2025 Predictions with bestie Gavin Baker

28:18Jeremy Lair, I mentioned by the way that I had this small little product that I exposed to the world, which is just our research. And we sit it on top of Substack. Again, the tools aren't very good. And we use Stripe. And Jeremy reached out to me. And he's like, I'll just rebuild all of your payment rails on using US dollars, stablecoins. And it's a no brainer because I'm spending hundreds of thousands of dollars in transaction costs that now I can just save and use to hire somebody else or just pay the team more. And so I do think like paying 10 % to sub -sac and the 3%. If it's obvious for me, it's obvious for everybody else.

29:02All right, my biggest business winner prediction for 2025 is Tesla and Google. I think this is going to be the year of AI and robotics, obviously. But I am just absolutely amazed at the comeback that Google has made with AI and absolutely know of what Elon did with Colossus. If those of you don't know, Jensen Wong, Michael Dell, they all obviously participated in building out XAI and they were shocked. They couldn't believe that they stood up 100 ,000 GPUs in under 45 days, was it Gavin? Something in that neighborhood? It was a tremendous effort. Is that Tesla? Well, you want Tesla, XAI and Google.

29:44That cohort who are investing heavily in AI, those two specifically, those two three names, I think, are going to be the biggest winners next year. They're gonna come out with some things that people didn't anticipate. I don't think people are anticipating what Google is gonna come out with because Gemini deep research, I keep telling people this and I'm using the app, is so impressive. Drop what you're doing right now, pause the podcast, download Gemini and just start playing with deep research on your desktop. Pay the 20 bucks for it. It is mind blowing. It blows anything else in the market out of the water period, full stop.

30:19it is a step function higher. All right, I'll just leave it at that. Jason, shouldn't you just go on with the podcast? Should you explain what it is? What you're sorry. Okay, so what it does is good. Good. Good. Yeah. If you wanted to create a model, let's say, and I did this, where I said, hey, make me a model based upon what it would take to replace all the cars and trips in the United States with full self -driving cars. What would that cost to do? And if you ask that to chat GPT or GROC or, you know, CLAWD, it's going to give you a decent answer. What deep research does is it goes and it figures out what the sub components of each of those questions would be.

30:57And then it fires off multiple threads. And then it searches the web in real time, which Google is extremely good at. And then it summarizes it, gives citations and it produces a report that looks like something that Gardner Group, McKinsey, Bosticons, Alding Group would have spent, I don't know, 30 days on Gavin and a million dollars, a half million dollars. It's f**king bonkers, how good this is. But the amount of compute it takes is extraordinary. That's why chat GPT released something similar. That's 200 bucks a month, the old one, Pro, I think they call it. And then this one is like 20 bucks from Gemini.

31:31Anyway, given what Google has access to YouTube, your G drive, your Google Docs, et cetera, your Gmail, it's going to do things that you wouldn't anticipate. like if you were asking this question, it might look in your Gmail for possibilities to answer those questions or YouTube videos of channels you subscribe to. So this is going to, I think, knock people socks off and solve problems that people didn't know they had. Is that a pretty good explanation, Gavin? Yeah, he's great. For last year, our predictions for business winner, Shema said bootstrapped or end -door profitable startups. I think that's a really great pick and that came to pass.

32:06We're seeing some of those go public and raise money at higher evaluations or not go out of business. Freeberg, you said commodities businesses. I'm not sure how that did. Do you know? Did you pretty flat? Yeah, we didn't have a lot of the inflationary pressures that I think were underlying that thesis. So got it. And ended up being, I'd say a loser relative to other indices you could have bought this year. I said training data owners like Reddit, New York Times, Google, etc. Reddit stock up to 24 % in 2024 and they launched their own Reddit answers. I think I got that one. New York Times stock is up as well and they fired off that lawsuit with open AI.

32:43All right. Now we're going to move on to the 2025 biggest business loser predictions in 2024. Shemot said pro sports teams because they hit peak valuations. That's looking like a pretty good prediction. Freeburg, you said vertical SaaS companies because of AI disruption. If that's another one, that seems like a great prediction. I said smartphone manufacturers. Apple stock was up 30 % in 2024, but I think we've all seen that these smartphones aren't advancing and people are taking their times, the sales of those are down services are up. I would take the other side of pro sports teams. It feels like that market is about to be institutionalized and funds are going to start buying pro sports teams.

33:22Okay. that ultimately in ultimately capital markets have way more resources than kind of the wealthy individuals who've done it for To date so I just think it's the amount of money that can go after a pro sports teams is about You know 10x 100x. No, I think I think you're totally right the the reason I said that last year was it was pretty clear to me at the time And the NBA was the canary in the coal mine that there was a viewership problem in professional sports and And specifically in the NBA, the game has devolved into essentially rebounds and dunks or three pointers. And the issue with that is that it becomes just meaningfully less interesting to watch at the same time because of the fact that the TV deals are really what determines the discounted value of these sports franchises.

34:11the TV deal was so enormous that it creates no reliable rivalries anymore. Because people will hop scotch teams almost every year because the compensation that they can get is just so obscene, quite honestly. And I think what happens is sports will have a decent run until the next TV deals get done. And I think if you, for example, take Farma ads outside of TV, So like that pool shrinks if you have less viewership and so you can sell the remaining ads Less effectively because there's just fewer of them and then there's fewer buyers and it shrinks yet again then the dollar pool That the television networks and the streamers are going to be willing to pay for sports will go down and The group that will be the most price sensitive are exactly who use a Gavin meaning the non -Trophy buyer So like, you know, when I bought into the Warriors, I bought it purely as a trophy asset.

35:12And I was price insensitive. But I agree with you that now that you have the PE firms on the cap tables of these sports franchises, those folks are all DCFs, those folks are all Excel models. I don't think that they're buying things for emotion. I don't think they've grown up thinking I want to own this thing, not using institutional LP dollars. So I just think that's why that's why I said that in 24. So I just want to be a fulfill. I'm with an eye. We appreciate you made that vanity investment for the number of times. we got to sitting your cards. I'd see. Yeah, because I never went to the games.

35:43We made with NBA players. I never went to the games. I should have gone to more games. I went to your games and almost got thrown out of your seats. I got a red card one time. Is it true? You did? Oh, you don't call that. I got a call. I got a call. I think it was from the Warriors orch from the NBA. Something to the effect of Chimoff. This guy that was sitting in your seats was almost kicked out. And I said, excuse me. Because I knew that it was the next game in fairness. And he was like job owning our own players. I was getting into it with Bogot and with David Lee because I told him to lose.

36:15I told Steve Kerr. Listen, you're up 30 on my next sit these guys down. This is bush league. What if Steph Curry gets hurt out there like and you know, Bogot told me to shut up on Andre Iguodau. Bogot told them to basically go pound sand and he basically did. It was the one is the ever -daven. This is what happens when you get bogot one of our friends. He's one of our good friends. That's why it's so funny, but they can't they come over free, and they tapped on the shoulder. I'm with my wife. She's mortified. And the guy hands you a card and the card says you've been warned one time and one time only about abusive, you know, behavior.

36:52If we have to warn you one more time, you will be escorted out. So I look at the guy and I say, but he goes read the card. I read the card. I say, You guys give me thumbs up. That was it. I never heard of it. You're not supposed to then three years later, I'm sitting in the same seats. I'm interacting with Dremont during the finals games and then everybody's hokey -doky with it. When you interact, when you say interact, Gavin wanted to make a point about what I'm doing. I just come back to Chimath because I for sure these private equity guys are DCFs. The NBA has been terribly managed. I think even LeBron said they have a big problem.

37:27And I'd separate the NBAs, the worst managed NFLs, probably the best managed. But the one kind of counterpoint, I would say, on the TV rights is Google bought Sunday ticket and are extremely happy with it. Amazon and Netflix also both bought NFL games and are really happy with them. And so I just think those three companies, it doesn't really matter to them if Farma ads go away. in 18 months, you're going to be able to dynamically create an ad for each individual person and show it to them. And if you're a high value user with a, you know, the Google knows that you're about to book a vacation, you know, they'll dynamically generate, you know, whatever, you know, hotel destinations you want and show click here.

38:12So I just think sports as long as they command the eyeballs that they do. And I for sure if the NBA doesn't fix it the value of those franchises will start to decline but Just the fact that all of the biggest tech companies are so happy with the sports kind of rights that they bought They're gonna buy them all and every Maybe maybe you're closer to this, but why wouldn't Apple Amazon or Google just back up the truck to the NBA and say we'll take the whole thing and then anybody who's got an iPhone gets the NBA for free and then everybody else has to pay and they figure it out in the back and they lose a, you know, five billion, they make two billion, who cares?

38:55It's a round here for Apple. I agree. And they, you know, I mean, they all, all except for Apple, really. And Apple, they have, I think, a new molestial but they all kind of stuck their toe in the water and I think they feel like, wow, the water's warm. Let's dive in. Oh, okay. Yeah. And the new deal is an 11 year deal for the NBA. So these things don't come up that often, but we'll see over time. Maybe somebody will buy one of these media companies and inherit them. Okay, biggest business loser for 2025. What's your prediction, Gavin Baker? Government service providers. You do not want to have the United States government at any level is over 35 % of your revenue.

39:36Good choice. Yes, obviously in the age of Doge, they might not be spending wildly and they might actually look at the bill. They might check the bill. Crazy thought. Crazy thought. Yeah, crazy thought to actually check the bell. You never know. Jamal, who do you predict will be the biggest business loser of 2025? Well, this is a little bit precarious, but I don't know what the percentage drawdown from here will be, but I think when we look back the absolute dollar drawdown of the Mag 7 will be in the trillions of dollars. And the reason is not necessarily because of the underlying fundamentals of these companies, but I am a little bit worried and I tweeted this a few days ago about just the general concentration of the top 7, 8, 9, 10 companies in the indices, I think it's approaching 40%.

40:38And I think that when you look at these historic concentrations, they've generally foreshadowed a big drawdown. And unfortunately, I don't see how you can sort of, you know, inoculate yourself from that risk. So independent of the quality of these companies, because I think these companies are exceptional businesses, I do think you've just had too much concentration and I think it is a setup to retrade and give back. And in that, it could even be 10%, but 10 % in the mag 8 will be a couple trillion bucks. So on a lot of super -dollity. Yeah, and absolute dollars. A lot. Okay, Freiburg, who do you predict?

41:21You predict mag 7, government service providers for you, Gavin Freiburg. Who do you predict will be the biggest business loser? I'm not. I'm sort of on the same vein as Gavin. I went with the kind of old defense and aerospace providers boeing Lockheed Martin, Raytheon. Defense one point driven by kind of China dominance driven by US defense budgets that I think are going to need to shift towards a more kind of tech oriented and ROI driven rationalization and pricing in spend. So the Palantir is an Android obviously the world will benefit. And I also just think like there's a lot of failure at scale with these businesses.

41:53They've gotten too clunky and too bureaucratic as we've seen with Boeing from their space program failure in 2024 to the challenges with their airplane business. I think that this government contracting business across the board is going to be deeply challenged this year with all the new blood. So the cost plus are going to suffer is what you're saying. The Andrals will thrive. Would you guys add just a question? Would you guys add the traditional consulting companies into the mix as well? like it's a good point too. That's a great one. Yeah, we think what we talked about with deep like the one pros, the Tata's, the HCL, the Accenture, and the CCL, the EMY's, all these folks in our real trouble if that if that also happens.

42:37Yeah, you mean the efficiency that they'll gain will also be felt by their customers and their customers might not hire them. When you got a bunch of software entrepreneurs that are now advising and informing the federal government on how to run their operations, I'm pretty sure that some of these Service providers are gonna get washed out. So that's a good idea. The thing to keep in mind is like cost plus is a fancier way of saying time and materials. And time and materials is a fancy way of saying human labor arbitrage. And I think that all of that stuff will get extremely scrutinized in 2025.

43:13Because if you are buying 800 dollar waste baskets and 9 ,000 dollar umbrella hangers, because of time and materials and all of this other crazy stuff that's in the system. And all of that gets washed out. Then a lot of these folks in their business models will get put under severe stress. The alignments, you know, you show me an incentive. I'll show you the outcome. The alignment of Clause Plus, his two GES keep being inefficient and waste. And these defense contractors are taking 60, 70, 80 % off the price of each piece of munitions or vehicle. Yeah. Cost was terrible. No, just cost was terrible.

43:52That's all right. For my biggest business loser prediction, I had to go through a lot of the people I've criticized. I didn't start in fights with over the past year. Commercial wheels, they came to mind because these leases are going to keep coming up. I think like they kicked the can down the road a little bit. So I started there. Then I looked at micro strategies and that made no sense to me that they were trading at two, three, four times the book value of their Bitcoin and I think that's not sustainable. I look to truth social, which is like doing four or five million dollars in revenue and is valued at seven billion.

44:26That makes absolute no logical sense. But I think the one that is the most overpriced of all of this and I think is going to see their peak valuation is open AI. I think the headwinds for open AI are being absolutely underappreciated. Like I said before, my previous prediction, Google is kicking ass, XAI is just getting started and building out so much big iron. Microsoft was basically on another podcast, almost like laughing at OpenAI for selling them the source code and that they didn't even need OpenAI. I mean, workers, they had it all. They don't need them and they own all the big iron. I think OpenAI's valuation made no sense.

45:11I don't think they can be able to keep charging. The prices are charging. And I think AWS, Apple, Google, XAI, this cohort are going to really take that $157 billion valuation and make it the peak valuation of the company. And I do think that there is a non -zero chance they could lose their process on these court cases of transferring $157 billion in value from a nonprofit into a for -profit. I think that holding to blow up in some of the prediction is open AI will not be able to convert from nonprofit to for -profit in 2025. I think that that's a small piece of it, but that's a really interesting super prediction insert polymarket graphic here.

45:57Super prediction will open AI convert. Is that something good? In 2025. Yeah, by the way, you know, they're projecting, I think, in the, the, the leak financials 12 billion revenue next year, J. Cal. So unlike a lot of the other things you were talking about, this is a real business with real revenue, real scale, real growth, real technology. It's a little bit distinct from kind of being a meme stock or being a... Exactly. That's why I'm picking it because I think it's easy to pick a meme stock. It's harder to pick a real company. But I do think that, that revenue, which a lot of it is consumer and a lot of it is developers.

46:32The developers I know all want to do open source. They don't want to have to be beholden to open AI and Sam Altman. They would much rather, and they're already setting their queries across multiple different sacks and trying different ones. I don't think there's any loyalty to open AI or Gemini or any of these services. I think they'll just go with eventually open source in many cases. So anyway, that's my thought in open AI. 2025. Biggest business deal. What do you got, Shemoth? What's your biggest business deal for 2025 prediction Shemoth? What do you got? You said Starlink to go public last year That hasn't happened yet.

47:06Yeah totally worked on that one. I think That this is the year that we will see the collapse of the traditional auto OEMs Oh, I think that the The deal that happened at the end of 2024 with Honda Nissan on I think is a bit of a signal to what the industry has to do, which is to go through a massive wave of consolidation. I think that Tesla is just in an incredible position with the quality of their vehicles and the quality of their software and the quality of their autonomy with FSD. So I suspect that after a couple of more meaningful product releases, it's just going to trigger the realization by the public capital markets that these auto OEMs are uninvestable.

48:00And I think the result of that will be a wave of auto mega mergers. And for people who don't know Honda and Nissan signed an agreement to merge and Mitsubishi is involved because they're part of I think Nissan's alliance. This would obviously get rid of all of the redundancy. But I think this is going to translate it like the European OEMs are in real trouble. You know, what does Volkswagen do? It's not clear. What does Stellantis do? It's not clear. These are all businesses that are effectively melting icebergs. And so, you know, typically melting iceberg businesses, when they get put under pressure from smart investors, like Gavin and his ill, they're forced to merge.

48:44I mean, you should have the capital. Are you sure these Gavin Gavin, you got a spread trade? Are you short these names? I would rather not talk about specific positions. I would just say I agree 100 % with Chimoff. I think these, they're going to lose their Chinese business because they don't make competitive products anymore. Or if there's not massive protectionism and we're seeing signs of that, they'll be caught between Tesla and the Chinese OEMs. And I think the only way that this doesn't have, the only risk to Chimouth's prediction is just government intervention because there's such big employers and often seen as national champions.

49:22But absent really significant government support, they're all in deep trouble. Okay, well done. Freeberg. Last year, you said there'd be some blockbuster deals for rights holders, licensing data for AI training, and Reddit did in fact sign two of us. So a great prediction from you for last year on biggest business deal. What do you got this year saving go two for two? Or just Reddit. I should probably look it up. I'll just follow on my year of the robot theme. I do think that there is going to be massive funding deals similar to what we saw this past year for compute build out. I think we're going to see massive funding deals for hardware -based manufacturing build out in the United States.

50:06And I think that those deals may take the form of kind of traditional equity from private markets, or they may have some component that includes government support to kind of motivate and drive and accelerate onshore manufacturing. We're not going to go in the US to making stuff that is like last century. I think we're going to need to move manufacturing to the next decade, next century of production. I think that's going to mean making some of these autonomous and robotic type systems that are going to become really critical for us, particularly with China doing this massive ramp up and build out for both drones and robots and autonomous vehicles.

50:47So I think we're going to need to kind of on short a lot of this. And so that'll be a big amount of capital that's going to move in. So you'll see a bunch of these big blockbuster deals for hardware build out in the US. Gavin, what do you think is the biggest business deal in 2025? I think the biggest business deal is that they're going to be deals. I think there's going to see a tidal wave of M &A after four years of not being able to get anything done. I think there's an enormous amount of pent up demand. So kind of point number one, point number two, something will happen with Intel. and that will be big and hopefully it's good for America.

51:20And then I do think you will see a lot of these frontier AI labs that are independent, be acquired. You know, I thought your points were well taken, Jason about, you know, everything that, you know, Google is bringing to bear an XAI on their own compute. When you guys can choose whichever one of these three like, but the ultimate AI winner will be the one with the lowest cost of infrastructure costs, the lowest cost of compute. And, definitely, you can't be the low cost provider if you're renting your compute from someone else. Because of markups. Yeah, because there's a markup. If you're buying your compute for measure or AWS or Google, you were in a disadvantage relative to their internal services over time.

52:06So the full stack wins. Great prediction for me. last year, my prediction was that bite dance would go public or TikTok would get divested or some version of this. We are but 18 days away from figuring out if the Supreme Court will do just that. My prediction for this year, I was looking at all the media companies gentlemen. There were so many possibilities there, Warner Brothers, we talked about Apple and Disney, you know, a couple of years ago. But I think the age of autonomy is here and I think there is going to be some partnerships that will happen between Amazon, DoorDash, Uber, Tesla, Waymo, and that cohort.

52:46And I would not be surprised to see Tesla could buy Uber right now for about 10 % of its market cap. And Waymo could spin out and partner with Uber, Amazon could buy DoorDash fairly easily. And with the wrath of Khan being over, the wrath of Lena Khan being over Gavin, it is possible that mega deals like these could go through. And if a couple of mega deals go through like this, whoever teams up here could win autonomy, delivery, food delivery, and e -commerce. This is a ginormous space. And I think, listen, I haven't spoken to obviously my friend about it, but Tesla buying DoorDash and Uber or Amazon buying, DoorDash and Uber could be the greatest service ever created if you wanted to build a super app.

53:34The only thing I would add, and I think Dovetails with what you said and and Freedberg's kind of year of the robot is Autonomous drones. There's a company called Supply in which my firm is in a bester in Fantasia. Yeah, but autonomous drones. They really are the best way to deliver almost anything to suburban America and then I think Over time it will be sorted out so that they can deliver in cities as well Well, so I just think that that might be a little bit of a wild card for some of these delivery services. Well, an Amazon, I believe it's Texas, is actually doing these now. They've got 60 ,000 skews as my understanding, or ready being delivered, and they just drop it in your backyard, and it's there in 45 minutes.

54:19We talked about this like two weeks ago. Maytron and China's got this, and they have food delivery happening with these drones. By the way, just kind of dovetailing off of this. I think the other big deal potential in 2025, just to be very specific is a deal with Waymo. You know, Waymo launched NSF in August 2023 in kind of an open market way. Uber and Lyft were 66 and 34 % market share at the time. And in 15 months in November of 2024, Waymo is now a 22 % market share of rides NSF, which is the same as Lyft and Uber is now down to 55. So Waymo 8 in to both Uber and Lyft's market share by on the order of 12 points in just 15 months.

55:01And now they're launching an L .A. in Austin all over the country. They're already in Phoenix. So I think you could see a massive and by the way, they also just move the hardware platform over to a new device that's supposedly going to bring the capex significantly down for new launches. So you'll see much improved ROIC metrics, which means that there's a much kind of more efficient way to use capital to scale. So the system works. It is scaling. They are opening up a new market. So you could see something happened with Waymo this year that could either be something like a massive financing and IPO or a merger or acquisition with one of the big right sharing companies.

55:35I don't know if that makes as much strategic sense as I've thought about it a little bit. But I do think you could see a big deal with Waymo. This company is, if you guys have not been in a waymo, I think we all talked about this, but it's an incredible experience. And everyone I know of every age group that has been for a ride in waymo comes out of it saying that is the future. This is going to absolutely dominate how I'm going to get around. Clearly. I'm in the future. And most people say it's slow right now and monotonous and they don't like it, but you know, because it does take weird routes, but that'll be fixed over time, obviously.

56:04Totally. And just in case anybody thinks I'm talking my book here, I have exposure to all these almost all these companies in a significant way because I believe in the entire space. One and a half percent of rides in the US and globally it's less than one percent are done by ride sharing. The TAM is going to go to 20 percent in a very short period of time and it's going to be across the board. There's going to be a lot of winners here and to my favorite Uber obviously. They have deals with eight people and it's a global market. BYD produces cars for half the price of any other car manufacturer and they have full self -driving and it's pretty darn good from what I understand.

56:40So this is going to be a global competition and that means if you want to win that global competition something like Uber and DoorDash, Waymo, Amazon, BYD, you're going to see some interesting partnerships happen very quickly I believe because there's so much at stake. All right, any final thoughts on biggest business deals? I think I maybe have a good one here. consolidation in the transportation space. Okay, moving on to 2025. Most contrarian belief last year, enterprise value of open AI goes down from Chimau, it roughly doubled. But I just picked it as my prediction. I think we're, we're, we're, Simpatico on what we think long term, freeberg, you said increased probability of a nuclear weapon being used for the first time since World War II.

57:24Thank the Lord that that didn't happen. Again, this is contrary and beliefs people are going out there. I didn't predict it was going to happen. I just said the probability went up. It was a tough thing to call. Well, this is most contrary and belief. I think it's fine. Dr. Doom strikes again. It's all good. I picked Apple would become the player in AI and they did launch Apple Intelligence, but it sucks. I mean, it sucks. It's terrible. I just bought the Google Pixel Fold 9 and the Gemini works perfectly. It does everything that's serious supposed to do. If you say, please play this song. If you say, please download this app.

58:02If you say, add this to my calendar, it does it and it does it in one fifth or 10th the amount of time that Apple takes. And Apple gets it wrong every f***ing time. It's a piece of garbage. It's a disgrace. Discretz the odd, Apple. Apple intelligence is even worse than Copilot, which is saying something. Jason, would you like to announce? Do you bought the domain? Discretziad .com, I own it. I'm not selling it. Right now it redirects to Jake Paul. Gavin, Gavin, Jim, and you're the Jake Paul. What word he's even saying when he says that? Discretziad. Discretziad. Discretziad is what people used to say in Brooklyn for somebody who is disgraceful.

58:48It is a high -town and American slang. How do you spell it? Oh, I don't know. You don't even know you own the domain. You don't even know. D -I -S -G -R -A -Z -I -A -D. Discretion. Yes. And if you're typing Discretion, it goes to Jake Paul. I bought it when I was watching the Tyson fight. It was so disgraceful. I was saying to my brother Josh, the black bomber. This is, and he just said, Discretion. And he just said, I wonder if that's available as a domain. I'm redirecting Discretion right now, Tim Cook, to Apple Intelligence, the website. Do you guys think Tyson through that fight that it was part of the deal?

59:28Yeah, I would love. I think somebody said Saudi Arabia was offering to host a remake or whatever. Rematch. Rematch, a rematch of the fight where the winner would make 50 million and then we'll see what's what? And the loser gets zero. Yes. And the loser gets zero. This is a good use of the Kingdoms money. The people want to know we will all fly out there and do an all -in -episode from that Did you see this? Did you see this thing where is it is it Logan Paul is fighting Conor Regreger in India and Conor Regreger is gonna get $250 million What? Yeah, it's like oh, is it crossing or is it M &R?

1:00:08It's done. I think it's boxing and it's meant to sort of like bring a bunch of tourists into India to show them the country But it's a quarter of a billion dollars to Conor McGregor. How are we getting on this graph? Freeberg versus Baker Polyhopathy versus Cali -Canis. Oh my gosh. We need to get in our own celebrity box. And who would we do? Come on, keep going. I got to drive home. Let's go. Come on. It's too much fun this episode. Tremoth, what's your most contrarian belief prediction for 2025? We're going out in the limb here. This is going out in a limb, folks. Don't judge us. The spicier, the better here.

1:00:42This is where you can go freestyle. I think that you're going to see a banking crisis in one of the major main line banks. a banking crisis. Wow, the there is a small chance it happens, but that's a contrarian belief. Okay. Why? Why? Box one? Well, I think if I had to kind of build the case for this, it would be along the following lines. If you added up the total indebtedness of PACS America, which is US government debt, plus corporates, plus mortgage debt, and you actually sensitize it to rates that are around, call it 5%. What you quickly realize is on a dollar basis that because the amount of debt that we have has just massively exploded.

1:01:42That 5 % rates today on $70 trillion is actually equivalent to 10 % rates 25 or 30 years ago because we only had a fraction of that debt on a dollar basis. And so the pain that you feel at 5 or 6 % can very quickly ripple through the economy the way that it did when rates 25 or 30 years ago were 10%. And so I think that when people look at rates, they forget the actual total dollar impact because when somebody ate or collectively, when we have to come up with three or $4 trillion, how do you do that? And so I think that there is a non -tribule risk. I think it's small, this is why it's contrarian, but I think it's a risk where if you have a market problem, If you have a credit default problem amongst the corporates or amongst enough individual consumers, what I think that happens more than anything else is that it triggers a reserve issue.

1:02:51And I think that the reserve issue in one of these mainline banks, I have two that I think are more obvious than others, but I don't want to name them. Okay. Fair enough. I love this contract and take. This is great. I think that there's a there's a small but reasonable chance that that happens. I love it. It's a great great contract and take small chance, but big impact. Gavin, what are you? Well, first of all, you want to respond to. You use Jim and I deep research to just ask you to look at the total, you know, packs Americana debt outstanding. Apply the current market interest rate to it. and then look at that, you know, interest expense relative to GDP and generate that chart over time, that would be a cool chart.

1:03:35That would be interesting. I don't disagree with Jamoth. You know, anything is possible and, you know, there could for sure be a problem in a big bank. I don't know that I would say it's likely, but anything is possible. My most contrary beliefs. So I think that America over the next, at some point over the next four years, will print at least one year of greater than 5 % GDP growth, real GDP growth. I think productivity is going to go vertical because of AI and deregulation. And I think there could be a world where this is the late 90s. And it doesn't sound like a big difference, you know, 5 or 6 % versus two or three percent, but it is a massive difference.

1:04:25You know, at five or six percent, you know, the economy is doubling. You'll call it every 12 years roughly. First 24 years at three percent. I mean, it's just, it's a massive difference in terms of kind of the wealth of the country and individual Americans. As far as a specific prediction for 25, because I don't know when that will happen, I think you will see the Frontier Labs stop releasing seeing their leading edge models to prevent knowledge distillation and their IP effectively being stolen. Deepseek from China, it was really impressive, but I think it's GPT -4. So I just think you will see the labs keep their best models in house, distill them, and put small models out over time.

1:05:12Farbrough, do you have a contrarian belief? And I did put into Gemini Advanced 1 .5 Pro with Deep Research the question in which banks of the biggest chance of being insolvent or having a financial collapse or crisis. So it's doing its research right now. It'll be done in about 10 minutes, I think, which gives you an idea of how much research it does. It's nuts. Free bread way to go. I think that the party line is that socialism was defeated in this election cycle and that there was a resounding kind of vote from the American populist against socialism. And I actually think my my contrarian belief is that we'll see a rise, a dramatic rise in socialist movements in 2025 in the United States.

1:05:54Okay. And I think that we are going to see as Gavin pointed out an acceleration of progress. We're going to see an unleashing of economic growth because of deregulation and AI. But I do think that some markets, we've also talked about the downfall of US automate manufacturing and some other industries. There's going to be a real significant shift in 2025. Some industries and some companies are going to be huge winners and some companies are going to be huge losers. There's going to be some parts of the economy that are going to be big winners and some parts of the economy that are going to be big losers.

1:06:27When you have this sort of a change this fast, there are often large contingents of people that are left behind. And when that happens, I do think that the socialist policies and the socialist movement's gained steam. When Perone came to power in Argentina in the mid 1940s, that country was experiencing 8 % GDP growth to Gavin's point about accelerating growth. Growth does not mean that it benefits everyone equally. And I think that some folks will see people go from being billionaires to 100 billionaires to the world's first trillionaire. And it will also start to fuel this rise. So I think that we will see an increase in the breadth and depth of socialist movements in the United States.

1:07:06By the way, particularly with doge cutting government funding to programs that benefit individuals, employment being cut in the federal government and through federal contractors. There's just a lot of rapid change that's about to really upset a lot of people. I totally agree. I think AI, you know, people are fond of saying that a world of AGI or ASI money will be meaningless. us. But for a short period of time, money will matter more than it's ever mattered before, because the amount of money you can spend on AI, on test time compute, is going to give you a massive advantage, whether you're a company or an individual.

1:07:45So I just think AI is going to really amplify inequality for some period of time. Yeah. I hope I'm wrong. Like I hope, you know, AI leads to, you know, all sorts of, you know, opportunities be created for a lot of people. There's a lot of employment and income disruption in 2025. And it's going to fuel socialist movements. And I think that this is going to be a more difficult year. Everyone thinks it's kind of rosy red because we're all working in the tech industry in Silicon Valley. But the reality on the ground for most Americans could be a lot harder than any of us anticipate. And that could make for a very difficult political environment and social environment.

1:08:23This is a great contrarian prediction for a burger. I would build on it that I don't think this is just going to hit blue collar. I am seeing in the venture industry and in entrepreneurs all over the place, people who are super qualified who had six figure salaries, even to mid six figure salaries, not be able to find work or not find work at previous compensation levels. Why? Because people are doing more with less. It's much better to invest and do deep research and AI and automate stuff or deprecate stuff or delegate stuff to other regions than to hire Americans in some cases. And that philosophy that's happening isn't just gonna hit truck drivers, it's gonna hit developers, potentially designers, writers.

1:09:06So what is the construction management? What is the construction management? What you guys are saying? What's the contrarian part? Socialism, socialism is going to rise. Socialism on the rise. I guess pretty interesting. Because I think, you know, they get to contrarian, you think it's obvious. I think the party line has been that socialism was getting knockback this year with the selection cycle, and it was a mandate against socialism and some of the socialist policies that were being put forth. And I think that the contrarian view is that we're actually got this really wrong, and socialism is going to be on a big rise.

1:09:37But just to build on what she said earlier, like, welchism and progressivism will decouple from socialism. I think welchism and progressivism, you know, will be on a declining trend, but socialism in terms of the government like policy has got more of a role. Yeah, yeah. That's an interesting idea. Why don't we have universal healthcare? Why don't we have pre -K or in every state? And these kind of things, I think, Americans are right to ask those questions. Now, other behaviors are obviously app -horrent, but you do have the right to ask why we can't figure this out and why our government has failed us.

1:10:14And something as basic as providing after school programs or universal healthcare or universal childcare. These things are easy to do. And when you see everybody getting rich and the polarization of wealth, I can understand people saying, why don't we have these basic things when other countries have them? It's a reasonable amount. But Jason, you're making the assumptions statement that these things are easy to do, which was what was said about education. It's like, let's give everyone access to college education with the federal student loan programs. And what happened was when we introduced those programs, those schools started to charge more and the tuition went up every year and eventually the cost of education inflated away from the benefit you were getting from it.

1:10:52And this has happened universally in healthcare. It has happened in housing. It has happened in education. It has happened in every market where the government has stepped in to provide capital to support that market. It's the market basically no longer operates in a free way. I appreciate the challenge to it and I'll explain to you why I believe it's easy. If you just put this down to the states and you make it more competitive, I think you solved the problem. If you introduce school vouchers and you create competition, if you take universal healthcare and maybe you run some experiments where different states get that money from the federal government and let them run 50 different experiments, I think we could actually solve some of these problems, but you're correct.

1:11:30Anything that the federal government does, it eventually becomes corrupt and inefficient. My most contrarian belief was open AI, loses its lead, loses its nonprofit, two for profit, transition, and becomes the number for player in AI. the total collapse of OpenAI is my most contrarian prediction for 20. That's a good one. The total collapse of all the big double and doubling and tripling down. Hey man, I'm trying to make this spicy, the spicy category. Yeah, I got it. Yeah, I got it. I have less than a moment. I mean, Jeff A .J. I was going to still run for president, Jake Alford. Maybe he's great.

1:12:03I don't know. Everybody who all his friends left the company. Maybe he's great. Maybe he's a stand up guy. I mean, everybody quit. But maybe he's... Gavin, are you familiar with Jake Alford prediction? the Jeff Bezos is going to run for president. It was that was my I was predicting I wanted him to I wanted him to and he bought Washington post and he quit the Amazon job and he bought a house in Washington DC and he went down to Mar -a -Lago. Don't be surprised if Bezos after he gets through his midlife crisis and going to Coachella and partying and having a great time, which he deserves. If he comes back and says, you know what, I want to serve my country.

1:12:39I still stand by that. You can still hold in post or do you think he's going to hold on to it? Well, let's stick with that one because that's super prediction Jeff Bezos will sell the Washington Post in 2025. That's a good, probably market. Yeah, sell it to Carousel. Sure. It's not to carry it. Sure. Yeah, right into the ground. Don't double down. Okay. Best performing asset. Everybody loves this one. Best performing asset. Hey, we can, you can put a price on this. Best performing asset last year. Tomat did a spread trade. He was long public text docs, short, private, late stage tech stock index, NASDAQ top 100 tech stock, ETF was up 10 % in 2024.

1:13:17Freeberg, you went with your uranium ETF, not Uranus Uranium ETF, and your A, you are A, was down 1 % in 2024. You know what? I looked at the components of that ETF last week when we were preparing for this. It has absolute junk in it. Like it was not the right way to kind of trade you're rating them, but anyway, that was my outcome for the year. I went with the on demand economy with Uber Airbnb and DoorDash. Uber was up 30 % but now it's only up 3 % with a Robo Taxi headwind. Airbnb is basically flat. And DoorDash up big, 74 % shout out to Stanley Tang. Great job to the team over there. So, Chimalt, get your flowers there.

1:14:02Let's do our best performing asset. Let's let our guests go first. Got them. What will be the best performing asset of 2025. I think the companies that make high bandwidth memory going back to, we're going to run out of compute.

1:14:19It's actually a pretty shocking stat. High bandwidth memory is a bigger part of NVIDIA's COGS on GPUs than Taiwan's Simeis. And today there's two companies that can make it, high Nix and micron. We'll see if Samsung gets their act together. But HBM memory, it's an infinity GPUs, AMD GPUs, Amazon Trainiums, and particularly in a world of test time compute and inference being so important. I've been with memory is arguably more important than it ever was and it's been sold out for the last two years. So I've been with memory would be my pick. Okay, good pick. Great pick. In fact, what do you got you, ma?

1:15:06So let me preface this by saying that this is a pick that 92 times out of 100 goes to absolute zero. Okay. And six out of the remaining eight times, you make 10 extra money. and then the final two times you make anywhere between 100 to 1000 extra money. Okay, sounds like that. Okay, so this is a loser trade. Okay, but I would be long CDS. So, what am I buying? I am buying insurance. I'm buying insurance using credit default swaps. I'm buying what's called protection. That there is no default event in 2025. Again, I'm not going to tell you which companies or what maturities, but just the general idea for me is I would like a little bit of an insurance policy in 2025 so that the men and the women that we have voted in have the chance to do their work in peace.

1:16:16I think that there is a small chance of some volatility next year. I hope it doesn't happen. I hope that this trade, like I said, 92 times out of 100 loses money. I hope it loses money. But if it hits, it will be the best performing asset of 2025. It will be the equivalent of Ackman buying CDS right at the right at the beginning of the COVID crisis. How does one buy those? You have to have an ISDA. You talk to the big investment banks, and they'll price it out for you. But again, I just want to be clear, this is not something I think It will happen. It's not something I want to happen. But I do think that if you look back in terms of just the tonnage of dollars you can make and the massive risk a symmetry that it presents to you.

1:17:04When you look at the concentration of the S &P, when you look at just the total gross amount of debt that we have, when you look at rates spiking, all of these things say having a little insurance may not be a bad thing. So I hope I'm You're not Gavin you're notting you want to just I was just see you I mean if you're if you know Chimath's prediction of a bank failures true you absolutely want to see DS Yeah, I mean you'll you forget a hundred X you'll a thousand X ten thousand X. What are you off freeberg? So I went with Chinese text docs of Chinese tech ETFs Wow, I think that the market, everyone's kind of dumped Chinese tech stocks over the last couple of years.

1:17:52Everyone's taken this isolationary stance on positioning portfolios and saying, hey, we can't do business with China. It's over. But I do think that the Trump administration, particularly with their recent request on TikTok being, the ban on TikTok being kind of halted, they're trying to line up what I would call kind of like the great deal with China. So I don't know anything about what they're actually trying to do. But I think that Trump and leadership in the US government want to kind of open up the Chinese market to American companies in order to give Chinese companies access to the American market.

1:18:27And I think that they're going to get a deal done given the position with China. I think that they're very likely to kind of get a deal done. That's one driver. I think there's three drivers. The second driver is obviously the cost of build out of electricity production in China is unfathomable. They recently approved $137 billion hydroelectric dam facility, which is going to add another, I think, a couple hundred gigawatts of electricity production in that country. Not to mention all the nuclear build that we've talked about in the past. So the cost per kilowatt hours already lower, the amount of electricity available is going up.

1:18:58And then I think that the Chinese Communist Party have this incredible ability to throttle up and down free markets and entrepreneurship. ship. And this is a moment where you could kind of see them making the throttle go the way towards enabling more innovation, more free market activity. And it's going to be one of the motivators for them to do a deal. So when you put all of this together, I do think that there's a lot of Chinese tech companies that have been beat up under the assumption that this is going to be a very difficult conflict with the US in the years ahead. And I think that that may not be the case going into 25 and I think that there are these stocks are pretty cheap.

1:19:31I was just looking at allie Bobbup and it creates it a pretty decent multiple. it seems like these stocks could be poised for a pretty good run in 25 if the macro works out. It feels like a contrary intake. I mean, Trump, I don't think is going to find a way to balance the relationship with China very well. And I don't think you can rattle up entrepreneurship. If you cut everybody's knees out the last time, plus I don't trust any accounting statement coming out of China because they could find whatever they want. But wow, what a great potential, So buy low sell high. The good thing here, you'll know if I'm right or wrong in a year.

1:20:08You can. Exactly. Well, no exactly. That's right. Pull the ETF. Absolutely. Gavin, what do you think of this hot take here from Mr. Freiburg? Really cheap. I've had a, I would call it a no China guideline ever since the long top financial fraud more than 15 years ago. Or it's just amazing. It was a lot of great investors owned it. And they talked to great game. And they had a Western auditor, but then it turned out that the fraud was happening at the local post office, where they were opening up the documents that the local auditors had signed off on, changing them, and then sending different documents, you know, whatever, FedExing them.

1:20:54Yeah, so I just think it's a hard place if you're, I think if you're not Chinese to make money. But I tend to agree with a lot of what David said. I think Trump and G both want to deal. I think there's a deal to be done that leaves Putin out in the cold as I referenced. And if that happens, Katy Bar the door, I mean, they're really, really high quality companies that are some of them are mid -single -digit multiples. And there's a big market. So if you did get it right, and you do the Chinese companies serve a global market. It's not just the US they serve You know Africa South America. I mean the whole southern hemisphere.

1:21:34Well, yeah, if you look at B .Y .D That's all over Europe. It's yeah I mean the Chinese companies and they have the best unit economics they have the best cost of production I mean everything is advantage, particularly if you believe it's the year of the robot, there's going to be a kind of a massive demand around the world for automation and for rebuilding manufacturing capacity all over the world. I think that China could service those markets more efficiently than any other kind of country of origin. It's a pretty powerful set of macro drivers as well. I think the Mac 7 is going to be the best performing asset on the other side.

1:22:13I think in an earlier prediction said maybe not so much. I think that what they've learned in the last couple of years is that there is an incredible earnings expansion you can do by not hiring people and outsourcing jobs to other parts of the world and automating. And the gains we'll see from AI, which they're producing for other companies and for consumers they're applying first internally. So the internal application of AI will allow these companies to have earnings growth that people will not be able to comprehend over the next couple of years. So I'm going with Mag 7. We got a lot of different takes here going different directions.

1:22:53What a great episode so far. All right, worst performing asset last year, Tramot said late stage tech stock index, mostly SaaS, freeberg you put into brilliant spread trade short vertical SaaS long AI cloud providers. SaaS has had a little bit of a rebound, but Google, a 30 % for AI cloud, Microsoft, 14 % Amazon, 46 % all in 2024. I said LLM startups like OpenAI and Thropic, too many players, open sourcing will kill, pricing, obviously the one valuation we can track is OpenAI and it doubled. But I didn't think all the long -term have that one work, worst performing asset of 2025 Gavin. enterprise applications software.

1:23:37This is basically just about, like, 2025 is going to be, I think, the year of agents, particularly in the second half, agents just being AI models that can take action on your behalf. They can do anything online that a human can do online. And if the labs and the big cloud providers dominate agents, which seems likely going back to, the low cost producers gonna win, enterprise applications offer I think is gonna be in a lot of pain. And some of these companies are talking a big game about agents, but at the end of the day, they don't have their own models, they don't own their own compute. And I just don't see them being ultimate winners in the world of agents.

1:24:24I could easily, I could be wrong because they do, you know, they have some customer data, maybe a little bit of a data mode. And they do, you know, have strong customer relationships. But, you know, most companies have relationships that they WS Google are Microsoft as well. So I think enterprise application software will be in pain. Okay. And, Chimoff, what are you got? I think Gavin just absolutely nailed it. I'm gonna double down on what he said. I think that there's a term that we will start to use more, I started to use it internally at 8090 over this last year in 2024, which is the software industrial complex.

1:25:05These are these large bloated in many cases, enterprise software companies that effectively have convinced incredible numbers of organizations to spend a tremendous amount of money essentially wrapping a bunch of heuristics and business rules around a crud database. And along with that, what they have perfected really is a go -to -market and sales motion. The golf trips, the state dinners, you know, we mentioned this before, what Alex Carp railed against. None of those things equate to product value. And increasingly, in the world of agentic software and AI, I think that you can rebuild a lot of these workflows flows in very efficient ways.

1:25:54And I think the go to market is going to be driven by CEOs and CFOs who start to exert a little bit more pressure on their CIOs to manage spend. And in that world, I just think that these next generation AI businesses are built, frankly, an order of magnitude cheaper than the companies that they compete against. And so even if it's just feature for feature the same, I think the software industrial complex, these old mainline traditional enterprise software companies, I think you're going to start to see fissures in those businesses in 2025. So I agree with Gavin, different words, but same result.

1:26:34And you put your time and money where your mouth is on this one 11 months ago, you found it 80, 90 to get 80 percent of the traction in less than a year to me is shocking. And I don't think it speaks necessarily. I think we're decent, we're very good. We have great engineers. But my 30 -person engineering team, I think, does the work of 300 people by the next year it'll be doing the work of 3 ,000 people. Maybe we'll only grow by 10 or 20%. So, and the reason is we use these tools. We're productive to an order of magnitude that I didn't think was possible. And as a result, we're just able to price it differently.

1:27:12So even if it's the exact same product, it's cost structure is just meaningfully lower. And so this is what I mean where the ROI calculators get blown up. All of the traditional go -to -market motions get blown up because in an RFP or in any other sales environment, what you do is somebody says it's $100 and you show up and you say 10. And at 10 it's still hugely profitable for you. And just to add just one last thing is just You have fundamentally these enterprise applications software companies, the software industrial complex, and I agree with everything Chema said. You know, they're fundamentally based on making white collar human employees more efficient.

1:27:53And what the AI companies are going to do is just say, hey, we're just going to replace that worker. And it's just a fundamentally different mentality. And it goes to like, there may be a lot of pain that accompanies this. and David's points around the potential rise of socialism. What do you got for the worst performing asset? Mr. Freiber, 2021. I'm probably just going to triple underline vertical SaaS again, Percy Pricing Model being challenged, pricing being compressed as companies that explore in -house tools built with AI that replaces these kind of traditional business practices, modes that we can destroy.

1:28:30I'm worried. EG is this is, this is scary. It was an obvious, it was an, it was an obvious one on my list, but I want to make a different one. I want to make a different one. How about opening? I'd see if you had anything open the, I will open it. I'll open it up. I'll open it up. Tell it to the other talents of people left. But you know, I don't know where they are. Where are they? Where are they all the other open AI employees? Any obligation? They're skiing too, right? I've all started competitors. Oh right. That's what happened. Correct. Yeah, they all left to compete and have revenge on us.

1:28:58Wow, that's an interesting trend. Okay, so consumers make five big decisions in their life as we all know Colleagues 12 billion revenue. I mean, well, that's that's a projection But also six billion Sometimes the reality six billion and losses to David against that 12 billion revenue. Yeah, six billion this year Six billion next year. I think the six is for next year, but I yeah, I don't know I guess it makes sense why they're trying to charge 200 bucks a month now Up for 20 they got some headwinds. Okay, listen consumers make five big decisions in their life if we know college spouse kids are the obvious ones and then cars in homes.

1:29:34And the consumer is up against it with record debt. So since you can't trade college spouse kids really, I think legacy car companies in real estate are going to face continued headwinds and be terrible assets. Because listen, we've overbelt in some cases, there's tons of cars on lots and people can't afford homes with these mortgages. So I think these are gonna be the two worst performing asset that are people in the legacy OEMs, as Jamal pointed out in a previous prediction. And then I just think real estate is the same. If you look at a place like Texas, two years in a row, housing values have gone down, rent has gone down two years in a row.

1:30:09Same things happening in other states where they allow to be a build, and people are leaving states where they don't allow you to build. So that's my worst performing asset trade. Enterprise was my other choice, but I'll go with something slightly different. Most anticipated trend for 2025. Last year, Jamal, congratulations. You said last year that Bitcoin would hit 100K for the first time nailed it, half -court shot. Well done. I think at the time you made that prediction, it was probably trading at... It felt like a layup. ...Felical layup to you, up 112%. Freeberg, you said predictive models in AI -driven discovery and farmer and bioengineering.

1:30:41How did that do? That prediction? Well, there was a lot of funding and... ...demosworn mineral bilpenned Nobel Prize. ...Penned Nobel Prize. Yeah, yeah, yeah. So, it worked out. I picked efficiency in the form of AI advancements in labor and outsourcing, and I've seen that a bunch with our investment in Athena, go to AthenaWow .com. Okay, got my plug in there. Let's go for most anticipated 2025 trend. What do you got, Chimoff? I think that there are a handful of, not to overuse and overuse term, but in areas in the coal mine for the end of the deep state. And I would like to point to one, which is this obscure thing called the supplemental law.

1:31:22ratio. And essentially what it is is a mechanism that the banks can use to include or not include treasuries and how they calculate reserves, et cetera, et cetera. Now, why is this an interesting thing? It's not interesting for many people. It's very arcane. But if we are unable to manage the debt situation in 2025. I think what you're going to see is maneuvering at the edges of these arcane regulations that effectively kick the can down the road. And there is a chance that that could happen to help the banks because we believe that we meaning collectively America that maybe dojo won't be as effective as it needs to be that they're still going to need to be, you know, $10, $20 trillion of debt issuance to refinance to 10.

1:32:22That's maturing this year and to plug holes in the coming years. My point in all of this is, we don't need to understand the details except that if we don't move the goalposts here, it is a great sign that the folks that are running the show are the ones that we all elected. So that is my most anticipated trend. Small, arcane, regulatory changes that allow us to kick the can down the road, stop in its tracks. This is an example. Okay, Freiburg, you got a most anticipated trend for 2025? My most anticipated trend is around the announcement of build out of nuclear power in the United States in 2025 as a function of deregulation and some new technologies.

1:33:12I do think that the new government is going to be much more accommodating. And it's going to, as I've said in the past, I think it's a necessity just because of the rate at which we have to do power buildouts to meet kind of competitive demand against China. The United States is going to need to add more power, electricity, production capacity, then we can scale up with any other renewable source. So I do believe that nuclear is an inevitability. I think that the deregulation will happen in 25 and I do know a lot of very smart people who are actually starting nuclear power companies and have left very good jobs to go and do this in anticipation of this happening in 25.

1:33:52So I'm very bullish. That's a leading indicator for sure when smart people do something with their time. That's a great indicator Gavin. What do you got? I think AI and Nick I sent you a chart. I don't know if you can flash it up. But I think AI is going to make more progress per quarter in 2025 that it did per year and 23 and 24. And the reason is just with 0103, this is ArcageEI, it's designed, we keep changing the goalposts for the Turing test and AGI. And I'm sure we're going to change it again as we're going to blow through this. And I just think what has happened is we were scaling around one on one access, which was pre -training.

1:34:40And then we started scaling around in FritzTime Compute. And it's very clear that we have now added a third access of scaling performance. And that is reasoning. And what this is is these models, the internet is composed of answers, people giving answers. And what the models really benefit from is kind of the internal model log of somebody getting to that answer. And this is, you know, in AI terms, they call it a reasoning trace. And it's one reason, you know, 18 months ago, everybody was like, oh, wow, the more code you train a model on, the better it does and all sorts of things that haven't seemingly nothing to do with code.

1:35:19But all code, you see kind of the reasoning, the internal model log, the thought process, the step -by -step. And so what's happening is you're using models to generate synthetic data that contains these reasoning traces. So you ask a model, you know, solve this problem. It has to be a problem that is functionally verifiable that has an answer or you know the answer. And we say show your work and we have to do that many, many different ways and times. And then you pick the best ones and you kind of feed those back into the model. You apply some reinforcement learning to it. And so now you're scaling along three axes that are multiplicative with each other.

1:35:59And I just, you know, a guy on the Google team said, tweeted maybe five days ago, it's going to be a straight shot to ASI, artificial superintelligence. And I think that might be right. Ilya gave a talk at Neurips, Ilya Sutskever, one of kind of the original pioneers of this field. And he said something that I thought was scary. And he said, these models that reason are inherently unpredictable. So the best reasoning models in the world today are the ones that play games, the kind of AlphaGo Alpha Zero style models. And they are constantly making unpredictable moves that no human grandmaster ever could have come up with.

1:36:40And now these models are going to be making similarly unpredictable leaps and all sorts of domains. Which hopefully will be awesome, but you know might not be yeah Well, they're gonna go around corners that people might not have considered that are non -intuitive and then just to Circle back and do a little call back here and remember I asked which banks would have the biggest chance of being insolvent Or having financial collapse or crisis tons of misspellings in there as I typed it while we were talking and you can see what deep my deep research did here It went and said here's what we're gonna do We're going to research a bunch of websites and find a list of banks in the US, find top banks by US by asset for each one of these banks find their latest financial savings for each of these banks find their capital adequacy ratios for each of these banks find their loan loss you get the idea and then it went and it analyzed and then it created reports this took about 10 minutes and when you look It created this final report here where it gave a list of Jamoth of JP Morgan Bank of America City Group Yada Yada It did an analysis of each one and at the end you can see all the different websites it pulled It was well over a hundred websites that it pulled that's incredible live data from 162 websites and you have to pay for this, but it's only $20 a month and it's conclusion This analysis is provided a snapshot of the financial help of some of the largest US banks while all banks face inherent risks sitting group in Wells Fargo appeared to be the highest risk of insolvency of financial collapse compared to JP Morgan Chase Bank of America Goldman Sachs, City Groups, Recent Net Loss, Lower CET, one ratio and high exposure.

1:38:17I mean, you should look at this now. I don't know how much of this is correct. I'm no expert on this, but it does seem like it's a pretty good start of where it's getting to. And if you haven't used 1 .5 pro with deep research, just go to Gemini .google .com. I'm not paying to say this. I just think it's the best product in the market. And it's pretty darn impressive. Okay. My most anticipated trend for 2025 was alluded to in an earlier prediction, I think by Gavin himself. Mine is that exits in DPI, Shower Town, and we'll have this incredible distribution as the wrath of Lena Khan ends and M &A and IPOs will surge.

1:38:55That is my prediction, my most anticipated trend. Okay, let's go to most anticipated media. I had two that I was working back and forth from James James Guns DC Universe with Superman coming out this year. I think it's going to be amazing and or season two Could be amazing. I predict they're going to do a Clone Wars live Actress series if you don't know the Clone Wars watch it with your kids. It's amazing animated series that takes place during the prequels but I went with a little Of a weird choice here I think my most anticipated media is seeing what happens with legacy media outlets owned by billionaires and or people who no longer want to pick a side, watching the post CNN and LA Times specifically, are steering towards the middle and trying to get back to classic journalism.

1:39:42The editors are revolting, Karen Swisher is upset, and they're adding some right -wing voices. It is going to be popcorn time for everybody. So enjoy whatever you want to enjoy. Star Wars, I got a little Star Wars for you with the Ender season two. I got a little Superman, or you can watch the chaos in the editorial newsrooms at Washington Post and LA Times, what do you got for most anticipated media trim off? It is the enormity of the files that are going to get declassified and released by the Trump administration. I think it's going to be unbelievably interesting, salacious, useful, good, earnest, just on the above.

1:40:27So the JFK files the Epstein files did he files the moon landing who knows what they find across all of these other French quote unquote conspiracy theories that may turn out to actually have some shred of truth, but All of that let's call it content for lack of a better word that gets released in 2025 by the Trump administration. I think will be Incredibly interesting. What do you got to media any anticipated media for you? What do you got? I'm into AI video games The cost of production comes way down when you use AI and you can have dynamic storylines. You can have new gameplay concepts, things that don't exist today.

1:41:05I think that the creative talent plus the technical talent that you typically find at development houses can be kind of unleashed with tools that have come to come to market recently. We've seen a lot of the generative video stuff, but there's also ways structurally that video games can kind of be rebuilt where the video game engine can run kind of locally. It can be generating parameters that can then use an existing rendering engine. So you can have entirely new storylines and entirely new kind of plot sequences. So I do think that there's going to be a rewrite of video games in the video game industry with the variety of AI kind of capabilities that are hitting market now and it's going to be incredible.

1:41:40It's going to be incredible entertainment. People are going to... People that don't play video games are going to find stuff that they're going to love. Gavin, most anticipated media, 2025. On question 1923 season two, I'm normally a science fiction kind of fantasy or you know spy kind of guy when it comes to TV, but 1883 and 1923 were the first TV shows that kind of hit me the way Game of Thrones did and I'm crazy excited for that to come out. Fantastic. Are you watching Landman? I mean, Joing Landman. I haven't watched it yet. I've expected to try it. It's quite fun. Turns out this guy Taylor Sheridan.

1:42:17He's I mean, he's incredible. He's at the zone. I highly recommend Day of the Jackal. I know Chimoff also love Day of the Jackal. Oh, that was really good. That was really good. That was a good day. It's a car suggestion for screening. Yeah, I'm excited. It was a car call. It was a car call. Yeah. Absolutely. What was our predictions for this last year? Last year, Chimoff predicted Mr. Beast. Freeberg, AI generated news. I predicted Gladiator 2 and the three -body problem. Gladiator 2 was mid. but okay, three -body problem. I didn't finish, so I guess, mid. Jimmy's show on Amazon Prime, the Mr.

1:42:56Beast thing, was the top unscripted drama in 140 of 180 countries. Wow, incredible. All right, we're gonna do our prediction markets here. I'm gonna put up a prediction market, which is based upon immigration and the promise that Trump made to have 15 million people be deported from the country. I think in the first year, I'm going to set the over under at 5 % of that stated number, which is 750 ,000. So after one year in office, will Trump have deported 750 ,000? Less or more. That's my first prediction. How do you measure that? You have to, there has to be a, like, a source of truth on these things, right?

1:43:38We'll do it based on the White House's reporting of deportations. Yeah, it's reasonable. And we'll check with the Polymarket team if there's a way to do that prediction market obviously But I think that was the biggest issue of the election So I'm putting it up there with just 5 % in the first year. Yeah, it is interesting Obama deported I think more than two million people. It's like people have forgotten But he was actually really really tough on the border. Yeah, Chimalt, do you have a prediction market? You want to put up? The Mag -8 representation on the S &P 500 shrinks Below 30%. Oh, that's a good one.

1:44:13That's a good one. So dispersion would happen to the other stocks. That's a good one. That's a good one. That's a good one. So we'll finalize these. You'll be able to go. I wanted to kind of play with was Microsoft AWS and Google Cloud revenue growth. Who's going to win in growth in 2025? I don't know how closely you guys track, but I get a sense that Google is kind of accelerating ahead. Gavin, I don't know how much you've got. Yeah, Google is. I wouldn't say they're a lot smaller, which makes it easier for them to grow faster. Yeah. Um, do we talk about? Yeah, I mean, I guess, um, who has the largest gain dollar dollar gain in revenue in cloud revenue in 2025?

1:45:01Is it Google Amazon or Microsoft? off. Well, it probably won't be Google because if they had the largest dollar gain, it would mean they were growing at insane rates. But I think Azure versus AWS will be interesting. Oh, I know the other one I want to do, which was the national debt. The national debt has grown about two trillion per year in each of the previous two presidential administrations, right? So over the last eight years, we've gone up over 16 trillion, two trillion per your average. So I'm going to set it at and Trump said he would not increase the national debt. I'll just set it at the national debt increases one trillion in the next year.

1:45:44Over under. Is that a good prediction market? Or is it should be two trillion? How would you do? Yes. So what I would do is I would set the federal debt for December, the US Treasury market report on federal debt in 2025. And I would set it at 30, 37 trillion. and see basically the US Treasury market report December 2025 above or below 37 trillion. It's going to be above. Let's just call it 38 trillion then. Yeah, you want to basically, in order to make this, when you set a line, Dave, it's got to be one where people take either side of it. It can't be everybody takes it over. Yeah, so we'll do the US Treasury market report December 2025 federal debt above 38 trillion or below 38 trillion.

1:46:28Perfect. Which would be how much added in the year? About one and a half. Yeah. I love that. I love that. That's a perfect one. We'll see if he can make any, he can control the spending or if it'll just be the same. Gavin, what's your sense on federal debt next year? I think like both things that will take like immigration will take time to get going. Yeah. It's just going to take a little bit of time, but I think they will make progress. By the way, at some point, if I'm here on the all end again, I want to talk about UFOs and the drones. Let's talk about it now. Do it right now. Are you going full conspiracy theorist?

1:47:02Are you trying to get your seat here by being a little more Alex Jones? Do you believe those drones were aliens? What's going on? So I don't know. And I think it's very clear. If you look at all the statements from the New Jersey mayors and governors who met with the police, the FBI, the defense department, then they don't know. Now Trump said someone in the government knows what they are. He also said he was not going to go to Bedminster anytime soon. The history was right there. I just think over the last, I would say eight years, every 18 months, there's a big story of the New York Times, the Washington Posts, the New Yorker, the Atlantic, very credible media sources with dozens of interviews with fighter pilots and commercial pilots talking about seeing things with advanced sensors that made no sense to them.

1:47:53And then there's kind of a taboo that went away. I was an article in the New Yorker where they quoted from a bunch of people who were at, kind of the skunkwork slavertories in the 1950s and said they absolutely saw extraterrestrial materials that have been recovered from a crash. That's one reason the US made such big leaps and material science. And there was the Oumata thing where essentially a lot of astronomers said, hey, this is clearly a UFO of some sort, including the head of astronomy at Harvard. And then just the conspiracy theory I would have is if, if, if, if, if, these are actually the UFOs and not government drones, either from the United States or China.

1:48:50It seems like the most likely explanation in New Jersey is that some sort of a drill. And obviously, once this hysteria gets going, people misidentify commercial airplanes as drones. And like why would UFOs have blinking green and red lights? But it is just interesting that there was, You know, a big concentration of these reports as we're scaling into nuclear technology, 1945 to 1960. And then now that AI is getting going, which is the next kind of technological phase shift for humanity, there's another big that a lot of us have reports. You can come back next week. You want, congratulations, we have our winner for all in Idol.

1:49:36Gavin is now the fourth best. I love this kind of conspiracy. But I mean, come on. How do we make a polymarket at this frame? I don't know that we make polyboxes. You're sure it's your way Gavin's family. I mean, are there documents that you think Trump will release about the past in terms of UFOs? There must be just an entire spectrum of stuff that could be subject to FOIA if we went after it, no? I mean, I think it depends on how deeply it's classified. And I'm sure if the government doesn't want to give it up, They won't give it up. But, you know, there's all the, you know, there's all the, you think, but look, let's be honest, you think that there are docs like there's documentation that the US government has that there are UFOs that there have been.

1:50:21We just can't explain it. Yeah, and, you know, they, they call it UAPs now to make it, you know, not flying saucers, but it just feels like something fun. What percentage chance you put on, we have actual knowledge on a percentage basis. What percentage chance you put on the government, US government is sitting on knowledge of extra thresholds, 20 % at least 20 % from what do you say Gavin? I would say 25. I would take the over on the 20. Okay. Great. So you think there's a non a significant small chance that this is the case free bird, Sultan of science. What chance do you think there is this government sitting on some extra sure I show a life or proof of it.

1:51:01It's a longer conversation. I don't have time for this, but I got to be honest, I don't, um, I, I don't generally align with the idea that like our very narrow range of like understanding of technology and biology kind of is what visits us or would visit us. I think that there's an extension of information gathering that doesn't require moving physical biological life forms from one part of the galaxy to another. So I think that the whole premise of like UFOs moving bodies around is rooted in the current state of technology of humanity, which is the basis of Arthur Clark's treatment of 2001 a space odyssey, not which was done before the screenplay, which was done before the book.

1:51:48And the treatment, which you can buy, I think highlights this the best, which is eventually every civilization reaches a sufficiently advanced level of technology that you no longer need to physically move the bodies of the biological organisms around that you simply are gathering information and affecting information because once you have the ability to convert any molecule into any other molecule and you have access to sufficient energy which you will eventually evolve to be able to do. You can basically turn your local part of the universe into anything you wanted to turn into and then you're simply gathering information from all over the rest of the universe.

1:52:20So I would argue that there doesn't really make a lot of basic sense in why alien bodies would want to move around the galaxy I'm just saying it right now if Trump releases information on extra -tressure life I am voting for him to have a third term. I'm putting it out there. I'm going full MAGA He gets a third term for me. We're changed in the Constitution. This has been another amazing episode of the all - We want to ask a question for Gavin. Oh, well, let's forget. Okay. Do you think extra -trust real life? built the pyramids? Is that the most plausible explanation to the accuracy? I don't know.

1:52:58It is so strange the way there are, you know, in so many, I would say, cultures all over the world, free. You know, we are closer in time to Cleopatra than she was to the time of their great pyramids. Like, it was a long time ago, But it's just weird that in so many cultures all over the world there are these depictions of what looked like astronauts And then there's all these Renaissance era paintings that clearly show what we would call UFOs in the skies over cities So I don't know I just see kids I'm with you. I love conspiracy Gavin This is been the most crazy, this is not because the government is awesome.

1:53:43If you're a question in person, these things create these weird, un -open loops that it's a carpet -closing simulation. I think we're in a simulation, so I'm fully vested in it. Anyways, I think the most credible thing I saw in the pyramids was that they used water and they raised water in channels, so they put them on wood, slats or something, and then they would raise like in like the Panama Canal, they would do canals and float them up and then place them and then release the water, which you know, sounds great to me. This has been another amazing episode of the All in Podcast and thank you to everybody.

1:54:22That's happened amazing to 2025 to everybody. Let's kick ass. Let's kick ass. Let's kick ass. Let's kick ass. All right. We'll see you all next time. Bye bye. Bye. We're like your winners ride. Rainman David Sack says. I'm going on a win. And it said we open source it to the fans and they've just gone crazy with it. I'm the US, I swing up, can walk. I'm going on a win. What are you doing? What are you doing? Besties are gone. Go through the teeth. That's my dog taking it away. She's right, wait. Wait, wait. Oh, man. We should all just get a room and just have one big hug. Because they're all just like this sexual tension.

1:55:11They just need to release that out. What? You're the bee. What? You're the bee. Beep. What? That's good for you. We need to get more cheese. I'm going on, Liam!

1:55:28I'm going on, Liam!