some extent, the power of AI and the influence it enables in terms of media, in terms of capital accumulation, in terms of changing people's minds, in terms of aggregating resources through its competitive capacity, productivity, etc., makes it a bit of a threat to government organizations. And so to Chamath's point, if one of the manifestations of that is that AI is now accruing more interest from capital than governments, governments aren't going to want to let that happen. And the governments, whether they're right or left, are going to fight for the AI to become either part of the government and the government to

[38:33](https://realalpha.app/v/p1Dy4e4ff0s/?t=2313) subsume the AI or control the AI organizations. And this is why I've kind of argued the case, I think that you're going to end up seeing compute get regulated in the future where compute capacity is going to be assigned by government. And they're going to pass laws to try and do that post production that is like meaning they're not going to control the chips,

[38:52](https://realalpha.app/v/p1Dy4e4ff0s/?t=2332) **David Friedberg:** they're going to control the actual compute layer and they're going to determine who's going to get access to what amount of compute i think for governments to compete and i think one of the

[39:01](https://realalpha.app/v/p1Dy4e4ff0s/?t=2341) ways this is going to play out to chamoff's point is in the near term in capital there's more capital going to be ai organizations and the government the governments aren't going to want to let that happen so they're going to try and stop the data centers because then i've never seen something in my adult working life where a complex of a handful of companies are effectively competing with governments now for capital because you've never seen companies in an organized manner have one very narrow thing that they need money for that is a one-way bet on something that attracts the same amount of money that would otherwise go to a traditional two three four five-year ten-year bond auction it's it's kind of nutty actually and by the way the story you're going to hear from both sides is a story of which side benefits the people more and that's going to be the narrative argument which is going to be every side's going to say the other side's lying because remember if one side's lying and another side's not lying the side that's not lying says, hey, those guys are lying, and they're correct. The side that is lying de facto says that the other side is lying because they're liars. And so you'll hear both sides screaming,

[40:12](https://realalpha.app/v/p1Dy4e4ff0s/?t=2412) we are the better path for society. We are the better path for humanity. It's either government or private market AI. And that'll be the huge battle that's going to brew over the next half decade. And we'll see which one. Politicians are for sale and Dario and Anthropic should start buying, just like the right did. Oh, they already have. I don't see them with champions. Where are their champions? Do they have champions yet? Oh my gosh, for sure. Listen, Anthropic, even as a startup, prioritized government affairs. They were very active during the Biden administration. All those former Biden officials who were doing AI in the Biden administration immediately joined Anthropic at the end of 2024. No, no, I get that, but you don't see them doing what you guys did, hosting a fundraiser for trump being out there publicly in front of it you don't see them oh sure but they've they have spent they've created packs sure and all sorts of entities and non-profits all ngos all that kind of stuff and they've been massively funding it they have a huge government affairs operation what you guys did like and you know getting out there in front of what you mean by you i don't know what you mean by you guys i did you hold on your support

[41:22](https://realalpha.app/v/p1Dy4e4ff0s/?t=2482) for trump i've never seen a person publicly come out for i'm not a corporation yeah exactly i'm not i'm not can you let me explain i'm not a corporation of course i'm just one person who has views and yeah i support certain candidates and i do fundraisers for candidates i'm not like seeking regulatory capture i'm just one person i'm saying why hasn't dario or the other founders done that why haven't they said we choose this candidate we choose these candidates we don't know that they haven't how do we know they haven't done it publicly because we've never heard them do it that's my sure but they have given huge amounts of money i agree they've done it which is public information and those packs have supported candidates if they're going to make a run at this they should do it publicly there's a huge revolving door where anthropic has been snapping up every former official first it was the biden administration now frankly they're hiring a lot of former trump administration officials oh really and yo yeah this and this is all public information yeah but they are building a massive government affairs operation and look i think you can expect that as they power up through all of this capital, having a $2 trillion market

[42:24](https://realalpha.app/v/p1Dy4e4ff0s/?t=2544) cap, they're going to have even more influence in Washington, or they're going to be capable of buying a lot more influence. And I think that is concerning. One thing I will say, though, is that as they go from being a startup to being a public company that's one of the top handful of companies by market cap on earth, it's going me very obvious that they are a big tech company and therefore they should be treated like other big tech companies, which is to say with suspicion, as opposed to this being some poor little startup that has innocuous views or is not the 800-pound gorilla that they actually are.

[43:04](https://realalpha.app/v/p1Dy4e4ff0s/?t=2584) So I do think it'll be clarifying on that level for them to be seen correctly as what I've been saying is that they are the most powerful monopoly or duopoly ever in human history, which is they're creating AGI, right? I've been saying that for a long time. So I do think that them going public will actually right-size them in the public consciousness. And one thing you're seeing already actually is there's starting to be a Doomer-Anthropic split. There's a very interesting article in Vox, which is this huge Doomer publication over the past week, and it was quoting a bunch of these NGOs, kind of Doomer NGOs, that were basically pointing out that, you know, like Anthropic, actually, if you separate their rhetoric from what they actually

[43:47](https://realalpha.app/v/p1Dy4e4ff0s/?t=2627) **David Sacks:** do, they are the ones leading the charge on recursive self-improvement. There's no single company in the world that is doing more to race towards full RSI.

[44:00](https://realalpha.app/v/p1Dy4e4ff0s/?t=2640) than Anthropic. They are hell-bent for leather on getting to full recursive self-improvement. In fact, a lot of the reason why they are becoming so efficient with their compute, the reason they're able to cut costs, offer the same capability at one-tenth the price, is because they've increasingly been using their own models to generate these algorithmic improvements, to create these compute multipliers. If you go back to August, Anthropic published a very interesting blog talking about how they were using RSI. And 26%, they had a chart showing that 26% of their tasks that are involved in basically trying to create the next generation of models, they were already were using RSI to do that.

[44:46](https://realalpha.app/v/p1Dy4e4ff0s/?t=2686) Now, that was back in August. So who knows what they're at now being in October. So look, they are pursuing RSI very, very quickly. And, you know, one way to think about that whole pacing letter that Dario published a few months ago is it's almost like they're creating an alibi for themselves where they are acknowledging that, hey, we are pursuing RSI as quickly as anyone. And it's almost like they're saying to the world, well, we want it to stop, right? Like we want it to slow down. We tried to get you all to agree to pace, but you guys wouldn't agree to do that. So therefore we kept going, you know?

[45:22](https://realalpha.app/v/p1Dy4e4ff0s/?t=2722) And it's almost like creating an alibi in advance for themselves if this RSI thing goes really bad. All right. But I think that they had to know when they published that pacing letter that they're not going to get the whole world on board with pacing. So the whole thing was sort of an exercise in virtue signaling. But in any event, I think what it shows, again, is I do think that it's possible that an anthropic Doomer split is coming because there's no way for them to maintain their lead as the number one superintelligence company without continuing to advance the frontier very rapidly and to continue to pursue recursive self-improvement. And that is something that the Doomers are most afraid of, of all the various risks, right? They are most worried about a breakaway superintelligence.

[46:13](https://realalpha.app/v/p1Dy4e4ff0s/?t=2773) So I do think that this is the beginning, maybe, of a divorce between Anthropic and the Doomers. But we'll see. Okay, let's get back to your breakdown, Chamath. You had the greatest revenue, greatest business ever built, yada, yada. They have a ton of cash. They have the cash for the build-out. They're going to raise some cash in the IPO. And all of this bond activity is crowding out. treasuries is where you left off, I believe. So let's continue. Exactly. So I think you have to go to these risk factors now and think if you're going to price the IPO, or if you're going to buy the IPO, how would I decide to buy the IPO? And I think at the 1.4, 1.5, 1.6, it's kind of priced fairly. So there's no deal, but they're giving you an entry price into the future. So then you have to sort of have a view on the future. And I think there are two risks. The first risk was what I showed you on their revenue composition, which is how long does it take for Ant to show those 10,000 customers, the ROI math that they will need to move from less than a million, to single digit millions to 10s of millions, right? That's one very simple thing that you can check quarter after quarter after quarter, as those numbers swell.

[47:33](https://realalpha.app/v/p1Dy4e4ff0s/?t=2853) The reason they will swell is that they'll have defensible use cases and white papers and analyses that make it very straightforward for a corporate infrastructure to sign off a multi person executive team to sign off on a multi million dollar spend. So that's an ant risk. And I think that you can price that risk. The second, though, is what I teased here, which is the risk you cannot price, which is this market risk. the AI complex has gotten so big that it now competes with US treasuries. Why is that an important thing to note? And why does that create market risk? Nick, if we just go back to the last chart, please. So when you look at this, what does it mean for treasuries having to compete with Facebook and SpaceX and Anthropic and OpenAI for money, well, it means that somebody is going to have to pay more. Now, let's play out one example. If it's the hyperscalers that have to pay more, because people believe the flight to quality and the durational risk of the government is better, then all of the money that the hyperscalers and the AI complex and anthropic and OpenAI have to raise will have to come in at a higher coupon. If that's true, then Friedberg's chart is also true, which is that those rates cascade through the ecosystem. The neoclouds will

[49:04](https://realalpha.app/v/p1Dy4e4ff0s/?t=2944) have to pay more, all these other folks have to pay more. What that means is that you increase and you pull forward the risk of defaults, which we talked about last time. So you have this negative reflexive cycle there. Let's say the opposite is true. Let's say that the AI complex is able to raise money at reasonable rates, and it's the US Treasury that has to actually go through an auction and pay more. Now you have the broad-based cost of borrowing goes up because because every other part of the United States economy is levered to the twos through fives and 10-year complex. That is a huge market risk that I don't understand because I've never seen before. What is the market risk? Explain it just crisply here as we wrap. What is the market risk?

[49:53](https://realalpha.app/v/p1Dy4e4ff0s/?t=2993) If interest rates go up because the US treasuries have to pay more for people to buy their bonds, then everything else in the economy has a higher cost of borrowing. That has negative implications.

[50:00](https://realalpha.app/v/p1Dy4e4ff0s/?t=3000) **Chamath Palihapitiya:** If the opposite is true, the AI complex has to pay more. And then there's a bunch of negative repercussions narrowly to the complex. The problem is we're trying to buy an AI stock. So many roads lead to downside risk, more than upside risk.

[50:16](https://realalpha.app/v/p1Dy4e4ff0s/?t=3016) Now, there are versions in which this all works out and everything is off to the races. But I guess my structural takeaway, maybe, Jason, is we're entering this very weird phase in the US economy where we've seen this before and we're seeing it now. This complex is too big to fail. And I think when you start to see these guys representing 40, 50% of all capital market equity and debt flows, which then in turn represents 30, 35, 40% of all treasury issuance as well, that this competition happens, these guys are too big to fail, which means that there's a different problem at hand, which is a more systemic problem.

[51:00](https://realalpha.app/v/p1Dy4e4ff0s/?t=3060) So I'm not saying that there is. I'm generally bullish. This is confusing to you as a market participant who's on the inside. I get it. What I'll say is, you could actually argue the opposite, Shema. This is the greatest business ever created. It's an American business. The American economy is still the greatest economy in the world. You could argue versus China, etc. But we are running the table on super intelligence. And if you look at the history of the greatest franchises ever made, I did a little bit of research. and just this is first seven years of revenue to back up what you're saying here if anthropic hits the targets they've set out you know ballpark uh here is getting to a hundred and then 300 billion dollars in revenue eventually 600 billion in revenue they're well on their way they're at about 100 billion in revenue this year which is like a third of a google uh you know a quarter of uh of an apple and you look at the cumulative revenue in the first seven years of the best franchises America has ever made, which would be Amazon, Google search, cost per click search, Freebrager Alma Mater, and the iPhone franchise. It's going to become clear that the three best franchises in the history of business, in my mind, iPhone, Google cost per click search,

[52:17](https://realalpha.app/v/p1Dy4e4ff0s/?t=3137) and Amazon, which will, this doesn't include AWS, this is just books and retailer, you put the books into the AWS into it into later years, it gets even more interesting. It's possible Anthropics business is bigger than the top three franchises in the history of business put together and that is something we've never seen which means you have no choice but to buy american debt and this debt if you're a global participant where are you going to put your money in france you know in china you can't put it into china i'm confused yeah haven't you been saying for like the past year that open models are going to eat anthropics lunch well have you changed your tune on that in the face of new evidence uh you would have to uh say that they are lowering the prices and the opportunity in the enterprise is um is so great that they're not being dramatically impacted by it you will see anecdotally startups and enterprises exploring it but it's obviously not enough now that we know their numbers that uh it's slowing them down it's not slowing them down yet i'm not i do think it's It's still the biggest risk factor, but if you're- I'm not debating revenue traction at all or business quality. What I'm saying is there

[53:31](https://realalpha.app/v/p1Dy4e4ff0s/?t=3211) are moments where there's systemic risk in markets where everybody goes risk off. I think that what I am saying very explicitly is I've not seen in the last 15 or 20 years. The last time we came close to this was in the GFC, where you have a narrow part of the economy represent basically all of everything that's happening in the capital markets. All that means is that everybody has to pay a lot more attention. Doesn't matter what side of the AI trade you're on, whether you're long it, whether you're short it, that's not, I don't think that's important. I'm saying something more structural, which is about 10 companies collectively to fund one thing will be competitive with global governments on borrowing. I don't know what the implications of that is because I have not seen that. To the point, Sachs, that you made and challenging me, which is great. Their revenue is slowing down dramatically. You know, their quarter over quarter revenue is decelerating. So obviously, it's on a big number.

[54:28](https://realalpha.app/v/p1Dy4e4ff0s/?t=3268) So we don't know Q3 yet. I mean, the scuttlebutt on X, and who knows, we can totally believe this is that things did slow down in Q3 a lot. But some of that may be attributable to the fact that they eliminated 99% of distillation, right? So they voluntarily took a big hit to the revenue From people stealing from them. Yeah, to prevent the copycat models from basically distilling them. So there was that. And then I think the scuttlebutt is that since they cut their token costs considerably, which was done pretty recently, now the demand has re-accelerated. Yes, Jevin's paradox in full effect. Yes, it seems like they're back to resuming their previous growth after a couple of hiccups in Q3.

[55:12](https://realalpha.app/v/p1Dy4e4ff0s/?t=3312) But I think the thing that's really impressive is just that the way they're able to cut their token costs, it's not just because they're giving up pricing power, right? It's not that they're losing margin. They're actually gaining margin. The reason they're able to do that is because all the algorithmic improvements they're making in order to make their models much more efficient. Yes. And just to dovetail with that, Sax, what's happening with the models is even more impressive. the they're lowering the price of tier two and tier three models right your sonnets your opus those are getting cheaper but enterprises are saying that's enough for me so as they make that cheaper then businesses get more value they solve more problems out of it and they don't feel the need to be on the latest greatest fable. If you're a hollow, maybe you need that to do science. If you're a mathematician, you need it. If they can keep making their second and third run models this much cheaper, 10x cheaper each year, the Jevons paradox is going to get even more pronounced because enterprises will use it more. Token cost matters, right? We're sitting here with the token maxing cost. Look, what we're seeing is that, I mean, we keep seeing Jevons paradox play out at every

[56:23](https://realalpha.app/v/p1Dy4e4ff0s/?t=3383) level, which is as you cut the cost of tokens or more and more use cases, enterprises use it more and more. And the net result is that the total demand just keeps going up and the total revenue and market size keeps growing. Also, just to reiterate a point that you made earlier in the program, the new applications that are coming all consume a lot more tokens than the ones that we started with, right? Like agents use a lot more tokens than prompting and cyber defense is going going to use a lot more tokens than just doing a pen test once a year, right? You're going to need continuous monitoring of agents, attack surfaces, all that kind of thing. So all the new applications are going to be using exponentially more tokens. 50 to 100 times the number of tokens, yes.

[57:11](https://realalpha.app/v/p1Dy4e4ff0s/?t=3431) Exactly. So the price will keep going down, but the market size keeps increasing. I think the biggest risk factor to Anthropic, I do think it is some version of the open source models, maybe not catching them, but sort of saturating intelligence at a low price point for certain... Commoditizing it. Commoditizing it for things like coding or where there is a big chunk of the market. That is still a risk. I would say sort of a second order risk is that in order for Anthropic to stay ahead and to keep making their models more and more efficient, they have to keep using more recursive self-improvement, right?

[57:46](https://realalpha.app/v/p1Dy4e4ff0s/?t=3466) You see this in the charts that they publish, that they are using their latest models more and more to discover these compute multipliers, to discover these new algorithmic efficiencies. So they have to kind of push the limits of what they themselves call risky activity. I don't know if I fully believe in the Doomer story about RSI, but they themselves say that RSI is very risky, but they have to keep pushing RSI in order to keep delivering these algorithmic improvements in order to stay ahead of the open models. And I just wonder how sustainable that is. At some point, do you get a breach with the doomers that becomes irreconcilable?

[58:28](https://realalpha.app/v/p1Dy4e4ff0s/?t=3508) Do the doomers want to basically shut down RSI or basically slow it down to the point where then the open models truly do catch up? I don't know the answer to that question. And it's sort of just a more nuanced take on this idea of open models catching up. Yeah, and I think this chart is super illustrative, if you can pull it up, Nick. Gallup's been keeping a survey of who's using AI at work daily versus frequently, defined as a few times a week. And, you know, the people using it like frequently versus daily, we're still talking about 10 and 20 percent here. It's nascent. A lot of the top enterprises are not letting their employees use this in an unconstrained fashion, and they're certainly not letting them connect their email, their knowledge bases, their notions, their slacks. Big corporations are not letting people actually use the power of AI because they're scared about cyber. Once the cyber threat, Chamath, gets mitigated, this is going to go from 10% of people being daily users to 60 70 80 there's so much growth left here uh when every single employee has an agent i saw just last week uber bought open a open ai chat gpt for every employee that's going to be the next shoe to drop is do you buy these things for every single employee okay i think we beat that

[59:55](https://realalpha.app/v/p1Dy4e4ff0s/?t=3595) one to death congratulations to the anthropic team and all the investors on making an incredible business. Extraordinary. And yeah, shout out to Sachs, who predicted this would be the greatest business ever on multiple programs. Turns out you got that one correct. And we'll see. We'll see what happens. But like I said, I said two things. Number one, best business ever creating this AGI monopoly. Second, they're going for regulatory capture, and we should definitely not allow that to happen, especially in light of number one, It's just kind of unseemly and gross for them to be seeking red capture when they already have such a good business and they're in such a dominant position.

[1:00:36](https://realalpha.app/v/p1Dy4e4ff0s/?t=3636) And I think actually that this IPO will be very helpful and clarifying on that because, again, once they're seen as a big tech monopoly or part of a huge duopoly, the arguments for giving them regulatory moats just go away. In fact, we should do everything we can to make this market more competitive and help it stay competitive. Anthropic movement, break up Anthropic, separate the lab from the tokens, from the subscription. It will, like, if, and who said it, Gavin, that they were claiming they were building the last business ever? You know, when you look at the other franchises. Yeah, Dario said that.

[1:01:13](https://realalpha.app/v/p1Dy4e4ff0s/?t=3673) Well, Gavin said somebody said Dario said it. Yeah, Gavin said that Dario said that and then he, Gavin, but Dario did not deny it, remember? Yeah, he said it might have been kind of said, yeah, so So, yeah, I mean, I think they obviously believe it. And if you look at that chart I made with the other franchises, they obviously have an incredible franchise that's theirs to lose when we get the OpenAI data. Man, then we're going to have all three of the major players in this space disclosing the key information we need. And that's going to be really interesting when we have all of the hands turned over in this poker game when OpenAI files.

[1:01:57](https://realalpha.app/v/p1Dy4e4ff0s/?t=3717) All right, Google got smashed on Thursday, 10%, 15% down. We record on Thursdays, obviously. Q3 earnings wiped out about $500 billion in market cap. Why? For two straight quarters, Google missed on search revenue. Even though searches are growing massively, the people clicking on the ads is not, which leads to a little bit of shenanigans and trying to get people to click on more ads. They're negative on free cash flow, even though cloud is ripping, cloud doubled year to year, 30.7 billion. That's the AWS business they have. It's called Google Cloud. It's quite nice. And overall revenue is still strong. They're growing 25% year over year. The issue is people are looking at that Google cost per click advertising network and saying, well, obviously that goes away at a certain point if you just give people the answer, right? ChatGPT, Anthropic Rock, they just give people the answer and in some cases they go solve their problem if it's an agent so that is pretty disruptive search business is what pays for everything and that grew 12 down from 17 so it's decelerating but it's still growing nicely freeberg this is your alma mater you witnessed the cost per click greatest business ever this was the previous one that we said was the best business

[1:03:09](https://realalpha.app/v/p1Dy4e4ff0s/?t=3789) ever created along with the iphone franchise what are your thoughts here are you worried about that franchise or do you think they've done a good enough job with the other businesses? Google Cloud and YouTube come to mind, Android, in terms of diversifying their revenue. Are you worried about Google as a buy opportunity or is this stay away? It's a complicated story. I think the core services, the core Google ad revenue is a real challenge right now in terms of can they keep the momentum up. Overall, the business trades at roughly 21 times operating income. And you get that sort of a multiple based on reliability of future cash flows and, and effectively growth of those cash flows. I think the Google Cloud business is looking, you know, really tremendous. I mean, I don't know if you guys remember, it wasn't too long ago, and this thing was not making money. Last year, the Google Cloud business for this quarter was generating $3.5 billion of operating income. This quarter, it's over $11 billion of operating income. And this is a lot like the SpaceXAI story, where the value of the compute infrastructure that's been built is just tremendous. The question is, does Google actually have the models that sit on top of it? And in many cases, they do is they can make a

[1:04:29](https://realalpha.app/v/p1Dy4e4ff0s/?t=3869) higher margin on that piece of the stack. So when I say it's complicated, I think there's a story you can build in the cloud business that shows the next couple of years of really progressive growth in that business. The core Google services, I think, is when it becomes challenging, where over the last year, it grew from 33.5 to 39. And as some people have pointed out, this may largely be driven by a change in the pricing algorithm for ads, and how Google is now, in some cases, over earning for those, for those clicks. And over time, advertisers will see that they'll experience that they'll reduce spend, they'll attract some dollars, and it won't look as good of a business. So the question then is, do they have a consumer AI business that catches up and

[1:05:15](https://realalpha.app/v/p1Dy4e4ff0s/?t=3915) **David Friedberg:** accelerates to support that? That's the thing I think everyone needs to be watching is what is the AI replacement look like on the consumer side for Google's core business, the core cost per

[1:05:25](https://realalpha.app/v/p1Dy4e4ff0s/?t=3925) click advertising network and you type a search into Google. That's the core business you're talking to. That's the core consumer business. So the question is, is there a consumer AI alternative that starts to generate meaningful revenue to replace that revenue? And what does the revenue ramp look like there relative to the flattening or decline that may arise in core search? And how quickly does that happen? That is a dynamic and challenging question to answer now. Internally, I think there's a bit of turmoil. there is a bit of like, what are we not just overall as a company, but just even within the business segments? What is Google search? Is it AI? Is it search? What is Google cloud? Is it the models? Or is it just the compute, the rental of the compute? And I think we saw this battle play out recently where Jeff Dean and others left Google. And I don't know this for sure. But the theory is that the computer scientists that have been building models at Google, maybe aren't getting the resources that they had hoped to get, because Google can make so much more money renting that compute out to others. And so it's a really hard question of what do we want to be at Google right now. And I don't think that they have a great answer. And I don't think it came

[1:06:38](https://realalpha.app/v/p1Dy4e4ff0s/?t=3998) across well in the it didn't come across well, obviously, and people reacted to them. But they did know this was coming. They did plan for it. They renamed the company Alphabet. And they said they've got this great cfo let's make all these other bets fend for themselves the way most of the world have to make their way in the world raise outside capital so they they did prepare for this in fairness to the team over there youtube surging android surging you know google cloud surging and then you have the the franchise slowing uh searches up but revenue growth slightly down so do you think they can fix this or should they just do a bending spoons and get as much money as possible out of the search and put it into other things like consumer ai corporate ai and their future models and hosting of other people's models what are your thoughts here i don't think that's what bending spoons does and not everything is an analogy to bending spoons well no i'm saying manage this is the best business i'm saying manage search let me be When I say bending spoons, I'm saying manage it for earnings, not for growing it necessarily.

[1:07:46](https://realalpha.app/v/p1Dy4e4ff0s/?t=4066) Just get as many dollars out of it as possible. I think that's what they've been doing in the last quarter. That's why people didn't like that. I mean, there was a very interesting tweet. Nick, maybe you can put it up here. I think a lot of the consternation... from people reacting to what Max Anderson wrote, which got 5 million views, by the way. And he wrote this through the lens of somebody, and these are his claims, so I don't know if they're true or not, but spending half a million dollars or more a month on Google for years. And he itemized all the ways in which things have changed. And the most important thing that I pulled out of here was what Freeberg mentioned, which is the change in the auction model. So

[1:08:28](https://realalpha.app/v/p1Dy4e4ff0s/?t=4108) **Chamath Palihapitiya:** Typically, in a Vickrey auction, what happens is Freeberg bids, I bid. If I'm the underbidder, what happens is Freeberg gets filled at my price because he was the high bidder.

[1:08:41](https://realalpha.app/v/p1Dy4e4ff0s/?t=4121) It's a really great way of doing price discovery. At Facebook, when we built the first ad system, that's essentially what we copied. We copied Google's feature for feature. If now what they're doing is they've abandoned the Vickrey auction, Freeberg's right, you're over earning. And if the market starts to smell that out, they're going to start to wonder what's actually happening underneath the hood. So these claims, which are now well syndicated have been out there since July. And I'm not sure that Google IR has necessarily nipped these in the bud. Because I think what happened was the at least the information war that happened post earnings was recirculating max's post here and saying this has been going on for a while and when you look inside the comments it's a bunch of other people seconding his analysis as accurate so without knowing the details jason because i don't spend money in the google ecosystem i think it's really important for google ir to get in front of this because i think if this momentum builds, this idea that this franchise is essentially robbing Peter to pay Paul, like pulling money from the future into the present, to kind of smooth out earnings, the market will

[1:09:54](https://realalpha.app/v/p1Dy4e4ff0s/?t=4194) react badly to it, you're seeing it today. But then this other problem starts, which is to your point, the composition of ad revenue as a percentage of the overall will fall below a threshold. And then they do look like more of a structured conglomerate, where now you have have a YouTube revenue block, a GCP block, and other bets block and a search block, none are dominant, which in some ways I actually think is better because then you're more diversified and you're less levered to any one single business. But they'll have to go through this complicated process where a bunch of folks may not want to own that kind of a business. And there's a different buyer pool. So you have to go through transitioning out the folks that wanted to own a single stock bet on search or ads or whatever it was, and now have to move to this other kind of business model.

[1:10:41](https://realalpha.app/v/p1Dy4e4ff0s/?t=4241) And when you switch buckets like this, a bunch of folks kind of say, oh, it's too complicated. So problem number one is what I would say is, if you were Google IR, please read this and refute it or try to figure out how to get in front of it. Because every analyst now will try to figure out whether this is true. The second, though, is very narrow. How do you keep Demis at Google? that's it that's the only task okay uh there's nothing else pay thomas curian whatever he wants how do you keep demos at google sacks looking at this uh business it's been obviously a journey for the past 10 years to make alphabet have resiliency in revenue streams diversify the revenue streams you think there's uh some great risk here and would you be long short or neutral on the stock? Well, I'm seeing people post that Alphabet's Google search revenue dropped below 50% of total revenue for the first time. And they're making it sound like that's a catastrophic situation. Basically playing into the narrative that the search business is going to be disrupted by SI. And that's what it seems like on the surface. But when I dug into the numbers, it didn't really seem that bad at all. So it's true.

[1:12:00](https://realalpha.app/v/p1Dy4e4ff0s/?t=4320) that Google search's relative share decreased, but its absolute revenue still increased. So if you look at Google search revenue year over year, it was still up 12%. It increased from $56 billion to $63 billion. So it's still a roughly $7 billion year over year increase in Google search. So Google search is still thriving. I think you could say it's not growing that fast relative to other businesses, but you're not seeing it deteriorate yet. And again, the reason why the share fell below 50% is because other Alphabet businesses are simply growing much faster. And the main one is Google Cloud, which basically doubled year over year to 30.7 billion. So it's the rise of the Google cloud business that has made Google search seem like it's on the decline. But I tend to think it's a good thing that Alphabet is now finally getting some of these other businesses to really work and to really grow fast and to finally diversify the revenue. Diversifying from search has been something they've wanted to do for a long time. They now have all these other segments.

[1:13:12](https://realalpha.app/v/p1Dy4e4ff0s/?t=4392) You've got YouTube, you've got G Suite subscriptions. So in any event, I tend to think Google is a little bit oversold on this news today. I agree. Although I'm not certainly not telling anyone to buy anything. Since inception, and maybe past 10 years, you can pull both charts up. We'll go through them real quick here. But this is just this franchise, the number of searches is still going up. The revenue per search. And that issue is obviously the one people are concerned with. But the other side of the coin is absolutely correct, David. The other businesses that they're now only 50% dependent on this business. And that will continue. So for me, I just literally bought some shares. So I'm long. I just bought more shares in Google while doing the show.

[1:13:55](https://realalpha.app/v/p1Dy4e4ff0s/?t=4435) Just remember, Alphabet owns 6% of SpaceX and like 15% of Anthropic as well. I think 85% of Waymo as well, right? Like that's the other piece of this puzzle. Amazon also owns a big piece of Anthropic. They're going to be a big winner. All right, listen, that's our time here. Do you guys want to talk about the election ahead of Tuesday night and predictions or anything like that? You've been shepherding this guy. What are you guys watching on the midterms? Anything you're keeping an eye on, Chamath? Any big contrarian predictions on what might happen on Tuesday? It's so interesting. I'm like really confused. I've started to stop paying attention just because there's so much misinformation. I thought that we are going to have, and I still think what Sachs called a spritz. I think it's more of a democratic spritz. But when you look at some of the early data, and I don't know if Brett Baier was doing this just to kind of hedge his bets or not, but he did a clip which went viral on X where it just looked like it was going to be a bloodbath for the Republicans and they were going to lose both sides, both the Senate and the House. I think it's still set up to have the Republicans keep the Senate and the Democrats

[1:15:15](https://realalpha.app/v/p1Dy4e4ff0s/?t=4515) to have a narrow majority. And just going back to maybe where we started, the mandate from the Democrats then becomes obvious, which is how do you introduce FUD? And there's one way to do that, which is to start subpoenaing everybody and start to do disclosure, discovery, release document after document after document and let, you know, the, the masses start to churn through this stuff going into 28. So number one, create FUD. And then number two is, I think a economic slowdown benefits the Democrats going into the 28 election cycle. And so whatever they can do to kind of like influence power permitting and data centers, because as we talked about earlier, that's the lever bet. So to me, it almost doesn't.

[1:16:00](https://realalpha.app/v/p1Dy4e4ff0s/?t=4560) matter what happens at the federal level, except for the FUD part, I think we now should be paying a ton of attention to what's happening in these governorships and some of these other races. Zach, has your view changed? Look, I think that you can't trust any of these polls. First of all, a couple of these polling firms have come out and admitted that they are fake. I mean, we literally have a couple of- Oh yeah, there was a hoax, right? Fake polls. It was literally a hoax. And those fake polls were included in those averages. So some of the polls are outright fraudulent. And then the rest of them are well known to have a bias. Patrick Graffini did a study of the last three elections and found that three quarters of the polls all, you know, erred in favor of Democrats. So we see this as a recurring pattern.

[1:16:47](https://realalpha.app/v/p1Dy4e4ff0s/?t=4607) We saw this in 2024. You had Ann Seltzer, who was supposedly the gold standard, say that Trump was going to lose Iowa by like 10 or something like that. And it turned out to be total nonsense. So the pollsters have a history of bias, of fraud, or you could just say, for some reason, oversampling progressives in their polls. So I think that people should shut that out. I think that some of them are a tactic designed to depress and suppress turnout. And Republicans should just go out there and vote. The economy is not a disaster. That is total fake news. We know what the growth rates are. It was 2.5% in the last quarter, and it's tracking at 3.7% right now.

[1:17:32](https://realalpha.app/v/p1Dy4e4ff0s/?t=4652) median household income is almost $90,000. It's at an all-time high. Poverty is at an all-time low. I think the percent of people below the poverty line is like 12%. It's the lowest it's ever been. It's not just a K-shaped recovery. You're seeing real wage growth in real terms by the average household, which was not true during the Biden years. So I don't think people should get psyched out by this media operation to make people super depressed about what's going on. jacal any views oh well i uh agree the polling data has been you know a suspect for a long time now across many elections wedgwood uh did this like they're claiming performance art but they were kind of serious i don't know who they're working for or what the shenanigans are but i do trust polymarket i think when you look at the polymarket pretty clear what's going to happen here and i can tell you polymarket was wrong on balsanero although i think maybe he got robbed it was wrong on Netanyahu. So the poly markets are just a reflection of public sentiment or public sentiment that's willing to place a bet, and they could be totally wrong. So they were totally wrong about those two national elections. By the way, I'm not predicting some sort of

[1:18:44](https://realalpha.app/v/p1Dy4e4ff0s/?t=4724) miraculous Republican win here. It would be very unusual for the Republicans to win a midterm election when they're in the White House, right? And you remember that Bill Clinton and Barack Obama both suffered horrendous midterm losses. Bill Clinton, remember, lost in 1994. He lost to New Congregates, the whole contract with America. That was the first time Republicans took control of the House for the first time in 40 years. With Obama, you had one of his midterms was the shellacking. So it's quite customary for the out-of-power party to do very well in the midterms. I'm just saying that the media is already portraying this as a tsunami or a bloodbath, and I think it might be a more normal midterm result. That's all I'm saying. So in any event, I think people should just go out and vote, not get depressed or psyched out by whatever the media is telling them because the media has a long track record of being wrong and biased. And J.K.L., any view that's different than where we've been in the past?

[1:19:47](https://realalpha.app/v/p1Dy4e4ff0s/?t=4787) I think polymarket is going to get it right. I think Democrats are going to win the Senate 68% chance right now on polymarket. I believe that. And House, obviously, everybody believes that 92% chance. So when that happens, and the reason I'll back that up is if you look at the net approval rating of Trump, all time low, the country is very upset. And the libs are going to come out in force to vote anti-Trump. the uh the the moderates are either not going to show up and they're not going to be trump curious like they were for the second term and you know oh kamala was such a disastrous candidate they were like okay i got to try something else here and they went for trump reasonably if you were going to have a choice between kamala and trump i think trump's the better choice for most americans and then you have the fractured uh republican party where the american first people feel really like they got rug pulled by trump because of the economy inflation didn't get solved the wars didn't get solved and he started another war so that group's kind of pissed off so when you put all that together i think it's a very easy sweep for the democrats then i think you know if we want to look at what the next two cards are if you look at impeachment you know that that process from what

[1:21:03](https://realalpha.app/v/p1Dy4e4ff0s/?t=4863) i understand is a house and then senate and it's a legal proceeding i think we're going to go right back to Trump being impeached. And then both houses are going to do that. It's going to be absolute chaos. And then the Dems are going to start putting legislation out there and force the Republicans to vote against it in order to scuttle J.D. Vance's chances. So this is obviously going to be a chaotic two years. So what's going to happen is it's going to be a chaotic two years. And I think what will come out of that ultimately is we're going to need some new candidates on the Republican side, and they're going to put the Trump era to bed. And then I think that means they put J.D. Vance and Marco Rubio to bed, and they're going to need a new champion that is more populist and actually executes on the populist agenda, which they feel Trump represented, but didn't execute on. And that's not my personal belief. That's just my analysis. Go ahead, Jamal. No, I think what I'm saying is you think there's going to be a Democrat-FUD campaign. They could control the House. They're just subpoena everybody.

[1:22:11](https://realalpha.app/v/p1Dy4e4ff0s/?t=4931) They're going to subpoena everybody. They're going to look into every single accusation of grift they can think of and ones that are valid, ones that are not valid, everybody in between. And so, yeah. And then we have a really good group, by the way, coming. So join us for the all-in midterm live stream, 8 to 10 p.m. YouTube X and Polymarket. Shane Copeland, Tim Dillon, Rahm Emanuel, Taylor Lorenz. It's going to be chaotic and fun. Taylor Lorenz. She's on a redemption arc, I have to say. Base Lorenz. She's actually been great on certain topics lately. What is going on? Full redemption arc, I have to say.

[1:22:49](https://realalpha.app/v/p1Dy4e4ff0s/?t=4969) Wow, Base Lorenz coming on the pod. Love it. It's going to be a fun time. I love Tim Dillon. He's coming on. I'm not going to be there. Where are you going to be? What do I need to do a midterm live stream for? Because you're going to lose. Your party's going to lose, so you're not coming. If we outperform, I'll pop in and spike the football. Otherwise, I'm not showing up. That's not cool. Everybody wants to hear you. Come on. We can drink some tequila. We'll have fun with this, Zax. Come on. You can't cry. We should all be drinking, by the way. Chamath, maybe we should get together at Chamath's house and drink and do it live.

[1:23:26](https://realalpha.app/v/p1Dy4e4ff0s/?t=5006) I agree with a lot of your analysis about what will happen if the Democrats win J-Cal because they have not changed their stripes. OK, people are just forgetting who the Democrats are and what they were like during COVID, all the lawfare that they perpetrated, all the crazy woke stuff. It's all there, ready to come back. They have not really analyzed why they lost in 2024. They have not really changed or adjusted anything. If anything, they've become more extreme, right? The DSA is ascendant in their party, as even Gavin Newsom acknowledged. So I think that if the Democrats do take Congress, you're likely to see how nutty they are. And the American public will be reminded of that. And that will be really interesting to see. So, you know, but that's why there's a pendulum in politics, right?

[1:24:17](https://realalpha.app/v/p1Dy4e4ff0s/?t=5057) there is a pendulum um i think we need a yeah i mean i i'm wondering who the champions are if it's not jd and um ruby i wonder who the champion on the right will be i think it's gonna be somebody we can't even name right now is going to emerge and i think the same thing on the left anyway it's going to be exciting we're going to get sacks to show up and uh we'll see you all next Thursday night for our live stream. Love you, besties. Bye-bye. Bye-bye. We'll let your winners ride. Rain Man, David Sacks. And it said, we open source it to the fans and they've just gone crazy with it. Love you, besties.

[1:25:00](https://realalpha.app/v/p1Dy4e4ff0s/?t=5100) Queen of Kinoa. I'm going all in. Let your winners ride. I'm going all in. Besties are gone. We should all just get a room and just have one big huge orgy because they're all just useless. It's like this like sexual tension, but they just need to release them out. I'm going all in