E38: Resurgence of Prediction Markets, AI Adoption and Complex Financial Systems

This week, Byrne Hobart and Erik Torenberg discuss the resurgence of prediction markets, the balance of sophisticated vs. 'dumb' money, Biden's nomination odds and the impact of AI on software economics. 🔥Apply to join over 400 founders and execs in the Turpentine Network: https://hmplogxqz0y.typeform.com/to/JCkphVqj --- SPONSORS: BABBEL: 🌐 Ready to achieve your 2024 goals? Start learning a new language with Babbel in just three weeks. Enjoy app lessons, live classes, and podcasts designed for real-world conversations. Get up to 60% off at https://babbel.com/torenberg BEEHIIV: Head to beehiiv, the newsletter platform built for growth, to power your own. Connect with premium brands, scale your audience, and deliver a beautiful UX that stands out in an inbox. 🐝 Head to https://beehiiv.com and use code "MOZ" for 20% off your first three months --- RECOMMENDED PODCASTS: 🎙️1 to 100 | Hypergrowth Companies Worth Joining Every week we sit down with the founder of a hyper-growth company you should consider joining. Our goal is to give you the inside story behind breakout, early stage companies potentially worth betting your career on. This season, discover how the founders of Modal Labs, Clay, Mercor, and more built their products, cultures, and companies. Spotify:https://open.spotify.com/show/70NOWtWDY995C8qDqojxGw Apple: https://podcasts.apple.com/podcast/id1762756034 - 📈 ECON 102 W/ NOAH SMITH Keeping econ entertaining - Noahpinion author Noah Smith and Erik Torenberg break down business news and politics every week. Spotify: https://open.spotify.com/show/3Mos4VE3figVXleHDqfXOH Apple: https://podcasts.apple.com/id1753399812https://podcasts.apple.com/id1753399812 --- TIMESTAMPS: (00:00) Intro (00:20) Is this the Polymarket election? (08:55) Prediction markets (11:07) Politics and prediction markets (15:13) Sponsors: Babbel | Beehiiv (17:48) CrowdStrike and the cost of software failures (23:39) AI adoption and workplace dynamics (27:29) Financial systems post-Great Financial Crisis (35:02) USSR's computer network for economic planning (40:01) Best performing stock of the last 100 years (43:22) AI's impact on software and hardware economics (48:46) Market cycles and political influence (51:11) Dot-com crash, Y2K, and the housing bubble (54:28) Stripe and the future of private companies (59:12) Venture capital vs. Private equity returns (01:00:49) Outro --- LINKS: Byrne’s writing: https://thediff.co --- X / TWITTER: https://twitter.com/eriktorenberg (Erik) https://twitter.com/ByrneHobart (Byrne) https://twitter.com/TurpentineMedia (Turpentine)