2025 Predictions with bestie Gavin Baker

The Besties welcome Gavin Baker and recap ski week! (0s)

• Jason Calacanis is hosting the All-In Podcast, and it's 2025, the year of their Bestie Awards, with Gavin Baker from Atreides Management as their guest (10s).
• Atreides Management is a crossover firm that invests publicly and privately in consumer and tech companies, from series A to Mega cap (48s).
• Gavin Baker is a capital allocator who places bets on technology and the most important new companies in the world (56s).
• Atreides Management has roughly $4 billion in assets (1m15s).
• The podcast is doing a prediction show, and each Bestie gets to make a super prediction that will be put on PolyMarket, a prediction market where people can place wagers (1m49s).
• PolyMarket has partnered with the All-In Podcast to create an "All-In" section on their site, where people can track the podcast's predictions and create markets (3m10s).
• The podcast will be discussing their predictions, which will then be posted on PolyMarket for people to trade (2m56s).
• The hosts also mention a recent ski trip and share some footage of the Besties skiing, with Gavin Baker rating their skiing skills (3m27s).
• Chamath has made significant progress in skiing, with noticeable improvements in his turns, and is now in his third season with the black bomber, having previously learned to ski with his kids in his 40s, which he found challenging but appreciates the help he received from others last season (3m52s).
• Chamath finished his 16th day of skiing yesterday and follows an executive program, skiing for 1.5 to 3 hours in the morning, completing 10 runs, and then taking the rest of the day off to relax and work (4m37s).
• Gavin Baker ranks himself in the bottom percentile in terms of natural athleticism but has many thousands of hours of skiing experience, which he believes makes up for his lack of athleticism (5m13s).
• The conversation is about to shift to politics and making predictions for 2025, with a goal of keeping the discussion moving due to the large number of predictions to cover (5m31s).

Biggest Political Winner (5m38s)

• Last year's prediction for the biggest political winner was incorrect, with one person predicting an independent third party in the US and another predicting an independent Centrist, but it's argued that independent Centrists may have swung the election for Biden in 2020 and Trump in 2024 (6m12s).
• A prediction for the biggest political winner of 2025 is fiscal conservatives, who may gain traction due to the need for austerity and the potential discovery of waste, fraud, and abuse in the US federal government, which could impact state elections (6m51s).
• Another prediction for the biggest political winner of 2025 is young candidates, as Trump's cabinet picks have an average age of 40-45 years old, compared to Biden's cabinet average age of almost 60, marking a potential shift towards younger political candidates (7m44s).
• A third prediction for the biggest political winner of 2025 is Trump and centrism, with a focus on Gen X and Elder Millennials, who may bring a new perspective to politics, thinking about the future of their children and themselves, rather than just their own interests (8m35s).

Biggest Political Loser (9m26s)

• The biggest political loser of 2025 is predicted to be Putin, as Xi Jinping will likely begin decoupling from him due to Europe's rearmament and the US shifting resources to the Pacific, making it harder for China to reunify with Taiwan (9m36s).
• Putin's loss will be a result of a humiliating defeat in Ukraine, with Russia having lost half a million people and the West only providing weapons, not soldiers (10m45s).
• Another prediction is that the pro-war neocons will go head-to-head with JD Vance and Elon Musk, among others, and will ultimately lose, leading to a crack in the establishment of the neocon movement (11m11s).
• However, it's also possible that the Trump Administration will exhibit bellicose rhetoric to get better deals, which may seem at odds with the prediction of the neocons losing, but will ultimately lead to the same outcome (12m8s).
• A different prediction is that progressivism will be the biggest political loser of 2025, as it has been riddled with instincts that are being countered by the MAGA movement (12m53s).
• The MAGA movement is seen as an antidote to progressive instincts, and its explanation and defense will continue to gain traction in 2025 (13m10s).
• Predictions for 2025 include Justin Trudeau losing the Canadian election to Pierre Poilievre, the Alternative for Germany (AFD) winning in Germany, and Marine Le Pen winning in France if an election is held due to a deadlock (13m28s).
• In the UK, the unfolding child rape scandal involving Pakistani Muslim men and the alleged failure to prosecute them due to fears of stoking Islamophobia may lead to the Labor government falling and Nigel Farage winning (13m50s).
• These potential outcomes are seen as a repudiation of class-based identity politics and may have significant ripple effects globally, with progressivism being the biggest political loser in 2025 (14m31s).
• The "racist vocal minority" of each party, estimated to be around 5% of both MAGA and the left, is seen as a driving force behind these changes, with the Democratic side having DEI (Diversity, Equity, and Inclusion) and the other side having outright racism (14m48s).
• Last year's predictions for 2024 included Netanyahu, Ukraine, and the Koch family as potential losers, with the GOP being correct about the Koch family (15m7s).
• The 2024 US election is seen as the end of the Republican party as it was known, with the MAGA movement taking its place and using the Republican label to run candidates and get elected (15m31s).
• The Koch family's influence in the Republican party is seen as having been significantly diminished, with their billions of dollars in investments essentially going to zero (16m17s).
• The new class of donors who will decide Republican policy is expected to include individuals like Miriam Adelson and Elon Musk, marking a significant shift from the Koch family's influence (16m42s).
• The issue of money in politics is discussed, with the conclusion that as long as the money raised on each side is roughly equivalent, it does not matter, and what is important is equivalence (17m21s).

Biggest Business Winner (17m34s)

• The year 2025 is predicted to be the year of autonomous hardware or robotics, following 2024's focus on compute build-out and AI system rollouts in software (17m48s).
• A company called Unry, based in China, has developed a robot called the Go2, which costs $1600, has an API, and features LAR and intelligence guidance systems, making it suitable for various applications, including scientific research and farm management (18m20s).
• The Go2 robot has been used in videos featuring machine guns mounted on its back, demonstrating its potential as an autonomous field soldier, and its low cost makes it an attractive option for various uses (18m35s).
• Unry recently raised a couple of hundred million dollars from mostly Chinese investors, indicating growing interest in autonomous robotics (18m54s).
• Humanoid robots and autonomous systems are expected to become more prominent in 2025, with the potential to revolutionize various industries and aspects of life (19m12s).
• The development of autonomous robots like the Go2 and Unry's humanoid robot, the G1, which costs $166,000, could lead to significant advancements in fields like security, manufacturing, and more (20m5s).
• The potential applications of these robots are vast, ranging from farm management and scientific research to household assistance and even entertainment, such as dealing poker (20m22s).
• The emergence of robots like these may also reveal interesting aspects of human behavior, such as the tendency to dominate or abuse robots (20m54s).
• The year 2025 is predicted to be the year of the robots, with robots and artificial intelligence (AI) expected to become increasingly advanced and mainstream. (21m17s)
• Full Self-Driving (FSD) technology, such as that developed by Tesla, is expected to become more widely adopted and compound at an accelerating rate, making it a safer and more preferred option for transportation. (21m47s)
• Big businesses that use AI thoughtfully are expected to be the winners in the near future, as they will have the resources to invest in AI technology and gain a profound advantage over smaller businesses. (22m5s)
• The increasing use of AI will lead to a shortage of GPUs, accelerators, and compute power, similar to what happened in 2023, with companies like Nvidia and chip makers expected to benefit from this trend. (22m48s)
• Dollar-denominated stable coins are predicted to be the biggest business winners of 2025, as they have become decoupled from crypto volatility and are being used for wholesale and useful functions in running businesses. (23m13s)
• Stable coin usage is expected to continue to rise, with the potential to quadruple or quintuple by the end of 2025, and attack the duopoly of Visa and MasterCard, with the possibility of being used to reduce high credit card transaction costs. (25m22s)
• Tether was criticized for being a primary tool for terrorism, sanctions evasion, and human trafficking, raising questions about whether it should be regulated, with the knowledge and third-party services available to add an intelligence layer to transactions (25m35s).
• Removing 300 basis points of drag from the global economy could result in a massive gain, potentially worth over a trillion dollars in the United States alone (26m13s).
• The economic justification for regulating stable coins is profound, but the United States government may be hesitant to give up its monopoly on the US dollar, as stable coins could potentially replace it as a reserve currency (26m43s).
• Replacing the US dollar with a constellation of stable coins could be bad for America, as it would mean giving up the ability to borrow in its own currency and control the size of its debt (27m23s).
• The US government's current monopoly on the US dollar allows it to control the size of its debt, and giving this up could be a big mistake (27m32s).
• Stable coins could be a big topic for the year, with potential guests like Jeremy Allaire from USDC to discuss the monopoly on the US dollar and the implications of stable coins (28m11s).
• Using US dollar stable coins for payment rails could save hundreds of thousands of dollars in transaction costs, making it a no-brainer for businesses (28m37s).
• The biggest business winner prediction for 2025 is Tesla and Google, with the year expected to be focused on AI and Robotics, and Google's comeback in AI and Elon Musk's work on Colossus being notable (29m0s).
• A tremendous effort was made by a cohort of companies, including Tesla, XAI, and Google, who are investing heavily in AI, standing up 100,000 GPUs in under 45 days, which is expected to lead to significant advancements in the field (29m27s).
• Google, specifically, is expected to come out with impressive AI-related developments, including Gemini, a deep research tool that is considered a step function higher than other similar tools in the market (29m56s).
• Gemini's deep research tool allows users to create models and ask complex questions, which it then breaks down into subcomponents, searches the web in real-time, and summarizes the findings in a report, all for a relatively low cost of $20 (30m30s).
• This tool has the potential to solve problems that people didn't know they had and is expected to be a game-changer in the field of AI (31m52s).
• Last year's predictions for business winners included bootstrapped or profitable startups, which came to pass, with some of these companies going public and raising money at higher valuations (31m59s).
• Commodities businesses were not as successful as predicted, due to a lack of inflationary pressures (32m16s).
• Training data owners, such as Reddit and the New York Times, have seen significant success, with Reddit's stock up 24% in 2024 and the launch of their own answer call, and the New York Times' stock also up, with a lawsuit filed against Open AI (32m29s).

Biggest Business Loser (32m43s)

• Predictions for the 2025 biggest business losers were discussed, with Shamat predicting pro sports teams due to peak valuations, and Free Perg predicting vertical SaaS companies due to AI disruption (32m44s).
• Another prediction was made for smartphone manufacturers, citing a lack of advancement in smartphones and decreasing sales, despite Apple's stock being up 30% in 2024 (32m59s).
• A counterpoint was made that pro sports teams may not be losers, as the market is about to be institutionalized and funds will start buying teams, with capital markets having more resources than individual wealthy buyers (33m12s).
• The reason for initially predicting pro sports teams as losers was due to a viewership problem, specifically in the NBA, with the game becoming less interesting to watch and the TV deals creating no reliable rivalries (33m41s).
• The enormous TV deals have led to players frequently changing teams due to high compensation, and the next TV deals may lead to a decrease in the dollar pool for sports, affecting non-trophy buyers (34m7s).
• The presence of PE firms and institutional LP dollars in sports franchises may lead to more price-sensitive buyers, rather than emotional or trophy buyers (35m13s).
• A personal anecdote was shared about sitting in court-side seats at a Warriors game and almost getting thrown out, with the owner receiving a call from the Warriors or NBA about the incident (35m37s).
• A humorous anecdote was shared about an experience at a basketball game where a warning card was given due to alleged abusive behavior, with the situation being ironic given the later interaction with Draymond during the finals games (36m18s).
• The NBA is considered to be terribly managed, with even LeBron commenting on the issue, although it's noted that the NFL is probably the best managed sports league (37m20s).
• Google, Amazon, and Netflix have bought sports rights and are happy with their purchases, which could lead to more tech companies buying sports rights in the future (37m33s).
• The ability to dynamically create ads for individual users may become possible in the future, which could benefit sports leagues and tech companies (37m53s).
• The value of NBA franchises may decline if the league doesn't address its management issues, but tech companies may still be interested in buying sports rights (38m16s).
• It's possible that a tech company like Apple, Amazon, or Google could buy the NBA and offer it for free to users of their products, with others having to pay (38m37s).
• The NBA has an 11-year deal, which means that opportunities for tech companies to buy sports rights don't come up often (39m12s).
• The biggest business loser of 2025 is predicted to be government service providers, as the US government may not spend as much money in the future (39m23s).
• A significant drawdown in the market is predicted for 2025, with the absolute dollar drawdown of the MAGS (a group of top companies in the indices) potentially being in the trillions of dollars, due to the high concentration of the top 7-10 companies in the indices, which has historically foreshadowed a big drawdown (39m52s).
• The concentration of the top companies in the indices is approaching 40%, which is a setup for a potential retrade and giving back, with a possible 10% drawdown in the MAGS, resulting in a couple of trillion dollars in absolute terms (40m36s).
• The biggest business losers of 2025 are predicted to be the old defense and aerospace providers, such as Boeing, Lockheed Martin, and Raytheon, due to China's dominance and the need for the US defense budget to shift towards more tech-oriented and R&D-driven rationalization and pricing (41m27s).
• The government contracting business, particularly the Cost Plus model, is expected to be deeply challenged in 2025, with the potential for new entrants and more efficient business models to disrupt the traditional players (42m5s).
• Traditional consulting companies, such as the Y Pros, Tatas, HCLs, Accenture, and EY, are also expected to face challenges in 2025, as their customers may not hire them due to the increased efficiency and competition from software entrepreneurs advising and informing the federal government (42m26s).
• The Cost Plus model, which is a form of human labor arbitrage, is expected to be scrutinized in 2025, leading to potential stress on the business models of companies that rely on this model (42m55s).
• The biggest business loser prediction is commercial real estate, as leases will continue to come up, and companies may try to delay dealing with the issue, but this will ultimately lead to problems (43m54s).
• Micro strategies are also considered overpriced, trading at 2-4 times the book value of their Bitcoin, which is not seen as sustainable (44m12s).
• Truth Social is valued at $7 billion despite only making $4-5 million in revenue, which makes no logical sense (44m22s).
• Open AI is considered the most overpriced, with headwinds being underappreciated, and its valuation making no sense, as it may not be able to keep charging high prices (44m31s).
• Google, AWS, Apple, and XAI are seen as competitors that could take market share from Open AI, potentially reducing its $57 billion valuation (45m13s).
• There is a nonzero chance that Open AI could lose its process and the court cases related to transferring $157 billion in value from a nonprofit to a for-profit company (45m31s).
• A super prediction is that Open AI will not be able to convert from a nonprofit to a for-profit in 2025 (45m48s).
• Open AI is projecting $12 billion in revenue next year, according to leaked financials, making it a real business with real revenue, scale, growth, and technology (46m5s).
• The revenue of Open AI is mostly from consumers and developers, but developers may prefer open-source options and switch to other services, potentially reducing Open AI's market share (46m27s).

Biggest Business Deal (46m54s)

• A prediction is made that 2025 will be the year of the collapse of traditional auto OEMs, with Tesla being in a strong position due to the quality of its vehicles, software, and autonomy with FSD, which may trigger a wave of auto mega-mergers (47m7s).
• The recent agreement between Honda and Nissan to merge, with Mitsubishi involved, is seen as a signal for the industry to consolidate and get rid of redundancy (48m6s).
• European OEMs, such as Volkswagen and Stantis, are in trouble and may be forced to merge due to pressure from smart investors (48m22s).
• It is predicted that traditional auto OEMs will lose their Chinese business due to a lack of competitive products, and will be caught between Tesla and Chinese OEMs, unless there is significant government intervention (48m56s).
• A prediction from the previous year about blockbuster deals for right holders licensing data for AI training was correct, with Reddit signing two such deals (49m32s).
• A prediction is made that 2025 will see massive funding deals for hardware-based manufacturing buildout in the United States, which may include traditional equity from private markets or government support (49m52s).
• The buildout of manufacturing in the US is expected to focus on next-generation production, including autonomous and robotic systems, in response to China's ramp-up and buildout of drones, robots, and autonomous vehicles (50m25s).
• A large amount of capital is expected to move into hardware buildout in the US, resulting in blockbuster deals (50m50s).
• The biggest business deal in 2025 is expected to be a wave of mergers and acquisitions (M&A) after four years of inactivity, driven by pent-up demand (51m3s).
• A significant event is predicted to occur with Intel, which could have a major impact, hopefully beneficial for America (51m14s).
• The rise of independent Frontier AI Labs is anticipated, with the ultimate AI winner being the one with the lowest cost of infrastructure and compute, which cannot be achieved by relying on external compute providers like Azure, AWS, or Google (51m37s).
• The full-stack approach is expected to be the winning strategy, as it allows for lower costs and greater control (52m5s).
• A prediction for 2025 is that there will be partnerships between companies like Amazon, Uber, Tesla, and Weo, potentially leading to mega-deals that could reshape the autonomy, delivery, food delivery, and e-commerce spaces (52m37s).
• Possible deals include Tesla buying Uber or DoorDash, or Amazon buying DoorDash and Uber, which could create a super app and revolutionize the industry (52m47s).
• Autonomous drones, such as those developed by Zipline, are expected to play a significant role in delivery services, particularly in suburban areas, and potentially in cities over time (53m40s).
• Amazon is already testing autonomous drone delivery in Texas, with 60,000 SKUs being delivered in 45 minutes, and this technology is expected to become more widespread (54m6s).
• Another potential big deal in 2025 is a partnership or acquisition involving Weo, which has already made significant inroads in the market, gaining a substantial market share in just 15 months (54m32s).
• Weo has gained a 22% market share of rides in San Francisco, matching Lyft's share, and has reduced Uber's market share by around 12 points in 15 months, with plans to launch in LA, Austin, and other cities, having already launched in Phoenix (54m47s).
• Weo has also moved its hardware platform to a new device, which is expected to significantly reduce capital expenditure for new launches, leading to improved return on investment (ROI) metrics and more efficient use of capital to scale (55m8s).
• A major deal involving Weo could happen this year, such as a massive financing, IPO, merger, or acquisition with a big ride-sharing company, although the strategic sense of such a deal is uncertain (55m27s).
• Weo's service is considered an incredible experience by people of all age groups, with many believing it is the future of transportation, despite current limitations such as slow and monotonous rides (55m45s).
• The ride-sharing market is expected to grow rapidly, with less than 1% of rides globally currently done by ride-sharing, but with the potential to reach 20% in a short period, leading to multiple winners in the space (56m12s).
• Companies such as Uber, Byd, and Amazon are expected to play a significant role in the global competition, with potential partnerships and deals happening quickly due to the high stakes involved (56m30s).
• Consolidation in the transportation space is predicted to be a major business deal in the future (57m0s).

Most Contrarian Belief (57m4s)

• A contrarian belief from last year was that the enterprise value of Open AI would go down, but it roughly doubled instead (57m6s).
• The probability of a nuclear weapon being used for the first time since World War II was predicted to increase, but fortunately, it did not happen (57m19s).
• Apple was predicted to become a major player in AI, and they did launch Apple Intelligence, but it is considered to be terrible and a piece of garbage (57m39s).
• The domain "dad.com" is owned, and it redirects to J Paul, while the domain "disggraad.com" is also owned and redirects to Jake Paul, with "disggraad" being an Italian American slang term for someone who is disgraceful (58m23s).
• There is a potential rematch between Tyson and another boxer, with the winner receiving $50 million and the loser receiving zero, and it is suggested that this could be a good opportunity for a podcast episode (59m24s).
• Logan Paul is fighting Conor McGregor in India, with Conor McGregor set to receive $250 million, and it is suggested that this is a publicity stunt to attract tourists to India (59m53s).
• A potential celebrity boxing match between Freeberg and Baker, or Poly and Kakanis, is suggested as a way to get in on the "grift" (1h0m17s).
• A contrarian prediction for 2025 is that there will be a banking crisis in one of the major mainstream banks, with a small chance of it happening (1h0m43s).
• The total indebtedness of Pax America, including US Government debt, corporate debt, and mortgage debt, is around $70 trillion, and if interest rates were to rise to 5%, the total interest expense would be equivalent to 10% interest rates 25 or 30 years ago due to the massive increase in debt (1h1m5s).
• This could lead to a market-to-market problem, a credit default problem, or a reserve issue in one of the mainline banks, potentially triggering a financial crisis (1h2m25s).
• Two banks are considered more at risk of insolvency or financial collapse than others, but their names are not disclosed (1h2m57s).
• Research has been conducted using Gemini Deep Research to analyze the total Pax Americana debt outstanding, apply the current market interest rate, and generate a chart of interest expense relative to GDP over time (1h3m14s).
• It is believed that America will experience at least one year of greater than 5% real GDP growth over the next four years, driven by increased productivity due to AI and deregulation (1h3m55s).
• This growth could lead to a significant increase in wealth for the country and individual Americans, with the economy potentially doubling in 12 years at a 5-6% growth rate (1h4m25s).
• A specific prediction for 2025 is that frontier labs will stop releasing their leading-edge models to prevent knowledge distillation and IP theft, and instead keep their best models in-house (1h4m45s).
• Research is being conducted using Gemini Advanced 1.5 Pro with Deep Research to identify which banks have the greatest chance of being insolvent or experiencing a financial collapse (1h5m12s).
• A contrarian prediction is made that socialist movements will rise dramatically in the United States in 2025, despite the common belief that socialism was defeated in the recent election cycle (1h5m29s).
• The acceleration of progress, deregulation, and AI will lead to an unleashing of economic growth, but some markets, industries, and companies will be huge winners, while others will be huge losers (1h5m58s).
• The downfall of US autom manufacturing and other industries will lead to a significant shift in 2025, with some parts of the economy being big winners and others being big losers (1h6m5s).
• When there is rapid change, large contingents of people are often left behind, and socialist policies and movements tend to gain steam (1h6m29s).
• The example of Argentina in the mid-1940s is given, where 8% GDP growth did not benefit everyone equally, and it is predicted that the same will happen in the US, with some people becoming billionaires or even the world's first trillionaire, while others will be left behind (1h6m41s).
• The cutting of government funding to programs that benefit individuals, employment cuts in the federal government, and through federal contractors will contribute to the rise of socialist movements (1h7m6s).
• AI will amplify inequality for some period of time, as the amount of money spent on AI, test time, and compute will give companies and individuals a massive advantage (1h7m33s).
• Employment and income disruption in 2025 will fuel socialist movements, and it is predicted that this will be a more difficult year than anticipated, with a harsher reality on the ground for most Americans (1h8m0s).
• The prediction is made that not only blue-collar workers but also highly qualified individuals with six-figure salaries will struggle to find work at previous compensation levels due to automation and the delegation of tasks to other regions (1h8m30s).
• Socialism is predicted to be on the rise, contrary to the popular view that it is declining, with a focus on government policies and a more significant role for the government in providing universal services such as healthcare and education (1h9m3s).
• Wokeism and progressivism are expected to decouple from socialism and decline in trend, while socialism will continue to grow (1h9m37s).
• The government's failure to provide basic services such as universal healthcare, pre-k, and after-school programs is seen as a reason for the rise of socialism, as people question why these services are not available in the US when they are in other countries (1h9m50s).
• The assumption that providing universal services is easy is challenged, citing examples of how government intervention in markets such as education and healthcare has led to increased costs and inefficiencies (1h10m31s).
• A potential solution to these problems is to introduce competition and decentralize decision-making to the states, using school vouchers and experiments with different healthcare systems (1h11m11s).
• Open AI is predicted to lose its lead and become the number four player in AI, with a total collapse of the company, due to its transition from a non-profit to a for-profit model (1h11m32s).
• There is speculation about the possibility of Jeff Bezos running for president, with some predicting that he will do so, although this is not confirmed (1h12m12s).
• Jeff Bezos is expected to sell the Washington Post in 2025, after going through a midlife crisis and re-evaluating his priorities (1h12m28s).
• It is predicted that Bezos will choose to serve his country instead of holding on to the Washington Post (1h12m38s).
• A potential buyer for the Washington Post could be Karen Swier, who may run the publication into the ground (1h12m49s).
• The Washington Post is considered a valuable asset, potentially being the best performing asset (1h12m57s).

Best Performing Asset (1h12m59s)

• The best performing asset of last year was public tech stocks, with Chamath doing a spread trade that was long public tech stocks and short private late-stage tech stocks, resulting in a 10% gain for the NASDAQ top 100 Tech stock ETF. (1h13m1s)
• The uranium ETF was down 1% in 2024, with its components being considered "junk" and not the right way to trade uranium. (1h13m14s)
• The on-demand economy, consisting of Uber, Airbnb, and DoorDash, had mixed results, with Uber up 30% initially but now only up 3%, Airbnb being flat, and DoorDash up 74%. (1h13m44s)
• Gavin predicts that the best performing asset of 2025 will be high bandwidth memory, citing its importance in GPUs and the fact that it has been sold out for the last two years. (1h14m6s)
• Jam's pick for the best performing asset of 2025 is a long shot, with a 92% chance of losing money, but potentially high returns if successful, involving buying insurance using credit default swaps to protect against a default event in 2025. (1h15m6s)
• To buy credit default swaps, one needs to have an ISDA and talk to big investment banks, which will price it out, but this is not a recommended trade and is considered a "loser trade" with a small chance of high returns. (1h16m41s)
• If a bank failure occurs, owning CDs would be a good idea, as they offer a safe and stable investment option (1h17m24s).
• Chinese tech stocks or ETFs may be a good investment opportunity, as the market has dumped them over the last couple of years due to the isolation stance on positioning portfolios (1h17m42s).
• The Trump Administration is trying to line up a deal with China, which could open up the Chinese market to American companies and give Chinese companies access to the American market (1h18m2s).
• Three drivers that could contribute to the success of Chinese tech stocks are the potential deal between the US and China, the increasing cost-effectiveness of electricity production in China, and the Chinese Communist Party's ability to throttle up and down free markets and entrepreneurship (1h18m32s).
• The cost of building out electricity production in China is decreasing, with the recent approval of a $1.137 billion hydroelectric dam facility, which will add hundreds of gigawatts of electricity production (1h18m36s).
• The Chinese Communist Party has the ability to enable more innovation and free market activity, which could be a motivator for them to make a deal with the US (1h19m1s).
• Chinese tech companies have been beaten down under the assumption of a difficult conflict with the US, but this may not be the case going into 2025, making their stocks look cheap (1h19m16s).
• Alibaba trades at a decent multiple, and these stocks could be poised for a good run in 2025 if the macro works out (1h19m31s).
• However, there are concerns about the reliability of accounting statements coming out of China, and the potential for the US-China relationship to be imbalanced (1h19m52s).
• The "no China" guideline has been in place since the Longtop financial fraud over 15 years ago, which highlights the risks of investing in Chinese companies (1h20m15s).
• Making money in China can be challenging for non-Chinese individuals, but a potential deal between Trump and Xi Jinping that leaves Putin out could create opportunities, especially with high-quality Chinese companies trading at mid single-digit multiples (1h20m55s).
• Chinese companies serve a global market, including Africa, South America, and the southern hemisphere, and have the best unit economics and cost of production, making them well-positioned to meet growing demand for automation and manufacturing capacity (1h21m24s).
• The Chinese companies' advantages will be particularly pronounced if 2025 is the "year of the robot," with massive global demand for automation and rebuilding manufacturing capacity (1h21m47s).
• China is likely to service these markets more efficiently than other countries, driven by powerful macroeconomic factors (1h22m0s).
• The NASDAQ 7 (Max 7) is predicted to be the best-performing asset, driven by earnings expansion through outsourcing, automation, and the internal application of AI (1h22m9s).
• The internal application of AI will allow companies to achieve earnings growth that will be difficult for people to comprehend over the next couple of years (1h22m37s).

Worst Performing Asset (1h22m56s)

• The worst performing asset in 2024 was late-stage tech stock, specifically the SAS (Software as a Service) index, which had a rebound but still underperformed compared to AI Cloud providers like Google, Microsoft, and Amazon, which saw significant growth (1h22m56s).
• LLM (Large Language Model) startups like Open AI and Anthropic are expected to face challenges due to open sourcing, which will likely kill pricing and lead to decreased valuations, with Open AI's valuation doubling but potentially not being sustainable in the long term (1h23m15s).
• The worst performing asset of 2025 is predicted to be Enterprise application software, as AI models, or "Agents," are expected to dominate the market, particularly in the second half of the year, and Enterprise application software companies lack their own models and compute (1h23m31s).
• Agents are AI models that can take action on behalf of humans and perform tasks online, and companies like lab ABS and big cloud providers are likely to dominate this space, leading to pain for Enterprise application software companies (1h23m41s).
• The term "software industrial complex" refers to large, bloated enterprise software companies that have convinced organizations to spend a lot of money on their products, which are essentially heuristics and business rules wrapped around a database, and are expected to face challenges in the world of agentic software and AI (1h24m52s).
• The go-to-market strategy for these companies, which relies on sales motions, golf trips, and steak dinners, does not equate to product value and will be driven by CEOs and CFOs who will exert pressure on CIOs to manage spend, leading to a shift towards more efficient workflows and cheaper AI businesses (1h25m43s).
• The next generation of AI businesses is expected to be built at a significantly lower cost than traditional enterprise software companies, leading to fissures in these businesses in 2025, even if the features are the same (1h26m6s).
• The use of AI tools has increased productivity to an order of magnitude, allowing a team of 30 engineers to do the work of 300 people, and potentially 3,000 people in the future, highlighting the potential for significant growth and disruption in the industry (1h26m52s).
• The cost structure of products is becoming meaningfully lower due to the magnitude of change brought about by AI, making traditional ROI calculators and go-to-market models obsolete (1h27m6s).
• Enterprise application software companies are fundamentally based on making white-collar human employees more efficient, but AI companies are going to replace these workers, marking a fundamentally different mentality and paradigm shift (1h27m47s).
• The worst-performing asset in 2025 is likely to be vertical SaaS, with its pricing model being challenged and pricing being compressed as companies explore in-house tools built with AI (1h28m15s).
• Many talented employees have left Open AI to start competitor companies, marking an interesting trend of revenge startups (1h28m40s).
• Consumers make five big decisions in their life, including college, spouse, kids, cars, and homes, but with record debt, legacy car companies and real estate are likely to face continued headwinds and be terrible assets (1h29m26s).
• Legacy car companies and real estate are expected to be the two worst-performing assets in 2025, with overbuilt cars on lots and unaffordable homes due to high mortgages (1h29m55s).
• Housing values and rent have gone down in some states, such as Texas, for two years in a row, and people are leaving states where building is not allowed, contributing to the decline of real estate (1h30m4s).

Most Anticipated Trend (1h30m19s)

• Last year's predictions included Bitcoin reaching $100,000 for the first time, which was achieved, and advancements in AI-driven discovery, farma, and bioengineering, which also showed progress with significant funding and a Nobel Prize win (1h30m19s).
• Predictive models in AI-driven discovery, farma, and bioengineering were expected to make progress, and there was a lot of funding in the field, with Demus winning the Nobel Prize (1h30m39s).
• Efficiency in the form of AI advancements in labor and outsourcing was also predicted, with investments in companies like Athena showing progress (1h30m48s).
• The most anticipated trend for 2025 includes small, arcane regulatory changes that allow the government to manage the debt situation, such as the supplemental loss ratio, which could be used to include or exclude treasuries in reserve calculations (1h31m1s).
• The supplemental loss ratio is a mechanism that banks can use to manage reserves, and changes to this regulation could help the banks and the government manage the debt situation (1h31m20s).
• Another anticipated trend for 2025 is the announcement of the buildout of nuclear power in the United States, driven by deregulation and new technologies, which is seen as a necessity to meet competitive demand and scale up power production capacity (1h32m57s).
• The buildout of nuclear power is expected to be supported by the new government, which is seen as more accommodating, and is driven by the need to add more power production capacity to meet demand (1h33m4s).
• AI is also expected to make significant progress in 2025, with more progress per quarter than in previous years, driven by advancements in technologies like rcgi and the touring test (1h33m59s).
• Artificial General Intelligence (AGI) is being scaled in three axes: pre-training, compute, and reasoning, which is a new development that has been added recently, allowing models to generate synthetic data that contains reasoning traces, enabling them to learn and improve at a faster rate (1h34m46s).
• The reasoning trace is the internal monologue or thought process of someone getting to an answer, and models are being trained to generate these traces, which are then used to improve their performance (1h35m0s).
• This new approach to scaling AGI is expected to lead to significant advancements in the field, with some experts predicting a "straight shot" to Artificial Super Intelligence (ASI) (1h36m4s).
• Ilia Sutskever, one of the pioneers of the field, has warned that models that reason are inherently unpredictable, and this unpredictability could lead to significant breakthroughs, but also potential risks (1h36m19s).
• The unpredictability of these models is similar to the way AlphaGo and AlphaZero models made unpredictable moves in games, and now these models are being applied to various domains, which could lead to significant advancements, but also potential risks (1h36m29s).
• An example of the power of these models is demonstrated by a tool called Deep Research, which was able to analyze the financial health of several major US banks, including JP Morgan, Bank of America, and City Group, by pulling data from over 162 websites and generating a report in just 10 minutes (1h37m32s).
• The analysis provided a snapshot of the financial health of these banks, and concluded that while all banks face inherent risks, City Group and Wells Fargo are particularly vulnerable (1h38m2s).
• Fargo appears to be at the highest risk of insolvency or financial collapse compared to other institutions such as JP Morgan, Chase Bank of America, Goldman Sachs, and City Group, due to its recent net loss, lower c one ratio, and high exposure. (1h38m7s)
• The Gemini 1.5 Pro with deep research is considered a valuable tool for analysis, and it can be accessed at gemini.com. (1h38m23s)
• The most anticipated trend for 2025 is the increase in exits, DPI, and M&A, as well as a surge in IPOs, following the end of the "wrath of lenina con" and the resulting distribution. (1h38m36s)

Most Anticipated Media (1h38m59s)

• Most anticipated media includes James Gunn's DC Universe with Superman, Andor season 2, and a potential live-action Clone Wars series (1h38m59s).
• The development of Legacy Media Outlets owned by billionaires is also anticipated, particularly with the Washington Post, CNN, and LA Times shifting towards the middle and incorporating right-wing voices (1h39m22s).
• The declassification and release of files by the Trump Administration, including the JFK files, Epstein files, and moon landing information, is expected to be interesting and potentially revealing (1h40m4s).
• The use of AI in video games is predicted to significantly impact the industry, allowing for dynamic storylines, new gameplay concepts, and reduced production costs (1h40m51s).
• The release of 1923 season 2 is highly anticipated, with the show being a rare non-science fiction or fantasy series to captivate audiences (1h41m45s).
• Other notable mentions include the enjoyment of the TV show Land Man and the recommendation of Day of the Jackal (1h42m10s).
• Last year's predictions included Mr. Beast's AI-generated news, Gladiator 2, and The Three-Body Problem, with Mr. Beast's prediction being a top unscripted drama in many countries (1h42m34s).

Super Predictions (1h43m3s)

• A prediction market is proposed based on immigration, specifically the number of people deported from the country in the first year of Trump's office, with an over/under of 750,000, which is 5% of Trump's stated goal of 15 million deportations (1h43m3s).
• The prediction will be measured based on the White House's reporting of deportations, and it is noted that Obama deported over two million people during his presidency (1h43m38s).
• A prediction market is proposed regarding the representation of the S&P 500, specifically whether it will shrink below 30% (1h44m2s).
• A prediction market is proposed comparing the revenue growth of Microsoft, AWS, and Google Cloud in 2025, with a focus on which company will have the largest dollar gain in cloud revenue (1h44m23s).
• The national debt is discussed, with a prediction market proposed regarding whether the national debt will increase by over or under $1 trillion in the next year, with a specific target of $38 trillion by December 2025 (1h45m40s).
• The prediction market for the national debt is based on the US Treasury Market report on federal debt, with the goal of setting a line that people will take either side of (1h46m16s).
• The discussion notes that the national debt has grown by approximately $2 trillion per year over the past eight years, and that Trump has stated he will not increase the national debt (1h45m21s).
• Gavin's sense is that the federal debt will take time to address, but progress will be made (1h46m40s).

Bonus: Drones, UFOs, and more (1h46m50s)

• There have been numerous reports of UFO sightings, including a recent incident in New Jersey, with some speculating that the objects could be of extraterrestrial origin, but the truth remains unknown (1h46m52s).
• Statements from New Jersey mayors, governors, police, the FBI, and the defense department suggest that they do not know what the objects are, while Trump has stated that someone in the government knows what they are (1h47m9s).
• Over the past eight years, there have been several big stories in credible media sources, such as The New York Times and The New Yorker, featuring interviews with fighter pilots and commercial pilots who have seen unexplained objects with advanced sensors (1h47m32s).
• An article in The New Yorker quoted people from the Skunk Works Laboratories in the 1950s who claimed to have seen extraterrestrial materials recovered from a crash, which may have contributed to the US making significant leaps in material science (1h47m57s).
• Some astronomers, including the head of astronomy at Harvard, have suggested that some UFO sightings could be of extraterrestrial origin (1h48m25s).
• The possibility of UFOs being government drones, either from the US or China, is also considered, but the most likely explanation for the New Jersey incident is a drill that got out of hand (1h48m45s).
• There have been concentrations of UFO reports during significant technological phase shifts, such as the development of nuclear technology from 1945 to 1960 and the current development of AI (1h49m11s).
• The idea of creating a prediction market for UFO-related events is discussed, but it's unclear how to make it happen (1h49m40s).
• The possibility of Trump releasing documents about UFOs is considered, but it's uncertain how deeply classified the information is and whether the government would be willing to release it (1h49m46s).
• The existence of documentation that the US government has knowledge of unexplained UFO sightings is speculated, with some referring to them as UAPs (unidentified aerial phenomena) (1h50m15s).
• The percentage chance of the US government having actual knowledge of extraterrestrial life is estimated to be around 20-25% (1h50m39s).
• The possibility of the government sitting on information about extraterrestrial life or proof of it is considered, but it's thought that advanced civilizations may not need to physically move biological life forms around the galaxy to gather information (1h50m54s).
• The idea that UFOs move bodies around is rooted in humanity's current state of technology, but as civilizations advance, they may be able to convert any molecule into another and access sufficient energy, making physical movement unnecessary (1h51m31s).
• It's argued that there's no basic sense in why alien bodies would want to move around the galaxy, and that gathering information and affecting information may be more likely (1h52m20s).
• If information about extraterrestrial life is released, it could have significant implications, with one person jokingly saying they'd vote for a third term for a president who releases such information (1h52m31s).
• The possibility of extraterrestrial life building the pyramids is discussed, with some finding it strange that many cultures around the world have depictions of what look like astronauts and UFOs in ancient artwork (1h52m48s).
• The construction of the pyramids is also discussed, with one credible theory suggesting that the ancient Egyptians used water and canals to move and place the stones (1h53m57s).
• The conversation concludes with a discussion of the importance of questioning and exploring conspiracy theories, and the potential for new discoveries and information in the future (1h53m45s).
• A humorous comment is made about the driveway and a person named "myit" meeting, suggesting a hypothetical scenario where everyone gets together and releases built-up tension (1h55m0s).
• The idea of a large group gathering is likened to a huge orgy, implying a sense of pent-up energy or frustration (1h55m5s).
• A person named "mer" is mentioned, and it is stated that something needs to be done to address the situation (1h55m18s).
• A decision is made to go "all in," although the context of this decision is not specified (1h55m28s).