Trump's First 100 Days, Tariffs Impact Trade, AI Agents, Amazon Backs Down

And according to the thread that you shared, somewhere around early June, we're going to expect warehouses trucking the entire supply chain maybe to start to seize up or layoffs.

And what has happened is a 60% decline in bookings of ocean freight from China to the U S I mean, so that's really, really pretty dramatic, like probably exceeding what was expected.

I think that you sort of phrase that we could do the research paper and we could do Aspen Institute as a bad thing, but also it could be a bad thing if you're the small business owner right now who has 30 employees and you just literally don't know what you're going to do next month.

Okay. I don't remember the shelves being empty, which is now the new panic the media is trying to create. So look, there's a lot of pant sweating that's occurring here that's being fueled by the media.

And at the core of it was a feeling by them that Amazon had abandoned them as American purveyors and sellers of goods. And that Amazon on the margins had a tendency to help competitors from abroad come, stand themselves up and compete and essentially cannibalize on price and margin.

And those feedback loops are there. I mean, the Trump administration is going to act on this, and there's an act that's coming out of Congress as well to shut down the foreign import of records. So those feedback loops are there in ways that I don't know if they were there in the past.

Whereas with AI, it's almost free. I'm calling thousands of them a day going, hey, this load looks like it's a good match for you. Are you interested? And then we activate them on the platform. That's new work that wasn't gonna happen before not just a replacement.

And so I think that'll probably be actually like 90% of the usage of AI in the future will be things that if we look back and we snap the line right now, we said this is what knowledge work is today, 90% of AI usage will be things that we don't do today. 10% will replace what we're doing in some areas.

I think that's the right take because Chamath, I can tell you in our firm, we would never have associates or researchers or analysts, Sacks, you also were in this line of work as well, Venture Capital, you would never have them review legal documents.

Yeah, I tend to believe that's true. I think the customers that we sell into at 80, 90 are largely large enterprises as well, so not dissimilar to Aaron's customer base.

All that matters to me is that Uber is the anti-tariff stock. It just does great. It's not impacted by tariffs. So here we go.

And so lots of implications, like massive implications to what the software business model is in the future. I would argue strongly that it's a massive TAM increase because now software starts to go after labor spend. It completely changes the dynamics of then, you know, how do you build a moat in a world of AI agents?

Let me say it differently, Sacks. I think we have not yet figured out how to move the budgets from experimentation to mainline production, meaning where large chunks of the US economy are comfortable enough with the ways in which hallucinations are managed such that they will replace legacy deterministic code with this new probabilistic model-generated code, meaning model-enabled code.

Yeah, I mean, the bleak scenario, which is, I don't really think it's going to happen. I think that the administration doesn't want this to be their legacy, that they created a policy that just kind of tanked small business and supply chain. So I don't actually think this is going to happen.

President Trump shifted the conversation away from this globalist consensus and he's now redefined the debate but it is now up to Scott Besson, the Treasury Secretary, Howard Ludnick, the Commerce Secretary, Jameson Greer, the US Trade Rep and so on, the Trump trade team to now negotiate these deals, stick the landing and I agree with you to the extent that the sooner that is done the better because it is good to provide business certainty.

If we're sitting here in nine months and you're saying this and there are no deals, I would say that you're right. What Howard Lutnick said last week, and again, we may have all gotten caught up in the knuckle tattoos and we missed this, but he was very clear. We have a country, a deal is already done. We're convening parliament. It's going to be the first of many. So for all we know, there's like 30 deals that are waiting in the wings, and the first one will set the tone.

I don't think that'll happen. I don't think that'll happen. I think we will end up in like I'm with Ryan, like we will end up in a good spot because we'll iterate through this. My only point is there's an alternative path that could have occurred.

Now, I think it's pretty easy to imagine where this goes, which is you'll be able to connect an agent to all of your SaaS apps. So, it won't just be four applications, it'll now be connected to dozens of applications, including ones that already have your data. And it's going to know what actions it's possible to take in those apps.

But I do think that this sets us up for a Trump boom in the future. It's just that a lot of these changes take time to play out.

This past week, Besson said that the tax bill will allow you to fully deduct all the PPE and all of the incidental costs of building a factory... The point is, that thing would create an absolute economic bonanza if it were to get passed.

The thing that the Chinese did that was so brilliant, which we still don't have an answer for, is they have these national champions. And being a national champion allows you, and we'll talk about this in AI, it allows you to blur the lines between the public and private partnership. It allows you to blur the law. It allows you to blur capital. And I'm not saying we have to do that. But what I am saying is we need to have our own answer to it.

And so you just stimulate a manufacturing boom in the country. We incentivize automation across the manufacturing. We use that as a competitive weapon to go and compete with the sort of lower cost labor that happens internationally.

Aaron mentioned this and I've mentioned this before, but I think that there are four things that really matter, batteries, AI, Pharma API, and Rare Earths. That now is on the agenda.

China over the last 25 years has been able to strategically annihilate our rare earth processing capability and our ability to cast rare earth magnets. We just sat back and watched as the market basically went to the lowest bidder, which was being subsidized by the Chinese government, which the WTO allowed them to do. And now we have a critical dependency in our supply chain on China for basically every electric motor in every product, including cars.

So I think for the first time in decades, we've actually started to make real cuts in government, real cuts in the federal workforce. And look, we'd like to do more, but that is a huge shift in the conversation.

And you see that on the power side, right? You're going from 100 megawatt datacenters to 300 megawatts to, we're just starting to now see the first gigawatt power datacenters. I don't even think they're live yet, but this is where they're trying to get to. And I don't think it's beyond the realm of possibility that we could be at five or 10 gigawatt datacenters in the next, I don't know, several years.

I think the question was, what is the dimension? Like, you know, we use Gemini. So for many tasks at 80, 90, we use Gemini. It's incredible. But for most of our co-gen, we use Anthropic and Claude kicks ass.

What I would say is that what they are encountering is the trough of disillusionment... And I think what has happened now is people have spent billions and billions of dollars. I think you can see it in the revenue traction of the AI companies. But I think where we are today is that there are some real technical complexities that have not been solved.

So we went from basic LLMs, Totally. You know, which don't require that many tokens to give you an answer, to the reasoning model, where you can spend a thousand times more tokens just getting one answer to a question. And now the agents are going to be even more token intensive than that. So the amount of compute required to serve all these new applications is going to be massive, which is why I think the CapEx build out actually makes sense.

But I'll just recall that Larry Summers' main argument for why this would not work out is that the market was down. Do you remember that? That was his evidence that this wasn't going to work. It was all about the market now pricing in lower expectations. Well, guess what? The market is actually up since Liberation Day on April 2nd.

It could have been done in a more thoughtful, well-communicated pattern instead of, hey, let's do barrel rolls with the airplane. I don't disagree with you, Aaron. And I can tell you we've already started to see layoffs.