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Chamath Palihapitiya

@chamath

May 4

What I Read This Week…

Berkshire Hathaway has been a net seller of stocks for ten consecutive quarters, trimming or exiting positions, including Apple, Bank of America, and Chevron, while fully exiting holdings like HP and Paramount Global.

At the 2025 annual shareholder meeting, Buffett explained that the firm is waiting for “extraordinarily attractive” opportunities, preferring to hold cash rather than overpay in an overheated market.

As a result, Berkshire’s equity portfolio has become more concentrated, with Apple (still its largest holding), Coca-Cola, American Express, and Occidental Petroleum anchoring Warren’s long-term convictions.

Meanwhile, the company’s cash pile has increased to an unprecedented $348 billion, which is roughly equal to the total reserves held by all U.S. commercial banks at the Federal Reserve.

Warren also announced he will step down as CEO by the end of 2025.

Under his leadership, Berkshire Hathaway delivered a return of 5,502,284% since 1965, compared to just 39,054% for the S&P 500 over the same period.

Google’s rollout of AI Mode marks a shift in its core search strategy, transforming Search from a results engine into a task-oriented AI assistant.

This mode offers conversational inputs, including voice and images, and delivers visually rich answers with product cards, local business info, and session memory similar to Search’s current UI.

AI Mode works by combining Gemini with structured real-time data from across its services, including Search index, Maps, Shopping Graph, and local business databases.

When a user enters a query, such as “best foldable camping chair under $100,” AI Mode generates a clear, concise answer formatted in visual cards, which are clickable, tappable, and linked to actions like visiting a store, calling the business, or placing an order.

Users can ask follow-up questions without starting over, and a memory panel on the left-hand side (on desktop) shows previous sessions, letting users revisit or refine their queries over time.

This launch is central to Google’s ecosystem play: by integrating shopping, trip planning, and local discovery directly into the AI layer, Google keeps users inside its platform as they compete with OpenAI and other platforms for more and more tasks that traditionally people searched for.

The U.S. court upheld a ruling requiring Apple to allow developers to include external payment links for apps downloaded from the App Store.

This ruling enables developers to bypass Apple’s in-app payment system and its 30% fee, long derided as the “Apple tax”, by using alternatives like Stripe, which charges just 2.9%.

Stripe responded immediately with a developer-friendly SDK, making it easier than ever to integrate external payments and reclaim margin.

After Apple tried to blunt the impact by introducing a new 27% “external processing fee,” the court further mandated that Apple must eliminate its 27% external processing fee as well, representing around $20 billion annually.

More broadly, as AI reshapes how people interact with their phones and software, the App Store may lose relevance under its current design. Apple must evolve or risk becoming a toll booth that fewer developers will use.

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Chamath Palihapitiya

@chamath

Apr 28

Deep Dive: A Primer on Stablecoins

Last year, Visa announced the launch of the Visa Tokenized Asset Platform, a new infrastructure designed to help banks issue and manage stablecoins and tokenized deposits.

This week, Stripe began testing a stablecoin pilot, aiming to help companies outside the U.S., and E.U. access U.S. dollars more easily through stablecoin payments.

And just today, Mastercard announced new features that allow consumers to spend stablecoins and enable merchants throughout the world to receive them.

Stablecoins weekly transaction volumes have already exceeded Visa’s, making it the second killer app in the crypto ecosystem, besides Bitcoin.

So what’s going on?

This deep dive will explain how stablecoins work, as well as the use cases and implications of more of these tokens flowing through the global economy.

We wanted to communicate the ‘a-ha’ moments which make it clear why players like Visa, Mastercard, and Stripe have allocated substantial resources towards stablecoins, and why one of the current administration’s priorities this year is to establish a clear legal and regulatory framework for them.

A few months ago, we published our first crypto deep dive which covered the crypto ecosystem as a whole.

Re-reading that deep dive, I would say that the primer is even more relevant today, and it’s interesting to note how some of the fads mentioned have already faded from culture.

If we’ve done our job right, both these deep dives should impart a visceral understanding of why cryptocurrencies command trillions of dollars of value, and how to navigate an ecosystem that has both a handful of incredibly useful products, as well as many experiments and scams.

On the first episode of All-In this year, I predicted that the biggest business winner in 2025 will be dollar-denominated stablecoins.

Let’s see if I’m right.

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Chamath Palihapitiya

@chamath

Dec 23, 2024

What I Read This Week…

The Federal Reserve cut interest rates by 25 basis points on Wednesday, lowering the federal funds rate to 4.25%-4.50%.

Jerome Powell described the decision as a "closer call" and indicated only two rate cuts for 2025, down from four rate cuts projected earlier this year.

Powell emphasized they are entering "a new phase" where they will be "cautious about further cuts" after having reduced rates by a full percentage point since September, reflecting the Fed's growing concerns about persistent inflation.

Public markets responded negatively to the Fed's more cautious approach to future cuts, with the S&P 500 decreasing 3% within hours of the announcement.

OpenAI announced their latest reasoning model, o3, demonstrating another step function advance in AI capabilities.

The model sets new performance records across multiple benchmarks, achieving 96.7% on the American Invitational Mathematics Exam, 87.7% on graduate-level science questions, and a Codeforces rating above the 99th percentile.

Using a "private chain of thought" approach, o3 can adjust its reasoning time across three settings (low, medium, high compute), taking longer to respond but providing more reliable answers.

However, o3 still has limitations in handling basic tasks despite its advanced capabilities. The model also requires higher computational costs, at $20 per task in low-compute mode.

o3's approach to problem-solving differs from previous models: instead of retrieving memorized information, it searches through possible solutions and reasons about them step by step, though this process takes more time and computing power.

This addresses a limitation of previous LLMs because it can recombine existing knowledge in new ways to solve novel problems rather than just applying memorized patterns.

New research shows that many smartwatch wristbands contain concerning levels of leachable PFAS chemicals.

Researchers at University of Notre Dame tested 22 wristbands across various brands and prices, finding that 15 contained fluorine indicating fluoropolymer content, which are chemicals containing fluorine atoms that create water and stain-resistant surfaces.

Nine bands had measurable PFHxA, a specific type of PFAS used in manufacturing, with four showing levels above 1 part per million, the highest concentrations ever seen in wearable consumer products applied to the skin.

The findings raise concerns because smartwatch bands maintain direct skin contact for extended periods - often more than 12 hours daily - and recent studies indicate PFAS can pass through human skin under normal conditions.

While the specific health effects of this exposure remain unclear, this discovery provides the first evidence of high PFAS levels in products that come into prolonged contact with the skin.

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Chamath Palihapitiya

@chamath

Dec 5, 2024

Deep Dive: A Primer on Cryptocurrencies

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Check the date.

In July, President Trump spoke at a Bitcoin conference and told the audience he would make the United States "the crypto capital of the planet". The crowd went wild.

Since then, President Trump won the presidential election with an unprecedented sweep of all seven battleground states, Gary Gensler announced his departure from the SEC next month, and earlier today, Bitcoin passed the $100,000 milestone.

The cryptocurrency market now commands $3.5 trillion in value, with over 15 million daily active users across all decentralized networks.

Yet many people are still puzzled by what Bitcoin and other cryptocurrencies actually are, and some people still can't see past all the speculation and scams to understand the real use cases driving this ecosystem.

Moreover, I've read many articles and flipped through many slide decks on crypto, but they all miss something crucial – those key "a-ha" moments that help someone really understand what's going on in this space.

For people still skeptical, I've realized that people don't necessarily need more information – they need the right guide to navigate the crypto rabbit hole.

Our fundamental goal with this deep dive is to deliver those "a-ha" moments in an accessible way. We start from first principles and review crypto's evolution from Bitcoin to smart contract platforms, to stablecoins and "P'nut the Squirrel" memecoins.

If we've done our job right, by the end of the deck, you should have a more visceral understanding of why cryptocurrencies command trillions of dollars in value, what projects in the ecosystem have achieved varying levels of product-market fit, as well as what are some of the takeaways from failed experiments.

For people that have already experienced those "a-ha" moments, I think this deep dive is a great framework to zoom out from the fractal edges and review everything that's happened since Satoshi's white paper was published.

By the way, I want to give a special thanks and shout-out to @vaneckpk , @GabeRabello, and the team at @vaneck_us for their contributions to this deep dive. Their expertise and understanding of the space was invaluable.

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

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Chamath Palihapitiya

@chamath

Dec 2, 2024

What I Read This Week…

Alibaba recently released QwQ, an open-source AI model that competes with OpenAI's o1 in reasoning capabilities.

What is QwQ and how does its performance compare with OpenAI's o1?

QwQ is an open-source, 32-billion-parameter model with a 32,000-token context window that is strong in mathematical and scientific reasoning.

It outperforms o1-preview on mathematical reasoning benchmarks AIME and MATH, and it beats o1-mini on GPQA for scientific reasoning tasks.

While it performs worse than o1 on LiveCodeBench coding tests, it still surpasses other leading models like GPT-4o and Claude 3.5 Sonnet.

QwQ shows that open-source models continue to rival the capabilities of closed-source models and that Chinese AI models continue to rival the capabilities of U.S. AI models.

Ethereum, despite being the second-largest cryptocurrency by market capitalization, faces challenges to its growth model.

The network's heavy reliance on Layer-2 solutions, which are separate networks built on top of Ethereum for faster and cheaper transactions, has created unexpected complications.

While Layer-2 adoption has seen an increase with popular networks like Base and Arbitrum, this success has undermined Ethereum's main network.

Users increasingly prefer the more efficient Layer-2 networks, which have reduced activity and fee generation on Ethereum's base layer.

This shift has two implications.

First, it weakens Ethereum's deflationary economic model, which relies on network activity to reduce token supply, and second, it has fragmented the ecosystem's liquidity and user base, leading to a more convoluted user experience.

This situation has created an opportunity for Solana, a competing cryptocurrency that processes transactions quickly and inexpensively without requiring additional layers.

Solana's native token has demonstrated stronger performance, rising 300% over the past year compared to Ethereum's 75% gain.

As a result, Solana has established itself as the second-largest platform for decentralized finance applications.

Amgen's recent clinical trial data shows how dominant Eli Lilly and Novo Nordisk's market positions currently are in the obesity drug market.

What's going on?

While dozens of companies are racing to enter this market, Amgen has emerged as the closest competitor to Eli Lilly and Novo Nordisk with its drug MariTide.

However, MariTide faces two headwinds.

First, its trial results show only 20% weight loss compared to over 25% achieved by Eli Lilly and Novo Nordisk's next-generation drugs.

Second, Amgen trails in timeline to FDA approval - having only completed Phase 2 trials, it needs several more years of large-scale Phase 3 studies before possible FDA approval and release to the market.

Meanwhile, Eli Lilly and Novo Nordisk are already finishing Phase 3 trials for their latest obesity medications.

Other companies like Pfizer, AstraZeneca, and smaller biotechs are even further behind than Amgen, which suggests that Eli Lilly and Novo Nordisk's early success has given them a leading position that may grow even stronger over time.

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Chamath Palihapitiya

@chamath

Nov 25, 2024

What I Read This Week…

Elon and Vivek shared their plans to reduce the size and scope of the U.S. federal bureaucracy.

Their plan focuses on five main areas.

First, they aim to remove regulations that Congress never explicitly authorized, using recent Supreme Court decisions as legal backing.

Second, they plan to cut the number of federal workers through workforce reductions, bypassing civil service protections by using existing "reduction in force" authorities rather than targeting specific employees.

Third, they will stop federal spending that wasn't authorized by Congress, which they estimate exceeds $500 billion per year.

Fourth, they intend to improve cost efficiency in government procurement by conducting large-scale audits of old contracts.

Fifth, they plan to address waste at the Department of Defense, which has a budget of more than $800 billion and has failed its seventh consecutive audit.

They plan to make these changes using presidential powers granted under existing legislation rather than trying to pass new laws through Congress, with a goal to complete this overhaul by July 4, 2026.

Bitcoin's price has nearly approached $100,000 multiple times this week.

What's driving this price increase?

First, political support from President Trump and his cabinet nominees has increased confidence in cryptocurrency markets. President Trump's pro-crypto stance has increased support for legislation to establish a strategic U.S. Bitcoin reserve and more favorable regulation of crypto markets, which would increase Bitcoin's mainstream adoption and legitimacy of the entire industry.

Moreover, institutional investors are increasingly buying Bitcoin through Bitcoin ETFs, which saw over $2 billion of net inflow over the last few days and represents a shift from previous years when Bitcoin was mainly bought by individual investors.

Furthermore, market psychology and increased attention on both traditional and social media are creating momentum as Bitcoin breaks through previous price records. With no historical price levels to act as resistance above these levels, and sentiment indicators showing extreme optimism, investors are increasingly targeting $100,000 as the next milestone.

Adding further pressure, the amount of new Bitcoin being created by miners is far lower than current buyer demand. This scarcity means buyers must compete for a limited supply, pushing prices higher. As prices rise, this attracts even more investors hoping to profit from further increases.

A recent study in Nature offers a new explanation for why it's difficult for people to maintain weight loss.

Scientists discovered that fat cells keep a biological record of previous obesity, even after someone loses weight. This record is stored through chemical modifications that affect which genes are activated (called epigenetic changes), which influences cell behavior.

When studying both humans and mice, the researchers found that these epigenetic changes persist even after successful weight loss and when overall health otherwise appears to return to normal. In their experiments with mice, the mice that had previously been obese gained weight more quickly when given high-fat foods compared to mice that had never been obese.

This helps explain why many people who lose weight often regain it – their fat cells retain a molecular "memory" of their previous obese state.

These findings are important because they show that obesity causes lasting changes in fat tissue that don't simply reverse with weight loss. This discovery could lead to new treatments that target these epigenetic changes in fat cells, potentially making it easier for people to maintain weight loss in the future.

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