E160: 2024 Predictions! Markets, tech, politics, and more

SPEAKER_05: I found out about a free bird purchase that is just you were there tomorrow. You heard what he bought? What did I buy pickles? The keynote? What was No, no, sacks. You missed this because you're you are a sunbird now and the rest of us are snowbirds 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 the suit free birds purchasing. Oh my god. So free SPEAKER_05: burgers. Do you have pictures of the radiation suits? I don't SPEAKER_05: have pictures of the radiation. I'm trying to find radiation SPEAKER_02: suits. I thought you're gonna talk about like Brioni suits or something. No radiation suits. You know how you went into full SPEAKER_05: scale panic mode and you during COVID and you had your whole outfit your your hazmat suit. freeberg just because he's SPEAKER_05: panicked about nuclear proliferation has bought suits for his entire family. 1000s of dollars of radiation suits and nuclear fallout. And he bought one for his dog. Dog, dog, dog, dog, sorry dogs for Monty and Daisy. I should send you guys SPEAKER_03: the photo of a bunker. I mean, I've got it all taken care of a SPEAKER_02: bunker first, right? I think that's underway as well. How do SPEAKER_03: you get to your bunker freeburg with with the pilots that you'll be asking to leave their families? Will you be protecting them with the guns that were stolen from? At least you'll have the 1000s of pickles you've made. No, freeberg was a prepper. Did you know this sex? Because sex SPEAKER_05: has a little prep sex freeburg was howling because he was so SPEAKER_03: mad. He made like 1000s and 1000s of pickles. And nobody would eat them including himself. Because they were so terrible. You literally bought a radiation pod for your dogs. SPEAKER_04: Yeah, so they that's their air filter on the right. So that they don't breathe in the nuclear fallout cloud. SPEAKER_02: I kind of like the the prepping. Thank you, sir. Yeah, it's good. SPEAKER_04: 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. You're saying paranoid rich white guys are going to SPEAKER_05: survive the nuclear holocaust. Paranoid rich white tech guys are going to make it to the other side. Got it. How SPEAKER_03: exciting. SPEAKER_03: Like we'd rather die. It touches my erogenous Jones just the idea that when Sax and freeburg are the only two reproducting males left. Can you imagine the gene pool? It's like literally this SPEAKER_05: is like some dystopian science fiction. This is like a Black Mirror episode. You'll have the pastiest preppers in the world. SPEAKER_05: pasty preppers to inherit the earth. SPEAKER_00: SPEAKER_05: Welcome back to the program, everybody. It is the new year, but it's the same squad. Your four besties are here. Shemagh poly hop. But he is now not just the dictator, he is chairman dictator calling in from the slopes with his beautiful Bert sweater. That's a great sweater. 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 is branding here on the all in podcast sneaking a little branding for his new startup that he is the CEO of David Sax 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, SPEAKER_02: I pivoted from the the Jefferson to the gecko. All right, so SPEAKER_05: everybody loves when we do our predictions. And so we're going to start off 2024. Big year for us. We have a lot going on here and 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 sacks 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, SPEAKER_02: well, you're gonna love this Jake out. But my prediction for biggest political winner in 2024 is Vladimir Putin. 2023 last year was the year that Putin turned it all around. He stabilized his economy after the West attempt to sanction him to his knees tried to collapse his economy, we issued a 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 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 the 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. SPEAKER_04: Sax, 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? SPEAKER_02: I think it's a one off. I mean, melee one 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 distance Argentina from from BRICS. But I think that's a little bit of a one off. The larger issue is that SPEAKER_02: the whole global south now is really resisting the collective West in a number of different ways. And so our influence and dominance is solely 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 SPEAKER_05: Putin here. You're just predicting he's the biggest SPEAKER_02: 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. Yeah, 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. SPEAKER_05: So if you had Ukraine and Putin in under seven minutes for this episode, you bet the under you win. Freeburg, who's your prediction for the biggest political winner in politics for 2024? SPEAKER_04: 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, our FK Jr. is obviously running on an independent ticket this year, we'll see if he can even get on the ballot and 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 challenges the traditional two party split in this country. SPEAKER_05: All right, and Shamath, what do you got for your biggest political winner in the 20 independent centrists? SPEAKER_03: 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 SPEAKER_03: most meaningful long lasting change that we see in American politics is this is amazing from from the RFK candidacy. I mean, SPEAKER_04: how many people do you guys know that were Republicans that don't want to be Republicans anymore? We're Democrats and don't want to be Democrats anymore. It's really like most so many people I know more of the ladder. I know more of the ladder actually SPEAKER_03: 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. SPEAKER_03: Interestingly, I also picked the dark horse presidential SPEAKER_05: candidate who will be treasonous and corrupt, aka Trump and Biden. I think we're going to actually see some dark horse candidate maybe beat these two. And 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 he can vouch for me here. And just to go back and look at 2023 what we predicted, sacks, 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 SPEAKER_02: affirmative action. And that's exactly what happened is that Supreme Court ruled against affirmative action and college admissions, saying that that unlawfully discriminated against Asian Americans. So yeah, that worked out exactly right. SPEAKER_05: 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 to Santa step paid off in spades. Well done there. Freeburg you had MBS and Saudi have the most important year in their modern era, not actually pretty prescient as well. They seem to be I mean, if you look SPEAKER_04: at let me just post this. This was this journal article that came out in March. If you guys remember this when Saudi was considering accepting you on instead of dollars for sales of oil to China. And then in August, the US ramped up pressure on Saudi Arabia to sell oil and dollars not you on. Let me just pull this up for you guys, which was obviously the 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 major nuclear powers and fighting for influence. And this is a big story and it will continue to be this year. And SPEAKER_04: modernizing society, that photo of the fist bump. I mean, what a SPEAKER_02: 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 SPEAKER_02: this global pariah, we tried to turn him into this goal pariah, but it's not working. Because of the way that he is defeating the collective West in Ukraine. I think that it's given him enormous cache 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 SPEAKER_04: 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 US will protect Saudi will provide military protection, and will help them develop a nuclear program, which is an incredible 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 SPEAKER_05: 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 those three correct. We'll see on the pardon. He has been indicted, obviously. And he is looks like a lock to win the nomination. But we'll see. I don't. It seems like Nikki Hely's doing okay. You'll see biggest political loser of 2024 is what we're gonna do next chamath last year you pick to Santis I picked to Santis that was a pretty easy one. Sax you picked California also a pretty easy one. We know that California has gotten demolished. Because specifically California went from having a SPEAKER_02: $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 SPEAKER_03: 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. I and everybody knew that they were on be under pressure, but nobody expected to be I think this Swift. So I don't think those are obvious. I think those were actually pretty decent picks. SPEAKER_05: Okay, that's good argument. And then freeburg 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 freeburg? We go on to our predictions for biggest loser. I don't think we had any big unwindings like I had expected. SPEAKER_04: 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 SPEAKER_05: Chama, who's your prediction for biggest political loser in 2024? SPEAKER_03: The coax, 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 the 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 24. Okay, switching it up, mostly because of the coax freeburg. SPEAKER_04: Well, Saxil like this one, but I think Ukraine might be the biggest loser this year as attention shifts 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, these competing interests and 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. Sax, what do you got? Well, I totally agree with that. And I would just add demographic SPEAKER_02: 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, the country's gonna be able to support the pensioners. And of course, the war isn't close to being over yet. So there's gonna be even more destruction that happens. So I agree with that that pick. I upleveled 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 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 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 gonna 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 whole bunch of elections this year, 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 shake ups in the European Parliament. And I wouldn't be surprised if there was similar shake ups in the US election as well. All right. And I picked for my SPEAKER_05: biggest political loser, I was gonna 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 of 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 seven 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. Chumath you predicted relativity space 3d printing rocket company and Sachs you picked America's natural gas industry freeburg open AI Wow, a lot of good choices are I think opening I was a huge winner in 2023. Yeah, freeburg. Even with the cash, SPEAKER_04: so I would say so that was a good massive revenue, the SPEAKER_05: 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, sex. Yeah, it has new records. SPEAKER_02: Good predictions. Good pick. Yeah, good pick. All right. So SPEAKER_05: let's go right to 2024 predictions. freeburg. You haven't let us off yet. So you're gonna lead up be the lead off batter here. What do you got? I'm going with commodities SPEAKER_04: 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 under investment 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 think the biggest business winner in 2024 SPEAKER_03: 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 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. SPEAKER_05: 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 gonna be the biggest business winner? SPEAKER_02: I'm predicting Androl for its Roadrunner product, which it announced last year. And this is a drone interceptor. So it basically intercepts drones 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 hooties, the US 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. Hundreds of thousands of dollars, do you think? SPEAKER_02: 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 if it doesn't blow up. If it does blow up, I don't think SPEAKER_05: you reuse it. It takes off it loiters. This is basically a AI SPEAKER_02: system where it's self 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 drone. It's actually a drone killer. Oh, really? I think it is I SPEAKER_05: think it 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 come back on the program. We miss you. Shout out to our boy. Are you an investor? Sachs in Andrew? No, I'm not. I'm not an SPEAKER_02: investor, but I think I would be. Yeah. You know, so a ton of money. Palmer. Great job. Yeah, no problem. We'll all SPEAKER_05: buy. Actually, I'm building a position right now. I've been buying secondary in Andrew. And for me, I was gonna go it startups again, buying secondary shares in Andrew. I've been building a large position in intro. 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 SPEAKER_05: 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 and it may be 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, and 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 chat GPT for 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 I'm accumulate 2% position and open AI through secondary purchases SPEAKER_04: and get them to do that on the board. Only 2 billion. Yeah, no, I think, yeah, I mean, we didn't SPEAKER_05: bring this up, because it's broke over the holiday break. But I think Sam Altman is 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 SPEAKER_03: will look like? I think it's going to be a nine figure settlement for previous SPEAKER_05: 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 is 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 wire cutter, and the subscription to New York Times, we would include the wire cutter 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 opening, I think we'll wind up losing the case if it goes to the man, I think they're gonna pay a big licensing fee to your question, Chima. My prediction then is that if this happens, this is not my SPEAKER_03: pick, but I'm just gonna 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. SPEAKER_05: Well, I mean, it's 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 open AI gets shuts down. Because open AI is too savvy. I bet you before the big difference SPEAKER_03: 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 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. SPEAKER_05: Yeah, so one suggestion would be what percentage of the models 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 weighed it that heavily chum off, 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 guess it's not easy. But what's the SPEAKER_03: cause? Yeah, but what's the cause for the like, are you telling me that like, the music industry has is going to be like a 30 40% cost of goods, you could say that chat GPT or let's SPEAKER_05: 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 that goes to the SPEAKER_05: people we built it off of or the licensees. Sure, why not? Why not? They're already the music industry does that would SPEAKER_03: guarantee the death of the startup ecosystem. And it would guarantee the lock in a big tech. No, I don't think so. You SPEAKER_05: 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 from off its early days for synthetic data. I don't have an opinion. I'm just reacting to this idea SPEAKER_03: 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. What a Spotify pay for music, SPEAKER_05: you know, so the same argument is made for Spotify, you know, or Netflix, but they were like, that's the difference. It's SPEAKER_03: limited in scope, meaning there's there's only ever one hit song from Rihanna that matters, or Jay Z or whomever picked 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 water line, where you don't know how the iceberg is. It's both, there SPEAKER_03: are things under the model that do it. And then there's also SPEAKER_05: quoting stuff. And that's really what the New York Times got there, 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 could be fixed. Right. They can, and they could, they SPEAKER_04: could exclude storing any proprietary data, you can create a filter that says the model can't store any of this data. SPEAKER_04: But it can still be trained or can't use it right. So if you SPEAKER_05: say what's the best coffee machine, it can't use the New York Times wire cutted 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 emergent press here in case of emergency. 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, Andrew, commodities, training data, and bootstrap profitable startups with a great cohort there. Let's go on to biggest business losers in 2024 2023. Chumot said Google search as measured by profitability engagement. SAC said the consumer. Freeburg 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? SPEAKER_04: I'll give you my prediction for 24. Please, yes, go ahead. SPEAKER_04: Vertical SAS companies, I think are going to get smacked this year. And I mentioned this, I think we talked about this step off off the show. But or if we talked about on the show, I apologize. But like, I think these tools to write code, no code tools, co piloting tools, and the ability for engineers to get 2050 100 x more productive to build custom applications for their enterprise are so incredibly powerful. I mentioned this to you guys, I know of a couple of vertical SAS 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 SAS businesses that can charge thousands of dollars per seat per year that are getting disrupted by the ability for companies now to very cheaply and quickly build homegrown solutions, a lot of the generative tools that are out there. SPEAKER_02: sacks 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 you know, it's 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. Chima, do you have a biggest business loser in 2024? SPEAKER_05: I am going to say that 24 is the peak in terms of valuations of SPEAKER_03: professional sports. Oh, and I will give you four examples in SPEAKER_03: 2023 that I think were in some very concerning or 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 with 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. SPEAKER_05: 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, I always buy the top of the line, and I think it was 14 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 and tik tok 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. sacks. You said a deal between Putin and she and then freeburg. You said, Petro for one trade, the Saudi China trade. Any thoughts on the predictions there? doesn't look like anybody nailed it. SPEAKER_02: Well, no, actually, Putin is he did make a deal their ties and have been stronger and the trade between those two countries keeps increasing as a result of the fact that we push Russia into China's arms. So that absolutely happened. And what's your prediction this year? sex? biggest business deal SPEAKER_05: so pretty good. My biggest business deal is whatever the Fed decides to do SPEAKER_02: 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 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 survive without this continued liquidity from this program. So I think the feds can have to do something to either replace the program, extend the program, they're gonna have to do something. And I think that regional banks are still in pretty bad shape with, you know, 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 feds trying to massage all of this into place without there being a recession. SPEAKER_03: Seems like they'll be able to do it. Jamaat, what do you got? I'm gonna go with the same thing. I think I was just off by your starlink will go public. Fascinating. I like it. And I had a similar theme, my wildcard, SPEAKER_05: my wildcard last year that the CCP would divest of tik tok. I'm going to say this year that I think tik tok 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 dance taking, going public or tik tok spinning out and going public some some version of that freebird. What do you got for this year? We got some continuation bets here from Jake Allen. Yeah, I would go in with my petro you on trade bet. SPEAKER_04: 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 or there's gonna 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? SPEAKER_04: 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 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 an 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 SPEAKER_05: 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. SAC says the bromance between Biden and Zelensky comes to an end. freeburg. You said 2023 marks the beginning of the end of the US dollar as the global reserve currency. I nailed that SPEAKER_03: one. SPEAKER_05: It didn't fall off a cliff. It didn't. What was inflation in SPEAKER_05: the first quarter of 2023? Just kidding. Oh, I'm like, yeah, but wait. SPEAKER_04: What are you talking about? Yeah, sorry, you confusing me. SPEAKER_05: Like, really? Wait a second. I think you get the jib Kramer or 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 SPEAKER_05: relief of 2024? I think the enterprise value of open AI goes SPEAKER_03: down. Okay, I don't think it has anything to do with open AI. I SPEAKER_03: 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 API's where you take 30 4050 seconds in between a request to get data back. It's that's ridiculous. These need to be SPEAKER_03: non starter. 50 3040 70 milliseconds. Second, is the SPEAKER_03: 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, I 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 1000 x. 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, that happens. And so my prediction is that will happen. And as a result, the enterprise values of, of those companies, and I think open AI will be the most obvious will go down people buying secondary at 90 billion right now we'll be SPEAKER_05: underwater next year. Although it's, again, they have to SPEAKER_03: 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 the revenue or enterprises 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 just left with the subscription. By the way, the people that provide that will be the ones that have the hardware to enable that 1000 xing of the cost, which is SPEAKER_03: Azure, AWS. No, no, no, no, I think these are startups that are building proprietary hardware. Oh, okay. Wow. So SPEAKER_05: there's another prediction. Freebird. What do you got 2024 prediction? Most contrarian belief. Okay, so I don't think SPEAKER_04: 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 spread up everywhere right now. And it weren't 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 and by the way, I don't think this is a high probability. And I'm not joking. It's I don't think it's a high probability. I think it's like, what do you know, call it one to 2% chance something like this happens, but it's 10 x where it was five years ago. And so that's my outcome of this is terrifying. SPEAKER_04: 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 SPEAKER_04: 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 the importance of NATO. What SPEAKER_05: do you got sacks? Your most contrarian belief? First, just make a comment on last year's pick? Yes, it's SPEAKER_02: okay. So I 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 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 buying 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 Zelensky after you've been telling the public for the last two years that our job is to support whatever Zelensky 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 the soft landing. SPEAKER_02: I'm not necessarily saying that there's going to be a recession. I just, you know, I feel like I predicted 10 of the last two recessions. So 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. SPEAKER_05: 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 in 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 era, losing hundreds of 1000s 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. It's actually what we short term tbills as well. And freeburg you went with semiconductor capital equipment, oil, gas services, pharma infrastructure, anybody have thoughts on their predictions from last year, SPEAKER_03: Ash was pretty good at 5%. No kidding, right? As good as it SPEAKER_02: gets. This is not a lot of motivation to enter the markets when you're earning five, five and a half percent risk free. Okay, so let's do our 20 equipment up 60%. Amazing. Good SPEAKER_05: year. Good year. freeburg. Well, what do you got? What's your SPEAKER_05: prediction for best performing asset of this coming year? Oh, I SPEAKER_04: took the uranium ETF, you are 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 it's kind of a trade that we have. It's a it's an index on SPEAKER_04: businesses that benefit from mining and producing nuclear power with money, uranium producing nuclear power. China is building up 450 nuclear power stations, as we talked about, there's a lot of ESG driven demand, and a lot of conflict driven demand, big shift underway. A lot of deregulatory effort underway globally to try and get nuclear back on track, nuclear power back on track. So these companies are going to benefit from this big macro cycle. So it's a and this is an existing ETF or you're saying you roll SPEAKER_05: one? No, it's called uranium. It's a uranium tracking ETF. SPEAKER_04: You are a is the ticker. I like that a lot. And I do a lot of SPEAKER_04: esoteric general statements. This one, I thought I'd go a SPEAKER_04: little specific. I like it. I mean, it's, it's a great SPEAKER_05: prediction. And sentiment has certainly changed here in the US. That trade has been on right. So since I'll just tell SPEAKER_04: 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 to x. But plenty of room to run if you look at the underlying assets that DTF tracks. Chumath, what do you got best performing asset 2024? What's SPEAKER_05: your prediction? I have to do it with the worst performing asset of 2024. SPEAKER_03: 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 SPEAKER_03: stage, mostly SAS 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. SPEAKER_05: What do you got sax? What do you think is gonna be the best performing asset of 2024? SPEAKER_02: Well, I'm really not sure about this. So I would urge nobody to actually trade on this. But this is not investment advice. To be clear, none of this is SPEAKER_05: investment advice. I'm not I'm not trading on this on these predictions. So you SPEAKER_02: shouldn't either. My guess here just to guess is energy is 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 freeburg, that there are huge risks of escalation in the Middle East, the Ukraine war 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 is 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 Eritrea, and then then that could spill over and create further disruption in the Red Sea. We also still have this unresolved issue of the hoodies. And of course, you have neo cons bring 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. SPEAKER_05: All right, you know, I'd love to I 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 recession, it's clear the consumers have spent all their money. So they're going to go for small luxuries like door dash, 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 door dash or, you know, getting an Airbnb and going to Japan or whatever it happens to be. So consumer comfort 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 will with energy, tomorrow, and tech energy junk debt, sax, when what office hours in San Francisco, and freeburg went with consumer credit. Well, I think we nailed it in almost all those cases here. What do we got for 2024? Sax, you got a 2024 prediction of worst performing asset? Again, this is not investing advice. SPEAKER_02: 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 make some 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. SPEAKER_05: Chama I too, when you predicted earlier about opening, I 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 Amazon's, 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 6070 80% in terms of their valuations, and that won't get marked in their books. But that will be the reality of where their stocks will trade on the private markets. Freeburg, what your worst performing asset worst performing earlier, I would go short vertical SAS, vertical software SPEAKER_04: 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 can obviously pick the companies that would go in that bucket, go along those those cloud bucket and go short the vertical bucket. SPEAKER_02: 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 SAS companies that sell seats at 510 bucks per seat per month. I'm just like, very skeptical. It's worth an enterprise's while to recreate that software. No, in so I'll give you an example that there's a vertical SPEAKER_04: 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 gonna replace it. Cut that out. I don't say that. But yeah. So it's like, you know, very specific, very SPEAKER_04: expensive, but I mean, sex, you can probably see the same thing happen in sales CRM type tools that are obviously also very expensive. And how much is it data receipt? How much do you pay? Five grand, five grand per year. So that's basically every SPEAKER_02: employee over $400 a seat per like 100 employees. So we're paying like 500 grand. And so SPEAKER_04: one of our software engineers is like, this spins up a replacement for we're gonna roll it out in q1. SPEAKER_02: Okay, so is there 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 SPEAKER_04: 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 pay could pay 50,000 for the same software instead of 500 SPEAKER_05: you would not have spun it up yourself. So there is a reasonable number between those two, right? And that reasonable number might be 250 or something. But here's the thing that we need to also factor in which is SPEAKER_03: that free works companies that engineer could also then just release that product for everybody else to use at 10 source. And everybody else will then use it because it'll be SPEAKER_03: good enough and that and that 80% solution will take over the will take over the market. Yeah, that's my point. There's gonna be pricing compression. This is the thing like I think that people underestimate how deflationary this whole thing is. It's like, yeah, exactly. It's like two to three orders of magnitude more deflationary than people have any inkling of. SPEAKER_05: Yep. Interestingly, I had David Hanmar Hanson on this weekend startups and they're releasing something called one stock comm 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, 95. No, you find a hosting SPEAKER_05: company. So okay, so it's cool. It's old school, it's old school SPEAKER_02: on prem software on prem. And then you pay you pay an upgrade SPEAKER_04: fee when you upgrade the software basically, I think they're gonna pay them like a maintenance percentage. That's SPEAKER_02: the way it always works. Cool enterprise software, right? The SPEAKER_04: pricing model was the revenue model was always built at when you did a sale, you would make on average 20% of the revenue per year in update fees. And so now and then everything switched to SAS, which just continued support, support, maintenance, SPEAKER_02: all that kind of stuff. 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 SPEAKER_04: always like, figure 20% of the install cost. Right. By the way, this is one of the reasons why Oracle made so much money is SPEAKER_02: 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, SPEAKER_04: SPEAKER_05: 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 SPEAKER_05: 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 freeburg is bringing up is like, why would you support SPEAKER_03: 500,000 to million dollar year, optics 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 SPEAKER_04: SAS 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 SAS business model is really a temporary phenomenon that existed between ubiquity of the internet, and the development of AI and low cost low code tools for developing software. Yeah, the dirt, it was SPEAKER_03: an arbitrage of the dearth of engineers, it was the gross margin that was correlated to the land now. And now now that SPEAKER_04: 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 differently freeburg, you could say like SPEAKER_03: the number of engineers has now multiplied by a million fold. That's right. And now everyone has them available. So then the SPEAKER_04: growth margins were not going to be 90%. The gross margins may be SPEAKER_03: 30%. And so so everything gets competed away, and pricing goes SPEAKER_04: down pricing gets compressed. And that's why this is a big macro trend for me, like I'm just seeing it across every company, everyone's rethinking whether or not the pay the seat fees for all different types of software tools. By the way, the SPEAKER_03: 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 and definitely stay there. Yeah, they should be at 40%. Not even every other market can start off in the 50 6070% when they're nascent, but capitalism competes away those margins down to 30 to 40%. Right. And a best in class business generates 20 to 25% EBITDA margins on a sustained basis. Yeah. So if you believe that the average best one company is a 35% gross margin business with 20 to 25% free cash flow margins. Tech SPEAKER_03: stocks have a long way to go down. Exactly. Exactly. Software software companies. Yeah, software companies. But if SPEAKER_05: it's priced below the cost of you rebuilding it, then you're not you're just it's a buyer. The point is, like when somebody SPEAKER_03: does that, so free Brooks 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 in plus first company who's starting up with two or three people can now raise an order of magnitude less money and will 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 SPEAKER_05: year for our most anticipated trend, Chumath and I both picked austerity. Feels like that came to fruition. SPEAKER_02: You're kidding, right? We did not see any austerity. We added like 2 trillion to the 34 trillion. I was talking about SPEAKER_05: consumers and companies and individual consumers didn't SPEAKER_02: 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? SPEAKER_05: I think it's happening right now where people are maxed out. You're already starting to see it happen with travel in some of those areas. But yeah, we could be off by six months on this one. SAC you said Trump's influence in the GOP wanes. SPEAKER_02: That was definitely wrong. Yeah. That was special thinking. SPEAKER_05: Freeburg cell gene there. We're still for you. SPEAKER_05: We're still for you too. No, that's true. I mean, I forget SPEAKER_02: 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 reason? Yeah, it was a big loser for the GOP and a lot of the SPEAKER_02: candidates, I'd say in particular, the candidates who had been endorsed and supported by Trump ended up losing and not doing very well. So and then by contrast, it seemed like the one part of the country where the republicans done incredibly well was in Florida, where obviously distance is one 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 is 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 freeburg. SPEAKER_05: We last year, you said cell gene therapy becoming more mainstream. How did that one pan out? Your prediction? Most impostor trend? SPEAKER_04: I don't know about mainstream, but I mean, we're seeing we've seen more approvals this year. It's been good. I mean, steady, steady pace of all the sickle cell product come out SPEAKER_04: sickle cell came to market. Yep. There's a few more that got approved. So in cell therapy, so it's great. Now 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. freeburg. You want to continue and tell us what your most SPEAKER_05: anticipated. Here. I'm really excited. Based on the progress we've seen in SPEAKER_04: 2023 of predictive models, AI driven discovery of novel molecules, materials and methods of production in bio pharma 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 in chemistry that are going to unlock all of these new products and grow up 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 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 gonna 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. SPEAKER_05: Okay, what do you got your mouth for your most anticipated trend of 2024? What are you most anticipating? SPEAKER_03: I think this is the most important year for Bitcoin that has ever existed. We are probably days away from a series SPEAKER_03: of ETFs being approved. And so this is the moment for Bitcoin to, 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. SPEAKER_05: What do you got sacks for your most implicit anticipated trend of the year sacks? What Jamal says a pretty good one, I think there's a version SPEAKER_02: of that same thing in AI. I mean, I 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 gonna 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. SPEAKER_05: 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, 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 Shemagh you had doing part two that was delayed. SAC you also had Oppenheimer What did you think of Oppenheimer SACS? Did it deliver for you? Have you seen it? I thought it was good, SPEAKER_02: not great. It was very long. Yeah, it's not a movie I need to see a second time. Let's put that way. Okay. And freeburg SPEAKER_05: 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 wrote me a release track here. What is this according to NASA? There's a new SPEAKER_02: look at Uranus. Uranus. Uranus. Uranus. Uranus. This is young SPEAKER_02: Spielberg. This is young Spielberg. Coming at you the SPEAKER_05: summer jam of the year. It's a banger. There it is. Talk about SPEAKER_02: SPEAKER_05: my name is coming at you banger. He obviously likes the deep bass SPEAKER_02: of my voice. He does like the deep bass of your voice and his engines. Yes. So that's a banger. That's gonna be I think SPEAKER_05: that that's gonna carry it's gonna be the summer anthem. The new album from young Spielberg dropping. That's the lead title track. Your aunts coming at you. I also am looking forward to gladiator two is coming out really Scott. Lucius, the nephew of Commodus is a grown man. It's gonna be awesome. I hope and Netflix is 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 gonna be on March. And that's gonna be awesome. SPEAKER_02: D&D. Anyway, three body problem. SPEAKER_05: ran out, they were kind of Yeah, they were kind of on their own SPEAKER_02: there. And the show kind of declined. It was a terrible last season. In this case, the three body problem is a complete SPEAKER_05: series. And it's it's mind blowing in terms of its epicness. It's what your most anticipated media of 2024 is there a Putin biography coming out? Is it Alex Jones is biography 10 part series on Netflix? Looking forward to? SPEAKER_02: Well, I agree with you about gladiator two, we actually have similar tastes in movies. I'm also looking forward to house the dragon season two. Oh, yeah. But one project I will give a little plug to is Jimmy Sony's book, the founders, which is the story of PayPal and the entrepreneurs who shaped Silicon Valley. Yes, they 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 wait, did you say the musician Drake? Yeah, he actually has a very successful SPEAKER_06: SPEAKER_02: production company called dream crew. They're the producers of euphoria, which is this huge hit. Oh, sure. On HBO. Terrifying. So they've decided to it is kind of a terrifying show. You have kids. It's terrifying. It is terrifying. Incredible. Terrifying. It's an incredible show, but terrifying. And yeah, it is scary. Many event is a big hit. So they SPEAKER_05: SPEAKER_02: 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? Or is it now SPEAKER_04: it's going to development this year? Hopefully, you get any SPEAKER_02: credit sex? Yeah. Oh, for the rest of us to get EP credits. SPEAKER_03: 5050 grand. Yeah. Is it a 50 grander or is SPEAKER_05: SPEAKER_02: a little this is this is this is gonna be an expensive one. Oh, SPEAKER_05: really? Well, who's your dream? Is it HBO is a dream or Netflix? Yeah. Netflix. Ultimately, a studio would make this right. SPEAKER_05: You would want HBO or Netflix, I take it those are the top two in terms of making high quality stuff. It'd be really good. SPEAKER_02: Yeah. It doesn't have to be those two, but they'd be good. It could be Amazon Prime. I mean, there's a lot of these. And who are you hoping streaming plays a young sax? Who would play a SPEAKER_05: younger question? Good question. That's good question. Who would SPEAKER_03: play a young David Sachs? What's the name of the guy that's dating Zendaya? What's your what's his name? Tom Holland. How about that Tom? Oh, Peter Parker. Peter Parker. Yeah. How about Millie Bobby Brown for you? So one guy can SPEAKER_04: play a young sex that it would be Ryan Gosling. Well, you guys are really shooting the moon with us. Hmm. Tom Holland's SPEAKER_05: interesting. Jake health busy on the internet right now. He's SPEAKER_05: gonna get looking I'm looking on the internet for a young actor to play you sex. Well, what the audience come back to that. Let the audience decide who plays a young sex. Yeah. Chumath you SPEAKER_05: looking forward to anything in media in 2024? Did you have anything for us to look out for? SPEAKER_03: Jimmy Donaldson, Mr. Beast added 100 million subscribers on YouTube in 2023. More than two times the next largest channel. 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, is mysteries. And freebird. You got anything you're looking forward SPEAKER_05: to? In the media space in 2024? I mean, I put AI generated news, SPEAKER_04: 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 the day in the early days of the internet, right? SPEAKER_05: Wasn't there like, or something? No, that was like, from the SPEAKER_03: news that was like naked news where like these people would be like in in the process of undressing as they as they like SPEAKER_03: read the news. It was so stupid. Really? It was really dumb, but SPEAKER_05: I it did capture people's imagination naked news, you could basically watch newscasters naked read the news. I do think you're gonna see a lot of this real time SPEAKER_04: 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 newsfeed. 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 data that happened. So I don't have to do 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 SPEAKER_03: that I had this year was the kind of like, take a model and learn how to fine tune it. And Sunny and I we took stable diffusion and there's a mod to it called juggernaut XL, which basically produces know the most beautiful people you've ever SPEAKER_03: 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 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 SPEAKER_04: 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 the news. If that, as they're SPEAKER_03: telling the news, you can have another agent that's basically scoring it and telling you how biased it is. Yeah, by the way, SPEAKER_03: I'll tell you a crazy story yesterday. After Jason, Jason took that and I out yesterday, we had an epic day. It was incredible. Good times. I was totally gassed skiing. And so I SPEAKER_03: 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 is so bad. It is all network news. Yeah, well, never know. It's SPEAKER_05: SPEAKER_03: really bad, Jason. Like now it's done. It is and just how inaccurate it is. If you were to watch it for an hour a day, you SPEAKER_05: SPEAKER_03: would have this totally lopsided view of what's going on in the world that is completely not accurate. But here's my 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 buy us SPEAKER_04: this 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. I mean, they SPEAKER_03: don't want to hear the truth. Yeah, they want to hear the SPEAKER_05: truth that speaks to them. Yeah, their version of the truth. And it's suddenly titillated, you know, it's about time I let SPEAKER_05: you guys know that we ran an experiment right now. Chumath and freeburg. I did this with Saxe's permission. But Saxe's participation here today was actually his AI. This is an AI version of sax that we programmed AI sax. Can you reveal yourself and what training data went into this SPEAKER_05: version of AI sax? Can you give us something about your training data? AI sax? What training data was used? SPEAKER_02: If this is a bit you want to do, you're gonna have to give me more bad stuff. SPEAKER_05: hilarious that we actually trained like a sax model. And we had him come on and we tried to fool the audience. Can we just SPEAKER_04: 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? SPEAKER_02: Sax? Oh, I feel fine. But if I were to describe 24 in one word, I would say the years can be turbulent. I feel I feel level. It's not me, but I feel like the world's gonna be very turbulent. SPEAKER_05: J. Cal kind of exhilarated, enthusiastic about 2024. It feels like a lot of the cleanup work, you know that we had to do in 2023 2022. Like, I feel like a lot of that we've worked through it. And I'm finding a lot of optimistic. So I guess that 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 2020. I feel very creative, creative. Yeah, yeah, creative. SPEAKER_03: I would say cautious and pensive. I think that just a lot of stuff is changing underfoot. And I'm personally not excited SPEAKER_03: 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 noses, 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. SPEAKER_04: Right? Where are you at freebird? SPEAKER_04: 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, my work. And then I would, and I'm really excited to share what we've done next year, which are 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 tinderbox, it's out there. So I mean, you guys know, SPEAKER_04: I like we joke about it. But I do think there's these like, little mouse traps that can get set off, and then they set up all the other mouse traps. 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 SPEAKER_05: 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 never been this much debt in the world. And that's what makes me SPEAKER_04: 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, SPEAKER_04: 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 will the republicans will force some SPEAKER_03: momentary temporary budget cuts in this next year. Couple weeks shut down. Yeah, a couple weeks. Yeah. 17. Two weeks away. Yeah. SPEAKER_03: Yeah, it's pretty interesting. Under the terms of the debt SPEAKER_02: ceiling increase that they agree 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 gonna 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. Yep. Yeah. I don't agree to anything. Agreed. That's the SPEAKER_04: most likely path, right? At this point, I hope so. And you know, SPEAKER_02: 1% cut cut is a rounding error. But the Washington elites are going to shriek like crazy over that. I mean, they're gonna squeal over this minuscule cut, like we were slashing their budgets. Right. But that's all we're cutting their arm. And I think, yeah, exactly. SPEAKER_05: They're cutting their fingernail and they're crying. It's like, just click your tongue. SPEAKER_05: They're gonna have to get off their arm when they got like a SPEAKER_02: fingernail clip. Yeah, it's nothing. All right, I gotta run. SPEAKER_05: 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 classic all in episode next week. Have a great new year. And we wish you all the best in 2024. Love you boys. SPEAKER_00: Oh, man. SPEAKER_03: We should all just get a room and just have one big huge door because they're all just like this like sexual tension that they just need to release. SPEAKER_01: What? You're a bee. We need to get merch. I'm doing all in. SPEAKER_06: I'm doing all in.