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

1. 0:00 – 4:17

   Bestie intros! Pasty Preppers

   1. JCJason Calacanis0:00

      I found out about a Freebird purchase that is just... You were there, Chamath. You heard what he bought.

   2. DFDavid Friedberg0:07

      What did I buy? Pickles? The quinoa? What- what was it?

   3. JCJason Calacanis0:09

      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-

   4. DFDavid Friedberg0:25

      Oh, the suits, the radiation suits.

   5. JCJason Calacanis0:25

      ... Freebird's purchasing.

   6. DFDavid Friedberg0:27

      Oh my God.

   7. JCJason Calacanis0:29

      So Freebird-

   8. DFDavid Friedberg0:30

      Do you guys have pictures?

   9. JCJason Calacanis0:31

      Oh. (laughs)

   10. DFDavid Friedberg0:31

       Do you have pictures of the radiation suits? I don't have pictures of the radiation suits. I'm trying to find them, but-

   11. CPChamath Palihapitiya0:35

       Wait, what? Radiation suits? I thought you were gonna talk about, like, Brioni suits or something.

   12. JCJason Calacanis0:40

       No.

   13. CPChamath Palihapitiya0:40

       Not radiation suits?

   14. JCJason Calacanis0:41

       You know how you went into full-scale panic mode and you... Uh, during COVID and you had your whole outfit, your (laughs) -

   15. CPChamath Palihapitiya0:46

       Yeah.

   16. JCJason Calacanis0:46

       ... your, your, your hazmat suit? Freebird, just because he's panicked about nuclear proliferation has bought suits for his entire family, thousands of dollars of radiation suits and-

   17. DFDavid Friedberg1:04

       Nuclear fallout.

   18. CPChamath Palihapitiya1:05

       Yeah.

   19. JCJason Calacanis1:05

       ... and he bought one for his dog.

   20. DFDavid Friedberg1:08

       Dogs. (laughs)

   21. JCJason Calacanis1:09

       Dogs.

   22. DFDavid Friedberg1:09

       Dogs.

   23. JCJason Calacanis1:09

       Dogs, sorry. Dogs.

   24. DFDavid Friedberg1:10

       For Monty and Daisy. I should send you guys the photo of the dog horn.

   25. CPChamath Palihapitiya1:14

       Well, do you have a bunker? I mean...

   26. DFDavid Friedberg1:15

       I've got it all taken care of.

   27. CPChamath Palihapitiya1:16

       You need a bunker first, right?

   28. JCJason Calacanis1:18

       I think that's underway as well.

   29. DFDavid Friedberg1:19

       How do you get to your bunker, Freebird, with- with the pilots that you'll be asking to leave their families?

   30. CPChamath Palihapitiya1:24

       (laughs)
2. 4:17 – 13:37

   2024's Biggest Political Winner

   1. JCJason Calacanis4:17

      for the biggest political winner in 2024. Sacks, who do you have? What's your prediction for who's gonna be the biggest winner in 2024? We're bracing.

   2. CPChamath Palihapitiya4:26

      Yeah. Well, you're gonna love this J-Cal.

   3. JCJason Calacanis4:27

      (laughs)

   4. CPChamath Palihapitiya4:27

      But my, my prediction for biggest political winner in 2024 is Vladimir Putin.

   5. JCJason Calacanis4:33

      Oh (laughs) . Oh, really?

   6. CPChamath Palihapitiya4:34

      Uh, 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, uh, 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, tur- 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- as a bit of a conquering hero. And I think as Project Ukraine falls apart in 2024, it's only gonna reinforce that sense that he's the big winner.

   7. DFDavid Friedberg5:45

      Sacks, did you see that Argentina said they're not gonna join BRICS, and that some have said that was a bit of a blow back on the BRICS effort to end dollar hegemony? And do you think it's really im- impactful or is it just a one-off?

   8. CPChamath Palihapitiya6:00

      I think it's a one-off. I mean, Milei 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, from BRICS. But I think-

   9. JCJason Calacanis6:17

      Yeah.

   10. CPChamath Palihapitiya6:17

       ... 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 this show.

   11. JCJason Calacanis6:38

       Just to be clear with the audience, you're not rooting for Putin here, you're just predicting he's the biggest winner.

   12. CPChamath Palihapitiya6:43

       I'm not rooting for it to happen. I, 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.

   13. JCJason Calacanis6:57

       Yeah.

   14. CPChamath Palihapitiya6:57

       So yeah, look-

   15. JCJason Calacanis6:57

       You've been clear about that, yeah.

   16. CPChamath Palihapitiya6:59

       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, that's a very negative trend.

   17. JCJason Calacanis7:49

       So if you had Ukraine and Putin in under seven minutes for this episode of You Bet the Under, you win. Freeberg, who's your prediction for the biggest political winner in politics for 2024?

   18. DFDavid Friedberg8:00

       I'm gonna go with independent third party in the US. We saw the stats last week, I think we reviewed them, with the poll that showed that 60-plus percent of people are claiming interest in a third party or an independent effort outside of the traditional Dem/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, uh, in the US, that there may be a big winner this year that challenges the, the traditional two-party split in this country.

   19. JCJason Calacanis8:45

       All right. And Chamath, who do you got for your biggest political winner in 2024?

   20. DSDavid Sacks8:49

       Same. I wrote independent centrists. I think this election-

   21. JCJason Calacanis8:52

       Wow.

   22. DSDavid Sacks8:52

       ... starts the breakdown of the two-party system.

   23. DFDavid Friedberg8:55

       Same, same. Look at that.

   24. DSDavid Sacks8:56

       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-

   25. JCJason Calacanis9:04

       This is amazing.

   26. DSDavid Sacks9:05

       ... from a, from, from the RFK candidacy.

   27. DFDavid Friedberg9:07

       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-

   28. JCJason Calacanis9:14

       Most.

   29. DFDavid Friedberg9:14

       ... so many people want a-

   30. DSDavid Sacks9:15

       I know more-
3. 13:37 – 19:41

   2024's Biggest Political Loser

   1. JCJason Calacanis13:37

      We'll see. Biggest political loser of 2024 is what we're going to do next. Chamath, 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, uh, California's gotten demolished.

   2. CPChamath Palihapitiya13:51

      Because specifically, California went from having a 76 billion dollar surplus in 2022 to a 68 billion dollar deficit now.

   3. JCJason Calacanis13:58

      Yeah, it's bonkers. Yeah.

   4. DSDavid Sacks14:00

      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 I, and everybody knew that they would all be under pressure, but nobody expected it to be, I think, this swift.

   5. JCJason Calacanis14:13

      Hmm.

   6. DSDavid Sacks14:14

      So-

   7. JCJason Calacanis14:14

      All right, I, I-

   8. DSDavid Sacks14:15

      ... I don't think those were obvious. I think those were actually pretty decent picks.

   9. JCJason Calacanis14:17

      Okay. Yeah, that's a good argument. And then Freyberg, you picked, uh, debt issues for emerging nations, debt markets start to unravel, IMF steps in. I'm not sure if I have enough information to check in on that one yet. Any thoughts, Freyberg, before we go on to our predictions for biggest loser in 2024?

   10. DFDavid Friedberg14:31

       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...

   11. JCJason Calacanis14:47

       Chamath, who's your prediction for biggest political loser in 2024?

   12. DSDavid Sacks14:51

       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 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.

   13. JCJason Calacanis15:24

       Hmm. Okay. Switching it up.

   14. DSDavid Sacks15:26

       Mostly because of the Kochs.

   15. JCJason Calacanis15:27

       Freyberg, who do you got?

   16. DFDavid Friedberg15:28

       Well, Sachs will 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 the political pressure, the US will probably not have the, uh, resources to commit to Ukraine. I think Ukraine's shot at being in NATO is gonna fade away. And unfortunately, it seems like the country may be left behind by the end of this year.

   17. JCJason Calacanis16:10

       Sachs, what do you got?

   18. CPChamath Palihapitiya16:11

       Well, I totally agree with that and I would just add demographic decline or even collapse. Uh, they've lost something like half a million soldiers in terms of casualties. They also, something like 10 million people have, 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 gonna be even more destruction that happens. So I, I agree with that, 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 in 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, the losers are gonna be. And I just think that Israel's invasion is, is not going well. It does not look like they're gonna 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, 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 gonna have a whole bunch of elections this year both in the US and in Europe. I think that there's gonna be tremendous disruption. Y- things are really not going well in Europe right now. Um, 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 gonna be some big shakeups in the European Parliament, and I- I wouldn't be surprised if there was similar shakeups in- in the US election as well.

   19. JCJason Calacanis18:47

       All right. And I picked, for my biggest political loser, I was gonna go with the American voter but I'm hoping that the American (laughs) 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, uh, 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- any reasonable person would be supportive of that, to, 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's gonna be the biggest loser in 2024.

4. 19:41 – 32:08

   2024's Biggest Business Winner

   1. JCJason Calacanis19:41

      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 Sax, you picked America's natural gas industry. Freeberg, OpenAI. Wow, a lot of good choices there. I think OpenAI was a huge winner in 2023, yeah? Freeberg? Even with the chaos?

   2. DFDavid Friedberg20:11

      I would say so. I would say so.

   3. CPChamath Palihapitiya20:11

      That was a good pick.

   4. JCJason Calacanis20:12

      Massive revenue.

   5. DFDavid Friedberg20:13

      The highest market cap gain of the year, probably.

   6. JCJason Calacanis20:15

      Yeah, 30 to 90 billion.

   7. DFDavid Friedberg20:17

      Yeah.

   8. JCJason Calacanis20:18

      American natural gas industry, that really actually cooked in, uh, 2023. Yeah, Sax? Yeah.

   9. CPChamath Palihapitiya20:24

      Yeah, it hit a new record, so-

   10. JCJason Calacanis20:25

       Good prediction there.

   11. CPChamath Palihapitiya20:26

       ... that was a good pick. Yeah.

   12. JCJason Calacanis20:27

       Yeah, good pick. All right. So let's go right to 2024 predictions. Freeberg, you haven't let us off yet, so you're gonna lead of- be the leadoff batter here. What do you got?

   13. DFDavid Friedberg20:36

       I'm going with commodities businesses, which I know isn't picking 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, uh, 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 in to 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 gonna see a- a killer 2024.

   14. JCJason Calacanis21:24

       Chamath, what do you got?

   15. DSDavid Sacks21:25

       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 gonna get 10 and 100 times better, and you assume the cost of compute is gonna get 10 and 100 times cheaper, and you assume the cost of energy is gonna 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 gonna 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 are 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.

   16. JCJason Calacanis22:43

       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 biggest business winner of 2024? Who do you predict is gonna be the biggest business winner?

   17. CPChamath Palihapitiya22:54

       I'm predicting Anduril for its Roadrunner product which it announced last year. Uh, 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 US was having to use two million dollar 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.

   18. JCJason Calacanis23:42

       And these cost hundreds of thousands of dollars, you think?

   19. CPChamath Palihapitiya23:45

       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 y- you send one up to take out one drone-

   20. JCJason Calacanis23:52

       Reusable if it doesn't blow up. If it does blow up, (laughs) I don't think you can reuse it. It- it- it's not

   21. How it looks, right?

   22. CPChamath Palihapitiya23:56

       It basically takes off. It- it loiters. This is a, basically a- a AI system where it's self- self-driving I guess, if you will. It has operators-

   23. JCJason Calacanis24:05

       Uh-huh.

   24. CPChamath Palihapitiya24:05

       But, uh, 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.

   25. JCJason Calacanis24:13

       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, come back on the program any time.

   26. CPChamath Palihapitiya24:24

       (laughs) Our friend.

   27. JCJason Calacanis24:24

       We miss you. Shout out to our boy. Are you an investor, Sax, in, uh, Andro?

   28. CPChamath Palihapitiya24:27

       No, I'm not, I'm not an investor, but I think I would be.

   29. JCJason Calacanis24:30

       Yeah.

   30. CPChamath Palihapitiya24:31

       You know, so, yeah, Palmer's
5. 32:08 – 37:31

   2024's Biggest Business Loser

   1. JCJason Calacanis32:08

      Let's go on to biggest business losers in 2024. 2023, Chamath said Google Search as measured by profitability engagement. Sacks 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?

   2. DFDavid Friedberg32:35

      As your winner, I'll give you my prediction for '24.

   3. JCJason Calacanis32:38

      Please, yes. Go ahead.

   4. DFDavid Friedberg32:39

      Vertical SaaS companies, I think, are gonna get smacked this year. And I- I mentioned this. I don't- I can't- I think we talked about this sep- off sh- off the show, but... Or if we talked about it 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 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, uh, vertical SaaS businesses that some of my companies use the software, and they're getting off the software because they've built homegrown solutions in 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 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-

   5. JCJason Calacanis33:36

      Okay.

   6. DFDavid Friedberg33:36

      ... using a lot of the generative tools that are out there.

   7. JCJason Calacanis33:38

      Sacks, your prediction.

   8. CPChamath Palihapitiya33:39

      My prediction for biggest business loser in '24 is- 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, is one of the biggest products that Germany manufactures. And with German costs going up and Chinese costs coming down, this is not a very good place for them to be. So, I think double whammy for Germany.

   9. JCJason Calacanis34:39

      Chamath, do you have a biggest business loser in 2024?

   10. DSDavid Sacks34:43

       I am going to say that '24 is the peak in terms of valuations of professional sports.

   11. DFDavid Friedberg34:53

       Hmm.

   12. JCJason Calacanis34:54

       Oh. Hmm.

   13. DSDavid Sacks34:55

       And I will give you four examples in 2023 that I think were, in sum, 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, um, talking about the LIV Tour versus the PGA, and then essentially force 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 gonna be a year of peak pro sports values.

   14. JCJason Calacanis36:41

       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 gonna 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 $1400 or $1500 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 gonna slow down and people will, during austerity, they're gonna 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,

6. 37:31 – 41:15

   2024's Biggest Business Deal

   1. JCJason Calacanis37:31

      biggest business deal of 2024. Biggest business deal of 2024. I went with, uh, last year my prediction was Amazon getting into healthcare, maybe they'd buy Peloton or Roman Hems, and they have been getting into healthcare a bunch more. And my, my wildcard was the CCP divesting of TikTok. 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 Xi. And then Freeberg, you said Petro for yuan trade, the Saudi China trade. Any thoughts on the predictions there? Doesn't look like anybody nailed it.

   2. CPChamath Palihapitiya38:11

      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.

   3. JCJason Calacanis38:22

      And what's your prediction this year, Sacks? Biggest business deal. Sacks, what do you got?

   4. CPChamath Palihapitiya38:26

      My biggest business deal is whatever the Fed decides to do to replace or extend BTFP, the Bank Term Funding Program. Um, remember that the BTFP, which is what the Fed used to bail out the regional banking system last year, in, 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 survive without this continued liquidity from this program. So I think the Fed's gonna 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 gonna 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.

   5. JCJason Calacanis39:36

      Seems like they'll be able to do it. Chamath, what do you got?

   6. DSDavid Sacks39:39

      I'm gonna go with the same thing. I think I was just off by your Starlink will go public.

   7. JCJason Calacanis39:44

      Hmm. Fascinating.

   8. DSDavid Sacks39:45

      75 billion.

   9. JCJason Calacanis39:46

      I like it. And, uh, I had a, a similar theme. My wildcard, my wildcard last year that the C- CP would divest of TikTok, I'm gonna 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 gonna go with ByteDance taking, going public or TikTok spinning out and going public, some, some version of that. Freeberg, what do you got for this year? We got some continuation bets here from Jake Allen.

   10. DFDavid Friedberg40:14

       Yeah. I would keep going with my Petro yuan trade bet. I don't think that the US is gonna let Saudi become a nuclear power, but, so maybe leave that one outstanding. But I think rights holders getting licensing deals for generative AI are, there's gonna be a couple of blockbuster deals this year.

   11. JCJason Calacanis40:30

       Great.

   12. DFDavid Friedberg40:31

       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, do you guys remember this company in the early 2000s called Zazzle? Do you remember that company?

   13. JCJason Calacanis40:44

       Yeah, what was that?

   14. DSDavid Sacks40:45

       They, they printed stuff on mugs.

   15. DFDavid Friedberg40:47

       Yeah, and they had a big deal with Disney where-

   16. JCJason Calacanis40:50

       Mm.

   17. DFDavid Friedberg40:50

       ... the idea was you could put any character in any way you want on any piece of, like, T-shirt or mug or whatever.

   18. JCJason Calacanis40:57

       Merch, yeah.

   19. DFDavid Friedberg40:58

       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 in- in interesting content rights will start to license it out and get a lot of value from it.

   20. JCJason Calacanis41:13

       Absolutely

   21. DSDavid Sacks41:13

       Mm-hmm.

   22. DFDavid Friedberg41:13

       Could see a couple of big deals like that

7. 41:15 – 51:18

   2024's Most Contrarian Belief

   1. DFDavid Friedberg41:15

      this year.

   2. JCJason Calacanis41:15

      Okay. Most contrarian belief of 2024. I went American exceptionalism soars. I think I, I like that prediction from last year I had. Chamath, you said inflation doesn't fall off a cliff as fast as people want. Sacks 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.

   3. DSDavid Sacks41:37

      I nailed that one.

   4. JCJason Calacanis41:39

      Uh, it, it, it didn't fall off a cliff?

   5. DSDavid Sacks41:43

      It didn't.

   6. JCJason Calacanis41:44

      What was inflation in the first quarter of 2023?

   7. DSDavid Sacks41:47

      J- just, just kidding, it fell off a cliff.

   8. JCJason Calacanis41:49

      Oh, oh. I'm like, it t-

   9. DSDavid Sacks41:50

      (laughs)

   10. JCJason Calacanis41:50

       Yeah, I'm like, "Wait a second."

   11. DSDavid Sacks41:52

       Right? (laughs)

   12. DFDavid Friedberg41:52

       It's like, "What the (censored) are you talking about?"

   13. JCJason Calacanis41:54

       Yeah.

   14. DFDavid Friedberg41:54

       (laughs)

   15. JCJason Calacanis41:54

       Sorry, you're confusing me. I'm like, "Really? Wait a second." (laughs) I think you get the Jim Cramer or the, uh, Professor Galloway moment for that prediction. (laughs) 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.

   16. DSDavid Sacks42:09

       I think the enterprise value of OpenAI goes down.

   17. DFDavid Friedberg42:13

       Hmm.

   18. JCJason Calacanis42:13

       Oh.Okay.

   19. DSDavid Sacks42:15

       I don't think it has anything to do with OpenAI. I think it has everything to do with the rest of the industry. I mean, and 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, as CEO, I've been trying to build models, Sunny'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. It's, that's ridiculous. These need to be-

   20. JCJason Calacanis42:55

       Non-starter. Yeah.

   21. DSDavid Sacks42:57

       ... 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.AI, whether it's OpenAI, 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's sort of 10, 20 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 1,000X. 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, and I, 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-

   22. JCJason Calacanis44:26

       (laughs)

   23. DSDavid Sacks44:26

       ... the enterprise values of, of those companies, and I think OpenAI will be the most obvious, will go down.

   24. JCJason Calacanis44:31

       People buying secondary at 90 billion right now will be underwater next year.

   25. DSDavid Sacks44:34

       Well, no, it's, uh, uh, 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 are enterprises paying for essentially some version of AWS.

   26. JCJason Calacanis44:51

       Yes.

   27. DSDavid Sacks44:52

       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 OpenAI problem, it's an entire industry problem. And so if this in- industry is really gonna 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.

   28. JCJason Calacanis45:16

       So then they, they're just left with a subscription from Freeberg?

   29. DSDavid Sacks45:17

       And the people... 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.

   30. JCJason Calacanis45:25

       Which is Azure, AWS, and Google Cloud?
8. 51:18 – 56:46

   2024's Best-Performing Asset

   1. JCJason Calacanis51:18

      Best performing asset of 2024. In 2023, I went with seed stage investing. I think I'll be proven right in five years (laughs) , but that's kinda hard to prove in the short term. Chamath, you said cash and the front end of the yield curve. Sax, you 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?

   2. DFDavid Friedberg51:42

      Cash was pretty good at 5%.

   3. CPChamath Palihapitiya51:44

      No kidding, right?

   4. JCJason Calacanis51:45

      As good as it gets. Yeah.

   5. CPChamath Palihapitiya51:46

      There's just not a lot of motivation to enter the markets when you're earning 5, 5.5% risk-free.

   6. JCJason Calacanis51:51

      Okay, so let's do our 2024-

   7. DFDavid Friedberg51:53

      Semiconductor cap equipment up 60%.

   8. JCJason Calacanis51:55

      Amazing.

   9. DFDavid Friedberg51:56

      It's a good year, good year.

   10. JCJason Calacanis51:57

       Freeberg, w- what do you got? What's your prediction for best performing asset of this coming year?

   11. DFDavid Friedberg52:01

       Oh, I took the uranium ETF, URA.

   12. JCJason Calacanis52:04

       Hmm.

   13. DFDavid Friedberg52:04

       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 an inevitability-

   14. JCJason Calacanis52:15

       Explain the trade. Explain why.

   15. DFDavid Friedberg52:15

       ... that we have to see. It's a... it's an index on businesses that benefit from mining and producing nuclear power, w- mining uranium, producing nuclear power. China is building out 450 nuclear power stations, as we 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 back on track, nuclear power back on track. So, these companies are gonna benefit from this big macro cycle.

   16. JCJason Calacanis52:45

       Hmm.

   17. DFDavid Friedberg52:45

       So it's a...

   18. JCJason Calacanis52:45

       And this is, uh, an existing ETF where you're saying y- you wa- you roll one? Just one-

   19. DFDavid Friedberg52:49

       No, it's an ETF called U- uh, Uranium. It's a uranium tracking-

   20. JCJason Calacanis52:52

       Oh, wow.

   21. DFDavid Friedberg52:53

       ... ETF. URA is the ticker. So-

   22. JCJason Calacanis52:55

       I like that a lot. Incentives certainly has changed.

   23. DFDavid Friedberg52:57

       I just made a nice, simple one. I, I do a lot of esoteric general statements.

   24. JCJason Calacanis52:59

       Hmm.

   25. DFDavid Friedberg52:59

       This one, I thought I'd go a little specific (laughs) .

   26. JCJason Calacanis53:01

       I like it. I mean, it's, it's, it's a great prediction and sentiment has certainly changed here in the US where we're in the-

   27. DFDavid Friedberg53:07

       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.

   28. JCJason Calacanis53:16

       Hmm.

   29. DFDavid Friedberg53:16

       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 the ETF tracks.

   30. JCJason Calacanis53:25

       Chamath, what do you got? Best performing asset of 2024. What's your prediction?
9. 56:46 – 1:06:14

   2024's Worst-Performing Asset

   1. JCJason Calacanis56:46

      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 tech energy junk debt, Saxx went with office towers in San Francisco and Friedberg went with consumer credit. Wow, I think we nailed it in almost all those cases here. What do we got for 2024? Saxx, you got a 2024 prediction of worst performing asset? Again, this is not investing advice.

   2. CPChamath Palihapitiya57:12

      Yeah, so I'm not gonna 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 gonna go down, I'm just saying that the S&P 493 are gonna 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 gotta be some catching up here and the huge gains made by the Magnifi- Magnificent Seven were really based on story, you know, uh, based on AI. And I don't see why those gains should be limited to the Magnificent Seven if AI is gonna play such a big role in the economy.

   3. JCJason Calacanis58:04

      Chamath, I too, what you predicted earlier about OpenAI 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 gonna 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 gonna come down by, you know, s- 50, 60, 70, 80% in terms of their valuations. And that, that won't get marked in their books, but that will be the reality of where their stocks will trade on the private markets. Friedberg, what's your worst performing asset? Worst performing asset in 2024?

   4. DFDavid Friedberg58:44

      Uh, 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, uh, 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, those cloud bucket and go short the vertical bucket.

   5. CPChamath Palihapitiya59:09

      Is there like a per seat price threshold that you think would kind of demarcate the companies that you think are at risk?

   6. DFDavid Friedberg59:17

      Yeah. Yeah.

   7. CPChamath Palihapitiya59:17

      In other words, like, I invest in plenty of SaaS companies that sell seats at five, 10 bucks person per month.

   8. DFDavid Friedberg59:25

      Yep.

   9. CPChamath Palihapitiya59:25

      I'm just like very skeptical-

   10. DFDavid Friedberg59:27

       They're not going anywhere.

   11. CPChamath Palihapitiya59:28

       ... that it's-

   12. DFDavid Friedberg59:28

       They're not going anywhere. Yeah. I'm ta-

   13. CPChamath Palihapitiya59:28

       Yeah, that it's worth an enterprise's while to recreate that software.

   14. DFDavid Friedberg59:31

       No. And, 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 get it very quickly, very low cost, and we're gonna replace it." Is it (censored) ?

   15. CPChamath Palihapitiya59:55

       Cut that out. I don't want to say that, but yeah.

   16. DFDavid Friedberg59:57

       (laughs) It is (censored) .

   17. JCJason Calacanis59:58

       Is it beep?

   18. DFDavid Friedberg1:00:00

       Yeah. So it's, it's like, you know, very specific, very expensive, but I mean, Saxx, you could probably see the same thing happen in sales CRM type tools that are obviously also very expensive and-

   19. JCJason Calacanis1:00:09

       How much is it, data per seat? How much do you pay?

   20. DFDavid Friedberg1:00:12

       Five grand.

   21. JCJason Calacanis1:00:13

       Per person?

   22. CPChamath Palihapitiya1:00:13

       Five grand a year. Five grand per year, so that's basically-

   23. DFDavid Friedberg1:00:16

       Yeah, and every, and every employee owns.

   24. CPChamath Palihapitiya1:00:17

       ... like over $400 a seat per, per month.

   25. DFDavid Friedberg1:00:19

       Yeah, and we have, we have like 100 employees, so we're paying like 500 grand. And so one of our software engineers is like, " (censored) this." Spins up a replacement for it, we're gonna roll it out in Q1.

   26. CPChamath Palihapitiya1:00:29

       Okay, so is there, is there like a per seat per month price that you think starts to where it doesn't work?

   27. DFDavid Friedberg1:00:35

       Yes. Yeah.

   28. CPChamath Palihapitiya1:00:35

       Is it 50 bucks? What is the number?

   29. DFDavid Friedberg1:00:37

       I, I, I, I mean, I'd do the math, but yeah, it shouldn't be in the range that it's at, for sure. But a lot of these guys when they had a monopoly and it wasn't worth the company's time to try and invest in software-

   30. CPChamath Palihapitiya1:00:46

       Mm-hmm.
10. 1:06:14 – 1:12:28

    2024's Most Anticipated Trend

    1. DFDavid Friedberg1:06:14

       Yep.

    2. JCJason Calacanis1:06:14

       All right. Last year, for our most anticipated trend, Chamath and I both picked austerity. Feels like that, uh, came to fruition.

    3. DFDavid Friedberg1:06:22

       (laughs)

    4. JCJason Calacanis1:06:22

       Zach, you picked-

    5. CPChamath Palihapitiya1:06:24

       You're kidding, right?

    6. DFDavid Friedberg1:06:25

       We did not see any austerity.

    7. CPChamath Palihapitiya1:06:26

       We, uh, added like-

    8. DFDavid Friedberg1:06:27

       Oh.

    9. CPChamath Palihapitiya1:06:27

       ... 2 trillion to the debt-

    10. DFDavid Friedberg1:06:29

        Oh, I was talking about-

    11. CPChamath Palihapitiya1:06:29

        ... because the debt's now 34 trillion.

    12. JCJason Calacanis1:06:31

        I was talking about consumers and, and companies and individuals.

    13. CPChamath Palihapitiya1:06:34

        Well, consumers didn't, didn't, uh, 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?

    14. JCJason Calacanis1:06:44

        Uh, I think it's happening right now. (laughs) Where people are maxed out.You're already starting to see it happen with travel, uh, and some of those areas but, uh, yeah, we could be off by six months on this one. Uh, Sax, you said Trump's influence in the GOP wanes.

    15. CPChamath Palihapitiya1:06:57

        That was definitely wrong.

    16. JCJason Calacanis1:06:58

        Yeah. Mm. That was wishful thinking. Freeberg, cell gene therapy-

    17. CPChamath Palihapitiya1:07:02

        Well, wishful for you. (laughs)

    18. JCJason Calacanis1:07:03

        Wishful for you too. You don't-

    19. CPChamath Palihapitiya1:07:05

        No, that's true. I mean, I-

    20. JCJason Calacanis1:07:06

        ... you've said it over and over again you don't want him as your candidate.

    21. CPChamath Palihapitiya1:07:08

        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 a big part of the reason-

    22. JCJason Calacanis1:07:17

        Yeah, he was a loser. Yeah.

    23. CPChamath Palihapitiya1:07:18

        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. So, and then by contrast, it seemed like the one part of the country where the Republicans had done incredibly well was in Florida where obviously 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, uh, prosecution and persecution of him by Biden and his minions. It's really, I think, galvanized the base to support Trump.

    24. JCJason Calacanis1:08:10

        Freeberg, we... last year you said cell gene therapy becoming more mainstream. How did that one pan out, your prediction, most anticipated trend?

    25. DFDavid Friedberg1:08:19

        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 progress.

    26. DSDavid Sacks1:08:26

        We saw the sickle cell product come out.

    27. DFDavid Friedberg1:08:28

        Sickle cell came to market, yep. There's a few more that got approved, so, in cell therapy, so it's great. Yeah, we're seeing good progress there. And I, I... remember there's, like, over 1,000 in clinicals so there's this tidal wave coming to market soon of cell and gene therapies that are gonna have a profound effect on a lot of disease conditions. So really exciting.

    28. JCJason Calacanis1:08:46

        Freeberg, you wanna continue and tell us what your most anticipated trend of this year is?

    29. DFDavid Friedberg1:08:49

        Oh, so this year, I'm really excited, uh, 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, uh, production processes in chemistry that are gonna unlock all of these new products and bring up costs. Going back to the deflationary point, not only does this introduce new products into the world that are gonna 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, 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 gonna be really cool.

    30. JCJason Calacanis1:09:53

        Okay. What do you got, Chamath, for your most anticipated trend of 2024? What are you most anticipating, Chamath?
11. 1:12:28 – 1:22:28

    2024's Most Anticipated Media

    1. JCJason Calacanis1:12:28

       Okay. Now, media. Everybody loves when we do our most anticipated media for 2024. For last year, I had Oppenheimer. Wow, that was great. Chamath, you had Dune: Part Two. That was delayed. Sax, you also had Oppenheimer. What did you think of Oppenheimer, Sax? Did, did, did it deliver for you? Have you seen it?

    2. CPChamath Palihapitiya1:12:49

       I thought it was good, not great. It was very long and it kinda went on and on.

    3. JCJason Calacanis1:12:53

       It was long. Yeah.

    4. CPChamath Palihapitiya1:12:54

       It's not a movie I need to see a second time, let's put it that way.

    5. JCJason Calacanis1:12:56

       Mm. Okay. And Freeberg, you said (laughs) generative AI-based media. For this year, um, I have to confess, I have inside information, so my prediction is gonna 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 re- the-

    6. DFDavid Friedberg1:13:21

       What is this?

    7. JCJason Calacanis1:13:21

       ... unreleased track here.

    8. DFDavid Friedberg1:13:22

       What is this?

    9. CPChamath Palihapitiya1:13:23

       According to NASA, there's a new look at Uranus. (instrumental music plays) (laughs) Uranus. Uranus.

    10. JCJason Calacanis1:13:30

        (laughs) Talking about my anus.

    11. CPChamath Palihapitiya1:13:34

        Uranus. Uranus.

    12. JCJason Calacanis1:13:37

        (laughs)

    13. CPChamath Palihapitiya1:13:37

        Is this Young Spielberg?

    14. JCJason Calacanis1:13:38

        This is Young Spielberg-

    15. CPChamath Palihapitiya1:13:41

        Talking about my anus.

    16. JCJason Calacanis1:13:41

        ... coming at you, the summer jam of the year.

    17. CPChamath Palihapitiya1:13:44

        Uranus. Uranus. (laughs)

    18. DSDavid Sacks1:13:46

        How is your colonoscopy been? Oh.

    19. JCJason Calacanis1:13:47

        It's a banger.

    20. CPChamath Palihapitiya1:13:50

        (laughs)

    21. JCJason Calacanis1:13:50

        Well, there it is.

    22. CPChamath Palihapitiya1:13:51

        (laughs)

    23. JCJason Calacanis1:13:51

        Talk about my anus.

    24. DFDavid Friedberg1:13:52

        That was great.

    25. JCJason Calacanis1:13:52

        Coming at you.

    26. DFDavid Friedberg1:13:53

        That was a banger.

    27. JCJason Calacanis1:13:53

        (laughs)

    28. CPChamath Palihapitiya1:13:53

        He obviously likes the deep bass of my voice.

    29. JCJason Calacanis1:13:57

        He does like the deep bass of your voice in his anus, yes.

    30. DFDavid Friedberg1:14:00

        (laughs)

Episode duration: 1:27:57