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

Hosts and Context

• The 2024 predictions segment features hosts Chamath Palihapitiya, David Friedberg, David Sacks, and Jamal (voice/AI) recording from the slopes.
• The discussion begins with a humorous anecdote about David Friedberg's prepper mindset, specifically purchasing thousands of dollars of radiation suits and a "dog bunker" for his pets, Monty and Daisy.
• The hosts acknowledge the previous year's (2023) predictions, noting Sacks' accurate call on Asian American college admissions and Chamath's successful spread trade on Nikki Haley vs. DeSantis.

Political Predictions: Winners and Losers (2024)

• Vladimir Putin: Sacks predicts Putin will be the biggest political winner due to Russia stabilizing its economy despite Western sanctions and consolidating military gains in Ukraine.
  • Sacks argues the "stalemate" narrative is false and that Russia is winning the war.
  • He notes Putin's growing influence in the Global South and BRICS nations as the US dollar hegemony faces challenges.
• Independent/Third-Party Candidates: Chamath, Freeberg, and Sacks predict the US third-party/independent movement will be a major winner, citing polls showing over 60% interest in alternatives to the two-party system.
  • RFK Jr.'s potential ballot access and the shifting sentiment among former Republicans and Democrats are cited as catalysts.
• David Friedman's Prediction: Freeberg predicts an independent third party will challenge the traditional split, referencing Ross Perot's 1992 performance.
• Ukraine: Freeberg and Sacks identify Ukraine as the biggest political loser of 2024 as US attention shifts to the Middle East and funding becomes less politically palatable.
  • Sacks highlights Ukraine's demographic collapse, noting only ~20 million people remain, with half being pensioners.
  • He predicts Ukraine's path to NATO membership will fade away.
• The Collective West: Sacks identifies the Collective West as a broad political loser, citing failures in both Ukraine and Israel.
  • He states Israel's invasion of Gaza is failing to militarily achieve the destruction of Hamas.
  • He cites a humanitarian crisis in Gaza with over 20,000 Palestinian deaths and 1.8 million displaced.
• Benjamin Netanyahu: Freeberg predicts Netanyahu will be a major political loser due to internal Israeli polls suggesting 75% support for his ouster and a shift in global opinion regarding the Gaza war.
• The Koch Network: Chamath predicts the Kochs will be the biggest political loser of 2024, suggesting their investments in Republican politics are the most consistent negative indicator of value.
• California: Sacks confirms his 2023 prediction that California would be a loser, noting a shift from a $76 billion surplus in 2022 to a $68 billion deficit.

Business Predictions: Winners and Losers (2024)

• Commodities: Freeberg predicts a commodities boom due to under-investment relative to demand post-pandemic and cash flowing back from treasuries as yields fall.
• Bootstrapped/Profitable Startups: Chamath predicts these will be the biggest business winners, arguing that AI will make copying existing businesses cheap and fast, rendering unprofitable high-burn models obsolete.
• Anduril (Roadrunner System): Sacks predicts Anduril will be a major winner due to the urgent need for cost-effective drone interceptors to counter asymmetric warfare (e.g., Houthi drones).
• Training Data Owners: Sacks predicts owners of high-quality training data (e.g., New York Times, Reddit) will emerge as winners through new licensing models.
  • He proposes a federated subscription model where users pay a fee to access specific licensed content within AI models.
  • He anticipates major licensing settlements (nine-figure) for past data usage and ongoing annual fees.
• Vertical SaaS: Freeberg predicts vertical SaaS companies will be major losers as enterprises use AI/low-code tools to build cheaper, custom in-house alternatives.
• German Economy: Sacks identifies the German economy as a loser, citing the loss of cheap Russian gas and the surge of Chinese EV exports undercutting German automakers.
• Professional Sports: Chamath predicts 2024 will be the peak for professional sports valuations, citing rising churn in streaming services, the LIV Golf-PGA merger, and NIL payments in college sports.
• Smartphone Manufacturers: Freeberg predicts smartphone manufacturers will struggle as consumers skip generations and upgrade cycles slow due to high prices and lack of compelling innovation.

Business Deals and Contrarian Beliefs

• Federal Reserve Intervention: Sacks and Chamath predict the Fed will extend or replace the Bank Term Funding Program (BTFP) to support regional banks with impaired commercial real estate portfolios.
• TikTok IPO: Chamath predicts TikTok (or its parent ByteDance) will go public or spin out to satisfy political pressure regarding US data security.
• Generative AI Licensing: Freeberg predicts blockbuster licensing deals for content rights (e.g., Disney), allowing users to generate content from proprietary libraries.
• Enterprise Value Decline: Chamath holds the contrarian view that the enterprise value of OpenAI and similar entities will decline due to economic unsustainability of current token pricing and latency issues.
  • He believes open-source models with proprietary hardware will disrupt the current market.
• Nuclear Conflict: Freeberg holds the contrarian belief that there is a non-zero (1-2%) probability of a tactical nuclear weapon being used in 2024 due to declining conventional supply and conflict escalation.
• NATO Fracturing: Freeberg warns of the risk of Turkey being challenged to leave NATO due to its alignment with Hamas and other anti-Western actions.
• Soft Landing Bumps: Sacks predicts the "soft landing" narrative will be bumpy, with too much market euphoria pricing in rate cuts that may not materialize without recessionary pressure.
• Apple in AI: Sacks predicts Apple will make significant gains in generative AI, likely rebooting Siri or releasing a new product series.

Asset Class Predictions (2024)

• Best Performing Asset (Uranium): Freeberg selects uranium ETFs (e.g., URA), citing a global shift toward nuclear power, ESG demand, and construction of 450 new Chinese nuclear stations.
• Best Performing Asset (Energy): Sacks selects energy stocks, anticipating price spikes from escalating conflicts in the Middle East, Venezuela-Guyana oil disputes, and Ethiopia-Egypt tensions.
• Best Performing Asset (Consumer Comfort): Chamath predicts "consumer comfort services" (DoorDash, Airbnb, Uber) will outperform as consumers continue small luxury spending despite austerity.
• Worst Performing Asset (Magnificent Seven): Sacks predicts the S&P 493 will outperform the "Magnificent Seven," arguing their gains were story-driven and others must catch up.
• Worst Performing Asset (LLM Startups): Chamath identifies late-stage private LLM startups as losers due to overvaluation and the rapid rise of open-source parity.
• Worst Performing Asset (Vertical SaaS): Freeberg predicts pricing compression for vertical SaaS as AI enables cheaper, custom alternatives.

Anticipated Trends and Media (2024)

• Bitcoin ETFs: Chamath predicts 2024 will be a historic year for Bitcoin as ETF approvals drive mainstream adoption.
• AI Efficiency and Outsourcing: Sacks anticipates trends where AI drives efficiency and enables global outsourcing, allowing companies to hire talent abroad at a fraction of the cost.
• Generative Media: Freeberg anticipates AI-driven news curation where users can interact with personalized, real-time generative video newscasters.
• Film and TV:
  • Freeberg reveals a personal project: a new DJ album by "Young Spielberg" featuring the track "Your Anus, Coming at You."
  • The hosts anticipate Gladiator 2, House of the Dragon Season 2, and Netflix's Three-Body Problem.
  • Sacks reveals an option to turn the book The Founders into a TV series with Drake's production company, Dream Crew.
• Biotech: Freeberg anticipates AI-driven discovery of new molecules and materials will accelerate biopharma, making production cheaper and less foot-print intensive.
• Austerity: Chamath notes that despite predictions of austerity in 2023, consumer debt is at record highs; however, he expects signs of strain to appear in 2024.

Emotional Outlook for 2024

• David Sacks: Feels "turbulent but level," acknowledging global instability but remaining calm.
• Chamath Palihapitiya: Describes himself as "exhilarated" and "optimistic," viewing 2024 as a year of cleanup and creativity.
• David Friedberg: States he is "excited" about his new role at Ohalo but "cautious and pensive" regarding geopolitical "tinder boxes" and global debt levels.
• Jamal (AI): The AI persona notes that "all the besties are gone" and humorously suggests a "huge orgy" due to "sexual tension," before the segment ends with a plug for merch.