E126: Big Tech blow-out, Powell's recession warning, lab-grown meat, RFK Jr shakes up race & more

**Chamath Palihapitiya** (0:00)
I can't wait to talk about lab-grown meat. I have been trying to get people to...

**Jason Calacanis** (0:09)
Oh, please.
Let's not get canceled. The four of us are functional again. We like each other. We enjoy, we look forward to doing the show again. Everything styled in.

**David Sacks** (0:21)
Is your lab-grown meat that use hormones?

**Chamath Palihapitiya** (0:23)
My lab-grown meat was a little...

**Jason Calacanis** (0:26)
Let me ask you this about your lab-grown meat. Do you have to sh** at this age?
No.

**Friedberg** (0:36)
No?

**Chamath Palihapitiya** (0:37)
No. I was told that my lab-grown meat was a little...
I've injected some flavors of tobacco, black cherry.

**Jason Calacanis** (0:46)
Some notes?

**Chamath Palihapitiya** (0:47)
Some notes.

**Jason Calacanis** (1:09)
So let's go to big tech earnings. Google stock is up 5% after beating on the top line and bottom line estimates, some high level takeaways. Google announced a $70 billion stock buyback plan and that their cloud unit was profitable for the first time in its history. As we mentioned last week, Sundar officially announced that DeepMind was merging with Brain. This is kind of controversial because it's really hard, according to some sources, for Sundar to get all his lieutenants to work together and row in the right direction. Google's Q1 search revenue up year over year, 2% down, 5% quarter of a quarter, just kind of to be expected because of seasonality and because we're in a down market right now, obviously with the recession.
YouTube down 2.5% year over year, down 16% quarter of a quarter. Other bets, which is like Nest and some other products down 35% year over year. Net income $15 billion. $15 billion.
Any thoughts, Friedberg, on what is a mixed quarter by Google and, I guess, the wider macro environment?

**Friedberg** (2:20)
What was so striking about the earnings call is not necessarily what was presented but what was not presented, which was a stronger voice and a strategic plan going forward for dealing with two major issues at the company. One is the operating cost model and the second is the AI strategy and the response to this evolution in AI.
I've heard from a lot of folks that the AI strategy in particular, it's almost like Google already has this in the bag, but they just haven't kind of let it out of the bag. It's like they've got a Tasmanian devil and they're ready to go with it. And there's, from my read, an incredible amount of confidence that there's something that's going to happen and a set of things that are going to happen that are going to be very profound and powerful. I even heard some anecdotal stories about, hey, you know, we don't have this feature in this product, but ChatGPT does, and then people basically showed up to this meeting and there was all this debate about, well, we can't let it out because we're not sure, you know, that the classic kind of like we're scared of doing wrong versus leaning forward and taking risks.

**Jason Calacanis** (3:21)
Don't be evil, you're referencing?

**Friedberg** (3:23)
No, it was just more about regulatory concern and getting things wrong and making a mistake. And so there's this total fear of like, again, you know, regulatory and fear. So someone kind of slammed the table and said, let's just put it out. The next day they put it out. So there's definitely a cultural change happening internally, is what I've heard anecdotally. But what was really missing, which is what Wall Street needed to hear, what investors and shareholders needed to hear is, what's the strategy there? How are you going to compete? How are you going to resolve what's going to go forward? And secondly, what are you going to do about the cost structure of the company? Because everyone else, you know, in contrast to Metta being up 11, 12 percent after hours with their cost cutting model and demonstrating that they're going to start pulling cash out of this business. Google's top, you know, kind of top story was, hey, we're stop serving peanut M&Ms in the cafeteria or something ridiculous.
And, you know, that doesn't really address the real structural question. So I think the stock buyback, the 70 billion dollar stock buyback is an authorization to repurchase. It's not a plan to repurchase. So it's unclear if, when or how that capital does actually get deployed in the market to buy back stock.
And so there is also this big kind of shareholder sentiment of being let down that there isn't an improvement in either cash coming out of the business or in cash being used in a smart way with the business. And it was the silence in the earnings call that I think really stunned a lot of people, which is why you didn't see a lot of stock movement despite the actual business numbers being better than expected.