Speaker 1: Thanks for tuney into tech Stuff. If you don't recognize
Speaker 1: my voice, my name is Oz Voloshian and I'm here
Speaker 1: because the inimitable Jonathan Strickland has passed the baton to
Speaker 1: Cara Price and myself to host tech Stuff. The show
Speaker 1: will remain your home for all things tech, and all
Speaker 1: the old episodes will remain available in this feed. Thanks
Speaker 1: for listening. Welcome to tech Stuff, a production of iHeart
Speaker 1: Podcasts and Kaleidoscope. I'm os Voloshan. Today, Cara Price and
Speaker 1: I will bring you the headlines of the week, including
Speaker 1: new personalized pricing methods and Ohio's investment in AI weapons.
Speaker 1: On today's Tech Support segment, we'll talk to four of
Speaker 1: four Media's Jason Kebler about Mark Zuckerberg's role in a
Speaker 1: TikTok band, and then we're back with another When did
Speaker 1: this become a thing? This time we're looking into the
Speaker 1: history of the PayPal mafia, all of that on this
Speaker 1: Week in Tech. It's Friday, January twenty fourth, So Carrol
Speaker 1: wa back.
Speaker 2: We are back, and so is TikTok.
Speaker 1: And so is President Trump. That's right, a lot of
Speaker 1: things returning, we do.
Speaker 2: It's the great return.
Speaker 1: So it's time for our news round up. Who's going
Speaker 1: first today?
Speaker 2: Me? Okay, you went first last time.
Speaker 1: That's true. What have you been reading?
Speaker 2: So you like to read Daily Mail and I like
Speaker 2: to read Scientific American like it's US weekly. At the
Speaker 2: nail salon, I don't get my nails done, but I
Speaker 2: would read Scientific American if I did. And I saw
Speaker 2: this thing that in a way, I've always been paranoid
Speaker 2: that this is going on, but this confirmed my paranoia.
Speaker 1: Okay.
Speaker 2: The FTC, the Federal Trade Commission, which is what was
Speaker 2: run by Lena Kon who we talk about often, has
Speaker 2: released a report about something called surveillance pricing. What has
Speaker 2: been found is that if you shop online, you may
Speaker 2: be getting charged a different for certain items than somebody
Speaker 2: else might be at the same store.
Speaker 1: So, in other words, the retailer knows that you might
Speaker 1: be less price sensitive and therefore charges you more correct
Speaker 1: and Lena Connley FTC think this is not right.
Speaker 2: I think they're actually more interested in looking into if
Speaker 2: it's happening, and it clearly is happening. What they have
Speaker 2: concluded is that this is similar to the technology being
Speaker 2: used to feed you targeted ads, which we've talked we
Speaker 2: talked a lot about on Sleepwalkers and targeted marketing uses
Speaker 2: things like our browsing history to serve us ads for
Speaker 2: things that we were just thinking about, like Oh, I
Speaker 2: need snowbooths. Now I have these snowbooths in my Instagram feed.
Speaker 2: This would work similarly. You know, if you have a MasterCard,
Speaker 2: for example, that stores a lot of information on you,
Speaker 2: the types of things you spend money on, where you live,
Speaker 2: you're banking information. All of the information that is accessible
Speaker 2: to companies via these third party providers, whether it be
Speaker 2: a Fyco credit its scored or credit card company, is
Speaker 2: now allowing retailers to make decisions on pricing that I
Speaker 2: don't think the average American consumer is used to. I
Speaker 2: think another really interesting thing that we didn't get in
Speaker 2: the actual report and that the reporter from Scientific American
Speaker 2: elaborated on is that this also might be happening in
Speaker 2: brick and mortar stores.
Speaker 1: How is that possible?
Speaker 2: That could be because price tags used to be something
Speaker 2: that if you think about that thing that would like
Speaker 2: put the price on that in and of itself is
Speaker 2: now becoming digitized, so you can actually change a price
Speaker 2: that's on a computer tag, especially exactly, and those prices
Speaker 2: are you know, based on both expiration dates or consumer demand.
Speaker 1: Lucky if a billionaires an never do theirn shopping, that's right.
Speaker 2: But Walmart, which is actually not being investigated, claims that
Speaker 2: it's digital price tags can be updated remotely within minutes.
Speaker 2: It's just an amazing thing to think about, which is
Speaker 2: like you usually go into a store, you trust the
Speaker 2: price of the thing. You understand that inflation might affect
Speaker 2: the thing, You understand that something might be on sale.
Speaker 2: You know, this is different. This is literally real time
Speaker 2: price not gouging, but price changing. And there's one other
Speaker 2: really interesting things which is these instacart smart shopping carts.
Speaker 2: And these are actual shopping carts that have scanners and
Speaker 2: screens on them. These are screens that advertise to you
Speaker 2: while you're shopping. Wow, and then they connect directly to
Speaker 2: your credit card payment system.
Speaker 1: I'm actually looking at now that the tagline is you'll
Speaker 1: feel like a magician each time you add an item
Speaker 1: and pay on the cart.
Speaker 2: This idea of like frictionless shopping is not all about ease.
Speaker 1: No, it's about selling you more stuff. I mean, I
Speaker 1: would guess the beginning of fixed prices is probably a
Speaker 1: late nineteenth century phenomenon, and before that, like it was
Speaker 1: a haggle every time.
Speaker 2: That's right, and you know what you were just saying.
Speaker 2: That was actually mentioned in the Scientific American article. They
Speaker 2: went back to like early BC bizarres, when people would
Speaker 2: just in Yiddish we call it handling, where it was
Speaker 2: like there was no set price. It was on the
Speaker 2: basis of what somebody was deciding something costs that day,
Speaker 2: or how much could you negotiate or finagle.
Speaker 1: And now we're kind of returning to the point where
Speaker 1: it's a hagout every time, except way conditioned to believe
Speaker 1: that the prices are fixed and our opponent, slash merchant,
Speaker 1: has perfect information about us and we have no information
Speaker 1: about them. So this sound this sounds pretty unfair.
Speaker 2: I want to say that this is not totally negative, right,
Speaker 2: Like demographic data can actually benefit people who are looking
Speaker 2: for financial aid, for example, And so in the FTC report,
Speaker 2: it wasn't like, oh my god, this is the worst
Speaker 2: thing ever, we must change as we must take this away.
Speaker 2: It was simply a probe into what are the ways
Speaker 2: in which data that can then be harnessed by the
Speaker 2: power of machine learning is affecting the way we shop.
Speaker 2: It is possible that using our demographic data, using our
Speaker 2: credit card information, it's possible that something might cost more
Speaker 2: for me than it might cost for you. And I
Speaker 2: think again, it's just something to be aware of, and I'm,
Speaker 2: you know, as we report on this show, very aware of,
Speaker 2: like how are small little uses of machine learning actually
Speaker 2: affecting the daily lives of Internet users, which we basically
Speaker 2: all are at this point.
Speaker 1: Yeah, and you know, the bargain we've had with the
Speaker 1: tech companies for some time is we give them our
Speaker 1: data and they give us their free services. But if
Speaker 1: it starts to become a world in which like we're
Speaker 1: actually charged on the back end for the way we
Speaker 1: gw up our data, it makes you think very differently
Speaker 1: about you know, Internet privacy, mvpns and all those kinds
Speaker 1: of things.
Speaker 2: Yeah, and this is I think the FTC being like
Speaker 2: how free is technology? You know, how free is it
Speaker 2: to us? And like what is the cost? What is
Speaker 2: the cost that we pay, the hidden cost that we
Speaker 2: pay as technology users? Is it just a friction free
Speaker 2: shopping experience? And the answer is usually now, So what's
Speaker 2: up with you this week? What are you talking about?
Speaker 1: So last week you showed me that video of a
Speaker 1: gun being remotely maneuvered and fired all by voice command
Speaker 1: using chat GPT, And then we've got talking about how
Speaker 1: open ai has gone back and forth about whether or
Speaker 1: their products are allowed to be used to develop weapons. Yes, yes,
Speaker 1: I looked into this a bit. And in October last year, Africom,
Speaker 1: which is the US military command in Africa who do
Speaker 1: a lot of drone surveillance and I think strikes on terrorists,
Speaker 1: signed this multi billion dollar contract with Microsoft that included
Speaker 1: open ai tools. However, when The Intercept asked open Ai
Speaker 1: for comment, they denied they had a partnership with US
Speaker 1: military and referred questions up to Daddy Microsoft.
Speaker 2: So they're really the Russian nesting doll.
Speaker 1: This is the Matrioshka of evading responsibility for weapons development.
Speaker 1: But then in December, open Ai did in fact sign
Speaker 1: a direct contract with a company that develops weapons andrill.
Speaker 2: We talked about them last week.
Speaker 1: The company is named after Arragoron's sword in Lord of
Speaker 1: the Rings. In case you're wondering, I wasn't an lot.
Speaker 2: Al Fleix, good old Palmer Lucky.
Speaker 1: That's right, Palma Lucky. Sam Altman, who runs open AI said,
Speaker 1: quote open AI bills to benefit as many people as
Speaker 1: possible and supports US led efforts to ensure the technology
Speaker 1: upholds democratic values. Unbelievable first as tragedy them as fast.
Speaker 1: I think on this upholding values with weapons. But Andreil,
Speaker 1: as usual, you're early to the story and already talking
Speaker 1: about it last week. Have had quite a couple of months, obviously,
Speaker 1: the big contract with open ai in December. This week,
Speaker 1: the New York Times reported they're planning to build a
Speaker 1: one billion dollar factory in Ohio, which is set to
Speaker 1: bring four thousand jobs and will build tens of thousands
Speaker 1: of autonomous systems and weapons over the coming years, swarming
Speaker 1: cruise missiles for use abroad and at home surveillance towers.
Speaker 1: Andreill's been part of the kind of border surveillance efforts
Speaker 1: for some time. It's remarkable to me how this burst
Speaker 1: of AI development over the last couple of years has
Speaker 1: in a sense, remodeled the American landscape.
Speaker 2: Yeah, and I think it's not just a tech story anymore.
Speaker 2: We're talking about American cities and infrastructure.
Speaker 1: But I mean people often. I remember the old question
Speaker 1: was like where is tech? The answer is, you can
Speaker 1: see it now because it's building huge buildings all over America.
Speaker 1: You mentioned Palmer Lucky.
Speaker 2: Do you know what he looks like, the dude the mask.
Speaker 1: Yeah, it's pretty close. He always wears a Hawaiian shirt
Speaker 1: and flip flops. He has a goatee, and he plays
Speaker 1: Dungeons and Dragons. He's described his character in Dungeons and
Speaker 1: Dragons as quote, a chaotic, neutral wizard.
Speaker 2: It's a dating app profile.
Speaker 1: It is. I don't know who you'd find with such
Speaker 1: a profile that it turns out you'd find a lot
Speaker 1: of investors if you're a founder. He got his start
Speaker 1: lucky building VR headsets in his own garage, and then, interestingly,
Speaker 1: given what he's doing now, went on to work in
Speaker 1: this clinic that worked with vets suffering from PTSD and
Speaker 1: using VR headsets for what's called exposure therapy to kind
Speaker 1: of help them with their PTSD.
Speaker 2: Wasn't he sort of integral in the creation of Oculous Rift.
Speaker 2: That's how he made a lot of his money.
Speaker 1: Well, that's right, he found an Oculus rift, the VR headset,
Speaker 1: which was acquired by Facebook, making him a very young
Speaker 1: billionaire at the time, in his mid twenties.
Speaker 2: They didn't figure out what to do with it, but
Speaker 2: he doesn't care well.
Speaker 1: And actually he left Facebook under something of a cloud
Speaker 1: in twenty seventeen. Some claimed he'd been forced out because
Speaker 1: of making a campaign contribution to Donald Trump's twenty sixteen
Speaker 1: presidential campaign. Lucky then founded Anderil after leaving Facebook, with
Speaker 1: support from none of them Peter Teel. So right now,
Speaker 1: it's a good moment to be Palmer Lucky.
Speaker 2: I can't even make the joke.
Speaker 1: What's the joke. It's Lucky, It's Lucky, that's the one.
Speaker 1: He's been quite vocal about the threat of China, about
Speaker 1: a potential for war in Taiwan, about how the war
Speaker 1: in Ukraine has shown the potential for developing new autonomous weapons,
Speaker 1: and kind of raise the alarm bell that the US
Speaker 1: may be falling behind the curve in all of these areas.
Speaker 1: What I find very striking, though, is just a few
Speaker 1: years ago the whole of Silicon Valley was more or
Speaker 1: less unified against military contracting, and now quite the opposite.
Speaker 1: Palmer Lucky recently tweeted, after spending a few days at
Speaker 1: CS twenty twenty five's clear that the vibe shift is real.
Speaker 1: Everyone wants to help our military. Everyone wants to build.
Speaker 1: Nobody's afraid.
Speaker 2: Big beautiful buildings. That's what the president would say. We're
Speaker 2: looking to build big beautiful buildings.
Speaker 1: Right, and big beautiful weapons. I guess.
Speaker 2: When we come back, we're joined by our friends at
Speaker 2: four afore media stay with us.
Speaker 1: So Caro, I know you are following the the will
Speaker 1: they weren't they? So to speak of the TikTok ban,
Speaker 1: how did you feel the moment it went dark?
Speaker 2: I was there the moment it went dark online, the
Speaker 2: moment it went dark. Yes, on the app, I was
Speaker 2: fine because I somehow have not become addicted to TikTok.
Speaker 2: But I have friends that were really in withdrawal and
Speaker 2: using reels as methadone.
Speaker 1: How bad was it for them?
Speaker 2: Very bad? Very bad. Even you're okay, I'm fine.
Speaker 1: It's back now, so you're fine. But what are you
Speaker 1: find when it was off?
Speaker 2: I was fine. It was off. It was just the
Speaker 2: weird like referral to Trump in the messaging on the
Speaker 2: app that I was like, what is going on here?
Speaker 1: Yeah? So when you log back on too TikTok, you
Speaker 1: were greeted by a message which includes the line as
Speaker 1: a result of President Trump's efforts. TikTok is back in
Speaker 1: the US.
Speaker 2: It sounds like Trump wrote it, and it also sounds
Speaker 2: like he did. It sounds like Biden's bad. Trump is good.
Speaker 2: Use TikTok again because of Trump bite dance.
Speaker 1: The Chinese parent company of TikTok is sending a pretty
Speaker 1: clear message there. But can I tell you who almost
Speaker 1: certainly was not jumping for joy?
Speaker 2: Who's that?
Speaker 1: That is Mark Zuckerberg, and he ha to tell us
Speaker 1: more about why not. On this week's Tech Support is
Speaker 1: four or four Media's Jason Kebler.
Speaker 2: Welcome Jason. It's good to have you with us again.
Speaker 3: Yeah, this has been my favorite topic of late so
Speaker 3: stoke to talk about it.
Speaker 2: So last week he reported on something that I think
Speaker 2: was buried in the pre inauguration slash TikTok chaos. But
Speaker 2: you reminded us that what Zuckerberg wanted did most was
Speaker 2: actually a TikTok ban. Why is this?
Speaker 3: In many ways, TikTok has become what Instagram once was.
Speaker 3: The simple answer is that if TikTok were to be
Speaker 3: banned in the United States, the most obvious place for
Speaker 3: people to go would be Instagram and Instagram reels and
Speaker 3: so a TikTok ban was very likely to benefit Meta
Speaker 3: in an outsized way.
Speaker 1: And how was zuck agitating for this?
Speaker 3: So it's very hard to say exactly how involved or
Speaker 3: not involved Meta or Mark Zuckerberg himself or in pushing
Speaker 3: for a TikTok ban. But Mark Zuckerberg has been sort
Speaker 3: of beating this drum about competition from Chinese tech companies
Speaker 3: since all the way back in twenty nineteen. He gave
Speaker 3: this speech at Georgetown University where he sort of pulled
Speaker 3: out this line where he says, you know, a decade ago,
Speaker 3: so all of the top ten tech companies were American today,
Speaker 3: meaning in twenty nineteen, six of the top ten were Chinese.
Speaker 3: And that was right before a big congressional hearing about
Speaker 3: Facebook's data privacy practices. Pretty Much anytime that he's pulled
Speaker 3: in front of Congress in any way to talk about
Speaker 3: Meta's monopoly or privacy issues, he starts talking about the
Speaker 3: threat from China and how if there is more regulation
Speaker 3: from the US government, basically like a Chinese app will
Speaker 3: come in to fill that vacuum. And so he really
Speaker 3: like seeded the ground, in my opinion, for what ultimately
Speaker 3: became the TikTok ban. The Washington Post also reported back
Speaker 3: in twenty twenty two that Meta paid a firm called
Speaker 3: Targeted Victory to push the narrative that TikTok was dangerous
Speaker 3: for children, although Meta has denied directly lobbying on the
Speaker 3: TikTok ban.
Speaker 1: So I can imagine this. We've got to beat China.
Speaker 1: Message is is resident with the new president. But it
Speaker 1: wasn't always plain sailing between zuck and Trump.
Speaker 3: Yeah, I mean, in the aftermath of January sixth Facebook ban,
Speaker 3: Donald Trump and Donald Trump spent time last year saying
Speaker 3: that he wanted to put Mark Zuckerberg in jail.
Speaker 1: But instead he put him hashtag front row.
Speaker 3: Yeah, he has, you know, gone to mar A Lago twice.
Speaker 3: He was at the inauguration and through a party, an
Speaker 3: inauguration party in DC.
Speaker 1: I threw a party.
Speaker 3: Yeah, he threw a party. TikTok also threw a party
Speaker 3: for Donald Trump.
Speaker 1: Well.
Speaker 2: And one of the things that's interesting is that Trump
Speaker 2: tried to ban TikTok during his first term in office
Speaker 2: with the same sort of China hawk argument, right, and
Speaker 2: now he's stalled the ban by executive order for at
Speaker 2: least seventy five days, and when asked during the signing
Speaker 2: why he changed his mind about the app, Trump said,
Speaker 2: because I got to use it, which seems to be
Speaker 2: Mark Zuckerberg's nightmare.
Speaker 3: I think that it is Mark Zucker's nightmare. I think
Speaker 3: that TikTok being banned would have been a huge prize
Speaker 3: for Meta, and they were so so close. I mean,
Speaker 3: the the app actually went down. In the lead up
Speaker 3: to the ban, Meta started buying ads on TikTok to
Speaker 3: advertise Instagram, for example, as an alternative. They started buying
Speaker 3: ads on Google saying, you know, come to reels. They
Speaker 3: also rolled out this like affiliate program that very closely
Speaker 3: mirrors how TikTok shop works, so sort of trying to
Speaker 3: entice influencers from TikTok to come to Instagram. And so
Speaker 3: I mean that there was like quite a lot of
Speaker 3: thought put into Instagram as a replacement for TikTok. And
Speaker 3: now there's still this seventy five day delay in terms
Speaker 3: of whether the band will actually be enacted. I think
Speaker 3: that Trump has made it clear he doesn't really want
Speaker 3: to ban this thing. Like they are using Oracle servers
Speaker 3: for American tiktoks more or less, which was part of
Speaker 3: that earlier executive order that you referenced where Trump wanted
Speaker 3: to ban TikTok during his first term, and as part
Speaker 3: of that byte dance agreed to move Americans data to
Speaker 3: Oracle controlled servers in.
Speaker 2: Texas, an American country.
Speaker 3: So an American company, and so Oracle shut down TikTok
Speaker 3: servers on Saturday, which is why it went down. But
Speaker 3: then on Sunday, I guess Trump was able to cut
Speaker 3: a deal with Oracle seemingly that convinced the company to
Speaker 3: take the risk to put it back up.
Speaker 2: Well, and Larry Ellison then is at the White House
Speaker 2: on Tuesday with Project Stargate.
Speaker 3: Yeah, Larry Ellison, who is the CEO of Oracle, and
Speaker 3: Trump are friends and they've been friends for a long time.
Speaker 3: And so to be totally honest with you, a lot
Speaker 3: of this seems almost reverse engineer to give Trump a
Speaker 3: big win. The ban is incredibly unpopular, and it's incredibly
Speaker 3: unpopular among TikTok users who are a young demographic that
Speaker 3: you know, Trump has really gone after in this election.
Speaker 3: And so I think being able to message like Biden
Speaker 3: took your TikTok away, and I gave it back, even
Speaker 3: if that is not exactly true. Is a very powerful
Speaker 3: thing for Trump to be able.
Speaker 1: To say, Jason, just close. I'm always fascinated by the
Speaker 1: law of unintended consequences. But there are a couple of
Speaker 1: other apps which saw big, big inflows of users, one
Speaker 1: of which was red Note.
Speaker 3: Yeah. So, red Note is an app that is a
Speaker 3: sort of Chinese competitor to TikTok. It's very popular in China.
Speaker 3: I have a lot of Chinese American friends who have
Speaker 3: been on it for years. It's very good for finding restaurants.
Speaker 3: From personal experience, I know that. But you know, in
Speaker 3: advance of the TikTok band, you had a lot of
Speaker 3: Americans downloading and going over to red Note. And it's
Speaker 3: one of the few Chinese social media apps that is
Speaker 3: available both in China and the United States. And so
Speaker 3: you had a mix of people sort of ironically saying
Speaker 3: I would rather give my data directly to the Chinese
Speaker 3: government or to a Chinese app than give it to
Speaker 3: Mark Zuckerberg. And then I think you also had people
Speaker 3: who just didn't like the fact that the US government
Speaker 3: was taking something away from them for this sort of
Speaker 3: amorphous national security spying reason. I think that there are
Speaker 3: very real concerns about TikTok and data privacy, but the
Speaker 3: US government has not made it's anything specific about, you know,
Speaker 3: the types of spying that may or may not be happening.
Speaker 2: I think you're right, Jason, that the US government has
Speaker 2: not made it compelling enough argument for like why TikTok
Speaker 2: should be banned. And you know, I think people don't
Speaker 2: want to be TikTok refugees. Also because circling right back
Speaker 2: to Zuck reels isn't as good. And you know, it's like,
Speaker 2: if you want people to use reels, make it as
Speaker 2: good as TikTok. And the problem is is I don't
Speaker 2: think that will ever be the case.
Speaker 3: Yeah, I think you're right. And also, I mean, this
Speaker 3: was a big argument ByteDance is making, but it's a
Speaker 3: very real and important argument that hundreds of millions of
Speaker 3: Americans we're on TikTok, are on TikTok. You have millions
Speaker 3: of small businesses, millions of influencers who make a living
Speaker 3: on TikTok. And I think that this sort of fractured
Speaker 3: Internet that we saw for only a few hours between
Speaker 3: Saturday and Sunday, I found it to be like a
Speaker 3: really chilling and weird thing that I'm not used to
Speaker 3: as an American who who I'm like, I have access
Speaker 3: to everything on the internet more or less and suddenly
Speaker 3: just sort of being cut off from that and not
Speaker 3: even having a very easy circumvention. This was sort of
Speaker 3: like a blueprint for how other types of bands could
Speaker 3: work in the US, and I think that's pretty scary.
Speaker 1: What will you be looking out for in the next
Speaker 1: seventy five days and beyond on this story.
Speaker 3: I think that by Dance is very unwilling to sell TikTok.
Speaker 3: Whether that is because of pressure from the Chinese government
Speaker 3: or because they have a good business and just don't
Speaker 3: want to sell it, who knows. But I think, honestly,
Speaker 3: the thing I'm most interested to see is whether this
Speaker 3: just kind of fades into the background. And I'm wondering
Speaker 3: if in seventy five days nothing changes and we just
Speaker 3: sort of keep going, and you know, it will be
Speaker 3: a question of whether the Justice Department is willing to
Speaker 3: you know, enforce a law that was enacted by Congress
Speaker 3: and upheld by the Supreme Court sort of for the
Speaker 3: like political interest of the President. Jason, Thank you, thank
Speaker 3: you so much.
Speaker 1: Coming up we'll explore a crucial first family in tech
Speaker 1: with another installment of when did this become a thing?
Speaker 1: So Kara, Ever since the election of President Trump, any
Speaker 1: number of tech moguls have been showing up at Mara
Speaker 1: Lago and in Washington and have even taken on official
Speaker 1: roles in the transition the new administration. But there's one
Speaker 1: group on everybody's lips.
Speaker 2: The PayPal Mafia.
Speaker 1: PayPal Mafia, and so in today's when did this become
Speaker 1: a thing? We want to explore the history of this
Speaker 1: powerful group to understand just how they went from smart
Speaker 1: investors and founders to seats of power at the top
Speaker 1: of government, business, and even social influence. Yeah.
Speaker 2: I know these guys, but I sort of take the
Speaker 2: PayPal Mafia for granted without really knowing what their stories are.
Speaker 2: So I'm excited for us to do this, and you're
Speaker 2: going to start us off.
Speaker 1: So let me start just by going over some of
Speaker 1: the members of the PayPal mafia who are now closely
Speaker 1: connected or actually inside the Trump administration. So we've got
Speaker 1: Elon Musk running DOGE, the Department for Government Efficiency, which
Speaker 1: tried to recruit applicants back in November, saying, quote, we
Speaker 1: need super high IQ's small government revolutionaries willing to work
Speaker 1: eighty plus hours per week on on glamorous cost cutting.
Speaker 1: That was a tweet.
Speaker 2: Great love it.
Speaker 1: Then you have David OSAs another podcast host, the All
Speaker 1: In Podcast, another South African and Trump's new AI and Cryptosa.
Speaker 1: This is an advisory position, so Sax doesn't have to
Speaker 1: quit his day job of being a VC.
Speaker 2: Is being a VC, Yeah, I guess that is it
Speaker 2: a real job.
Speaker 1: Well, it's the intersection of VC in podcasting.
Speaker 2: It's obviously effect on the path heading there.
Speaker 1: And then of course at the center of it all
Speaker 1: is Peter Teal. He doesn't have an official capacity in
Speaker 1: this administration, but he's the person who introduced Trump and JD.
Speaker 1: Vance in twenty twenty one, a key investor in Anderill
Speaker 1: and a significant donor to Trump and Vance for many.
Speaker 2: Years millions and millions of dollars. And I want to
Speaker 2: add that the guy who used to be CEO of
Speaker 2: Teal's personal philanthropic foundation that is most famous for paying
Speaker 2: kids not to go to college, has been tapped by
Speaker 2: Trump to be Deputy Secretary of the HHS, helping RFK
Speaker 2: Junior Maha make America healthy.
Speaker 1: Again, make America healthy again. So that's where some of
Speaker 1: the leading lights of the mafia are today. But to
Speaker 1: understand why we call them the Papal Mafia, I need
Speaker 1: to take you back to the fall of two thousand
Speaker 1: and seven.
Speaker 2: Q MGMT.
Speaker 1: Two thousand and seven was, of course, the golden age
Speaker 1: of MGMT and prestige television. The Sopranos are just at
Speaker 1: its final episode and then Fortune Magazine prints this photo.
Speaker 1: Credit to Robin Toomey for the indelible image. Cary, can
Speaker 1: you pull it up and just describe it for anyone
Speaker 1: who doesn't have it burned onto their eyes?
Speaker 2: Well, red lacquer tabletops, a bunch of I mean, I'm gay,
Speaker 2: but I still understand a good looking man. And these
Speaker 2: are a bunch of guys dressed like they belonged to
Speaker 2: Leonardo DiCaprio's pussy Possy.
Speaker 1: You're also vegetarian. There's a steakhouse vibe here as well.
Speaker 2: Being steakhouse vibe. There's an oil painting of venice in
Speaker 2: the background, a lot of whiskey and most absurdly, poker chips.
Speaker 2: But it's giving mafia.
Speaker 1: There's also a baseball bat giving mafia. Do you recognize
Speaker 1: anyone in the picture. No, well, two of them are
Speaker 1: somewhat recognizable, Peter Teal and Rehealth.
Speaker 2: Yeah, Speedertael in Halfman. They just look different. Now, that's
Speaker 2: why I said that's true.
Speaker 1: I mean, it's been some time has passed. They're also
Speaker 1: dressed kind of as they're going to a costume party,
Speaker 1: which which doesn't.
Speaker 2: Help definitely, which they seem to be enjoying. I don't
Speaker 2: know if I enjoy it so much.
Speaker 1: So in this photo is almost every single member of
Speaker 1: the PayPal Mafia. They've been using this term in their
Speaker 1: own circle, you know self. Self given names of groups
Speaker 1: can be on the embarrassing side, yes, but it was
Speaker 1: this photo, which is very iconic, that cemented them as
Speaker 1: the PayPal Mafia as far as the wider public is concerned.
Speaker 1: Right in the front are PayPal founders Peter Teal and
Speaker 1: Max Levchin, who Fortune called the don and the conciliary
Speaker 1: of the.
Speaker 2: Mass, and Max is the Conix the conciliary.
Speaker 1: To get the full picture of how they got inducted
Speaker 1: into this elite steakhouse brotherhood.
Speaker 2: Dream, by the way, I just have to say, we have.
Speaker 1: To go all the way back to the founding of PayPal,
Speaker 1: which started with a different name, which was Confinity not
Speaker 1: as Good, Not as good too much like connad by
Speaker 1: Teal and Levchin. And then in two thousand they merged
Speaker 1: with a company called x dot com, which it was
Speaker 1: an online banking platform you know who that was founded
Speaker 1: by By two thousand and one, the combined company was
Speaker 1: known as PayPal. This is way before Meta or ABNB
Speaker 1: or way way before open Ai.
Speaker 2: Yeah, it's funny because I think back, I mean, two
Speaker 2: thousand and one is nine to eleven. I mean it's
Speaker 2: that's really early Internet. And I, you know, as a
Speaker 2: young person, was not interfacing with PayPal.
Speaker 1: This is more like Netscape. Oh yeah, a little bit.
Speaker 1: Maybe he was at Yahoo even around those Yeah.
Speaker 2: YEAHO was around because I used to use yahooligans.
Speaker 1: But this was just a few years after Google was
Speaker 1: founded in nineteen ninety eight. But there were some very
Speaker 1: big differences between how these two future behemoths, Google and
Speaker 1: PayPal were run, and a lot of it had to
Speaker 1: do with culture. As that two thousand and seven Fortune
Speaker 1: article explains, a few of the PayPal mafia had some
Speaker 1: choice words about the Omerta the PayPal culture. The former
Speaker 1: CFO of PayPal said, quote the difference between Google and
Speaker 1: PayPal was that Google wanted to hire PhDs and PayPal
Speaker 1: wanted to hire people who got into PhDs and then
Speaker 1: dropped out. It is, he said, a different temperament.
Speaker 2: Well, right, and you can absolutely see how Peter Tiel
Speaker 2: would later incentivize people to drop out of college with
Speaker 2: the foundation.
Speaker 1: And these weren't even PhD students, were undergraduate, that's right.
Speaker 1: But so you know, back in the early days of PayPal,
Speaker 1: there was this concerted effort to not hire anyone affiliated
Speaker 1: with any kind of establishment organization. Teal and Levchin wanted
Speaker 1: workaholics who weren't consultants, weren't MBAs, and weren't part of
Speaker 1: the kind of elite establishment culture.
Speaker 2: So like, who was the ideal profile for this.
Speaker 1: Well, co founder Max Levchin said that hiring was sort
Speaker 1: of a process of finding like minded people. He said
Speaker 1: he was looking for, quote, someone just as geeky and
Speaker 1: who doesn't get laid very often. For the most part,
Speaker 1: this worked. Elon was quickly ousted because he tried to
Speaker 1: mandate some kind of technological overhaul, but that bad blood
Speaker 1: that once existed has been put to rest, and according
Speaker 1: to Walter Isaacson, who wrote the most biography. Musk couch
Speaker 1: surfs on PayPal mafia couches when he's traveling.
Speaker 2: Between hotel That's how you have one hundred billion? Is
Speaker 2: you couch service?
Speaker 1: Exactly? That's right. There are stories back in the day
Speaker 1: of disagreements turning to wrestling matches again. Another preview of
Speaker 1: that that the yet to happen cage fight between Musk
Speaker 1: and Zuckerberg. But it was it was quite the vibe.
Speaker 2: And it's I mean, it's very funny because it is
Speaker 2: an anti establishment vibe that's so clearly yearns to be
Speaker 2: this anti establishment.
Speaker 1: Right. It's like totally like teenage. It's like a teenage
Speaker 1: sort of sleepover on the you know, with this money
Speaker 1: and as she drinks as that's right, as you are.
Speaker 2: But they're like, it's not a sleepover, it's just a
Speaker 2: gathering of boys.
Speaker 1: But this mindset was really cultivated by the libertarian leaning
Speaker 1: Peter Teal and there is this inherent sort of culture
Speaker 1: and personality of the Papal Mafia that may in some
Speaker 1: sense help explain why these contrarians went on to be
Speaker 1: some of the most successful entrepreneurs and vcs in Silicon
Speaker 1: Valley history. For reference, David Sachs is thought to be
Speaker 1: worth in hundreds of millions, Levchin apparently about a billion,
Speaker 1: Teal closer to ten, and Musk in the hundreds of billions.
Speaker 2: That money does not seem real to me, but whatever,
Speaker 2: I don't exactly know how to wrap my head around
Speaker 2: that level of money, but it does seem like PayPal
Speaker 2: was such a giant Unicorn success story that all of
Speaker 2: these guys had enough money to keep seeding this huge
Speaker 2: wave of big companies and apps that came as the
Speaker 2: iPhone and app store exploded and the digital economy boomed.
Speaker 1: Yeah. I mean, there's a reason they call it the
Speaker 1: PayPal Mafia. And if you've watched The Sopranos or any
Speaker 1: mafia movie or TV series, you know like when you
Speaker 1: need a loan or when you need some money to
Speaker 1: start your business, you go to the godfather or one
Speaker 1: of the one of the captains and they gave you
Speaker 1: some money to start your thing, and then they own you.
Speaker 2: That's right, they own your ass.
Speaker 1: And apparently, you know, this relied most heavily on the
Speaker 1: wallet and mind of Peter Teal, at least initially.
Speaker 2: So PayPal is like the patriarch of a very wealthy family,
Speaker 2: and the PayPal Mafia is the offspring of that family.
Speaker 2: And when they all moved on, they put money into
Speaker 2: different companies with similar principles to PayPal, or founded companies
Speaker 2: based on their previous experience. And you know, now members
Speaker 2: of the PayPal Mafia are some of the most influential
Speaker 2: players in Silicon Valley and DC.
Speaker 1: Yeah, and I think the whole tech industry in some
Speaker 1: sense has taken on the ethos of the PayPal Mafia.
Speaker 1: I mean, we talked about in the early days how
Speaker 1: Google was kind of opposed in some sense to PayPal
Speaker 1: Mafia and how they did business, and there's still some
Speaker 1: of that, but suddenly this is now the dominant culture
Speaker 1: in Silicon Valley.
Speaker 2: And I think now, as I was just saying, traits
Speaker 2: that will carry into the current administration. You know, if
Speaker 2: that doge listing tells us anything.
Speaker 1: Eight hours a week, lo pey no sleep No.
Speaker 2: But I just think in terms of why it was
Speaker 2: interesting is because you can just trace the roots of
Speaker 2: so much of the wealth that has come out of
Speaker 2: technology in the last twenty five years, and it's wealth
Speaker 2: that is so concentrated.
Speaker 1: Yeah, And to be fair, these guys are also good branders.
Speaker 1: I mean, like if Goldman started talking about the Goldman
Speaker 1: Ges or the McKinsey mafew, you would also see like
Speaker 1: the fingerprints of a very specific group all over corporate America.
Speaker 1: But in some sense, these guys weren't afraid to say
Speaker 1: the quiet part out loud and to kind of claim ownership.
Speaker 1: What I find really interesting is we look ahead, is
Speaker 1: that you know, it's easier to be on the outside
Speaker 1: throwing rocks, it's harder to be on the inside picking
Speaker 1: up shots of lahs. So as this group has essentially
Speaker 1: now become the mainstream and the establishment, how are they
Speaker 1: going to deal with that? Right?
Speaker 2: Because they don't want to be the establishment. I mean,
Speaker 2: that's what's really interesting watching the inauguration, is like, these
Speaker 2: are people who built themselves in the anti establishment figures.
Speaker 2: You can't really be anti establishment and be that close
Speaker 2: to the executive branch, you would think. Or maybe you can,
Speaker 2: and it remains to be seen, but I just, yeah,
Speaker 2: I don't know how much the libertarian ethos will really remain.
Speaker 1: That's it for this week for tech Stuff. I'm Os
Speaker 1: Voloshian and I'm Kara Price.
Speaker 2: This episode was produced by Victoria Dominguez, Lizzie Jacobs, and
Speaker 2: Eliza Dennis. It was executive produced by me Kara Price,
Speaker 2: oz Valoshian and Kate Osbourne for Kaleidoscope and Katrina Norvel
Speaker 2: for iHeart Podcasts. The Engineer is Biheied. Fraser and Jack
Speaker 2: Insley mixed this episode. Kyle Murdoch wrote our theme song.
Speaker 1: Join us Next Wednesday for tech Stuff the story when
Speaker 1: we share an in depth conversation with author Nathaniel Rich
Speaker 1: about the psychological effects of colonizing mars.
Speaker 2: Please rate, review and reach out to us at tech
Speaker 2: Stuff podcast at gmail dot com. Do they want to
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