2025 Predictions with bestie Gavin Baker

FriedbergBearish

Friedberg reiterates his bear case on vertical SaaS, arguing per-seat pricing models are being challenged and pricing compressed as companies build in-house AI tools that replace traditional business software.

“I'm probably just going to triple underline vertical SaaS again. Per-seat pricing model being challenged, pricing being compressed as companies explore in-house tools built with AI that replaces these kind of traditional business practices.”▶ Listen · 1:28:16 ⚑

ChamathBearish

Chamath predicts that the 'software industrial complex'—bloated legacy enterprise software companies built around CRUD databases and expensive go-to-market motions—will face severe disruption in 2025 as next-gen AI companies rebuild workflows at an order of magnitude lower cost.

“I think the software industrial complex... these are these large bloated, in many cases, enterprise software companies... along with that, what they have perfected really is a go-to-market and sales motion... None of those things equate to”▶ Listen · 1:26:19 ⚑

Gavin Baker argues that 2025 will be the year of AI agents, and enterprise application software companies—which lack their own models and compute—will be severely disrupted as AI replaces white-collar workers rather than just making them more efficient.

“2025 is going to be, I think, the year of agents... enterprise application software, I think, is going to 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”▶ Listen · 1:23:39 ⚑

ChamathBullish

Chamath argues Tesla is in an incredible competitive position with its vehicle quality, software, and FSD autonomy, predicting this will trigger the realization that legacy auto OEMs are uninvestable and cause a wave of auto mega-mergers.

“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 gonna”▶ Listen · 47:37 ⚑

Gavin Baker argues that Tesla's FSD is already working and crossing into mainstream adoption, with autonomous driving compounding at an accelerating rate, making Tesla a major winner in the robotics/autonomy era.

“I think FSD works today and it's gonna— it's gonna cross into mainstream adoption where I already notice, particularly if I'm taking an Uber late at night, I really, really prefer to have a Tesla... I think it's going to continue”▶ Listen · 21:29 ⚑

JasonBullish

Jason predicts the Mag 7 will be the best-performing asset of 2025, arguing that internal AI adoption will drive earnings growth beyond what most investors can comprehend.

“I think the Mag 7 is going to be the best performing asset... 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”▶ Listen · 1:22:10 ⚑

ChamathBearish

Chamath warns that the Mag 7's near-40% concentration in major indices historically foreshadows a large drawdown, predicting trillions in absolute dollar losses even though he views the underlying businesses as exceptional.

“the absolute dollar drawdown of the Mag Seven will be in the trillions of dollars... I am a little bit worried about just the general concentration of the top 7, 8, 9, 10 companies in the indices. I think it's approaching 40%... these”▶ Listen · 40:05 ⚑

Gavin Baker agrees that legacy auto OEMs are in deep trouble, caught between Tesla and Chinese OEMs with no competitive products, and the only saving grace would be significant government intervention.

“They're going to lose their Chinese business because they don't make competitive products anymore. If there's not massive protectionism... they'll be caught between Tesla and the Chinese OEMs. And I think the only way that this doesn't—”▶ Listen · 48:59 ⚑

ChamathBearish

Chamath predicts the collapse of traditional auto OEMs as Tesla's competitive advantages trigger a wave of consolidation, with European OEMs like Volkswagen and Stellantis effectively becoming 'melting icebergs.'

“I think that the deal that happened at the end of 2024 with Honda and Nissan... is a bit of a signal to what the industry has to do... the European OEMs are in real trouble. You know, what does Volkswagen do? It's not clear. What does”▶ Listen · 47:05 ⚑

JasonBearish✗ wrong so far

Jason argues Apple Intelligence is a failure—worse even than Copilot—and the company is losing its AI edge to Google's Gemini, making it a loser in the AI transition.

“Apple Intelligence is even worse than Copilot, which is saying something.”▶ Listen · 58:18 ⚑

Gavin Baker argues that inference compute demand will cause the world to run out of GPUs and accelerators in 2025, just as it did in 2023, making NVIDIA and chipmakers major beneficiaries.

“inference compute is going to be the kind of derivative winner of that. We're going to run out of GPUs, accelerators, compute in 2025 the same way we did in '23.”▶ Listen · 22:43 ⚑

JasonBullish✓ right so far

Jason is highly bullish on Google as a 2025 business winner, arguing that Gemini Deep Research represents a step-function improvement over competitors and that Google's AI capabilities will surprise people given its data advantages from YouTube, Gmail, and Drive.

“I am just absolutely amazed at the comeback that Google has made with AI... Gemini, deep research, I keep telling people this and I'm using the app. Is so impressive... It blows anything else in the market out of the water, period, full”▶ Listen · 29:13 ⚑

JasonBearish

Jason predicts OpenAI's $157B valuation represents its peak, arguing it faces fierce competition from Google, xAI, and Microsoft, developer loyalty is nonexistent, open source is a threat, and its nonprofit-to-for-profit conversion could fail legally.

“I think OpenAI's valuation made no sense. I don't think they're going to be able to keep charging the prices they're charging... I do think that there is a non-zero chance they could lose their process on these court cases of transferring”▶ Listen · 45:13 ⚑

FriedbergBullish

Friedberg is bullish on Waymo, citing it capturing 22% market share in SF in just 15 months, improving ROIC from new hardware, and national expansion, predicting a major financing, IPO, or M&A deal in 2025.

“in 15 months, in November of 2024, Waymo is now at 22% market share of rides in SF... they also just moved the hardware platform over to a new device that's supposedly going to bring the CapEx significantly down... You could see something”▶ Listen · 54:43 ⚑

FriedbergBearish✗ wrong so far

Friedberg predicts legacy defense and aerospace providers like Boeing will be among the biggest business losers of 2025, driven by a shift in US defense spending toward tech-oriented, ROI-driven contractors and Boeing's own failures at scale.

“I went with the kind of old defense and aerospace providers, Boeing, Lockheed Martin, Raytheon, Defense 1.0... I also just think like there's a lot of failure at scale with these businesses. They've gotten too clunky and too bureaucratic,”▶ Listen · 41:30 ⚑

Gavin Baker predicts that companies deriving more than 35% of revenue from US government contracts will be the biggest business losers of 2025 as DOGE-era scrutiny leads to spending cuts.

“Government service providers. You do not, you do not want to have the United States government at any level as over 35% of your revenue. They might check the bill. Crazy thought.”▶ Listen · 39:28 ⚑

FriedbergBearish✗ wrong so far

Friedberg predicts legacy defense and aerospace companies like Lockheed Martin will lose as US defense budgets shift toward tech-oriented, ROI-driven contractors, while new entrants like Palantir and Anduril benefit.

“the old defense and aerospace providers, Boeing, Lockheed Martin, Raytheon, Defense 1.0, 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”▶ Listen · 41:27 ⚑

FriedbergBullish📌 position call

Friedberg picks Chinese tech ETFs as his best-performing asset for 2025, arguing these beaten-down stocks look cheap given potential US-China trade deal progress, China's energy cost advantages, and a likely shift toward enabling more market innovation.

“I went with Chinese tech stocks, uh, Chinese tech ETFs... I do think that the Trump administration... are trying to line up what I would call kind of like the great deal with China... these stocks look pretty cheap. I was just looking at”▶ Listen · 1:17:40 ⚑

Gavin Baker, whose firm is an investor in Zipline, argues autonomous drones are the best way to deliver almost anything to suburban America and will be a wild card winner in the delivery space.

“There's a company called Zipline, which my firm is an investor in. Fantastic company. But autonomous drones, they really are the best way to deliver almost anything to suburban America.”▶ Listen · 53:43 ⚑

ChamathBullish

Chamath predicts stablecoins will be the biggest business winner of 2025, arguing they have decoupled from crypto volatility, already exceed Visa's transaction volume, and are poised to attack the Visa/Mastercard duopoly with potentially 4-5x growth.

“Stablecoin usage at the end of the second quarter of 2024 was about 1.1 billion transactions that summed to $8.5 trillion... more than double Visa's transaction volume... I think stablecoins could quadruple or quintuple by the end of '25.”▶ Listen · 24:00 ⚑