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Chamath Palihapitiya

Jul 7

What I Read This Week…

The U.S. economy added 206,000 jobs in June 2024, exceeding expectations, but the unemployment rate rose to 4.1%, its highest level since November 2021.

What do these mixed signals mean for the Federal Reserve's interest rate policy?

The Federal Reserve's dual mandate requires it to promote maximum employment and price stability, so some see the unemployment rate increase as a factor that may lead to two potential rate cuts this year, with the first expected in September or November.

However, economists note that while the labor market is showing signs of moderation, it remains relatively resilient overall.

The investment world is increasingly focused on geopolitical risks, with many financial firms hiring geopolitical advisors and former government officials to help navigate a more complex global landscape.

What's driving this trend?

Investors perceive a fundamental shift in the global landscape, where geopolitical factors are increasingly driving inflation, amplifying risks, and complicating investment decisions.

This marks a departure from recent decades, when globalization typically led to reduced prices and risk across markets.

Key concerns include US-China tensions, conflicts in Ukraine and the Middle East, and political instability in South American countries like Venezuela, Bolivia, and Ecuador.

Europe's major militaries are facing significant personnel shortages, with countries like Germany, the UK, France, and Italy struggling to recruit and retain soldiers.

What's driving these recruitment challenges, and how are European countries trying to address them?

Contributing factors include competition from the private sector for skilled workers, inadequate living conditions on military bases, and changing attitudes towards military service among younger generations.

Some countries are exploring new recruitment strategies, including forms of conscription, while others are focusing on improving pay and living conditions to make military careers more attractive.

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Chamath Palihapitiya

@chamath

Jun 23

What I Read This Week…

Nvidia's market capitalization recently passed the $3 trillion mark, surpassing Microsoft and Apple as the most valuable company in the United States. Nvidia now also accounts for 34.5% of the S&P 500's growth this year.

So what's the problem?

Nvidia’s growth is partly driven by speculation about the future potential of AI, as well as Nvidia’s central role in shaping that future.

However, if these optimistic projections do not materialize as investors anticipate and Nvidia's stock were to decline, it would lead to a significant drop in the S&P 500 as well.

Anthropic released Claude 3.5 Sonnet this week, the first release in a forthcoming Claude 3.5 model family.

Notably, Claude 3.5 Sonnet excels in the Graduate-level Proficiency Question Answering (GPQA) assessment, which is designed to assess advanced academic understanding across various disciplines, testing complex reasoning and knowledge application typically associated with graduate-level education.

While the average PhD graduate scores 34% on this test and a specialized in-domain PhD scores around 65%, Claude 3.5 Sonnet has set a record with an impressive 67.2% score.

The ADVANCE Act, a bill aimed at boosting nuclear energy development in the U.S., has been passed by Congress and is now awaiting President Biden’s signature to become law.

The Act seeks to streamline processes for next-generation reactor development, position the US as a leader in the international nuclear market, and help keep aging reactors operational.

While the passage of this bill may accelerate nuclear technology development and deployment, its success will ultimately depend on how well it addresses longstanding concerns about nuclear safety, waste management, and public perception.

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Chamath Palihapitiya

@chamath

Jun 4

Deep Dive: Creator Economy - The Next Phase of Media

Every day, we make decisions about which products and services to consume. With countless options and categories to choose from, how do we end up selecting certain products over others?

More than $60T is spent annually by consumers on various products and services so this month’s deep dive focuses on the changing nature of how consumers are influenced.

In a world where we often lack the time or expertise to evaluate every option, the media initially drove consumption decisions by selling advertising about which products and services were best, most valuable, or most suitable.

To understand how media will drive consumption decisions in the future, we look to the past to investigate the underlying economic dynamics that have driven its evolution. Through our investigation, we uncovered four distinct phases of media:

We are already seeing evidence of this today, as influencers like MrBeast and Kim Kardashian build massive consumer goods businesses on the back of their captive audiences.

But they aren’t the only ones. We end our deep dive with an analysis of Elon Musk, the world’s first Mega-Influencer, who has built several massive businesses by following the playbook we outline in the deck.

You can read our full deep dive by following the link below:

chamath.substack.com/p/deep-dive-cr…

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Chamath Palihapitiya

@chamath

Mar 24, 2023

1/ Founders: If you have competing term sheets, what factors are important beyond price? Firm A has a lower valuation BUT a much better track record of realizing that value. Firm B has a history of paying up but fewer exits. Who do you choose? 🧵👇🏾

2/ Startup employees: Similarly, how do you weigh offers from two competing startups? Is there data hiding in plain sight that may help you decide whose equity will be worth more?

3/ Allocators: Whether you are investing in startups directly or indirectly, what tools are you using to sift through the signal and the noise?

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Chamath Palihapitiya

@chamath

Jan 5, 2023

@AkiliLabs

New data from @AkiliLabs clinical trial for teens 13-17yo with ADHD show that 2 out of 3 teens had meaningful clinical improvement in attentiveness (using an FDA-cleared test to measure attention deficit) and 1 in 4 teens tested into the normal range. All through a video game

https://twitter.com/AkiliLabs/status/1611036476636073985

These results are 3X better than Akili's clinical trial results for 8-12yos, which was their original FDA authorization

For decades parents have had limited options to treat kids with ADHD, mostly relying on pills like Adderall and Ritalin (90% of diagnosed kids are prescribed stimulants). Today, ADHD drugs are the #1 prescribed drug and #1 pharmaceutical expense for kids

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Chamath Palihapitiya

@chamath

Jan 3, 2023

The two most important drivers of the next decade: the marginal cost of energy AND the marginal cost of compute will both go to zero.

What does this mean?

@tomgoldsteincs

Take one of the biggest technology leaps of 2023: ChatGPT. It takes 6,000kWh and $100K per day to run ChatGPT, per @tomgoldsteincs, not including the $1B MSFT spent to fund @OpenAI

https://twitter.com/tomgoldsteincs/status/1600196981955100694?s=20&t=kXgZEifntqmVjULNbDlTSw

My thought is that the same $1B today will cost $1M in 2033… meaning in 10 years AI models will generate 1,000+ times what they can today.

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