Biggest LBO Ever, SPAC 2.0, Open Source AI Models, State AI Regulation Frenzy
Timestamps are as accurate as they can be but may be slightly off. We encourage you to listen to the full context.
Podcast Summary
In this episode of the All In podcast, hosts Jason Calacanis, Chamath Palihapitiya, David Friedberg, and David Sacks dive deep into the massive $55 billion take-private deal of Electronic Arts (EA) by Saudi Arabia's PIF, Silver Lake, and Jared Kushner's Affinity Partners. (01:54) The discussion reveals how gaming has become the anchor pillar of internet usage with 3 billion daily active users worldwide. (03:49) The hosts also explore Chamath's new SPAC structure that eliminates traditional warrants and founder shares, the rise of Chinese open-source AI models like DeepSeek, and the concerning patchwork of state AI regulations emerging across all 50 states.
Main themes:
- Gaming emerges as the future of entertainment with massive investment from sovereign wealth funds, while AI transformation creates new opportunities for private equity deals and open-source competition threatens established players
Speakers
Jason Calacanis
Entrepreneur and angel investor who founded Mahalo and is working on new ventures including begin.com. He previously sold companies and has been an active voice in tech investing and podcasting for over a decade.
Chamath Palihapitiya
Former Facebook executive and founder of Social Capital who pioneered the modern SPAC movement. He recently closed financing for a new "Raptor 2.0" SPAC with improved compensation structures and is CEO of 8090 Partners, a major consumer of AI inference services.
David Friedberg
Scientist and entrepreneur who has founded multiple companies in agriculture and technology. He brings deep technical expertise to discussions about AI, energy infrastructure, and technological transformation across industries.
David Sacks
Former PayPal executive and venture capitalist who has been appointed as AI and Crypto Czar for the incoming Trump administration. He has extensive experience in enterprise software and has been vocal about AI regulation and open-source models.
Key Takeaways
Gaming is the Anchor Pillar of Internet Usage
Gaming represents the most significant form of digital engagement globally, with approximately 3 billion daily active users according to Unity executives. (03:49) This massive user base makes gaming "as important and, frankly, more important than social media" in terms of internet usage. The EA deal represents a strategic bet that gaming will benefit more from AI transformation than traditional social media or content platforms, as AI can create more dynamic and engaging interactive experiences compared to static content consumption.
AI Will Transform Gaming Through Dynamic Experiences
Artificial intelligence is revolutionizing gaming by creating adaptive, personalized experiences that adjust to individual players. (07:57) Fortnite exemplifies this by using AI opponents for new players, tuned to be easier to beat to prevent churn and gradually develop skills. This represents a fundamental shift from traditional programming methods to AI-driven systems that can maximize engagement, satisfaction, and retention by adapting to each player's skill level in real-time.
Open Source AI Models Create Economic Advantages But Raise Strategic Concerns
Chinese open-source models like DeepSeek are offering dramatically lower costs - 28¢ per million input tokens compared to Claude's $3, representing a 10x+ cost advantage. (55:24) However, this creates a strategic challenge where the best open-source models are coming from China while leading closed-source models are American. Companies can run these models on their own infrastructure without data going to China, but the dependency on Chinese-originated models raises national security considerations for critical applications.
State-by-State AI Regulation Creates Market Fragmentation
All 50 states have introduced AI bills in 2025 with over 1,000 pieces of legislation and 118 laws already passed. (68:55) This regulatory patchwork threatens to create the same fragmentation that hurts European tech companies, where businesses must navigate different rules in each jurisdiction rather than benefiting from a unified national market. The lack of federal preemption could render AI companies "incapable of generating any positive economic output" due to compliance complexity.
Energy Infrastructure is the Critical Bottleneck for AI Growth
Data centers now consume 40% of Virginia's energy, and electricity rates are projected to double in the next five years without intervention. (53:40) This creates both a massive public relations crisis for tech companies and a practical limitation on AI deployment. Solutions include cross-subsidies where data centers pay premium rates to keep residential costs stable, and infrastructure improvements like installing batteries at homes near data centers to absorb demand fluctuations.
Statistics & Facts
- 3 billion people play games daily worldwide, making gaming usage comparable to or larger than social media according to Unity executives. (03:49)
- The EA take-private deal at $55 billion represents the largest take-private transaction in history, surpassing previous records like the Texas Power Company deal in 2007. (01:54)
- DeepSeek's new AI model costs 28¢ per million input tokens and 42¢ per million output tokens, compared to Claude's $3 and $15 respectively - representing a 10x+ cost advantage. (55:24)
