Trump vs Powell, Solving the Debt Crisis, The $10T AGI Prize, GENIUS Act Becomes Law

**Jason Calacanis** (0:00)
So, Gavin, were you at the Coldplay Concert in Boston last night?

**Gavin Baker** (0:05)
Sadly, I missed that. It's once a day, exactly. I was at home with my wife, but yeah, wow, how insane.

**Jason Calacanis** (0:13)
There's just so many layers to that story. It's impossible to get away from. It'll be 72 hours of memes. Dave, were you at the Coldplay Concert in Boston last night? And if so, were you with Woody, your astronaut friend, did you take Woody to the concert?

**David Friedberg** (0:32)
No, counselor. I was here in Santa Cruz last night.

**Jason Calacanis** (0:36)
Oh, you were in Santa Cruz on a business trip?

**Gavin Baker** (0:39)
The funny thing is, if they had not reacted the way they did, the camera would have just panned away.

**David Friedberg** (0:44)
Yeah.

**Gavin Baker** (0:45)
Nothing.

**David Friedberg** (0:46)
No one would have ever known.

**Jason Calacanis** (0:47)
There is some great irony to the head of people and human resources being in an affair with the CEO apparently.

**David Friedberg** (0:56)
Don't jump to conclusions, Jason.

**Jason Calacanis** (0:57)
No.

**David Friedberg** (0:58)
He could have been cracking her back, like when you get the back tights and he comes behind. Yes. It could have been a chiropractic move.

**Jason Calacanis** (1:04)
Oh my God. All right, let's get to work. It is the slow, slow news weeks of summer, and we are delighted, delighted to have fan favorite, super intelligent bestie, Gavin Baker with us from Atreides. How are you, sir? How's your summer shaping up?

**Gavin Baker** (1:40)
Fantastic. It's been awesome.

**Jason Calacanis** (1:42)
Stock market is back. That's good for you because you invest in both public and private companies, yeah?

**Gavin Baker** (1:49)
My firm does, yes.

**David Friedberg** (1:51)
Gavin, let me ask you a question. How do you price tariffs today? So where do you think this ends up? Obviously, there's a lot of back and forth, and everyone's trying to make a read on what the end game is. What's your market take as you're making investments right now and where we end up on the tariff front?

**Gavin Baker** (2:07)
It is a good question. It's open. We're going to see what happens with sectoral tariffs.
I think it's hard. You're doing the Winning AI Summit. It's going to be hard to win in AI if we put tariffs on semiconductors. But for a lot of what I do for now, tariffs are not super relevant. But for the market, for the economy, they are relevant. But for AI, they're maybe a little less relevant because I think everyone is maybe a little more sophisticated about the downsides of tariffs for constructing data centers here in the United States.

**Jason Calacanis** (2:44)
And ultimately, don't we look at the tariff situation and say, despite the shock and awe of the opening salvo, it's quite a boring position now. It just seems to be reciprocity and reasonable reciprocity at that. Yeah, that's how we would sort of categorize the end game here.

**Gavin Baker** (3:06)
I would say for everyone but China. You know, it is, and you know, we're, we've clearly reached some sort of deal with China, you know, rare earths for H20s and MI308Xs. But it's interesting. And one of the trade deals that has been finalized is Vietnam. And there's a special carve out for goods that were transhipped from China through Vietnam. So they are clearly focused on China more than almost, you know, any other country, rightly or wrongly. But yeah, and I do think there is, you know, there was maybe three months where Trump said he did not care about the stock market. But now he's back to quoting the market at all time highs. Yes. He clearly cares and is clearly very sensitive to market feedback. So I think that that will be a dampening mechanism on tariff volatility.
But, you know, they passed the bill, and he immediately went back to tariffs. And, you know, we'll see where we land in August. But I just think the most important thing in the market by far is AI kind of overwhelms everything else.

**Jason Calacanis** (4:14)
Absolutely. And I guess the other big story with the market, and we'll get into the H20s, David Sacks will be joining us in a moment. So he'll be jumping in halfway through it. But let's start with maybe this soft launch of the firing of Jerome Powell. On Wednesday morning, Bloomberg reported that Trump was likely to fire Powell soon after talking with Republican lawmakers. Shortly after that, the New York Times reported that Trump had actually drafted Powell's termination letter. Market instantly reacted negatively, dropped 1 percent. Bonnie yields rose about 10 basis points. You can see the blips here on these charts starting around 1130 a.m. When the article was published, Polymarket reported Jerome Powell out as Fed chair in 2025, spiked up to 30 percent on Wednesday before dropping back down to 20 percent. Trump quickly squashed these rumors, markets rebounded, and Trump said, we're not planning on doing anything regarding Powell. Some people speculating maybe this was Trump testing the market reaction. As you talked about earlier, Gavin, he does seem to care about the market as most presidents do. If you remember, Trump nominated Powell as Fed chair November 2nd, 2017, and he has gone on a tirade the last couple of months, calling Powell, stupid, numbskull, stubborn, low IQ, a knucklehead, mentally average. It's a long list of descriptors of the person he placed. Powell's term ends May of next year. White House officials have confirmed Trump is in the process of selecting his successor. Polymarket says that could be Kevin Warsh, 22%, Kevin Hassett, 19%, Scott Besson, 15%. This hasn't actually ever happened, right? We've never had a Fed chair fired. But we have inflation coming back a bit. If you all remember, there's a dual mandate for the Fed, keep unemployment low, check. That's pretty good. And keeping inflation under control.