Peter Thiel | All-In Summit 2024

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

oneof A- kind companies how do you get from Z to one what great business is nobody building tell me something that's true that nobody agrees with you on all right Peter welcome back it's good to see [Applause] you um you don't do this too often uh so we do appreciate it U but when you do do it you're always super candid and appreciate that as well you fit right in here um you're sitting this year's political cycle out right politics well no I mean I think this is a question we all have which is you

were very active um you bet on Jed in a major way um he delivered today it was a very impressive uh discussion why aren't you involved this this cycle where it's very confounding to us because these are your guys man how much time do we have supposed talk about this for two hours or something um um I I don't know look I have a lot of conflicted thoughts on it uh I I am still very strongly prot Trump Pro uh Pro JD I've decided not to uh donate any money politically but uh I'm supporting them

in every other way uh every other way possible uh I you know uh obviously uh you know I think uh I think there's my my pessimistic thought is that uh Trump is is going to win and probably will win by a big margin uh he'll do better than the last time and it'll still be really disappointing because you know the elections are always a relative Choice and then once someone's president it's an absolute and they you get evaluated you know do you like Trump or Harris better and that seems there seem to be a lot

of reasons you know and that one would be more anti-h haris than anti-trump let's again no one's Pro any of these people it's all it's all negative right um and uh but then after after they win there will be a lot of buyers remorse and disappointment that's sort of that's sort of the arc that I I see of what's going to happen and it's it's somewhat under motivating um I don't know just to describe describe it I I think you know I think it's I think the odds are slightly in favor of trump but it's

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

the next uh in the next two months and then you know if you want to get involved you know with all the headaches that come with being involved if it makes a difference counterfactually and if it's a really close election everything makes a difference if it's if it's not even close I don't think it makes much of a difference if if it is going to be close by the way if it's if it's like going to be a razor thin close election then um then I'm pretty sure KLA will win because um because they will

cheat they will fortify it they will steal the ballots and so so uh so you know if we if we can if we can if we can and so then in the event in the event that it's close I don't want to be involved in the event that it's not close I don't need to be involved and so that's sort of that's sort of a straightforward analis right there jumping off point much cheating on a percentage basis do you think happens every year how much and do you think Trump actually careful with the verb so

you know um cheating stealing that implies something happened the dark night I think the verb you're allowed to use is fortify okay yeah we don't want get canell on YouTube ballot harvesting I mean it was you know it's all sort of there were all these rule changes it was sort of done in plain daylight and uh um but yeah I think I think our elections are not they're not perfectly clean otherwise we could examine it we could have vigorous debate about it well what would you change then what what should change cuz we all want

everybody's votes to count we want it to be clean um I'm I'm talking about the audience here I know at a minimum you you'd run them you'd try to run elections the same way you do it in every other Western democracy you have one day voting you have practically no absentee ballots um you have um and um and it's you know it's it's it's it's it's one day where everything happens it's not this uh two two-month elongated process that's what the way you do it in every other country you you'd have you'd have some somewhat

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

would make you not disappointed so Trump gets elected how do you what's your counternarrative on you know where a year or two years past the election Trump is president what what makes you say I'm surprisingly not disappointed what takes place man it's um you know it's I I I think there are some extremely difficult problems that it's it's it's really hard to know how how to how how to solve them I wouldn't know what to do but uh we have you know we have an incre incredibly big deficit and uh and yeah if you can

if you can find some way to meaningfully reduce the deficit with no tax hikes and without without GDP contraction well you you would do it if you got a lot of GDP growth maybe right but um if you could if you could meaningfully reduce the deficit with with um with no with no tax hikes that would be that would be very impressive you know I I think we're sort of sleepwalking into Armageddon with uh you know the Ukraine and um the conflict and Gau are just sort of the warm-ups to the China Taiwan war and

uh and so if uh if if Trump can find a way to head that off that would be incredible if they don't go to war in four years that that would be that would be better than I would expect possibly in relation to Taiwan if Trump called you and asked should we defend it or not in this acute case would you advise to let Taiwan be taken by China in order to avoid a nuclear Holocaust in World War II or would you believe that we should defend it and defend free countries like that well I

I I think um I think you're probably not supposed to say no no no if you no if you um you I I I think look I think there's so many ways our our policies are messed up but probably you know the one the one thing that's roughly correct on the Taiwan policy is that uh uh we don't tell China what we're going to do um and what we tell them is we don't know what we'll do and we'll figure it out when you do it which is probably has the virtue of being correct and

uh and then I think if you had yeah if you had a red line at quoy Matsu the the island you know five miles off the coast of China that's unbelievable if you um if you um if you say we want some guard rails and we won't defend Taiwan then they'd get invaded right away so I think I think I think policy of um not say policy is and maybe not even having a policy you know in some ways is relatively the best I I I think anything anything anything precise you say that's going to

just lead to war right away but what do you believe I um worth defending or not worth starting the conflict democracy in this tiny Island worth going to war over or not according to Peter teal it's um it's not worth uh it's not worth World War III um and I I still think it's it's uh quite catastrophic if it uh if it gets taken over by the Communists how does the world those can both be true how does the world divide if we end up in a heightened escalation is China Russia Iran friends is that

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

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

I were in your place I would still get the business out of China I would get the computers out the people out I'd completely decouple it from bike Dan because um Tik Tok will be banned 24 hours after the Taiwan invasion and if you think there's a 50/50 chance this happens and that will destroy you know 100% of the value of the Tik Tok franchise what was his reaction um you know uh he said that they had done a lot of simulations and the bunch of companies in World War I and World War II that

managed to sell things to both sides he doesn't seem so bright to me do you think he's um he no he donly what your take on him he he didn't disagree with my frame and so I always I always find that flattering if someone basically framing so he seemed he seemed perfectly bright to me even though lot of bright people I saw you give this I saw you give a talk last summer with Barry Weiss and you talked about this decoupling should be happening you weren't saying should you were recommending that every industry leader consider

decoupling from China I think your comment was it's like picking up nickels in front of a freight train you remember saying that the well I I I think like it's it's there a lot of different there lot of different ways in which businesses are coupled to China that were investors that tried investing there are people who tried to compete within China they people who built factories in China for export um and um you know there different parts of that that worked to um to to varying degrees but uh but yeah my um my I I

certainly would not try to um to invest in a company that competed domestically inside China I think that's that's virtually impossible um I think it's probably quite tricky even to invest in Chinese Chinese businesses um uh and uh and then and then there is there is sort of this model of you know building factories in China uh for uh for export uh to the west and um it was it was a very big Arbitrage these things do work you know I me I visited the foxcon factory nine years ago and it's you know you have

people get paid a dollar and a half $2 an hour and they work 12 hours a day and they live in a dorm room with two bunk beds where uh you know you get eight people in the dorm room someone's sleeping in your bed while you're working and vice versa and uh and you sort of realize they're really far behind us or they're really far ahead of us and either way you know it's it's not that straightforward to just uh shift the um the iPhone factories to the United States um so I I sort of

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

policy re probably not that it may not be as inflationary as people think because um people always model trade in terms of uh pairwise in terms of two countries so if you literally have to move the people back to the US that's that's insanely expensive I don't you know I don't know how much would cost people to build an iPhone you just you just well I think India is sort of too messed up but you shift it to like Vietnam Mexico there are you know there there 5 billion people living in countries where the incomes

are lower than China and so um and so you know probably the um the negative sum trade policy we should have with China is um you know we should just shift it to other countries which is a little bit bad for the US extremely bad for China and let's say really good for Vietnam that's kind of um and that's kind of the the negative sum policy um that uh that's going to manifest as this sort of uh decoupling happens let's talk about avoiding it for a second here Trump seems to be extremely good with dictators

and authoritarians uh Kim Jong-un seems like a big fan I mean that in like as a compliment as a superpower right like he doesn't have a problem talking to them he connects with them and they seem to like him so what would be the path to him working with XI to avoid this is there a path to avoid this because we were sitting here last year talking about this and it just seems mindboggling that if everybody agrees that this is going to happen happen that we can't figure out a way to make it not happen

well it's it's not just up to us so um yeah there's there's and so I don't know it's it's obviously somewhat of a black box we don't exactly we we I I I feel we just have no clue what people in in in China think but um but I I I think it's sort of the the sense of history is is strongly the sort of thus trap idea that you have a rising power against an existing power and it tends to you know it's it's willham mean Germany versus Britain before World War I and you

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

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

with the US and and uh and Russia at this point where um I I think it is impossible for anybody in the Biden Administration even to have a back Channel communication with uh with people like I I don't think Tucker Carlson counts as an emissary from the Biden Administration and if anybody gets tuckered or I don't know what the verb is who talks you know that's that's that seems that seems worse than the alternative can we um talk about technology um you have this you you you have a speech where you talk about some of

the misguided things we've done in the past in the name of technology and use like big data as an example of that um what is AI um oh man that's that's sort of a big question I um it's um yeah I I always I I always had this riff where I I don't like the buzzwords and um you know machine learning learning Big Data cloud computing you know I'm going to build a mobile app bring the cloud to um you know if you have sort of a concatenation of buzzwords um you know my my first

instinct is just to run away as fast as possible some really bad group think and um and for many years I I my bias is probably that AI was one of the worst of all these buzzword it meant you know the next generation of computers the last generation of computers you know anything in between so it's meant all these all these very different things if we if we roll the clock back to the 2010s you know the um probably the AI to the extent you concretize I would say the AI debate was maybe framed by

by two the two books the two canonical books that framed it was there was the the Bostrom book super intelligence 2014 where AI was going to be this super human super duper intelligent um thing and then um the anti- um Boston book was the Kaiu Lee 2018 AI superpowers you can think of the CCP rebuttal to Bostrom where basically AI was going to be surveillance Tech face recognition and China was going to win because they had no qualms about uh applying this technology and um and then um if we now think about what actually happened

let's say with the llms and and chat GPT it was really neither of those two um and it was this in between thing which was actually what people would have defined AI as for the previous 60 or 70 years which is passing the touring test which is you know this the somewhat fuzzy line it's a computer that can pretend to be a human um or that can fool you into thinking it's a human and um and uh you know even with the fuzziness of that line you could say that pre chat GPT wasn't passed and

then chat GPT passed it and that seems that seems very very significant um and um and then obviously leads to all these questions what does it mean you know is it going to is it going to complement people is it going to substitute for people you know what does it do to the labor market do you get paid more paid less you know so there all these all these questions but uh it um it seems extremely it seems extremely important um and um and it's probably you know certainly the the big picture questions which I

think Silicon Valley is always very bad at talking about is like you know what does it mean to be a human being right um sort of the I don't know the stupid 2022 answer would be that humans differ from all the other animals because we we're good at languages if you're a three-year-old or an 80-year old you speak you communicate we tell each other stories this this this is what makes us different and so um so yeah I think there's something about it that's uh incredibly important and and very disorienting you know the question I

always have as a I know the narrower question I have as an investor is sort of how do you make money with this stuff and um how do you make money I it's um it's pretty confusing and I think I I don't know this is always where I'm anchored on the late 90s is sort of the formative period for me but uh I I I I keep thinking that uh AI in 20123 2024 is like the internet in 1999 um it's it's really big it's going to be very important it's going to transform the world

not you know in 6 months but in 20 years and then um there are probably all kinds of incredibly uh catastrophic approximations where you know uh what businesses are going to make money you know who's going to have the Monopoly who's going to have pricing power is um you know is is is is super unclear um probably you know one one layer deeper of analysis you know if attention is all you need and if you're you're not post economic you need to pay attention to who's making money and in AI it's basically one company is

making Nvidia is making over 100% of the profits everybody else is collectively losing money and so um and so there's sort of a you have to do some sort of you should do you should try to do some sort of analysis you do you go long Nvidia do you go short you know is it um you know My Monopoly question is it a is it a really durable Monopoly you know and and then I it's it's hard for me to know because I'm in Silicon Valley and I haven't done anything we haven't done anything in

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

know if this is the same but this is you know the the history of 2050 years the Industrial Revolution what was that it you know it adds to GDP it frees people up to do more more productive things um you know maybe there's you know there was yeah there was a I know there was a lite critique in the 19th century of the factories that people were going to be unemployed and wouldn't have anything to do because the machines would replace the people you know maybe the Lites are right this time around I'm I'm I'm

probably I'm probably pretty pretty skeptical of it but uh but yeah it's it's it's extremely confusing you know uh where where the gains and and losses are there there probably are um you know there there's always sort of a hobby you can always just use it on your hobby horses so I don't know the you know my anti- Hollywood or anti- university hobby horse is that uh it seems to me that you know the um the AI is quite good at the woke stuff and um it'll and and so you know if you want to

if you want to be a successful actor you should be maybe a little bit racist or a little bit sexist or just really funny uh and you won't have any risk of the AI replacing you everybody else will get everybody else will get replaced and then probably I don't know um I don't know uh Claudine gay the plagiarizing Harvard University president um you know the AI is going to you know the AI will produce end amounts of um of these sort of I don't even know what to call them uh woke um papers and um

they they were all already sort of plagiarizing one another they were because they were always saying the same thing over and over again they were using their own version of is just going to flood the Zone with with even more of that and that you know I don't know obviously they've been able to do it for a long time and no one's noticed but uh but I think I think at this point um that it it doesn't seem promising from a um compet compe Point obviously my hobby horses so I'm I'm just maybe just wishful

thinking on my part what are the areas of technology that um you're curious about that your mind is like wow this is really I have to learn more pay attention you know I'm always I always think uh you you want to instantiate it more in companies than than um things or you know you ask sort of like where is where is innovation happening you um you know it it it in our society it doesn't have to be this way but it's it's um it's mostly in in um in a certain subset of relatively small companies

where we have these relatively small teams of people that are really pushing the envelope and that's that's sort of you know that that's sort of what I find you know inspiring about about venture capital and then you and then obviously you don't just want Innovation you also want it to sort it to it to um to translate into into good businesses but that's that's where it happens it it somehow it doesn't happen in universities it doesn't happen in government you know there was a time it did I mean you know somehow in this very very

weird different country that was the United States in the 1940s you had you know somehow the Army organized the scientists and got them to produce a nuclear bomb in Los Alamos in three and a half years and you know the way the New York Times editorialized after that was you know it's it's you know it was sort of an anti-libertarian write up it was you know there were um you know obvious Maybe you'd left the Primadonna scientists to their own would have taken them 50 years to build a bomb and uh the Army could just

tell them what to do and this will should silence anybody who doesn't believe the government can do things and uh they don't write editorials like that in the New York Times anymore but I think um yeah but I think that's sort of that that's that's sort of where where when where when should look I think it I think I think a crazy amount of it still happens in the United States you know there sort of you know we've we've you know episodically tried to all this investing we probably tried to do tooo much investing in

Europe over the years it's always sort of a junk it sort of it's a nice place to go on vacation as an investor and um and it's it's it is it is very it's it's very and I don't have a great explanation but it's a very strange thing that uh so much of it is still the US is somehow still the country where people do new things Peter is that is that a team organizational social evolutionary problem in the United States what is the root cause of the failure to innovate in the United States relative

to the expectation going back 70 years 50 years Etc from you know the the rocket shift and we're all going to live yeah well this is always this is always this always one of the big picture and claims I have that we've been in an era of relative Tech stagnation the last 40 or 50 years or the you know the tagline um that we had they promis flying cars all we got was 140 characters which is not an anti- Twitter antix commentary even though the the way the way I used to always qualify it was

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

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

you know a sign significant but sort of somehow narrow cone of progress but it was everything having to do with atams that was slow this was already the case When I Was An undergraduate at Stanford in the late 80s in retrospect any applied engineering field was a bad idea it was a bad idea to become a chemical engineer you know a mechanical engineer aeroastro was terrible nuclear engineering everyone KN I mean I no one did that you know and um and and there's something about yeah the world of Adams that um you know from a

Libertarian point of view you'd say got regulated to death um there probably uh you know there's there's some there's some set of arguments where um the lwh hanging fruit got picked and got harder to find new things to do although I always I always think that was just a sort of baby boomer excuse for for covering up for the the failures of that generation um and um and then um and then I think but I think maybe maybe um maybe a very big picture part of it was that uh at some point in the 20th

century the idea got took hold that not all forms of technological progress were simply good and simply for the better and there's you know there's something about the two world wars and the you know the development of nuclear weapons that uh that that gradually pushed people into this this more uh risk ofers society and it didn't happen overnight but um you know maybe a quarter century you know after the nuclear bomb it's like by Woodstock it happened by Woodstock it happened yeah cuz that was the same summer we landed on the moon yeah Woodstock was

three weeks after that yeah that's that was the Tipping Point progress stopped in the took over sex can we shift gears just to the domestic economy what what do you think's happening in the domestic economy and just say backdrop we've had something like 14 straight months of downward revisions to jobs the revisions are supposed to be completely random but somehow they've all been down um prob doesn't mean anything um there's also what's happening with with the yield curve but I'll stop there what what's your take on what's happening in the economy um you know it's

it's man it's always hard hard to know exactly yeah I I I suspect we're close to a recession i' I've probably thought this for a while uh it's it's being stopped by really big government spending so um you know in May of 2023 the projection for the deficit in 20 fiscal year 24 which is October of 23 to September 24 was something like 1.5 1.6 trillion um the deficit is going to come in about 400 billion higher and so um which you know was a sort of a crazy deficit was projected and it was way

off and then somehow um and so if if we had not found another 400 billion um to add to you know this this crazy deficit at the top of the economics cycle you know you're supposed to you're supposed to increase deficits in a recession not at the not at the top of the cycle um you know think things would be probably very shaky there's yeah there's there's there's there's some way where um we yeah we have a um too much debt not enough sustainable growth um you know again I always think it comes back to

you know Tech Innovation there probably are other ways to grow an economy without Tech um or intensive progress um but I think they we we we don't have those don't seem to be on offer and then that's that's where it's very deeply stuck if you if you wind back over the last 50 years you there's always a question why did people not realize that this Tech stagnation had happened sooner and I think there were two one-time things people could do economically that had nothing to do with science or tech there was a 1980s Reagan Thatcher

move which was to massively cut taxes deregulate allow lots of companies to merge and combine and and it was sort of a one-time way to make the economy a lot bigger even though it had it was not something that really had the sort of compounding effect so it led to one great decade and then there was um you know and that was sort of the right-wing capitalist move and then um in the 90s there was sort of a Clinton Blair um Center left thing which was sort of Leaning into globalization and there was a giant

Global Arbitrage you could do which also had you know a lot of negative externalities that came with it but um it sort of was a one-time move I think both of those are are not on offer you know I don't necessarily think you should undo globalization I don't think you should raise taxes like crazy but um you can't you can't do more globalization or more tax cuts here that's not going to be the win and and so I I think you have to somehow get back to the future um we have time for a couple

more questions you um I think saw that maybe this ivy league institutions maybe weren't producing the best and brightest or weren't exactly um hitting their mandate um and you created the teal fellows and you've been doing that for a while and I meet them all because they all have crazy ideas and they pitch me for Angel investment what have you learned getting people to quit school giving them $100,000 and then how many parents call you and get really upset that their kids are quitting school uh it's well I I don't know I've I've I've learned

a lot I mean it's it's um I don't know I I I I think I think the universities are far worse than I even thought when I started this thing um I think um yeah it's um you know I I I I did this uh I did this debate at Yale last week um you know resolved higher education's a bubble and um and uh you sort of go through all the different numbers and um the and then you know and again I I was ful to word it in such a way that I I didn't

have to you know and then people kept saying well what's your alternative what should people do instead and I said nope that's not was not the debate I'm not you know I'm not your guidance counselor I'm not your career counselor I I don't know how to solve your problems but um if something's a bubble you know the first thing you should do is probably not you know lean into it in too crazy a way and you know the student debt was 300 billion in 2000 it's uh it's basically uh close to two trillion at this

point so it's just been the sort of runaway um this runaway process and um and then if you look at it by cohort if you graduated from college in 1997 12 years later um people still had student debt but most of the people had sort of paid it down um but the first by 2009 we started the teal Fellowship in 2010 and it you know it felt uh two by 2009 was the first cohort where this really stopped if you take the people graduated from college in 2009 and you fast for forward 12 years to

2021 the median person had more student debt 12 years later than they graduated with because it's actually just it's just compounding faster and it was you know partially partially the global financial crisis the people had less well-paying jobs they stayed in college longer um and the colleges they it's just sort of been this background thing where it's it's decayed in these in these really significant ways and um you know again I I think it's on some level um there are sort of a lot of um debates in our society that are probably dominated by sort

of a boomer narrative and maybe the Baby Boomers were the last generation where College really worked and you know they think well you know I I worked my way through college and why can't why can't um why can't you know an 18-year-old going to college do that today and um and so I I I think the bubble will will will be done once the Boomers have exited stage left but does the government to it would be good if we figured something out before then you know does does the government need to stop underwriting the loans

because it's the lending I think the 90 plus perc of the the the capital in the student loan programs is funded by federal uh Federal the federal government and there's if you're an accredited University you can take out a loan and go to it and accreditation in in a in a in a rigid kind of free market system you would have an underwriter that says are you going to be able to Gra graduate make enough money to pay your loan off is this a good school are you going to get a good job and then

the market would figure out whether or not to give you a loan would figure out what the rate should be and so on but in this case the government simply provides Capital to support all this and as a result everything's gotten more expensive and the rigidity in the system that basically qualifies schools and the quality of those schools relative to the earning potential over time is gone we need the government to get out of student loan business yeah but look the the place where I'm I I know I'm sort of some ways I'm rightwing some

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

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

if if if we if we say that uh if we if we start if we start with my place where you know a lot of the student debt should be forgiven and then and then and then reform the then we'll see how many people are willing to lend you know how how much how many of the colleges can um pay for all the student what's your sense if if it was a totally free market system how many colleges would shut down because they wouldn't be able to S there's no tuition support it it probably would

be a lot smaller it it might it might you might not have to shut them down because there's you know a lot of them have gotten extremely a blow it's like Bal Mall's cost disease where you know I don't know if I have no idea like a place like UCLA it probably has you know twice or three times as many bureaucrats as they had 30 40 years ago so there's sort of all there's sort of all these sort of um parasitic people that have sort of uh gradually approved and uh and um and and so

there's probably a lot of would be a lot of rational ways to dial this back but um but yeah um you know maybe we're to a new location if the only if the only way to lose weight is to cut off your thumb that's kind of a difficult way to go on a DI he um Peter three of your collaborators longtime collaborators Elon Musk um Mark Zuckerberg and uh Sam mman are arguably the three leading AI language model um leaders which one is going to win rank in order and tell us a little bit about

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

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

board they had nobody would do this again and so there actually isn't much of a moral hazard from it so but yeah who whoever whoever I talk to I find very convincing in the moment well will that spaces get commoditized I mean do you see a path to Monopoly there well again this is this is again where you know you should you know attention is all you need you need to pay attention to who's making money it's Nvidia it's it's the hardware the chips layer and um and um and then that's just it's just what

we you know it's not what we've done in tech for for 30 years you are they making 120% of the profits they're they're make they're I think everybody else is losing money collectively yeah everyone else is just spending money on on the computer so it's it's one it's one company that's making I mean maybe there's a few other people are making some money I mean I assume tsmc and asml but but uh but uh yeah I think everyone else is collectively losing money what do you think of Zuckerberg's approach to say I'm so far behind

this isn't cour in my business I'm going to open source it um is that going to be the winning strategy handicap that for us um again I I I I I I I would say um my again my my my big my my big qualification is you know my my model is AI feels like it does feel uncomfortably close to the bubble of 1999 so I'm we haven't invested that much in it um and uh I I I'd want to have more clarity in investing but uh but the the uh the simple simplistic question is

you know who who's going to make money um you know I think a year ago two years ago in retrospect Nvidia would have been a good buy you know I think at this point everybody it's it's it's sort of too obvious that they're making too much money everyone's going to try to copy them on on the chip side maybe that's straightforward to do maybe it's not but but that's you know I'd say probably um you should you should if you if you want to figure out the AI thing you you should not be asking this

question about um you know meta or um open air or any of these things you should really be focusing on the Nvidia question the chips question and the the fact that we're not able to focus on that that that tells us something about how we've all been trained you know I think Nvidia got started in 1993 yeah I believe that was the last year where anybody in their right mind would have studied electrical engineering over computer science right 94 Netscape takes off and then yeah it's probably a really bad idea to start a Semiconductor Company

even in '93 but the benefit is there was going to be no one would come after you no no talented people started semiconductor companies after 1993 because they all went into you know into software score their Monopoly power um it's I I I think it's quite strong because this this this history that I just gave you where none of us know anything about chips um and then I think the you know I think the risk it's always you know if attention is all that you need um the qualifier to that is you know when you

get started as an you know actress as a startup as a as a company you need attention then it's desirable to get more and at some point attention becomes the worst thing in the world and and there was the one day where Nvidia had the largest market cap in the world earlier this year and I do think that represented a phase transition once that happened they probably had um more attention than was good hey Peter as we wrap here um your brain works in a unique way you're an incredible strategist you think you know very

differently than uh a lot of the folks um that we get to talk to um with all of this are you optimistic for the future uh I I always man I always push back in that question I I um I think I think extreme optimism and extreme pessimism are both really bad attitudes and they're the somehow the same thing you know extreme pessimism nothing you can do extreme optimism the future will take care of itself so if if you have to have one it's probably you want to be somewhere in between maybe mildly optimistic mildly

pessimistic but uh you know I I believe in human agency and that it's up to us and it's not you know it's not some sort of winning a lottery ticket or some astrological chart that's going to decide things and I believe in human agency and that's sort of an axis that's very different from optimism or pessimism what a great extreme optimism extreme pessimism they're both excuses for laziness what an amazing place to end ladies and gentlemen give it up for Peter J thank you thank you Peter come on now wow all right Peter ch