24 Predictions for 2024: Tech, Politics & Economics Forecast
From AI Breakthroughs to Global Alliances: Exciting Potential and Challenges of the Coming Year
Last week, I wrote about my experience forecasting some of the major events of 2023. The exercise of analyzing how trends might continue or shift going forward always sharpens my thoughts and beliefs about the world. This year, I found it clarified my thinking on important decisions ranging from work, to learning to personal life.
For my 2024 forecast, I’ll largely use the same approach I did last year, so if you’d like to learn more about that, see my past predictions and the system I use to score them. In general, I like to focus on the areas I read about most: tech, economics, policy and (geo)politics.
Onto the forecast:
Tech, AI & Media
1. Tech hiring rebounds (70%)
Let’s kick off with some optimism. It’s no secret that 2023 was a rough year for those of us employed in tech. I’m grateful that I was able to use the moment to launch my own business, but fortunately for everyone, I think the picture looks rosier in 2024. Stock prices have risen, layoffs have gone about as deep as many of the FAANG companies are comfortable with, and I think we’ll see much less of them next year.
2. Reddit finally IPOs (80%)
The Reddit IPO has been in the works for over three years at this point. Though the platform is still struggling to hit ad revenue targets, I think they’re going to find a way to get it together in ‘24. While unexpected platform shifts (see: ATT) have gotten in the way before, Reddit should have both the financial and operational path cleared at this point to find their way to the stock market.
3. AI learns to reason (60%)
2023 was the year my team at Keye pivoted into AI. We saw huge improvements in AI’s ability to compute, analyze and predict, but there is still plenty it can’t do. The gaps now are often in models’ ability to reason, second-guess themselves and apply common sense. With breakthroughs in model training and ever increasing computational power, this could be possible, according to Vinod Khosla. Based on the improvements I’ve seen so far, I tend to agree.
4. Leading AI companies surpass $1Bn in revenue (90%)
Barring any major unforeseen circumstances, several of the major AI platform companies (OpenAI, Anthropic, etc.) should be able to hit $1 billion in revenue and exceed it. This is per their own forecasts, so my prediction is on the safer side, but it feels right to record the milestone nonetheless.
5. Media companies slow investment in streaming platforms (60%)
I’ve argued, as have many, that the dollar amounts being poured into streaming infrastructure, content and distribution by most media companies simply don’t make sense. There are some early signs that the battle to own the entire streaming stack is calming — several Paramount and Comcast subsidiaries have begun licensing content again — and I expect this to continue. Part of this is the new investment environment, which prizes short-term revenue, but some of this is also the fact that the economics simply haven’t added up for all of the players involved, with churn outpacing new user growth.
6. Mainstream AI adoption in finance (90%)
I’ve long been a believer that finance is more likely to be disrupted from the outside than it is to reinvent itself with fintech. In 2024, I expect we’ll see AI applications in banking, finance and investing go mainstream. This could mean everything from better robo-advisors, to AI implementation in core functions in VC, PE and IB (as my company, Keye, is working on). The big concerns now are security and privacy, and whether AI can act as a financial decision-maker. The thing is, it doesn’t have to. As long as analysts and associates can see their work meaningfully improve (with the requisite controls in place), I predict adoption will go mainstream.
7. Innovation in app stores (80%)
Everyone’s getting bored of the app store regulation discussion, but the after-effects of this year’s big events have yet to play out. Those events include court cases such as Apple’s win and Google’s loss again Epic Games, which are set to relax rules around payment and “app stores within app stores”. These aftershocks are increasingly likely to go global, as Japan looks to be the next country to crack down on strict rules. More broadly, new surfaces such as AI and VR are looking primed to create their own developer ecosystems and app stores, which, combined with more relaxed store policies, could create an explosion of innovation in content and business models.
Which brings me to my next point…
8. Vision Pro is a hit (70%)
Remember Apple’s splashy VR headset that we all subsequently forgot about? Well, it could be shipping as soon as a few weeks from now. I think it’s going to be a big hit. People love Apple products, and Vision Pro could be the perfect storm of people-central design with the power of a hardcore VR set to create the momentum to activate a new market. I don’t expect V1 to go mass market just yet, but I do think the headset will sell out just like Apple Watch, before seeing broader adoption in later years.
Policy & Regulation
9. US judges and lawmakers will weigh in on AI (90%)
2023 brought us the EU’s AI Act, along with some hurried executive action in the US. Those rules apply more strictly to the product development process and LLMs than applications and end usage. However, I think 2024 will bring just that — a broader adoption of AI with use cases we weren’t expecting. That is going to force judges up and down the court system to make big decisions. Best case, it means congress might be motivated to put some smart rules in place. Worst case, we’ll get a few sound bites and continue to be governed by law suits. Either way, the outlines of AI regulation are going to be drawn.
10. Industrial policy gets in on AI (80%)
One of the big challenges for AI going forward is the need to scale. For example, by some estimates, we need 100,000x the amount of training data we have now to power LLMs that approach AGI. The amount of capital needed for AI is so great, it may break the traditional venture capital model. At the same time, AI is becoming the geopolitically important technology. With that being the case, we should expect industrial policy to address AI in countries across the world, not just China. Governments are going to start setting up investment funds, allocating tax dollars and creating subsidies for AI. Hopefully it’s the right ones.
11. Renewed Focus on Mental Health Policies (60%)
As the discussion around COVID-era mental health impacts fades, I’m seeing increased chatter about the broader impact of “the phones”. Whether the addictiveness of TikTok, the alleged toxicity of social media or our upcoming AI friends, I see discussions mental health moving further into the spotlight of tech safety discourse and beyond. I’ll be looking out for new initiatives, perhaps first on an industry or state government level, to address this.
12. More EU-Asia regulation partnerships (55%)
2023 proved it would more challenging than expected to get the EU and US on the same page with regards to tech regulation. A turn to Asia could make a lot of sense for EU, as they continue to position themselves as the world’s regulation innovator. Japan and Korea appear to be top candidates, unless a Western rapprochement with China actually comes to pass.
Economics & Business
13. The Fed sticks the landing (70%)
One thing’s for sure: a year from now, we’ll either be able to confidently celebrate a soft landing, or we’ll be in a recession. I haven’t seen any signs of worry, so I fully expect core PCE to come back down to around 2% by mid-year. If a slowdown in spending does finally come, I expect it to be soft, but economic surprises are always possible, so I’m giving this a 70%.
14. Decoupling continues (60%)
Decoupling between China and the West, especially the US, does seem to be proceeding, and a lot of this is just China’s slowdown and industrial policy playing out. Russia also did its part in reminding the world that countries can close off certain trade channels without negative impacts to prosperity, and the US and EU are much more diversified and capable of navigating a shift away from a few large economies. We can measure this primarily in terms of trade flows between the US and China.
15. The US sees a rental market boom (60%)
Unfortunately for me, I think the slowdown in the rise of rent prices might be coming to an end soon. Housing is still scarce in many dense US cities, and the market is such that new construction isn’t exactly encouraged. More people are going to be locking into renting for longer, and I believe we’ll see landlords become more confident in raising rents again. The rise in 2024 might be modest, but it will be noticeable and larger than 2023.
16. M&A sees a resurgence (90%)
2023 saw a major slowdown in M&A activity, so I’m mostly just predicting a return to normal here as capital markets start to see more liquidity in the back half of the year with the Fed’s planned rate cuts. We’re also going to see the first wave of AI companies get acquired as certain companies hold off on building themselves. Other areas to look out for are eCommerce (Shein, Temu) and streaming (Netflix getting into ad tech, gaming, etc).
17. More bundled consumer tech (80%)
The big marketing trend I’ll be keeping my eyes out for next year is bundling, especially in consumer tech and software. In my work on subscription pricing, the major trend we saw is subscription fatigue — the idea that consumers don’t want to take on additional subscription charges for the same value they’re getting today. This year, I saw some companies address this by lowering prices, or offering “lite” ad-funded tiers. Next year, I expect companies to explore partnerships that will allow them to bundle services to increase value without having to cut down on revenue per user.
18. S&P 500 surpasses 5,000 (70%)
In line with my optimistic prediction about a general soft-landing, I expect we’ll see modest stock market growth. This means the S&P 500 will reach the milestone of 5,000 for the first time ever. There’s a chance it will go much higher, but I do expect we’ll see corrections here and there as much of the upside is likely already priced in.
Politics, Foreign Policy & Energy
19. Earth crosses 1.5 C post-industrial warming for the first time (50%)
On the bleaker side of things, there’s a chance we reach the 1.5C warming milestone next year, which the more ambitious climate agendas were supposed to help us avoid. Of course, this won’t be a global average rise just yet, but some experts predict a few days in the summer where we reach those highs. There’s not really much that can happen between now and then to influence the outcome, so this is more of a guess and deference to the scientists.
20. Shifts in nuclear policy (60%)
While solar should eventually become the world’s dominant energy source, there are some signs that the stigma around nuclear is beginning to melt away. Japan just lifted the operational ban on its largest plant, and there is chatter about using nuclear to power the extremely high energy costs of building AI models. If all goes smoothly, this might incline governments to take a second look at the promise of nuclear, which was already spurred on by energy security questions caused Russia’s invasion.
21. Clashes over Taiwan (70%)
Taiwan, along with the US, India, Pakistan, Indonesia and several other major countries, is slated for elections next year. The confluence of events in American and Chinese politics makes some sort of clash likely, in my view. Whether it starts on the US debate stage or with a shift on PRC policies in Taiwan, there’s a good chance it will affect the steadily improving relations between the US and China.
22. Biden beats Trump (70%)
It’s anyone’s guess who will win the US presidential election, but my money happens on be on Scranton Joe. This isn’t meant to be a political article, but I do think Biden’s achievements, from infrastructure investment to foreign policy, have been objectively noteworthy. If inflation fully normalizes and more workers can capture economic gains, whether through union campaigns or simply economic growth, I do think some of his ratings will improve. And this is all without considering Trump’s criminal indictments.
23. Senate flips red, house flips blue (60%)
The odds seem to be such that the Democrats will lose their narrow majority in the Senate, but, especially if Biden can draw enough voters, they might finally have enough votes to end the fracas that is the 118th US House of Representatives.
24. More peace, less war (80%)
As I did last year, I like to end on the most optimistic note possible. 2023 saw another horrific rise in global violence, this time in Gaza. Meanwhile, war in Ukraine rages on. Heading into next year, the global community seems to be putting pressure on the main actors to scale back aggression. At the same time, defense pacts among Western allies are strengthening. There’s no guarantee that will happen, but I do believe the trends are converging such that most of the bad actors will begin looking for a way out of the conflict. Some speak of the decline of the Pax Americana, but if the West navigates this deftly, a renewed NATO and East Asian alliances could act as necessary deterrence to future wars.
Zooming out, the crisis years of Covid are fading in the rear-view mirror as we move firmly into the mid-2020s. I expect 2024 to be a year where society switches from panic mode to optimism on multiple fronts. Yes, there are large-looming elections which will dominate the discourse for much of the year, but I’m confident that the experiences of the early 2020s have made us more resilient.
Whether we get Trump or Biden, a mild recession or none at all, or AI leads to new dangers or breakthroughs, we’ve now had some time to prepare, and we should have a better sense of what to expect. Let’s finally make this decade what it deserves to be — the roaring ’20s of the 21st century. Good health and success to you in 2024, and I’ll see you on the other side!
