61 – What happened in 2024? What’s hot/not hot for 2025?

Our review of 2024 and what 2025 holds for the world and the Tech industry. From geopolitical dynamics to M&A and IPOs, regulation, crypto winters and summers, to inflation and DOGE and many other things.Navigation:Intro (01:34)Review of 2024What’s next, 2025?ConclusionOur co-hosts:Bertrand Schmitt, Entrepreneur in Residence at Red River West, co-founder of App Annie / Data.ai, business angel, advisor to startups and VC funds, @bschmittNuno Goncalves Pedro, Investor, Managing Partner, Founder at Chamaeleon, @ngpedroOur show: Tech DECIPHERED brings you the Entrepreneur and Investor views on Big Tech, VC and Start-up news, opinion pieces and research. We decipher their meaning, and add inside knowledge and context. Being nerds, we also discuss the latest gadgets and pop culture news Subscribe To Our Podcast Bertrand SchmittWelcome to Tech DECIPHERED Episode 61. It's at this time of the year where we look back what happened in the past year in 2024 in tech, as well as trying to put some thoughts into what 2025 might look like, what might be the next big things happening in global tech industry. Let's start with our review of 2024. Nuno Goncalves PedroIt's been an interesting year. A year of elections around the world, so maybe we start at that level. The landscape geopolitically has become very interesting. I'd seen some chart that shows the most gain on the right ever globally across elections. I think there's some message going on that people are really not happy about, status quo. Obviously, in the US, Donald Trump got elected, so he will again be the President of the United States next year or starting next year. Nuno Goncalves PedroIn Europe, we've had a lot of countries that went to the right. Austria, I believe the right wing party won. A lot of interesting and somehow shocking results in some cases with very populist views, for example, countries like my own Portugal, and all around that. Very significant geopolitical transition where it seems like populism is here to stay. Nuno Goncalves PedroThere are significant concerns around the world around immigration. There are significant concerns around the world around security. There are significant concerns around the world around economic growth. I think the elections that we saw this year, for the most, are reflecting upon the discontent of citizens across the world, of which the US is just but an example. Bertrand SchmittYes. Actually, I'm not sure anymore about that when we call populism, one side or the other, what it really means at some point, it doesn't sit right to me anymore. I think 10 years ago, maybe I had some concept about what it means. But today, I'm not really clear, to be frank, because when you see Trump and his alliance with people like Elon Musk or JFK, it's not clear they are populist at all. The same in Europe. I'm not really clear, what is true is for sure more right wing, moving away from left or centre. Bertrand SchmittYeah, this will have a significant impact on a lot of topics, and we'll go through that. France also went more right wing, at least in term of parliament. Germany, we will see next year, actually. They're preparing for election, the government in Germany. I think it was the day or the next day after the result of the US election, the government imploded. There are new elections scheduled for early next year. It looks like it will also go more right wing. It will make certainly for an interesting change of policies and politics. Nuno Goncalves PedroIndeed, all of all, I think a lot of renewed discussion around what is the role of countries, governments, different counties, provinces, states in the case of the US, local government, is the system fully broken or not? A lot of debate around precisely the incentives that people have to vote for a party versus another and what are the key issues that are on their mind. But as I mentioned, I feel it's clear that it's the economy, stupid back through the day, and security have been effectively the key considerations for this year. Nuno Goncalves PedroIn terms of the overall year, it was a year that was supposed to somehow be really awful. It wasn't. It wasn't a year that was awful. Stock markets have gone up, in particular in the US, driven mostly by technology, The Fed rates started to go down, so it seems like inflation now is more and more under control. We see a lot of movement around, in particular, the technology stack of the fence that has taken us to the next level. There's a lot of bright spots. I think we had anticipated maybe a very bleak 2024. It certainly was not in terms of equities, both on the public markets, but also on the private market side of the fence, including venture capital. Nuno Goncalves PedroWe'll come back to that later. I think there is somehow certainly on the private markets a huge impact of AI. AI is distorting the numbers. The markets are still a bit shaky, but AI and AI investment has changed how the markets look certainly for venture capital. We'll come back to that later. But basically, a year that was bad, and well, it wasn't. It wasn't bad. Bertrand SchmittI would mostly agree with you, Nuno. Maybe I would qualify that it's certainly true in the US. China also in terms of stock market, it did well thanks to a big stimulus. It's not clear how long it stays that way, but it looks like they plan to keep doing more stimulus. The European markets were pretty bad, or at least it was like zero or slightly negative. US, for sure, doing very well. Maybe also the European startups, at least with the ones in AI, are also doing well like in the US. Nuno Goncalves PedroIndeed. In terms of other pieces of the market, the M&A market have been very strained. There has obviously been some acquihires on the low end of the spectrum in terms of lower cap acquisitions in place. There's now a few large acquihires, as we mentioned in one of our last episodes, happening on the AI space. But a bunch of M&A activity that was basically blocked for big tech companies, and some of them silly blocks, I think in my mind. Nuno Goncalves PedroIt's been a tale of two outcomes. One, acquihires somehow seem to be working and getting around the system. Then on the larger M&A side, in particular, the beginning of the year, the first half of the year or so, a lot of blocks and a lot of things that didn't go through, even when… Some of them actually I don't understand why they didn't go through. A little bit surprising and shocking. Bertrand SchmittAs you say, some of the big tech companies tried to go around M&A getting blocked by doing some very surprising, very large acquihires, never done before, at least at this scale. One interesting one is actually OpenAI, because if you look at what Elon Musk is arguing that it has de facto become acquired by Microsoft, except it is not. That would be another one where will OpenAI have been acquired in a parallel universe by Microsoft, if there was not all these regulations already in place blocking a lot of acquisitions for big tech? Nuno Goncalves PedroThere might be acquisitions that maybe already happened that we just don't know yet. But we'll soon find out about them. Because the entrenched Trojan horse of participation in the company rights that the companies have while putting money to the company, et cetera, give them effectively right at some point to have ownership of IP and ownership of a bunch of things. Anyway, we won't know until we know is going to be the scenario for some of these plays. Nuno Goncalves PedroMaybe moving to AI. AI is the gift that keeps on giving if you're trying to fundraise. It's like it reminds me of crypto and blockchain in Web3 in the heyday where you just had to put something in there, and you would raise money. Nuno Goncalves PedroI would say we are starting to see already this year in 2024, even before we go to 2025. I would call it actually the end of the beginning. It's the end of the beginning of this big AI leap forward that we've had. We're watching the last chapters of this, if this first chapter where there's been a ton of money, thrown on foundational models, large language model building platforms, as we discussed before in that episode that we dedicated to not starting a company around AI platforms at this stage. I think that cycle is coming to an end. Things are going to scale and continue scaling. There's going to be, I think, a lot of investment on the AI app side, on the applications that are AI-first. Nuno Goncalves PedroBut definitely 2024 has been a year where we're starting to see the end of that beginning, the end of that leap forward that we've watched over the last year and a half or so of the big AI momentum coming to bear. Nuno Goncalves PedroReally interesting. Really exciting. We're seeing all these acquihires in the space. I think we'll see more hardcore M&A, in particular in the US with President Trump being in office, I would say that's probably going to open even more the floodgates around M&A, like hardcore M&A, not just these funky deals on Trojan horse investment or acquihires that we were just mentioning before. Bertrand SchmittYeah, it's tough to say at this stage. I don't think they have been super, super clear on what they plan to do regarding M&A, especially if you look at JD Vance's positions, who are actually quite supportive of Lina Khan actions. Let's see until we see who they have named as head of FTC to get a sense of where it's going. Bertrand SchmittIn term of AI, I agree with you. I mean, it's the end of the beginning. The big AI platforms have consolidated their power, and they have consolidated also because there was such an arm race in term of getting the financing to build bigger, larger, better models that basically no one could keep going on if you don't have billions on the side to keep running. I mean, in a way, Elon Musk with xAI might have been the last entrant in the race,...