LA Fires, Trump Trades, TikTok, and Legacy Media’s Fate — ft. Andrew Ross Sorkin
Jan 16, 2025
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In this discussion, Andrew Ross Sorkin, Editor-at-large of DealBook at The New York Times and co-anchor of CNBC's Squawk Box, shares his insights on pivotal economic trends shaping Trump's potential second term. He highlights challenges in the private equity sector and the murky waters of AI valuations. The conversation shifts to the rumors of TikTok's sale to Elon Musk and the urgent need for media to regain public trust in a social media era that thrives on sensationalism. Sorkin delivers sharp commentary on what’s at stake for legacy media.
The appointment of Donald Trump Jr. as an advisor reflects shifting political dynamics and their implications for economic trends under his father’s potential second term.
The economic impact of climate change is starkly illustrated by Los Angeles wildfires, emphasizing the need for reassessment of disaster management policies and environmental responsibility.
The evolving landscape of AI technologies raises concerns about the sustainability of high valuations in the sector amid increasing competition and potential commoditization.
Deep dives
Venture Capital Innovation Fund
The Fundrise Innovation Fund aims to make venture capital more accessible, seeking to democratize capital investment for a broader audience. With a substantial portfolio of $150 million, it focuses on top private tech companies, particularly in sectors like technology and AI. Investors can participate starting with a minimum investment of just $10, a significant change in a field typically reserved for the wealthy and well-connected. This initiative indicates a shift towards inclusivity in investment opportunities within venture capital markets.
Record Music Spending in the UK
Britain experienced a remarkable resurgence in music spending, with a record £4 billion spent in the last year—an amount not seen since the peak of CD sales in 2001. This increase reflects not only a return to physical media, such as vinyl, but also growing digital subscription services that have contributed to the renewed enthusiasm for music consumption. This trend showcases a significant cultural shift in the UK's relationship with music, hinting that consumers are willing to invest more in their musical experiences. The resurgence points to a more vibrant music industry that is adapting to modern consumption patterns.
Declining Tipping Culture
The average tip at full-service restaurants in the United States has dipped to a six-year low, currently standing at 19.3%. This decline is attributed partly to widespread digital tipping prompts that have become commonplace in many venues, leading to consumer resentment. Many individuals perceive these prompts as an added tax rather than a demonstration of gratitude for service, which diminishes the enthusiasm for tipping. As tipping practices evolve, there is ongoing debate over the future of tipping culture and what it represents economically and socially.
Impact of Climate Change on Wildfires
The severity of recent wildfires in Los Angeles highlights the extreme economic risks posed by climate change, with potential losses estimated at $275 billion. The discussion around these wildfires emphasizes a growing recognition that climate change is a significant contributing factor, doubling the frequency of wildfires in the last 40 years. As the public discourse evolves, there is concern over how policies are formed in response to such crises, particularly regarding housing and insurance in fire-prone areas. The urgency to address climate-related challenges reflects a need for communities and governments to reassess their approaches to disaster management and environmental responsibility.
The Future of AI and Market Trends
AI technologies are reshaping market dynamics, where valuations for major AI companies are soaring compared to traditional sectors. The conversation around AI raises questions about the sustainability of these valuations, especially as many new entrants can replicate similar models, potentially commoditizing the technology. There's a growing concern that significant investments may not guarantee long-term advantages, given the rapid pace of technological advancement. Analyzing these trends calls for careful scrutiny of the distinctions between hype and real value creation in the emerging AI marketplace.
Scott and Ed open the show by discussing Kalshi’s decision to appoint Donald Trump Jr. as its new advisor, a decline in tipping across America, and the economic impact of the wildfires in Los Angeles. Then Andrew Ross Sorkin, editor-at-large of DealBook at the New York Times and co-anchor of CNBC’s Squawk Box, joins the show to discuss the key economic trends he’s watching for Trump’s second term. He explains why he thinks the private equity space is broken right now, analyzes the changing landscape of the AI industry, and shares his thoughts on the rumors that China is considering selling TikTok to Elon Musk. Andrew also offers his perspective on how journalists and legacy media should adapt to a social media era that lacks fact-checking and trust.
