SHOWNOTES

Episode Overview

In this special edition of the Cash Flow Memo, hosts Mike, Jason, and Hunt look back on their “12 Surprises” from last year—unconventional predictions with high potential impact—and discuss which came true and which missed the mark. Then they unveil fresh predictions for 2025, ranging from nuclear fusion milestones and AI-driven health breakthroughs to geopolitical events and government spending cuts.

Revisiting the 12 Surprises of Last Year

[00:01:01] 1. Saudi Arabia Shifts to Market Share Production

Hunt recaps his 2024 expectation that Saudi Arabia would ramp up production to maintain/expand market share.

Outcome: The Saudis did not pivot to a “market share” strategy. Instead, OPEC+ postponed some production increases, partly due to uncertainties around Iran sanctions.

2025 Outlook: Market-share-driven strategy remains unlikely unless geopolitical circumstances change (e.g., renewed Iran sanctions).

[00:02:09] 2. Biden Administration Blocks New LNG Projects

Hunt notes the prediction that the current administration would impede further Liquefied Natural Gas (LNG) development.

Outcome: Yes, the Biden administration blocked the development of new LNG export projects.

Future Scenario: A potential Trump administration could remove constraints.

[00:02:20] 3. The Federal Reserve Comes to the Rescue

Prediction was for a major market disruption prompting an urgent Fed intervention.

Outcome: No major crisis materialized in 2024 requiring such a rescue.

[00:02:30] 4. A Treasury Bond Auction Fails

Hunt speculated that a failed auction might occur if interest rates soared.

Outcome: No actual failure took place, but the 10-year yield continued climbing.

2025 Outlook: Hunt expects 10-year yields to remain high (potentially in the 5.10–5.20% range), even if the Fed cuts rates.

[00:03:59] 5. Apple Blocked from Paying Google for Default Search

Hunt & Mike discuss how the DOJ’s antitrust case could end Google’s multi-billion-dollar deal with Apple.

Outcome: Not yet resolved, but constraints on Google-Apple payments appear more plausible now.

Jason suggests Microsoft focuses on AI-powered (e.g., ChatGPT-like) search instead of paying for default status.

Mike’s Note: Apple’s revenue hit might be mitigated if a “universal” revenue-share approach replaces the exclusive deal.

[00:11:00] 6. Apple Implements Edge AI Models

Jason predicted the iPhone 16 would feature on-device language models (improving Siri).

Outcome: Hardware can support local AI, but software/OS-level support lags behind.

2025 Outlook: Apple may open APIs for third-party developers, potentially boosting Apple’s competitive position—if done well.

[00:12:57] 7. Voice Control for Tesla Vehicles

Jason predicted Tesla would enhance its built-in voice assistant.

Outcome: Tesla released updates enabling voice commands for trunk/frunk and other controls.

2025 Outlook: Further expansion likely, especially if Tesla’s “steering wheel-less” robo-taxis launch.

[00:13:58] 8. U.S. Implements a National Framework for Autonomous Driving

Jason & Mike consider how state vs. federal oversight might evolve.

Outcome: No sweeping national framework in 2024, but talk of federal mandates (especially if the administration changes) remains.

Discussion also touches on regulation for emerging personal “air taxi”/drone transport.

[00:15:33] 9. Tepid Uptake of AI Leading to Overbuilt Data Centers

Mike describes how Big Tech has poured billions into AI infrastructure.

Outcome: AI usage (e.g., ChatGPT, generative AI tools) is growing, but monetization still lags behind the hype.

Tech companies remain optimistic about future revenue offsetting current massive spending.

[00:16:15] 10. A Drug Designed with AI Gets FDA Approval

Hunt & Jason note that AI is prevalent in drug discovery (protein folding, molecular design).

Outcome: While many drugs are in the pipeline, no major “AI-only” drug with a clear direct link has been approved yet.

The line is blurry because most modern R&D integrates AI at some level.

[00:17:41] 11. Generative AI Replaces Influencers

Hunt questions whether top influencers (e.g., Elon Musk) could be supplanted by AI.

Outcome: Real-world, high-profile personalities remain; however, AI “virtual influencers” do exist.

Mike jokes that high-volume posting might be partially AI-assisted.

[00:18:45] 12. FDA Expands In Silico Experiments

Mike explains “in silico” refers to computational drug testing.

Outcome: No major regulatory breakthroughs in 2024; still potential for partial replacement of animal models in the future.

New 2025 Surprises

[00:21:05] 1. A Private Company Achieves Nuclear Fusion Ignition

Jason anticipates a private firm matching Lawrence Livermore National Laboratory’s feat of net energy gain from fusion.

Commercial viability remains far out, but venture-backed efforts might surpass prior milestones.

[00:23:20] 2. FDA Bans Corn Syrup in Food Products

Jason predicts that, under an RFK Jr.-led FDA, a ban on high-fructose corn syrup (HFCS) could disrupt the U.S. food supply chain.

Such bans exist in parts of Canada and Mexico, potentially foreshadowing U.S. changes.

[00:24:28] 3. China Reunifies Taiwan

Mike floats a significant geopolitical surprise—Beijing asserting control over Taiwan.

Would shock global markets and the semiconductor supply chain.

[00:24:43] 4. First $1B “One-Person Company”

Mike foresees an individual leveraging AI, automation, and outsourcing to build a billion-dollar enterprise solo.

[00:24:51] 5. U.S. Government Spending Reduced by $500B

Hunt envisions federal expenditures dropping from $7 trillion to $6.5 trillion.

Believes modest cuts across agencies could achieve savings without major entitlements overhaul.

Key Themes & Takeaways

Energy & Geopolitics: From OPEC+ decisions to nuclear fusion breakthroughs and potential China-Taiwan reunification.

Tech Innovation: Apple’s on-device AI, Tesla’s voice controls, and the changing landscape of search and digital advertising.

Regulation & Policy: Federal vs. state oversight of autonomous vehicles, possible FDA stance on corn syrup, and AI drug development.

Market Risks & Spending: Ongoing concerns about the U.S. Treasury market, Fed policy, and government spending trajectories.

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