All-In E133: Market melt-up, IPO update, AI startups overheat, Reddit revolts & more with Brad Gerstner
Episode 133 • 6/16/2023
Key Topics & Timestamps:
Market Rally & Fed Update
- Fed paused rate hikes after 10 consecutive increases
- Tech stocks up 30% YTD despite recession concerns
- Discussion of whether the rally is justified given economic conditions
- Brad notes markets still trading below 10-year average
IPO Market & ARM Filing
- ARM confidentially filed for IPO seeking $8-10B
- Debate over ARM's true valuation (Bloomberg reporting $70B target)
- Discussion of ARM's failed $40B acquisition by Nvidia
AI Startup Funding Concerns
- Discussion of Mistral AI's $105M seed round at $240M valuation
- Criticism of large early-stage funding rounds in AI
- Chamath argues against funding hardware/compute costs via equity
- Debate over optimal fund sizes and investment discipline
Reddit Platform Revolt
- 95% of subreddits went dark in protest of API pricing changes
- Impact on third-party apps like Apollo
- Friedberg discusses history of platform API changes at Facebook/Twitter
CalPERS Investment Strategy
- CalPERS increasing venture allocation from 1% to 6% ($800M to $5B)
- Discussion of past poor performance in venture investments
- Chamath criticizes decision-making process and risk management
Notable Insights:
- Brad Gerstner argues that while there's exuberance in AI funding, some winners will emerge and justifies larger fund sizes
- Chamath strongly criticizes the practice of funding compute costs through equity at high valuations
- Discussion of how platform companies like Reddit struggle to balance monetization with community interests
- Debate over optimal venture fund sizes and investment discipline in frothy markets
The episode provides deep insights into current market dynamics, venture capital practices, and challenges faced by both established platforms and emerging AI companies.