E153: In conversation with Jared Kushner: Israel-Hamas War, paths forward, macro picture, AI
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All right, welcome back to the all in pod. Really excited to have a guest to us today. Jerry kosher, i'm sure everyone knows who he is.

We obviously talked about jarred interview with like freedmen on the part a couple of weeks ago and what happened to maud and Jerry and started chatting and said, hey, would you be a president? Come to talk with us. Yeah but this matters very, you know, kindly agreed to do IT.

So we're really excited to, uh, have jar join us. Jar, welcome. Thank you for having me so I don't think you need much of an introduction and obviously uh you a senior advisor to uh president from from twenty seventeen and twenty twenty one and uh you worked on the U.

S. Mexico relationship as well as LED the middle east peace efforts, which I think is going to make up the bulk of what we're excited to talk about today. Uh just really briefly since leaving um office, you've been investing running a firm called definity partners. Is that right? Um maybe you can share that just a little bit about what you've been up to and then you know get into IT here.

perfect. A ity partners is a private equity firm that I started when we left doing growth investing, privative investing globally. We raised just over three point one billion, are doing a lot of investments, trying to a bring golf money into israel, into the U. S. Trying to figure out how through investments you could bring countries closer together, people closer together, looking at a lot various where there is structural transitions happening at large in the global economy, whether it's near shoring from offline to our mind ah you know software, a lot of uh different interesting areas, not in the the fin tax space and finance services right now. Uh but you join IT and uh the girl is really to bring the experience that we had from the previous ly being in investor and um and the time in government and then thinking through how you could use those macro learnings and connections and relationships uh and navigational skills to the investing side.

right? So we're going na try and talk later in the show uh, about mro markets a bit, talk a little bit about some of the activity and A I this week. We think it's all pretty resent and hopefully can all dialogue about that.

I think you'll be helpful when you I talk just to get ready for the show today. You mentioned that you had a very liberal upbringing in the other side, new york, and your perspective began to shift as he started to travel the country, and you were in the trump White house and have become very active since. Would love to hear a little bit about how your perspective shifted in the time you spend.

Could you mention you started traveling the country and seeing things that you otherwise having seen? Living in the upside, we would love to hear that part of your story before we kind of get into things you want. My shine.

Yeah, sure. So one thing about my life is that nothing has gone according to the plan. Um I grew up in a new jersey, really nice place living stand. My father was to prenez in the real state business banking insurance to a lot of different things uh really brought up in my siblings to be focused on business. And I really for us was A A good experience growing up up after I went to a harvard and then after that chose to go to uh lost business school uh, where I was at in by you during that time.

My my father had a legal issue and I was forced to take over the business um and so I got into the real state business and after that bought a media company in new york and that's really where I got exposure to a lot of or called new york society wife and I H we met, got married and through that experience thought we had a very expanded world view at our house. In the every side we have dinner parties, we have heads of banks and hitch funds and technology companies and fashion and and and then he was just been a really nice life. Then her father, uh, announced his running for office and that was an interesting experience process. Republican we didn't know too many republicans um to democrats and I was .

registered democrat going up.

Uh my father was a big democrat donor we were going to have in our house where there be a tumor hello indent. I think my father gave a cory booker his first campaign donations I know since on fifteen years old to really grab around democrat politics ah of our life. But over time I I think during the obama years I change my restrain to independent. I didn't feel uh like the democrat party was fully representing my my viewpoints so I felt more independent minded.

And then during the time with my father in law, when he was running a for office, I he invited me to go with them to a rally and spring filter to know I we flew out there, I got off the plane and, you know, we hope to arena the guy comes up the trump in says, uh, congratulations star, you just broke the record for the arena for attendance uh, then he says, who had the who had the record before and he says, what was elton john thirty six years earlier and he says, Jerry, look, I don't even have a guitar or piano. This is impressive, you know? So, you know, he gets up on stage and and without really notes, you riffed over an hour.

And IT was interesting for me. I was watching no CNN in the new ork times, and all my friends, the media basically were describing his raly is almost like K, K, K. conventions. But I walked around the crowd. Nobody knew who I was then. And what I saw was that these were just, you know, they were people, old, Young, male, fee, male, White minority and um and and IT was just people who are hard working americans who who you know really felt like trump was giving them a voice.

And what was interesting to me was a couple weeks earlier we'd been at ah the Robin hood foundation which is the big uh philanthus and new york where a lot of the hedgehog d managers support I member the chairman of Robert hood, getting up and saying, you know we want to save uh know the next generation. We want to save uh the kids in the intersection, uh we have to uh we have to support common core that's the way that we can save people and I member trump gets up there and he says, um you know, if we want to save education, we have the income and core intended to the states. I'm saying, wait, I thought I thought comic course this great thing and but why are all these people against IT? And so I really just kind of peak my interest and maybe realized that maybe my approach ure was way smaller um we more close than I thought I was and IT really let me up to to seek out a lot of people who are differ points of view than the people i've been around before.

I really opened my approach, explore a lot and over the years I really got the chance to meet with people from both sides. So, you know, I have a lot of friends who are independent, friends who are liberal, friends who are very republican. And, you know, my personal view was, I, but of myself, more as a pragmatic, fact based and data driven and based on that, I try to pursue uh, the different policies that I thought made the most sense, uh, in as unemotional way as possible.

How did you figure out that that moment in spring field could translate all throughout the country like there a process that you guys went through the validate? Like, hold on, is this just a moment in time? Or is this just a specific c area? Or what is how did you guys get to the ground truth of what the scalable, marketable candidate like? Because I am sure that was part of the calculus and what you did because if I think the to your point, maybe the media perspective was hold on a second, this disguise is ripping.

But IT clearly went very quickly from reefing to a methodical plan. And I don't think that that's ever really been talked about. Do you want to just tell us a little bit about that?

sure. I would say was less planned and way more entrepreneurs. And and I see entrepreneurs in two different senses. You know, one is the campaign was one was run incredibly entrepreneurs. People were told that if you work for trump, you'll never get a job in washington again, which is why he really was unable to hire a lot of people initially and why a lot of the responsibility for the campaign felt to people like myself who, uh, I really just cared about and personally, I wanted to make sure that people ables do a competent job, uh, with the Operations of a campaign n that LED to us doing a lot of things in an untraditional way.

But we actually able to make the dollars go a lot further, whether we are building a data person or how we turn to the advertisers or how we um you did our events, we able to do in a much different way. But from A A viability of the candidate perspective, I I really give all the credit to him because what I saw, what politicians is, a lot of politicians will take polls and then moderate their perspectives. This is somebody who, without poll stories, without any political experience, really put forward a lot of points of view.

And and keep in mind, in a republican primary, a lot of his viewpoints on trade were very headover ical, where they were not what was conventionally thought of. And what I saw with trump was that he was able to move the polls to him. And that was that was a talent and and just a skill of, and is willingness to kind of stick to the issues at that point time.

Remembering polls that the illegal immigration was not like a top five issue when he started the campaign by middle the end of the campaign, people were really seeing now the craziest that was happening at the southern border and why that was, uh, critical to our national security. And so, uh, I think that for him he found a lot of his message and with him he was not a perfectly uh, always on message candidate. But what he did do was he was constantly and evolving and learning. You know, I would learn from the different things that happened and and constantly evolving to uh find ways to to persist amazing .

like I start up finding a product market fit yeah .

and what's you like as a father? Um i'm curious a as a firing .

line has been great you know that obviously brought us a lot closer together. You know until that time, our time was mostly they are plank off together.

We together, our family events, uh, working together was uh was was a different element of our relationship but I think one of the benefits I had with him was that he knew I was always can tell the truth, uh, whether I agree with him or not uh, I also, uh, I think one of the things he liked about me was that I I was not obviously worked hard. I game straight answers and I didn't apply on things right. Didn't feel like I had an expertise.

So if you had asked me a question, and I didn't feel like I do with the answer, I would say, well, this is not by expertise. These are the people I would recommend I speak due to get perspective and let me bring you there their opinions. And so I think he saw me as somebody who was who was competent, obviously had his best interest at hard.

Then I wasn't accepting money for you of these jobs. S so IT wasn't doing IT for for financial game. Um and I just started to really believe in a lot of the policies that he was pushing and wanted to help him maybe translated from A A campaign speech to kind of technical policy and then see once you got the opportunity to help an implement that as well.

that's really good. What do you agree to do legs? And why are you doing the show today? We were kind of surprised to see you on legs. And obviously, like lex said, I was a very different conversation. And I think any of us would have expected having the only exposure to you being through, you know, some sort of media channels, what's motivating you.

the kind of do this today before we get so. So lex, again, in my wife or friends and I, I, I really follow and listen what he does. I I think in society today, the news, uh, is kind of just one persons, you know, point of view.

And and there there they're picking and choosing and and editing what they put into IT one way or the other. But the medium of the podcast is something that uh, my personal uh, was growing with and and I felt like I was a place where you could have real conversations. I think the people who are listening to podcast are people who are looking to have a more nuanced perspective on something and and really want to you know, try to understand something deeper.

And and I respect, like all my private conversations with him, I really enjoyed and I love that he was really trying to um find perspectives from people that maybe others didn't understand to try to bring greater understanding across and so I agreed to do IT after while was really, really glad I did and based on the the great feedback I got uh there uh my sense is that the podcast format is is something that um we could have a real conversation, you can go back and forth, you could argue, you could disagree. Um I think that that's where people really want to get their information from. So I turned out a lot of, you know, cable news are different interview request, because I find that you can have as nuances, the discussion and and I wish things were simple as the black and wider, the political slogans that people use. But reality, these things are a lot more new on. So when smoth reached out, I followed you guys, and I will thank you for the first time I was, I was really happy to come.

Do IT awesome. Well, thanks for doing IT a sex. You won't kick us off on the gaza conflict. Framing up the presenter.

sure. Based on what i've read IT seems like israel has now formed a premier around uh, gaza city. We've sort of bisected gaz between the north and south. They've been trying to bomb entry or exit points from the homos tunnel network.

And that seems like their strategy is to kind of gradually close in on that home network and basically try and eliminate homos m from southern, northern part of gosa and one assumes will move to the south. And I guess one other element to add to IT is that while israel is doing that, you're seeing protests both in the west and in the arbor. Most the world, you're starting to see statements condemning israel by leaders of these other countries in the region.

I say that the one by turkey, by artavan, was notably harsh and threatening. But you're start to see again, as israel proceeds with this Operation, you're start to see more, more condemnation from various parts of the international community. So let's start with that is, how do you assess what's happening on the ground? What do you think the prospects first success are? And how do you access the risk of this sort of escalate horizontal in ways that are kind of hard to predict and could spire a lot of control.

So there's a lot of different ways you go at that. But i'll start with kind of the first question, which is um in the immediate aftermath of the attack, my my biggest concern was that israel's quilly a caught off guard from intelligence and military perspective with the attack and the attacks were they shook a lot of people. They were they were very, very happiness beyond um really comprehensions.

It's it's crazy. The more and more stuff that comes out and we were seeing a lot of in a real time. Thanks to know the fact they are right now with x and what what he wants done there to uh do not try to sensor things in the way that I was happening before.

So we are all getting a lot of information real time, and I was really pulling out a lot people's heart strings. My big fear initially was that israel would react uh emotionally as supposed to uh to pragmatically. And I think that are the steps that they've taken since then have been very wise.

I think the fact that they took their time and have been very methodical about getting their supply uh lines ready, about working, had a garden as much international support. I mean, you have remember these markest israeli citizens that were killed. These were american citizens.

They were german citizens, they retire citizens ah, they were U. K. Citizens and and the hostage is as well, or not just israel citizens.

So H, I think that israel took gets time to get the military Operation, said i've seen them go slowly. Method ally, I mean gaza is a very, very complicated place. Mean, we studied IT for four years.

We we were very closely watching all the different incursions. We managed to mostly and there uh their malicious activities uh very, very closely uh, to avoid situations like this and the places would be trapped like like crazy. And so I do think the fact that the israelis have taken their time and been very methodical and i've come up with the strategy has given me more hope. Me every morning I wake up and I looked to see you know uh praying there hasn't been more casualties um in israel and and the hope is that they continue to do in the best way possible um so I think that the goal for that is really the elimination of a mos.

So I think that um that the big point that I really want to make in the next podcast, which I went back uh to really do the point, was that um the people who are protesting um in favor of the palace anian a lot of israelis the palace anian want the same thing which is um they want security for his role in a Better life for the palestinians and I think what people are there able to really grass um for a long time is that hamas has been through cause of a lot of the the bad lives for the palace. Ini, if you think about goza, uh before this recent four to over seven, the over half the population look one to the poverty line. Um you know, people were were really trapped there, and people would blame israeli for the blockade. But what's also happened over the last thirty days is a lot of the worst fears that we had during the administration or things that is probably be saying I have totally been proving true and you've seen now i'm going to some of these are school houses where there know there five hundred or fifty different in rocket launchers.

You in the school houses, the hospitals of the terrorists that they have captured that their territory are saying, well, that's where the military headquarters are they are now learning about this um this tunnel network which are saying as hundreds of miles of tunnel s on the ground well that's why you know israel wasn't allowing cement and a lot of these these materials in the cement went in which was supposed to houses for for the people of gaza was then stolen by homos to to build these tunnels the are the pipes that went into to fix the water were then taken to to rockets that the fuel was was was stolen and and not used for for for the hospitals or or for people have Better lives that was stormed for them to Operate their tunnel network and then to feel the rockets so um it's a situation that that really does have to be dealt with again. Israel, you guys are, I know poker players, so uh so israel definitely has the stronger you know hand to play here. So I think time is on the one hand in their in their favor, but on the other hand, obviously you know the international community has historical been very uh anti israel and antisemitic in the way that dave approached a lot of these uh discrimination es uh to date. But I will say I think there's been more international support for israel this time than i've ever seen. Um and I do think that that uh a very important thing so that that maybe general, there are some of the specific questions that .

you want to go to in there. I what about the risk of sona tion time about for second? Because you do here, I think a growing of countries who are denouncing israel, they are saying that this is collective punishment, that the bombing of gaza is in discriminate.

They wanted to stop. There's ode genocide yeah i'm not saying I agree with that rhetoric, but you do hear IT. Yeah, there's an effort at the U.

N. To pass the ceasefire resolution. So there's a lot of people who want the ceaseth fire, and there's lot aren't growing international pressure for that. And then you've heard threats from, you know again or one and turkey that if there's not a ceasefire, at some point they're going to get involved there. We have to act.

Iran has said some more kinds of things, although I think pretty clear, they don't want to get involved, they don't want to display into a wider regional war. But they they sort of intimated that if the bombing continues, that they might have to take action, they might feel pressure to do that. So I guess one question there is, is time on israel side. IT does seem like that again, there's more pressure to stop the military Operation over time as opposed to less yeah .

so so the answer is everyone's talking their book and. What they should be doing, they're talking to their populations. The question is what people will actually do. I would say that you have the hardest thing for us all is obviously, you see civilians in gaza who are being used as human chills. And the last thing that anyone wants us for more civilian deaths to occur at twenty this morning I was speaking to a friend ah in israel who was telling me that yesterday there was A A major evacuation tion of uh civilians in gaza and uh a lot people are surprised that the israeli defense forces were basically putting themselves in between the mos militants and the gozen civilians to protect them and open up a core door and again, one thing that is rose done I think a good job of is getting out a lot of the facts about how um you've been warning the golden civilians to flee.

Ask them to go and and what happens to most was you know shooting him down on with snipers and trying to prevent them from going because they wanted that to stay in place as human shields uh in in the schools, in the hospitals where they were conducting their terror activities and so ah what was interesting to me was my friend was telling me is speaking to a friend of his who was a soldier was that was that um is that a lot of the civilians really thinking them for liberating them from from homos and for risking their lives to help them get out of gaza. And a lot of these people, again, they've been prisoners to homos more than anything else for a long time. And they want to see themselves, you know, out of there are so they can perhaps have a Better opportunity to live a Better life.

And so um so I think that the current region, I think the biggest immediate threat is is from hesba h the north. I think that's been um I think israel going to fall ready alert h IT was a really smart thing. I think the U S.

Moving uh the battle Carriers there I think was also good. I think the uh the statements from uh from the U. S. Administration were strong up front again, whether people to believe that the they'll back up those statements is is another thing because they do a little bit of credibility deficit in the region based on what they have done over the last couple of years.

Um but I think that's all been very helpful and kind of pushing um pushing a ground back and and send a strong message to hezbollah is if you want to attack this rope, don't do IT when the right form military routinely is rose a nuclear power and I think everyone is starting to realize that this has been iran trying to manipulate things. And as long as they think there's a threat that you're not going to go after one of their proxies, but you may go after them, that's been the best way of keeping uh, the escalation. I think with turkey in others say i've spent no many hours where I want uh, personally talking about gaza and I know that you know he is a big hard for the palestinian people. He hates a to see they are suffering and it's also good politics from him you know he's also from A A muslim brotherhood uh no leading party uh but I think you know that is hard of party. He does have to acknowledge that a lot of their plates is is let you by bad governance he may, I want to would admit publicly but reality is is the best way to improve the lives of the people of gaza is to uh, eliminate a homos and put in place structure where people can finally have the opportunity to to live more freely and and and make Better lives for themselves.

You said something that I think is really interesting. You said urd wan has a soft spot for the palestinians. Can I just take that concept and just can you explain the historical context of arabs, the arab world, in their relationship with the palestinians? Sort of because it's definitely had its ABS and flows over the archive history. And so how do people think about IT as just broadly speaking, just in terms of like the big historical arc that have kind of shaped this relationship between arabs and and palestinian specifically?

That's that's a question we can spend about three days talking about, but i'll try to give you kind of a very quick a version a bit. So I think that you know a lot of this goes back really too. Uh, people say us back to a lot of times, but I I think that the the we have to provide go back to and i'll try this very quick as is really in one thousand nine and forty eight, which was a complicated time, it's post hold cost post world war two.

Um you know again, the middle is really in the early one thousand nine hundred hundreds was a lot of our was created by a lot of arbitration ines drawn by foreigners. And you had a situation where israel, uh is is the U N. Price for the partisan plan.

Israel, uh, they're willing to recognize israel as a state for the jewish people and also give a state to the palestinians. The arabs reject that attack. israel.

There's a whole war. During that war he was flared up really by general noster from egypt to at the time was the leader of the muslim world. Uh, during the war, uh, israel was able to defy the odds and win. And a lot of palms anian were either forcing their homes or displaced from their homes in those versions where they say the arms that leave their homes. And then um you know when the words over you're going to come back and you take everything uh some erba stayed in their homes and actually today there is ri citizens with full you know equal rights as other israeli um and so so that happened um then in one thousand nine hundred and sixty seven uh that's when egypt acted again and during that war again israel racial sly one and um and that was really kind of the time where um his was able to expand their territory.

They took over the west bank at the time, which wasn't didn't belong to the palestinians as much belong to Jordan, was part of trans Jordan at the time and then they also gained control of the gaza strip which also was previously administered by egypt although when egypt was administering IT they didn't take IT as their territory they never granted citizenship to the people who are there so between one thousand hundred and forty eight and one hundred and sixty seven when the sixty were occurred um most of the leader's near world enjoyed uh, leaving this issue out IT was a great way of stock nationalism and too uh IT was a very easy political issue for them to have to say what we need to do this and to to to fight for the past tinian people so in a lot of use as a way to deflect in their shortcomings at home and to justify sort of actions that they were taking because they were fighting for this h this group of people. Then he gets really interesting after the six day war. So this was the second time that the uh, erb countries had failed to to destroy, uh, israel, which what they had promised they would do.

So there is a Young terrorist at the time, and yes, r arat. And he was part of a party called photos. And what he said is, you know at all these arab leaders they're lying to, they're fAiling you. I'm going to be the one to start creating a liberation and opportunity for the palestinian people so he took on this medal, was able to use his photo group and and simply uh fuggers ways to take over the palace and liberation organza, which is why that he got some international claim. And at the time he's doing that from Jordan.

So this about one thousand sixty eight, nineteen sixty nine ah they cost so much trouble in Jordan that uh king who saying at the time, whose king of dealer's father who really was a very very uh special um diplomats and leader in the middle ast got so fed up with with our thought I mean that the time he was causing trouble they IT was still ing people with people would invest there. Uh they would would he was hurting terrorism. And then they took a little further, they tried to assassinate him, which was probably, uh, the final straw.

So the Jordanian leader said, get these people to hell out of my country. Um IT was a big clash between the pillow um uh and and foto uh uh terrorist and then the Jordanian military and they were able to excel them. And then the palsy ian went to lebanon, uh that's where ASR was.

They were there for about twelve years again, they went back to the old ways of a for mental uh radicalism and find ways to the cause trouble. Uh, what israel uh invaded lebanon in thousand nine hundred eighty two h then yes r fat, fat again. Uh this time to tunica.

Um in tanesha they were living pretty well. The beach from place there in these beautiful villa on the beach and they kind of came a little bit disconnected uh, from the palestinian people but there was a lot of resentment uh of the broader uh a world because they felt like again, the old world didn't released. They would say they were for the palestine people but never really stood up for them in the way that they felt like they deserve. So IT was IT took until about one thousand and eighty eight that finally uh this is forty years after one hundred and forty eight the worth independence where ah the P L.

Was finally able to get the ability to say, and this is really because Jordan was just like done with this issue, say, okay, we're going to acknowledge this land here should become a palestinian state so the notion of a palestinian state didn't the verge to about, uh, one thousand nine eighty seven thousand nine hundred eighty eight uh which is the same time that homos actually you know came about and they came about really from they were not shoot of the egyptian mum brotherhood um and their whole thing was basically, we're gonna uh do faul terrorism in order to uh prevent uh prevent any compromise or any deals with israel so then you got in one thousand nine ninety one, which is a very, very important uh time for the palestinians mostly because uh sym sine in iraq in face code um and that was very scary for a lot of the arab leaders right they didn't want, they did fear sadam. Uh, he was a uh he was seen as the radical are thought uh and the palace anian leadership backs to do to seen mostly because they do that he was seen as the revolutionary and popular with the more common man um and this pissed off every single golf leader say, basically wait, this guy, if he's going to take over quite, he can for salty arabia, he for you and so. They were very against that.

And at the time, there's about over two hundred thousand palms inie and way. What happened at that time though was that that made the palestinian leadership so weak because a lot of the other countries cut off the funding was just done with them. And that's really we LED to the oslo o courts. So the oslo courts happen not because our fun necessarily know all, sun said, after you to thirty seven or twenty seven years of trying get to terror and and pushing forward, uh, he basically ran out of other options and this was the only way to get some farm legitimacy so they drop in their charter, uh, the whole notion of destroyed israel and said, let's try to create this area.

We can have governance and tried this whole a effort for palestinian state so that's really kind of this A A long, short version of kind of how we got to then and then in the last at eight, thirty years, that the big change that I would say between then and today is that you have a lot you have a new middle ast forming and a lot of the work we didn't. The trump administration was really too help. What i'd call the new middle is to merge where you have A A lot of economic uh, opportunities now happening in sati arabia.

A U A E guitar. Uh, there's been a massive mind shift where if you go kind of post there of spring, a lot of these leaders are saying, uh, you know, how do we create opportunity for our people? When I got into my job in two thousand and seventeen and all the experts were sent to me, the big divided in middle east is between the sues, the zones and the SHE is and when I got there I said not to know the dividers between leaders who want to give opportunity uh in the Better man of life to their people and people who want to use religion or um or or whatever issue they want to hold on to from the past in order to deflect in the shortcomings and justify bad leadership.

So um so I think what's happened today, as you have a lot of the gulf countries really wanting to see this issue, uh, get resolved, which is different than you had in in camp David in in two thousand and dog clinton was getting close to a deal. The arriva, I think the sales another is the time didn't want this issue to go away. But now the issue is really no longer useful for the arms, only people useful to quite freely as iran.

And that's why they've been backing her mos and has blain all these other functions factions in order to continue their project of instability. So ah the way I kind of view this period right now is that the middle ast today is way stronger. Um then it's bit in the past and this is what I would say the last gasp of around and and those who have you know pushed for destabilization and kind of this whole um you know islamist, you had this project at the expensive ve kind of a collaboration uh middle of which had which with them will create a lot of opportunity uh, for the next generation to to really thrive.

Shared isn't there like at this point, bend like IT is IT hard or easy to create an objective target. We we call individuals that israel wants to target homos. But there is no card Carrying members of a mos.

You don't want a jacket that i'm a member of a mos, and walk around of the I D. carden. There are some folks who are sympathetic, who believe that her MaaS represents a resistance movement. There are some folks who obviously feel terrorized, uh, and ruled over. And there are some hope to support the cause but don't pull the trigger.

There are some folks you pull the trigger but don't want to support the we are being forced to by some a reports how easy and how hard is IT to really direct a military Operation at such a fluid population that the is very hard to I D A. And target. And as we've seen in years past, there's always another group that seems to emerge.

You cut off one group, you get rid of all. Chia s emerges and there is this almost like a fluid transition of uh of this intention and particularly in the gaza community is very difficult perhaps to distinguish between who's him out and who's not come out. So how do you actually achieve the objective there? And you know how does the military target?

Yeah so so that's probably the most important question that I think people have to um really be thinking about as we kind of and do space, right? So um it's both how do you do this in the short term and then the long term and so you can't kill your way out of an ideology.

But there are obviously you are some bad leaders at the top were culpable who um who are military targets and I imagine that it's really you know knowing the capabilities of israel and assad, its system matter of you know when and how was supposed to anything else but then you have a lot of middle vel and and and Younger members of this group and I do think that a lot of these people are in the situation more circumstantially. I think this is what we've been taught to believe. I think this is really the place they were.

And this was the the system in gaza worth if you wanted to advance and live a Better life than you really had to succumb this tute system. So how did the ideology is? Um people will debate them in different ways.

If you go back to two thousand and sixteen in the campaign when we are dealing with ice is a the talking point that everyone used was you have to defeat the territorial califano ISIS and then you have to win the long term battle against extremism. A one of the things that president trump did when he went to saudi arabia, and two thousand and seventeen, ah, the reason we went there was that middle east was basically on fire. Mean, if you had I S hea caliphs the size of ohio, they were a rilling, over eight million people.

They were behaving journalists and and killing Christians. H syria was in a civil war where five hundred thousand uh people were killed, a lot of muslims. And you didn't see the same protest on college campuses when that was happening.

Sad was guessing as some people uh, libya was destabilized, yen was destabilized and iran was on a quiet path to a nuclear weapon, having just been given one hundred and fifty billion dollars in cash through the uh, disasters. J C, P, O, A, uh, deal that a, the Carrier, obama A, A negotiated. So IT was a mess.

And so trump went there and and basically was was pretty tough with body, said he said, this season, our problem, this isn't your problem to solve our problem and we need to to prove this ideology, you get IT out of your your homes, get IT out of your mosques, get IT out of this earth. And h, the king of study, rab, has set up at the time and said, there is no glory and death that was really important. H two of the big deals that came out of that, people talk about the big investments to over five hundred billion dollars of investments, uh, and arms sales with sounded aby that create a lot of U S.

jobs. But the two agreements we made that didn't get a lot of coverage during that time was that we did a counter terrifying center that we set up. We've got all the gulf countries to really allow treasury to work closely with their banks to stop, allow the funding to the terrorist or organizations and then these kind of border line organizations.

And then the second one was in saudi arabia, which is the custodian of the two is holy sites in in islam cada um they started countered stream ism center where basically they were uh combating online um radicalization that was occurring. And if you remember red the U. S.

In two thousand and sixteen and we had the same problem, data shooting. We are the pulse nike club shooting and do a lot of people being radicalized online. One of the things that i'm very proud of from the trump administration is the work that we did uh to really help salty arabia change changed their trajectory. And what I realized quickly was that in the us, we just did not have the capabilities to win the long term of ideological bt ourselves. So um we could be bad at you know sauty for some thing.

They've one in the past, but they were the the most powerful partner we could have in order to um try to a combat uh the radicalization that was occurring both in terms of stopping the funding but also uh you know replacing the clerics we're doing the radicalization with the clerks were uh restoring islam to a more peaceful and and more proper uh place. Oh, that was something that that's really current made a big difference. I was just in sadi rabia a couple weeks scale at their big investment conference.

And IT was really exciting to me was I was meeting with a lot of the Younger study entremets s and ah I did A A conference in bahrain to talk about the palestinians in two thousand and fifty. And one of the big chAllenges we had, we are putting that together as we were thinking about who are the role models for these Young palestinian kids. And in the in the muslim world, you know they had some sports stars, they had some business leaders, but IT wasn't really uh people who were necessarily uh reliable to a lot of the ever generation in saudi was an event with all these Young tech trees.

News there were building uh, amazing companies to unicorns. There are they're doing a lot of the you know the companies that are dominant in the U. S.

In the asia and now they're building them for the middle ast there. And it's very, very exciting. And these really are the next generation of role models for a lot of these kids.

So um that's a long way of saying that you know obviously you have to do what you have to do from a military perspective and and the hope obviously is that but IT could be as quick as possible and that a few civilians as possible uh or or heard by this um but the notion is that once that once that's completed, you need to then create a framework where people don't just have more despair uh because is in an area where there is no hope and opportunity then obviously the radicals and the jihad is that's really where they do their best recruiting and they flowers so uh so so once this occurs, there needs to be a paradise created with the next generation. Feels like it's Better for them to get a job, be part of the economy and where they can live Better life through capitalism. Uh then by going to to these your hottest groups.

But its leadership targeting right now, that's the objective effectively. I think that's i'm hearing this. I.

Leadership and and degrading of capabilities, right? So because again, what you've seen as well, you've seen this with car tels in in in south america, and you've seen this with their organza. You know you you kill the top guy and and sometimes you cut the head off the snake and the snake dies and sometimes you just, you know, scatters into a lot of little pieces, then you end up IT ends up becoming more complicated at less. But I think here obviously leadership but but significantly degrading uh the capabilities for anything in gaza to uh to to threaten israel and that actively .

build a Better way, actively build a .

Better solution. That's the only way. By the way, even today, it's it's much more easy to visualize that than I was in two thousand and nineteen when I was talking about this because you're seeing the economic project in sarabia, you they're doing A U A E. I mean that the fact that sauty shifted so much in five years should give you hope that it's really, really possible. And they've been pushing the rest of the countries to try to emulate and and compete with them, which is also an amazing thing.

I'd love to get your reaction to the difference in tone and messaging from western governments.

First is what you're seeing sometimes on the ground with some of these protests and just how almost diametrically opposed the language in the retorted in the point of view is how is that that the and sort of this is why I kind of asked you just for a little bit of A A history, how is IT that people aren't taking all of these views in? How is IT that there is this radical zone that may not be a happening in the same level in the middle ast, but this may be happening actually in the west, whether it's in learn universities or otherwise. Yes, so that's .

something like my friends in middle east, a lot of our laughing at the west because they are basically saying, you know we got all these islamist radical muslim brother of people to hell out of our countries. You don't see the same protests in those places that you see in the west and um and I think that in in in the west what's occurred is is people I saw this love when I deal with the europeans where people's understanding of the issue uh is more with their heart than IT is with their head and obviously nobody wants to see any suffering uh of any human beings but the reality is is that you know the the solutions that they have proposed for the last seven, five years have all been uh just not sensical. They they've more often than not perpetuated the problem that they have been solutions to the problem.

And you know I faced tens criticism when I was, you know, in my role working on this issue and mostly because I I kind of looked at all the things that have done the past and keep my being asked up to work on, you know, the midst east. It's like it's almost like a joke, right? It's it's the hardest st problems that you can get in the world.

And ah I think we almost made a look too easy getting the results that we did. And uh, we looked very quiet and I think now people are starting to appreciate that IT wasn't that easy and it's not um it's not a simple problems that to deal with. And uh but I think that a lot of people um where we're kind of looking at um and at what they thought was wrong, but looking at the wrong route causes for how I got there.

I have a question for you and sax. I'd love to get your guy's open on visit. India are dealt with a terrorist attack when mono hungry was prime minister and basically was an extremist muslim group from pakistan luxuriates.

But that came in and killed a lot of indians, but a lot of foreigner as well, right? Attacks some the major hotels in bombay, SATA. And what happened was, monohan saying, didn't do anything.

And in hand sight what was written. As you know, they debated what to do. They debated, do we go after this group? Do we show some production demonstration of force to be invade pakistan?

Ultimately, they went on a more cover path to sort of dismantle that tired network. And they were just a lot of international support that came around IT. Can we still man whether IT would be possible for net yahoo to take that path? Or was IT really not even reasonable? Just curious what you guys think about that.

Do you wanna first?

Now you should go for there.

okay. So look at anything possible, uh, to athon. And I think that there are different ways. Look, I think the big fears initially were that going into gaza, number one, you be walking into a big trap and number two is you would be inviting mato escalator in the region. The third fear was obviously the decoration of the israeli economy.

When we did, uh, the abram records, one of the big, uh, attractive uh, things to a lot of these countries be partners with this role was there, uh, massively robust economy. And what could happen if they go to war, and it's a prolonged war, is that economy can golf f track? I think GDP will take a big hit there.

Thank you for but obviously, you know in israel they do have a history of coming back right away. But if this a prolong ged uh war effort, that could be big hits. And then you also think about the age of know A I and software development.

Losing you know day of productivity is the equivalent of losing you know week or a month and and they don't want to fall behind and what they are doing. So there is an argument to be made for doing that. But I do think that from israel's perspective um I do think that they understand this thread. I think that they want to eliminate this thread and I think their view is is, uh we can't live like this anymore uh we we underestimated IT before uh and and we will not let that happen again and I think also the psychology of really the jewish people is, you know, only once of sitting with with promise in the town.

Yahoo and one of the generals and uh and B, B was basically saying, like, you know, if if a ran gets too closely is what i'm going to do, what I have take matters our hands and the general basically said to me, said, you know, I get, you know you guys we're going back to the events was just black wall you know he was a real acknowledge ment of like the way that israel Operates with kind of no margin forever. And I would always say when I want negotiate with the israelis, that sometimes you do a contract and there is like, you know, there's there's two issues that are are ten and like complies that are five and like a whole bunch, you know bag of issues that are like two and trees and when I was negotiate with the israeli is like they would treat every issue like IT was like a ten. You don't mean the sense that like they they just Operate like there's no more for error um and and I do you think that obviously, there is some complacency and and and the international division letter than being quite off guard here.

But I think that, uh, they're going to do with they are going to do to make sure this this happens. And I think there's also a way where israel feels mentally like we have to show that we're strong or else people will will go after us. And I think that that's what you've done.

And I will say now the fact that is roles gone from being completely divided to now, uh, full united in this effort mean even the people on the far left in this role who were all people who are you know funding you know jobs with the palace in ian and you know housing them in their homes. I mean, they're basically saying they want to go to war. So the mentality there is very much we need to do IT we need to do now to keep ourselves safe. People are very, very a hard broken for those who are who are past and there there the praying very closely for the hostages um and but they've given a lot of attitude to the government to do what he needs to do to make sure this this is this is not um this is not occur again. And I will say too, like israel also recognizes that I think now they have the world more on their side than they have in in a in past conflicts and and I think their view is to um the review is to to to do with what they have that situation.

Sex body think could not yahoo have taken the the path of doing nothing?

No, I don't think sorry, not given his domestic political situation, I think the israeli people demand a response. And look, one of the arguments that israel would make is that if this happened to you, the united states, are you russia, you china, what would you do? I mean, I think we know we would turn gaza into fu, ja or mobile.

Russia turned into rosy. So I think israel is taking the response that I think most countries would take. And given their situation, the thing I worry about is that israel, not the united states, I mean, the one states so powerful, can act largely with impunity.

We don't have to worry as much about back. And israel does, because at the end of the day, there are a small country in a very hostile region. And so I do worry about the potential front intend, the consequences here.

One potential consequence is arizona escalate tion. Does this worse? Some how spent out of control and IT could lead to a much wider regional war that would not be in your interest. The other is dramatic isolation.

I do think that israel taking a big hit right now on the information war, the war of a public opinion, and then finally, you do have a lot of civilian casualties and and those civilians have brothers and sisters and cousins. So fourth, and that's onna lead to the next generation of terrorists. And so even success in this Operation against homos doesn't solve the long term problem.

I mean, this kind of keeps you going. So I think all of those things are potential problems. But at the end of the day, if israel can have a successful military Operation here, that significant degrades or destroyed her moss without this inspiring out of control that buys them time to find a political solution, then maybe I will be worthwhile.

I mean, I think a lot depends you on what the optimum timah is. I think it's like a very tough thing to judge. And without knowing what .

the oculus gonna be, the king of Jordan a couple of weeks ago gave a speech and uh in the speech he said there is no peace possible in middle ast to without the emergence of a palestinian state. With a two state solution being the only path forward, a alani, an independent and sovereign state should be on june forth, one thousand nine hundred and sixty seven lines, with easter usum of its capital.

And so that the cycles of killing whose ultimate victims are innocent civilians and. Is this the only path to stabilization jarred? And is that where we're headed?

So that statement is, is the same throwing statement, right? That's the safest statement for anyone to say because that became the international consensus.

So you know, one thing that was super interesting to me when I was working on this was, um I kind of sit my team once, like where is the palestinian laim for east elm as the capital come from? And I D guy, my team who is A A military guy who actually bought for john, Carrie and I always have in the room because he would represent the palestine perspective with a bunch of worth ox, you and you know we try to be impartial, but know we did the best we could to have you know all perspectives represented and um and he came said by I I actually don't know and then what's interesting is you know when when the west bank was actually uh governed by Jordan, the capital of the time was among and so I really wasn't til the the the the one thousand nine hundred and eighty eight um uh uh launch up of this right for postini state that they self declare that the capital for yesterday slemon so that was actually an interesting notion as well and I think that everyone knows that that's not gonna the case. And I ask one of the leaders once why they say that? They said, well, particular.

And I said, well, maybe we need nuclear. He and he says, yeah, that's a good idea. Let's come up with the nuclear.

He, so now I think whatever solution is going to occur has to be pragmatic, right? You, you. The reality is is that if if we're going to learn from gossip, there's a couple of lessons to learn right?

Number one is you know israel withdrew from gaza two thousand five or two thousand six uh they forcibly removed fifty thousand israeli settlers uh from goza um all those people they they left their their homes. They left their businesses up thinking that would be peace they they transferred governance of gaza to the palestinians the palace initiation uh had election again. IT was of the the P A at the time convinced the bush administration to allow for homos even though they're charter call for the destruction of israel to participate the election and they won in a democratic election.

Since that time, there's spent no improvement in the economy. Uh, it's become A A A real security risk. israel. And so israel h withdrew and then let them govern themselves. And now you have what happened today be the case. So I think the reality is is that and if you look at the historical um maps and the historical lies I in there, there's really no uh making a claim there. There's no uh other example in history where somebody y's lost the reoffended ve wars and then has been able to maintained their claim over a territory ah that they had before.

But I do think that there is uh in international consensus and I do even thinking this others consensus to give opinion people the ability to kind of uh have their own land and and then also to govern themselves. So um the word state is is a very low to term because IT comes with a lot of definitions to different people. But I think the construction of what's chief able is um is in the west banker or gaza.

Uh there can be no security threat to israel. This is something that h that they were insistent on before, and I was sympathetic. This was even before at top seven. If you go back and look at the work we did and what we put out, we had a security regime that we designed with uh U S H.

Intelligence and military and and israeli intelligence and israeli military ah that we thought actually gave a lot of autonomy from police force perspective to the palace ini ans allow them to build their capabilities and and they kind of like earn their way into more and more security control, which I thought was the right way to do that. You don't want take a tn of risk there. The other part of IT though in any state is you need a functioning uh, economy.

Otherwise obviously you have a big a grievance party. The biggest problem the palatines have faced over the last called twenty five years since since oslo, I guess almost thirty years now since oslo is is just bad governance. So the problem with the P. A is is they were elected, I think, in two thousand and five, and they happened another election since.

So I think present of bosses in the sixteen and seventeen and eighteen, the year, like a four year term, a very now popular, is more popular washington and the united nations than he is you know his own country um he's uh there is a very corrupt system again a lot of the money he's gone for uh for for the leaders, their family, for the top people but not to the IT hasn't trickle down to the people and so there's not a lot of trust on IT uh, you know, I held a conference in bahrain where I brought all the top investors in the at least I brought stiff workman from blackstone came we had a little Stevens, came from firm A, T, N, T. And everyone came and said, you know, we actually would love to help the post inie people. We'd love to invest here.

Uh, and then they looked at the magnitude de of IT. I mean, it's three million people, which is like a small state in the west bank, in two million in gaza against, like a small state, the U. S.

And obviously to build things is much cheaper. Me, the GDP per capital there is about three thousand per persons. So you know it's it's it's cheaper labor.

It's it's to do IT and it's connected right israel, right, which is like know california, not be connected to silk valley. So the prospects for prosperity spills are our massive, a big sandwich between the rich golf and and the growing israel. So but the thing that's missing in photo senias is very basic things, right? There's no fair judiciary.

There's no real ef law. The governance is terrible. The institutions are incredibly opake. And what all these people are saying is we'd love to invest here, but it's just not investable place.

And so the thing that's been holding back the palace, ian, people, has not been israel. It's been their bad leadership. And again, you're seeing in other places in the middle ast that with the leadership investments can come and those investments will actually lead to people living a much Better life.

How does that leadership .

change in your view? So the way that I would think about this is that if you're waiting for a solution to come to you, you're not gonna find IT, right? If you say, okay, let's go back to the U.

N. Well, they have a perfect track record failure. Let's go back to the P. A.

Will they have a perfect track record failure? You definitely not going to go back to a mass. So you need to find something different.

So I think you either need to create something new or you need to look at what's working and put IT together. So some places that could do with me, the world bank, has a lot of good uh, institutional knowledge. They helped us work on the plan, the world back in the I F.

Uh, now some of the other regional governments mean jordin. Uh, their government is is pretty, pretty capable. I think there are.

They're Better military than economy, but I think they're y're starting focus more economy um as they realized that that that's necessary. Um if you look at the benefits of that area, the posting people are are ninety nine percent literacy rate. Again through the taxi U S.

Taxpayer international donations we've paid them become uh very educated. Unfortunate we've poisoned uh their minds with a lot of what's been taught um in their curriculums. Um they have a pretty good health care system there.

Again, I think I could be improved because it's been done very kind of piecemeal versus holistic. Um and in addition to that um they obviously have uh tremendous m of tourism sites, mean you know jewish, Christian, muslim tourism sites. So if they ever get their acts together, I mean that the boom in that area can be uh, unbelievable.

And I think I could work very, very well. There was one time where the palace economy was working. I think he was in about two thousand and seven.

There was a great named salon fios, who was, uh, the first time somebody came in who was a, he was not corrupt. H things were happening. Uh, we just were rising, a projects were moving, the money was actually getting to the people. And he became so popular because he was such doing, such a good job administering that. H, that the president got right of them, that the boss got rid of hem because he saw as a threats to his power.

So you know what's happened is not different where you always have kind of iteration of the minority in some way uh with with with most forms of of government and so uh what happened was is that he was starting to gain popularity. He became a threat to kind of the chronister that occurred. And so I think that the international community, if they can put money into this, again, either rebuild, number one has to be conditions based.

Again, we've put tens of billions dollars into this situation, right to me. This this refugee group has got more money uh, over time than any refugee group in history by a factor. Maybe a hundred, right? And then you know you you you you none of its skin condition space and IT has to be in in a set where people are trying to create outcomes. And I think one of the problem, a lot of the people working on this don't have business backgrounds. They understand, you know, human rights, so they understand politics, but they don't understand capitalism, and they don't understand what kind of framework you need in order to allow a society to thrive.

Has treasury ever tried to trace these dollars or some other organization to just show where the theft happened and where these polls of money have gone to?

There is some intelligence on IT, uh, that I can go into but h but I think most people don't wanna know to be honest. But I mean, you could just look at IT in a couple of ways like you know you look at um you know we with me with prime minister anton yahoo in washington and he will take a commercial L A flight to computer and he brings military superpower and economic superpower uh in the region.

Uh present a boss would come visit us in washington and he uh obvious ly represent A A refugee group and he will fly in a sixty million dollar boeing business jet, a private jet, a to wash ton. I would meet with him and we've been sitting around then, uh, you know, he put a cigarette, his mouth, and then somebody would come over and the'd like the cigarette for him. I be like in my meeting with the head of a refugee group by me with. You know just IT was a different situation and but I think people but .

he's a reasonable one, right? The alternative is a moss and those guys, I mean those are billionaire he create who live in cut are at the four seasons, right?

Yeah but but my sense is is you you're gonna get what you to make and right and I think that from the U S. Is perspective, right we four billion dollars a year and foreign n to the P A to unruh, to jord into egypt and uh and we've we've tolerated, you know, status quote, that's not acceptable.

And you know one of the difference, again, trump at a lot attention with the foreign policy, you know, establishment and IT was over a lot of things, right? Obviously you wanted to end the forever war. He felt like we get some return on the investments we are making. He felt U S A was an entitlement um but I think the biggest difference was they wanted to all maintain the world. They wanted just to manage IT.

And he wanted to change IT and know what we did by the by the time again this is one of the disagreements I had with the incoming administration is that when we turned over the middle ast to them again we spoke her earlier about what a mess um you know we have been herded when we started but we had five p deals between israeli and and majority muslim countries uh iran was totally broke again under obama uh when he left they were selling about two point six million barrels of oil a day under trump when he left office they were selling one hundred thousand barrels oil a day they were ata foregone currency reserves they were dead broke uh now they are back up to three million girls a day of of sales they've one over one hundred billion dollars uh of oil revenue us since we left the office the palace in ian you know one of thinks we did uh after I think the first years we cut the funding to unroll very controversial. We say h this is for refugees we set up for refugees is to build terror unnecessary cints they're saying, no, it's for schools and hospitals and we are saying those are the military bases and they were saying, you guys are crazy, your cruel and are all thing and and so when we left the pa was was basically broke. Um the arabs had kind of lost interest in that cause uh because they kind of saw that he was he was morally bankrupt.

Ed, in that uh every time we gave a boss the opportunity to do something Better for his people, he refused and and and they kind of saw that and we we smoke them at a little bit and so we kind of took the issue and we strong IT tremendously. And the final deal we did was between guitar sad rabia A U A E egyptian and bahrain. And that was a critical, uh, deal to do because that was was what really made a possible for sauty.

And israel then do the deal, and that was really on the table. We laugh, but they took too much time. They allowed a ran to get you strong.

They started allowing a ran to get money. They started funding the palace ini, ans and and ra again. And and now you have a situation where it's just become you know, a mass IT could be fixed.

They definitely be fixed if you're strong and if you're smart. But if you're going to go back to kind of the old ideas, uh, you're going to get the old results. You need do ideas.

You need to create the ideas and force them. You can just wait for them to occur. And they go back to the old institutions in old people who have failed before.

who leaving should be secretary state, the next administration.

I think china should .

let me two state solution.

This is double click on this I mean, my view on this, and I think by the standard of israeli politics that d be a liberal there, is that the only solution, the only way out of this is the two state solution. And we can have a situation of indefinite, permanent occupation of the palace, ian. People, at some point they developed a national consciousness.

And if you have conditions of permanent occupation, you're going to resist and you're going to alper terrorism at the same time. If israel is out right anecdo these territories, or continues on a program of called creeping anx ation, or key building settings to the west bank, and you have a greater israel that eventually juice in israel will not be the majority, the population. I think if you look at kind of greater israel, there's about seven point three million years.

There's about seven point three million palestinian arabs. So if if the plan is a single greater israel, it's either gone to stop being a jersey because you know the palestinian s will vote for something different or it'll give me in the jury. But there can be some serve two tier system where a lot of personas want to have to vote.

And so eventually a greater is well to choose between whether wants to be democratic or whether they wants to be jewish. And that seems like a very bad choice. Seems like we want both.

Those things be true. So again, that kind of brings you back to a two state solution as the only option here. And yet, IT seems to me that the two state solution has never been further away.

IT seems, I guess, never been further away in terms of israel domestic politics. And it's never been further away in terms of having a negotiating partner to negotiate something like this with. So that would be sort of my pessimistic outlook.

I mean, I know you're pretty optimistic about situation. Do you see IT differently than that? Is that framing wrong somehow? How how would you how would you see IT?

So number one is a naturally optimistic and I I just find is more fun to be optimistic than pessimistic. But i'll say everything i'm saying in the context of the fact that this is a really, really, really, really hard, proper said right. So um i'll try to say this um in the right order. So no number one is I don't think there's any viability to a one state, and I don't think that that's something ever occur.

Um number two is um and actually, you know what what's interesting one of the problems is a lot of the the arabs and the palin's would actually prefer to be part of israel than the past instate so right before code we trump peace plan, which uh which you can you can you can still find online. And I think the political part feels about fifty four pages, the economic part in the political part about a hundred eighty one pages in detail. Um we at the time i've got the right wing and the left wing again as they win the third election and we had a primitive at yahoo and many games who also amazing um person came they they all endorsed IT.

And so what I would find what I tell you is that semantics you know state has to do a lot of the semantic so uh you can definite give them a state. The question is is you know you have to give israel certain overriding security controls so that uh that the state cannot be a threat to them and then you can let them kind of earn their way out of that with good behavior and and showing that is a true partnership. But what I will just tell you is that whatever you call that, you give a flag, you can give whatever you want unless there's A A system where people can live a Better live than the grievance will overtake, uh will overtake whatever independence they have.

And I will just become a problem again. And so um so I do think a two state solution is is possible. Again, what you do with gaza is very much, you know, T V D um but I do think especially in the west bank there, there's definitely possibility to do.

And I think that from his world the'd like to see that happen where you'd like the palestinian speed to govern themselves. But it's it's a couple big gives if it's not a security threat and if they can have a viable economy, that's going happen. One of the big things that's happening now that i'm hearing about is that think the number was like two hundred and fifty thousand palestinian suit work visas from the west bank to a to go on israel.

And now with the threats, there's just such a great distrust that, that has occurred that those are now not being renewed. So I think is roles going up to bring in workers for the parts of the world. But that was an amazing thing, right? You had muslims and juice, uh, you know, working together.

You, uh you know palestinians whose lives were Better off because they are working with this role. So the vast majority of the palace inis made me, not the vast. I don't know its people are different perspectives on this.

But I I I just believe that fundamentally human being small, to live a Better life, uh, I don't think our natural status is to hate each other or to be, uh or not be together again. If you look at the middle ast for you, a thousand years before the second world war, I mean, jews and muslims, Christians, they lived very peacefully together. So you know what I was seeing with the Abrahama accords and what I was hoping would occur would really be a reversion to the free world or two error where people were starting to live peacefully together.

But there's been a lot of hate that's been for mental and manipulated over over this time. But the best way to started is just you take a one day at a time. You know, we should say in government we get a hard problem. You used to say, you know, how do you eat an elephant? You know, one by at a time. And so just have to kind of outline where you want to get to put in place the right system and then just start, you know, step after step after step and then you get to a place and and maybe able to do something that becomes viable with time.

Cherry, did you see v um debates last night?

Did you watch them? No, I did not.

thanks. You watch .

them .

anymore. Things have seen clips on social media.

Do you ever take away? I mean, was even worth watching?

Yeah, I thought. I thought the the clips did a pretty good job of actually showing some of the punch your moments. But the crazy thing is that the the mainstream media has completely erased the vex cintas Y, I don't even think IT exists in the eyes of the mainstream media, but if you look on on acts, all the posts were like, he clearly won and he was basically throwing fireballs everywhere. But then if you go to, you know, CNN or fox, you don't even here is name, right? I said it's it's a real, real difference.

The mainstream media coverage is what they want you to believe, and social media is what actually happened. Is what people actually believe. And I think that if you look at social media, what IT shows is that the vae dominated the debate and he was thring fireballs and he was slamming the neocons on the stage and showing that there's been, I think, in a referable break between the neocon establish showing in the republican party and the more populist mag ging. So I think that's that's kind of what social media showing. And then you if you listen to mainstream media there, they say something, talk about A C and said he had some sort of meltdown and he insulted nicky hay's daughter or whatever, something like that .

butter tiktok usage yeah, by the way.

all he said is that that he was being barraged for why he created a tiktok account. And he said, I want to be Young people. You like your daughter is on there and and for that, nicky, yeah that we said and nicky ali called him scum .

for that the by SHE SHE also called like the will smith. fine. Like get your my daughters name out your mouth did slater? No, he did is a pretty good point.

They're like seven, five million Young americans on tiktok. If you want to reach them, that's where you post your messages. I have seen the vx stuff on there.

I've seen ark juniors videos on there yet. Like everyone uses tiktok. Now you want to reach people.

This is reality, nicky. He doesn't. I'm not sure. I don't know that he has much of a social media following because I don't think her campaign inspires any real grass roots.

I think her campaign is supported and propped up by the top establishment wing. I don't think is any market for what she's ling among the grass roots. So social media kind of pointless for her. But if you actually want to reach people, especially Young people, you use social .

media pretty intense. Vivek said that the the heat, the R, N, C, should just be fired for all the losing, and kind of went through every single election in the mid terms, not that they've lost ince. He became her to the r cy, apparently on social media. Uh, SHE mild something to the effect of disguise in a hole. He's not in a single set for much.

Yeah no, it's bronic ic annual. No, I know I like on a but I mean.

he done a good jobs acts.

Look, it's hard for me to speak to the jobs she's actually done because I don't know the activities are actually involved in being R N C. chair. So but I mean, the best point is look at the results.

So we are on the board of a company that kept missing quarter after quarter. And the CEO say, no, look at all the good things i'm doing. We reply to fire that.

C, E, O, just because you're like, how of things get worse, right? You just take the chance that you bring in a new CEO. They are going do Better.

So the reality is our results in the republican party have been cited lately. Now at all. Run is fault. No, IT may not be much more fault at all, but how do you do worse? I think a big reason for the crappy results have been the abortion issue.

We've now had this issue on the ballot in at least six states, most of which were red states, a couple of more purple states. It's lost every time. The anti abortion on a pro live site has lost decisively every time. And I think there's a lot of reasons to vote republican.

I think republicans have the advantage on the economy, on border, on anything related to woke on um prime and homelessness, these all issues that should be big winners for republicans but the public by I think probably a two thirds majority does not want to ban abortion and as long as that issue is in the forefront, republicans are going to lose. And actually he was an and culture who just said this, and cutter are a really good blog post about this, saying that the pro life are retweet IT. By the way, she's very pro life.

I mean, she's a social conservative. But he says that for life is gna wipe out the republican party. They need to focus on non political activities, which is winning over hearts and minds. They have to make the case. The country have to persuade more people because they are not in a position, they are not popular enough.

actually win elections. You can charge her, giving the republican parties gona change their position, or need to change their position to win elections preventin .

d ultimately be, if you don't win that, you can govern and you can impact the changes you want to do. So I do think that, uh, people are definitely paying attention. You know, the results of the results, I will say that you know one thing with with trumpy, one you know with his Operation, be able to overpersuaded polling.

I think here in this last time, there has been under performance of of polling. And so that's something that obviously have to look at, which is very troubling. But i'll also say that with what I found again, you are not really um somebody was new to the republican party. What I found is that you know both parties are really, I would say, collections of of of tribes, right you have different tribes that kind of make up the party. What I found that the republican party was that there was A A ton of infighting and figure pointing and purity tests.

And um you know instead of saying, like you know I am happy you agree with me on on seventy person or eighty percent IT was specially saying, well if you don't agree with me at one hundred percent then then you're a bad republican and I think that a that that's a culture that's gonna lead to you um having very strong opinions but having no ability to affect ate things. I think that people have to you know say, where do we agree on on different issues, uh, that uh where do we agree on issues, how we work together to do IT. But if you don't win, then you're not gonna be able to affect ate the things you won to.

Even worse, the other size can be affectionate, the things they want. And you look at where the world is today. Because of that.

there's a lot of internecine fighting in the republican party. I think trumps instincts on abortion actually have been very good. I said this a couple of months ago. There was kind of a blue ha on the right when trump gave an interview in which he said that that actually what the same to done in florida with the six week ban was a mistake and that he sort of up level the issue, just i'm going to find a compromise that makes everybody happy. And this created a lot of upset people on the right, because they thought that trump's kind of selling amount the abortion issue.

And I made this case on Megan called a couple months ago, that I thought that what trump s was doing was pretty smart because he doesn't want to get pin down on an issue that's gona hurt him in the general. And I think part of the reason why he was being a little bit kg on that issue is because he knows that would put him in the general and he started to think about that. And I think the results that we just have the other day, our strong indication of that, and just may say this more generally, that whenever trump has opposed republican groups in on the issue, I think he's invariably been proven correct.

If you go away back to two thousand sixteen, you know, think about all the Harris that he committed in the republican party. He spoke out against the forever wars, against bushes, forever wars. I think he was right about that at the time.

The republican party either wasn't talking about immigration or didn't really seem to care. He basically made, uh, the border a huge issue of things proven right about that. The issue of china and china trade was not an issue. Republican party, if anything, I was sort of this this sort of unrecovered free trade, total free trade issue.

When was pushing the tpp air right?

exactly. So the trump defy the worth of oxide on that. Anything is proven correct. Paul yan also wanted to rattle back entitlements like, so security, medicare.

And trump thought that was suicidal for the top so you post that I think on all these issues whenever he has defied the orthodoxy he's been improvement correct and um you know I don't know it's a conscious thing or just that he's got tremendous got instincts as a politician. Be curious get geerts take on that like how much this is sort of him working things out. And I actually oit is just as good. But I think this is why he's still the candidate to beat for the publications, inc. Is at the end of the day, for all of trumps issues, he's actually the best politician.

the holiday party. Can I would see the way that he would work on trade. And again, uh, you know, trade deals usually take five, six years.

And you know his attitude on on trade was that h whenever there's a multilateral l it's the the weaker countries all ganging up on the stronger part. So he says, like, I want to do them bilaterally so you with you from tpp, uh, whatever you want, when crazy. Instead, he was a disaster.

Well, we ended up negotiating with japan and korea and everyone, and we got basically ninety five percent of the market access that was in tpp without giving up any of the things that would have absolutely designated or ottawa. Dusty, are we renegotiate the the nta, which you know everyone said obama said they would say that you want to fix IT. Uh, you all trump came in in a year and a half.

We renegotiate and after and got over eighty votes in the senate or was a bipartisan, uh, when did did it's at the highest standards for a labor protection? And IT IT did a lot of great things that I think make amErica way more competitive, hopefully will reduce our trade deficit. So these are the all things that he took on that people weren't willing to, uh, and again, he said, no, look, if i'm wrong, going to pay.

Putting terrible on these different countries. Remember people coming into him saying, I see if you put these terrace on the whole worlds, going to explore the U. S.

Economy is going to blob and I never sitting with him privately, and he said to me, know, jared, I we had a year debate and we had some people who were more religious about this issue than anything else says, you know, Jerry, I have been saying this for thirty years. A, I believe IT, uh, I campaign on IT. H, I won on IT.

I have to see IT like, I have to see IT through. And you know, if IT turns out is a big disaster, I could take off, you know, so that was kind of like his way of thinking about IT, where he had his instinct, he fought his instinct, but he knew he could always back off. And I think his flexibility and unpredictably.

With some of his greatest asset. And I think also on on the porter immigration, again, it's the issue of somebody grow up you know in jersey and then was living on the upper that I didn't a lot of residents for. But I was seeing my friends in new york now they're getting a taste of what I can do, you know, to the country there. They're becoming, you know.

big migration hawks like trump. The thing that the republicans need to realize right now is that if you pick these topics that go down a rabid hole, you're going to be in a really tough spot in the general because the economy is also gonna in reasonable shape. Now if we were going to go into a november election where we were going to be in a recession, that's very bad for biden.

But sort of the tea leaves, for whatever worth, all the diction, all the predictive markets show that we're going na be in a reasonable place. And so the republicans get need to get very, very focus sucks, as you say, on the real issues list here, right? Because they're not going to a have the benefit of the tail wind of a bad economy to say president bitten has done a bad job necessarily.

And so the message will need to be even more precisely focused. And so I think that, that's going to be an important thing. I I did a little t leaf freezing on macros you guys wanted.

I have some charts just give you a little run down of because I I went and I A look, we used to talk about these things when I was when we were doing a lot of forecasting going into this cycle. But so here's like a couple of really interesting observation. So the first one is when you look at this empty money supply, look how much it's actually shunk.

Now why that's interesting to me is that you have these two forces that are opposing each other. One is we have these huge deficits, were technically still Frankly, issuing a lot of money, right? But then on the other side, where we have Q, T, so when that rules off were not reissuing IT.

And the baLance of that is still a really constructive thing, where now you can see that, you know, m two is materially started to shrink. And I think that that's a really positive thing because now what that does IT IT combats inflation in a good way. Unfortunately for all of us, IT hurts financial assets, which is not so good.

I think we've all felt that pain, but the reality is that, that's been working. So the neck, if you go to the second chart, so what you see now is like we are in a really decent place with inflation. And if you think about what's gona happen over the next six months, it's mostly in the bag.

And meaning we talked about this before, but there's a lag effect on a handful components, specifically rents, which when you roll them into this inflation rate, you're onna see IT really, really turn over very quickly, right? So we know that inflation is falling. It's going to fall even more.

The second thing, nick, the third chart here you can see that now validated in these ten year break events. Remember, this was the chart we used to look at when we were like holy macro o something's gna break in november of twenty one. I think we probably should have just sold everything we had in november twenty one.

We didn't do IT. But the point is now we know and what you see here is the ten your break events are also telling us, okay, guys, we're going to be in a pretty decent place. And so I think the set up is basically the following.

There's less money in the system. That's a positive, nick. You should ask that there's more money on the sidelines than this is just a picture of. I mean, look at the amount of money in money market funds, six trillion and growing. So that's a really positive sign, which is that money will need to find a home one up once. Oh no, even just now because you're not you're gonna be in a situation where and i'll get to this in a second, but companies are now starting to perform because they're been able to rebasing ine against very, very lowered expectations, right?

And and money managers have to do their job into blue capital.

And that's something we mentioned, I think, last week, but this is now the beginning of the new fiscal year for the entire mutual uncomplex. So that's trillions of dollars that have to get deployed because even though you pay them a very small fee per year, you're not paying them to hold cash, you're paying them to make decisions and own assets. And then as you said, we break the last part of this is now you introduce rate cuts, and that's a real excEllent. Now more than likely, I think what that means is that markets are set up to to do pretty well, equity markets specifically.

And so I went and I said, well, how can we see some data that proves that this is happening? And what's amazing is if you look at the performance of what I would call the most risk adJusting seeking company is so those are tech businesses that have been absolutely hammered, what you see in the last month as they have ve gone just nuclear agent up thirty percent in a matter of a week, dora ashes up now twenty five, thirty percent in a matter of a week. Data dog, up thirty percent in the matter week.

These are the businesses that were just completely disseminated. So what is all of this saying? I think what what is kind of saying is inflation is very much in the review mirror.

Rates are gonna get cut by the middle part of the year. The economy looks like it's gonna a soft landing that is actually very beneficial for the sitting president, is also good for equity, is good for us. So it's really interesting actually. I think we ve had a fundamental kind of now change jar. Do you think the soul having an effect on the election cycle.

they could definitely good. But I do think a lot of people are still very concerned. I know the the the, the the inflation, the the wages, wage inflation is still about four percent.

I think that people are are are still just nervous bet walk to come. I think there's been a lot of shocks and there's been a couple of times where it's felt that way. And I think that, you know, election years traditionally bring a lot more voluntier, ity to the market because there's some predictability about what the policy will be going forward.

So I think that of people who have kind of been a little whip lash from the the transition of flow over the last year, eighteen months see that they are going into another cycle of uncertainty. Uh, I do think that you know now you're actually getting paid to not do anything with your money in those money market accounts. So there's less of a maybe less of a formal to kind of go out and do something, uh, there. So so I think that lot of people still can be very much and kind of wait and see mode and obviously look for for special opportunities, which I think only further exacter by, uh, a potential decline as well here.

Last week, we talked about real state. You used to be in the real estate business. What do you have any thoughts on commercial real estate and how good, bad average things are? So I still have .

a lot of exposure to commercial real state in my family's company. And uh, we're most in the multi family space. I think the office space right now was in for a massive uh, change in the industry. I think you're going to see a lot of the older buildings get uh get transition, a lot of our trading now for below uh land Price, which is which is pretty remarkable.

I think you have um you also have a transition and kind of what are the cities of growth, right right? So you look at a place like some Frances go, there is a big debate over whether you know A I is going to save, you know the office market there, whether it's kind of like the detroit of this industrial revolution and it's just never gna come back and then you're sing a little servants to go. Companies moved to new york and the new york people are saying others too much crime and how most less they're saying compared to for cisco.

This looks like super like it's it's a beautiful place. So you know new york is still doing I think okay, but you're sing a lot of place without the country that that are. But the fundamental with real status is correlated to interest rates.

And so you know interest rates, you know right, I think the ten years, like four and a half, if I go up to to six years to going to see a repricing in real state, if IT settles at at four and half five, then you will you'll probably see more stability and what that will be. But ultimately, uh, real states become much more institutionalize ed over the last call, the two decades. And it's really a function of, no, what are your your rent and expense growth and then what kind what can you borrowed and can you create you a positive held that hopefully, uh, good hedge get inflation.

So I I think that, that IT will be a great asset class. Mean, it's part when the biggest asset classes in the world, um I think right now though, a lot of people are just holding back because they're not certain what the what the ah what the multiples are. Cap rates, as they call in real state, are going to be on a forward basis, but they're really going to be a function of of what's the growth in the economy going to be and then also, uh, what the forward to rates will be.

That's fair. I think that everything's .

chAllenge in real state. I mean, the demand size chAllenge because you've had the whole work from home cover disruption and a lot of cities haven't fully come back. I think new york's come back at this point, but like every scot, definitely hasn't.

I think new york is something like ninety five percent of workers are back in the office. I think it's something good, something like forty five percent. You've got demand issues and you've got financing issues. You um refinancing as much more expensive because industry or higher and then you've got these corporate dishes or no one knows what the long term valuations are going to be. So everything's mess.

And by the way, that, that has compounded by the fact that now banks that have office exposure or pulling back their lending, so you the combination of a cost of borrowing being higher and then the availability, availability of liquidity going lower, and that could further compound a lot of these refinances. But a lot of what the people I know in the industry telling me is that be able just to work with existing lenders and just do some kind of uh extension and and you know kind of live to fight for another day to get through the cycle.

And I will say in new york that the the rental rates for residential, oh, I think about the historic s and and we actually would what my family seen their portfolios that there properties in jersey city, which is basically like the six borrow of new york, are just absolutely on fire because basically, you know, you go into york now, you go to A C, D, S, everything locked up. You can buy anything that doesn't feel necessary, like the safest city. You go to jersey city, they actually have like, you know, long or water and rule of law.

So um so you still take a train to new york and that's actually been a place that's done incredibly well. So you s have micro markets and you have different trends that that work and don't work. But but I won't Better against new york is still, uh, an amazing city and and I think about new york is every time of there.

And I always talk with some of the cops, and I basically asked, I say if you the mayor that said, uh, go by cops, go by cops, nobody y's gona, you know, hold back, you know, get out of the car due to, do we get you back ah how long going to take you to clean this place up and the answer I get is usually anywhere from like three months to six months. So like we could have this place fix. So clearly this have to what to be cops again. And and so I am hopeful that you eventually there will be the political will to just, you know, let new york be. What is that he has the potential to be, is such an amazing dynamic place.

such a good point? I mean, IT really is just a matter of political will. Yeah, if you hire more cops and let them do their job, that will stop the crime. Or certainly the incentive for crime right now, peeling things get away with this now and they don't get prosecute when they get caught. The jails are like a revolving door.

Yeah, they have putty a cops, they said, to let them do their jobs. And they need prosecutors who will, who will do their jobs as well. I I worked at manand district to Turner's office when I was said, what you law for the summer, I mean, you have amazing people there. And if they are allowed to kind of fall the procedures and just just do the job in the way it's been done before, you can make that city very, very safe very quickly. We actually have .

a cop shortage and serves as go as well, not just a matter if not aim, do their job. We actually have a massive shortage. The city needs to hire a lot more.

They allowed a pretty high rate of attraction in the role. I don't think there's lot of people who want to be captain. So where to go? It's a prety tough job and we'll get a lot of support. So yeah, we actually have a short year and that's a big problem, yes, but it's very solvable, as you say. I mean, to hire more, train them to do their jobs.

Jared, how much do you think um federal deficits and the federal debt matters going to the selection cycle? Is IT going to be a top topic or is IT not really gonna ter? And then more importantly, how consequential is IT in reality?

I think in reality it's it's massively consequently um I think in the election cycle, I think both parties are gona probably try to avoid talking about IT because I think that you know everyone knows, you know I find in politics is when something are a really big issue. People try not to talk about .

IT that much and but I have to get cut right the .

hope is is that you know um once you get through the election, things can be done to to to to have to deal but it's definitely that .

needs to be deal with what you think that is rising raising revenue or cutting .

expenses above growth? Growth is the answer when the political cop out answer is growth.

Six per econo.

How about we free spending until till the danny or can grow big enough to reduce .

the I mean that da amendment center? But speaking of G D P growth, I mean, you guys wanted cover tax stories. I this week quit before, you know.

it's really I got, I can resist getting jar on the record about, uh, the craine war. So I mean, this is a war that I thought .

was very easy to get .

I think I .

think gave is happy of somebody who agrees with him most .

of what he's been saying uh so yeah we worked with a with ukraine and we worked well with russia ah uh during our four years uh, i'd like to point out of people that uh, when we were in kind of our worst moments in covet, the second country that sent to plain load of supplies and ventilators when new york look like IT was not on the verge of going under IT was russia and that was because we were offering them the possibility of of working together.

We armed ukraine but we also told ukraine you know don't need to think about raising needs um as membership as as a way to go. I think what happened was as the by administration uh you know, conversations with ukraine about joining nato, russia basically push their their military to the front line to say, we are never gna let this happen. If you go through, uh, kind of the geography and the history, you understand why russia never let that occur.

And I think he was right after, you know the embarrassment uh, what happened with our withdraw in afghanistan where they thought that we had a week amErica that was gna come and do much to IT. So um I think he was all very, very avoidable. I think that you know from what I read and again I was an involved these conversations, I didn't feel like there were some of ms uh, initially uh, I do think that from our perspective, I think the everyone interest is always been how do we avoid a nuclear war? I don't think that that's uh that something we want to see happen.

And I do think that um I do think that hopefully it'll able to find some kind of resolution to a do not have to be a problem. And I will say to that, that's impacting the meal. Least mean right now what's happening with uh with israel and and with with the palestinians and and is basically a proxy war h for russia.

I mean if the amErica decided tomorrow to change and support the palsy ans that russia would come to be for israel, I mean there is not a lot of ideology for them in that but I think russia and china wanted see the U S. Stretched and distracted that where we're less focused on kind of the areas where we're more directly uh in um in in conflict with them. And so I think that that's a very major thing and I will say to like I think that you know I I don't believe that the countries have permanent allies or permanent enemies.

You know I during my time the government will deal the germans and the japanese who uh were vicious in world war two and we will be against the chinese and we will be against the russians who were basically are paralyzed in world war two and so um I don't think countries really have friends. I think countries have have interests. And I think that uh with with most countries you have areas of overlapping interest.

And I think that uh, you can find those even with countries where you're an opposition for so you know one of the the the Operating principles I I brought uh to all the different foreign icy problems that I was given was don't condemn tomorrow to be like yesterday, uh, because you think IT has to be so I would always look at something I tried to pull whatever up and as I could find and then say, you know, what's the best case scenario of the first principles perspective? I start there and then i'd work through all the problems, uh, that you had to try to get there. So um so so David, I think you've been uh way more right on ukraine than than others.

And h and I do think there's been uh a tremendous amount that's been mismanaged by a by the U S. And and by the world. And in that scenario, and I think it's unfortunate to because I think a lot of uh, people were killed in that war and I I do think that obvious ously the invasion of ukraine was a terrible thing which never have happened, but I do think there's a lot of um x by leaders that could have been done in order to either prevent IT or or minimize IT. And and I still think that that's the job of of leaders in the world is to try to do the hard things and try to do the things to to make the world less volatile and dangerous.

Place giving is coming to an end.

It's definitely lost its prominence. IT does seem military. Um again, i'm i'm sitting here in miami you know reading you know x and and newspapers and talk at the folks so i've been to i'm not going to apply e like i'm a general on the front lines but um but IT does seem like it's it's kind of reached the point where it's not much is gonna military and uh and and no again, like every day that goes on, there is just more life that's being lost and again, I said the same thing with this role that i'd say here mean russian ukraine both have, you know, unbeliever ly brilliant of people.

If you take all these these Young men and you you take them off the battle lines and put IT back into, you know, their jobs of creating things, I just think that that net, that's just a much Better thing for the world. So, uh, my hope is that you know, the leaders involved try to find a way to get to a resolution. Uh, again, I think that you know both sides and maybe overpromised their people what what vict looks like, but that's the job of negotiation. Or you need to you need to find an offer and for everyone and get them to a place where we can, you know, start focusing on how to make tomorrow Better instead of litigating grievances from the past.

You guys see that Sunny, Sunny tweet, this thing he had dinner last night with far on tar, who's the V P of engineering a sharpie y to see his tweet. Like, can you find IT? He said that sharpie y has written more than a million lines of code with copilot.

Oh, wow, I was like what I mean, I don't exactly know how there's there's your G D P crop 这 well， that's definitely growth. I wonder what there IT will be. It'll be G, D.

And I think, well, I think a lot of productivity games are gonna the economy forward historically. Was just talking with someone this past week about over the last couple of decades, we've seen a massive shift. On GDP growth being driven largely by labor of the labor force growing and labor participation.

And increasingly in the last couple of years has been the tremendous shift that all G D P. Growth is paramenters driven by productivity gains. And productivity gains, you know economically net their way through the uh the system and you see the the total G D P grow.

This is the whole argument for A I particularly moment like this that if you're having a decline population, you're having declined labor participation. People want to work few hours if you want to keep growing the economy. In order to sustain the debt and the services that you provide through a government infrastructure, you have to grow the economy.

You have to increase productivity to the only way forward. I mean, like you can have one. It's like you going to fire engineers. It's gonna one engineer to five times as much.

You just solve the whole budget deficit. And that have you found the answers? It's proper productivity by by the A I, which by the way, there is a lot of tremendous productivity gains that will occur because of this.

I always give people the example of the tractor. Like when the tractor came around is not like, you know, people were like, we're going to make less food now. Or you know what happened was we able to farm ten times as much and you know, total output increased. And when total output increased, there is abundance of surplus of food, of calories that that people, popular station grow, the overall economy grow. There is no point in history that we've had a productivity gain through technology that didn't ultimately grow the economy like it's never, never got the other way.

In one hundred, I think about fifty percent of workers in amErica were somehow involved in agriculture there by more than oro. Yeah, yeah. By two thousand there was done like two percent. So it's not like we had a forty percent unemployment rate figured out a way to do new and productive things, and that LED to more wealth. That being said, that he caused lot of social disruption.

and I think certain job classes went away and had to get replaced by others that had to be invented. If you think about a world where there is a million little companies, are fifty million companies, are are five hundred million companies that exists because there are one in two percent teams that can build stuff that seems pretty reasonable and logical as the outcome.

There's a lot of sort of like financial engineering that kind of goes away in that world, right? I think the job of the venture capitalist changes really profoundness. I think there's a reasonable case to make that IT doesn't exist.

It's more of an automated system of capital against objectives, right? And that you wanna making many, many, many small hundred thousand, five hundred or thousand dollar barthes and then you get to this push larger scale, where then you once you get some place, you can go and get one hundred and two hundred million dollar checks. I don't I don't know how else all of this gets supported financially.

well. So there were there are a couple big news stories this week. One was he launched ched rock, which is a uh ChatGPT collige competitor. IT took them about under his X A I business unit, took him about eight months to range. Greg one, which is the model, uh, and by many measures as as performative as GPT three to half GPT four at .

the same zero zero took three months of train zero.

He's still training. G, R, three months of train zero. You guys know ki fu, yeah, he was a google. He was a google search yeah and he is um in china will but his business starting eight months ago and in those eight months, he's now delivered a thirty four billion parameter model that he's completely open source that he shows by against some performative metrics outperformed lama too and again, doing IT from china speaks, I think, really clearly and importantly to the point we talked about last week about if the U. S.

Tries to overregulate A I model development, there are alternatives out there, particularly open source alternatives, that will continue to proliferate and improve. And again, this was done in eight months. And then the it's almost like the timing was perfect because in the same week, open a ee respond with developer day may not necessarily respond, but they developer day on the books for a long time.

And at developer day, OpenAI released a number of really powerful tools for developers that allow them to build really powerful applications and infrastructure on top of open A S platform. So they uh released A P S for delhi three four cents to generate an image uh using uh the deli three A P I. They launched a tool to create your own GPT, which can actually leverage propriety data. So from within your own database, your in your your own data lake, you can build, uh, a GPT that you can integrate into applications n GPT for turbo with two versions that have, you know pretty powerful pricing improvements.

All of this um being said, it's it's a big leap forward in what feels like a low cost, low friction and multi model developer set a tools from open an eye that allows them to move away from having the quark best model to now having what feels like much more of a platform business that as more um applications and more developers start to utilize OpenAIce to ll ki t an d se rvices or a re al uh ec osystem st art to de velop an d th at cr eates a su stainable bu siness mo de ra ther th an ju st th e te chnical mo de th at Op enAI st arted wi th. I think the big point is that we're seeing the technical gap narrow between the best and the average or the worst in the media in model development. We're also now seeing that the evolution for lot of these businesses is through up and I trying to build know applications on top of a platform and build a business mode. And so there's a real shift underway. But net, net, I think what the markets forcing everyone to do is really compete and build these incredible capabilities and are really gna launch a number of new business models, new innovations.

new questions. Are we building apps for the IOS apps? Or are we building what pages for the open internet? And I think open the eyes, hope is that its apps for the up store because it's propriety and they owned that they could take a share.

I think the reality is it's going to end up as the open web. And again, I think it's mostly because everybody else just can't afford to let one company run away with IT. And so you know whether it's lama or mistral or even clock when elon open sources IT, it's going to allow people to have access to these tools basically for free.

The problem that I think IT creates, you know, we had, you know what, when I first came to the united states by the company that I worked at A O well, they were the ones that believed in a fundamentally closed internet, right? And you have the service, and you went into the world garden A A while, and then the pendulum swan over the last one years, and we opened IT up our facebook and at other places, and now we have this fundamentally open architecture. The problem now is these models will not get Better unless you have fine tuning that happens by yourself, or these reinforcement learning loops that come from data that you control.

And you can see IT with grog, zero part of what makes grog really successful. He said elan and only elan can give access to the x fire hose to grow. Now that's a giant normous repository of propriety data that they're going to be able to train on.

So then the question is, well, obviously then facebook will want to train their models on instagram and their models on whats up. Google will want to train german I on gmail. Not none of those companies will want to make that available to any other model.

And so the unfortunate by product of a more of of foundational models that are more pervasive is going to be that the internet gets a little bit more closed in the short term, and we're going to have to really figure out what the implications of that are. So I think what that means economically is there just gonna be a lot more small companies and a lot fewer of these gene Normal outcomes. And that's, on baLance, probably Better for, you know, innovation in the economy.

probably. Yeah, data is the advantage of the model itself.

You have you have to own some data asset that is unique so that you can train these models and then you have to close that off so nobody else can have access to IT. And that has to be an explicit business decision because IT would be foolish for you to not do that. Says, did you take .

anything away from this week announcement with kind of elan and OpenAI developer? Day rock is interesting .

as an A I because IT has a sense of humor. I mean, that was kind of interesting about the user experience is that tries to be funny. And as a sense of irony, it's also willing to be more politically incorrect.

And I think one of the concerns about ChatGPT early on was that I was programmed to be woke and that IT wasn't giving people, you know, truthful answers about a lot of things that the censorship was being built in to to the answers. And there is a lot of examples very early on where seemed like there are some sort of trust and safety layer that have been built on top of the AI. And sometimes I would intervene and not give you the true answer that came from the I would give you come some made up boiler plate.

And so having something like rock around will, at a minimum, keep OpenAI honest and keep keep ChatGPT honest. Because if is going to give you truths of answers about things compare to the charging the answer, then we're gonna when these, like so called trust and safety interventions are are happening. So I think that's kind of interesting. Separately, the OpenAI developer day shows that, that company, if you want to call IT, that I mean, it's a company, our foundation or what but complicated legal entity.

I mean, what I say, those are details.

Those are details. I mean, they are really trucking along at full speed. I mean, IT is pretty impressive what they're shipping yeah the and even if the underlying language models gets somewhat commoditize, IT does seem like they're building a very robust developing ecosystem.

So you could analogize IT to something like stripe, where credit card payments are very much a commodity, but everyone uses a strike because their death tools are so good. And then they are able to get to a bunch of skill network effects because there are developing platforms so good. So I do think that that sea of inge OpenAI may not be the model itself, although I think I think their models actually pretty good.

But it's is that Better? Better than lama too? Probably not. but. The developer platform is getting really good.

I like that's a really interesting analogy because if you play that out and you say is A I like payments, well, what does the payments landscape look like in terms of companies that have real enterprise value?

There are, I guess, three or four big ones and then there's a bunch of long tail ones in specific geography because there are these random rules in a country and you build something to be very to IT and you have value in that market or in that use case. And maybe there's a maybe there's an analogy gy there and how this market develops in that sensors. Four, five big foundation models. And then there is a bunch of small vertical use applications that you use.

depending on what the task, the time in the cost. New foundation model seems to be shrinking, had a pretty fast clip.

So by the way, all of this happened on eight one hundred ds, and a bunch of this happened on a one hundred. So we're just one generation of silicon behind. So to your point, this thing is gonna like people will be training models in weeks.

yes. So let's go ahead and track world's models that have a federal regulatory party we see on this.

Well, I I have a guy from the U. K. File report. Yes, yeah, yeah. Definitely following high level from .

my perspective. I think it's it's great, especially when you think about carefully IT. Just can we've what we ve thought, which is that amErica is definitely leading in this. And I think that is just important to to know that their leading be really because of the private sector and the fact that the private sectors been allowed to do what they do. And and we start to think about the regulation frameworks.

I mean, you could think about OpenAI as a as a company or foundation or even as a nation state with with kind of of power that these you'll have the ability to to harness once there. They're fully scale. And I just think it's it's going to be very interesting to see.

I think the more uh comp competition you have here, I think the Better uh will be very, very good. But I do think you want the most powerful uh models, the most powerful platforms to be in the hands of people who are gna. Try to apply IT for all the right uh all the right things for society. So I think that there's a lot of positive applications, a lot of negative applications that can come from this. Um and my hope is that the regulatory frameworks that are developed a one time for innovation at the expensive of allowing others to get ahead of us who will produce them in, in ways that we would not want to see them use.

Five couple of OpenAI announced I think are interesting yeah .

as long as you don't repeat what I said because you we're paying attention but yeah.

what did you mention the if I got to delete IT, but did you mention the hundred and twenty eight k context window?

I I, I kind .

of big deal. I means that you can ever prompt that has three pages of text in IT. Yes, i'll tell you like several months ago, I trying to figure out like is a way where I could just put all of my blog posts in a prompt for ChatGPT and have a turned into a book, for example. And I was just kind of like a problem I just started working on. IT was actually very problem.

Like also vector D, B were totally useless in her. Me, like that abstraction didn't need to exist. That's all gone now too. They're doing those guys are firing on all soon. It's really it's really impressive to see.

Yeah the other thing is multimodal. I mean, so they're really stressing the idea of combining text with photos. I guess videos will eventually come later, text to speech, but again, having multiple kinds of inputs and outputs for the A I I think, yeah, propriety.

we can plug in your own proprietary data sources. I mean, I just can change for a lot of enterprise customers. I think those developers are going to go at.

I heard a lot of positive feedback from developer folks I know who attended and sounds like that there was very positively received. okay. Well, this has been great air.

Thank you so much for joining us. Today was really great to spend time together. This is the point in the show where you tell David sacks that you love .

him and he says, right back, atrix guys, I want to say, stick in one hundred and fifty three episodes but finally, there's a person that I can say. I'm now the second best looking guy on this pots so you are thank you for come.

You guys are the best I going to come back. More of that is happy this I get treated Better here than I do at my home. So it's good. So sorry.

that's yeah that's so much yeah together.

But thank you guys for having Young and and really thank you for all the different you know important conversations you have. And again, i've made a lot of people who listen to you guys over the time, and they all find that you guys give a lot of good input into a lot of the issues that are impacting our our daily life.

So thank you for the opportunity .

to be very let your winners light.

man.

And said we open sources to the fans .

and got crazy with.

Why you?