Dreams and Nightmares

Speaker 3

That was a week.

Speaker 1

hello everyone welcome back to that was the week my weekly summary of tech news with my old friend keith tear the uh the publisher of that was the week newsletter we usually end with his x of the week but we're going to start there the uh subject of um his newsletter this week he writes his editorial about dreams and nightmares and he begins with an X of the Week from the VC Doug Leone, who is announcing that he's going to vote for Donald Trump in the coming election as a VC. Tell me about this X, why, Keith, you led with it.

Speaker 2

Well, I led with it because there's a collection, really, because Shamath Palihipitaya and David Sachs today actually are running a fundraiser for Donald Trump as well. So there's a bit of a mini trend going on of Silicon Valley who's who's deciding that they're going to vote for Trump. Doug Leone is an extremely well-thought-of Sequoia Capital investor who has in the past been pro-Trump and then deviated, said he was not going to vote for Trump, and now he's gone back. His reasoning is very vague, isn't it?

Speaker 1

Yeah, let's read for people who aren't watching. Let's read out the X. It was... He wrote this on June 3rd. I have become increasingly concerned about the general direction of our country, the state of our broken immigration system, the ballooning deficit, and the foreign policy missteps, among other issues. Therefore, I am supporting former President Trump in this coming election. So he notes three things, the immigration deficit, foreign policy missteps.

Speaker 2

It's a little bit like saying, I've become disillusioned with Old Trafford, Eric Tan Haag, and the entire team. Therefore, I'm going to be supporting Wrexham.

Speaker 1

Or Man City.

Speaker 2

No, that would be... At least Man City and Liverpool represent something you could aspire to, theoretically.

Speaker 1

So you're not, Keith, so in the editorial... You articulate your own ambivalence about voting for Trump. You say it's a big no-no for me personally. I don't want to turn this conversation into just another conversation about Trump versus Biden, because as we speak, I got an email from Reid Hoffman linking with an op-ed he has in this week's Economist about American business shouldn't be empowering a criminal. So The powers that be in Silicon Valley are lining up for or against Trump. It's not just for Trump. People like Osman, who I have a great deal of time and respect for, are financing the anti-Trump forces. But do you see with Leon and some of the others a real sharp shift amongst investors to Trump?

Speaker 2

No, but I do see a greater willingness to own up to it, which is probably the only new thing here. A boldness. You mean own up. You mean sort of. Confess. Confess that that's where they're going to be.

Speaker 1

Well, in our mind, it's a confession. But for them, there's no need to confess. There's nothing to be embarrassed about. They like the guy.

Speaker 2

No, but that is new. I mean, I think it is new. I was pretty taken aback when the All In podcast announced they were doing a fundraiser for Trump. I mean, nothing, I wouldn't put anything past them, but that did surprise me. And, you know, a few weeks ago, Marissa Meyer held a fundraiser for Biden. So, yes, Silicon Valley is getting drawn into the election and picking sides. The real drive of my editorial is that it's pretty hard to feel good about either side. But if you have to pick one, the lesser evil is usually the place to go.

Speaker 1

And that feels like Biden to me. It's interesting in the Lyon. x that he doesn't talk about tech he doesn't talk about business uh he talks about the broken immigration system that was broken before biden i mean trump didn't do deal with it when he was president any better uh the ballooning deficit which isn't really a tech issue and foreign policy missteps so and all of those if you hold it

Speaker 2

on the screen all of those are like buzzfeed headlines they don't mean anything the the state of our broken immigration system is obviously means the immigration system is broken, but that could mean Doug Leone is basically anti-immigrant or he could mean he's pro-immigrant and wants a better system. Who knows what he means? But given that he's voting for Trump, you've got to assume that he's pretty much a rabid racist because that's what Trump is. On the foreign policy stuff, well, what is he saying? Is he saying that he's for Israel? Or is he saying he's for the Palestinians? Or is he for more help with Ukraine or less? It's totally unclear. And Trump, by the way, isn't really clear on any of those issues. So when he states those issues and says, therefore, I'm voting for Trump, there's a big missing hole of logic there, isn't there?

Speaker 1

And in your editorial, you talk about a piece, a video, the video of the week from Andreessen and Horowitz entitled The American Dream. Are Andreessen and Horowitz, are they pro-Trump? And do they link the crisis of the American Dream with the policy of the Biden administration?

Speaker 2

No, I don't think they've ever stated whether they're pro-Trump or anti-Trump. Their American dream narrative is tied to an investment strategy they call American dynamism, which is basically what happened after the New Deal. It's kind of the New Deal, but in a new age, where they're looking for a new industrial revolution, in quotes. It's really an AI revolution and a digital revolution. And they're looking to the government to be a big investor in that, as well as private capital. They are often going on about socialism and communism as a problem, which is really just using labels to define the Democrats. So they're definitely not strongly pro-Democrat in any way whatsoever. What I like about what they say is they focus on doing things with money and technology, which I think is getting close to the real story that needs to be discussed.

Speaker 1

And it seems one of the things that. Trump and Biden are both on the same page when it comes to China. They're both in an odd way statists. I mean, Biden's invested massively in the state and chips policy, investment in the environment. Trump is certainly no neoliberal. So is there a big difference in terms of tech policy? I'm assuming that Trump also, if he comes back to power... won't be particularly friendly to big tech, to Google, to Facebook, to Amazon, to Apple?

Speaker 2

Yeah, rhetorically, they try to sound different. And Biden's giving back students some of their debt. He does do some things that are different to what Trump would do. But they're very close on foreign policy. They're very close on immigration. They're very close on the economy. So the big issues, they're quite close on. I think abortion is one where Biden feels very different, and I'm on his side of that one.

Speaker 1

And there's no tech angle on that one.

Speaker 2

It's not a tech angle, but it is a social angle. So I think guns, rhetorically they're different, but actually in practice not that different.

Speaker 1

Yeah, but let's keep it on the tech, Keith, because otherwise...

Speaker 2

Well, on tech, I think...

Speaker 1

What about on his investment in the so-called chips bill? I mean, is that recognized? Is it real? What's the take in Silicon Valley when you and your wealthy VC friends get together in Palo Alto? Are you muttering about the absence of investment in innovation in America or applauding it or critiquing it?

Speaker 2

Well, the CHIPS Act is basically a huge expenditure to compensate for the fact that there's a trade war with China and that Taiwan may or may not be a trusted place in the future. So it's really a foreign policy decision more than it is a technology decision. And I'd be surprised if Trump doesn't agree with it because he's an economic nationalist as well. They're both pretty isolationist. They're both anti-free trade in this period, at least. So, yeah, I don't think the Chips Act is really a technical decision. In terms of technology, Biden is more anti-tech than Trump. Biden clearly, yesterday the FTC and the Department of Justice announced a new investigation of NVIDIA, Microsoft and OpenAI, which didn't make the newsletter because my cut-off time happened and then it happened. But that is very much a Biden, Elizabeth Warren, Lena Kahn initiative.

Speaker 1

Your friend Lena.

Speaker 2

Exactly. Keith, you're not...

Speaker 1

You said voting for Trump is and I want you to wear your tech cap because that's what we do.

Speaker 2

That's what you're saying.

Speaker 1

Voting for Trump is a big no, no. But you're not particularly keen on Biden. You're I've always thought of you as a kind of left libertarian. Might you be interested in RFK if he began to articulate a more

Speaker 1

sane Libertarian approach to liberal to innovation who would you like to see who could excite you? You don't like Trump Biden doesn't excite you Where might you write a check for example?

Speaker 2

I think anybody that understands how to rebuild a declining economy And it's really about innovation. It's it's it's the New Deal for 2025

Speaker 1

But Biden would claim he's done that. He's poured masses of money into environmental innovation, into green tech.

Speaker 2

Honestly, I don't think so. I think he's put money into railways and building bridges and roads.

Speaker 2

For America to survive as the most wealthy country on earth, it really has to leapfrog the newly developing technological economies like China and the rest of Southeast Asia. And if it doesn't, it will become like England, which is a nice place to visit, which used to be number one but is now not. And I don't see a politician... picking up on the themes that Andreessen and Horowitz are talking about, and doing really practical things to make that real. In fact, on AI, they're doing the opposite. They're trying to slow it down, if not destroy it through regulation. It's hard to feel optimistic about the government. So I do end up being a libertarian, and these days I'm very, I find it very hard to define left and right, to be honest. what does it mean to be a libertarian? It means believing in human beings, technology, and innovation, and not really believing in governments, which is sad, because I want to believe in government. I do believe the government of the people, for the people, and by the people is the ideal. I don't think we have it.

Speaker 1

Yeah, I mean, I hear you say, well, I don't believe in political categories anymore. It perhaps suggests a man who in his youth was left and now is right and is not willing to ignore it. But maybe I'm being unfair. So I want to move on to some more hard tech news of the week, Keith, but give me a Just briefly, a couple of things that you would like to see happen that's doable. Maybe in terms of AI, you're not in favor of aggressive regulation, but you have to acknowledge that there's a need for some regulation. One of the stories this week is about open AI employees warning of advanced AI dangers. The open air company, I want to get to that in a second, is, I wouldn't say in crisis, but certainly there's a great deal of controversy. Isn't it important to call on the impact of this and there is a role for government?

Speaker 2

Well, what I'd like to see is absolute free trade in tech. between the whole world, including China. I'd like to see shared research and open source research so that human beings collectively can move faster to make good things. I would absolutely disagree with the employees and former employees' letter. I think they're basically not representatives of the future. They're kind of like scared little children. I don't believe there's any danger at all with AI. I think it's made up.

Speaker 1

Again, some people might say, well, these people have been working with it. You haven't. So they have every right to call out its dangers.

Speaker 2

Well, you know, I work with all kinds of things that I don't understand. And they're typically doing very specific jobs. They're not... the big thinkers that invented the whole thing.

Speaker 1

Well, some of the senior people have left. One of the stories that I was particularly intrigued with this week is the, and you include it in the newsletter, I think I sent you the link, is a Wall Street Journal, I don't know if it's a hatchet job on Altman, but The title is The Opaque Investment Empire, Making Open AI's Sam Altman Rich. It makes him look pretty slimy. What do you make of this piece and the increasing media hostility to Altman?

Speaker 2

Yeah. Well, I think, firstly, it documents his investments and his Is it true, do you think? Oh, I'm sure it's entirely true.

Speaker 1

I mean, the way I read it was he doesn't take any money from OpenAI, but he benefits in terms of his startup investments. A lot of what he's doing benefits those startup investments with OpenAI's policy. So he's making billions as the OpenAI CEO without acknowledging it.

Speaker 2

I don't think he doesn't acknowledge it, to be honest. I mean, most of these investments predate open AI by a long way. For example, the one into Reddit or Stripe, which are two very big ones. I do think he acknowledges it. He just doesn't focus on it because he's quite humble and focused.

Speaker 1

I don't know if anyone would use the H word with Altman. He's focused and incredibly smart. There's a sort of a fake, a faux humility about him.

Speaker 2

He doesn't boast in the same way that Jason Calacanis does about all the investments he's made.

Speaker 1

Yeah, because he's a success and Jason isn't. Jason's a little...

Speaker 2

But that said, honestly, I think this article makes him look like a genius, to be honest. He's built up a fantastic... Yeah, he is a genius.

Speaker 1

I don't think there's any doubt. You've always had a great deal of admiration. I mean, in a more broad sense, though, I mean, Tim Cook... wasn't a VC before he became CEO, the CEO of Google. These are not VCs. Can one be a VC, an accelerator investor, and be the CEO of a company and not have these massive conflicts of interest?

Speaker 2

Well, I'd split it up a little bit. So firstly, Sam is part of a culture, especially at Y Combinator, where it was normal for individuals to invest personally in companies that the organization also invested in. Gary Tan, the current CEO of Y Combinator created Initialized Capital. He started life as a photographer at Y Combinator and started making his own investments in companies he liked. So there is this kind of culture which Y Combinator is, I think, quite unique. It's not the only example, but there's not many of them where individuals could make personal investments. And Sam eventually ran up against that when he left Y Combinator to run OpenAI. you know, it was obvious that he'd been doing both and he had to make a choice.