Peter Thiel: The Coming Collapse No One Is Prepared For

0:00 Peter was the person who told me this really pithy quote in a world that's changing so quickly the biggest risk you can take is not taking any risk this guy is a tough nut to try to sort of explain changed money with PayPal was the first outside investor in Facebook back paler which is I believe they helped find Osama Bin Laden almost certainly the most successful technology investor in the world I don't think the future is fixed

0:31 I think what matters is a question of agency what I think works really well are sort of oneof A- kind companies how do you get from Z to one what great business is nobody building tell me something that's true that nobody agrees with you on all right Peter welcome back it's good to see you you don't do this too often so we do appreciate it U but when you do do it you're always super candid and

1:00 appreciate that as well you fit right in here you're sitting this year's political cycle out right politics well no I mean I think this is a question we all have which is you were very active you bet on Jed in a major way he delivered today it was a very impressive discussion why aren't you involved this this cycle where it's very confounding to us because these are your guys man how much time do we have supposed talk about this for two hours

1:28 or something I I don't know look I have a lot of conflicted thoughts on it I I am still very strongly prot Trump Pro Pro JD I've decided not to donate any money politically but I'm supporting them in every other way every other way possible I you know obviously you know I think I think there's my my pessimistic thought is

1:59 that Trump is is going to win and probably will win by a big margin he'll do better than the last time and it'll still be really disappointing because you know the elections are always a relative Choice and then once someone's president it's an absolute and they you get evaluated you know do you like Trump or Harris better and that seems there seem to be a lot of reasons you know and that one would be more anti-h haris than anti-trump let's again

2:26 no one's Pro any of these people it's all it's all negative right and but then after after they win there will be a lot of buyers remorse and disappointment that's sort of that's sort of the arc that I I see of what's going to happen and it's it's somewhat under motivating I don't know just to describe describe it I I think you know I think it's I think the odds are slightly in favor of trump but it's

2:48 basically 5050 my one contrarian view on the election is that it's not going to be close un you know most presidential elections aren't and you know one side just breaks you know 20 2016 2020 we super close but two-thirds of the elections aren't and you know you can't always line things up and figure it out I think either the you know the comma bubble will burst or you know maybe maybe the Trump voters get really demotivated and don't show up but I

3:12 think you know one side is is simply going to collapse in the next in the next two months and then you know if you want to get involved you know with all the headaches that come with being involved if it makes a difference counterfactually and if it's a really close election everything makes a difference if it's if it's not even close I don't think it makes much of a difference if if it is going to be close

3:31 by the way if it's if it's like going to be a razor thin close election then then I'm pretty sure KLA will win because because they will cheat they will fortify it they will steal the ballots and so so so you know if we if we can if we can if we can and so then in the event in the event that it's close I don't want to be involved in the event that it's not close I don't need

3:54 to be involved and so that's sort of that's sort of a straightforward analis right there jumping off point much cheating on a percentage basis do you think happens every year how much and do you think Trump actually careful with the verb so you know cheating stealing that implies something happened the dark night I think the verb you're allowed to use is fortify okay yeah we don't want get canell on YouTube ballot harvesting I mean it was you know it's

4:21 all sort of there were all these rule changes it was sort of done in plain daylight and but yeah I think I think our elections are not they're not perfectly clean otherwise we could examine it we could have vigorous debate about it well what would you change then what what should change cuz we all want everybody's votes to count we want it to be clean I'm I'm talking about the audience here I know at a minimum you

4:43 you'd run them you'd try to run elections the same way you do it in every other Western democracy you have one day voting you have practically no absentee ballots you have and and it's you know it's it's it's it's it's one day where everything happens it's not this two two-month elongated process that's what the way you do it in every other country you you'd have you'd have some somewhat stronger voter ID and you know make sure that you know the

5:11 people who are voting have a right to vote make it a national holiday that's that's basically that's basically what you do in every other Western democracy and it's it's it and it used to be much more like that in the US I mean it's it's it's meaningfully decayed over the last 20 30 years you 20 30 years ago 30 40 years ago you you got the results on the day of of the vote and that sort of stopped happening a

5:32 while ago what would make you not disappointed so Trump gets elected how do you what's your counternarrative on you know where a year or two years past the election Trump is president what what makes you say I'm surprisingly not disappointed what takes place man it's you know it's I I I think there are some extremely difficult problems that it's it's it's really hard to know how how to how how to solve them I wouldn't know what to do but we have you know

6:03 we have an incre incredibly big deficit and and yeah if you can if you can find some way to meaningfully reduce the deficit with no tax hikes and without without GDP contraction well you you would do it if you got a lot of GDP growth maybe right but if you could if you could meaningfully reduce the deficit with with with no with no tax hikes that would be that would be very impressive you know I I think we're sort

6:32 of sleepwalking into Armageddon with you know the Ukraine and the conflict and Gau are just sort of the warm-ups to the China Taiwan war and and so if if if Trump can find a way to head that off that would be incredible if they don't go to war in four years that that would be that would be better than I would expect possibly in relation to Taiwan if Trump called you and asked should we defend it or not in this acute

6:59 case would you advise to let Taiwan be taken by China in order to avoid a nuclear Holocaust in World War II or would you believe that we should defend it and defend free countries like that well I I I think I think you're probably not supposed to say no no no if you no if you you I I I think look I think there's so many ways our our policies are messed up but probably you know the one the one thing

7:29 that's roughly correct on the Taiwan policy is that we don't tell China what we're going to do and what we tell them is we don't know what we'll do and we'll figure it out when you do it which is probably has the virtue of being correct and and then I think if you had yeah if you had a red line at quoy Matsu the the island you know five miles off the coast of China that's unbelievable if you if you if you

7:53 say we want some guard rails and we won't defend Taiwan then they'd get invaded right away so I think I think I think policy of not say policy is and maybe not even having a policy you know in some ways is relatively the best I I I think anything anything anything precise you say that's going to just lead to war right away but what do you believe I worth defending or not worth starting the conflict democracy in

8:20 this tiny Island worth going to war over or not according to Peter teal it's it's not worth it's not worth World War III and I I still think it's it's quite catastrophic if it if it gets taken over by the Communists how does the world those can both be true how does the world divide if we end up in a heightened escalation is China Russia Iran friends is that an Alli is that an axis that forms you know think out the next decade

8:51 in kind of your base case and I don't know what happens how the world I don't know what happens militarily if there's a China Taiwan Invasion I mean may maybe we roll over maybe it escalates you know all the way to nuclear war probably it's it's you know some very messy in between thing sort of like what what you have in in the Ukraine what what I think happens economically is very straight forward I think I think basically you know

9:18 you have with Russia and Germany you had one northstream Pipeline and we have the equivalent of a 100 pipelines between the US and China and they they all blow up you I I met the tick tock CEO about about a year ago and you know I not maybe I wouldn't have said this now but what I told him and I felt was very honest advice was you know you don't need to worry about the us we're never

9:41 going to do anything about Tik Tok we're too incompetent but but but if I were in your place I would still get the business out of China I would get the computers out the people out I'd completely decouple it from bike Dan because Tik Tok will be banned 24 hours after the Taiwan invasion and if you think there's a 50/50 chance this happens and that will destroy you know 100% of the value of the Tik Tok

10:07 franchise what was his reaction you know he said that they had done a lot of simulations and the bunch of companies in World War I and World War II that managed to sell things to both sides he doesn't seem so bright to me do you think he's he no he donly what your take on him he he didn't disagree with my frame and so I always I always find that flattering if someone basically framing so he seemed he seemed

10:31 perfectly bright to me even though lot of bright people I saw you give this I saw you give a talk last summer with Barry Weiss and you talked about this decoupling should be happening you weren't saying should you were recommending that every industry leader consider decoupling from China I think your comment was it's like picking up nickels in front of a freight train you remember saying that the well I I I think like it's it's there a lot of

10:58 different there lot of different ways in which businesses are coupled to China that were investors that tried investing there are people who tried to compete within China they people who built factories in China for export and you know there different parts of that that worked to to to varying degrees but but yeah my my I I certainly would not try to to invest in a company that competed domestically inside China I think that's

11:30 that's virtually impossible I think it's probably quite tricky even to invest in Chinese Chinese businesses and and then and then there is there is sort of this model of you know building factories in China for for export to the west and it was it was a very big Arbitrage these things do work you know I me I visited the foxcon factory nine years ago and it's you know you have people get paid a dollar and a half $2 an hour and they

12:01 work 12 hours a day and they live in a dorm room with two bunk beds where you know you get eight people in the dorm room someone's sleeping in your bed while you're working and vice versa and and you sort of realize they're really far behind us or they're really far ahead of us and either way you know it's it's not that straightforward to just shift the the iPhone factories to the United States so I I

12:23 sort of understand you know why a lot of businesses ended up there and why why this is the the arrangement that we have but but yeah my my my intuition for you know what is going to happen without making any normative judgments at all is it is going to decouple how inflationary will that be it presumably is it's presumably pretty inflationary yeah that that's that's probably the you know I I don't know it's and you'd have to sort of look

12:55 at you know what the in elasticities of all these goods are so that's true what's the policy re probably not that it may not be as inflationary as people think because people always model trade in terms of pairwise in terms of two countries so if you literally have to move the people back to the US that's that's insanely expensive I don't you know I don't know how much would cost people to build an iPhone you just you just well I think

13:20 India is sort of too messed up but you shift it to like Vietnam Mexico there are you know there there 5 billion people living in countries where the incomes are lower than China and so and so you know probably the the negative sum trade policy we should have with China is you know we should just shift it to other countries which is a little bit bad for the US extremely bad for China and let's say really good for

13:46 Vietnam that's kind of and that's kind of the the negative sum policy that that's going to manifest as this sort of decoupling happens let's talk about avoiding it for a second here Trump seems to be extremely good with dictators and authoritarians Kim Jong-un seems like a big fan I mean that in like as a compliment as a superpower right like he doesn't have a problem talking to them he connects with them and they seem to like him so what would

14:16 be the path to him working with XI to avoid this is there a path to avoid this because we were sitting here last year talking about this and it just seems mindboggling that if everybody agrees that this is going to happen happen that we can't figure out a way to make it not happen well it's it's not just up to us so yeah there's there's and so I don't know it's it's obviously somewhat of a black box we don't exactly we we I

14:46 I I feel we just have no clue what people in in in China think but but I I I think it's sort of the the sense of history is is strongly the sort of thus trap idea that you have a rising power against an existing power and it tends to you know it's it's willham mean Germany versus Britain before World War I and you know it's you know Athens against Sparta the rising power against the existing power you you tend to

15:15 get conflict that's that's probably what deep down I think is is really really far in the China DNA so so I'd say maybe maybe the first I don't know the meta version would be the first the first step avoiding the conflict would be we have to we have to start by admitting that China believes the conflict's happening right and then if if if if people like you are constantly saying well we just need to have some happy

15:41 talk right that's that is a recipe that's a recipe for world I'm not advocating happy Jo necessarily I'm I get accused of being a bit more hawkish obviously obviously in in general you know I don't know I I'm not I'm not sure Trump should talked to the North Korean dictator but yeah in general it's probably a good idea to to try to talk to people even if they're they're really bad people most of the time and and you know it's

16:10 it's certainly a very odd Dynamic with the US and and and Russia at this point where I I think it is impossible for anybody in the Biden Administration even to have a back Channel communication with with people like I I don't think Tucker Carlson counts as an emissary from the Biden Administration and if anybody gets tuckered or I don't know what the verb is who talks you know that's that's that seems that seems worse than the

16:37 alternative can we talk about technology you have this you you you have a speech where you talk about some of the misguided things we've done in the past in the name of technology and use like big data as an example of that what is AI oh man that's that's sort of a big question I it's yeah I I always I I always

17:07 had this riff where I I don't like the buzzwords and you know machine learning learning Big Data cloud computing you know I'm going to build a mobile app bring the cloud to you know if you have sort of a concatenation of buzzwords you know my my first instinct is just to run away as fast as possible some really bad group think and and for many years I I my bias is probably that AI was one of the worst of

17:33 all these buzzword it meant you know the next generation of computers the last generation of computers you know anything in between so it's meant all these all these very different things if we if we roll the clock back to the 2010s you know the probably the AI to the extent you concretize I would say the AI debate was maybe framed by by two the two books the two canonical books that framed it was there was the the

17:58 Bostrom book super intelligence 2014 where AI was going to be this super human super duper intelligent thing and then the anti- Boston book was the Kaiu Lee 2018 AI superpowers you can think of the CCP rebuttal to Bostrom where basically AI was going to be surveillance Tech face recognition and China was going to win because they had no qualms about applying this technology and and then if we now think about what actually happened let's

18:29 say with the llms and and chat GPT it was really neither of those two and it was this in between thing which was actually what people would have defined AI as for the previous 60 or 70 years which is passing the touring test which is you know this the somewhat fuzzy line it's a computer that can pretend to be a human or that can fool you into thinking it's a human and and you know even with the fuzziness of that

18:56 line you could say that pre chat GPT wasn't passed and then chat GPT passed it and that seems that seems very very significant and and then obviously leads to all these questions what does it mean you know is it going to is it going to complement people is it going to substitute for people you know what does it do to the labor market do you get paid more paid less you know so there all these all these questions but

19:21 it it seems extremely it seems extremely important and and it's probably you know certainly the the big picture questions which I think Silicon Valley is always very bad at talking about is like you know what does it mean to be a human being right sort of the I don't know the stupid 2022 answer would be that humans differ from all the other animals because we we're good at languages if you're a three-year-old or an 80-year old you

19:48 speak you communicate we tell each other stories this this this is what makes us different and so so yeah I think there's something about it that's incredibly important and and very disorienting you know the question I always have as a I know the narrower question I have as an investor is sort of how do you make money with this stuff and how do you make money I it's it's pretty confusing and I think I I don't know this is always where I'm

20:14 anchored on the late 90s is sort of the formative period for me but I I I I keep thinking that AI in 20123 2024 is like the internet in 1999 it's it's really big it's going to be very important it's going to transform the world not you know in 6 months but in 20 years and then there are probably all kinds of incredibly catastrophic approximations where you know what businesses are going to

20:45 make money you know who's going to have the Monopoly who's going to have pricing power is you know is is is is super unclear probably you know one one layer deeper of analysis you know if attention is all you need and if you're you're not post economic you need to pay attention to who's making money and in AI it's basically one company is making Nvidia is making over 100% of the profits everybody else is collectively losing money and so and so there's

21:11 sort of a you have to do some sort of you should do you should try to do some sort of analysis you do you go long Nvidia do you go short you know is it you know My Monopoly question is it a is it a really durable Monopoly you know and and then I it's it's hard for me to know because I'm in Silicon Valley and I haven't done anything we haven't done anything in semiconductors for a long

21:31 time so I have no clue do you if you let's debz word the word Ai and say it's a bunch of process automation let's just say that's version 0.1 where brains that are roughly the equivalent of a teenager can do a lot of manual stuff what do you have you thought about what it means for you know 8 billion people in the world if there's an extra billion that necessarily couldn't work or like whether that in political or economic

21:56 terms I don't know the the the I I I don't know if this is the same but this is you know the the history of 2050 years the Industrial Revolution what was that it you know it adds to GDP it frees people up to do more more productive things you know maybe there's you know there was yeah there was a I know there was a lite critique in the 19th century of the factories that people were going to be unemployed

22:24 and wouldn't have anything to do because the machines would replace the people you know maybe the Lites are right this time around I'm I'm I'm probably I'm probably pretty pretty skeptical of it but but yeah it's it's it's extremely confusing you know where where the gains and and losses are there there probably are you know there there's always sort of a hobby you can always just use it on your hobby horses so I don't know the you know my anti-

22:50 Hollywood or anti- university hobby horse is that it seems to me that you know the the AI is quite good at the woke stuff and it'll and and so you know if you want to if you want to be a successful actor you should be maybe a little bit racist or a little bit sexist or just really funny and you won't have any risk of the AI replacing you everybody else will get everybody else will get replaced and then probably

23:17 I don't know I don't know Claudine gay the plagiarizing Harvard University president you know the AI is going to you know the AI will produce end amounts of of these sort of I don't even know what to call them woke papers and they they were all already sort of plagiarizing one another they were because they were always saying the same thing over and over again they were using their own version of is just going to flood the Zone with with even more of

23:46 that and that you know I don't know obviously they've been able to do it for a long time and no one's noticed but but I think I think at this point that it it doesn't seem promising from a compet compe Point obviously my hobby horses so I'm I'm just maybe just wishful thinking on my part what are the areas of technology that you're curious about that your mind is like wow this is really I have to learn more pay

24:11 attention you know I'm always I always think you you want to instantiate it more in companies than than things or you know you ask sort of like where is where is innovation happening you you know it it it in our society it doesn't have to be this way but it's it's it's mostly in in in a certain subset of relatively small companies where we have these relatively small teams of people that

24:41 are really pushing the envelope and that's that's sort of you know that that's sort of what I find you know inspiring about about venture capital and then you and then obviously you don't just want Innovation you also want it to sort it to it to to translate into into good businesses but that's that's where it happens it it somehow it doesn't happen in universities it doesn't happen in government you know there was a time it did I mean you know

25:07 somehow in this very very weird different country that was the United States in the 1940s you had you know somehow the Army organized the scientists and got them to produce a nuclear bomb in Los Alamos in three and a half years and you know the way the New York Times editorialized after that was you know it's it's you know it was sort of an anti-libertarian write up it was you know there were you know obvious Maybe you'd left the Primadonna

25:29 scientists to their own would have taken them 50 years to build a bomb and the Army could just tell them what to do and this will should silence anybody who doesn't believe the government can do things and they don't write editorials like that in the New York Times anymore but I think yeah but I think that's sort of that that's that's sort of where where when where when should look I think it I think I think a

25:51 crazy amount of it still happens in the United States you know there sort of you know we've we've you know episodically tried to all this investing we probably tried to do tooo much investing in Europe over the years it's always sort of a junk it sort of it's a nice place to go on vacation as an investor and and it's it's it is it is very it's it's very and I don't have a great explanation but it's a very strange

26:15 thing that so much of it is still the US is somehow still the country where people do new things Peter is that is that a team organizational social evolutionary problem in the United States what is the root cause of the failure to innovate in the United States relative to the expectation going back 70 years 50 years Etc from you know the the rocket shift and we're all going to live yeah well this is always this is

26:40 always this always one of the big picture and claims I have that we've been in an era of relative Tech stagnation the last 40 or 50 years or the you know the tagline that we had they promis flying cars all we got was 140 characters which is not an anti- Twitter antix commentary even though the the way the way I used to always qualify it was that at least you know at least it was at least a good company you

27:04 had you know 10,000 people who didn't have to do very much work and could just smoke marijuana all day very similar to Europe and so I I think that actually that part actually did get corrected but but the very but I think I I think like what went wrong because you you point out that it's not a technology Trend tracker that you think about it's about people and teams that innovate and drive to outcomes B on

27:28 their view of the world and and what's gone wrong with our view of the world and our ability to organize to achieve the seemingly unachievable with very rare exceptions obviously elon's here later but yeah you know it's it's it's it's overdetermined the the the the rough frame I always have and again it's not that there's been no innovation there's been there's been a decent amount of innovation in the world of bits computers internet mobile internet you know crypto AI so there sort of all

27:57 these world of bits places where there was you know a sign significant but sort of somehow narrow cone of progress but it was everything having to do with atams that was slow this was already the case When I Was An undergraduate at Stanford in the late 80s in retrospect any applied engineering field was a bad idea it was a bad idea to become a chemical engineer you know a mechanical engineer aeroastro was terrible nuclear engineering everyone KN I mean I no one did that you

28:25 know and and and there's something about yeah the world of Adams that you know from a Libertarian point of view you'd say got regulated to death there probably you know there's there's some there's some set of arguments where the lwh hanging fruit got picked and got harder to find new things to do although I always I always think that was just a sort of baby boomer excuse for for covering up for the the failures of that generation

28:53 and and then and then I think but I think maybe maybe maybe a very big picture part of it was that at some point in the 20th century the idea got took hold that not all forms of technological progress were simply good and simply for the better and there's you know there's something about the two world wars and the you know the development of nuclear weapons that that that gradually pushed people into this this more risk ofers society and

29:23 it didn't happen overnight but you know maybe a quarter century you know after the nuclear bomb it's like by Woodstock it happened by Woodstock it happened yeah cuz that was the same summer we landed on the moon yeah Woodstock was three weeks after that yeah that's that was the Tipping Point progress stopped in the took over sex can we shift gears just to the domestic economy what what do you think's happening in the domestic economy and just say backdrop we've had

29:47 something like 14 straight months of downward revisions to jobs the revisions are supposed to be completely random but somehow they've all been down prob doesn't mean anything there's also what's happening with with the yield curve but I'll stop there what what's your take on what's happening in the economy you know it's it's man it's always hard hard to know exactly yeah I I I suspect we're close to a recession i' I've probably thought this for a while it's it's being

30:20 stopped by really big government spending so you know in May of 2023 the projection for the deficit in 20 fiscal year 24 which is October of 23 to September 24 was something like 1.5 1.6 trillion the deficit is going to come in about 400 billion higher and so which you know was a sort of a crazy deficit was projected and it was way off and then somehow and so if if we had not found another 400 billion to add

30:54 to you know this this crazy deficit at the top of the economics cycle you know you're supposed to you're supposed to increase deficits in a recession not at the not at the top of the cycle you know think things would be probably very shaky there's yeah there's there's there's there's some way where we yeah we have a too much debt not enough sustainable growth you know again I always think it comes back to you know Tech Innovation there probably

31:21 are other ways to grow an economy without Tech or intensive progress but I think they we we we don't have those don't seem to be on offer and then that's that's where it's very deeply stuck if you if you wind back over the last 50 years you there's always a question why did people not realize that this Tech stagnation had happened sooner and I think there were two one-time things people could do economically that had nothing to do with science or tech

31:47 there was a 1980s Reagan Thatcher move which was to massively cut taxes deregulate allow lots of companies to merge and combine and and it was sort of a one-time way to make the economy a lot bigger even though it had it was not something that really had the sort of compounding effect so it led to one great decade and then there was you know and that was sort of the right-wing capitalist move and then in the 90s

32:15 there was sort of a Clinton Blair Center left thing which was sort of Leaning into globalization and there was a giant Global Arbitrage you could do which also had you know a lot of negative externalities that came with it but it sort of was a one-time move I think both of those are are not on offer you know I don't necessarily think you should undo globalization I don't think you should raise taxes like crazy but you can't you can't do more

32:41 globalization or more tax cuts here that's not going to be the win and and so I I think you have to somehow get back to the future we have time for a couple more questions you I think saw that maybe this ivy league institutions maybe weren't producing the best and brightest or weren't exactly hitting their mandate and you created the teal fellows and you've been doing that for a while and I meet them all because they all have crazy ideas and they pitch

33:06 me for Angel investment what have you learned getting people to quit school giving them $100,000 and then how many parents call you and get really upset that their kids are quitting school it's well I I don't know I've I've I've learned a lot I mean it's it's I don't know I I I I think I think the universities are far worse than I even thought when I started this thing I

33:37 think yeah it's you know I I I I did this I did this debate at Yale last week you know resolved higher education's a bubble and and you sort of go through all the different numbers and the and then you know and again I I was ful to word it in such a way that I I didn't have to you know and then people kept saying well what's your alternative what should people do instead and I said nope that's not was

34:04 not the debate I'm not you know I'm not your guidance counselor I'm not your career counselor I I don't know how to solve your problems but if something's a bubble you know the first thing you should do is probably not you know lean into it in too crazy a way and you know the student debt was 300 billion in 2000 it's it's basically close to two trillion at this point so it's just been the sort of runaway

34:28 this runaway process and and then if you look at it by cohort if you graduated from college in 1997 12 years later people still had student debt but most of the people had sort of paid it down but the first by 2009 we started the teal Fellowship in 2010 and it you know it felt two by 2009 was the first cohort where this really stopped if you take the people graduated from college in 2009 and you fast for

34:57 forward 12 years to 2021 the median person had more student debt 12 years later than they graduated with because it's actually just it's just compounding faster and it was you know partially partially the global financial crisis the people had less well-paying jobs they stayed in college longer and the colleges they it's just sort of been this background thing where it's it's decayed in these in these really significant ways and you

35:27 know again I I think it's on some level there are sort of a lot of debates in our society that are probably dominated by sort of a boomer narrative and maybe the Baby Boomers were the last generation where College really worked and you know they think well you know I I worked my way through college and why can't why can't why can't you know an 18-year-old going to college do that today and and so I I I think the

35:53 bubble will will will be done once the Boomers have exited stage left but does the government to it would be good if we figured something out before then you know does does the government need to stop underwriting the loans because it's the lending I think the 90 plus perc of the the the capital in the student loan programs is funded by federal Federal the federal government and there's if you're an accredited University you can take out a loan and go to it and

36:20 accreditation in in a in a in a rigid kind of free market system you would have an underwriter that says are you going to be able to Gra graduate make enough money to pay your loan off is this a good school are you going to get a good job and then the market would figure out whether or not to give you a loan would figure out what the rate should be and so on but in this case the

36:36 government simply provides Capital to support all this and as a result everything's gotten more expensive and the rigidity in the system that basically qualifies schools and the quality of those schools relative to the earning potential over time is gone we need the government to get out of student loan business yeah but look the the place where I'm I I know I'm sort of some ways I'm rightwing some ways I'm left wing on this so the place where I'm

36:58 leftwing is I do think a lot of the students got ripped off and and so I think there should be some kind of broad debt forgiveness at this point who should pick up the T but it's not just the taxpayers it's the universities and it's the the the the bond holders got it the bond take a little bit out of those ends the universities and and then obviously if you just make it the taxpayers then then you'll just then

37:26 the universities can just charge more and more no incentive to reform what whatsoever but had me you know it's in 2005 it was under Bush 43 that the bankruptcy laws got Rewritten in the US where you cannot discharge student debt even if you go bankrupt and if you haven't paid it off by the time you're 65 your Social Security wages checks will be garnished it's crazy so so you know I I I I do think but should

37:52 we stop lending should the federal government get out of the the student lending business well if if if we if we say that if we if we start if we start with my place where you know a lot of the student debt should be forgiven and then and then and then reform the then we'll see how many people are willing to lend you know how how much how many of the colleges can pay for all the student what's your sense if if

38:15 it was a totally free market system how many colleges would shut down because they wouldn't be able to S there's no tuition support it it probably would be a lot smaller it it might it might you might not have to shut them down because there's you know a lot of them have gotten extremely a blow it's like Bal Mall's cost disease where you know I don't know if I have no idea like a place like UCLA it probably has you know

38:43 twice or three times as many bureaucrats as they had 30 40 years ago so there's sort of all there's sort of all these sort of parasitic people that have sort of gradually approved and and and and so there's probably a lot of would be a lot of rational ways to dial this back but but yeah you know maybe we're to a new location if the only if the only way to lose weight is to cut off your thumb

39:07 that's kind of a difficult way to go on a DI he Peter three of your collaborators longtime collaborators Elon Musk Mark Zuckerberg and Sam mman are arguably the three leading AI language model leaders which one is going to win rank in order and tell us a little bit about each Peter said he would answer any question I I I I I said I would take any

39:37 question I didn't say to answer any question you said you would honestly you said today you felt extremely honest and candid Let's I I yeah but Ive already been extremely honest and candid so I think qu it's it's it's whoever I talked to last okay they're they're all very very convincing people so you know I cre I I talk a little bit I talked to Elon a while ago and and you know and it was it

40:04 was just how ridiculous it was that Sam Alman was getting away with turning open AI from a nonprofit into a for-profit that was such a scam if everybody was allowed to do this everybody would do this that it has to be totally illegal what Sam's doing and it shouldn't be allowed at all and that seemed really really convincing in the moment and then then sort of half an hour later I I thought to myself but you

40:30 know actually man it was it's been such a horrifically mismanaged place at open AI with this Preposterous nonprofit board they had nobody would do this again and so there actually isn't much of a moral hazard from it so but yeah who whoever whoever I talk to I find very convincing in the moment well will that spaces get commoditized I mean do you see a path to Monopoly there well again this is this is again where you know you should you

40:58 know attention is all you need you need to pay attention to who's making money it's Nvidia it's it's the hardware the chips layer and and and then that's just it's just what we you know it's not what we've done in tech for for 30 years you are they making 120% of the profits they're they're make they're I think everybody else is losing money collectively yeah everyone else is just spending money on on the computer so it's it's one it's one company that's

41:25 making I mean maybe there's a few other people are making some money I mean I assume tsmc and asml but but but yeah I think everyone else is collectively losing money what do you think of Zuckerberg's approach to say I'm so far behind this isn't cour in my business I'm going to open source it is that going to be the winning strategy handicap that for us again I I I I I I I would say my again my my my big my my big

41:55 qualification is you know my my model is AI feels like it does feel uncomfortably close to the bubble of 1999 so I'm we haven't invested that much in it and I I I'd want to have more clarity in investing but but the the the simple simplistic question is you know who who's going to make money you know I think a year ago two years ago in retrospect Nvidia would have been a good buy you know I think at this point

42:24 everybody it's it's it's sort of too obvious that they're making too much money everyone's going to try to copy them on on the chip side maybe that's straightforward to do maybe it's not but but that's you know I'd say probably you should you should if you if you want to figure out the AI thing you you should not be asking this question about you know meta or open air or any of these things you should really be

42:47 focusing on the Nvidia question the chips question and the the fact that we're not able to focus on that that that tells us something about how we've all been trained you know I think Nvidia got started in 1993 yeah I believe that was the last year where anybody in their right mind would have studied electrical engineering over computer science right 94 Netscape takes off and then yeah it's probably a really bad idea to start a Semiconductor Company even in '93 but

43:10 the benefit is there was going to be no one would come after you no no talented people started semiconductor companies after 1993 because they all went into you know into software score their Monopoly power it's I I I think it's quite strong because this this this history that I just gave you where none of us know anything about chips and then I think the you know I

43:41 think the risk it's always you know if attention is all that you need the qualifier to that is you know when you get started as an you know actress as a startup as a as a company you need attention then it's desirable to get more and at some point attention becomes the worst thing in the world and and there was the one day where Nvidia had the largest market cap in the world earlier this year and I do think that

44:08 represented a phase transition once that happened they probably had more attention than was good hey Peter as we wrap here your brain works in a unique way you're an incredible strategist you think you know very differently than a lot of the folks that we get to talk to with all of this are you optimistic for the future I I always man I always push back in that question I I I think I

44:40 think extreme optimism and extreme pessimism are both really bad attitudes and they're the somehow the same thing you know extreme pessimism nothing you can do extreme optimism the future will take care of itself so if if you have to have one it's probably you want to be somewhere in between maybe mildly optimistic mildly pessimistic but you know I I believe in human agency and that it's up to us and it's not you know it's not some sort of winning a lottery

45:08 ticket or some astrological chart that's going to decide things and I believe in human agency and that's sort of an axis that's very different from optimism or pessimism what a great extreme optimism extreme pessimism they're both excuses for laziness what an amazing place to end ladies and gentlemen give it up for Peter J thank you thank you Peter come on now wow all right Peter ch