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More from @chamath

Chamath Palihapitiya

@chamath

Oct 30

Deep Dive: Understanding Federal Agencies

When Elon, RFK Jr., and Vivek talk about an overgrown and ineffective federal bureaucracy, they are referring to the 400+ federal agencies that form the operational backbone of the U.S. federal government.

Why have federal agencies become a lightning rod for criticism?

First, federal agencies are the largest employer in the U.S., employing more civil servants than both Walmart and Amazon.

They also issue thousands of regulations annually, which far exceeds the number of laws passed by Congress during its biennial term.

Given that these regulations touch nearly every aspect of American life today and the vast majority of federal employees within the agencies are unelected, there have been calls to reform the federal government's agency system. In order to do that, we need to look at the problem from first principles.

This deep dive provides an insider's look into our federal agencies, focusing on understanding the issues from first principles. We will deduce and uncover the structural problems facing our federal agencies and propose some of the actions that the Department of Government Efficiency could take to solve these structural issues.

The following topics will be covered:
- How our federal agencies work in practice
- How our federal agencies create regulations
- How our bureaucracy is an unintentional byproduct of our governing system
- Why previous reforms have not addressed the core structural challenges
- What actions the Department of Government Efficiency could take to address the core structural challenges

Our deep dives are designed to be read in one sitting, like a flip book. If we've done our job well, after 20-30 minutes of reading, you should be able to form a clear picture of how our government works in practice, the structural challenges facing our federal agencies, and the actions necessary to drive real change. We've also included a companion podcast, which we think introduces the deep dive well.

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Chamath Palihapitiya

@chamath

Oct 21

What I Read This Week…

Scientists at Harvard Medical School have developed a versatile, ChatGPT-like AI model called CHIEF capable of performing various diagnostic tasks across multiple forms of cancer.

What makes CHIEF different from current AI approaches to cancer diagnosis?

CHIEF stands out by performing a wide range of tasks across 19 cancer types, maintaining consistent performance regardless of cell sample collection or digitization methods. The model detects cancer cells, predicts tumor origins, forecasts patient survival, and identifies treatment-related genetic patterns, achieving 94% accuracy in cancer detection across 11 of the 19 cancer types.

CHIEF was pretrained on 44 terabytes of high-resolution pathology data and validated using 19,491 images from 32 independent sets across 24 international hospitals and cohorts.

Through more efficient and accurate cancer evaluations, CHIEF could enable clinicians to better diagnose and treat cancer patients.

Four college students from the University of Toronto developed an anti-drone technology that outperformed systems from major defense companies like Boeing in a competition hosted by the Canadian military.

How did they do it?

The students built a device that emits high-frequency sound waves to disrupt drones in flight. It works by exploiting materials' resonant frequencies, causing drone components to vibrate and malfunction, similar to how a powerful sound can shatter a wine glass.

To create this device, the team first experimented with car speakers in a living room, testing various sound frequencies on drone parts. They then upgraded to more powerful speakers that could produce ultrasound waves beyond human hearing. Through repeated backyard tests, they refined their system to destabilize drones' navigation systems from 50 meters away, making them unstable, veer off course, or crash.

This final prototype cost the students about $17,000 to develop.

U.S. output per capita remains the highest in the world, with each worker generating about $171,000 in annual economic output on average.

What is driving this?

One key driver is the nation's commitment to innovation, with the U.S. investing roughly 3.5% of GDP in research and development—a percentage surpassed only by South Korea and Israel.

This investment fuels growth in digital-intensive sectors like tech, finance, law, and consulting, where the U.S. provides high-value products and services to the world.

The American economy also thrives on a constant influx of new startups and a flexible labor market which allows workers to easily change jobs or relocate to where they can be most productive.

Together, these factors facilitate efficient resource allocation in the economy, driving a 70% increase in labor productivity since 1990.

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Chamath Palihapitiya

@chamath

Oct 1

Deep Dive: Is India the Next Economic Giant?

Around 20 years ago, China experienced a period of unprecedented economic growth and technological advancement. I watched many of my friends invest early in China and achieve remarkable success.

Yet, I didn't make a single investment then. Why?

I didn't feel like I understood China. I couldn't speak the language, I didn't grasp the political landscape, and I felt like an outsider looking in.

When I look at India, I feel entirely different about it. India's democratic ideals align well with those of the United States. Many Indians speak English, which removes the language barrier, and there are favorable conditions for American entrepreneurs and investors to create successful businesses.

Around 2016, when India launched UPI (digital payment system), a few of my friends and I made some bets then. Even though UPI was a huge success, in hindsight, 2016 was too early to invest in India and my bets didn’t pay off. Even though we saw a wave of successful startups like Flipkart and Zomato emerge during that time, in many ways, India's startup ecosystem was still nascent.

Today, India feels very different from how it was in 2016. Even though some of the same fundamental characteristics remain (e.g., the world's largest working-age population, many talented and educated individuals), the tectonic plates of India's economy have shifted significantly in the past eight years, and many of the long-standing obstacles that were holding back India's economic growth have been addressed.

All this to say, through my own experience of investing in India, I realized that focusing on narrow aspects (e.g., momentum of investment in Indian startups) is necessary but insufficient. It is understanding how the structural pieces of India’s economy fit together that offers the clearest understanding of where India’s economy is today and if it’s the next economic giant.

Many articles have been written about India’s economic potential, but every article I came across, I felt that it was missing this foundational and multi-dimensional approach.

This deep dive builds a foundational understanding of India, from the lens of its economic potential. We will discuss India’s history, governance, demographic profile, technology sector, financial sector, infrastructure, and geopolitical position, to help you understand where India is in its economic development.

We assume the reader has no prior knowledge of India. One of our goals for this deep dive is to come at the subject with the right entry point, so you can develop an enduring perspective that you can build upon over time. If you don’t know very much about India, one sign we’ve done our job is that if, after reading this deep dive, the subject of India should feel less impenetrable (like China was for me), so you have the right footing to read news about India, meaningfully participate in discussions about India, and form a nuanced worldview.

Later, we will do more deep dives on India that branch out and dive into specific topics, with this one as the base.

One thing I want to say is that my team and I spend a lot of time and energy to create an enjoyable reading experience. Our deep dives are designed to be read in one go, like a flip book. If we’ve done our job well, after 20-30 minutes of reading, you should be able to form a clear picture of where India stands in terms of its economic potential.

Part of what makes working on these deep dives so enjoyable is the people we work with to bring them to life. I would especially like to thank @sharvidubey08 and @R0hanMalhotra at @GoodCapitalVC for their contributions to this work.

I hope you enjoy reading, and let me know what you think.

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Chamath Palihapitiya

@chamath

Sep 6

We will be publishing our deep dive on India's economy next week, covering everything from how India's education system works to how the country's infrastructure development varies across different regions.

Like our previous deep dives, we will build from the ground up, assuming no prior knowledge.

Here’s what we’ll cover:

What is the current state of India's economy? How does it rank globally in terms of GDP, growth rate, and other macroeconomic indicators? What are the key sectors driving India's economy?

How is India's education system preparing its youth for the future job market? How has India's IT sector evolved and what is its contribution to the economy? How is the startup ecosystem in India contributing to economic growth and innovation?

What is the current state of India's banking system and capital markets? How does India's debt profile influence its economic stability and growth prospects? How is India addressing its energy needs and transitioning to renewable sources?

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Chamath Palihapitiya

@chamath

Aug 5

What I Read This Week…

The “Magnificent 7” stocks have lost over $1.7 trillion in market capitalization in just two weeks, with Nvidia's stock price decreasing 7% in a single day.

What's going on?

Investors are reassessing the lofty valuations of the largest technology companies, driven by concerns over their large investments in AI and mixed Q2 earnings.

Macroeconomic indicators are pointing to a weakening economy. The latest jobs report revealed new unemployment claims at their highest level since last August, while manufacturing has contracted for the fourth consecutive month.

These signs of economic weakness are prompting investors to anticipate Federal Reserve interest rate cuts starting in September, with the 10-year Treasury yield dipping below 4% for the first time in six months.

The United States is engaged in an increasingly complex battle to control the export of advanced AI chips to China, amid fears they could be used to enhance Chinese military capabilities.

Despite stringent export controls implemented since October 2022, a thriving underground market and creative corporate structures are allowing China to acquire them.

For example, in Shenzhen's bustling electronics markets, vendors openly offer Nvidia's most advanced chips, with some deals reportedly involving hundreds or even thousands of units.

One vendor claimed to have facilitated a $103 million shipment of over 2,000 advanced Nvidia chips from Hong Kong to mainland China.

Scientists have developed a novel class of antibiotics called GmPcides that shows promise in treating dangerous bacterial infections, including those caused by "flesh-eating" bacteria.

How do these new antibiotics work?

GmPcides are specially designed molecules that attack bacteria by breaking both their bacteria's DNA and cell walls. These antibiotics can kill bacteria whether they're growing or not, and even when they're hiding in colonies called biofilms – two scenarios that most regular antibiotics struggle to deal with.

While these results are encouraging, GmPcides are still in the early stages of development.

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Chamath Palihapitiya

@chamath

Jul 19

We will be publishing our deep dive on biotech at the end of this month, covering everything from how gene editing works to how AI is accelerating drug discovery and development.

This month’s deep dive on biotech focuses specifically on human therapeutics.

We will do future deep dives on agricultural biotech (e.g. GMO crops) as well as industrial biotech (e.g. biofuels and biodegradable plastics).

Like our previous deep dives, we will build from the ground up, assuming no prior knowledge.

Here’s what we’ll cover:

What is biotech? How do biotech companies turn breakthrough research into new products and treatments? How do small molecules, biologics, gene therapies, and other biotechnologies differ in their approaches and applications?

What are the stages of developing a new drug? Why are biotech companies generally higher-risk and more capital-intensive compared to other technology companies? Why are drug prices so high?

What is CRISPR and how has it advanced gene editing How have advancements in gene sequencing technologies shaped genomics and personalized medicine? What is Moderna's business model for commercializing mRNA-based treatments?

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