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E110: 2023 Bestie Predictions!

All-In PodcastChamath, Calacanis, Friedberg, David Sacks
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Political Predictions for 2023

  • Biggest Political Winners:

    • Asian American College Applicants:
      • David Sacks predicts the Supreme Court will repeal affirmative action in the Students for Fair Admissions cases (Harvard and UNC).
      • The ruling is expected to strike down policies that discriminate against Asian American applicants in favor of other groups.
      • Chamath Palihapitiya views affirmative action as classism disguised as racism, arguing it favors legacy admissions and wealthy donors over lower-middle-class merit.
    • Mohammed bin Salman (MBS):
      • David Freiberg predicts MBS will rise in global influence due to the "Petro-Yuan" trade (Saudi oil sold in Chinese currency).
      • This shift positions Saudi Arabia at the intersection of the US, Russia, and China, allowing MBS to dictate global currency reserve trends.
      • The Biden administration's confrontational stance is seen as ceding influence to China and Russia, who welcome Saudi integration.
    • Nikki Haley:
      • Chamath Palihapitiya proposes a "spread trade": going long on Nikki Haley and short on Ron DeSantis for the Republican nomination.
      • The logic is that DeSantis faces "front-runner decay" and populist attacks, while Haley represents a moderate candidate capable of uniting the party's fractured wings.
    • Donald Trump:
      • David Sacks predicts Trump will lose 40–50 pounds via Ozempic/GLP-1 treatments, win the 2024 nomination, face indictment, and subsequently receive a presidential pardon.

  • Biggest Political Losers:

    • Ron DeSantis: Chamath believes DeSantis has peaked too early and will be overwhelmed by chaos and the "Forever Trump" faction.
    • The International Monetary Fund (IMF):
      • David Freiberg predicts the IMF will be the primary political scapegoat for an impending global debt unraveling (projected at $235 trillion).
      • The IMF will face criticism regardless of whether its intervention is viewed as too slow (causing defaults) or too aggressive (causing inflation).
    • California & San Francisco:
      • David Sacks identifies California and San Francisco as major fiscal losers due to $24 billion state budget shortfalls and collapsing commercial real estate tax bases.
      • The state failed to build a rainy-day fund from its 2021 $76 billion surplus, instead distributing funds to boost re-election numbers.
    • The US Dollar (as a Risk-Free Asset):
      • David Freiberg predicts the dollar will begin trading more like a risk asset rather than a guaranteed reserve currency due to US debt loads and non-USD trading blocs.

Business Predictions for 2023

  • Biggest Business Winners:

    • Relativity Space:
      • Chamath Palihapitiya identifies 3D-printed rocket manufacturing as a key differentiator, potentially reducing launch costs from hundreds of millions to $5–50 million.
      • Relativity has a $10 billion order book and aims to achieve a valuation comparable to SpaceX if their January launch succeeds.
    • OpenAI:
      • David Freiberg predicts OpenAI will become a top tech company, potentially securing a billion-dollar investment or a massive deal with Microsoft.
      • The company is expected to provide the infrastructure and tooling for a wave of new startups building on its ChatGPT model.
    • America's Natural Gas Industry:
      • David Sacks highlights Europe's shift from Russian gas to US LNG as a major win, driven by the Nord Stream pipeline sabotage and rapid infrastructure build-out.
      • Biden's policy shift to support gas exports is viewed as a pragmatic strategic move despite previous climate rhetoric.
    • Laid-Off Tech Workers:
      • David Freiberg predicts that groups of former tech employees (developers, product managers) will form new, high-growth startups, turning mass layoffs into entrepreneurial success.
    • Gig Economy Platforms:
      • Freiberg expects companies like DoorDash, Airbnb, and Uber to benefit from "sticky" unemployment as workers turn to gig platforms for income.

  • Biggest Business Losers:

    • Capital-Intensive Growth Startups (Series B–D):
      • David Freiberg predicts a "dot-com bubble" style purge where growth-stage companies face capital infusion walls and die due to lack of follow-on funding.
      • Investors are retreating to seed/early rounds, leaving late-stage companies with toxic cap tables.
    • Google Search:
      • Chamath Palihapitiya predicts a 10–15% usage drop for Google Search as AI-driven models (like ChatGPT) provide direct answers, eliminating the need for traditional search queries.
      • He argues that learning capabilities will converge across competitors, eroding Google's unique advantage.
    • White-Collar Workers / "Surplus Elites":
      • Chamath and others identify mid-managers and non-technical staff as major victims of corporate restructuring and efficiency mandates.
      • Companies like Amazon and Salesforce are cited as cutting thousands of white-collar jobs to rationalize unit economics.
    • Toxic Private Equity/Convertible Deals:
      • Chamath notes that companies valued at $3 billion are now effectively worth $300 million; converting to equity will wipe out common shareholders and employees.

  • Biggest Business Deals:

    • Starlink IPO: Chamath predicts SpaceX will spin off Starlink, valuing it at least $75 billion to provide Elon Musk with financial flexibility.
    • Russia-China Strategic Alliance: David Sacks anticipates a trillion-dollar deal covering energy, agriculture, and rare earth minerals between Putin and Xi Jinping.
    • Saudi-China Petro-Yuan Trade: David Freiberg predicts a formal agreement to trade oil in Yuan, marking a turning point in the USD's dominance.
    • Apple Acquisition (Wildcard): Freiberg suggests Apple may buy a content company (e.g., Disney) or an automotive firm (e.g., Fiat Chrysler/Tesla) to diversify away from China and declining hardware demand.
    • Amazon's "Fourth Pillar" (Health): Chamath predicts Amazon will expand into health via acquisitions (e.g., Roman, Peloton, Whoop), moving beyond its three-legged stool of e-commerce, Prime, and AWS.
    • TikTok Divestiture: Chamath predicts TikTok will be forced to divest or go public under duress due to bipartisan US pressure, though the content ecosystem may simply migrate to YouTube Shorts.

Asset Class & Market Trends

  • Best Performing Asset:

    • Seed Stage Investing (Series A): David Freiberg identifies early-stage investing as the top opportunity, as investors avoid "toxic" late-stage cap tables.
    • Short-Term Treasuries: Chamath and Sacks recommend T-bills (2-year duration) yielding 4.5%–5% risk-free while waiting for market clarity.
    • Industrial/Infrastructure Equities: Freiberg cites semiconductor equipment (Applied Materials), oil & gas services (Schlumberger), and construction equipment (Caterpillar) as resilient plays on global infrastructure spending.

  • Worst Performing Asset:

    • Junk Debt: Chamath predicts high leverage will break as variable rates rise to 11%–14%, forcing mass defaults and restructurings.
    • San Francisco Office Towers: Specifically cited as toxic assets with 27% vacancy rates, facing potential bank ownership via foreclosure.
    • Consumer Credit: Freiberg warns of a credit bubble burst, citing record credit card debt (19.6% interest rates), high car loan stretching, and potential mortgage defaults.
    • Energy: Chamath notes energy stocks may overheat and decline if a recession reduces consumption.

Most Anticipated Trends & Contrarian Beliefs

  • Most Anticipated Trends:

    • Austerity: Chamath and Sacks predict a cultural shift away from wasteful spending (e.g., private jets, luxury travel) as the "consumer back breaks."
    • Cell and Gene Therapies: Freiberg anticipates a mainstream rollout of gene editing and cell therapies, necessitating massive infrastructure investment in delivery systems.
    • Decline of Trump's GOP Influence: Sacks predicts Trump's endorsements will become worthless as the GOP establishment and MAGA base begin to openly defy him.

  • Most Contrarian Beliefs:

    • Persistent Inflation: Chamath argues inflation will not fall as fast as expected due to wage inflation and a labor market shift favoring capital to labor.
    • End of US Dollar Dominance: Freiberg believes the dollar will begin trading as a risk asset in 2023, losing its "risk-free" status due to geopolitical fragmentation.
    • Biden-Zelensky Rift: Sacks predicts a divergence in US and Ukrainian interests in 2023, where the US pushes for negotiation/stalemate to avoid nuclear escalation over Crimea.

Media & Culture Notes

  • Anticipated Media:
    • Film: Oppenheimer (Nolan), Cocaine Bear, and Dune: Part Two.
    • TV: Succession Season 4, Ted Lasso Season 3, and Loki Season 2.
    • Books: Michael Lewis's book on Sam Bankman-Fried and Prince Harry's Spare.
    • Tech-Media: Generation of AI-driven media, including AI-written symphonies, novels, and interactive video games.
  • ChatGPT Valuation Context: The group notes a reported $29 billion tender offer by OpenAI, questioning the fundamentals given its daily losses and lack of monetization, while highlighting potential copyright litigation risks regarding training data.