Answering our 2024 questions, and charting a bright path into the New Year
Welcome to Cautious Optimism, a newsletter on tech, business, and power.
📈 Trending Up: SpaceX’s Starlink build out … Li Auto … Trump’s view of high-skill immigration? … people pointing out that Trump’s view on high-skill immigration was once, er, different …
📉 Trending Down: Russian gas in Europe … literary freedom in China … free speech on X? … our relative age … food affordability in Russia … power access in Puerto Rico …
New year, new toys: Stanford’s Storm AI research tool is good fun. Play with it here.
Answering our 2024 questions
To cap off 2023, CO posed four questions for the new year. Let’s answer our now year-old queries:
Can anyone make real progress on low national birth rates?
No. In fact, it seems that many countries made negative progress on this front despite rising global concern over aging, declining populations. Vietnam’s birth rate hit a new low in 2024; mid-year data from the United States was grim; births in Italy were “headed for new record low” in October; amongst higher-TFR African nations, birth rates are rapidly coming down.
The issue here is serious; if we humans invented a way of managing our productivity (capitalism) that is so effective it eats other, critical human activity (having kids) then we’ve built a self-defeating system. Capitalism needs to find a way to encourage births, or it will wind up staggering under the weight of its prior generations until it collapses.
Can hundreds of billions of dollars worth of private-market equity find liquidity?
Not really, no. There were IPOs. Reddit, Astera Labs, Ibotta, and a few others. There were some big deals, too. But the venture-startup liquidity crisis continued (got worse?) in 2024 and private-market investors are once again trusting to the New Year to save their returns.
Can the CCP’s economic leaders manage a soft landing?
No. Currently, China is facing deflation, the same real estate crisis it has muddled through for years, a currency under pressure, and muted consumer demand. Mix in trade tensions and expected higher tariffs between it and the critical U.S. market this year, and the nation’s near-term economic outlook outlook isn’t great. Officially, China intends to shoot for 5% growth again in 2025. Sure.
Can democracies regain their teeth in the face of rising authoritarian threats?
Somewhat. I am heartened that Europe seems to be shaking itself awake — in both economic and military terms. But here in the United States, we’re not exactly heading into a period in which press freedoms are expected to expand.
International IDEA’s Global State of Democracy 2024 report is hardly bullish.
But there is much to celebrate, too. Ukraine remains free despite the best efforts of Putin and his apologists to force the free nation to capitulate. Spinning the globe, Taiwan remains free of CCP control, and therefore is still a democracy. And elections were mostly smooth in the United States during the last electoral cycle.
Well, that wasn’t very optimism-inducing on the whole.
Rays of sun
So let’s start 2025 with some positive vibes, yeah? Here’s some stuff that I think is going to kick lots of ass in this, our new year:
Bigger, more powerful, and cheaper artificial brains
Startups are working on building faster, cheaper, and better chips to power data centers and, especially, AI model training and AI inference. Incumbents, too. At the same time we’re seeing real improvements from market-leader Nvidia, and a global rush to build more, larger data centers.
If you think as I do that better AI models and faster, more available compute to feed them is a net-good, then 2025 is going to rock.
Real challenges to incumbent software products that deserve disruption
There’s a lot of software in the market today that people use and hate. Concur, of course. But also everything that SAP sells, Salesforce’s CRM and so forth. Microsoft Teams. You get the idea.
What’s super exciting in 2025 is that startups building software that is AI-native from day one have a chance to shake some big names. Why? Because legacy software companies can’t afford to tear down their existing software suites to build something better; their customers don’t want that. Yet, at least.
So, startups have the field, and with a new computing/computer-human interaction paradigm rising, it’s their game to win.
Accelerated progress towards a zero-carbon future
I like to imagine green energy sources as us politely asking the universe to imbue our ever-larger digital brains (data centers) with more magical lightning. Zap zap, motherfuckers.
But there’s work to do outside of just putting juice into Nvidia silicon. Thankfully, companies like Exowatt and Fervo Energy are tinkering with new methods of generating power for industrial and commercial uses that could disrupt current thermal sources.
On the nuclear front there’s more money and enthusiasm flowing than I can recall at any other point in my life. I am a fan of my atoms split, so this brings me joy. And if you want to believe that we’re really making enough progress towards fusion power, there’s lots to get excited about there, too.
A greater economic edge for the free world
Today, Ukraine halted Russian gas flowing into Europe. So much for a hydrocarbon-based autocracy using its energy reserves as a unbeatable weapon. Around the world, the move to greener energy is a direct blow to some of the most regressive, miserable governments in power today.
Down with Putin’s oil and gas regime; down with the theocratic monarchies in Saudi Arabia, Qatar, Oman and other countries that sit atop a historical archive of temporary energy-based wealth.
All that’s to say that it’s a kickass time to live in the free world. The United States is economically trouncing the world in terms of GDP growth (suspect Chinese 2024 numbers aside). This leaves the world with two axes: The United States, the EU, India, and their friends, and Russia, China, Iran and their friends.
Which grouping do you think is going to do better in economic terms this year?
Outsiders as insiders, insiders as outsiders
It’s very easy to critique incumbent powers; you could argue that how easy it is to attack current office-holders in democratic nations is actually a useful allergy to one-party rule. What’s harder is taking power, and becoming the incumbent yourself.
I, for one, am curious to see how the GOP governs with a tiny majority in the House, and a President who appears to be number two in his own administration.
Accelerated capital recycling
This one is simple. Nearly every person I speak with about the issue of startup liquidity thinks that 2025 is going to be the year. If we take half the hope as hype, and half as substance, we’re heading for a massive year of exits.
That’s good news because it will allow for startup founders and their backers to sell their accumulated equity to public-market investors for cash — cash that they will then plow back into more startups and venture funds.
Sure, some asshats will get paid and that will be annoying, but you can’t capitalism without some yahoos doing better than they deserve, and some solid folks doing worse than they have earned. Such are the vicissitudes of the market.
More intense competition for the future of space
Closing here, Blue Origin appears to be closing in on a real milestone, the EU is going to challenge SpaceX’s Starlink, and there are so many neat technology companies building a mostly-out-of-sight new space economy.
And I don’t just mean Albedo Space and its ilk — I mean the wild shit, like OrbitFab wanting to build spacecraft refueling systems in space, that sort of thing. It’s going to be cheaper and easier to reach LEO in 2025. And I cannot wait to see what that unlocks for our species.
Strong democracy, expansive human rights, uncompromising press freedom, inflexible separation of religion and government, and heavy metal for all in 2025.
Let’s get it.