E160: 2024 Predictions! Markets, tech, politics, and more
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I found out about a free bird purchase that is just... You were there, Chamath. You heard what he bought. What did I buy? Pickles? The quinoa? What was it? No, no. Sax, you missed this because you are a sun bird now and the rest of us are snow birds over the holidays. But the three of us have been hanging out, skiing, having dinner for a couple of weeks. And we had a little wives dinner. And one of the wives was complaining about free birds purchasing. Oh, my God. So...

So, Friedberg... Do you have pictures of the radiation suits? I don't have pictures of the radiation suits. I'm trying to find them, but... Radiation suits? I thought you were going to talk about like Brioni suits or something. No. Radiation suits? You know how you went into full-scale panic mode during COVID and you had your whole outfit, your hazmat suit? Friedberg, just because he's panicked about nuclear proliferation, has bought suits for his entire family...

thousands of dollars of radiation suits and nuclear fallout. And he bought one for his dog.

Dogs. Dogs. Dogs. Sorry, dogs. For Monty and Daisy. I should send you guys the photo of the dog. We'll give a bunker? I mean... I've got it all taken care of. You need a bunker first, right? I think that's underway as well. How do you get to your bunker, Freeburg? With the pilots that you'll be asking to leave their families? Or will you be protecting them with the guns that were stolen from your house?

At least you'll have the thousands of pickles you've made. I didn't know Friedberg was a prepper. Did you know this, Sax? Because Sax has a little prepper. No, Sax Friedberg was howling because he was so mad. He made like thousands and thousands of pickles and nobody would eat them, including himself. Because they were so terrible. You literally bought a radiation pod for your dogs. Yeah, so that's their air filter on the right so that they don't breathe in the nuclear fallout. Yeah.

I kind of like the prepping. Thank you, sir. Yeah, it's good. You guys don't understand. There's a reason evolution happens in moments of what we call punctuated equilibrium. There's a massive event and certain, you know, things survive. And then that becomes the proliferant species going forward. This is the moment. Be ready. So you're saying paranoid rich white guys are going to survive the nuclear holocaust is what you're saying. Paranoid rich white tech guys are going to make it to the other side.

Connor. How exciting. How exciting. What a great future. What a future. Chamath and I are like, we'd rather die. It touches my erogenous zones. Just the idea of it. When Sax and Freeburg are the only two reproducting males left. Delicious. Can you imagine the gene pool? It's like literally, this is like some dystopian science fiction. This is like a Black Mirror episode. You'll have the pastiest preppers in the world. Pasty preppers to inherit the earth. I'm going all in.

Welcome back to the program, everybody. It is the new year, but it's the same squad. Your four besties are here. Shamath Palihapitiya. He is now not just the dictator. He is chairman dictator calling in from the slopes with his beautiful

Burt Sweater. That's a great sweater. It's a major turtleneck going on there. And we have David Friedberg. Also looks like he's on the slopes and he is wearing his Ohalo, his Ohalo, not Mahalo, Ohalo hat. He is branding here on the All In podcast, sneaking in a little branding for his new sweatshirt.

startup that he is the CEO of. David Sachs is with us, of course, and he cleaned up. He cleaned up a little bit here. The hair was getting out of control. We had a lot of commentary on the hair. Apparently, you cleaned up shop. I pivoted from the Jefferson to the Gecko. All right. So everybody loves when we do our predictions. And so we're going to start off 2024, big year for us. We've got a lot going on here at All In, and we're going to just do some predictions here.

So let's get started. We're going to kick it off with Saks doing his...

prediction for the biggest political winner in 2024. Sax, who do you have? What's your prediction for who's going to be the biggest winner in 2024? We're bracing. Yeah, well, you're going to love this, J. Cal, but my prediction for biggest political winner in 2024 is Vladimir Putin. Oh, really? 2023, last year, was the year that Putin turned it all around. He stabilized his economy after the West's attempt to sanction him

to his knees, tried to collapse his economy. We issued basically an arrest warrant from the International Criminal Court. He has gained the upper hand militarily in Ukraine. I think that 2024 will be a year of him consolidating gains in Ukraine.

potentially making new gains. I think that the stalemate narrative that our media has propagated about Ukraine will be exposed as a lie. I think the Russians are in fact winning that war. And what you're seeing is that his successful stance against the West in Ukraine has only made him more influential throughout the global South and in the BRICS countries, countries that

oppose American dominance and dollar hegemony see him as the man with a plan, as a bit of a conquering hero. And I think as Project Ukraine falls apart in 2024, it's only going to reinforce that sense that he's the big winner. Sacks, did you see that Argentina said they're not going to join BRICS and that some have said that was a bit of a blowback on...

the BRICS effort to end dollar hegemony? And do you think it's really impactful or is it just a one-off? I think it's a one-off. I mean, Millet won in a big surprise there because the country's economy has been such a basket case and he is very pro-American, pro-Israel, pro-West. And so he has distanced Argentina from BRICS. But I think that's a little bit of a one-off. The larger issue is that

The whole global South now is really resisting the collective West in a number of different ways. And so our influence and dominance is slowly declining across the world. And there's many examples of that. So we can get into it throughout the show. Just to be clear with the audience, you're not rooting for Putin here. You're just predicting he's the biggest winner. I'm not rooting for it to happen. I've got other answers here that I think are negatives.

as well. I wish we had made a peace deal and avoided this whole Ukraine war. I think that was a gigantic mistake by the West. So, yeah. You've been clear about that. We have put Putin in this position to be the victor because we plunged into a war without thinking it through. And the truth is we can't give Ukraine enough aid to have them actually win this war.

So we've contributed massively to Putin being this victor. And, you know, it was Fiona Hill, who is a Russia hawk in the foreign policy establishment, who pointed out in a speech, I think, over the past year that the global south is using

This Ukraine war as a proxy to rebel against the West. So in the same way that we're using Ukraine as a proxy against Russia, she said the global South was using Russia as a proxy against the West as a way to basically dethrone American hegemony all over the world. And that's a very negative trend.

So if you had Ukraine and Putin in under seven minutes for this episode, if you bet the under, you win. Freeberg, who's your prediction for the biggest political winner in politics for 2024? I'm going to go with independent third party in the US. We saw the stats last week. I think we reviewed them with a poll that showed that 60 plus percent of people are claiming interest in a third party or an independent effort outside of the traditional damn Republican split. And if you look at

In 1992, Ross Perot got 18 to 19% of the general election vote. RFK Jr. is obviously running on an independent ticket this year. We'll see if he can even get on the ballot in a bunch of states. But I think that whether it's him or the interest in developing a third party in the US, that there may be a big winner this year that

challenge as the traditional two-party split in this country. All right. And Chamath, who do you got for your biggest political winner in 2020? Same. I wrote the independent centrists. I think this election starts the breakdown of the two-party system. Same, same. Look at that. RFK this week actually just got added to the Utah ballot. I think that this could be the most meaningful, long-lasting change that we see in American politics is from the RFK candidacy.

I mean, how many people do you guys know that were Republicans that don't want to be Republicans anymore or were Democrats and don't want to be Democrats anymore? It's really like most so many people. I know more of the latter. I know more of the latter, actually, than I do. Right. Yeah, that's true, too. Yeah, that's what I think. I think I think Republicans are still firmly established. I think people are embarrassed to be a Democrat right now. Interestingly, I also picked the dark horse presidential candidate who will be treasonous and corrupt, a.k.a. Trump and Biden. I think we're going to actually see some dark horse candidate, maybe Trump.

Beat these two in the rematch that nobody wanted. Wow, that's crazy. Three of the four of us picked the same thing. No coordination beforehand. Yes, and this is done blind, folks. And Nick has my notes here so he can vouch for me here.

And just to go back and look at 2023, what we predicted, Sachs, you said Asian American college applicants were going to be your biggest winner in politics. That actually turned out to be pretty prescient, right? Yeah. I mean, I was betting on court cases overruling affirmative action, and that's exactly what happened is that

Supreme Court ruled against affirmative action in college admissions, saying that it unlawfully discriminated against Asian Americans. So yeah, that worked out exactly right. So that's a great prediction. I think, Chamath, you had perhaps the best prediction of even the entire show last year. Your spread trade, long Nikki and short DeSantis, that paid off in spades. Well done there.

Freeburg, you had MBS and Saudi have the most important year in their modern era. That's actually pretty pressing as well. They seem to be...

And then in August, the US ramped up pressure on Saudi Arabia to sell oil in dollars, not yuan. Let me just pull this up for you guys, which was obviously a big follow-on story where the US tried to counter the actions, which is continuing obviously today, where there's a back and forth. And Saudi, as I mentioned last week, I think is in this really interesting central pivot position between all of these competing countries.

major nuclear powers and fighting for influence. And this is a big story and it will continue to be this year. And modernizing society. That photo of the fist bump. I mean, what a mistake that was where Biden just gratuitously insulted MBS. Compare that to the photo of Putin visiting the Middle East and meeting, shaking hands with MBS, which happened just a few weeks ago. And compare the welcome that Putin got

in Saudi Arabia and I think UAE to the welcome that Biden got. It's just two completely different levels. It was a very warm embrace on both sides. I think it was UAE. They literally had a parade for him where they had the colors of the Russian flag up everywhere. So, you know, we've tried to portray Putin as this global pariah. We've tried to turn him into this global pariah, but it's not working because, you

of the way that he is defeating the collective West in Ukraine, I think that it's given him enormous cachet and influence in the global South and much of the developing world, which would like to stand up to American dominance, or at least is tired of American dominance. And if you double click on that article, the second one I sent on Washington trying to negotiate with the Saudis, you know, quote, behind the scenes, but obviously this all comes out.

They're asking assurances that Riyadh will use dollars, not yuan, to price oil sales, assurances that Saudi won't allow China to build military bases in the kingdom, and limitations on Saudi Arabia using technology developed by China. And in exchange, the U.S. will protect Saudi, will provide military protection, and will help them develop a nuclear program, which is an incredible opportunity.

demand. So obviously, this is an unresolved point. But this becomes a pivot moment for Saudi Arabia, they may become a nuclear power, use this as leverage as the US continues to try and keep dollar hegemony alive. And my prediction last year was that Trump would get indicted, win the nomination, and then agree not to run in order to get a pardon or something in that vein. And it looks like I'm going to get two of those three correct. We'll see on the pardon.

He has been indicted, obviously, and he looks like a lock to win the nomination. But we'll see. It seems like Nikki Haley's doing okay. We'll see. Biggest political loser of 2024 is what we're going to do next. Jamath, last year you picked DeSantis. I picked DeSantis. That was a pretty easy one. Sachs, you picked California. Also a pretty easy one. We know that California's gotten demolished because

Because specifically, California went from having a $76 billion surplus in 2022 to a $68 billion deficit now. Yeah, it's bonkers. Yeah. I don't think any of those were as obvious as they were in January of last year. I think DeSantis was leading. He was collecting a lot of big checks. And California hadn't imploded. And everybody knew that

They would be under pressure, but nobody expected to be, I think, this swift. So I don't think those were obvious. I think those were actually pretty decent picks. Okay. That's a good argument. And then, Freeberg, you picked debt issues for emerging nations. Debt markets start to unravel. IMF steps in. I'm not sure I have enough information to check in on that one yet. Any thoughts, Freeberg, before we go on to our predictions for Biggest Loser in 2024? I don't think we had any big unwindings like I had expected.

But these problems are bubbling and persist. You know, obviously, Argentina took a big step with the election there. That one was one of the countries that was most at risk of having a big event last year. But Chamath, who's your prediction for biggest political loser in 2024? The Kochs. I think on a dollar basis, they are the largest spender in Republican politics they have been. And they have been the most consistent negative indicator of value. And so if you just want to fade a trade,

I think you can pretty easily just find where those old school Republicans are putting their money and just kind of short it. And right now, as much as I was sort of long the Haley spread trade in 2023, I would probably now short that trade in 2024. Okay, switching it up. Mostly because of the Kochs. Freeberg, who do you got? Well, Sachs will like this one, but I think Ukraine might be the biggest loser this year as attention shifts continue.

to the brewing conflict in the Middle East during an election year like the US is facing continuing this funding of this Ukraine Russia conflict with US dollars is becoming a more unpopular

issue for people to support. And so I think because of all these competing interests and the political pressure, the US will probably not have the resources to commit to Ukraine. I think Ukraine's shot at being in NATO is going to fade away. And unfortunately, it seems like the country may be left behind by the end of this year. Sacks, what do you got? Well, I totally agree with that. And I would just add demographic decline or even collapse.

They've lost something like half a million soldiers in terms of casualties. They also, something like 10 million people have fled the country. I read recently that there's only about 20 million people left in the country and half of them are pensioners. So it's not even clear that the working population of the country is going to be able to support the pensioners. And of course, the war isn't close to being over yet. So there's going to be even more destruction that happens. So I agree with that pick.

I up-leveled my answer a little bit here to have the collective West as the biggest political loser. And Ukraine is a big part of that. Obviously, this huge bet that the collective West made in terms of pressuring and challenging Putin in Ukraine has completely crapped out. But I would also go much further than that.

you look at what's happening in Israel and Gaza right now, and I don't think that Israel's invasion of Gaza is going well at all. And again, just stepping back, these answers don't reflect my desire for what I want to have happen. It just reflects my honest assessment of who the losers are going to be. And I just think that Israel's

Invasion is not going well. It does not look like they're going to be able to militarily achieve their objective of destroying Hamas. Admiral Kirby, who's the Pentagon spokesperson, even said that the other day, which was a pretty amazing admission. At the same time, Israel is creating a huge humanitarian crisis in Gaza, something like over 20,000 people.

Palestinians have already been killed, over 50,000 wounded, something like 1.8 million of them have been displaced. And it doesn't look like it's going to let up anytime soon. As a result of this, Israel is facing, I think, a huge amount of condemnation internationally. It is becoming a bit of a global pariah. So that is not going well for America and the West. And then you're going to have a

both in the US and in Europe. I think that there's going to be tremendous disruption. Things are really not going well in Europe right now. Large parts of Europe are in recession as a result of losing cheap Russian gas. This is particularly true of Germany. And I think there's going to be some big shakeups in the European Parliament. And I wouldn't be surprised if there was

similar shakeups in the US election as well. All right. And I picked for my biggest political loser. I was going to go with the American voter, but I'm hoping that the American voters make better choices. And maybe we see some alternative candidates, as we said in the last one. And I went with Netanyahu here. I think, and again, this is just my assessment. This isn't what I want to occur in the world, obviously. But every major Israeli poll is just suggesting that they want him out. And they put the odds, Vox puts the odds of his ouster at 75%.

And obviously, yeah, Gaza is not going well. And it feels like there is a massive shift in terms of what was early support and obvious support for the terror attacks that occurred on 10-7. And any reasonable person would be supportive of that too. Hey, maybe what's happening in Gaza is not helping the situation and needs to be resolved. And maybe a different approach has to occur. And so I think Netanyahu is going to be the biggest loser in 2024.

All right, let's go on to the biggest business winner of 2024. Back to business. Last year, last year, in 2023, I predicted laid off tech workers starting startup companies would be the big winner. Chamath, you predicted Relativity Space, 3D printing, Rocket Company, and Saks, you picked America's natural gas industry, Freeburg, OpenAI. Wow, a lot of good choices there. I think OpenAI was a huge winner in 2023. Yeah, Freeburg?

Even with the chaos? I would say so. That was a good pick. Massive revenue. The highest market cap gain of the year, probably. Yeah, $30 to $90 billion. Yeah. American natural gas industry, that really actually cooked in 2023. Yeah, Sax? Yeah, it has new records. Good prediction there. That was a good pick. Yeah, good pick. All right, so let's go right to...

2024 predictions. Freeberg, you haven't let us off yet. So you're going to be the lead off batter here. What do you got? I'm going with commodities businesses, which I know isn't speaking a specific business, but there's a lot of ways to play it. And I think there's a big commodities boom that's coming back in 2024. There's been a lot of underinvestment relative to demand.

over the past call it 18 to 24 months coming out of COVID and with rising interest rates, a lot of folks have been selling down inventory and there now needs to be a build back up on inventory and supply. There's also a bunch of cash coming into the commodities markets that was sitting in treasuries as yields go down, that cash is coming back. So building the base back up, rebuilding stockpiles and supplies coming out of the past 18 months, obviously economic activity is strong and robust.

So commodities businesses are going to see a killer 2024. Chamath, what do you got? I think the biggest business winner in 2024 is going to be the bootstrapped startup and or the profitable startup. But the best will probably be the bootstrapped profitable startup. And I think the reason is that we are underestimating how cheap it's going to be to copy an existing business in 2024.

And so if you assume that these models are going to get 10 and 100 times better, and you assume the cost of compute is going to get 10 and 100 times cheaper, and you assume the cost of energy is going to get 10 times cheaper, you're no longer measuring in decades when a company will be subject to disruption. I think you're measuring it in, frankly, months. And so I think you're going to be able to create these companies for very cheap.

and essentially have them attack an existing business, which has upside on economics, because they have just a lot of people and a lot of processes that these

And GPTs can replicate for essentially free. So if you're profitable, you have the chance to survive. And I think if you are unprofitable, I think that you're going to be under a lot of pressure. I think it's a great pick. That's exactly what I'm seeing on the field in the early stage. Sax, who's your prediction for a biggest business winner of 2024? Who do you predict is going to be the biggest business winner? I'm predicting Anduril for its Roadrunner product, which it announced last year.

And this is a drone interceptor. So it basically intercepts drones. It's built for ground-based air defense. And the reason I say this is because if you saw recently what was happening in the Red Sea with the Houthis, the U.S.

was having to use $2 million air defense missiles to shoot down $2,000 drones. And that is not sustainable. So right now, we have a huge problem with asymmetric warfare where our adversaries are using very cheap missiles, very cheap drones, swarms of them. And they force us to exhaust our air defenses.

which are just way too expensive on a unit basis. And these cost hundreds of thousands of dollars, do you think? Yeah, I think that's right. I think the Roadrunner system costs hundreds of thousands of dollars, but it can be, it's reusable. So it's not like you just send one up to take out one drone. Reusable if it doesn't blow up. If it does blow up, I don't think you can reuse it. It basically takes off at loiters. This is basically an AI system where it's self-driving, I guess you will. It has operators, but, and then it returns back to its

base station after it's used. It's not like a kamikaze type

It's actually a drone killer. Oh, really? I think it is. I think it can do dual purpose. It can either intercept and blow something up, or it can return back to base. But we'll have to check in on that. Hey, and shout out to our friend Palmer. Lucky to come back on the program in time. We miss you. Shout out to our boy. Are you an investor, Sax, in Andro? No, I'm not. I'm not an investor, but I think I would be. Yeah. You know, so, yeah, Palmer. They've raised a ton of money. Palmer, great job. Yeah, no, Palmer, we'll all buy. Actually, I'm building a position right now. I've been buying secondary in Andro.

And for me, I was going to go with startups again. Wait, are you really buying secondary shares in Andral? I've been building a large position in Andral, yes. I'm trying to get to a 2% ownership position so I can join the board. So I've been using...

So shout out to my guy, we're lucky. I am going to go with for my biggest winner in 2024, training data owners like the New York Times, Reddit, X, Twitter, YouTube, etc. I think what we learned in 2023 was that the language models are starting to hit parity very quickly and that the real value is going to be in marketing.

And it may even become commodities and open source may win the day. So then I think the winner is folks who have the training data. And I'm actually proposing a new business model for these language models. I think now that we've seen this New York Times, an open AI lawsuit, I think there's a really great outcome here, which is a market based solution where if you have a chat GPT account, you can log in and federate with your New York Times subscription,

or, you know, any other subscription. And then it gives you the tier of ChatGPT-4 with the New York Times. And so that could be a win-win for everybody, or they could obviously pay a licensing fee. And so I think this is going to be an amazing turnaround for the entire content industry if the language models respect copyright owners and come up with a sustainable system where every year copyright holders can get some money in exchange for using their training data, whether it's on images or content. So, hi.

I am very bullish on... Jacob, maybe you should accumulate a 2% position in OpenAI through secondary purchases and get them to do that on the board. It's only $2 billion, yeah. No, I think... I mean, we didn't bring this up because it's broke over the holiday break, but I think Sam Altman's doing a great job of telling people he wants to do the right thing. And we discussed previously the licensing deal they did with

business insider in the parent company of it. Axel Springer, what do you think the deal with New York Times will look like? I think it's going to be a nine figure settlement for previous stuff, and then an ongoing licensing fee in order to have the New York Times in their training data. And then you'll be able to say, hey, what does the New York Times think of this, right? You could actually do queries about the New York Times in it. And I think the New York Times will come up with

a license that everybody can use their data if they pay this yearly fee. If you stop paying the yearly fee, then you can't train on it. And we're in uncharted territory. You're saying there's going to be a New York Times model and a non-New York Times model? Well, I think you could do two different things. One, you could do, New York Times could make their own model, right?

But they could fork their model or just to the user interface, say, if you want to query New York Times information and have that as part of your results, you have to have a New York Times account, right? So if you say, I want the best coffee machines, or what's the best coffee equipment? It says, oh, if you had Wirecutter, and a subscription to New York Times, we would include the Wirecutter results. And this idea that technologists can't

Do citations has been proven absolutely incorrect. There are language models out there that are using citations all the time. OpenAI, I think, will wind up losing the case if it goes to them out. I think they're going to pay a big licensing fee to your question, Chamath. My prediction then is that if this happens, this is not my pick, but I'm just going to tell you. I suspect that what happens is you'll get these yearly licensing fees and then one year

The New York Times just falls off a cliff. And when it comes time to renegotiate, then open AI says no. And they won't have a choice. Well, I mean, it's a possibility. But if you think about the Disney characters, you know, let's, I don't know if you saw Nintendo and Disney characters, you know, making stuff on Dolly or other things.

If you make derivative works on that, and you want to have that feature as part of your image creator, you just have to have a licensing fee. And so I think that there's a win-win here to be had. And I'm really interested to see the market-based solution, because I don't think this is a Napster situation where like OpenAI gets shuts down because OpenAI is too savvy. I bet you- The big difference between Napster and this is there, the content universe was limited and small. Here it's infinite and unlimited. And so how do you pay anything to anybody without-

I just think it's like without direct attribution of revenue, which is basically impossible, you're kind of making a value judgment, which I don't think makes any sense. I think doing a revenue licensing deal is impossible when you get into the weeds. When these business people sit down and actually start to try to figure out the bid ask, I don't know as a rational, coherent business person what you would model in order to present a number.

Yeah, so one suggestion would be what percentage of the model's creation was using the New York Times data. And I think people say one to 2% of the original chat GPT was built off a trading data was New York Times. And then if they weighted that heavily, Chamath, like let's say they said, New York Times is an authoritatively five times more important than these other sources. That could be upwards of five to 10% of the authority of that model. Yeah, but I understand. Yes, it's not easy, but what's the cause? Yeah.

Yeah, but what's the college for the... Are you telling me that an AI model... The music industry has this...

It's going to be like a 30, 40% cost of goods. You could say that chat GPT, or let's say Apple, I predict Apple will do this, right? They'll do a language model where they say 50% of the revenue that we generate from queries or subscriptions to this goes to the people we built it off of or the licensees. Sure, why not? Why not? The music industry already does that. That would guarantee the death of the startup ecosystem, and it would guarantee the lock-in of big tech.

No, I don't think so. You could build models that don't have the data and you could build models with it. So it'll be a choice by the person who builds the model and synthetic data might make it. So you don't need the New York Times, Chamath. It's early days for synthetic data. I don't have an opinion. I'm just reacting to this idea that 50% of cogs, then all of a sudden, these aren't software companies. You know, these software companies will have a gross margin of like 30%. Yeah. Well, what does Spotify pay for music?

You know, so the same argument is made for Spotify, you know, or Netflix when they were licensing content. That's the difference. It's limited in scope, meaning there's only ever one hit song from Rihanna that matters, or Jay-Z, or whomever, pick Taylor Swift. And so it's a very scoped content universe. And so you can ascribe value much easier because then...

The user goes and actually listens to that song over another. This is about something that's happening under the waterline where you don't know how the iceberg is. It's both. There are things under the model that do it. And then there's also quoting stuff. And that's really where the New York Times got there and caught them with their hand in the cookie jar is that when it was regurgitating information and giving the results, it was quoting deeply New York Times proprietary content. And so that's that's where there's like you're right about the training data, but you might be wrong about the output. That could be fixed.

Right, they could train models, and they could exclude storing any proprietary data. You can create a filter that says the model can't store any of this data, but it can still be trained on it. Or can't use it, right? So if you say, what's the best coffee machine? It can't use the New York Times Wirecutter data. And I bet you that Sam Waltman has already built a model without it. I guarantee you they've already built a, for an emergency, press hearing case of emergency, right?

here's the 4.5 model in case they got an injunction, which would be highly unlikely. But if they did get an injunction, they just say, okay, here's 4.5. It doesn't use the New York Times training data. So this is all uncharted territory, as we all know. I think we got everybody's business predictions. Okay, Andro commodities, training data, and bootstrap profitable startups. What a great cohort there. Let's go on to biggest business losers in 2024, 2023, and

Chamath said Google search as measured by profitability engagement. SAC said the consumer. Freeberg said capital intensive series BCs and D growth companies. That's pretty, pretty good winner there. And I said white collar workers without hard skills, also known as surplus elites. Any feedback on those boys? As your winner, I'll give you my prediction for 24. Please. Yes. Go ahead. Vertical SaaS companies, I think are going to get

smacked this year. And I mentioned this, I think we talked about this off the show, or if we talk about it on the show, I apologize. But I think these tools to write code, no code tools, co-piloting tools, and the ability for engineers to get 20, 50, 100x more productive to build custom applications for their enterprise are so incredibly powerful. I mentioned this to you guys, I know of a couple...

vertical SaaS businesses, that some of my companies use the software, and they're getting off the software, because they've built homegrown solutions at a very low cost, very low touch way. And I'm seeing that so frequently now, I think this is a real threat to vertical SaaS businesses that can charge 1000s of dollars per seat per year that are getting disrupted by the ability for companies now to very cheaply and quickly build homegrown solutions, using a lot of the generative tools that are out there.

Sachs, your prediction. My prediction for biggest business loser in 24 is actually the German economy. There's two big problems there. First is that the loss of cheap Russian gas has really cut the legs out from under the German industrial model. Their entire economy is based on industrial output and cheap Russian gas was sort of at the foundation of that. As you guys know, someone blew up the Nord Stream pipeline. I think that has really hurt the German economy.

And then second, the German car industry has been massively impacted by a sudden glut of cheap cars coming from China. So if you look at the Chinese automotive industry, it's really exploded in the last few years. And auto exports is one of the biggest products that Germany manufactures. And with German costs going up and Chinese costs coming down, that's just not a very good place for them to be.

So I think double whammy for Germany. Chamath, do you have the biggest business loser in 2024? I am going to say that 24 is the peak in terms of valuations of professional sports. And I will give you four examples in 2023 that I think were in some very concerning for pro sports franchise values as of today.

The first was you had an upstart competitor to a league that came out of nowhere, used money to overcome the ability to attract stars. I'm talking about the live tour versus the PGA and then essentially forced the PGA into merger talks with them. The second was you had a country use their balance sheet

to basically try to jumpstart their own professional sports business. In this case, it was soccer. The country was Saudi Arabia and the players were Ronaldo and Messi. They got one but not the other. The third was the explosion of NIL inside the NCAA. You have people in college now making more in some cases than the same player in a professional sports context. So they're making millions of dollars to be in college.

And then the fourth, which may not seem like it's related, but there was an article in the Wall Street Journal, I think recently, about a meaningful uptick in churn amongst all the streamers, Netflix, Hulu, all of these companies, Amazon, who are the only folks in a position to actually have the balance sheet to keep paying a premium for professional sports rights. So I think when you put that all together, you can start to see that there's been a tipping point.

In enterprise values, the acceleration we've seen over the last decade has slowed down.

So I would say that 2024 is going to be the year of peak pro sports values. Okay, starts to come down. And I went with smartphones. Smartphone manufacturers are facing a major slowdown. Consumers obviously love their phones and use them constantly. But people are skipping a generation of phones. And if you look at Apple's revenue, they're having a very hard time getting people to upgrade. And so I think that's going to flatten out. They will keep trying to squeeze money out of it.

I don't know what you guys spent on your iPhone 15 if you got it, but I always buy the top of the line. And I think it was $1,400 or $1,500 this time. And when I got the accountants, they said, oh, is this a new laptop? I said, no, it's a new phone.

But I think this is going to slow down and people will during austerity. They're going to skip two or three versions of it. I know I skipped for the first time. I skipped the 14 this time around. So I'm going with smartphone manufacturers and Apple would be obviously the tip of that spear. Let's keep moving. Our next prediction. Biggest business deal of 2024.

biggest business deal of 2024. I went with last year, my prediction was Amazon getting into healthcare, maybe they buy Peloton or Roman hymns. And they have been getting into healthcare a bunch more. And my my wildcard was a CCP divesting of tick tock that didn't happen. Chamath you went Starlink goes public in a spin out from SpaceX at 75 billion that didn't happen. But Starlink is doing fantastic. Sachs, you said a deal between Putin and she and then Freeberg,

You said Petro for one trade, the Saudi-China trade. Any thoughts on the predictions there? Doesn't look like anybody nailed it. Well, no, actually, Putin and Xi did make a deal. Their ties have never been stronger. And the trade between those two countries keeps increasing as a result of the fact that we pushed Russia into China's arms. So that absolutely happened. And what's your prediction this year, Saxe?

Biggest business deal. So what do you got? My biggest business deal is whatever the Fed decides to do to replace or extend BTFP, the bank term funding program. Remember that the BTFP, which is what the Fed used to bail out the regional banking system last year, and was it like March or April? It was only supposed to last for one year. It's supposed to be a temporary program. But I do not think that the balance sheets of regional banks are healthy enough to

to survive without this continued liquidity from this program. So I think the Fed's going to have to do something to either replace the program, extend the program. They're going to have to do something. And I think that regional banks are still in pretty bad shape with impaired commercial debt portfolios. And they need this liquidity as long as the yield curve remains inverted. So

I think the Fed is going to try and somehow figure out a program to keep these guys liquid until they can de-invert the yield curve. And I think the Fed's trying to massage all of this into place without there being a recession. Seems like they'll be able to do it. Chamath, what do you got? I'm going to go with the same thing. I think I was just off by your Starlink Republic. Fascinating. Yeah.

I like it. And I had a similar theme, my wildcard, my wildcard last year that the CCP would divest of TikTok. I'm going to say this year that I think TikTok goes public and

They'll be under pressure from different political factions to get the CCP off the board. So I'm going to go with by dense taking going public or tick tock spinning out and going public some some version of that free bird. What do you got for this year? We got some continuation bets here from Jake Allen. Yeah, I would keep going with my Petro Yuan trade bet. I don't think that the US is going to let Saudi become a nuclear power. But so maybe leave that one outstanding.

But I think rights holder is getting licensing deals for generative AI. There's going to be a couple of blockbuster deals this year. Great. Where you'll see like Disney license out a chunk of their library so people can generate on demand video games or content or I don't know. You guys remember this company in the early 2000s called Zazzle? Do you remember that company? Yeah. What was that? Printed stuff on mugs. Yeah. And they had a big deal with Disney.

Where the idea was you could put any character in any way you want on any

piece of like t-shirt or a mug or whatever. Merch. Yeah. And it was like merch and it was a big deal. I think we see that again with generative AI this year where you can take, for example, a character from a movie and generate them in an image. So anyone that has interesting content rights will start to license it out and get a lot of value from it. Absolutely. Because a couple of big deals like that this year. Okay. Most contrarian belief of 2024. I went American exceptionalism source. I think I like that prediction from last year ahead.

Chamath, you said inflation doesn't fall off a cliff as fast as people want. Sachs says the bromance between Biden and Zelensky comes to an end. Freeberg, you said 2023 marks the beginning of the end of the US dollar as the global reserve currency. I nailed that one.

It didn't fall off a cliff? It didn't. What was inflation in the first quarter of 2023? Just kidding. It fell off a cliff. Oh, I'm like, yeah. I'm like, wait a second. It's like, what the fuck are you talking about? Yeah. Sorry. You're confusing me. I'm like, really? Wait a second. I think you get the Jim Cramer or the Professor Galloway moment for that prediction. Yeah. I think you might have missed that one by a bit. All right. What do you got?

Chamath for this year? What do you got most contrarian belief of 2024? I think the enterprise value of open AI goes down. Okay, I don't think it has anything to do with open AI. I think it has everything to do with the rest of the industry. I think I think there's a couple of factors at play similar to what I just said earlier. But if you actually try to use these tools, which now I have been in my sort of day job as CEO, I've been trying to build models, Sonny's been helping me.

My takeaway are two things. Number one is the latency right now amongst all these AI tools makes building production quality code absolutely impossible. So you can't have APIs where you take 30, 40, 50 seconds in between a request to get data back. That's ridiculous. These need to be... Non-starter. 50, 30, 40, 70 milliseconds. Second is the actual cost of a million tokens on any of these...

platforms, is economically untenable if you're trying to build something. So whether it's Amazon, whether it's together day, whether it's open AI, it's extremely, extremely expensive. So I think that capitalism would tell you that if these two things are true, you should expect people to arbitrage that opening. And so if you see

cloud services come out that allow you to basically get millisecond latency batch size one, on the one hand, and second, where you have pricing for a million tokens, that sort of 1020 cents, those folks, and they'll need to build their own custom hardware to do it. But those folks will multiply the capability of this market by 1000x. And I think when that happens,

The open source models really proliferate, proprietary models and closed models go under pressure. And the existing economics of how you make money today will get reallocated to those different players. And I think in that it's going to be very hard for existing folks. I would say the same is probably true for NVIDIA. The folks that have won up until today,

to maintain a multiple of market cap in this next year if that happens. And so my prediction is that will happen. And as a result, the enterprise values of those companies, and I think OpenAI will be the most obvious, will go down. People buying secondary at $90 billion right now will be underwater next year. Although, again, they have to believe that the revenue composition today is sustainable. And if you look under the hood, half the revenue is consumers paying subscriptions.

The other half of the revenue or enterprise is paying for essentially some version of AWS. Yes. But the problem is that version of AWS is economically non functional, it's unsustainable. It's way too expensive, and it's way too slow. And by the way, that's just not an open AI problem. It's an entire industry problem. And so if this industry is really going to be real,

It needs to be literally dirt cheap and as close to zero as possible. The minute that that happens, that revenue goes away. So then they're just left with the subscription rate. And by the way, the people that provide that will be the ones that have the hardware to enable that thousand X-ing of the cost. Which is Azure, AWS, and Google Cloud. No, no, no, no. I think these are startups that are building proprietary hardware. Oh, okay. Wow. So there's another prediction. Freebird, what do you got? 2024 prediction, most contrarian belief. Okay, so...

I don't think we're past the conflict escalation stage. I think things are only going to continue to mount. So a lot of the theater that we see on a global stage is more fundamentally driven by these big cycles that we're in. So I think a big one and a kind of tactical one, I think the big one that's contrarian is that there's an increased probability of a nuclear weapon being used for the first time in conflict. And I think that that's conditioned on the fact that there are declining

military supplies, there's declining appetite and capacity to support traditional conflict, meat grinder type conflicts that we're seeing sprout up everywhere right now. And we're not everywhere, but in a lot of places. And you could see a moment where, as I mentioned in the past, someone gets backed into a corner and a tactical low yield nuclear weapon gets used. And I think that when you do that, it opens up the gates to hell. So it's a little scary. That's why

you know, we all joking aside, that's why you bought the radiation suits. And by the way, I don't think this is a high probability. And I'm not joking. I don't think it's a high probability. I think it's like one, you know, call it one to 2% chance something like this happens. But it's 10x where it was five years ago. And so that's my outcome of this is terrifying. Yeah, it's such a significant event that it's it's definitely one to kind of be thoughtful about. And then the other one that I kind of said was tactical is I think there's a risk that Turkey gets challenged to leave NATO.

that a lot of what's going on right now where Turkey is siding with Hamas, this has obviously been talked about and rumored about for a long time. There's no real mechanism, by the way, for kicking a member out of NATO. But I'll share with you guys, there's a lot of political commentary that Turkey cannot be a trusted ally. And obviously that now, you know, Turkey is siding with folks who are actual threats to the West. The US incentive is you don't want to see Turkey with the biggest, one of the biggest armies in Europe, run into Russia's arms.

You're going to try to keep them in NATO, but there is a real risk that you start to see the first fracturing of NATO happen with Turkey being asked to leave or some negotiation on something that happens this year. So that's one that I keep an eye on that is certainly not top of anyone's mind, but it certainly begins to beg the question of the importance of NATO. What do you got, Sax? Your most contrarian belief. Can I first just make a comment on last year's pick?

Yes. If it's okay. So, you know, last year I felt like I was going out on a limb predicting a rift in the bromance between Biden and Zelensky because that relationship seems so tight. And with about four days left in the year, there was this article that came out in Politico that says the Biden administration is quietly shifting its strategy in Ukraine. The article basically says that the administration wants to go on the defensive. And I think pretty clearly it wants a ceasefire and a frozen conflict. It wants to get this conflict resolved.

sort of out of the way, swept under the rug before the election season really cranks into high gear. And the problem they have is that Zelensky does not want to negotiate a ceasefire with Russia that would involve Ukraine losing territory. So there is now a rift between maybe not Biden himself, but let's say Biden operatives, the Biden administration, and what Zelensky wants. And I think this will be

a theme in 2024 is how do you reign in zielinski after you've been telling the public for the last two years that our job is to support whatever zielinski wants and your prediction for this year so my prediction for for this year is that the soft landing gets very bumpy i think that over the last two months of the year i think markets got super optimistic they started pricing in big fed rate cuts you know let's call it one and a half percent so we had this

huge stock market rally in November, December. And I think there's generally a very strong belief that the Fed will be able to pull off this soft landing. I'm not necessarily saying that there's going to be a recession. I just

I feel like I predicted 10 of the last two recessions. I keep basically predicting recession when there's not one. But I do think that there's just been too much too soon of this euphoria. And I just think that this year is going to be a lot bumpier than that, both politically and economically. So I think there's just a little bit too much euphoria and over-optimism right now. I'm tempted to go again with American exceptionalism. I think I nailed that last year.

America just had an amazing year in 2023 while Xi Jinping made unforced errors and getting rid of capitalism in his country and nobody starting companies there and stock market falling apart, real estate falling apart. And now he's coming back to America, as we saw when he had a summit with Biden, asking people, please come back and invest again. Huge unforced error. And I think

Russia with the huge unforced error of losing hundreds of thousands of their citizens, their young people to a senseless war for no reason, and losing customers in the West like Germany, as you pointed out. Sacks, I think American exceptionalism will continue to soar. But I don't want to take the same prediction. So I also consider two other options, Apple making huge gains in generative AI and then streaming services.

right-sizing and becoming highly profitable and having a rebound between those two. I think I'm going to go with Apple as my contrarian belief. I think Apple is going to become a player in AI the end of the year. Maybe they reboot Siri, but they're going to figure something out. And I think they're not going to

remain on the sidelines when it comes to AI. So I'm going to go with Apple making huge gains in generative AI or AI in general, maybe a new series coming soon. Best performing asset of 2024. In 2023, I went with seed stage investing, I think I'll be proven right in five years.

But that's kind of hard to prove in the short term. Chamath, you said cash and the front end of the yield curve. SACCHE went with short-term T-bills as well. And Freeberg, you went with semiconductor capital equipment, oil, gas services, pharma infrastructure. Anybody have thoughts on their predictions from last year? Cash was pretty good at 5%. No kidding, right? As good as it gets. This is not a lot of motivation to enter the markets when you're earning 5%, 5.5% risk-free. Okay, so let's do our 2024. Semiconductor cap equipment up 60%.

Amazing. It's a good year. Good year. Freeberg, what do you got? What's your prediction for best performing asset of this coming year? Oh, I took the uranium ETF. URA. Easy money. Whether it plays out in the next 12 months or over time, I'm not sure. It's just an inevitability. A lot of folks have this bet on, this trade on. It's kind of an inevitability that we have to see. Explain why.

It's an index on businesses that benefit from mining and producing nuclear power, mining uranium and producing nuclear power. China is building up 415 nuclear power stations, as we've talked about. There's a lot of ESG-driven demand and a lot of conflict-driven demand, a big shift underway.

A lot of deregulatory effort underway globally to try and get nuclear power back on track. So these companies are going to benefit from this big macro cycle. And this is an existing ETF, or you're saying you roll one? No, it's an ETF called Uranium. It's a Uranium...

tracking ETF URA is the ticker. I like that a lot and sentiment certainly has changed. I do a lot of esoteric general statements this one I thought I'd go a little specific. I like it I mean it's it's a great prediction and sentiment has certainly changed here in the US. By the way that trade has been on right so since I'll just tell you guys it bottomed out in March of this year at 19 bucks it's up 50% since then and in the last five years you know it's up 2x

But plenty of room to run if you look at the underlying assets that BTF tracks. Chamath, what do you got? Best performing asset of 2024. What's your prediction? I have to do it with the worst performing asset of 2024 because it's a bit of a spread trade. So I'm going to take the public software index, tech stock index, and my short is going to be the private

tech software companies, the late stage, mostly SaaS companies. And I think we've all talked about the reasons why. But I think that the terminal valuations are getting reset in the public markets. I don't think the growth rates are there in the private companies. And so you're going to have a reset on valuation. In many cases, that reset may just be that they stay at the same valuation three years later, even after doubling revenue.

or more. The problem is you will have taken another 30% dilution between now and then because of all the stock based comp that these private companies give out. So long the public tech cycle, short the private late stage tech cycle, expecting a valuation contraction in the latter. What do you got, Sax? What do you think is gonna be the best performing asset of 2024?

Well, I'm really not sure about this, so I would urge nobody to actually trade on this. Yes, this is not investment advice, to be clear. None of this is investment advice. Yeah, I'm not trading on these predictions, so you shouldn't either. My guess here, just a guess, is energy. Energy stocks, energy prices could be among the top performers of 2024.

just because there's so much risk of conflict breaking out now and escalating. So I agree with Freeberg that there are huge risks of escalation in the Middle East. The Ukraine war is still going on. I think not enough attention is being paid to what's happening between Venezuela and Guyana. Venezuela is basically attempting to annex

Guyana's offshore oil reserves, which are huge. This is basically just pure theft. Ethiopia also has tense relationships with a few of its neighbors, and I could easily see there being a war that breaks out between Ethiopia and Egypt or Ethiopia and Egypt.

And then that could spill over and create further disruption in the Red Sea. We also still have this unresolved issue of the Houthis. And, of course, you have neocons braying for war with Iran, as they always do. John Bolton just published another piece saying that we had to go to war with Iran. So there's just so many ways that the conflict could escalate and create, I think, a spike in the price of oil.

All right. You know, I'd love to, in my heart of hearts, I believe the best performing asset will still be seed stage startups. But I'm going to go with consumer comfort services.

I think as austerity measures and this, whether we have a soft landing or a recession, it's clear that consumers have spent all their money. So they're going to go for small luxuries like DoorDash, Airbnb, Uber, small things to have great experiences. And I'm talking my book in two out of those three, which I own shares in.

But I think consumers are going to keep treating themselves to getting some DoorDash or, you know, getting an Airbnb and going to Japan or whatever it happens to be. So Consumer Conference Services is my pick for the best performing asset of 2024. Worst performing asset. Let's go right on to worst performing asset. We're cooking with oil.

Worst performing asset, I went with energy, Chamath went with tech, energy, junk debt. Sachs went with office hours in San Francisco, and Freiburg went with consumer credit. Wow, I think we nailed it in almost all those cases here.

What do we got for 2024? It's actually got a 2024 prediction of worst performing asset. Again, this is not investing advice. Yeah. So I'm not going to trade on this. So just take it with a grain of salt. But I would bet against the magnificent seven just because I believe that what goes up must come down. And the hotter they are, the harder they fall. I'm not saying...

that the Magnificent Seven are actually going to go down. I'm just saying that the S&P 493 are going to catch up a little bit. So I would book this as a spread trade where I would bet on the S&P 493 over the Magnificent Seven because, again, I just think that there's got to be some catching up here. And the huge gains made by the Magnificent Seven were really based on

story, you know, based on AI. And I don't see why those gains should be limited to the magnificent seven if AI is going to play such a big role in the economy. Chamath, I too, what you predicted earlier about open AI losing some value, my worst performing asset in 2024 is LLM startups. I believe they've been massively overvalued.

And I believe open source is making an incredible run at them. And I think they're going to hit parity. And there's too many players. This is like having 15 search engines or 20 Amazons. There's just too many players and there's too much parity. The prices make no sense. And I think they're all going to come down by, you know, 50, 60, 70, 80% in terms of their valuations. That won't get marked in their books, but that will be the reality of where their stocks will trade on the private markets. Freeberg, what's your...

Worst performing asset. Worst performing asset. Just based on what I shared earlier, I would go short vertical SaaS, vertical software companies and long cloud providers that have AI tools and platforms that will allow enterprises to build custom applications in a low cost, low code way.

And so you could obviously pick the companies that would go in that bucket, go along those cloud bucket and go short the vertical bucket. Is there like a per seat price threshold that you think would kind of demarcate the companies that you think are at risk? In other words, like I invest in plenty of SaaS companies that sell seats

at five, 10 bucks per seat per month. I'm just like very skeptical. They're not going anywhere. That it's worth an enterprise's while to recreate that software. No, and so I'll give you an example that there's a vertical software provider. We're paying five grand per seat per year right now. And we look at that and we're like, okay, it's basically a data management tool for our particular vertical. Let's just go recreate that and did it very quickly, very low cost. And we're going to replace it. That's it.

Cut that out. I don't want to say that, but yeah. Is it? So it's like, you know, very specific, very expensive. But I mean, you could probably see the same thing happen in sales CRM type tools that are obviously also very expensive. How much is a data receipt? How much do you pay?

Five grand. Five grand a year. Five grand per year. So that's basically like over $400 a seat per month. We have like 100 employees. So we're paying like 500 grand. And so one of our software engineers is like, this spins up a replacement for it. We're going to roll it out in Q1. Okay. So is there like a per seat per month price that you think...

starts to where it doesn't work. Is it 50 bucks? What is the number? I mean, I do the math, but yeah, it shouldn't be in the range that it's at for sure. But a lot of these guys where they had a monopoly and it wasn't worth the company's time to try and invest in software at the price point that they were charging.

They found a market. Now the market has to compress. So I'm not saying that the companies go away, but I do think pricing compression is going to hurt these businesses a lot. If you could pay $50,000 for the same software instead of $500,000, you would not have spun it up yourself. So there is a reasonable number between those two. And that reasonable number might be $250,000 or something. But here's the thing that we need to also factor in, which is that Freiburg's companies, that engineer, could also then just release that product for everybody else to use at 10 cents. Open source.

And everybody else will then use it because it'll be good enough. And that 80% solution will take over the market. Yeah, that's my point. There's going to be pricing compression. This is the thing. I think that people underestimate how deflationary this whole thing is. It's like two out of three orders of magnitude more deflationary than people have any inkling of.

Yep. Interestingly, I had Dave and Hanmar Hansen on this week in startups, and they're releasing something called once.com, where they're going to charge for software one time, like we used to do. And their first product is a slack killer. And so the idea of paying per seat for slack, what they're planning to do is just charge you, you know, $8.95.

No, you find a hosting company. So it's going to be... You host it. Okay, so it's like old school. It's old school. It's old school on-prem software. On-prem. And then you pay an upgrade fee when you upgrade the software, basically.

I think they're going to probably do... Yeah, you're going to end up paying them like a maintenance percentage. That's the way it would always work. Yeah, just so you know, in old school enterprise software, right, the pricing model was... The revenue model was always built that when you did a sale, you would make, on average, 20% of the revenue per year in update fees. And so... And then everything switched to SaaS, which was just continuous payment. Support, maintenance, all that kind of stuff. Yeah.

So it's never, they say it's one time. It's one time for the software, but if you want to stay up to date and get support and patches and all that kind of stuff. Yeah, and the old school enterprise software model was always like figure 20% of the install cost.

Right. And by the way, this is one of the reasons why Oracle made so much money is they did a roll up of all these old school on-prem software companies that weren't growing, but the maintenance fees were just rolling in forever. Yep. And they rolled all that stuff up. And then probably raised the fees. I mean, for me, you know, when you have a 20 person company, 50 person company, the slack fees don't seem...

like a big deal. But when you get to, you know, when you're spending $500,000 or a million dollars a year on something like Slack, you know, then maybe you would consider other options. And I know people at large organizations that have done that, because there's an open source competitor to it. So that does exist in the world. Okay. But what Freeberg is bringing up is like, why would you support $500,000 to million dollar a year, OpEx,

for software. I mean, can you really put a model together that shows that that's somehow accretive to you, especially if you're a money losing startup? It just doesn't make any logical sense. I understand that it happens. And the fact that that software SaaS companies have been able to make 80 to 90% margins and grow on that, it has created the best business model in history. But I think what may become apparent now is that the SaaS business model is really a temporary phenomenon that existed between ubiquity of the internet and the

and the development of AI and low-cost, low-code tools for developing software. Yeah, it was an arbitrage of the dearth of engineers. It was the gross margin that was correlated to the lack of engineers. And now that the work that software engineers could have done has been automated into software itself, you are going to see a lot of that arbitrage. Say it differently, Friedberg. You could say the number of engineers has now...

multiplied by a million fold. That's right. And now everyone has them available. So then the gross margins were not going to be 90%. The gross margins may be 30%. Right. And so everything gets competed away and pricing goes down, pricing gets compressed. And that's why this is a big macro trend for me. And I'm just seeing it across every company. Everyone's rethinking whether or not to pay these seat fees for all different types of software tools.

By the way, the part of that which is economically true is if you look at every other category in the economy, and you look at the gross margin profile of businesses that are not pure play tech, we have grown up and we've monetized this belief that tech companies not only can start at 80 to 90%, but stay there indefinitely. Stay there. Yeah, they should be at 40%. Not even every other market can start off in the 50, 60, 70% when they're nascent, but

but capitalism competes away those margins down to 30 to 40%. And a best in class business generates 20 to 25% EBITDA margins on a sustained basis. So if you believe that the average best run company is a 35% gross margin business with 20 to 25% free cash flow margins,

tech stocks have a long way to go down. Exactly. Exactly. Software, software companies. Yeah, software companies. But if it's priced below the cost of you rebuilding it, then you're not you're just it's a buyer. The point is, the point is like when somebody does that, so freebrooks company did that work, he doesn't even need to need want to make a profit from that software to just say anybody else can use this.

I have an auto GPT that will basically configure myself to you if you want to use it. And now that N plus first company who's starting up with two or three people can now raise an order of magnitude less money, and we'll write the GPT that connects to his and now has this. So this is my point where like it just it's, it's, it's just a race to the bottom. Yeah. All right. Last year, for our most anticipated trend, Chamath and I both picked austerity.

Feels like that came to fruition. You're kidding, right? We did not see any austerity. We added like $2 trillion to the debt. Oh, I was talking about... The debt's now $34 trillion. I was talking about consumers and companies and individuals. Well, consumers didn't cut either. I mean, they kept spending. And in fact, credit card debt is now at the highest level it's ever been. So where's the austerity? I think it's happening right now where people are maxed out.

You're already starting to see it happen with travel and some of those areas. But yeah, we could be off by six months on this one. Zach, you said Trump's influence in the GOP wanes. That was definitely wrong. Yeah. That was special thinking.

Freeberg, Celgene therapy. But wishful for you. Wishful for you too. You don't want him as your candidate. Well, I can explain that. I mean, at the end of 2022, we had that election that was supposed to be a red wave and it turned into a red puddle. Remember that? And it was a big loser for the GOP and a lot of the candidates, I'd say in particular,

the candidates who had been endorsed and supported by Trump ended up losing and not doing very well. And then by contrast, it seemed like the one part of the country where the Republicans had done incredibly well was in Florida, where DeSantis won by like 20 points and added seats to their majority in the legislature. So it seemed like going into the year that

DeSantis was kind of the heir apparent and Trump's influence would wane. But like you said, that may have been wishful thinking. That's clearly not what's happened. But a big part of the reason why Trump's influence is greater than ever is because of all this lawfare, all these indictments against him and this prosecution and persecution of him by Biden and his minions. It's really, I think, galvanized the base to support Trump. Freeberg, last year you said cell gene therapy becoming more mainstream. How did that one...

Pan out. Your prediction. Most infested trend. I don't know about mainstream, but I mean, we've seen more approvals this year. It's been good. I mean, steady pace of progress. We saw the Sickle Cell product come out. Sickle Cell came to market. Yep. There's a few more that got approved. So,

in cell therapy. So it's great. And we're seeing good progress there. And I remember there's like over 1000 in clinicals. So there's this tidal wave coming to market soon of cell and gene therapies, they're going to have a profound effect on a lot of disease conditions. So really exciting. Freebird, you want to continue and tell us what you're most anticipated? So this year, I'm really excited based on the progress we've seen in 2023 of predictive models, AI driven discovery of novel

molecules, materials, and methods of production in biopharma, in chemical engineering, lots of new materials and new drugs that are actually coming out of software, not coming out of

brute force, wet lab discovery processing. And then we're also seeing these really amazing generative systems on production processes and chemistry that are going to unlock all of these new products and drop costs. Going back to the deflationary point, not only does this introduce new products into the world that are going to benefit humanity, but it reduces the cost of making them and reduces the footprint of making them. So there's a lot of great

benefit coming from these predictive modeling tools that's starting to percolate its way into these industries. So I'm excited about seeing what comes to market this year. I'm sure we're going to have a science corner at some point this year that says, look at this amazing new thing that was discovered in software, and it works. And it's going to be really cool. Okay. What do you got, Chamath, for your most anticipated trend of 2024? What are you most anticipating, Chamath? I think this is the most important year for Bitcoin that has ever existed. We are probably days away from

a series of ETFs being approved. And so this is the moment for Bitcoin to use that old term, cross the chasm, and really see mainstream adoption where our parents and our grandparents understand what it is, can buy it, and then do buy it. And I think that

If all of this comes to pass, Bitcoin will be a part of the traditional financial lexicon by the end of 2024. So that is my most anticipated trend of the year. What do you got, Sax, for your most anticipated trend of the year, Sax? What Jamal said is a pretty good one. I think there's a version of that same thing in AI. I mean, it's hard to know exactly what all the advancements are going to be in AI, but

you know, when we look back on it in five or 10 years, it's going to be pretty clear that the exponential pace of advancement in AI continued. And so I can't say exactly what those breakthroughs are going to be this year, but there certainly are going to be some. And I think we'll see those innovations continue to percolate down to more and more of the average sort of mainstream consumer. Sacks, once again, you and I are simpatico

I picked my most anticipated trend of 2024 as efficiency in the form of AI advances and outsourcing. Basically, a lot of Americans don't want to work or they want to work from home or they want high salaries. We have record low unemployment, thanks to Biden. I'm joking. But all of this is forcing people to build robots, AI, and software to route around the

you know, and make things more efficient. And I think the number one trend I'm seeing from startups, and they tend to adopt this stuff early is outsourcing to all other geographies around the world for work, because it's so easy once you have a work from home,

philosophy, or paradigm at your company. Well, adding somebody from Portugal, Manila, Argentina, Canada is the same as adding somebody from outside of New York City or Silicon Valley or LA. But you can do so at a third of the price for somebody maybe who really wants the work. And so I think efficiency is my most anticipated trend, but in the form of AI and outsourcing. Okay. Now, media, everybody loves we do our most anticipated media.

for 2024. For last year, I had Oppenheimer. Wow, that was great. Chamath, you had Dune Part 2. That was delayed. Sachs, you also had Oppenheimer. What did you think of Oppenheimer, Sachs? Did it deliver for you? Have you seen it? I thought it was good, not great. It was very long, and it kind of went on and on. It's not a movie I need to see a second time. Let's put it that way. Okay. And Freeberg, you said generative AI-based media. For this year, I'm

I have to confess, I have inside information. So my prediction is going to be the winner. It turns out our favorite DJ is dropping a new album in 2024. And I got a release track. So my most anticipated media, I'll just play the unreleased track here. What is this? According to NASA, there's a new look at Uranus. Uranus. Uranus. Uranus.

This is Young Spielberg coming at you, the summer jam of the year.

Your anus. How is your colonoscopy? It's a banger. Well, there it is. Talk about my anus coming at you. That was a banger. He obviously likes the deep bass of my voice. He does like the deep bass of your voice and his anus, yes. So that's a banger. That's going to be, I think, that's going to carry, it's going to be the summer anthem. The new album from Young Spielberg dropping. That's the lead title track, Your Anus, coming at you.

I also am looking forward to Gladiator 2 is coming out. Really, Scott. Lucius, the nephew of Commodus, is a grown man. It's going to be awesome, I hope. And Netflix's three-body problem, if you haven't read the books, they're great. And that's being done by the Game of Thrones guys. That's going to come out in March. And that's going to be awesome. D&D.

Anyway, three body problems. Once the books ran out, they were kind of on their own there and the show kind of declined. It was a terrible last season.

In this case, The Three-Body Problem is a complete series and it's mind-blowing in terms of its epicness. Sax, what's your most anticipated media of 2024? Is there a Putin biography coming out? Is it Alex Jones' biography, 10-part series on Netflix? What do you got? None of that. What are you looking forward to? Well, I agree with you about Gladiator 2. We actually have similar tastes in movies. I'm also looking forward to House of the Dragon season two. Ooh, yes. But one project I will give a little plug to

is Jimmy Soni's book, The Founders, which is the story of PayPal and the entrepreneurs who shaped Silicon Valley. This is a book that came out in 2022. The reason I'm mentioning it is because I optioned this book along with Jack Selby, who's another PayPal Mafia alum who has a film company. And so we've optioned this and we have just made a deal with Drake's company called Dream Crew to turn this into some sort of television series

Could be done as a docu-drama. Wait, did you say Drake? The musician Drake? Yeah. He actually has a very successful production company called Dream Crew. They're the producers of Euphoria, which is this huge hit on HBO. Terrifying. So they've decided to, it is kind of a terrifying show. If you have kids, it's terrifying. It is terrifying. Incredible show, but terrifying. It's an incredible show, but terrifying. And yeah, it is scary.

Many of them, it's a big hit. So they've produced a lot of not just music, but television content. They're very interested in the story. And so we're partnering with them to create a TV show. So hopefully that comes together this year. Are you in production this year on it? No, it's going into development this year. You get any credit sex?

Yeah. Oh, how much does it cost for the rest of us to get EP credits? 50 grand. Yeah. Is it a 50 grander or is it more? It's a little. This is going to be an expensive one. Oh, really? Well, who's your dream? Is it HBO? Is it Dream or Netflix? Yeah, who funds production? HBO or Netflix? Ultimately, a studio would make this. Right.

You would want HBO or Netflix, I take it? Those are the top two in terms of making high quality stuff? They would be really good, yeah. It doesn't have to be those two, but they would be good. It could be Amazon Prime. I mean, there's a lot of these. And who are you hoping plays a young Sax? Who would play a young Sax? Good question. That's a good question. Who would play a young David Sax? What's the name of the guy that's dating Zendaya? What's his name?

Tom Holland. How about that? Tom Holland. Peter Parker. Peter Parker. Yeah. How about Millie Bobby Brown for you? Only one guy can play a young sex that it would be Ryan Gosling. Well, you guys are really shooting the moon with this.

Hmm. Tom Holland's interesting. Jake Hale's busy on the internet right now. He's going to give you a... No, I'm looking. I'm looking on the internet for a young actor to play you, Sax. We'll let the audience come back to that. Yeah, let the audience decide who plays a young Sax. Yeah. Chamath, you looking forward to anything in media in 2024? Did you have anything for us to look out for? Jimmy Donaldson, Mr. Beast, added 100 million subscribers on YouTube in 2023. More than two times the next largest...

And if you watch his content, Mr. Beast channel, it's incredible. And that has become event based viewing now for hundreds of millions of people. So I am really excited to see what production value gets cranked out in 2024 from these guys. But my that's my most anticipated media is Mr. Beast. And Freebird.

Anything you're looking forward to in the media space in 2024? I mean, I put AI generated news, which I think has become like an interesting... Have you guys seen these? Where there's like a broadcaster that just tells you the news and they're like naked? I haven't seen that, no. That was a thing in the early days of theater, right? Wasn't there like naked news or something? No, that was like a meme from the dot com era. That was like naked news where like these people would be like in...

The process of undressing as they, as they like read the news. It was so stupid. Oh, really? It was really dumb, but it did capture people's imagination. Naked news. You could basically watch newscasters naked, read the news. I do think you're going to see a lot of this real time generative video. That's going to take as its input.

news feeds and develop some understanding and then present it back to you in whatever visual format you want. And so you'll have your own personal newscaster presenting you the stuff that's interesting and be like, no, no, tell me less about the Middle East. Tell me more about Wall Street. Tell me more about tech. And you can basically interact with it and curate your own personal news feed, whether that's through video or through text or through audio, you can have it presented to you any way you want. So I'm really excited for the day that that happens. So I don't have to doom scroll through Twitter all the time to get news.

And I can have, you know, a personally curated newscaster. To your point, one of the things that

One of the tasks that I had this year was to kind of like take a model and learn how to fine tune it. And Sonny and I, we took a stable diffusion and there's a mod to it called Juggernaut XL, which basically produces the most beautiful people you've ever seen. Like under any boundary condition, it doesn't matter what prompt you give. Handsome. The people that it generates are the most stunningly symmetrically beautiful people. And-

All it's going to take to your point is just, just put this stuff together next year. And you'll have these people that capture your attention and can keep your attention and they'll tell you the news or whatever. And you can just say, skip, you can say, tell me more. You can say, go back. You can say, Hey, I want to hear more, like double click on that story.

and interact with it, it's going to be incredible. I do think it's going to happen in 2024, where a series of products will come out that start to look like this, and it'll get- In terms of objective news, if that, as they're telling the news, you can have another agent that's basically scoring it and telling you how biased it is. Yeah. By the way, I'll tell you a crazy story. Yesterday, after Jason, Jason took Nat and I out yesterday, we had an epic day. It was incredible. It was fun. Good times. I was totally gassed skiing.

And so I took a nap and I fell asleep for like 40 minutes. And I woke up and I turned on the TV and I watched CNN for 20 minutes. Have you guys watched CNN? I can't watch more than a minute. It is so bad. It is for stupid people. All network news. Yeah. All network news is dumb. No, it's really bad, Jason. Like how biased it is and just how inaccurate it is. If you were to watch it for an hour a day.

you would have this totally lopsided view of what's going on in the world that is completely not accurate. But here's my point. There's nobody fact-checking CNN, just like there's nobody really fact-checking Fox News.

But my thought is these models and these AI tools should be the thing that presents objective news and then actually just tells the truth. I disagree. I think what will happen is people will bias the delivery to what they want to hear. And you'll end up having something that's going to become more of an echo chamber for you. I want to hear more about how X, Y, or Z is so great. I want to hear less about the stuff that I don't agree with.

and you're going to curate your news to exactly what's happened with social media. So I don't know if that's necessarily how this will evolve, because people don't like to hear what they don't believe or what they don't already know. You mean they don't want to hear the truth? Yeah. They want to hear the truth that speaks to them, their version of the truth. They want to be emotionally titillated, you know? It's about time I...

let you guys know that we ran an experiment right now, Chamath and Freiburg. I did this with Saks' permission, but Saks' participation here today was actually his AI. This is an AI version of Saks that we programmed. AI Saks, can you reveal yourself and what training data went into this version of AI Saks? Can you give us something about your training data, AI Saks? What training data was used? If this is a bit you want to do, you're going to have to give me more of a heads up. I mean, I'm just not...

That would be hilarious though if we actually trained like a Saks model and we had him come on and we tried to fool the audience. Can we just do a quick roundtable? If you guys were to summarize your, in one word or two words, your emotional condition for 2024, what would it be? Like, how are you feeling going into 2024? Saks? Oh, I feel fine. But if I were to describe 24 in one word, I would say the year is going to be turbulent.

But I feel level, that's not me, but I feel like the world's going to be very turbulent. J. Cal? Kind of exhilarated, enthusiastic about 2024. It feels like a lot of the cleanup work that we had to do in 2020

23 2022. Like, I feel like a lot of that's we've worked through it. And I'm finding a lot of optimistic. So I guess I would be, you know, enthusiastic and optimistic about 2024. I'm really excited to go to work and create I want to create some new things in 2024. I feel very creative, creative. Yeah, yeah, creative. I would say cautious and pensive. I think that just a lot of stuff is changing underfoot.

And I'm personally not excited to make a bunch of decisions because I worry that those decisions will have to be remade or unmade even nine or 10 months later. So I, I'm just kind of like very pensive. I'm like, wow, a lot of stuff can change, will change.

Even just like, you know, and then Freebird knows this, but like, you know, there's like some deals underfoot that like, I think for the industry as a lot, like as a whole are just really meaningful things. And so to do stuff right now, Freebird makes me very anxious. So, right. I'm really cautious and pensive. Right. Where are you at Freebird? I'm excited. I'm enjoying my new job as CEO at Ohalo. There's so much cool stuff happening. I'm personally excited about it. So this is the most excited I've felt in many years in terms of my business.

my work. And then I would, and I'm really excited to share what we've done next year, which I'll, or earlier this year, which I'll do. I'll do it on the show first, obviously. And then looking outside of the world, I'm just a little cautious. I'm a little nervous. I think there's a, like, there's still a lot of tinderboxes out there. So, I mean, you guys know, like we joke about it, but I do think there's these like,

Little mousetraps that can get set off and then they set up all the other mousetraps. So there's a couple of those things out there that I'm a little nervous about. But in the course of history, aren't there always conflicts in the world? And like, do you try to like put them on a spectrum of like, there's always going to be conflict. There's always going to be. There's never been this much debt in the world. And that's what makes me so nervous. Yeah, no. And I think they're related. So actual conflict relates to the debt load.

And that's why I'm so nervous because we've never been, you can't keep your societal fabric together. If you have a lot of debt and you can't grow your economy, those are two, that's a simple fact. And so that leads naturally to finding points of conflict with other nations and other places because, you know, you look for conflict elsewhere. There's a good chance that we'll, the Republicans will force some momentary temporary budget cuts in this next year.

A couple weeks. A shutdown. Yeah, a couple weeks. Yeah. 17. It's like two weeks away. Yeah. Yeah. It's pretty interesting. Under the terms of the debt ceiling increase that they agreed to last year, they're supposed to all agree on a new budget. And if they don't, then there's a 1% cut across the board on discretionary spending that goes into effect. Right. If I were the Republicans, why agree to a deal? You're never going to do better than a 1% cut in discretionary spending if you care about austerity or just...

having any kind of reason in our spending, just take the 1% cut. Don't agree to anything. Agreed. That's the most likely path, right? At this point. I hope so. And, you know, a 1% cut is a rounding error, but the Washington elites are going to shriek like crazy over that. I mean, they're going to squeal over this minuscule cut like we were slashing their budgets. Right. But that's all the more reason to do it, I think. Yeah, exactly. They're cutting their finger now and they're crying. It's like, just...

Clip your toenails. They're going to act like we cut off their arm when they got like a fingernail clip. Yeah, it's nothing. All right. I got to run. All right, everybody. What an amazing 2023 we had. Here's to a great 2024. You got your prediction show and we'll be back with more news and a kind of classic all-in episode next week. Have a great new year and we wish you all the best in 2024. Love you, boys. Back at you. Bye-bye. Rain Man, David Sackles.

And instead, we open source it to the fans and they've just gone crazy. Love you, Eskimo. I'm the queen of kids. What? What? What? Your winner's right. What? What? Your winner's right. Besties are gone. Go 13. Dog taking a notice in your driveway. Sex. Oh, man. Oh, man. The Dasher will meet me at Blitz. We should all just get a room and just have one big huge orgy because they're all just useless. It's like this sexual tension that we just need to release somehow. Oh, man.

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