Setting the Stage
As we step into 2025, I find myself reflecting on a year of transformation and resilience. The economic and financial landscape is undergoing seismic shifts, marked by higher-for-longer interest rates, accelerating technological innovation, and global geopolitical recalibrations. For me, 2024 was a year of immense learning and growth, both professionally and personally, as I navigated the evolving venture and wealth management ecosystem.
This moment of reflection is not just about looking back—it’s also about envisioning the path ahead. Today, I’m sharing my observations, lessons learned, and predictions for the macroeconomic climate, venture ecosystem, and private equity landscape as we gear up for a year of recalibration and opportunity.
2024 Reflections: Lessons from the Venture Ecosystem
The venture capital world continues to grapple with a cooling period, underscored by a 25% decline in active VC firms since 2021. This “VC winter” serves as a reminder of the cyclical nature of markets—a truth my grandmother, who lived through the Great Depression, taught me early on (Stanford). Her words, “Wealth is not just about accumulation but about resilience,” resonate deeply in these moments of recalibration.
From 2014 to 2021, we witnessed an unprecedented surge in VC activity fueled by enthusiasm for innovation and growth. However, as market realities shift, I see an opportunity to realign strategies, focusing on frontier technologies and bracing for the symbiotic age ahead. This is not just a correction; it’s an evolution.
Key Takeaway: As valuations stabilize and dry powder in VC funds depletes, the firms that survive will be those that double down on operational value creation, adopt frontier technologies, and innovate new business models. Growth equity and innovative startups will remain at the forefront, but success will require new business models and frontier technology.
Macroeconomic Outlook: Living with Higher for Longer
The global macroeconomic climate is defined by what I term "the new normal": elevated interest rates that are likely to persist throughout 2025. According to Goldman Sachs and JP Morgan’s outlooks, this new equilibrium presents both challenges and opportunities. Inflation is cooling, and central banks are beginning easing cycles, but the pace and impact will vary by region.
Key Predictions for 2025:
- The U.S. economy is poised for a soft landing, with inflation approaching the Federal Reserve’s 2% target and rate cuts resuming.
- Europe faces unique headwinds, including political instability and regulatory pressures, but also opportunities if structural reforms materialize.
- Emerging markets, especially India, will shine as demographic tailwinds and technological advancements bolster growth.
Key Point: For wealth managers and investors, diversification will be crucial. Allocating across geographies and asset classes—particularly into fixed income, green bonds, and mid-cap equities—can offer a hedge against volatility.
Disruptive Technology: The Year of AI and Edge Computing
2025 is poised to be the year of AI agents and edge computing, transforming industries such as finance, healthcare, and law. Enterprise AI and vertical large language models (LLMs) will dominate workflows, orchestrating complex tasks and simplifying operations. Major software companies, including Salesforce, ServiceNow, Microsoft, and Workday, have already launched AI agents that promise to make business processes more hands-off (McKinsey). NVIDIA’s recent unveiling of Project Digits exemplifies this trend.
Bullish AI Predictions:The new generation of AI models is advancing at an unprecedented pace. At the start of 2024, state-of-the-art (SOTA) models achieved just 3% proficiency in professional engineering tasks. By the end of the year, that number soared to 50%, demonstrating exponential growth. My prediction for 2025 is that these models will reach 90% proficiency, paving the way for groundbreaking advancements in 2026, where text-to-simulation technologies will enable large, complex, interoperable models to solve multi-logical and Bayesian problems with ease.
Project Digits: A compact AI supercomputer the size of a Mac Mini, this $3,000 device democratizes AI by enabling small businesses and developers to run up to 200-billion-parameter LLMs locally without cloud infrastructure (Huang). This innovation parallels the disruption custom-built PCs brought to the computing industry in the 2000s, offering a decentralized, secure alternative to traditional setups.
Neural Scaling Laws: Advances in scaling laws further bolster AI efficiency. These laws, which define performance improvements through the scaling of compute, parameters, and data, will guide resource allocation and model development in 2025.
Sam Altman, CEO of OpenAI, announced o3 during the company’s “12 Days of OpenAI” event in December 2024. The AI model scored 87.5% on ARC-AGI, a test designed to measure how well computers can think like humans. This score beats the average human score of 80%, marking the first time an AI system has outperformed people on this benchmark. To achieve that high-water mark, o3 used well over $1,000 of computing power per task—over 170 times more computing than a low-power version of o3 and leagues beyond its predecessor, which cost less than $4 per task.
Predictions:
AI Agents: Enterprises will increasingly adopt autonomous AI agents for bespoke workflows, such as screening sales leads and managing IT systems.
Edge Computing: As devices like Project Digits gain traction, the decentralization of AI workloads will become the norm.
Vertical LLMs: Tailored models will drive efficiencies in niche industries, particularly finance, healthcare, and law.
Quantum Technology: Unlocking Superalignment
As AI progresses, quantum computing will play a pivotal role in achieving superalignment—a critical step toward handling more complex and efficient systems. Google's recent unveiling of the Willow Quantum Chip marks a milestone in quantum performance. With best-in-class results in quantum error correction and random circuit sampling, this chip positions quantum computing as a game-changer for industries ranging from AI development to cryptography (Google).
The Hierarchy of AI:
- ANI (Artificial Narrow Intelligence): Today's AI systems like LLMs and generative AI tools.
- AGI (Artificial General Intelligence): Theoretical systems with human-level intelligence capable of solving diverse problems and teaching themselves new tasks.
- ASI (Artificial Superintelligence): Hypothetical AI surpassing human intellectual capabilities. Although ASI remains speculative, advancements in ANI and AGI are accelerating toward its potential realization (LinkedIn, Batra).
My belief is that quantum computing will be essential for achieving superalignment in AGI and paving the way for solving humanity's most complex challenges. The combination of AI and quantum technology represents the next frontier of innovation and progress.
Geopolitics: Roadmaps for a Reshaped World
The geopolitical landscape is more dynamic than ever, with heightened tensions and evolving alliances reshaping global economic and financial systems. One notable trend is the increasing adoption of Bitcoin by nation-states as a strategic reserve asset. This shift, while still nascent, signals a growing desire among countries to hedge against dollar dependence and navigate global financial uncertainty (Forbes).
The ongoing conflict in Eastern Europe remains a flashpoint, disrupting supply chains and prompting nations to reassess their energy security strategies. Meanwhile, the U.S.-China rivalry continues to influence trade, technology development, and capital flows, further dividing the global economy into competing blocs.
Governments and sovereign funds that navigate these complexities with localized strategies, diversified operations, and bold investments in frontier technologies will emerge as winners in this reshaped world.
Key Developments to Watch:
State Adoption of Cryptocurrencies: As countries experiment with Bitcoin as a reserve asset, this could create volatility in global financial systems while also redefining the role of traditional reserve currencies like the dollar.
Energy Security and Transition: European nations are doubling down on renewable energy investments, while resource-rich nations leverage energy markets as geopolitical tools.
Tech Wars and Innovation: The competition between the U.S. and China in AI, semiconductors, and quantum computing will not only drive innovation but also shape the economic strategies of allied nations.
A Personal Note: Resilience and Opportunity
As I reflect on 2024, I am reminded of the importance of adaptability. From my own journey of navigating the venture world to witnessing shifts in global markets, one thing remains constant: the value of human connection and foresight. Reflecting on the lessons of 2024, my grandmother’s wisdom holds constant: “True wealth lies in resilience and opportunity.” This belief drives my work and informs my predictions for the year ahead.
In 2025, I am committed to continuing this journey, sharing insights, and fostering meaningful discussions. Amid global transformation, I remain optimistic. Whether through AI agents revolutionizing workflows, the growing importance of the new normal, or recalibrated strategies in private markets, 2025 is a year to reimagine what’s possible. For those who join me in reading The Brief, I look forward to exploring these themes with you in depth. Let’s embrace this new year with optimism, confidence, and a shared commitment to innovation and growth.
Sources
- Batra, Ravi. "Superintelligence and Superalignment: Existential Risks for Humanity." LinkedIn, 2024.
- Google. "Google Willow Quantum Chip." Google Research Blog, 2024.
- Goldman Sachs Asset Management. "2025 Outlook: Reasons to Recalibrate." Goldman Sachs, 2025.
- Huang, Jensen. "Project Digits: Democratizing AI with Edge Computing." NVIDIA Blog, 2024.
- J.P. Morgan Asset Management. "2025 Global Market Outlook." J.P. Morgan, 2025.
- McKinsey & Company. "Why Agents Are the Next Frontier of Generative AI." McKinsey Digital, 2024.
- Stanford, Kyle. "VC Winter: A 25% Decline in Active Firms." PitchBook Blog, 2024.
- "Nation-States Turn to Bitcoin as a Strategic Reserve Asset." Forbes, 2025.