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

Jason Calacanis 0:00 I found out about a Freebird purchase that is just... You were there, Chamath. You heard what he bought.

David Friedberg 0:07 What did I buy? Pickles? The quinoa? What- what was it?

Jason Calacanis 0:09 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-

David Friedberg 0:25 Oh, the suits, the radiation suits.

Jason Calacanis 0:25 ... Freebird's purchasing.

David Friedberg 0:27 Oh my God.

Jason Calacanis 0:29 So Freebird-

David Friedberg 0:30 Do you guys have pictures?

Jason Calacanis 0:31 Oh. (laughs)

David Friedberg 0:31 Do you have pictures of the radiation suits? I don't have pictures of the radiation suits. I'm trying to find them, but-

Chamath Palihapitiya 0:35 Wait, what? Radiation suits? I thought you were gonna talk about, like, Brioni suits or something.

Jason Calacanis 0:40 No.

Chamath Palihapitiya 0:40 Not radiation suits?

Jason Calacanis 0:41 You know how you went into full-scale panic mode and you... Uh, during COVID and you had your whole outfit, your (laughs) -

Chamath Palihapitiya 0:46 Yeah.

Jason Calacanis 0:46 ... 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-

David Friedberg 1:04 Nuclear fallout.

Chamath Palihapitiya 1:05 Yeah.

Jason Calacanis 1:05 ... and he bought one for his dog.

David Friedberg 1:08 Dogs. (laughs)

Jason Calacanis 1:09 Dogs.

David Friedberg 1:09 Dogs.

Jason Calacanis 1:09 Dogs, sorry. Dogs.

David Friedberg 1:10 For Monty and Daisy. I should send you guys the photo of the dog horn.

Chamath Palihapitiya 1:14 Well, do you have a bunker? I mean...

David Friedberg 1:15 I've got it all taken care of.

Chamath Palihapitiya 1:16 You need a bunker first, right?

Jason Calacanis 1:18 I think that's underway as well.

David Friedberg 1:19 How do you get to your bunker, Freebird, with- with the pilots that you'll be asking to leave their families?

Chamath Palihapitiya 1:24 (laughs)

Jason Calacanis 1:26 (laughs)

David Friedberg 1:26 (laughs)

Chamath Palihapitiya 1:26 (laughs)

David Friedberg 1:26 Or will you be protecting them with the guns that were stolen from your house?

Jason Calacanis 1:29 (laughs)

David Friedberg 1:30 (laughs)

Chamath Palihapitiya 1:31 (laughs)

David Friedberg 1:31 At least you'll have the thousands of pickles you've made. (laughs)

Jason Calacanis 1:35 (laughs)

David Friedberg 1:35 And the pounds of quinoa.

Jason Calacanis 1:36 I didn't know Freebird was a prepper. Did you know this, Sacks?

David Friedberg 1:40 (laughs)

Jason Calacanis 1:40 'Cause Sacks has a little prepper in him.

David Friedberg 1:41 No, no. Sacks, Freebird was howling because he was so mad. He made, like, thousands and thousands of pickles and nobody would eat them, including himself.

Jason Calacanis 1:49 Because they were so terrible.

David Friedberg 1:51 (laughs)

Jason Calacanis 1:51 You literally bought a radiation pod for your dogs.

David Friedberg 1:54 Yeah, so they... That's their air filter on the right so that they don't breathe in the nuclear fallout, cloud.

Jason Calacanis 2:00 Well, I-

Chamath Palihapitiya 2:01 Oh, I kinda like the, the prepping.

David Friedberg 2:02 Thank you, sir. Yeah, it's good. You guys don't understand. There's a reason evolution happens in moments of what we call punctuated equilibrium. There's a massive event and certain, you know, things survive and then that becomes the proliferant species going forward. This is the moment. Be ready.

Jason Calacanis 2:18 So you're saying paranoid rich white guys are gonna survive the nuclear holocaust. Is what you're saying?

Chamath Palihapitiya 2:23 (laughs)

Jason Calacanis 2:23 Paranoid rich white tech guys are gonna make it to the other side. Got it.

David Friedberg 2:28 How exciting. (laughs)

Jason Calacanis 2:30 Exciting. What a great future.

David Friedberg 2:31 That, that- (laughs)

Jason Calacanis 2:31 What a future, Chamath.

David Friedberg 2:32 Oh my god.

Jason Calacanis 2:33 Chamath and I are like, "We'd rather die."

David Friedberg 2:35 That touches my erogenous zones, just the idea of it. When Sacks and Freebird are the only two reproducing males left, mm, delicious.

Chamath Palihapitiya 2:42 (laughs)

Jason Calacanis 2:42 Can you imagine the- the gene pool?

David Friedberg 2:44 Oh my god.

Jason Calacanis 2:44 It's like, literally this is like some dystopian science fiction. This is like a Black Mirror episode.

Chamath Palihapitiya 2:49 (laughs)

David Friedberg 2:49 You'll have the pastiest preppers in the world.

Chamath Palihapitiya 2:52 (laughs)

Jason Calacanis 2:52 Tasty preppers to inherit the Earth.

Chamath Palihapitiya 2:55 (laughs)

Jason Calacanis 2:56 We're going all in. Don't let your winners ride. Rain Man, David Sacks. We're going all in. NSN, we open source it to the fans and they've just gone crazy with it. Love you, NSN. Queen of quinoa. Welcome back to the program, everybody. It is the new year, but it's the same squad. Your four besties are here. Chamath Palihapitiya, 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 with a major turtleneck going on there. And we have David Freebird. Also, uh, looks like he's on the slopes and he is wearing his Ohalo. His Ohalo, not Mahalo. Ohalo hat. He is branding here on the All In podcast, sneaking in a little branding for his new startup that he is the CEO of. David Sacks 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-

Chamath Palihapitiya 3:56 Yeah.

Jason Calacanis 3:56 ... on the hair. Apparently you cleaned up shop.

Chamath Palihapitiya 3:58 I pivoted from the, the Jefferson to the gecko.

Jason Calacanis 4:01 All right. So, everybody loves when we do our predictions. And so we're gonna start off 2024, big year for us. We got a lot going on here at All In, and we're gonna just do some predictions here. So, let's get started. We're gonna kick it off with Sacks doing his prediction

Jason Calacanis 4:17 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.

Chamath Palihapitiya 4:26 Yeah. Well, you're gonna love this J-Cal.

Jason Calacanis 4:27 (laughs)

Chamath Palihapitiya 4:27 But my, my prediction for biggest political winner in 2024 is Vladimir Putin.

Jason Calacanis 4:33 Oh (laughs) . Oh, really?

Chamath Palihapitiya 4:34 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.

David Friedberg 5:45 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?

Chamath Palihapitiya 6:00 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-

Jason Calacanis 6:17 Yeah.

Chamath Palihapitiya 6:17 ... 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.

Jason Calacanis 6:38 Just to be clear with the audience, you're not rooting for Putin here, you're just predicting he's the biggest winner.

Chamath Palihapitiya 6:43 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.

Jason Calacanis 6:57 Yeah.

Chamath Palihapitiya 6:57 So yeah, look-

Jason Calacanis 6:57 You've been clear about that, yeah.

Chamath Palihapitiya 6:59 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.

Jason Calacanis 7:49 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?

David Friedberg 8:00 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.

Jason Calacanis 8:45 All right. And Chamath, who do you got for your biggest political winner in 2024?

David Sacks 8:49 Same. I wrote independent centrists. I think this election-

Jason Calacanis 8:52 Wow.

David Sacks 8:52 ... starts the breakdown of the two-party system.

David Friedberg 8:55 Same, same. Look at that.

David Sacks 8:56 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-

Jason Calacanis 9:04 This is amazing.

David Sacks 9:05 ... from a, from, from the RFK candidacy.

David Friedberg 9:07 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-

Jason Calacanis 9:14 Most.

David Friedberg 9:14 ... so many people want a-

David Sacks 9:15 I know more-

David Friedberg 9:16 Yeah.

David Sacks 9:16 ... of the latter, I know more of the latter actually than I did before.

David Friedberg 9:19 Right. Yeah, that's fair too.

Jason Calacanis 9:20 Yeah, that's what I would say.

David Sacks 9:21 I think, I think Republicans are still firmly established. I think people are embarrassed to be a Democrat right now.

Jason Calacanis 9:26 Interestingly, I also picked the dark horse presidential candidate who will beat treasonous and corrupt, AKA Trump and Biden. I think we're gonna actually see some dark horse candidate-

David Friedberg 9:35 (laughs)

Jason Calacanis 9:35 ... maybe beat these two in the rematch that nobody wanted. Wow, that's crazy. Three of the four of us picked the same thing.

David Friedberg 9:43 No coordination beforehand.

Jason Calacanis 9:45 Yes. And this is done blind, folks. Uh, and, and Nick has my notes here so he can, he can, uh, vouch for me here. And just to go back and look at 2023, what we predicted, Sachs, you said Asian American college applicants were going to be your biggest winner in politics. That actually turned out to be pretty prescient, right?

Chamath Palihapitiya 10:02 Yeah. I mean, I was betting on court cases overruling affirmative action and that's exactly what happened, is that Supreme Court ruled against affirmative action in college admissions-

Jason Calacanis 10:12 Hmm.

Chamath Palihapitiya 10:13 ... saying that it unlawfully discriminated against Asian Americans. So yeah, that worked out exactly right.

Jason Calacanis 10:18 So that's a great prediction. I think, Chamath, you had a, perhaps the best prediction of even the entire show last year. Your spread trade, long Nikki and short DeSantis, that paid off in spades. Well done there. Freeberg, you had MBS and Saudi have the most important year in their modern era. That actually pretty prescient as well. They seem to be-

David Friedberg 10:38 Yeah, I mean if you look 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 yuan instead of dollars for sales of oil to China. And then in August, the US ramped up pressure on Saudi Arabia to sell oil in dollars, not yuan. Let me just pull this up for you guys. Which was obviously a big follow-on story where the US tried to counter the actions, which is continuing obviously today, where there's a back and forth. And Saudi, as I mentioned last week, I think is in this really interesting central pivot position between all of these competing major nuclear powers and fighting for influence. And this is a big, uh, story-

Jason Calacanis 11:19 Yeah.

David Friedberg 11:19 ... and it will continue to be this year.

Jason Calacanis 11:21 And modernizing, uh, society.

Chamath Palihapitiya 11:23 That photo of-

Jason Calacanis 11:24 Yeah.

Chamath Palihapitiya 11:24 ... the fist bump. I mean, what a mistake that was, where Biden just gratuitously insulted MBS. Compare that to the photo of Putin visiting the Middle East and meeting, shaking hands with MBS, which happened just a few weeks ago. And compare the welcome that Putin got in Saudi Arabia, and I think UAE, to the welcome that Biden got. It's just two completely different levels. It was a very warm embrace-

Jason Calacanis 11:50 Wow.

Chamath Palihapitiya 11:50 ... on both sides. I think it was UAE, they literally had a parade for him where they had, uh, the colors of the Russian flag up everywhere. So, you know, we've tried to portray Putin as this global pariah, we've tried to turn him into this global pariah, but it's not working because...... 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, or at least is tired of American dominance.

David Friedberg 12:28 And if you double click on that article, the second one I sent on Washington trying to negotiate with the Saudis, you know, quote, "behind the scenes," but obviously this all comes out. They're asking assurances that Riyadh will use dollars, not yuan, to price oil sales, assurances that Saudi won't allow China to build military bases in the kingdom, and limitations on Saudi Arabia using technology developed by China. And in exchange, the 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, may become a nuclear power, use this as leverage, uh, as the US continues to try and keep dollar hegemony alive.

Jason Calacanis 13:14 And my prediction last year was that Trump would get indicted, win the nomination, and then agree not to run in order to get a pardon or something in that vein. And looks like I'm going to get two of th- those three, right? We'll see on the pardon. He has been indicted, obviously, uh, and he is, looks like a lock to win the nomination, but we'll see. I don't... It seems like Nikki Haley's doing okay.

Jason Calacanis 13:37 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.

Chamath Palihapitiya 13:51 Because specifically, California went from having a 76 billion dollar surplus in 2022 to a 68 billion dollar deficit now.

Jason Calacanis 13:58 Yeah, it's bonkers. Yeah.

David Sacks 14:00 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.

Jason Calacanis 14:13 Hmm.

David Sacks 14:14 So-

Jason Calacanis 14:14 All right, I, I-

David Sacks 14:15 ... I don't think those were obvious. I think those were actually pretty decent picks.

Jason Calacanis 14:17 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?

David Friedberg 14:31 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...

Jason Calacanis 14:47 Chamath, who's your prediction for biggest political loser in 2024?

David Sacks 14:51 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.

Jason Calacanis 15:24 Hmm. Okay. Switching it up.

David Sacks 15:26 Mostly because of the Kochs.

Jason Calacanis 15:27 Freyberg, who do you got?

David Friedberg 15:28 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.

Jason Calacanis 16:10 Sachs, what do you got?

Chamath Palihapitiya 16:11 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.

Jason Calacanis 18:47 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.

Jason Calacanis 19:41 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?

David Friedberg 20:11 I would say so. I would say so.

Chamath Palihapitiya 20:11 That was a good pick.

Jason Calacanis 20:12 Massive revenue.

David Friedberg 20:13 The highest market cap gain of the year, probably.

Jason Calacanis 20:15 Yeah, 30 to 90 billion.

David Friedberg 20:17 Yeah.

Jason Calacanis 20:18 American natural gas industry, that really actually cooked in, uh, 2023. Yeah, Sax? Yeah.

Chamath Palihapitiya 20:24 Yeah, it hit a new record, so-

Jason Calacanis 20:25 Good prediction there.

Chamath Palihapitiya 20:26 ... that was a good pick. Yeah.

Jason Calacanis 20:27 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?

David Friedberg 20:36 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.

Jason Calacanis 21:24 Chamath, what do you got?

David Sacks 21:25 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.

Jason Calacanis 22:43 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?

Chamath Palihapitiya 22:54 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.

Jason Calacanis 23:42 And these cost hundreds of thousands of dollars, you think?

Chamath Palihapitiya 23:45 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-

Jason Calacanis 23:52 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

23:56 How it looks, right?

Chamath Palihapitiya 23:56 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-

Jason Calacanis 24:05 Uh-huh.

Chamath Palihapitiya 24:05 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.

Jason Calacanis 24:13 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.

Chamath Palihapitiya 24:24 (laughs) Our friend.

Jason Calacanis 24:24 We miss you. Shout out to our boy. Are you an investor, Sax, in, uh, Andro?

Chamath Palihapitiya 24:27 No, I'm not, I'm not an investor, but I think I would be.

Jason Calacanis 24:30 Yeah.

Chamath Palihapitiya 24:31 You know, so, yeah, Palmer's

David Sacks 24:32 They've raised a ton of money.

Chamath Palihapitiya 24:34 (laughs)

Jason Calacanis 24:34 Palmer, great job. Yeah, no, Palmer. We'll all buy... Actually, I'm building a position right now. I've been buying secondary in, uh, Andro. And for me, I was gonna go with startups again, but-

David Sacks 24:44 Wait, are you really buying secondary shares in Andro?

Jason Calacanis 24:46 I've been building a large position in Andro, yes. I'm, I'm trying to get to a 2% ownership position so I can join the board.

David Sacks 24:52 (laughs)

Jason Calacanis 24:52 So I've been, uh, yeah, using ... So shout out to my guy, Palmer Lucky.

David Sacks 24:57 Uh-

Jason Calacanis 24:58 I am gonna go with, for my biggest winner in 2024, training data owners like the New York Times, Reddit, X, Twitter, YouTube, et cetera. I think what we learned in 2023 was that the language models are starting to hit parody very quickly and that the real value is gonna be in, and it may, may have 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 OpenAI lawsuit, I think there's a really great outcome here, which is a market-based solution where if you have a ChatGPT account, you can log in and federate with your New York Times subscription or, you know, any other subscription and then it gives you the tier of ChatGPT 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 gonna 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 very bullish on-

David Sacks 26:13 Jacob, you should accumulate a 2% position in OpenAI through secondary purchases and get them to do that on the board.

Jason Calacanis 26:19 It's only 2 billion. Yeah. No, I think-

David Sacks 26:20 Yeah.

Jason Calacanis 26:21 I, I mean, we, we didn't bring this up 'cause this broke over the, the, the holiday break. But I think Sam Altman's doing a great job of telling people he wants to do the right thing. We, we discussed previously the licensing deal they did with Business Insider and, and the parent company of it.

David Sacks 26:35 Axel Springer, what do you think the deal with New York Times will look like?

Jason Calacanis 26:38 I think it's gonna be a nine-figure settlement for previous stuff and then an ongoing licensing fee in order to have the New York Times in their training data. And then you'll be able to say, "Hey, what does the New York Times think of this?" Right? You could actually do queries about the New York Times in it. And I think the New York Times will come up with a license that everybody can use their data if they pay this yearly fee. If you stop paying the yearly fee, then you can't train on it. And we're in uncharted territory.

David Sacks 27:06 You're saying there's gonna be a, a New York Times model and a non-New York Times model?

Jason Calacanis 27:10 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 do 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, "What's the best coffee equipment?" it says, "Oh, if you had Wirecutter and a subscription to New York Times, we would include the Wirecutter results." And th- this idea that technologists can't do citations has been proven absolutely incorrect. There are language models out there that are using citations all the time. OpenAI, I think will wind up losing the case if it goes to them, and I think they're gonna pay a big licensing fee, to your question, Chamath.

David Sacks 27:50 My prediction then is that if this happens, uh, uh, this is not my 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 OpenAI says no and (laughs) and they won't have a choice.

Jason Calacanis 28:10 Well, I mean, it's a possibility, but if you think about the Disney characters, you know, let's ... I don't know if you saw Nintendo and Disney characters, you know, making stuff on DALL-E or other things. If you make derivative works on that and you wanna 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, I'm really interested to see the market-based solution, because I don't think this is a Napster situation where, like, OpenAI gets shuts down because OpenAI's too savvy. I, I bet you in the fore-

David Sacks 28:37 Well, I, I bet you the for- the big difference between Napster and this is there the content universe was limited and small. Here, it's infinite and unlimited. And so how do you pay anything to anybody without ... I just think it's, like, without direct attribution of revenue, which is basically impossible, you're kind of making a value judgment, which I don't think makes any sense. I, 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.

Jason Calacanis 29:13 Yeah. So one suggestion would be what percentage of the model's creation was used in the New York Times data, and I think people say 1 to 2% of the original ChatGPT was built off of, uh, training data was New York Times. And then if they weighted that heavily, Chamath, like, let's say they said New York Times is an authoritatively five times more important than these other sources, that could be upwards of 5 to 10% of the authority of that model.

David Sacks 29:37 Yeah, but I understand just the-

Jason Calacanis 29:37 And so yes, it's not easy, but-

David Sacks 29:39 What's the cogs?

Jason Calacanis 29:39 ... you, you could-

David Sacks 29:40 Yeah, but what's the cogs for the ... Like, are you telling me that, like, an AI model-

Jason Calacanis 29:43 The music industry has his. The music, music industry has its.

David Sacks 29:44 But what is it, you're saying it's gonna be like a 30, 40% cost of goods?

Jason Calacanis 29:47 You could say that ChatGPT or, let's say, Apple. I, I predict Apple will do this, right? They'll do a language model where they say, "50% of the revenue that we generate from queries or subscriptions to this-"

David Sacks 29:59 50%?

Jason Calacanis 29:59 "... goes to the people we built it off of or the licensees." Sure. Why not? Why not? They're already ... The music industry already does that. Yeah.

David Sacks 30:04 Well, that, that would guarantee the death of the startup ecosystem, and it would guarantee the lock-in of big tech.

Jason Calacanis 30:12 No, I don't think so. You could build models that don't have the data and you could build models with it, so it'll be a choice by the person who builds the model. And synthetic data might make it so you don't need the New York Times, Chamath. Uh, it- it's early days for synthetic data, but-

David Sacks 30:23 No, I don't have an opinion. I'm just reacting to-

Jason Calacanis 30:25 Yeah.

David Sacks 30:25 ... this idea that 50% of cogs, then all of a sudden these aren't software companies. You know, these software companies will have a gross margin of, like, 30%. (laughs)

Jason Calacanis 30:33 Yeah. Well, what if Spotify paid for music? You know, so the- the same argument's made for Spotify, you know, or Netflix-

David Sacks 30:38 No, but that's limited in scope, Jason.

Jason Calacanis 30:38 ... when they were licensing content.

David Sacks 30:39 That's the difference. It's limited in scope, meaning there's- there's only ever one hit song from Rihanna that matters, or Jay-Z or whomever, pick- Taylor Swift. And so, it's a very scoped content universe, and so you can ascribe value much easier because then the user goes and actually listens to that song over another. This is about something that's happening under the waterline where you don't know how the iceberg is built.

Chamath Palihapitiya 31:01 It's both. There are things under the model that do it, and then there's also quoting stuff, and that's really where the New York Times got their- um, 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, a- you're- you're right about the training data, but you're- you might be wrong about the- the output.

David Friedberg 31:21 Yeah, but that could be fixed, right? They could train models-

Jason Calacanis 31:24 It can be- I'm sure they-

David Friedberg 31:25 ... and they could-

Jason Calacanis 31:25 Yeah.

David Friedberg 31:25 ... they could exclude storing any proprietary data. You can create a filter that says the model can't store any of this data, but it can still be trained on it.

Jason Calacanis 31:33 Or- or can- or can't use it, right? So if you say, "What's the best coffee machine?" it can't use the New York Times wire cut of data. And I- I bet you that Sam Altman 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, uh, as we all know. I think we got everybody's business predictions. Okay, Andrew, commodities, training data, and bootstrap profitable startups. What a great cohort there.

Jason Calacanis 32:08 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?

David Friedberg 32:35 As your winner, I'll give you my prediction for '24.

Jason Calacanis 32:38 Please, yes. Go ahead.

David Friedberg 32:39 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-

Jason Calacanis 33:36 Okay.

David Friedberg 33:36 ... using a lot of the generative tools that are out there.

Jason Calacanis 33:38 Sacks, your prediction.

Chamath Palihapitiya 33:39 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.

Jason Calacanis 34:39 Chamath, do you have a biggest business loser in 2024?

David Sacks 34:43 I am going to say that '24 is the peak in terms of valuations of professional sports.

David Friedberg 34:53 Hmm.

Jason Calacanis 34:54 Oh. Hmm.

David Sacks 34:55 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.

Jason Calacanis 36:41 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,

Jason Calacanis 37:31 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.

Chamath Palihapitiya 38:11 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.

Jason Calacanis 38:22 And what's your prediction this year, Sacks? Biggest business deal. Sacks, what do you got?

Chamath Palihapitiya 38:26 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.

Jason Calacanis 39:36 Seems like they'll be able to do it. Chamath, what do you got?

David Sacks 39:39 I'm gonna go with the same thing. I think I was just off by your Starlink will go public.

Jason Calacanis 39:44 Hmm. Fascinating.

David Sacks 39:45 75 billion.

Jason Calacanis 39:46 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.

David Friedberg 40:14 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.

Jason Calacanis 40:30 Great.

David Friedberg 40:31 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?

Jason Calacanis 40:44 Yeah, what was that?

David Sacks 40:45 They, they printed stuff on mugs.

David Friedberg 40:47 Yeah, and they had a big deal with Disney where-

Jason Calacanis 40:50 Mm.

David Friedberg 40:50 ... the idea was you could put any character in any way you want on any piece of, like, T-shirt or mug or whatever.

Jason Calacanis 40:57 Merch, yeah.

David Friedberg 40:58 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.

Jason Calacanis 41:13 Absolutely

David Sacks 41:13 Mm-hmm.

David Friedberg 41:13 Could see a couple of big deals like that

David Friedberg 41:15 this year.

Jason Calacanis 41:15 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.

David Sacks 41:37 I nailed that one.

Jason Calacanis 41:39 Uh, it, it, it didn't fall off a cliff?

David Sacks 41:43 It didn't.

Jason Calacanis 41:44 What was inflation in the first quarter of 2023?

David Sacks 41:47 J- just, just kidding, it fell off a cliff.

Jason Calacanis 41:49 Oh, oh. I'm like, it t-

David Sacks 41:50 (laughs)

Jason Calacanis 41:50 Yeah, I'm like, "Wait a second."

David Sacks 41:52 Right? (laughs)

David Friedberg 41:52 It's like, "What the (censored) are you talking about?"

Jason Calacanis 41:54 Yeah.

David Friedberg 41:54 (laughs)

Jason Calacanis 41:54 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.

David Sacks 42:09 I think the enterprise value of OpenAI goes down.

David Friedberg 42:13 Hmm.

Jason Calacanis 42:13 Oh.Okay.

David Sacks 42:15 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-

Jason Calacanis 42:55 Non-starter. Yeah.

David Sacks 42:57 ... 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-

Jason Calacanis 44:26 (laughs)

David Sacks 44:26 ... the enterprise values of, of those companies, and I think OpenAI will be the most obvious, will go down.

Jason Calacanis 44:31 People buying secondary at 90 billion right now will be underwater next year.

David Sacks 44:34 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.

Jason Calacanis 44:51 Yes.

David Sacks 44:52 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.

Jason Calacanis 45:16 So then they, they're just left with a subscription from Freeberg?

David Sacks 45:17 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.

Jason Calacanis 45:25 Which is Azure, AWS, and Google Cloud?

David Sacks 45:27 No, no, no, no, I think these are startups that are building proprietary hardware.

Jason Calacanis 45:31 Oh, okay. Wow, so there's another prediction. Freeberg, what do you got? 2024 prediction, most contrarian belief.

David Friedberg 45:36 Okay, so I don't think we're past the conflict escalation stage. I think things are only gonna 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, 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, uh, supplies, there's declining appetite and capacity to support traditional conflict, meat grinder type conflicts that, that we're seeing sprout up everywhere right now, and we're, not everywhere, but in a lot of places. And you could see a moment where a- 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 (laughs) -

David Sacks 46:39 That's why you bought the radiation suits.

David Friedberg 46:42 And I, and by the way, I don't think this is a high probability. A- and I'm not joking, it's, I don't think it's a high probability. I think it's like one, you know, call it 1 to 2% chance something like this happens, but it's 10x where it was five years ago. And so that's why-

Jason Calacanis 46:53 And the outcome of this is terrifying.

David Friedberg 46:56 Yeah, it's such a significant event that it's, it's definitely one to kind of be, be thoughtful about. Um, and then the other one that I kind of said was tactical is I think there's a risk that Turkey gets challenged to leave NATO, that a lot of what's going on right now where Turkey is siding with Hamas, this has obviously been talked about and rumored about for a long time. There's no real mechanism, by the way, for kicking a member out of NATO, but I'll share with you guys, there's a lot of political commentary that Turkey cannot be a trusted ally, uh, and obviously that now, you know, Turkey is siding with folks who are actual threats, uh, 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 gonna 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, 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, uh, the importance of NATO.

Jason Calacanis 47:56 What do you got, Sacks? Your most contrarian belief 2024.

Chamath Palihapitiya 47:59 Well, can, can I first just make a comment on last year's pick?

Jason Calacanis 48:02 Yes.

Chamath Palihapitiya 48:03 If it's 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 Zelenskyy because it, that relationship seemed 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 Biden himself, but let's say Biden operatives, the Biden administration and what Zelensky wants. And I think this will be a theme in 2024, is how do you rein in Zelensky after you've been telling the public for the last two years that our job is to support whatever Zelensky wants? So-

Jason Calacanis 49:09 And your prediction for this year?

Chamath Palihapitiya 49:10 So my prediction for, for this year is that the soft landing gets very bumpy.

Jason Calacanis 49:15 Hmm.

Chamath Palihapitiya 49:15 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 1.5%. So we had this huge stock market rally in November, December, and I think there's generally a very strong belief that the Fed will be able to pull off this soft landing. I'm not necessarily saying that there's gonna be a recession, I just, you know, I feel like I've predicted 10 of the last two recessions, so...

Jason Calacanis 49:41 (laughs)

Chamath Palihapitiya 49:42 I keep basically predicting recession when there's not one.

Jason Calacanis 49:45 Yeah.

Chamath Palihapitiya 49:45 But I do think that there's just been too much, too soon of this euphoria, and I just think that this year is gonna be a lot bumpier than that, both politically and economically. So I think there's a... just a little bit too much euphoria and over-optimism right now.

Jason Calacanis 50:02 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 in getting rid of capitalism in his country and nobody starting companies there and stock market falling apart, real estate falling apart. And now he's coming back to America, as we saw when he had a summit with Biden, asking people, "Please come back and invest again." Huge unforced error. And I think Russia with a huge unforced error, losing hundreds of thousands of their citizens, their young people to a senseless war for no reason, and losing customers in the West, like Germany, as you pointed out. Sax, I think American exceptionalism will continue to soar. But I don't want to pre- t- 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 gonna go with Apple as my contrarian belief. I think Apple's gonna become a player in AI the end of the year. Maybe they reboot Siri, but they're gonna figure something out and I think they're not going to remain on the sidelines when it comes to AI. So I'm gonna go with Apple making huge gains in generative AI or AI in general. Maybe a new Siri coming soon.

Jason Calacanis 51:18 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?

David Friedberg 51:42 Cash was pretty good at 5%.

Chamath Palihapitiya 51:44 No kidding, right?

Jason Calacanis 51:45 As good as it gets. Yeah.

Chamath Palihapitiya 51:46 There's just not a lot of motivation to enter the markets when you're earning 5, 5.5% risk-free.

Jason Calacanis 51:51 Okay, so let's do our 2024-

David Friedberg 51:53 Semiconductor cap equipment up 60%.

Jason Calacanis 51:55 Amazing.

David Friedberg 51:56 It's a good year, good year.

Jason Calacanis 51:57 Freeberg, w- what do you got? What's your prediction for best performing asset of this coming year?

David Friedberg 52:01 Oh, I took the uranium ETF, URA.

Jason Calacanis 52:04 Hmm.

David Friedberg 52:04 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-

Jason Calacanis 52:15 Explain the trade. Explain why.

David Friedberg 52:15 ... 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.

Jason Calacanis 52:45 Hmm.

David Friedberg 52:45 So it's a...

Jason Calacanis 52:45 And this is, uh, an existing ETF where you're saying y- you wa- you roll one? Just one-

David Friedberg 52:49 No, it's an ETF called U- uh, Uranium. It's a uranium tracking-

Jason Calacanis 52:52 Oh, wow.

David Friedberg 52:53 ... ETF. URA is the ticker. So-

Jason Calacanis 52:55 I like that a lot. Incentives certainly has changed.

David Friedberg 52:57 I just made a nice, simple one. I, I do a lot of esoteric general statements.

Jason Calacanis 52:59 Hmm.

David Friedberg 52:59 This one, I thought I'd go a little specific (laughs) .

Jason Calacanis 53:01 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-

David Friedberg 53:07 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.

Jason Calacanis 53:16 Hmm.

David Friedberg 53:16 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.

Jason Calacanis 53:25 Chamath, what do you got? Best performing asset of 2024. What's your prediction?

David Sacks 53:28 I have to do it with the worst performing asset of 2024 'cause it's a bit of a spread trade. So I'm gonna take the public software index, tech stock index and-

Jason Calacanis 53:39 Mm-hmm.

David Sacks 53:39 ... my short is going to be the private tech software companies, late stage, mostly SaaS companies. And I think we've all talked about the reasons why, but I think that the terminal valuations are getting reset in the public markets. I don't think the growth rates are there in the private companies, and so you're going to have a reset on valuation. In many cases, that reset may just be that they stay at the same valuation three years later, even after doubling revenue or more. The problem is you will have taken another 30% dilution between now and then because of all the stock-based comp that these private companies give out. So, long the public tech cycle, short the private late-stage tech cycle, expecting a valuation contraction in the latter.

Jason Calacanis 54:28 What do you got, Sax? What do you think is gonna be the best performing asset of 2024?

Chamath Palihapitiya 54:32 Well, I'm really not sure about this, so I would urge nobody to actually trade on this, but if I were-

Jason Calacanis 54:37 Yes. This is, this is not investment advice-

Chamath Palihapitiya 54:40 (laughs) Yeah.

Jason Calacanis 54:40 ... to be clear. None of this is investment advice (laughs) .

Chamath Palihapitiya 54:42 Yeah, I'm not, I'm not trading on this-

Jason Calacanis 54:44 Thank you.

Chamath Palihapitiya 54:44 ... on these predictions, so you shouldn't either.

Jason Calacanis 54:46 (laughs)

Chamath Palihapitiya 54:46 My guess here, just a guess, is energy-... is energy stocks, um, 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 Friedberg that there are huge risks of escalation in the Middle East, the Ukraine War's still going on. I think not enough attention's being paid to what's happening between Venezuela and Guyana. Uh, Venezuela is basically attempting to annex Guyana's offshore oil reserves, uh, 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 Houthis. And, of course, you have Neocons praying for war with Iran, as they always do. John Bolton just published another piece saying that we have 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.

Jason Calacanis 56:01 All right. Uh, 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 gonna go with consumer comfort services. I think as austerity measures end this, whether we have a soft landing or a recession, uh, it's clear that consumers have spent all their money, so they're gonna go for small luxuries like DoorDash, Airbnb, Uber, small things to have great experiences. And I'm talking my book in two out of those three, which I own shares in. But I think consumers are gonna keep treating themselves to getting some DoorDash or, uh, 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

Jason Calacanis 56:46 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.

Chamath Palihapitiya 57:12 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.

Jason Calacanis 58:04 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?

David Friedberg 58:44 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.

Chamath Palihapitiya 59:09 Is there like a per seat price threshold that you think would kind of demarcate the companies that you think are at risk?

David Friedberg 59:17 Yeah. Yeah.

Chamath Palihapitiya 59:17 In other words, like, I invest in plenty of SaaS companies that sell seats at five, 10 bucks person per month.

David Friedberg 59:25 Yep.

Chamath Palihapitiya 59:25 I'm just like very skeptical-

David Friedberg 59:27 They're not going anywhere.

Chamath Palihapitiya 59:28 ... that it's-

David Friedberg 59:28 They're not going anywhere. Yeah. I'm ta-

Chamath Palihapitiya 59:28 Yeah, that it's worth an enterprise's while to recreate that software.

David Friedberg 59:31 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) ?

Chamath Palihapitiya 59:55 Cut that out. I don't want to say that, but yeah.

David Friedberg 59:57 (laughs) It is (censored) .

Jason Calacanis 59:58 Is it beep?

David Friedberg 1:00:00 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-

Jason Calacanis 1:00:09 How much is it, data per seat? How much do you pay?

David Friedberg 1:00:12 Five grand.

Jason Calacanis 1:00:13 Per person?

Chamath Palihapitiya 1:00:13 Five grand a year. Five grand per year, so that's basically-

David Friedberg 1:00:16 Yeah, and every, and every employee owns.

Chamath Palihapitiya 1:00:17 ... like over $400 a seat per, per month.

David Friedberg 1:00:19 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.

Chamath Palihapitiya 1:00:29 Okay, so is there, is there like a per seat per month price that you think starts to where it doesn't work?

David Friedberg 1:00:35 Yes. Yeah.

Chamath Palihapitiya 1:00:35 Is it 50 bucks? What is the number?

David Friedberg 1:00:37 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-

Chamath Palihapitiya 1:00:46 Mm-hmm.

David Friedberg 1:00:46 ... at the price point that they were charging. They found a market and 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.

Jason Calacanis 1:00:55 If you pay- could pay $50,000 for the same software instead of $500, you would not have spun it up yourself. So there is a reasonable-

David Friedberg 1:01:01 Correct.

Jason Calacanis 1:01:01 ... number between those two.

David Friedberg 1:01:02 Correct.

Jason Calacanis 1:01:03 And that reasonable number might be $250 or something, yeah.

David Sacks 1:01:06 But, and here's the thing that we need to also factor in, which is that Friedberg's companies, that engineer could also then just release that product for everybody else to use at 10 cents.

David Friedberg 1:01:16 Open source.

David Sacks 1:01:17 And everybody else will then use it, because it'll be good enough.

David Friedberg 1:01:20 Because it's like-

David Sacks 1:01:20 And that, and that 80% solution-

David Friedberg 1:01:22 That software and company.

David Sacks 1:01:22 ... will take over the, will take over the market.

David Friedberg 1:01:25 Yeah, that's my point. There's going to be pricing compression.

David Sacks 1:01:27 This is the thing, like I think that people underestimate how deflationary this whole thing is. It's like-

David Friedberg 1:01:30 Yeah, exactly.

David Sacks 1:01:31 ... it's like, it's like two to three orders of magnitude more deflationary than people have any inkling of.

David Friedberg 1:01:36 Yep.

Jason Calacanis 1:01:37 Interestingly, I had, uh, David Handmar Hansen on This Week in Startups, and they're releasing something called OneStockCom, where they're gonna charge for software one time like we used to do, and their first product is a Slack killer. And so the idea of paying per seat for Slack, what they're planning to do is just charge you, you know, 8.95-

David Friedberg 1:01:55 And they host it?

Jason Calacanis 1:01:56 No. You find a hosting company. So it's gonna be-

David Friedberg 1:01:58 You host it. Okay, so it's like old school-

Jason Calacanis 1:02:00 You host it.

David Friedberg 1:02:00 ... it's old school.

David Sacks 1:02:01 It's old school.

Chamath Palihapitiya 1:02:01 It's old school on-prem software.

David Friedberg 1:02:03 On-prem, and then you pay a, you pay an upgrade fee when you upgrade the software basically?

David Sacks 1:02:07 I think they're gonna probably do-

Chamath Palihapitiya 1:02:08 Yeah, you're gonna be paying them like a maintenance percentage, that's the way it-

David Friedberg 1:02:11 Yeah, just so you guys know-

Chamath Palihapitiya 1:02:11 ... the, the, you know, old school works.

David Friedberg 1:02:12 ... in old school enterprise software, right, the pricing model was, the revenue model was always built that when you did a sale, you would make on average 20% of the revenue per year in update fees. And so that, and then everything switched to SaaS, which was-

Chamath Palihapitiya 1:02:25 Right.

David Friedberg 1:02:25 ... just continuous support, payment.

Chamath Palihapitiya 1:02:26 Support, maintenance, all that kinda stuff. So it's never-

David Friedberg 1:02:29 Yeah.

Chamath Palihapitiya 1:02:29 ... they say it's one time. It's one time for the software, but if you wanna stay up to date and get support and patches and all that kind of stuff-

David Friedberg 1:02:36 Get maintenance, yeah.

Chamath Palihapitiya 1:02:37 ... you know.

David Friedberg 1:02:37 And the, and the old school enterprise software model was always like figure 20% of the install cost.

Chamath Palihapitiya 1:02:42 Right.

David Friedberg 1:02:43 On a, on a annual basis.

Chamath Palihapitiya 1:02:43 And by the way, this is one of the reasons why Oracle made so much money is they did a rollup-

David Friedberg 1:02:47 Yeah.

Chamath Palihapitiya 1:02:47 ... of all these old school on-prem software companies that weren't growing.

David Friedberg 1:02:52 Right.

Chamath Palihapitiya 1:02:52 But the maintenance fees were just rolling in forever.

David Friedberg 1:02:55 Yep.

David Sacks 1:02:55 Mm-hmm.

Chamath Palihapitiya 1:02:55 And they rolled all that stuff up.

Jason Calacanis 1:02:57 And then probably raised the fees. I mean, for me, you know, when you have a 20-person company, 50-person company, the Slack fees don't seem like a big deal. But when you get to, you know, when you're spending $500,000 or a million dollars a year on something like Slack, you know, then maybe you would consider other options. And I know people at large organizations that have done that, 'cause there's an open source competitor to it. So that does exist in the world. Okay.

David Sacks 1:03:19 Yeah, but what Friedberg is bringing up is like why would you support $500,000 to $1 million a year OpEx for software? I mean, can you really put a model together that shows that that's somehow accretive to you, especially if you're a money losing startup?

David Friedberg 1:03:35 Right.

David Sacks 1:03:35 It just doesn't make any logical sense. I understand that it happens.

David Friedberg 1:03:39 And the fact that, that software, uh, SaaS companies have been able to make 80% to 90% margins and grow on that, it has created the best business model in history. But I think what may become apparent now is that the SaaS business model is really a temporary phenomenon that existed between ubiquity of the internet and the development of AI and low-cost, low-code tools, uh, for developing software.

David Sacks 1:04:01 Yeah, the dir- it was an arbitrage of the dearth of engineers. It was the gross margin that-

David Friedberg 1:04:05 Right.

David Sacks 1:04:05 ... was correlated to the lack of engineers.

David Friedberg 1:04:06 And, and now, and now, now that the work that software engineers could have done has been automated into software itself, you are going to see a lot of that arbitrage.

David Sacks 1:04:15 Say it differently, Friedberg. You could say like, the number of engineers has now multiplied by a million fold.

David Friedberg 1:04:21 That's right. And now everyone has them available, so that they can build marginals-

David Sacks 1:04:26 So then the gross margins were not gonna be 90%. The gross margins may be 30%.

David Friedberg 1:04:28 Right. And so, so everything gets competed away and pricing goes down, pricing gets compressed, and that's why this is a big macro trend for me. Like I'm, and I'm just seeing it across every company. Everyone's rethinking whether or not to pay these seat fees for all different types of software tools.

David Sacks 1:04:41 By the way, the, the part of that which is economically true is if you look at every other category in the economy and you look at the gross margin profile of businesses that are not pure play tech, we have grown up and we've monetized this belief that tech companies not only can start at 80% to 90%, but stay there indefinitely.

David Friedberg 1:05:01 Stay there. Yeah, they should be at 40%.

David Sacks 1:05:03 Not even. Every other market can start off in the 50%, 60%, 70% when they're nascent, but capitalism competes away those margins-

David Friedberg 1:05:10 Competes, yeah.

David Sacks 1:05:10 ... down to 30% to 40%.

David Friedberg 1:05:12 Right.

David Sacks 1:05:12 And a best-in-class business generates 20% to 25% EBITDA margins on a sustained basis.

David Friedberg 1:05:18 Yeah.

David Sacks 1:05:18 So if you believe that the average best run company is a 35% gross margin business with 20% to 25% free cash flow margins, tech stocks have a long way to go down.

David Friedberg 1:05:29 Exactly. Exactly, or software, software companies. Yeah.

David Sacks 1:05:33 Software companies.

Jason Calacanis 1:05:34 Uh, but if it's priced below the cost of you rebuilding it, then you're not, you're just, it's a buy or build situation.

David Friedberg 1:05:39 No, no, no, but here, but Jason, the point is-

David Sacks 1:05:41 You're just gonna buy it.

David Friedberg 1:05:41 ... the point is like when somebody does that, so Friedberg's 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 wanna use it." And now that N+ first company who's starting up with two or three people can now raise an order of magnitude less money and will write a GPT that connects to his, and now has this- Absolutely.

David Sacks 1:06:09 ... so th- this is my point-

David Friedberg 1:06:10 Yeah.

David Sacks 1:06:10 ... where like it just, it's, it's, it's just a race to the bottom.

David Friedberg 1:06:14 Yep.

Jason Calacanis 1:06:14 All right. Last year, for our most anticipated trend, Chamath and I both picked austerity. Feels like that, uh, came to fruition.

David Friedberg 1:06:22 (laughs)

Jason Calacanis 1:06:22 Zach, you picked-

Chamath Palihapitiya 1:06:24 You're kidding, right?

David Friedberg 1:06:25 We did not see any austerity.

Chamath Palihapitiya 1:06:26 We, uh, added like-

David Friedberg 1:06:27 Oh.

Chamath Palihapitiya 1:06:27 ... 2 trillion to the debt-

David Friedberg 1:06:29 Oh, I was talking about-

Chamath Palihapitiya 1:06:29 ... because the debt's now 34 trillion.

Jason Calacanis 1:06:31 I was talking about consumers and, and companies and individuals.

Chamath Palihapitiya 1:06:34 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?

Jason Calacanis 1:06:44 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.

Chamath Palihapitiya 1:06:57 That was definitely wrong.

Jason Calacanis 1:06:58 Yeah. Mm. That was wishful thinking. Freeberg, cell gene therapy-

Chamath Palihapitiya 1:07:02 Well, wishful for you. (laughs)

Jason Calacanis 1:07:03 Wishful for you too. You don't-

Chamath Palihapitiya 1:07:05 No, that's true. I mean, I-

Jason Calacanis 1:07:06 ... you've said it over and over again you don't want him as your candidate.

Chamath Palihapitiya 1:07:08 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-

Jason Calacanis 1:07:17 Yeah, he was a loser. Yeah.

Chamath Palihapitiya 1:07:18 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.

Jason Calacanis 1:08:10 Freeberg, we... last year you said cell gene therapy becoming more mainstream. How did that one pan out, your prediction, most anticipated trend?

David Friedberg 1:08:19 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.

David Sacks 1:08:26 We saw the sickle cell product come out.

David Friedberg 1:08:28 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.

Jason Calacanis 1:08:46 Freeberg, you wanna continue and tell us what your most anticipated trend of this year is?

David Friedberg 1:08:49 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.

Jason Calacanis 1:09:53 Okay. What do you got, Chamath, for your most anticipated trend of 2024? What are you most anticipating, Chamath?

David Sacks 1:09:59 I think this is the most important year for Bitcoin that has ever existed.

Jason Calacanis 1:10:03 Hmm.

David Sacks 1:10:05 We are probably days away from a series 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.

Jason Calacanis 1:10:42 What do you got, Sax, for your most impis- anticipated trend of the year, Sax?

Chamath Palihapitiya 1:10:46 Well, Chamath said a pretty good one. I think there's a version of that same thing in AI. I mean, I th- I... it's hard to know exactly what all the advancements are gonna 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 gonna be this year, but there certainly are gonna be some, and I think we'll see th- those innovations continue to percolate down to more and more of the average sort of mainstream consumer.

Jason Calacanis 1:11:19 Sax, 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 wanna work or they wanna 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, uh, 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.

Jason Calacanis 1:12:28 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?

Chamath Palihapitiya 1:12:49 I thought it was good, not great. It was very long and it kinda went on and on.

Jason Calacanis 1:12:53 It was long. Yeah.

Chamath Palihapitiya 1:12:54 It's not a movie I need to see a second time, let's put it that way.

Jason Calacanis 1:12:56 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-

David Friedberg 1:13:21 What is this?

Jason Calacanis 1:13:21 ... unreleased track here.

David Friedberg 1:13:22 What is this?

Chamath Palihapitiya 1:13:23 According to NASA, there's a new look at Uranus. (instrumental music plays) (laughs) Uranus. Uranus.

Jason Calacanis 1:13:30 (laughs) Talking about my anus.

Chamath Palihapitiya 1:13:34 Uranus. Uranus.

Jason Calacanis 1:13:37 (laughs)

Chamath Palihapitiya 1:13:37 Is this Young Spielberg?

Jason Calacanis 1:13:38 This is Young Spielberg-

Chamath Palihapitiya 1:13:41 Talking about my anus.

Jason Calacanis 1:13:41 ... coming at you, the summer jam of the year.

Chamath Palihapitiya 1:13:44 Uranus. Uranus. (laughs)

David Sacks 1:13:46 How is your colonoscopy been? Oh.

Jason Calacanis 1:13:47 It's a banger.

Chamath Palihapitiya 1:13:50 (laughs)

Jason Calacanis 1:13:50 Well, there it is.

Chamath Palihapitiya 1:13:51 (laughs)

Jason Calacanis 1:13:51 Talk about my anus.

David Friedberg 1:13:52 That was great.

Jason Calacanis 1:13:52 Coming at you.

David Friedberg 1:13:53 That was a banger.

Jason Calacanis 1:13:53 (laughs)

Chamath Palihapitiya 1:13:53 He obviously likes the deep bass of my voice.

Jason Calacanis 1:13:57 He does like the deep bass of your voice in his anus, yes.

David Friedberg 1:14:00 (laughs)

Jason Calacanis 1:14:00 So that's a banger. That's gonna be, I think the... That's gonna car- it's gonna be the summer anthem, the new album from Young Spielberg dropping. That's the lead title track, Uranus, coming at you. I also am looking forward to Gladiator Two is coming out, Ridley Scott. Lucius, the nephew of Commodus, uh, is a grown man. It's gonna be awesome, I hope. And Netflix's Three Body Problem. If you haven't read the books, they're great. And that's being done by the Game of Thrones guys that's gonna come out in March.

David Friedberg 1:14:27 That's gonna be awesome.

Chamath Palihapitiya 1:14:27 Uh-oh. Uh-oh.

Jason Calacanis 1:14:28 And that's gonna be awesome. (laughs)

Chamath Palihapitiya 1:14:30 D&D.

Jason Calacanis 1:14:32 Anyway, Three Body Problem, Gladiator Two-

Chamath Palihapitiya 1:14:33 Once the books ran out, they were kinda-

Jason Calacanis 1:14:36 Yeah.

Chamath Palihapitiya 1:14:37 ... they were kinda on their own there and then the show kinda declined.

Jason Calacanis 1:14:40 It was a terrible last season. In this case, the Three Body Problem is a complete series and it's, it's mind-blowing in terms of its epicness. Sax, what's your most anticipated media of 2024? Is there a Putin biography coming out?

Chamath Palihapitiya 1:14:53 (laughs)

Jason Calacanis 1:14:54 Is it Alex Jones's biography, ten-part series on Netflix? What do you got?

Chamath Palihapitiya 1:14:58 No, n- none of that.

Jason Calacanis 1:14:58 What are you looking forward to? (laughs)

Chamath Palihapitiya 1:15:00 Well, I, I agree with you about Gladiator Two. We actually have similar tastes in, in movies. I'm also looking forward to House of the Dragon Season Two.

Jason Calacanis 1:15:06 Ooh, yes.

Chamath Palihapitiya 1:15:07 But one project I will give a little plug to is Jimmy Soni's book, The Founders, which is the story of PayPal and the entrepreneurs who shaped Silicon Valley.

Jason Calacanis 1:15:17 Oh, yes.

Chamath Palihapitiya 1:15:18 It's a book that came out in 2022. The reason I'm mentioning it is because I optioned this book along with Jack Selbee, 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-

Jason Calacanis 1:15:39 Wait, did you say Drake-

Chamath Palihapitiya 1:15:40 ... drama.

David Friedberg 1:15:40 The musician, Drake?

Chamath Palihapitiya 1:15:41 Yeah.

Jason Calacanis 1:15:41 Oh.

Chamath Palihapitiya 1:15:42 He actually has a very successful production company called Dream Crew. They're the producers of Euphoria, which is this huge hit-

Jason Calacanis 1:15:48 Oh, sure.

David Friedberg 1:15:48 Mm-hmm.

Chamath Palihapitiya 1:15:48 ... on HBO.

Jason Calacanis 1:15:49 Terrifying.

Chamath Palihapitiya 1:15:50 So they've signed up... It is kind of a terrifying show. (laughs)

Jason Calacanis 1:15:53 If you have kids, it's terrifying. (laughs)

Chamath Palihapitiya 1:15:55 Um, but it is, it is terrifying.

David Sacks 1:15:56 Incredible show.

Jason Calacanis 1:15:57 Terrifying.

Chamath Palihapitiya 1:15:57 It's an incredible show but terrifying.

Jason Calacanis 1:15:59 Yeah.

Chamath Palihapitiya 1:15:59 And yeah, it is scary. But in any event, it's a big hit. So they've produced a lot of not just music, but television content. They're very interested in the story. And so we're partnering with them to create a TV show.

Jason Calacanis 1:16:11 Mm-hmm.

Chamath Palihapitiya 1:16:11 So hopefully that comes together this year.

David Friedberg 1:16:13 Are you in production this year on it or is it-

Chamath Palihapitiya 1:16:15 No, it's going to development this year.

David Friedberg 1:16:16 Development, yeah.

Chamath Palihapitiya 1:16:16 And then hopefully, you know-

David Sacks 1:16:17 You get any EP credits, Sax?

Chamath Palihapitiya 1:16:19 Yeah. Yeah.

David Friedberg 1:16:20 Oh, of course, you put the money on it.

Jason Calacanis 1:16:20 How much does it cost for the rest of us to get EP credits?

Chamath Palihapitiya 1:16:23 (laughs)

Jason Calacanis 1:16:23 50, 50 grand.

Chamath Palihapitiya 1:16:24 (laughs) Yeah.

David Sacks 1:16:25 Is it a 100...

Jason Calacanis 1:16:26 Is it, is it a 50, is it a 50-grander or is it more like-

Chamath Palihapitiya 1:16:29 No, it's 150.

David Friedberg 1:16:29 We can start just a little.

Chamath Palihapitiya 1:16:29 This is, this is, uh, this is gonna be an expensive one.

Jason Calacanis 1:16:32 Oh, really? Well, who's your dream... Is it HBO is a dream, or Netflix?

David Friedberg 1:16:36 Yeah, who funds production?

Jason Calacanis 1:16:37 HBO or Netflix?

Chamath Palihapitiya 1:16:37 Ultimately, a studio would make this.

David Friedberg 1:16:39 Right.

Jason Calacanis 1:16:40 You would want HBO or Netflix, I take it? Those are the top two in terms of making high-quality stuff even?

Chamath Palihapitiya 1:16:44 They'd be really good, yeah.

Jason Calacanis 1:16:45 Then HBO.

Chamath Palihapitiya 1:16:45 It doesn't have to be those two, but they'd be good. Could be Amazon Prime. I mean, there's a lot of these-

Jason Calacanis 1:16:49 And who are you hoping-

Chamath Palihapitiya 1:16:50 ... streaming services.

Jason Calacanis 1:16:50 ... plays a young Sax? Who would play a young Sax?

David Friedberg 1:16:53 Oh, good question. Good question.

Chamath Palihapitiya 1:16:55 That's a good question.

Jason Calacanis 1:16:56 Who would play a young David Sax?

David Sacks 1:16:59 What's the name of the guy that's dating Zendaya? What's, what's his name? Tom Holland. How about that? Tom Holland, the big one.

Chamath Palihapitiya 1:17:05 Or Peter Parker.

David Sacks 1:17:06 Peter Parker, yeah.

Jason Calacanis 1:17:07 How about Millie Bobby Brown for you, Sax?

David Friedberg 1:17:08 Only one guy can play a young Sax, then it would be Ryan Gosling.

Chamath Palihapitiya 1:17:12 Oh, you guys are really shooting the moon with this.

Jason Calacanis 1:17:15 Hmm. Tom Holland's interesting.

David Friedberg 1:17:17 Okay, Kal's busy on the internet right now, he's gonna give you a-

Jason Calacanis 1:17:19 No, I'm looking, I'm looking on the internet for a young actor to play you, Sax. Well, well, we'll let the audience come back to that.

David Friedberg 1:17:24 Yeah, let the audience decide who plays a young Sax.

Jason Calacanis 1:17:27 Yeah. Chamath, you looking forward to anything i- in, uh, media in 2024? Did you have anything for