We are "living interesting times" as in what the Occidental world thought was a Chinese curse, but apparently has no identical match in the Chinese language and culture, only a few kind of similar ones. 😀 At least, that's what ChatGPT was "kind" enough to inform me some time ago when I asked.
The connotation of the saying is negative, as "interesting times" bring many changes, some of them hard to endure. The disruptions brought by the interesting times may be a net positive for the world's evolution (not always, likely), but they certainly disturb the status quo.
The year 2024, as the one that follows, are part of what appears to be a highly disruptive decade, with changes on many levels.
Before I talk about the two years separately, I'd rather take a look at the entire decade.
The decade started under the sign of lockdowns. They brought with them an abrupt shift in the work culture, from the work place to working from the distance. That brought several disruptions with them:
- office buildings start having trouble finding renters
- relocation for a new job is not an issue
- commute time disappears
- competition for jobs is global.
That's before even talking about AI and robots.
Then we have the wars. First in Ukraine, then in the Middle East. Both still ongoing, as far as I know. That brought with them new war tactics (after Russians tried to apply WW2 strategy in Ukraine, which didn't work). It turns out it's cheaper and effective to attack with a swarm of cheap drones a highly performant but expensive military equipment. Then the hybrid war got used intensely in both wars, including on 3rd parties not directly engaged. On the hybrid war side, impressive how Israel took out many Hezbollah leaders by detonating explosives hidden in the batteries of their pagers. Russians also created a new intercontinental hyper-sonic missile which allegedly can't be stopped by any Western military equipment. Will we have a new arms race? Looks like it, unfortunately... But enough about this.
We could say this decade is also under the influence of blockchain technology and cryptocurrency, but that only started to be brought center stage recently with the support received by Trump. We will see where this leads.
Unlike blockchain and crypto, AI got pushed to the masses quicker and more intensely. Luckily, there seems to be a natural marriage between blockchain, crypto, and AI (agents) in certain fields.
We have seen an explosion of AIs through LLM models since ChatGPT version 3. Their limitations is on qualitative data and compute, but looks like both can be overcome. For data, there is the possibility to create synthetic data, or a different approach to the problem. Compute limitations are getting tackled as we speak, by optimizations of to the existing infrastructure. One Chinese company has this focus on optimizing compute, and their inference cost is 5x less than ChatGPT for the top models, if I remember well. Their top model is in top 10, but I forgot how it's called.
With all the popularity of LLMs, there is another type of generative AI that is getting attention lately: LQM (large quantitative model). These models are not based on pre-existing data, but rather on base concepts and how they assemble together, their relationships. Very good type of models where precision is crucial, like in mathematics, engineering, physics, chemistry, biology, medicine, etc.
Source - Do you check family albums on holidays? We do... Of course, many of them are in digital form nowadays...
Both AI and POW blockchains will drive a revolution in energy that will most likely start to happen in a big way in the next few years, this decade for sure.
AI (particularly LQMs) will also speed up many research processes (we are talking years instead of decades).
There will be massive job losses to AI and robots, but looks like others will be created as well. Completely different from the ones displaced, most often.
I'm not sure if we will have significant quantum computing at scale by the end of the decade. But you never know when there will be a breakthrough here as well that changes things radically.
It's interesting... We seem to be very aware of the disruptive times we live in nowadays. I don't think we realized that as much when smartphones started to spread. Or even earlier in the dot com bubble. Most people didn't realize it was a bubble then, by the way.
2024
2024 was under the sign of inflation (higher prices), AI (LLMs), elections, and raising crypto (bitcoin, in particular) to the level of US presidential race. For crypto, we had Bitcoin ETFs, with much smaller impact Ethereum ETFs, generally a direction toward mainstream and abandonment of the "alternative" narrative, the first time when BTC makes a new ATH before the halving, and a huge rally after Trump's victory.
Stocks have also made impressive highs, perhaps as a refuge from inflation. But if that's the case, that also means that they are inflated more than they should, at least some of them.
2025
I think there will be two parts in 2025. Before and after. Maybe even a more complex situation. I imagine the "before" part as being bullish, and the "after" part as bearish. It might be that the bearish part is pushed toward the end of the year, but there are many things at play. Trump, through what he does, is a key player in how 2025 will go in many domains.
I'm curious how his relationship with Elon Musk will go in 2025. They are both stubborned, Musk likes to be in the center of attention, and Trump won't allow anyone to overshadow him.
Final Words
In the end, I'd like to wish you an inspired 2025 for your investments, but especially may it be a healthy and warm year alongside your loved ones! Happy New Year!