E6: Big Tech antitrust aftermath, potential effects of an M&A clampdown on Silicon Valley & more

Given the state of US antitrust law as of mid‑2020, large tech platforms (Facebook, Google, Apple, Amazon) will not be broken up under existing antitrust statutes; instead, over the coming years they will primarily face new regulatory regimes (rules, oversight, taxation) rather than structural antitrust breakups.

“I really think that the antitrust legislative framework that exists today isn't enough to touch any of these guys. Instead, I think what really happens is more regulatory.” View on YouTube

Among the big four US tech companies, Amazon will face the least antitrust/competition enforcement risk in the ensuing years compared with Facebook (highest risk), then Google, then Apple.

“In many ways Amazon is the most inoculated simply because the end market that they operate in is so massive.” View on YouTube

Starting from around 2020 and for the foreseeable future, the four largest US tech companies (Facebook, Google, Apple, Amazon) will be effectively unable to complete large acquisitions of other tech companies due to antitrust and regulatory scrutiny, causing a de facto halt to major M&A by these firms.

“So I think large acquisition and M&A, uh, by the big four, uh, it's impossible.” View on YouTube

If large‑cap tech M&A becomes effectively unavailable as an exit (as expected from 2020 onward), US public capital markets will respond over the following years by more actively funding and listing emerging growth tech companies, increasing IPO/going‑public activity compared with the 2000–2020 period.

“the idea that there isn't an M&A on ramp anymore means that more capital and the capital markets will become more fluid, and we will support emerging growth companies in the public markets, is my suspicion.” View on YouTube

Following the July 2020 House antitrust hearings, the major US tech platforms will substantially reduce their acquisition activity due to fear of regulatory challenge, producing a sustained chilling effect on M&A that will materially harm the Silicon Valley startup ecosystem (fewer startup exits via acquisition) in subsequent years.

“the big four tech companies have to be looking at these hearings, and now they're going to be second guessing every acquisition they want to make, and it's going to have a chilling effect. And I think that's a disaster for Silicon Valley.” View on YouTube

If, as expected from 2020 onward, large‑cap tech companies are effectively prevented from acquiring startups, late‑stage private tech company valuations will decline significantly (relative to 2010s levels) because investors can no longer underwrite a 2x markup via strategic M&A exits.

“If big tech M&A is off the table, the single biggest thing that'll change is valuations by late stage by late stage privates. Because if you know that you can't get A2X mark to market from the last post, guess what will happen to your post money? It'll go way down.” View on YouTube

Regulators will increasingly act (from the early 2020s onward) to prevent already‑large internet/tech companies from further compounding their advantage through acquisitions that strengthen their core businesses, leading to more blocked or heavily conditioned deals as those firms grow.

“there is a fear that there is going to be a compounding advantage that regulators have a responsibility to stop.” View on YouTube

Over the coming years, governments will come to treat core internet services as critical infrastructure, subjecting major internet companies to regulatory regimes analogous to those applied historically to aviation, agriculture, radio/TV, and transportation (i.e., sector‑specific regulators and rules rather than pure antitrust enforcement).

“we have to admit that now the internet.” View on YouTube

In the 2020s, news and journalism will increasingly be rebuilt from the bottom up on subscription platforms like Substack, where individual writers monetize directly via paid subscribers; over time, additional aggregation tools will emerge on top of these newsletters, enabling bundles of multiple creator subscriptions that function as "next‑generation magazines" or content bundles.

“the first place where I think that goes is places like Substack, which is going to rebuild it bottoms up, where people will vote with their subscription dollars, what to believe and what not to believe. And then on top of that, people will overlay aggregation tools so that you can actually have multiple subscriptions and create sort of like next generation magazines and content subscriptions or whatever. I think that's where the that's where the world is going in terms of information and content.” View on YouTube

Governments will implement new regulatory frameworks on major internet and social media platforms (e.g., Facebook, Google, Twitter) in the years following 2020, going beyond existing laws to more directly govern their operations and societal impact.

“I think that governments are going to regulate these companies. Let's just be clear.” View on YouTube

Amazon will escape the current round of antitrust hearings largely unscathed, but within 5 to 10 years it will face the same antitrust scrutiny currently aimed at Facebook and Google.

“within 5 or 10 years, um it definitely will be looked at through the same lens as Facebook and Google” View on YouTube

Freiberg predicts that if today’s large tech monopolies/oligopolies were forcibly broken up into many smaller firms with much lower profits, those smaller firms would not be able to fund large-scale, capital-intensive R&D projects (like Amazon’s $10B satellite constellation or Alphabet’s self‑driving cars), and such projects therefore would not occur at the same scale or pace.

“Which is a net benefit for society. So by having scale, by having incredible profits and then by reinvesting it in R&D, creating jobs, innovating, it's the only way this kind of stuff is going to get done. You're not going to get it done by breaking up these companies and having 100 companies that only have $10 million of profit each, and then each of them are no one at all can afford to do these grand, important projects that that move markets forward.” View on YouTube

Trump goes all-in on masks, vaccine news improves through the fall, US COVID-19 deaths fall under 250/day by September 15, 2020, the stock market rallies, and Trump outperforms expectations against Biden in the first presidential debate at the end of September 2020.

“By September 15th, the market rips ... Biden dunks on a senile or maybe not crisp Biden. Trump sails in” View on YouTube

Freiberg predicts that over the 2–3 months following July 31, 2020 (i.e., through roughly October 31, 2020), public news about COVID-19 vaccines will be predominantly positive, with more favorable (“upside”) than unfavorable (“downside”) updates.

“I think there's tons of promise with vaccine news in the next two months. Three months? Uh, I guess the point is you're going to hear more upside than you're going to hear downside news on vaccines, for sure.” View on YouTube

Freiberg predicts that effective COVID-19 vaccines will definitively exist (not just in trials but as real, deployable products); the remaining uncertainty is only about manufacturing scale (number of doses) and timing of availability.

“We're going to have a vaccine. I think it's a function of how many doses, um, at what point in time.” View on YouTube

Freiberg predicts that between July 31, 2020 and the U.S. election in early November 2020, the aggregate flow of information about COVID-19 vaccines will increasingly indicate success — i.e., additional trial data and announcements will on net strengthen confidence that vaccines are effective and forthcoming.

“There is a vaccine. There are vaccines, right. This is a, a known, known. Uh, so, so that news will only continue to improve and build, and there will only be more and more indications of success with vaccines between now and November.” View on YouTube

Trump will win the November 2020 election, betting his own assessment against the prevailing consensus that Biden is the clear favorite.

“I'd go Trump” View on YouTube

When forced to choose as of July 31, 2020, Freiberg predicts that Donald Trump will win the November 2020 U.S. presidential election.

“I'd go. Trump!” View on YouTube

Biden is likely to win the November 2020 election because Trump, lacking his pre-COVID economic message and unable to hold in-person campaign rallies, has been knocked off his game and has not found a new pitch to run on.

“now it looks like Biden's going to win. Trump's Trump's been knocked off his game” View on YouTube

Chamath predicts that once Congress and the administration agree on a new federal unemployment insurance extension in 2020, it will take U.S. state agencies approximately 4–8 weeks to technically implement and restart payments under the revised program.

“So my point is, uh, it's going to take 4 to 8 weeks to reimplement unemployment insurance once we decide what we're going to do.” View on YouTube

When forced to stake his “entire net worth” as of July 31, 2020, Chamath predicts that Joe Biden will win the November 2020 U.S. presidential election.

“No, Biden, it's it's a languishing campaign as of today. David is right. He's a salesman without a pitch.” View on YouTube

Sacks estimates a 25% probability that the aftermath of the November 2020 U.S. election will produce a constitutional or legitimacy crisis similar to Bush v. Gore (2000) if the election margin is close, potentially causing serious political damage to the United States.

“That's a 25% chance of a constitutional crisis. I think if the election is close, we could easily have like a Gore v Bush type situation. Um, it could be very damaging for for the Republic.” View on YouTube

Chamath predicts that the 2020 U.S. presidential election outcome will be decisively resolved in the Electoral College, without a Bush v. Gore–style recount or “hanging chad” controversy, and that the margin will not be razor-thin in electoral votes.

“I do not think there will be a hanging Chad issue in this election. This is going to be one way or the other, incredibly decisive on an electoral college level.” View on YouTube

Sacks predicts that, as of late July 2020, the 2020 U.S. presidential election is on track to be a non‑close race, likely a Biden “blowout,” which in turn will prevent a post‑election constitutional or legitimacy crisis.

“I don't think the election is right now. It's not trying to be close at all. It's trying to be a blowout. And so I think we'll avoid the the crisis because it's not close. And it looks like Biden's going to run away with it.” View on YouTube

Jason assigns a 5% probability that Donald Trump will drop out of the 2020 presidential race before the election, in exchange for an implicit or explicit deal not to prosecute him after leaving office.

“I think he might drop out. I think I'm putting it out there. I think there's a 5% chance he doesn't want to be demolished. And he says, you know what? I'll take the deal. You agree to not prosecute me getting out of here? Uh, I'll take it.” View on YouTube

By the end of the discussion (still as of July 31, 2020), Freiberg revises his earlier stance and predicts that Joe Biden, not Donald Trump, will win the November 2020 U.S. presidential election.

“And I changed. I changed my bet to Joe Biden. I've changed my bet after this.” View on YouTube

Sacks predicts that, despite the then‑current impasse and congressional recess in mid‑2020, Congress and the administration will eventually pass another COVID‑19 relief bill that includes some form of unemployment extension or stimulus.

“I think they will eventually pass a bill.” View on YouTube