Epstein Files Fallout, Nvidia Risks, Burry’s Bad Bet, Google’s Breakthrough, Tether’s Boom

Summary

The All-In Podcast besties gather in person at The Venetian in Las Vegas for F1 weekend to discuss several major topics. They dive deep into the Epstein files release, which passed Congress nearly unanimously (427-1) and was signed by Trump, analyzing what the documents might reveal about intelligence agency involvement and why the files have been suppressed for so long. Jason reveals he met Epstein multiple times at TED conferences and shares his theory that Epstein may have been an intelligence asset.

Chamath provides an extensive breakdown of Tether’s business model after dining with CEO Paulo Ardoino, explaining how the stablecoin company serves 500 million users worldwide with $183 billion in circulating USDT and operates at 95%+ profit margins. The hosts then engage with Michael Burry’s criticism of tech company depreciation schedules, with Friedberg delivering a detailed “Accounting Corner” segment explaining why Burry’s thesis that big tech is “cooking the books” is incorrect under GAAP standards.

The episode also covers Nvidia’s blowout earnings (revenue up 62% YoY), Google’s Gemini 3 release and potential TPU-only training, Friedberg predicting Huawei as a dark horse to challenge Nvidia by 2026-27, and a philosophical discussion about investing your own money versus LP capital. The show concludes with poker pro Alan Keating joining to discuss his unorthodox playing style, risk psychology, and the importance of mastering fear in high-stakes situations.

Highlights

”I think he’s a spy”

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“I think looking back on it, I think he’s a spy. I think he worked for intelligence agencies… Why would he have an interest in the top scientists in the top universities to get close to them and then who did he want to pass that information on to? Russia, Israel, the CIA.” — Jason Calacanis, 8:01

”$168 million for tax advice”

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“Leon Black who’s the founder of Apollo in one year paid Epstein $168 million for tax advice… I am hard-pressed to understand what advice could have been given to me that where I would have paid $168 million.” — Chamath Palihapitiya, 10:28

”Upwards of more than 95% margins”

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“They’re making 10 billion. What’s more, what do you think their profit margins are?… Upwards of more than 95%… Here we are grinding away trying to get to 30-40%. It’s so many of our business and he’s like, ‘Yeah, yeah, it’s incredible.’” — Chamath Palihapitiya on Tether, 22:18

”Burry’s implication is completely false”

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“Burry’s implication that they are cooking the books or hiding accounting is completely false because all of the accounting is apparent in the cash flow statement and in the balance sheet.” — David Friedberg, 33:50

”I cried and realized I wasn’t doing what I should be doing”

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“I saw the movie Oppenheimer in IMAX and I left that movie and I cried and I realized I wasn’t doing what I should be doing with my life by being this board member who was useless… and I made the decision to step in as CEO.” — David Friedberg, 47:30

”Purity in the chaos”

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“I just think there’s some purity or beauty in the chaos after everyone’s, after you get past where everyone’s prepared, and I’m interested in that space and I have no interest in the space that everyone’s prepared.” — Alan Keating, 59:07

Key Points

• Epstein Files Vote (1:13) - House passed 427-1, Senate by unanimous consent, Trump signed saying “give them everything”
• Larry Summers Fallout (2:03) - Resigned from OpenAI and other roles after emails revealed he sought dating advice from Epstein until 2019
• Epstein Intelligence Theory (8:01) - Jason theorizes Epstein was a spy or asset for CIA, Israel, or Russia based on his interest in top scientists and cameras everywhere
• Mystery of Epstein’s Wealth (10:06) - Leon Black paid Epstein $168 million for “tax advice” in one year, raising questions about true source of his money
• Tether’s Business Model (14:44) - 500 million users globally, $183B in circulation, $135B in treasuries, growing 30 million users per quarter
• Tether’s Margins (22:18) - Operating at upwards of 95% profit margins with only ~100 employees needed to run the business
• Stable Coin Legislation (17:46) - Banks fought to prevent stablecoin providers from paying interest directly to consumers
• Nvidia’s Blowout Quarter (23:50) - Revenue up 62% YoY, net income $31.9B up 65% YoY, guidance of $65B for next quarter
• Michael Burry’s Depreciation Thesis (24:50) - Claims tech companies are cooking the books by using 6-year depreciation schedules on GPUs instead of 3 years
• Accounting Corner Rebuttal (25:50) - Friedberg explains GAAP standards allow longer depreciation if asset is still generating revenue
• Burry’s Impact on Profit (28:05) - Even if Google used 3-year depreciation, profit would only decrease 10-12%, not the massive cooking of books Burry implies
• Google’s Gemini 3 (35:25) - Regained lead on most benchmarks, Polymarket has Google at 89% to finish year as top LLM
• TPU vs GPU Training (35:45) - Speculation that Gemini 3 was trained only on Google’s TPUs, not Nvidia’s GPUs
• AI Market Fragmentation (36:30) - Winners emerging in different segments: Anthropic crushing enterprise, Google growing chat share from 8% to 16%
• OpenAI Trust Issues (38:50) - Startup community not trusting OpenAI with their data given product releases like Sora that compete with customers
• Huawei as Nvidia Challenger (40:40) - Friedberg predicts undisclosed Chinese lithography tech will enable Huawei to rival Nvidia by 2026-27
• Investing Own Money vs LP Capital (42:51) - Chamath’s returns better investing alone but higher dispersion; LP accountability made him more conservative
• Friedberg Returns as CEO (45:25) - After multiple failures as chairman/board member, Friedberg went all-in as CEO of Ohalo after breakthrough results
• Oppenheimer Inspiration (47:30) - Friedberg cried after seeing Oppenheimer in IMAX, realized he wasn’t doing what he should with his life, decided to step in as CEO
• Alan Keating’s Poker Philosophy (48:57) - Soul reading opponents by navigating fear better than most, finding purity in chaos beyond where everyone’s prepared

Mentions

Companies

• Tether (14:44) - Stablecoin company with $183B in circulation, 95%+ margins, 500M users globally
• Nvidia (23:50) - Blowout quarter with revenue up 62% YoY, net income $31.9B
• Google (35:25) - Released Gemini 3, regained LLM lead, doubled chat market share to 16%
• OpenAI (2:20) - Larry Summers resigned from board; Jason predicts they’re the big loser losing market share
• Anthropic (36:40) - “Absolutely crushing” on enterprise side with model quality
• Circle (15:43) - Competing stablecoin provider, similar business model to Tether
• Apollo (10:25) - Leon Black resigned after lawsuit revealed $168M payment to Epstein for “tax advice”
• Palantir (24:55) - Burry shorting due to 100:1 price to sales ratio
• Polymarket (35:30) - Prediction market showing Google at 89% to finish year as top LLM; Alan Keating was seed investor
• Coinbase (18:02) - Referenced in stablecoin legislation discussion
• Stripe (23:07) - Bought a stablecoin provider, everyone will have their own stablecoin
• Huawei (40:55) - Friedberg’s dark horse prediction to challenge Nvidia with undisclosed lithography tech
• Ohalo (44:55) - Friedberg’s company where he decided to step in as CEO after breakthrough results
• MIT (7:33) - Received Epstein donations via Marvin Minsky
• Climate Corp (45:28) - Friedberg’s previous company he sold before starting venture studio

Products & Technologies

• USDT (21:45) - Tether’s stablecoin ticker symbol, $183B in circulation
• Gemini 3 (35:25) - Google’s latest LLM, regained lead on most benchmarks
• TPU (35:45) - Google’s Tensor Processing Unit, potentially used exclusively for Gemini 3 training
• H100 (24:58) - Nvidia’s GPU discussed in depreciation debate
• Grok (30:30) - X’s AI that has token limits, referenced in chip market discussion
• Sora (31:47) - OpenAI’s video generation product cited as trust issue for startups
• Inferentia (36:30) - Amazon’s inference chip mentioned in AI chip fragmentation
• DeepSeek (39:10) - Open source model startups using to avoid OpenAI data concerns
• Bitcoin (21:50) - Tether holds ~10B in Bitcoin; price dropped below $90K

People

• Jeffrey Epstein (1:13) - Files released by Congress; discussion of his network and potential intelligence connections
• Larry Summers (2:03) - Resigned from OpenAI and other roles after Epstein email revelations
• Paulo Ardoino (14:47) - CEO/founder of Tether, Chamath had dinner with him
• Michael Burry (24:35) - Shorting Nvidia and Palantir based on depreciation thesis; hosts disagree with his analysis
• Clay Higgins (1:32) - Only Rep to abstain from Epstein files vote, former sheriff and army staff sergeant
• Leon Black (10:25) - Apollo founder who paid Epstein $168M for “tax advice”
• Jensen Huang (24:15) - Nvidia CEO, said they can’t keep products on shelves
• Reid Hoffman (9:19) - Met Epstein trying to raise money; Jason defends him
• Peter Thiel (9:25) - Met Epstein for “tax advice” which tracks with his Roth IRA strategy
• Ghislaine Maxwell (3:23) - Her appeal case cited as reason Biden admin didn’t release files
• David Sacks (19:30) - Credited for creating crypto framework; couldn’t make it to Vegas taping
• Alan Keating (48:57) - High-stakes poker player, seed investor in Polymarket, joined show as guest
• Doug Polk (51:05) - Poker pro soul-read by Keating in famous hand with 4-2 vs AK
• Phil Helmuth (59:40) - Poker legend who crashed the show wearing 12-year-old tracksuit
• Nayib Bukele (21:05) - El Salvador president, Chamath planning to interview him at Tether conference

Surprising Quotes

“I think looking back on it, I think he’s a spy. I think he worked for intelligence agencies… Why would he have an interest in the top scientists in the top universities to get close to them and then who did he want to pass that information on to?” — Jason Calacanis, 8:01

“In one year, Leon Black paid Epstein $168 million for tax advice… I am hard-pressed to understand what advice could have been given to me that where I would have paid $168 million.” — Chamath Palihapitiya, 10:28

“Burry’s implication that they are cooking the books or hiding accounting is completely false because all of the accounting is apparent in the cash flow statement and in the balance sheet.” — David Friedberg, 33:50

“I saw the movie Oppenheimer in IMAX and I left that movie and I cried and I realized I wasn’t doing what I should be doing with my life by being this board member who was useless.” — David Friedberg, 47:30

“I just think there’s some purity or beauty in the chaos after everyone’s, after you get past where everyone’s prepared, and I’m interested in that space and I have no interest in the space that everyone’s prepared.” — Alan Keating, 59:07

Transcript

0:00 All right, everybody. Welcome back to the number one podcast in the world. We are together in person. Yes, the besties are together in Vegas. It’s going to be a great time. We’re here for F1. Our friends at the Venetian have been amazing, gracious hosts. They gave us their beautiful studio here. We’re going to play some cards. We’re going to have Phil Helmuth, Jason, all of our besties are coming.

0:25 I’ve never seen the Venetian before. It’s amazing, wonderful suites they gave us. It’s beautiful. They VIPed us out and this is the place you want to play cards. They’ve got a beautiful brand new poker room. They got high stakes room. We’ll be playing here later. We’ll be playing great games and yes, trackside for Formula 1. I brought a card dealer with me. Wait, you brought a card dealer with you? You know, Matthew. Oh, your car dealer from your home game is here. Yeah, Matthew. Card dealer.

0:55 Is he dead money? What’s the story here? Sadly no. I haven’t been in the home game for a little bit and it looks like people got out of line. But anyway, thank you so much to our friends at the Venetian. They’re doing a ton of poker content here. So you can look at that on their YouTube.

1:13 All right, everybody. You’ve wanted us to talk about the Epstein Files and we’re going to talk about it today. In a stunning turn of events, the House and Senate voted nearly unanimously to release the Epstein files. The vote was 427 to 1 for the Epstein Files Act. The person who abstained, well played, was Republican Clay Higgins from Louisiana. Thanks for asking. He said it reveals and injures thousands of innocent people, witnesses, people who provided alibis, family members. He makes a great point, but AG Pam Bondi of course has addressed that already that they’re not going to release any open investigations and they’re going to remove names if it would harm anybody.

1:50 The Senate passed it by unanimous consent which requires a sign off from every senator and Trump in a reversal signed the bill last night saying give them everything. We did see some emails come out from the Epstein files last week. Friend of the pod Larry Summers was a main character in them and he was communicating with Epstein up until 2019 asking him for advice on dating. He’s since stepped down from OpenAI and several other public facing roles and was just, I think, put on leave from Harvard.

2:27 I mean, what do you guys think’s going to be the fallout from this, I guess, is what from the release of the files. Is that the question? Yeah. I mean, I guess we’ll put our tinfoil hats on.

2:36 Let’s break this down. So I think the first question is what is the relation between the Epstein files and Donald Trump? And I think the answer is it’s flimsy. And the reason is because this is the most investigated, most litigated human being on earth. And I think that if you had something that was incredibly salacious and accusatory of Trump, it would have been released during the Biden administration because it would have made a lot of sense politically to try to damage his candidacy.

3:04 So the fact that we haven’t seen much of anything other than some photos means that there’s nothing there related to Trump. So then the question is why didn’t the Biden administration release more of the files when they had them for four years? And it’s probably because there are a non-trivial number of Democratic operatives that are touched by these things. Well, also they did have I think the reason they didn’t release them was because there was an open Ghislaine Maxwell case as well and she was appealing it so they couldn’t release. There’s probably two of them but you know how this works. There’s innumerable number of ways to leak stuff, right?

3:35 My point is now what you’re starting to see in these documents is that it seems to be tainting the Democratic establishment elite more than the Republicans. It explains why there was so few leaks in the last four years. The point is Jeffrey Epstein was a total creep, right? That island should be covered in cement and drowned. The house should be burned to the ground and replaced with something nice. And you have to make sure that these - you’re the one that said this. It’s a thousand women.

4:05 That’s what I saw a report. They keep saying a thousand women. Someone said a thousand women in the apparently in there there’s claims - it was one of the victims who said there’s a thousand of us. Okay. I mean, you have to be incredibly careful and thoughtful to protect their rights and just to respect what they’ve gone through. But I think now we need to just release these files in an orderly manner and put this episode behind us. Learn what we need to learn from it. Get better. Be better. Treat these people with respect and move on.

4:33 But do you think the release of the files is meant to help the victims or do you think it’s meant to identify fodder to go after political enemies? Neither of those two things. The releasing of the files at this point is one of these things that is about a compact between those that have power and those that ask for something. This is an issue that has animated millions of Americans. So when they constantly keep asking for these things to be put out there, I think it’s a good signal for the government to listen to folks and release them again in a respectful way.

5:13 Similarly, there are other things that I think fall into this. We’ve heard about the JFK files, right? The killing of Martin Luther King, the Amelia Earhart files, and all the UFO files. I think what it does is it shows a pattern of being responsive to the voting public and I think that that’s a good thing.

5:32 So Higgins, who by the way was a sheriff, he was an army staff sergeant and he’s been in Congress for I think 9 years. In addition to talking about the victims, he said, you know, this abandons 250 years of criminal justice procedure in America and releasing broad reveal of criminal investigative files released to a rapid media will absolutely result in innocent people being hurt. Do you think this is like a singular situation with Epstein because it’s so extraordinary and there’s so many people tied up in it or does this set a precedent where anytime people and the media start to say, “Hey, we want to know what’s going on in the middle of an active investigation or former investigation that these files kind of get released?”

6:15 You think it’s like a singular thing? Because this is his whole point. This feels like a singular thing and also it’ll bake for a lot of these issues have to bake for a decade or two before people want them to come out. This has been going on for now for how many decades? This is like a 20 years story.

6:30 The investigative piece that’s missing is how did he get away scott-free in Florida. When he was criminally charged, he was convicted and pleaded out and he was basically let go.

6:42 So he told a story that I feel you know about this. I know a little bit about it because I met Epstein a half dozen times at the TED conference. Oh, you did? Yes. So interesting. I’ve talked about it on my Twitter incessantly. Because I - you are in his book. I am amongst the thousands of people in his black book. I met him at the TED conference. My book agent - congratulations. You guys weren’t in New York. Went to the TED conference. I just avoided that room.

7:09 Well, there was a billionaire’s dinner at the TED conference. I didn’t actually go to the TED conference. My book agent would host the billionaire’s dinner. And if you type in billionaires age - you should go to the tech conference. Used to go to the tech conference. It was like - I was never invited to the billionaires dinner.

7:22 This is in the 1990s. Like this is how old this is. He was there giving donations to scientists, Marvin Minsky, MIT, all that stuff. And when he went away and he got busted in Miami, the way it was framed in the TED community was that he was set up and this was just like an underage girl. They had checked her ID and it was like some sort of a setup and that he had been given a work from home sentence. He could go to work every day and then he had to report to jail and that it was all just like a misunderstanding is how they framed it.

8:01 I think looking back on it, I think he’s a spy. I think he worked for intelligence agencies. Now I am not the conspiracy theorist of this podcast - or shared intel with because I - it could be any in that - we all know people in the intelligence community and there’s easy ways to pass intel without it being - sure like working.

8:21 So then I think the question becomes was he an asset? Was he sharing information? To what extent? And the reason I think this is because why would he have an interest in the top scientists in the top universities to get close to them and then who did he want to pass that information on to? Who would want top intelligence from scientists? Russia, Israel, the CIA. And then the compromat thing does seem also likely because he had cameras everywhere and they’ve talked about this.

8:53 And you’re saying he recorded famous people and then used that to get things. I think there is a nonzero chance that that part of the story is true. But I don’t know that it’s like a 90% chance that happened. And I think that when we go back and we look at this, there’s a bunch of people who have embarrassing interactions with this person who spread money everywhere. Everybody wanted his money. That’s why they were lining up. All the scientists, Joey Edo, Reid Hoffman, all of these folks were trying to get his money, which is peculiar.

9:25 And he was also giving tax advice to the Microsoft people, to Peter Thiel. So he was always trying to integrate himself into powerful people with money and scientists. Why? Was it to make money or was it for some other purpose? I think it was not to make money. I think there was some other purpose here. Now, I am not a conspiracy theorist, but because this thing has gone on so long and it has not been released, I think there’s mechanisms that are keeping it at bay.

9:53 That’s to me like the Occam’s razor version of this. I think there’s going to be very embarrassing or compromising things for intelligence agencies, which is I think the same thing behind - if I could have one thing JFK’s assassination. If I could have one question answered for me out of the Epstein files, or if I could just have the question answered, I’d want to know where did all his money come from?

10:11 Because it is not very clear how a guy who was managing money for a billionaire Wexner. We all know like if you’re a money manager maybe you’re making half a percent a year. That was documented how he got - Leon Black who’s the founder of Apollo in one year paid Epstein $168 million for tax advice that came out in the lawsuit that ultimately led to Leon Black resigning from Apollo.

10:37 Right. And but was it tax advice? Like that’s what he said it was. Now look, I’m not trying to high roll anybody, but I’ve had all the tax advisers come and give me their advice. It didn’t cost you 168 million. It cost you 1,200 an hour. No, it’s cost me millions. Okay. But it’s never - I am hard-pressed to understand what advice could have been given to me that where I would have paid $168 million.

11:05 Breaking news. Here’s your accountant. They just said the bill. It’s $172 million. No, I mean it’s crazy, right? You’re right. And look, if you go to the best estate lawyers in the United States, it will cost you 5 to 10 million. What do you think he was getting paid for?

11:22 I mean, was he getting a portion of the savings for doing tax loopholes? Maybe he was charging on some sort of a commission, but he was a money manager for many of these like Microsoft executives, etc. And when Peter Thiel said, “Why did you meet with me?” He said, “Tax advice.” Which makes total - that’s a total Peter Thiel like legitimate - that totally tracks. Peter Thiel was known for his Roth, right? And he’s known for like studying these kind of things. Makes total sense to me.

11:47 I think that we’re going to have a bunch of Larry Summers like embarrassing things. There could be embarrassing things there for Democrats, Republicans, everybody in between, the scientists obviously who went to the island and all that stuff. It’s going to be all embarrassing. And I think we’re going to get to the end of the day. We’re going to find out that some intelligence agency was somehow involved in this and that’s why it’s being covered up. That’s your prediction. That’s my prediction. Yes.

12:13 Which intelligence agency will you pick? CIA. I mean it would be one of the big three. The CIA, which he was talking to, I think in this latest volley of emails, he was talking to people from Israel, from the CIA, and he was talking to Russians. He was talking to all three in the emails that have been leaked.

12:37 He was talking to Russian intelligence. He was talking to Russians. Oh my god. Yes. Russians, I think, is just generally he was very involved with Russians. Could you imagine how much anxiety we would have if that was our job? I can’t even imagine. I just want to go to my office, build some stuff, make a few investments, go home, play with my kids, text people, you know, mess around.

13:01 Jason, when they make the movie, are you going to play yourself or - I mean, if you look online, if you go to the edge.org site and you look at those billionaire dinners, you’ll see me in a couple of pictures with Larry, Sergey, Zuck, Ev Williams when we were all 29, 30 or something. Should I nominate Jesse Eisenberg to play you? I know his hair is curly and yours is straight. I think it’s more like Leo probably now. Or people might say Ethan Hawk. I get a lot of those, but I digress.

13:30 Who would play Ghislaine? Who plays young Ghislaine? Who plays Reid Hoffman? I just don’t see a world in which Reid was involved in shenanigans. I’ll be totally honest. I think he was just trying to raise money. I think it’s like unfair that everybody who met him is being dragged into like oh they were somehow a pedophile. Like that’s just crazy. I think they were all trying - because this guy was a consummate networker obviously doing a bunch of stuff.

14:02 He funded all of those dinners. He was funding all of these dinners. He was hosting dinners in New York. In New York he was known for having these dinner parties with all kinds of famous people. You can look online. He was constantly - that was his business pretty much. His business was to meet with people and he would throw dinners. That seems calorically taxing. You know what I mean? Like dinner parties. Like you overeat at a dinner party. Imagine having like three of those a week.

14:35 Jason and I went to Carbone last night. Well, we’ll talk about it when Keating gets here. That got a little heated. We’ll talk about it. We’ll talk about when he gets here. Somebody got out of line. All right. Thanks again to our friends at the Venetian.

14:47 I had dinner last night with Paulo Ardoino, CEO, founder of Tether. Can’t wait to meet him. Amazing, amazing guy. That is an incredible business. What do they got? 150 billion in treasuries now. It is an incredible. And here’s why that business is incredible. This is what I love. You’re talking about Tether, the stable coin. Tether, the stable coin.

15:07 Yes. There are 500 million people using US dollar-backed stable coins from Tether all around the world, all over Africa, all over Central America, all over Asia. Number one. Number two, his user base is growing by 30 million users a quarter. It’s the financial inclusion that then ties back to US dollar hegemony is unbelievable.

15:34 I buy a stable - explain it to me like I’m an idiot who’s never bought a stable coin just like every week which is what I am just like every other week. So let’s look at these businesses as roughly the same. There’s Circle, there’s Tether, there’s World Liberty Financial. They all have a stable coin. What is it? Okay. So let’s just say that Jason is a cash worker in India. Let’s just use that example.

15:58 Sure. He gets paid a hundred rupees and he’s like you know the rupee is constantly getting devalued. I’m constantly losing purchasing power. I want to swap that into a US dollar. So he would create a crypto wallet and what Tether will say is great give me your INR your hundred rupees. They immediately swap it to a US dollar. So now there’s a US dollar and there’s a token for that dollar. I give to Jason the token for that dollar.

16:29 Now I have this dollar. What do I do with it? If when I accumulate enough of these dollars, 50 billion, hundred billion, I can take that and I would invest it in treasuries so that it’s completely safe. US treasuries. US treasuries. Now if Jason decides to send it to you and then you redeem, I can sell a little bit $1 of those treasuries that I own and undo the chain.

16:50 And does Tether earn all the interest on the treasuries? So I’m getting to this. So now Tether and Circle and World Liberty, they earn interest on that. And so now when the number gets big enough, this number gets ginormous. Then what they do in Tether’s case is they then reinvest this capital into all kinds of distributed assets, Bitcoin, gold, real estate. But what they also do is they now invest in things like financial inclusion in Africa.

17:19 So he walked me through kind of a bunch of things that he’s doing yesterday. It is an incredible business. And so as a holder of the stable coin in my wallet, I’m not earning any of that treasury yield. I just have a flat dollar denominated or dollar protected to the dollar. You have a dollar pegged stable coin. And that is sufficient risk management and risk mitigation for half a billion people.

17:46 They’re not trying to get a 4% or 3% interest yield. They care more about you not being in - you’re bringing up the big point which is in the United States what is the big fight now? The big fight in the United States in this thing called the clarity bill that is meandering through the house and the senate is what should happen in the market structure.

18:02 So meaning if David Friedberg is the one that gave me the dollar and I am let’s for say for example say Coinbase and I issue you a stable coin. Do I share that revenue with you? Do you earn all of it? Obviously, the banks like the JP Morgans of the world, the Citibanks, they don’t want that, right? Because that’s their net interest margin. That’s what happens today. You deposit money in the bank.

18:26 And Sacks said this on the program, they in the stable coin legislation, they weren’t able to give the stable coin providers the ability to pay interest to consumers. They did that concession, but that will change over time. But the banks were able to fight for that concession.

18:39 The banks were able to fight for it. But then you have the emergent crypto companies who say hey this is like let’s find a way where we can do a sharing mechanism. How they hack around it is they do kind of sharing but via this kludgy way called rewards. So like you earn rewards and you earn reward points but it’s not really what it should be. It should be that if you earn net interest margin you should be able to share that.

19:04 And by the way, you should be able to have different rules in different markets because again, if you’re in Kenya, the last thing you’re probably thinking is, do I get the 4%. What you’re more worried about is the Kenyan currency is about to depreciate another 60% this year. Let me just hedge that. That’s more than enough value.

19:20 Anyways, I thought Paulo was incredibly impressive. Well, I will say this - business is really impressive. I have been super critical of Tether publicly and they had a lot of challenges as a business. They were banned in many markets. They didn’t do any audits. People didn’t know what was in there. They’ve done an incredible job cleaning all that up. Now they are starting to do going from attestations to audits and they desperately want to be legal in America in that legislation. They have three years to do it and they have to then unwind being banned in New York, banned in Canada, all these places.

19:55 I have an offer for you, okay? Which is - I just want to say, let me finish my thought for a second. I just want to give credit to David Sacks. What we saw under Biden and what we saw with the anti-crypto approach that they took - and Trump in his first presidency was anti-crypto as well. That decade of anti-crypto led to a lot of people doing offshore stuff like Tether, a lot of shenanigans and actually Sacks who can’t make it this weekend. He has now created a framework which is helping people do it the right way and taking out all of these questions.

20:37 And Tether is example one. What I saw yesterday was a very, very, very credible and thoughtful entrepreneur and a great business.

20:52 I would like to invite you to come with me to the Tether conference at the end of January. Okay, we are going to go - I’ve never turned down an invitation. Here we go. Here’s what we’re going to do. We’re going to fly together to El Salvador. We’re going to do a tour of the prisons. No, no. We’re going to do an interview with Bukele. Okay. And then we’re going to do an interview with Paulo and then we’ll fly home.

21:18 If I can ask him any question I want. And you have to go check out the prison. No, I’ve been told you cannot go to the prison the first trip. You go to Urkott the second trip. I don’t want to go anywhere near that prison. But if I can ask him any question and he’ll be fine with it. He’s great, dude. Yeah, I’m happy. I’m happy to go. Yeah, of course. In any other world, he would have been in Silicon Valley doing the same thing.

21:38 Anyway, the other challenge they’re going to have is when interest rates go down, these businesses are going to have to figure that out as well. But $183 billion in circulating USDT. That’s a ticker symbol right now. 135 billion of that’s in treasuries. And then another like 10 billion in Bitcoin and gold and land.

22:01 And well, and that means they’re throwing off whatever 5% they were making seven, eight billion dollars a year just on the holdings. I’m not going to tell you what the details are, but I’ve never seen a business. No, they said the word on the street is a $500 billion market cap, which would be roughly 50 times their price to sales ratio.

22:24 Let me say it different. They’re making 10 billion. What’s more, what do you think their profit margins are? Forget the growth quantum. So, oh, you only need 100 people to run the business. Yeah, if the interest is the revenue, it’s probably 60-70% margin business. Upwards of more than 95%.

22:45 It makes total sense because I mean, how many people - you know what I thought last night at dinner? Here we are grinding away trying to get to 30-40%. It’s so many of our business and he’s like, “Yeah, yeah, it’s incredible.” Good for him. Congratulations. The good news about that is there’s a financial theory though that high margin businesses like that invite competition more.

23:03 That’s literally where competition gets ground down. Stripe bought a stablecoin provider. It’s pretty well known Stripe, Visa, everybody’s going to have their own stable coin. So Tether will not have the market all to themselves. And obviously Jeremy Allaire and Circle is a very vital - margin like that’s only got one direction to go.

23:17 Correct. And if the margin, if the interest rates go down which we’ll talk about that as well. That’s going to be headwinds for that whole space.

23:26 All right. We’ve been talking a bit about Brad Gerstner personally deciding to blow up the AI bubble and then destroying the stock market. I’m joking. Shout out to Brad Gerstner. My gosh this short Bitcoin thing has been a bonanza. Wow. Is it below 90? It is right. It’s like 87. I know it hit 88 or something, but I mean, watch out below.

23:50 Okay, let’s talk about Nvidia. So, Nvidia had a blowout quarter. Revenue up 62% year-over-year, 22% quarter over quarter. Net income 31.9 billion. That’s up 65% year-over-year. They expect 65 billion this quarter. Jensen, friend of the pod, has said that they can’t keep their product on the shelves. It’s sold out everywhere.

24:19 And then at the same time, Michael Burry who has got the short on it, he’s been mixing it up. He is posting in response, I think, to you Friedberg last week making a defense of the reasonable life of an H100 of these new chipsets that Nvidia sells. Is it four years, five years, six years, seven years? When do they get replaced? When do they have a useful life and GAAP accounting?

24:44 He believes, just to make it easy for the audience to understand that major tech companies, big tech are cooking the books in order to spike their earnings. That this is a house of cards and that he’s going to short Palantir because it’s 100 to 1 price to sales ratio, but he’s going to also short Nvidia, etc. because of the depreciation. What’s your thoughts? I know you’ve seen his comments.

25:09 I downloaded the GAP depreciation rules. I was going to play accounting corner jingle, which a fan, by the way, sent me over the week. Oh, great. But I kind of got the internet working. We’ll put it in post. I want to hear it. Nicely done. Thank you. Thank you for joining me here at Accounting Corner. And thank you to Roxanna Martinez for that incredible jingle. I think we should adopt it. Love it. Send in your jingles, folks.

25:45 Depreciation rules. Accounting standards 360. Here we go. Depreciation must reflect the asset’s estimated useful life, not market innovation. The specific language. Can you call us at 11:30 tonight and put us to bed? Okay. You found a corner even more boring than science corner. Come on. People love accounting corner. No, no, explain it because I - yes, it is actually important.

26:11 Under the GAAP standards, the general accepted accounting principle standards. So, you set a useful life and you reset that useful life as you do a reassessment on when you’re actually using that asset, not necessarily if there’s a better asset that makes more value.

26:31 So, let’s just explain this again. You make a big investment in property, plant, equipment, PP&E, and that investment you write down over a period of time that you as an accountant estimate to be the useful life of that asset. So, if you’re going to use a building for 20 years, every year you write down the cost of that building by 1/20th. You don’t get to write it all down in the first year.

26:58 In fact, what Burry is arguing is that if you wrote it all down in the first year, your profit would go down and your business would look worse. So when you make an investment that you can use over a period of time, unlike salary, when you pay someone a salary, you’re paying them for the hours they’re working that quarter, that year. And so that money is an expense. It gets recognized as paid out that period.

27:23 But when you make an investment in a building or a piece of equipment that you’re going to use over time, you depreciate it just to go through that principle again. And so there’s standards in GAAP on how do you recognize the depreciation schedule? What’s the useful life? And the useful life is when you’re actually realizing return value from that asset.

27:49 Burry’s point is incorrect on Twitter. He said the idea of a useful life for depreciation being longer because chips from more than 3 to four years ago are fully booked confuses physical utilization with value creation. That is incorrect. There is value creation because they are generating revenue from those chips this year, 6 years later. So there is in fact a useful life for that chip that has extended into year six.

28:12 So what he’s arguing is you should depreciate it over say 3 years which means you’re doubling the cost every year and that it’s all written off in 3 years. But if you did that to give you a point of example in Google’s case their total net profit would come down by roughly 10 to 12%. So, it’s not like they’re cooking the books and recognizing some massive delta in their profit by doing this. The difference between 3 and 6 years is roughly 12% of their profit and they’re still using these chips.

28:45 And what GAAP says is that only if the new asset, meaning the new chips, replaces the old one, then the old asset’s remaining useful life has to be marked down and you take accelerated depreciation that year. Or if the maintenance costs spike, which mean you have to spend money to fix the asset, which is not the case with chips. The third is if the throughput requirements exceed the old equipment capabilities forcing early retirement. They’re not retiring. They’re still making revenue off the old chips.

29:16 Or if technological obsolescence means that you’re putting it up for sale, then you can meaning you stop using it after a period of time. Yeah. And if you put it up for sale, you would actually know the market value of it. You could take that from the depreciation. This is almost textbook GAAP, which is that if you’re still using the asset after 6 years, you can depreciate it over six years.

29:28 I think this conversation lacks technical literacy. So let’s assume you were Google and let’s just say that the equivalent of an output token was the equivalent of a link, right? The first thing you would tell me is, hey, Chamath, not all links are made equal, right? So for example, if you generate a link for a pharmaceutical drug, Google charges a price per click that’s way different than the link that they generate that goes to Amazon to buy toothpaste.

29:54 Right now for Amazon it actually costs the same amount of money to generate that link. I think the thing that he needs to understand is he’s equating this to energy but the reality is that in AI models the thing that we care about is what is that output token, what is the revenue that’s being generated by the output token and ultimately what he doesn’t appreciate is that obviously Google and Facebook and Microsoft and OpenAI and X are not going to be in the business of generating negative revenue output tokens just for the sake of it.

30:23 How do you know that? My wife got to the end of the internet this week. She launched X, put it on voice mode. She was stuck in traffic going from our house all the way to Sausalito and back. That’s like - no, no, it’s 25 minutes up 25 minutes back. And she said, “Hey, you know what? I ran out of tokens.” Like it said you can’t use it anymore in Grok. On Grok? Yeah.

30:55 Why do they do that? It’s because they are very conscious of there’s a certain energy output, there’s a certain revenue potential and then beyond this they start to gate it. Yeah, you do it on OpenAI, you do it on all these things. So they are already keenly aware of the value of these output tokens. They know the revenue it’s generating.

31:10 And then the second thing is in the bowels of these organizations, everybody has completely rebuilt all of the decoder infrastructure. What does that mean? Before something gets to you, the user, there’s all kinds of different manipulations that people are doing in the models, after the models, before the models, and all of that stuff has been rebuilt.

31:32 So, I think what he needs to understand, and look, in fairness to him, what I would say what GAAP needs to appreciate is when those laws were written, it’s for a factory, it’s for a turbine, and it’s this static thing. It probably doesn’t do a very good job of understanding the world of chips. But could he take a little bit of effort to call somebody and actually learn how this works? Yes. Is he doing it? No. So there you go.

31:58 I mean, hold on. I think that the most important point of what you said there is, Chamath, this is a new asset and it’s a new space. There might be some companies that are like, we’re going to lose money on this and we’re going to let you build, I don’t know, Sora videos, right? And that’s just going to be a money loser for 5 years as we get ChatGPT to two billion users.

32:24 We don’t care about it. And those machines are going to have 90% of their utilization in the first three years and then for the next seven years it’ll be, you know, 10% of their value. They’ll be doing some small jobs in the background that won’t be as important. Accounting isn’t built to do this kind of refined depreciation schedule.

32:39 What do you mean 90% of their utilization? Because if they’re still making value to the consumer so that if you theoretically think about the value of that H100, what value did the users get out of it? Well, the value today is like I’m making goofy Sora videos that generate no revenue. It’s all money losing. But down the road that might actually be advertising and it might create some number of clicks. It might create some number of subscriptions.

33:10 I think we know now much more than we did even 6 months ago how to value an output token. And then what is the instructions we give to the accounting community on how to deal with that? This is not that complicated. In the past, there have been efforts to try and change straight line depreciation, but your point of utilization, I don’t think is necessarily the correct one. If they’re still making revenue on that chip every year, year four, year five, year six, so even still using it, it’s still generating revenue for them.

33:32 And I think that remember the cost of electricity and the cost of running the data center is still an expense in that period. So all of that shows up as an operating expense. So if it’s generating negative profit, negative gross profit, the market sees that. And they would turn it off. They’ll tolerate it to the point and then they’ll stop.

33:53 You get look there’s no hidden information here. Burry’s implication that they are cooking the books or hiding accounting is completely false because all of the accounting is apparent in the cash flow statement and in the balance sheet. Remember companies have three financial statements. An income statement, a balance sheet, and a cash flow statement.

34:11 The cash flow statement reconciles the income statement, the balance sheet, makes the linkage, and it shows you all the cash that’s going in and out of the company. And many analysts and many investors that are intelligent and do their homework will look at the cash flow statement and they will see the capex. They will see all the investments going out and they will calculate a number typically called free cash flow that will allow them to estimate the true cash generation of the business in a particular period.

34:37 And make an assessment of should they be valued on free cash flow or should they be valued on the GAAP standard of EBITDA and the investor has the choice on how they want to value the company and Burry is incorrect in thinking that they’re hiding anything because it’s all there. Following GAAP standards and then investors make a market and they all decide what do I want to value this company on - cash flow, EBITDA - let them choose and then the market sets the price.

34:56 I think we’ve given this guy way too much air time. He’s not very good at what he does. I mean - come on the program Burry, we’d love to double click on it. Is there any other random person out there on the internet you want to take? Let’s just use a magic ball to like generate numbers and names. I would say that there’s a lot of people who think highly of him - they’re right - but I think it could be a good conversation.

35:21 You know who we’ve never had on the pod - Stan Druckenmiller. Let’s get Druckenmiller before we get Michael. Have both of them. I mean why are we choosing here.

35:28 Okay. Google released Gemini 3. It’s pretty great. They regain the lead on most of the benchmarks. Market now has Google at 89% to finish the year as the top LLM and all the speculation that Google was going to have their search franchise absolutely slaughtered by ChatGPT has turned out to not be true at least not this year with their searches going up, revenue going up.

35:56 But the big story is speculation around Gemini 3 being trained only on Google’s TPUs, not Nvidia’s GPUs. Your thoughts, Chamath?

36:05 I think TPU is an incredible product. I’m biased, but I think it’s an incredible architecture. This latest spin is very profound. But I also think that what we are quickly seeing is that there’s going to be a highly fragmented layer of decoding chips that exist in the marketplace. Groq is one, TPU is one, Microsoft has a spin, Amazon has Inferentia, Facebook I think is apparently spinning up their own silicon.

36:36 So we’re going to get to disaggregated decode pretty quickly. The question is who will win? There will be a bunch of different solutions. I think what’s incredible about Google is I don’t know if you saw the stats, but they went from like 8% share to like 16% share of the entire chat market as of like this last month. That’s an incredible stat.

36:59 On the enterprise side, Anthropic is just absolutely crushing. So what are we seeing? We’re seeing a nascent market get created. We saw an allocation of traffic that basically favored one company over everyone. And now we’re starting to see a sorting function and a classifier in all of these different markets. It’s like breaking apart, right? There’ll be winners in science. There’ll be winners in enterprise level coding. There’s going to be winners on the chat side.

37:24 And where are the advantages going to be? On the enterprise side, it’s going to be model quality. Anthropic’s is excellent. On the chat side, it’s probably going to pivot around your existing inherent distribution - which is operating system, which is your browser, which is your phone, which is Apple and Google and Microsoft.

37:44 Yeah. The only thing that I would push back on what you said though is that I agree that Google has done an absolutely incredible job in defending search. Yeah. But I think what this creates is the setup where now they can cannibalize themselves versus having their market cannibalized for them. That’s still going to be a very tough decision for Google to make and it’s going to happen.

38:05 I’m going to take the other side of it. I think what’s going to happen is the AI gains in advertising targeting and the number of searches is going to go up. So while the revenue per search might go down, the number of searches goes up and then the targeting goes up. So, I’m going to take the other side of it. I think the search franchise is going to grow and that Google’s not going to lose to ChatGPT.

38:30 And I think the big loser in all this is going to be OpenAI because they started with 100% of the market and they’re only going down and they’re facing a Google firing on all cylinders. Anthropic and Grok beating them in the leaderboards pretty consistently. So, I think the short in all of this, if you were going to put on the pair trade, is short OpenAI, which I think is overvalued and is going to go down. And I think I would be long Google, Grok, and Anthropic.

38:55 I think that they’re going to have many challenges. Also, I don’t think the startup community, I’ll just add this as my final thought on it. The startup community is not trusting OpenAI with their data. If you use OpenAI and you see them releasing products like Sora, if you were in the space of doing image generation, social networking, why would you trust OpenAI with your data?

39:16 If you’re doing a Cursor and OpenAI has that product, they’re not going to trust them. They’re going to go with a model like Anthropic, which is taking a more neutral, we’re not going to go to the application level. And they’re also using DeepSeek and open source models again because they don’t want to give their data and their advantage over to a person and enabling somebody who might compete with them.

39:39 Sure. Number one is I think what we will see over time is probably a differentiation of general purpose workhorses in chip architecture to more of these kind of special purpose chips that work well with certain models and certain applications. You can kind of think about inference in machine vision in robotics. You don’t necessarily need an H100 to do that. You can use a purpose-built chip to do that in a way that reduces power cost, reduces ultimate kind of capital cost to deploy that in an edge environment.

40:16 In the core data center environment, you may end up having models that are different for graph neural nets versus LLMs. There are going to be different chips that’ll likely fit very differently with different architectures. So, you know, I would say that the general workhorse is what we had, but now that everyone’s making these investments and you should expect that the investment dollars in chip design is only going to ramp up, not down. There’s going to be differentiated chips for different markets and different applications and that’s where there’s a risk to Nvidia.

40:45 Who do you think has the best chance of challenging Nvidia? So, this is where I was going to go. The other black swan that I think is missing in the equation today and my early prediction for 2026 is Huawei, where I think that there’s a lithography technology that exists in China that is not publicly discussed that is going to be deployed in Huawei and all these fabs that they’re building in mainland China.

41:09 And Huawei can create at a very low cost probably very high volume and probably in reasonably short order chips that can start to rival for certain market applications chips that might be expensive. Give a timeline for that - 2 years, 3 years out when they start to make announcements? And by the way, remember chip architecture and even Jensen’s talked about this is being redesigned with AI. So AI can design better chips.

41:36 Okay. So announcements 2026, impact ‘27. Probably fair. Yeah. Okay. Great. Love it.

41:40 Is this what it’ll be like when we have to be in a studio? When we get to this level of scale where our show actually matters and we need to studio. We could be in a studio together. Yeah. I mean, we’d have to - the show would have never happened or worked. Yeah. Yeah. I mean, you have four people with actual schedules and jobs. It’s not like we do this for a living.

42:01 Oh, you do? No. I mean, I invest in 100 companies. Not well, but I’m saying you do it. No, you could have carved out the time. The rest of us actually have jobs.

42:09 No, actually, I literally just got back from launching Foundry University in - that’s what I’m saying. Watching. That’s the key word, watching. You didn’t say doing. And launching Foundry University in Tokyo, thanks to my partners there. Did you watch the plug? And investing in 100-150 companies per year and launching the fifth Launch Fund next year. So go to launch.co and you can email me any -

42:32 Distribution from you by the way recently. Yes. Good. That first fund is like five 6x now. Yeah. But it was on $8 million. What’s your top fund? Have you hit a 5x fund yet? Yes. Okay, great. So welcome to the club. Welcome to the club. It was on 500 million. So - okay, great. Awesome. Well, more than a 5x.

42:55 Okay, great. I’m happy for you. I’m happy for you. I should have just done it with all my own money. That is actually the question that a lot of people have. Do you feel you’re a better investor when you’re investing your money or do you think you’re better when you have the discipline of having to report into LPs? It’s actually a good question.

43:07 My returns have been better when I’ve been by myself. But I think that there is something really valuable about working for other people which it does keep you accountable. I mean, what’s happened is my dispersion has increased massively investing on my own, which means I cut the losers off far longer than I would have if I was running a fund.

43:28 Because I think what I signed up for when I was running a fund was never lose money ever and return the money as quickly as possible and then run the upside. And so I would have traded a 7x with high volatility for a guaranteed 3 and 3.5x because I think that was my responsibility. As the GP - because my LPs were Memorial Sloan Kettering, the Mayo Clinic. I wanted to give them the money back because they have programs. And it’s not my job to hold the money back.

43:55 With myself, I can keep it out. So then the ups are higher, but then the lows are also lower. Yes. Because some of these things just get annihilated. Like look, Relativity Space, you know, I took a $400 million goose egg. Yeah. And this is the challenge. Smith shows up and he’s like here it’s a billion dollars pay to play and I’m like okay I’m not going to do it.

44:16 So you had a venture studio for a little while. You had to deal with outside investors. Now you’re obviously in the driver’s seat CEO of Ohalo. You also had that pressure. You have to answer to LPs. Did it make you better at the job or did it make -

44:29 I still do same investor. My venture studio owns the majority of Ohalo, so it’s our biggest driver of value. So I’m spending all my time on Ohalo. That’s kind of my - but do you run the production board still? Like are there investments that you - I’m on a few other boards. But no active investment. I’m not doing any new investing.

44:46 Actually, a lot of folks moved into Ohalo, we moved out to stop doing new investing and then slowly we’re kind of as we have a liquidity event, we’ll do a distribution. But the goal is for TPB to end up being a holding company with just Ohalo in it. That’s where all the value is going to come from. So we actually just did a distribution and then we’re going to do kind of distributions as we have other kind of events for the other things that are in our portfolio and then we’ll just focus on Ohalo.

45:12 When you came into this venture studio model did you anticipate - which is what most people do anticipate with venture studios - that you’d have one breakout and you would go all in on it? I was delusional.

45:26 Okay. In 2011, two years before I sold Climate Corp, I started a company called Metro Mile. I was the chairman of the board of the company. I hired an outside CEO, fired him in a year, brought the - promoted the CTO to be CEO for years. I worked with him as the chairman of the board. I invested close to 10 million of my own money in this company. Spent years on it. It had raised a series B, a series C, series D. Was doing great.

45:52 I’m like, man, this is awesome. I can be a chairman, not a CEO, run these companies. This goes great. Scaled to like whatever it was 100 million of revenue. I started Mezli which as you guys recall was this quinoa fast food restaurant. Robotic as well. Robotic - way ahead of your time. I put 3 million of my own capital in the business. And then I had a CEO run it. And then we raised outside money which I was not planning to do in that business.

46:17 And I’m like man I am so good at starting companies and being a chairman. This is what I should do. And that’s what led me to start the venture studio. Both those companies ended up being net negative returners for me.

46:35 And over time, many of the other projects that I was a founder of but chairman of didn’t succeed financially. And over my years being on boards, I realized how frustrating it was to be on a board where you would tell a CEO a bunch of stuff. They wouldn’t listen. They would do whatever they wanted to do. I was frustrated pulling my hair out, watching them do things I wouldn’t do, not doing the things I would do.

46:55 So after many years of this failure after failure, I realized, you know, this was the moment where we had this amazing outcome, series of outcomes at Ohalo. And it was a research project for several years. We put close to $40 million into this project before these results started to come in. I’m like, holy - this is the game-changing business of my career. This is the power law.

47:16 And that’s when I made the decision, I’m going to go all in on this and I’m going to run it as - how did the LPs take that? And how did you communicate it to them? Everyone was very supportive and very active. They were like, “This is exactly what we always hoped you would do was to find a winner.”

47:34 And I never thought that that’s what I would do because I swore after I sold Climate Corp, I swore I would never be a CEO again. It’s too stressful. It was damaging to my health. It’s like overwhelming. I’m so into it. I cannot stop building the business. It’s just it consumes me. Everything about it, I have to win. I have to make the business an ultra success. It consumes me. And I knew that it would happen to me again. And I’ve got kids and all this stuff.

48:02 So, I had to really like dig deep to make the decision to do it. And actually, you know what changed my mind about this was I saw the movie Oppenheimer in IMAX and I left that movie and I cried and I realized I wasn’t doing what I should be doing with my life by being this board member who was useless and I’m like what am I doing here and I said I’m going to make this and I’d been thinking about this and I’m like that’s it. It tipped me over and I made the decision to step in as CEO.

48:26 So yeah, the LPs, the investors were all thrilled because they had all said like, “We hope you would run something one day.” And then more capital came in and we’ve been running Ohalo for - it’s been two years now this month that I’ve been running Ohalo CEO. And I’m really happy I did it.

48:37 That’s incredibly inspiring. Chamath, would you like to mock Friedberg for crying out of Oppenheimer in any way? I saw you queuing up. He’s queuing up. He’s like, “Yeah, great movie, by the way.” I cried. I cried when I got married. I cried when my kids were born. Yeah. He cried all the time. He’s like, “Oh my God, he split the atom.”

48:57 Do you ever ask yourself, “What did I do with my life?” Like, do you ever think like, “Hey, the impact I thought I would have in my life - that there’s a missing piece to that. There’s something that I didn’t accomplish that I always expected I would that there’s something I didn’t achieve as a person.” And then you see these kind of extraordinary outcomes that others do and you’re like, man, what was I do? What am I doing with my life? What am I doing?

49:16 I think that’s a pretty profound insight you had. And it sounds like you made the right decision.

49:22 All right. Next up on the program, one of our favorite human beings. You know him from High Stakes Poker, the one, the only, the mad man of the poker tables and the mensch in our poker group, Alan Keating. What’s up, brother - introduction? Have a seat. Have a seat. What’s up, brother? How are you? You’re sitting next to me. Oh, good, good, good, Alan. Just like at dinner last night. Yeah, you were my right.

49:47 Let me introduce you - at dinner last night. Hold on. Let me just do a proper introduction. So the audience understands who Alan Keating is. We’ll get to it. Alan Keating. Just type that into YouTube. Watch a bunch - that was incredible. That was legendary.

49:58 Alan Keating ran the high stakes game here, the elite big game for many years. Then he started investing in companies. He was the seed investor in a little company known as Polymarket. And he’s gotten into our friend group. I don’t know how many years ago Chamath brought him in and he fit right in and we started hanging out 10 years ago and we got to know him. In that time he also started to play high stakes on TV. Stopped running the big game here in Vegas.

50:22 And on TV you’re known for playing way above the rim in a way that to call it non-traditional would be an understatement. Take us through - no, okay go ahead Chamath you wanted - yeah look - I will explain your career to you. Go ahead. Listen up.

50:38 Keating at his core is an exceptional player, not a traditional like you know you’ll see some of the other guys who are more solver oriented but Keating has incredible, incredible live reads, kind of like a modern younger generation of Helmuth. I mean Helmuth has good live reads, but now you know he’s like an aging horse. We’re going to have to send him to the glue factory soon.

51:03 But Keating is in his prime and what he can do is he can soul read people which when you’re playing at the high stakes honestly that’s all that matters because you can’t play solver-based at these at the stakes in which we play. You cannot - you’re just going to get run over. And that’s why you see him being able to do these things because everybody else steps into the game. They’re like a deer in the headlights. They’re so afraid and he is very comfortable. Yeah.

51:27 And so he can see it and he can pick people off like when he picked off Doug Polk with a four. How does that happen? It’s because he can soul read people and he’s attuned to play this game. Keating, true or false? Can you soul read people?

51:43 Yeah. I think I’ve - I’m navigating fear on the poker table better than most. So I think when people are, you know, afraid, they tend to give things away or get scared or act different. And I try to - the problem with the Doug Polk hand was that he messed up the bet sizing on the turn. Yeah. He ships the turn, you fold. Yeah. He puts himself in a horrible situation where he’s betting the river.

52:08 I mean, you just soul read it. And it was great. It was incredible. There were a few different tells that I - I wonder if I should delve into - break it down because these guys the most - by the way I think this is important because a lot of people think poker became solved because of computers and AI and everyone uses trainers now but to your point, to Chamath’s point, there’s still at the core of the elite level of the game very much a tell and psychology component.

52:34 We’ll get Nick to play picture-in-picture this hand. How big was the pot in the end? Million something? No probably - 6-700K. Doug Polk who was a phenomenal heads up player had ace king - like the best in the world. You like a ding-dong had - 42. 42. It somehow ends up seeing - hand raised, flop, it was like what, like 150 on the flop? 75 pre, 35, 75 all in.

53:10 Okay. So, take us behind the hand like what’s the read and why are you playing 4-2 to begin with? Why don’t you explain that to the people watching? Yeah. But explain the thinking there because a lot of people - let him talk.

53:25 I, you know, a lot of people want to like you said put everything into a solver and reduce something into a vacuum and navigate that situation. And I don’t really have a passion for that. I have a passion for like what’s happening in this moment. What’s happening with this person? What’s happening with me? What are they perceiving me as?

53:45 And you know, in that moment, Doug had gotten some confidence around a couple hands and there was a player in between that I knew he didn’t think much of his hand and he didn’t think much of my hand and it seemed like an obvious situation for him to pull it away from me. And I thought about re-raising all-in pre-flop just to simplify it. And I think that was probably a better way to do it.

54:12 But at the same time, I do a lot of things for the fun of it. And I thought it’d be a little bit more fun to get him in a spot later on a couple streets down where I could, you know, bluff him out or call him down.

54:26 And did he have a tell on the turn? Yeah, he goes 75,000 like kind of directly. And about an hour and a half before then, he had the same tonality, same cadence, and he was just stealing, air-balling the situation. And there was just a myriad of things where it was like, that might be something. I’m not sure. That might be something, I’m not sure. Well, here’s a lot of things that might be something, and I’m pretty sure that the combination of them.

54:57 What happens if you call and he shows pocket jacks or something? So, you know, and then do you like in those spots where you call off and you lose? How do you process losing $700,000 that way? Do you think this is so stupid? Why did I do that? Or are you saying what’s the self talk? What’s the internal monologue?

55:18 I don’t - I guess I don’t know where it came from, but I wanted to always kind of have a sense of humor around whatever happens to me. You know, the things I can’t control, the things I can control. You know, if I put myself in a spot, I’ve gotten to a point where I can immediately recognize how ridiculous what I just did was and kind of laugh and be okay with it. Yeah. Yeah. Sure.

55:41 So like you’re forgiving yourself during the hand. Yeah. There’ll be like an internal part that’s just like, “Yeah, of course that was so dumb to do that.”

55:50 So to be able to pull off the hands you pull off, you have to have a “I don’t give a f***” kind of attitude about - this is all a game. I don’t take it too seriously because that’s where fear comes from.

56:00 It’s about mastering the fear. Yeah. I think I just recognize that people make bad decisions when they’re scared and that’s why I like - but sorry, say that again. Mastering fear. You put in reps. How do you put in reps to master fear because that extends to many other things in life, right?

56:15 Absolutely. Like we talked about this in investing and you know, different strategies about how big of a bet you want to make relative to your bankroll and venture and stuff like that. Well, I like making the bet where if it doesn’t work out, I’m in a little bit of trouble, right? You like to feel the pain. You like that - it feels real. Yeah. It’s a motivator. It’s something that drives and I - I like poker. I’ll put myself in the same type of situation.

56:40 This like two years ago, Keating calls me. He’s like, “Hey, this is like about portfolio construction and like a specific company. We won’t say the company. Talk for an hour.” And I’m trying to give him my best advice. Look, here’s how you structure it to minimize volatility. You know, take some of these chips off the table, do this, do that. He goes, I really appreciate this. Calls me two days later. Yeah. So, I doubled down on this thing and I just put it all.

57:07 Okay, throw that advice on management out the window. You don’t know this, but I’ve tripled down. Exactly. Well, here’s what your purpose on calling him then.

57:12 So, if you felt that that was where you were going to go, why are you checking it? Were you trying to check your sanity or like what were you doing there? Why do you check?

57:20 I’m inviting him to the deep end. I’m saying - want to come with - no, you’re talking about me. I’m asking why he called you - talking about - no, no. I’m asking why you called Chamath in that situation where you’re going to double down, triple down.

57:33 I have access to someone that’s like infinitely smarter than me at the thing that I’m trying to understand. You’re jumping in the deep end. Yes. Yes. Why are you asking him like should I jump in the deep end first?

57:44 Because I want to earmark like all the reasoning, right? I’m setting - I’m trying to understand everything about this decision because I’m going to live with the outcome of that decision no matter what. Right? So I want to remember his take, my take, my feelings, other people’s thoughts and I want to put that into like a little bit of folder that I could come back to.

58:05 If you’ve unconsciously or you’ve discovered something which is referred to as super forecasting in behavioral sciences which is if you write down and you understand all the permutations of your decision making and then you reflect on it years from now you’ll just be better at decision-making. So that’s actually what you’re doing and I think it just comes natural to you.

58:24 And you were going to say when you thought the question was about the poker hand about inviting him to the deep end. Unpack that concept of saying, “Hey, we both know that this hand’s out of control. We’re in the deep, dark waters. There could be sharks in there.”

58:45 Explain what you’re doing cuz I’ve been in hands with you where I feel like you just dragged me out to the deep water where I’ve got jacks or queens and then all of a sudden I’m going to be playing for my entire stack and they don’t feel good anymore even though I have an over pair to the board or whatever it is.

59:00 Yeah, that’s a great point. I just think there’s some purity or beauty in the chaos after everyone’s - after you get past where everyone’s prepared and I’m interested in that space and I have no interest in the space that everyone’s prepared.

59:19 Everybody’s got a plan until they get punched in the face. You remind me of Alex - you’re the Alex Honnold of poker. Alex Honnold is the guy who - oh my god. Oh my god. What is this? We’re in Vegas. Uh-oh.

59:36 And you see - oh my god, his bestie. And look guys, Helmuth decided for this special occasion with us here taping All-In for the first time in Vegas, Helmuth decided to wear a tracksuit that’s only 12 years old. One of his newer tracksuits.

59:57 Few years ago at Helm’s birthday, we each chipped in I think three grand to buy a new one. There was like 60 - it was like $70,000 in total. Yeah, there was 20 of us. We put in three grand. We - he hasn’t worn a single thing.

1:00:13 No. This shirt you guys bought for me. I will say this between - no, hold on. Between that wall and that wall, you guys gave me all new - all those clothes. Did you sell them? Ton of clothes. No, no, I gave them to my sons.

1:00:27 Okay. All right, sit down. Phil, help me. Please sit down. I got to close the show. Hold on. Everybody stand by. Supplemental. Yeah. Three, two. All right. Alan Keating, you’re a mensch. It’s a pleasure to know you. Great to play with you. And we’re going to have some exclusive content on our YouTube channel of the besties playing poker with incredible professional poker players like Jason Alan Keating.

1:00:52 We’ll let your winners ride. “We open sourced it to the fans and they’ve just gone crazy with it.” Besties are - that is my dog taking a notice in your - oh man, my will. We should all just get a room and just have one big huge orgy cuz they’re all just - it’s like this sexual tension that we just need to release. All in.