Bond crisis looming? GOP abandons DOGE, Google disrupts Search with AI, OpenAI buys Jony Ive's IO
Speakers
David Friedberg
— CEO, The Production Board
Chamath Palihapitiya
— CEO, Social Capital
David Sacks
— General Partner, Craft Ventures
Jason Calacanis
— Angel Investor / Founder, LAUNCH
Summary
The All-In hosts open on the bond market, where a weak $16 billion 20-year Treasury auction pushed yields higher just as the House passed the big beautiful bill, and debate whether rising US and Japanese yields mark the start of a debt spiral. They then cover Google's I/O week, with AI mode moving into search and a $250 per month AI Ultra subscription bundle, and OpenAI's $6.5 billion all-stock purchase of Jony Ive's design startup io. David Sacks recaps his Middle East trip and the new AI acceleration partnership framework that lets Gulf states buy American chips in exchange for matching US investment. The show closes with a CRISPR base editing breakthrough and an argument that scaling US energy production, not austerity alone, is the real fix for the fiscal problem.
- A weak 20-year Treasury auction pushed yields higher and knocked major indices down 1.5% to 2%.
- CBO debt models assume 3.6% rates while the 30-year sits above 5%, costing about $350 billion a year per extra point.
- Chamath expects the 10-year past 5% and the 30-year near 6.5%, and would sell US debt in favor of gold and Bitcoin.
- Japanese 40-year yields spiked and Japan's 20-year auction was the worst since 1987, raising yen carry trade unwind risk.
- Google's AI mode rollout and the $250 per month AI Ultra bundle point to a shift in revenue mix toward subscriptions.
- OpenAI acquired Jony Ive's io for $6.5 billion in stock; the device form factor, pendant or glasses, is still unknown.
- The Gulf AI framework requires dollar-for-dollar US investment and 80% American-operated chips on an Nvidia and AMD stack.
- Hosts argue US power generation is the binding constraint on AI, robotics and the fiscal outlook, with China scaling far faster.
Ideas
Market refuses to fund widening US deficits.
Wednesday's $16 billion 20-year Treasury auction was small relative to the hundreds of billions sold each quarter, yet there were essentially no buyers and the market was dry, which forces the government to pay up. CBO's debt projections assume a 3.6% interest rate while the 30-year is already at 5.1%, and every incremental 1% above 3.6% costs roughly $350 billion a year in extra interest. That makes the problem recursive and nonlinear: higher rates force more issuance, which pushes rates higher again, and with the House bill widening the deficit the market is signalling it does not want to fund the debt.
Sell US debt as yields spike.
Rates are escalating quickly since liberation day: the 10-year is around 4.5% and should be past 5% by the end of this year, and the 30-year is on a path past 6.25% and possibly 6.5%, far beyond what anyone considered a reasonable level for the US economy. The House added roughly $4 trillion to the debt after failing to pass even a $9 billion rescission, the bill's math was run at CBO's 3.6% rate rather than real rates, and ratings agencies have started downgrading the US. His stated response is to delever from the United States and sell US debt, and he expects the bond market to act decisively against the US if the Senate does not fix the bill.
Own gold and Bitcoin against US debt.
If the fiscal path forces investors to delever from the United States and sell US government debt, capital moves into hard, non-sovereign stores of value. He says explicitly that you will own things like gold and Bitcoin, notes both already started to spike in the days around the failed auction and the US ratings downgrade, and expects the downgrade cascade and rising yields to keep pushing money in that direction.
US power scaling is the generational trade.
81% of the incremental power generated in the US last year came from private enterprises financing short-duration power against credit and transfer markets, and the House changed those rules at the 11th hour, so those actors will rationally stop building. Elon has already flagged a possible power capacity issue by the middle of next year; fewer electrons means prices go up, it is inflationary, and power has to be rationed between AI data centers and homes. Gas turbines are sold out until 2030 because China makes them all and nuclear takes until 2035, so he calls scaling US energy production this generation's Manhattan and Apollo project and argues private capital is ready to fund it if the financing markets are not decapitated.
Tax-equity repeal breaks US solar financing.
The short-term power incentives stripped out of the bill at the 11th hour are precisely what makes residential and industrial solar and battery storage financeable through the tax equity and credit transfer markets. Take the financial incentive away and the underwriters cannot underwrite the projects, so they simply stop doing them; he describes walking through the options and concluding that when the tax equity route for residential or industrial solar goes away, there is no near-term new energy at all.
Japanese bond selloff can cascade globally.
Japanese 40-year government bond yields jumped from 2.5% to 3.5% in a matter of days and Japan's 20-year auction was the worst since 1987, mirroring the weak US auction. Japan owns about $1.1 trillion of US Treasuries, so this does not stay local: a massive climb in Japanese yields is a massive selloff in credit, and historically when the global reserve currency nation's debt sells off it is part of a broader global selloff. Albert Edwards' point is that recent developments in Japan may mark the end of the favorable investment cycle established since the 2008 crisis, and any one of these markets unravelling can cascade through global financial markets.
Fed bond buying would devalue the dollar.
If reluctance to own US Treasuries keeps pushing yields higher, the only way to hold borrowing costs down for businesses and individuals is for the Federal Reserve to step in and buy those bonds itself. That monetization is what devalues the dollar, so the auction and deficit stress ultimately expresses itself in the currency, not only in rates.
Google pivots to AI subscription revenue.
At I/O Google pushed AI mode toward ubiquity in search, effectively flipping the switch to replace classic search over time after testing it on a small group. More importantly for the business model, they bundled AI Ultra at $250 a month including YouTube Premium, 30TB of storage and Flow with Veo 3, Gemini and Imagen, which points to a high dollar volume consumer subscription that could meaningfully shift Google's revenue mix away from ads and answer the revenue-per-query question. The relaunched Labs gives them a test bed to try new modalities and graduate the winners, and he calls this the week Google really pivoted into the AI business model.
Google is no longer caught flatfooted.
Google has taken the step everyone had been calling for, risking its dominance in search by moving to a more AI-based model, and it has threaded the needle between keeping the old UI and product and incorporating the new AI UI. It feels like a transitional move rather than the end point, but given the need to protect the search business while developing the AI business it is a good compromise. It shows Google is in the game and will not be caught totally flatfooted while the world disrupts them, and the market liked it with the stock up about 5%.
Watch AI mode default and device risk.
AI mode becoming the default for a large swath of existing Google users is a fait accompli and only the timing is being debated; the market is betting on 18 months and he suspects less than a year, with the open variables being the AB tests, which user cohorts shift, and the impact on cost per click. The risk to watch is the innovator's dilemma: while Google perfects the current lily pad, OpenAI buying Jony Ive's io signals a jump to a next-generation device, so Google should shorten its measurement window and start allocating resources to new form factors rather than spending five years reacting.
Gulf AI deals unlock American chip demand.
The new AI acceleration partnership framework replaces the October 2023 Biden licensing blanket that had frozen Gulf data center buildouts. For every dollar these countries invest in regional data centers they must invest a dollar in US AI infrastructure, and at least 80% of the chips in the regional data centers must be owned and operated by American cloud service providers or hyperscalers, running on an American tech stack, explicitly Nvidia and AMD and those types of companies. These states are resource-rich, have enormous capital and real AI ambition, and the alternative is that they build on the Huawei plus DeepSeek stack, so the framework unlocks large incremental demand for American chips, improves the trade balance and makes the American stack the global standard.
Chinese IP arbitrage dampens US biotech.
The US still holds an advantage in gene editing, but a lot of technology developed in the United States is being transferred to China, where companies are taking American IP and bringing biotech solutions to market. He says that dynamic has already had a very big dampening effect on the biotech market, and that the remedy would be tighter IP controls inside the trade negotiations.
Energy capacity gates everything; US trails China.
Abundance comes in four forms, food and calories, labor through automation, lifespan, and energy, and energy is the gating factor that unlocks the other three because there are no labor savings or productivity gains without it. The US produces about 1 terawatt and is on a path to 2 over the next 15 years, while China is at roughly 3 terawatts scaling to 8 and is adding the equivalent of the entire US power capacity every 18 months, mostly nuclear, solar and hydro. He considers that chart more important than the budget deficit chart and says that if the US were adding a terawatt of capacity a year he would stop worrying about the $38 trillion of debt.
Robots will collapse physical build costs.
Automation unlocked by AI means an explosion of robots, most of them not humanoid, that let humans get an enormous amount of work done and could cut the cost of putting up a large building by 50 times. China already demonstrates it with automated drilling, automated mining and automated building, where a multi-lane bridge goes up in days. He argues the technology exists today and the only missing input is power, so the robotics unlock is gated on energy rather than on the technology.
Up Next
This All-In Podcast video, published May 24, 2025, features David Friedberg, Chamath Palihapitiya, David Sacks discussing TLT, IEF, GLD, BTC, Power infrastructure, TAN, Japanese government bonds, UUP, GOOG, NVDA, AMD, XBI, ROBO. 14 trade ideas extracted by AI with direction and confidence scoring.
Speakers: David Friedberg, Chamath Palihapitiya, David Sacks · Tickers: TLT, IEF, GLD, BTC, Power infrastructure, TAN, Japanese government bonds, UUP, GOOG, NVDA, AMD, XBI, ROBO