Jun 16, 2023 · 1h 58m · allin
E133: Market melt-up, IPO update, AI startups overheat, Reddit revolts & more with Brad Gerstner
Brad Gerstner · 29m spoken Chamath Palihapitiya · 28m spoken Jason Calacanis · 23m spoken David Friedberg · 22m spoken
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In Episode 133 of the All-In Podcast, guest Brad Gerstner joins Jason Calacanis, Chamath Palihapitiya, and David Friedberg to discuss macroeconomics, AI market trends, venture capital discipline, platform shifts like Reddit's API controversy, and science-backed health protocols.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. The hosts hold 71.3% of the talking time here. How this is scored →
The hosts as informed peer 6.9 Guest teaching 3.9 Guest disagreement 2.7 The hosts pushing back 3.9
speaking balance: gold is the hosts, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 1:16:37 Chamath blasts VCs taking small checks in mega seed rounds
Chamath forcefully condemns VCs putting small amounts into $100M+ seed rounds at high valuations, stating they don't know what they are doing and might as well light their money on fire in Vegas.
Hardest push from the hosts ▶ 1:25:05 Chamath rejects funding startup compute as software IPChamath pushes back hard against the rationale for massive AI funding rounds, explaining that funding startup compute is simply subsidizing CapEx like a bank lease rather than buying differentiated IP.
Biggest teaching moment ▶ 1:45:41 Friedberg debunks RFK Jr. on Wolbachia mosquito controlFriedberg thoroughly schools public figures and listeners on the scientific details of mosquito vector control, proving the project uses natural Wolbachia bacteria rather than genetic modification.
The host holds their own ▶ 1:34:42 Friedberg details the exponential cost decay curve of AI modelsFriedberg demonstrates deep domain expertise by comparing machine learning cost curves to DNA sequencing, showing how 100x cost drops in 18-24 months will invalidate early foundation model investments.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | The hosts as informed peer | Guest teaching | Guest disagreement | The hosts pushing back | Why |
|---|---|---|---|---|---|---|
| All-In Podcast Official Title Sequence | 2 | 1 | 1 | 1 | Chamath recounts playing in high-stakes World Series of Poker events and flying Southwest, leading to playful banter among the hosts and Brad Gerstner. The conversation is lighthearted informal chit-chat with low conflict. | |
| Fed Rate Hike Pause & 2023 Tech IPO Landscape | 6 | 4 | 2 | 3 | Brad explains why tech IPO candidates must offer discounts in the current environment while Chamath critiques ARM's product limitations and valuation expectations. Friedberg pushes back on JCal's premise that ARM's IPO saves SoftBank. | |
| Tech Rally Breakdown, Valuation Multiples & Macro Outlook | 7 | 4 | 3 | 5 | Brad provides detailed market analysis on tech stock valuation multiples reverting to the mean. Chamath strongly disagrees with Stan Druckenmiller's hard landing prediction, citing incoming Chinese stimulus. | |
| AI Hype vs. Real-World Efficiency Gains Across Industries | 7 | 3 | 1 | 2 | Friedberg applies financial discount rate frameworks to argue that AI efficiency gains will take years to impact broader legacy industries beyond semiconductors. The exchange is structured and collaborative. | |
| Movie Debate: 'Everything Everywhere All at Once' vs. 'Tár' | 2 | 1 | 3 | 3 | The group pivots to talking about recent movies. Chamath aggressively dismisses the movie Tár as self-absorbed, while Friedberg praises Everything Everywhere All at Once. | |
| Health & Biohacking: Saunas, Steam Rooms & Cold Plunges | 4 | 2 | 1 | 1 | The hosts and guest trade personal health routines around infrared saunas, steam rooms, and cold plunges. Chamath cites specific physiological research studies on heat and cold exposure. | |
| Google's AI Position & Re-Architecting Web Search | 8 | 6 | 2 | 4 | Brad shares takeaways from a private dinner with tech founders regarding conversational UIs and web search cannibalization. Chamath pushes back on horizontal personal assistants, arguing users will demand hyper-fragmented agents for privacy and control. | |
| Google Bard Demo & AI Search Competition | 6 | 4 | 4 | 4 | JCal presents Google Bard features and argues Google will outperform ChatGPT due to search indexing advantages. Brad challenges JCal's thesis, emphasizing Google's monetizable search traffic risk. | |
| JTrading Portfolio Analysis & VC Distribution Strategy | 7 | 7 | 3 | 4 | Brad and Chamath analyze JCal's stock trading performance, schooling him on portfolio position sizing. Chamath details a strict principle for handling VC stock distributions by immediately selling and re-underwriting. | |
| CalPERS' $5B Venture Push & Pension Fund Strategy | 8 | 3 | 4 | 6 | Chamath harshly criticizes CalPERS' decision to exit and re-enter venture capital, labeling past decisions emotional and imbecilic. Brad offers a counter-perspective, defending the new CIO's strategic timing. | |
| The Value of Deal Memos vs. Pitch Decks | 7 | 3 | 1 | 2 | Chamath and JCal advocate for long-form written investment memos over pitch decks. Chamath explains how written memos prevent performative slide-deck groupthink. | |
| Reddit Subreddit Revolt & Platform Monetization | 9 | 2 | 2 | 3 | Friedberg details the historical precedent of Facebook and Twitter restricting third-party APIs like Zynga to capture platform value. Chamath reflects on running Facebook Platform and suggests revenue sharing for Reddit moderators. | |
| Mistral AI's Seed Round & Overheated AI Valuations | 9 | 3 | 6 | 7 | Chamath strongly attacks VCs putting small checks into bloated seed valuations like Mistral AI, calling the behavior stupid and financially illiterate. Brad draws parallels to the 1997 search engine bubble. | |
| LP Dilution Risks & VCs Subsidizing Capex Over IP | 9 | 4 | 5 | 7 | Chamath insists VCs funding early GPU compute are subsidizing low-margin CapEx rather than creating proprietary software IP. Brad counters that AI startups face an unavoidable compute arms race. | |
| Rapid AI Cost Reductions & Application vs. Foundation Layers | 9 | 5 | 4 | 5 | Friedberg presents an analysis showing AI model training costs decay faster than Moore's Law (100x cost reduction in 18-24 months), rendering early foundation model spend unviable compared to the application layer. | |
| Optimal Venture Fund Size & The 10-Year Feedback Loop | 8 | 4 | 4 | 5 | JCal asks if fund size inflation drives bad VC investments. Brad defends billion-dollar funds while Chamath highlights the 10-to-20-year feedback loops that shield underperforming VCs from accountability. | |
| Fact-Checking RFK Jr. on Bill Gates' Mosquito Project | 9 | 7 | 2 | 6 | Friedberg fact-checks RFK Jr.'s viral post about Bill Gates' mosquito project, explaining the biological mechanism of Wolbachia bacteria vector control versus genetic modification. | |
| Sunscreen Endocrine Disruptors & Nuanced Public Health | 8 | 8 | 1 | 2 | Friedberg educates Chamath and JCal on endocrine disruptors in chemical sunscreens versus physical zinc oxide blockers. Chamath and JCal express surprise and ask clarifying safety questions. |
Statements from this episode (35)
Chamath Palihapitiya says he keeps no social media apps on his phone
“I brought my phone, but I don't have anything on my phone. Like I don't have Twitter. I don't have any of that stuff.”
Brad Gerstner says Databricks generates over $1 billion in annual revenue
“Databricks is doing over a billion in revenue, growing extraordinarily fast, led by an incredible team.”
Chamath Palihapitiya estimates Arm is worth no more than $25 billion
“It's a mid twenties billion dollar company. No more.”
David Friedberg notes the SoftBank Vision Fund took a $32B write-down
“And in the fiscal year ending March, the Vision Fund alone took a thirty two billion dollar write down”
Brad Gerstner predicts Nvidia will beat earnings expectations through late 2023
“I don't think there's any problems with Nvidia. I think they're going to continue to perform. I think they're beat their numbers for the balance of the year.”
Chamath Palihapitiya predicts Chinese stimulus will prevent a US hard landing
“And the reason there's not going to be a hard landing is you just saw China today basically say we're going to start to rip in trillions of dollars. They're going to stimulate the economy. You can't have a hard landing when China's printing trillions of dollar…”
Chamath Palihapitiya predicts sticky inflation and high rates through the 2020s
“And so you just have to get prepared for rates just being sticky and inflation being sticky. And I think that that's probably the most reasonable base case for the rest of the decade.”
Chamath Palihapitiya shares research on optimal weekly heat and cold exposure
“The data is like an, ah, like a little less than an hour of heat and 11 minutes of cold per week. Was shown to be physiologically optimal.”
Jason Calacanis notes 80% of LAUNCH startups are actively implementing AI
“Four out of five startups that we've invested in and the majority of them that we're being pitched on right now are not only talking about AI, which they were all talking about it three years ago. They're actually implementing it now because the tool sets are …”
Brad Gerstner predicts AI will force Google to cannibalize search revenue
“The top of the funnel is up for grabs and all of those dollars over a period, again, a five years, seven years is going to get redistributed and make no mistake. Google is well positioned to make its claim for that, but its claim is going to come at the expens…”
Chamath Palihapitiya predicts conversational AI usage will become hyper-fragmented
“In a world of AI where you can be more conversational, the idea that humans will want to get reduced to talking to one thing for everything, I think is wrong. I think instead it's actually going to be hyperfragmented because the best in class use cases are goi…”
Brad Gerstner claims ChatGPT has a 10-to-1 mindshare lead over Google Bard
“The number of people I interact with on a global basis who talk about chat GPT versus barred is like 10 to one today.”
Jason Calacanis predicts Google will eventually beat ChatGPT in AI search
“I think Google is going to be chat GPT for I'm saying it right here right now. I think they're going to beat them, because I think that they're better at indexing all this information and understanding it than anybody on the planet.”
Brad Gerstner reveals Altimeter bought back Google stock around Google I/O
“I said on CNBC that we had sold our shares. We bought back some of the shares around Google IO because we do think they're going to be a player.”
Chamath Palihapitiya advises LPs to immediately sell venture capital stock distributions
“Once you get shares distributed to you, immediately sell them. And then, hold on. And then re-underwrite from scratch from there.”
Brad Gerstner reveals Altimeter halted new venture investments in October 2021
“We stopped making venture investments in October of 21. Principally because of how we felt about public markets at that point in time.”
Brad Gerstner outlines three requirements for an incredible venture capital vintage
“You know, listen, in venture, you got to find three things. You got to find, you know, you don't want to invest all your money at the top. So you got to get the bottom, you know, bottom third. None of us can call the bottom, but you know, last year at the end …”
Chamath Palihapitiya claims most venture investors are unprepared for market shocks
“Most venture investors are probably Unprepared for the shock because they've never lived through one.”
Chamath calls CalPERS' risk management infrastructure hollow and imbecilic
“So I think that that shows a very hollowed out. And at a minimum imbecilic risk management infrastructure at CalPERS that needs to get fixed.”
Jason Calacanis argues written deal memos attract higher-quality questions than pitch decks
“When you write a deal memo compared to doing a deck, The questions you get are so qualitatively different and the people you attract are so different. It is extraordinary.”
Chamath Palihapitiya argues pitch decks foster groupthink and mask poor reasoning
“It's hard to critique decks because you use broken English, you use fancy graphics. All of a sudden, somebody that's very good at like graphical layout can dupe somebody else. And so you don't get to good outcomes because this weird group think effect sets in …”
David Friedberg says user-generated networks gain no structural value from third-party apps
“That works well in some contexts, like an Apple app store context, but in the context where there is a network unto itself, like Facebook, Twitter, and Reddit, meaning that there is already a user network that is generating value in the form of the content tha…”
David Friedberg predicts the Reddit revolt will chill social network venture investing
“So I think it'll, it'll have a lasting effect in terms of investing in social network or social media type businesses where the users are generating so much of the value and have the ability to kind of communicate with one another and control Where value ultim…”
Chamath Palihapitiya predicts internet value will shift to creators and moderators
“I think in this current version of the internet, The value is going to go and again, further, further, further erode away from the centralized apps and more towards the individual people, or in this case, these hubbid spokes, these mods, and not to the central…”
Chamath harshly criticizes VCs writing small checks into massive AI seed rounds
“When you're embedding four million in a hundred and five million dollar round at 240 plus, you do not know what the fuck you're doing.”
Brad Gerstner predicts upcoming AI funding rounds will dwarf Mistral's €105M seed
“There are going to be a couple of monster rounds, I think announced next week, like that are going to make this one look like kids play.”
Brad Gerstner notes investors could wait until 2003 and capture search upside
“You got the internet right, you got search right, but you didn't have to invest a dollar in search until 2003, and you would have captured 98, 99%.”
Brad Gerstner reveals Altimeter Capital has passed on over 60 AI startups
“We have a huge anti-portfolio for AI. It's painful. We've said no to over 60 companies, right?”
Chamath Palihapitiya argues funding AI compute subsidizes capex instead of building IP
“When you put in a hundred million dollars into a startup to buy compute, You are not buying whiz bang next generation IP. You are subsidizing capex.”
Brad Gerstner predicts tech hyperscalers will each spend $100 billion on AI
“When you think about what these hyperscalers are going to do, they're not going to spend a billion, they're not going to spend ten billion, they'll spend a hundred billion dollars, right, in order to be in this race.”
Brad Gerstner claims antitrust regulations block tech giants from $1B+ AI acquisitions
“No hyperscaler can spend over a billion dollars to buy any AI company.”
David Friedberg predicts GPT-4 training costs will drop 100x within 18 months
“If they spent four hundred million dollars in the last couple of years, you could probably assume that doing the same trading exercise could be done for five to ten million dollars, 18 months from now, to generate the same model.”
Chamath Palihapitiya says identifying bad VCs takes years but proving skill decades
“It takes 10 years to prove you're good. And it takes 20 to prove that you can be consistently good and didn't get lucky. But in a few years, you can tell that somebody sucks.”
David Friedberg highlights an Indonesian trial where Wolbachia mosquitoes slashed dengue infections
“There was a study done in Indonesia where they took these Walbachia infected mosquitoes and they released them into the wild, and they looked at a population that was in a region where they released them in a population that they didn't. In the relation, regio…”
David Friedberg warns common chemical sunscreen ingredients act as endocrine disruptors
“Oxybenzone. I don't use any products with oxybenzone. That's like the most common sunscreen ingredient. Octinoxate is the other one. Homo salate and the parabens. All of those product categories. Which are the most common products used in sunscreen. They're ab…”