The Exchanges

Q Journal has a story. Senate passes Trump's mega bill bill after all night session tax cuts and Medicaid spending reductions head to the house. With a July fourth deadline reachable, what's interesting in the bill? How likely do you think it is to pass? What are the major reads on this? And then we want to get your, your takeaway from like where the dividing lines are around the bill.

A Yeah, so there's a couple trip lines. Uh, the first trip line, I would say, you guys have been tracking the moratorium, the ten-year moratorium on AI development. This was the, on AI regulation, this was the first it was in, Ted Cruz put it in, then it was out, then it was back in, there was a compromise, there was a five-year agreement instead of a ten-year agreement, and Blackburn has been sort of the key driver of getting it back out again. It's out, now it was done, 99 to one in the Senate, almost unanimous in the Senate, To get this out. This was a big win for Dario of Anthropic, probably the number one beneficiary. And by the way, somebody who certainly used a fair bit of political capital pushing for this, that's fault line. Number one, I would say fault line. Number two.

AI assessment note: “there's a couple trip lines. Uh, the first trip line, I would say”

Q the Democrats feeling about EVs these days? Because it used to, I used to feel like it was a democratic cause to be pro EV incentive. Let's save the environment. Let's get people out of the gas cars. I'm joking about the V 12 obviously, but, um, but now it's become, Maybe let's punish Elon, but is this a cut your nose to spite your face situation for the Democrats?

A I think it's a rough spot. I mean, you guys remember when Elon wasn't invited to the big EV summit under the Biden administration, right? That's part of what kicked off his political awakening is he isn't, he doesn't use unionized labor. And so he was excluded from this EV summit. There has been a huge polarization and negative polarization against EVs among not only Dems in office, but the democratic base too, which is to all the points you brought up quite ironic. You're not going to find many Dems willing to cross the aisle in support of electric vehicles to save this bill. This is a bill that will live or die by Republican whip count and Republican unity. If the whip count isn't there, it's going to be really hard to get it done before July fourth.

AI assessment note: “There has been a huge polarization and negative polarization against EVs among not only Dems”

Q where I, I have to, I, I have to comply kind of at the national level, and they're kind of forcing me to comply everywhere, or can I just pull back out of that state? Because we've seen this with, with, uh, Apple intelligence not being available in China. That's right. Not being available in Europe, for example. But yeah, what, what would the impact on something like that be?

A Well, think about states in two categories, right? There are some states that are so large. And by the way, the analog that I would think about here is what happens in the textbook market. So if you're a textbook publisher and you want to write some textbook about biology or whatever, if the largest states in the country, this is category one, pass a law mandating something needs to be in a textbook, suddenly you're going to comply nationally because they are so large, they warp the market. Exactly. You have to. That's right. And so if California tomorrow says, look, We're passing a European-style bill to severely curtail, which I think would be a disaster, to severely curtail AI development. That would, in effect, be a national bill. And part of the, in my view, mistake that's happening tactically right now is this self-imposed July fourth deadline is so restrictive that it forces all of these more nuanced negotiating points to fall by the wayside, right? It becomes blanket. Either it's in or it's out. There's just not time to get to A more nuanced middle ground. So 11 Labs, if Tennessee has the Elvis Act, probably says, look, we just squirt around Tennessee. I don't, I haven't spoken to 11 Labs. But if California passes, then suddenly you have the whole country warped by this. And Gavin Newsom and the California legislature are certainly ambitious enough to try, as they did l…

AI assessment note: “if the largest states... pass a law... suddenly you're going to comply nationally”

Q biggest bill. There's all this pork. Are there any like green shoots where there's some random startup out there? That's just super excited because maybe it's not a headline grabbing, you know, ten billion dollar thing, but it's like, that's a hundred million dollars that I can go after in energy or in defense or in shipbuilding or anything. Have you seen any of these? Like they're called riders, right?

A Yeah. Yeah, it's a good question. Um, Biden was famous for stacking a lot of these. Like, the Inflation Reduction Act had a million ways you could go participate. This one's got fewer. I'll say one funny piece of pork, and I'll say one actual opportunity. The real opportunity, I would say, is for fintech folks who are looking at the Trump accounts, right, which is negatively giving huge amounts of new Americans who are underbanked or not banked before access to capital for the first time. If I'm Robin Hood, I am loving. That's a big change for me. Funniest piece of Orc in the bill, Murkowski, who was the key holdout in the Senate from Alaska, got a tax exemption for, uh, Alaskan, native Alaskan, uh, whalers. She said basically native Alaskan whalers need to be, yeah, that was honestly big delivery for, uh, her constituency of people who kill whales in Alaska, I suppose.

AI assessment note: “The real opportunity, I would say, is for fintech folks”

Q the Dolce Trilindy. It's a multi-hundred-thousand-dollar car. Even if we can't subsidize that, maybe we can just take away the subsidies from electric cars to tilt the, to tilt the playing field in favor of the, of the larger engines, the supercharged V-Aids, the twin turbos. The G-sixty threes. These types of cars that Americans, you know, deserve to be driving. So, what's the news on the EV credit front?

A I agree with you that the backbone of the American economy is the Ferrari, right? It's impossible to me to imagine a world. Thank you for the last track. I appreciate that. Where a blue collar factory worker cannot own a sports car is beyond me. This bill doesn't address that. I wish it did. It'd be great if it did. It's not going to solve that huge unsolved problem. What it will do, by the way, is continue to drive a wedge between Elon and Trump. Right. Then you saw Elon take the Twitter. I imagine you guys probably mentioned it earlier. You saw Elon take the Twitter and start to really crusade against people voting for this. That is in part because at least the house version of the bill was much worse on a lot of the subsidies for electric vehicles than a Senate version. The big challenge is going to be going into now the conference committee. It's going to be how do they reconcile these two challenges so that they can hopefully tilt the market back in favor, of course, of Ferraris and supercars nonetheless, while also not alienating One of the two power centers of the GOP, at least today in Elon, who could easily primary somebody who votes against.

AI assessment note: “the house version of the bill was much worse on a lot of the subsidies”

Q Yeah. Wasn't, wasn't there news out of California this week or, or last week around some of this stuff?

A Yeah, yeah, there's, there was a huge fight, which had an unlikely set of bedfellows where you saw Andreessen and others leading the anti-legislation, anti-regulatory brigade against some other folks who are much more pro-curtailing. By the way, I, I will just say the other interesting takeaway for Tech, not to totally dovetail away from your question, but the interesting, other interesting takeaway for us, I think, in this is the deciding vote in the Senate on the overall package, the reconciliation bill, was J.D. Vance. And so, if you're a Vance head looking at twenty-twenty-eight, right, you already see that Ocasio-Cortez and others, AOC and others, are gonna use his deciding vote on this bill, which includes huge amounts of Medicaid cuts that Tom Tillis from North Carolina, in particular, thought were politically toxic, as a wedge against him when he comes and runs for president in four years. So sorry, that was, you didn't answer, you asked a question about California, and I dovetailed it back to the federal level.

AI assessment note: “you asked a question about California, and I dovetailed it back to the federal level”