E97: SPAC updates, public/private market overview, Putin's end game & more

Chamath Palihapitiya shut down two SPACs rather than force deals into a market he thought offered bad risk-reward, accepting an estimated $10–20 million personal loss. He said late-stage companies were typically pricing 50–60% below their last private valuations, while boards preferred staying private to accepting the markdown.

Palihapitiya said he began selling roughly $100 million of assets in late 2021 and continued systematically reducing exposure through 2022. He tied the move to record asset prices, rising inflation and heavy selling by Elon Musk and Jeff Bezos, treating those signals as reasons to protect liquidity.

The panel described a venture market where some investors skipped basic diligence and simply copied prior investors, allowing social proof to substitute for evidence. They recalled founders using friends’ small checks to manufacture credibility, and one case where investors requested a data room only to discover none existed.

The headline claim that U.S. venture funds held $290 billion of “dry powder” was challenged as potentially badly overstated. Funds can be announced months after fundraising, while one Tiger fund was reportedly two-thirds deployed before announcement; slower post-boom deployment also means far less capital reaches companies each year.

The Fed’s September 2022 forecast shift mattered more than its 75-basis-point hike: expected additional tightening rose by roughly a full percentage point in two months. The panel interpreted that revision as evidence inflation was proving stickier than expected and expected substantially tighter financing conditions for growth companies.

The Magnus Carlsen–Hans Niemann dispute exposed a deeper vulnerability in competitive games: computer assistance can be decisive even if used on only a few critical moves. The panel noted Niemann’s past online cheating, Carlsen’s extraordinary withdrawal and two-move resignation, and tournament moves toward delayed broadcasts and tougher screening.

Palihapitiya said Peter Thiel introduced him to DeepMind founder Demis Hassabis around 2011–12, when Hassabis explained the company through game-playing AI. The underlying idea was that mastering games could produce a general problem-solving system, an early framing Palihapitiya recalled finding extraordinary.

The panel’s sharpest energy point was the disconnect between cheaper renewable generation and rising household utility bills in California. Palihapitiya claimed renewable generation costs had fallen about 90% while electricity rates had doubled, and argued household solar, batteries and backup systems could provide greater resilience than relying solely on utilities.