E171: DOJ sues Apple, AI arms race, Reddit IPO, Realtor settlement & more

The DOJ will ultimately fail to win its Sherman Act antitrust case against Apple filed in March 2024 (i.e., Apple will not suffer a clear government court victory that forces major structural or behavioral remedies).

“And so I'm a little bit skeptical right now that the government going to be able to win this case.” View on YouTube

Regarding the 2024 DOJ Sherman Act lawsuit against Apple: (1) There is at least a 50% probability that a change in presidential administration (i.e., post‑2024 election) will result in the lawsuit being altered substantially or dropped; (2) Even if it proceeds, final meaningful remedies or judgment will take roughly 10 years from filing (i.e., into the early–mid 2030s); and (3) By the time any such outcome occurs, the dominant consumer compute platform will have shifted away from the current smartphone paradigm, making the case largely irrelevant in practical market terms.

“I don't think anything's going to happen here because it's taking them five years to file. There's a at least a 50% chance that the administration is going to turn over, which means that this lawsuit changes or goes away entirely. And then even if it does kind of proceed, it's going to take ten years of very detailed arguments for something to happen. And frankly, probably in ten years from now, we've already moved to a different compute platform. And this is not going to matter.” View on YouTube

The DOJ’s 2024 antitrust case against Apple will be resolved via a settlement (not full trial judgment), and as part of or as a consequence of that resolution: (1) Apple will release an official iMessage client for Android; and (2) Apple Watch will gain compatibility with non‑Apple phones (e.g., Android), in a way that ultimately benefits Apple commercially, making the overall outcome a net positive for Apple.

“I think this will be settled. And if you look at the different issues here, I think this is going to be actually a huge win for Apple, because if iMessage were to exist on Android, they would get all of those users to download iMessage, and they would have all those users. If they made the watch compatible, they would open up many more people to buy the watch and you would get more watches.” View on YouTube

Of the five categories named in the DOJ’s 2024 lawsuit against Apple (super apps, cloud gaming apps, messaging apps, smartwatches, and digital wallets), at least three will be materially changed in the government’s favor via settlement or ruling (i.e., Apple will be compelled to alter its practices in at least three of those five areas).

“These are five recent tactics. I think the government's going to win changing three of these. And that's win. That's a win for me.” View on YouTube

(1) The DOJ–Apple antitrust dispute over the five listed practice categories will culminate in a settlement where Apple concedes on roughly three of the five areas; (2) The net effect of the settlement will be positive for consumers (e.g., more interoperability/lower restrictions); and (3) The outcome will not seriously damage Apple’s long‑term business performance, making Apple stock an attractive long‑term investment despite the case.

“So anyway, I think three out of five of these get settled and it'll be good for consumers. Ultimately I would not financial advice, but I think that Apple is going to be able to manage this. I'd buy the stock. I may buy more of the stock. I think that this will be good for them long term.” View on YouTube

In the U.S. residential real estate market, the dominant compensation model for agents (currently a percentage of home value, typically ~5–6%) will shift over time toward fixed or flat fees for defined services, materially reducing the use of percentage‑of‑sale‑price commissions.

“I do project, and I do expect that much of what is charged on a commission basis, on a percent of home value today will change to being a fixed fee and a flat fee.” View on YouTube

As the post‑settlement commission regime in U.S. residential real estate takes hold, between roughly 500,000 and 1,000,000 of the current ~1.4 million National Association of Realtors members will, over the coming years, find the profession insufficiently lucrative and exit the industry.

“So there is a long tail. So there's probably a third of those folks who are already kind of sub living standards in terms of income. Maybe half of them won't be able to make enough money in this new fee regime that it'll no longer be an attractive proposition to be a real estate agent for maybe half 1 million to 1 million people over time that are agents today.” View on YouTube

If, in practice, U.S. home buyers are required to directly pay their own buyer’s agent commissions (rather than those fees being baked into the seller’s side), the total commission pool in the U.S. residential real estate brokerage industry will fall by approximately 50% from its pre‑settlement level.

“If buyers are forced to pay their own broker's commission, and in the articles they're saying there's still like some gray area about what's going to happen. But that is what should happen. Buyers should be responsible for paying their own brokers. And if you do that, I think you'll knock out half the fees of this industry.” View on YouTube

Following the NAR commission settlement, a significant number of startups will quickly launch AI‑enabled, direct‑to‑consumer, a‑la‑carte real estate transaction services (e.g., disclosure review, negotiation support) that reduce or replace the need for traditional residential real estate agents, and these offerings will be compelling enough to gain meaningful adoption in the near term.

“And I think it's a great opportunity for startups. I'll say this right now. Like I think there's going to be a lot of startups that are going to come out of this ruling that are going to launch a la carte services, leveraging AI to make these services available direct to consumers without needing an agent. And they're going to be pretty compelling services, and they're going to show up real fast.” View on YouTube

Traditional industrial sectors such as food, medicine, and manufacturing will derive substantial future gains in productivity and value from applying AI, software, robotics, automation, and related hardware, with much of AI’s economic value accruing to these existing businesses rather than to new pure-technology companies.

“These are markets that aren't going anywhere. And they could all certainly benefit from unlocks in software or in robotics and automation and hardware. So that's probably where I would think about concentrating capital.” View on YouTube

Over the next 5–10 years (roughly 2024–2029/2034), companies that build fundamental AI hardware (e.g., chips and related systems) and companies that build fundamental application-level AI experiences will capture substantial financial value and generate very large profits.

“I think the the folks that are building fundamental hardware will make a lot of money over the next 5 to 10 years. And then the folks that are building the fundamental application level experiences will make a lot of money as well.” View on YouTube

The current generation of AI-enabled robotics (circa 2024), unlike prior cycles, will successfully achieve widespread practical deployment and commercial success, marking the first sustained ‘working’ wave of general-purpose or broadly useful robotics.

“I just. Something tells me this robotic space, which has been a false start over and over and over again. I think this is the time where actually it's going to work. And so I'm I love that hardware robotics space for AI.” View on YouTube

The Federal Reserve will implement three interest rate cuts in 2024, bringing the federal funds rate down to approximately 4.5–4.75% by the end of 2024, and will then cut an additional 50–75 basis points during 2025, resulting in a federal funds rate around 3.75–4.0% by the end of 2025.

“Powell did say finally, it looks pretty likely we're going to get these three cuts. So we're going to be down to four and a half to 4.75 on fed funds by the end of the year. It probably means that we'll get another 50 to 75 basis points through 2025. So people will look out to the end of 2025 and look at a fed funds rate that's sort of like 3.75 to 4%.” View on YouTube

A new speculative phase in financial markets (including meme coins, high-risk assets, and IPO speculation) is just starting as of March 2024 and will increase from this point forward, rather than already being near its peak.

“So this is the beginning of the beginning in terms of that kind of speculation.” View on YouTube

If the Federal Reserve keeps interest rates elevated for a prolonged period instead of delivering the anticipated cuts in 2024–2025, there will be significant financial distress in commercial real estate and this distress will extend into the U.S. regional banking system (e.g., rising loan losses, failures, or forced mergers).

“But if rates stay higher, longer then you're going to see some real distress. Including in the regional banking system.” View on YouTube

Use of genetically modified animal organs (such as CRISPR-edited pig organs) for human transplantation will become an increasingly adopted medical solution in the future, moving toward routine or mainstream clinical use over time.

“Definitely where we're headed.” View on YouTube

Neuralink will make significantly larger or more impressive public announcements about its brain–computer interface technology within roughly one year of March 2024 (by around March 2025), indicating substantial progress beyond the initial quadriplegic chess demonstration.

“And there's more amazing stuff coming. They're making significant progress over there. I was talking to somebody who works there. And you know, it's it's it's going to be. Yeah, it's going to be a process. But they're making significant progress and they're going to have, I think, even bigger announcements in the coming year.” View on YouTube

The combination of SpaceX Starship milestones and Neuralink’s advances during this seven-day period in March 2024 will rank among the most significant achievement streaks of Elon Musk’s career, exceeding what most individuals will accomplish in their entire lifetimes, and will be viewed as such in retrospect.

“Starship had an incredible performance last week. And then this thing this week. I mean, what an incredible seven day run. It's more than most of us will have in our lifetime.” View on YouTube

If the All-In Podcast YouTube channel reaches 1 million subscribers by December 31, 2024, the hosts will organize and hold a public party, inviting as many listeners as feasible to attend.

“We decided that if we hit 1 million subscribers by the end of the year, we're going to throw a party and you all will be invited. We'll have as many people at the party as possible.” View on YouTube