E78: VC fund metrics that matter, private market update, recession, student loans, Bill Hwang arrest

Chamath was accurately relaying Intel CEO Pat Gelsinger’s then-current guidance that the overall semiconductor shortage would “drift into 2024,” i.e., that industry-wide supply constraints would persist until at least that year.(cnbc.com)

However, with hindsight it’s clear that the acute global chip shortage largely ended before 2024:

• The period is now commonly described as the “2020–2023 global chip shortage,” indicating that the systemic, cross-industry imbalance between chip supply and demand is seen as having run from 2020 through 2023, not through 2024.(en.wikipedia.org)
• By early 2023, industry analysts such as Gartner were already projecting excess inventories and a surplus zone for semiconductors through 2023, with overall market revenue declining that year—characteristics of oversupply, not ongoing broad-based shortage.(gartner.com)
• A 2024 Capgemini study notes that the world had “largely recovered from the chip shortage of 2020–2023” by mid‑2023; remaining concerns in late 2024 were about resilience and future risks, not a continuing, generalized inability to obtain chips.(techrepublic.com)
• In autos—one of the hardest-hit sectors—Reuters and other reports in 2023 described chip supply as easing, with experts expecting the era of “millions of cars cannot be built” to be behind them by the end of 2023, even though some legacy nodes remained tight.(investing.com)

By 2024, there were pockets of tightness (e.g., certain automotive components, high‑end AI accelerators), but not a continuing, economy‑wide global semiconductor shortage of the type seen in 2020–2022. On that basis, the normalized prediction that global chip shortages would persist through at least the end of 2024 is best judged wrong.

The conditional scenario Chamath worried about did occur, but the negative outcome he implied did not.

1. Fed did raise rates by more than 400 bps into a slowing economy.
   From near zero (0–0.25%) in early 2022, the Federal Reserve lifted the federal funds target range to 5.25–5.5% by July 2023—a cumulative increase of 525 basis points. (federalreserve.gov)

2. The U.S. economy did not “tank” in 2022–2023 or in the immediate aftermath.
   Real GDP grew, not contracted: BEA data (after revisions) show real GDP rising about 2.5% in 2022, 2.9% in 2023, and 2.8% in 2024—solid, above‑trend growth for a developed economy. (apps.bea.gov)

3. No official recession followed the tightening cycle.
   The NBER recession indicator remains at 0 ("no recession") from Q1 2022 through at least Q3 2025, meaning the U.S. has not entered an NBER‑dated recession in the period when the hikes were implemented and digested. (ycharts.com)

4. Labor market remained relatively strong, not characteristic of a “tanked” economy.
   Unemployment stayed historically low (around the mid‑3% to low‑4% range); even by late 2024, unemployment was roughly 4.1–4.2% with continued job gains in the millions over the year, far from a collapse in employment. (bls.gov)

5. The episode is widely described as a near‑term “soft landing,” not a sharp downturn.
   Analyses from institutions such as S&P Global, the Congressional Research Service, and major banks describe the outcome of this hiking cycle as the economy steering clear of recession and moving toward or achieving a soft landing—inflation falling while growth and employment remain positive. (spglobal.com)

Because the Fed did raise rates by roughly (indeed, more than) 400 basis points, but the U.S. economy did not experience the severe downturn or "tanking" he warned would likely result, the prediction is best judged as wrong.

According to the Bureau of Economic Analysis (BEA), real U.S. GDP in Q1 2022 did in fact contract, with the third estimate showing a -1.6% annualized decline.【1search6】 Subsequent BEA releases for Q2 2022 initially reported another small decline (advance and second/third estimates around -0.6%), which led many commentators in mid‑2022 to say the U.S. was in a "technical recession" based on two consecutive negative GDP quarters.【3search0】【3search3】 However, later comprehensive revisions to the national accounts have changed the picture: recent compiled tables using the latest BEA data now show Q1 2022 at roughly -1.0% and Q2 2022 at about +0.3% real growth, i.e., only the first quarter of 2022 is currently estimated as negative and the second quarter is modestly positive.【1search0】【3search4】 Thus, in the final data for 2022 there were not "additional quarters" of negative real GDP within 2022, and the popular two‑quarter rule for a technical recession in that year is no longer satisfied. Consistently, the National Bureau of Economic Research’s Business Cycle Dating Committee has not dated any new recession after the brief COVID recession ending in April 2020.【5search0】【5search2】 Because the normalized prediction specifically referred to more negative GDP quarters in 2022 leading to a technical recession, and the best current data now show that did not occur, this prediction is best classified as wrong, even though provisional 2022 releases temporarily appeared to validate it before later revisions.

The May 3–4, 2022 FOMC meeting raised the federal funds rate target range from 0.25–0.50% (set at the March 16, 2022 meeting) to 0.75–1.00%. That change is exactly a 0.50 percentage point (50 basis point) increase. (federalreserve.gov)

Contemporaneous coverage from financial news outlets also described this as a 50 basis point hike, the largest single increase in over two decades. (bankrate.com)

Since Chamath predicted that at the May 2022 FOMC meeting the Fed would raise the federal funds rate target by 50 basis points, and the Fed in fact did raise it by 50 basis points, the prediction was right.

The prediction was conditional on a specific policy: broad forgiveness of the first $10,000 of student loans for roughly 43 million borrowers (around $0.5T total).

What actually happened:

• In August 2022, the Biden administration announced a plan to cancel up to $10,000 (or $20,000 for Pell recipients) for most federal borrowers, with a projected cost in the hundreds of billions.
• On June 30, 2023, the U.S. Supreme Court struck down this broad-based forgiveness plan, so the mass $10k cancellation for ~43M people never went into effect.
• Instead, the administration has pursued narrower relief through existing programs and regulatory changes (PSLF fixes, borrower defense, new IDR rules, etc.), which by mid‑2024 had forgiven on the order of $150–$170B for a few million borrowers—not the half‑trillion, 43M‑borrower scenario described in the prediction.

Because the specific policy (“forgive the first $10k for 43M borrowers, ~$0.5T total”) was not implemented, we can’t empirically observe the macroeconomic effect of exactly that action. Any claim about whether it would have been significantly stimulative and raised near‑term U.S. growth is therefore a counterfactual judgment, not something we can verify against realized data.

So:

• The condition of the prediction (that particular form and scale of forgiveness) did not occur.
• Without that, the impact on spending and growth cannot be directly measured.

Given this, the correct evaluation is ambiguous: there isn’t a realized outcome to check the prediction against, even though enough time has passed.

The prediction was conditional: if the U.S. forgave roughly $0.5T of federal student loans (about the first $10,000 per borrower), GDP would get a one‑time ~2.5% boost.

In reality, that specific broad-based cancellation was never implemented. Biden did announce a plan in August 2022 to cancel up to $10,000–$20,000 per eligible borrower, which independent estimates put at up to about $519 billion in cost—very close to the ~$0.5T scale Chamath referenced—but the U.S. Supreme Court struck this plan down in Biden v. Nebraska in June 2023, so it never took effect.【3view1】【0search7】

Instead, the government pursued a patchwork of targeted relief (PSLF fixes, borrower‑defense discharges, income‑driven repayment corrections, etc.). By early 2025, total forgiveness under these narrower programs was around $180–$190 billion for roughly 5 million borrowers—far below $0.5T—and it was rolled out gradually rather than as a single, discrete shock.【0search6】【0news15】【0search4】 Because the predicted policy was not carried out at the scale or in the one‑time fashion assumed, there is no clean real‑world episode to test whether GDP actually jumped by 2.5% as claimed.

Moreover, macroeconomic modeling available after (and even before) the podcast suggests that large-scale student loan cancellation is a relatively weak stimulus. The Committee for a Responsible Federal Budget estimated that canceling all student loans (about $1.5T) would only boost annual consumer spending by roughly $100 billion—on the order of a few tenths of a percent of GDP per year—characterizing student‑debt cancellation as “poor economic stimulus.”【3view1】 This theoretical work implies that a $0.5T cancellation is unlikely to generate a 2.5% one‑time GDP surge, but that remains a model-based inference, not an observed outcome.

Because the triggering policy never occurred at the predicted scale, and GDP effects cannot be isolated from other shocks, there is no direct empirical test of Chamath’s 2.5% one‑time GDP boost claim. The best we can say is that the prediction’s truth or falsehood cannot be determined from actual outcomes, even though subsequent research suggests it was probably overstated.

Biden did move ahead with large-scale student debt relief, but the marquee 2022 broad cancellation plan (up to $10k/$20k for most borrowers) was ultimately struck down by the Supreme Court in Biden v. Nebraska, so the full, one-time "broad bailout" that Sacks was reacting to never actually took effect.(en.wikipedia.org) The administration instead delivered roughly $180+ billion of more targeted forgiveness through existing and revised programs (PSLF fixes, income‑driven repayment adjustments, borrower‑defense settlements, disability discharges, etc.), which is politically salient but different from a one‑shot, everyone‑gets‑relief bailout.(investopedia.com)

On public opinion, multiple national polls in 2022 found that forgiving around $10k in student loans was either modestly popular or evenly split overall, not broadly unpopular. Economist/YouGov polling after Biden’s announcement showed 51% support vs. 39% opposition for canceling up to $10,000, with even 43% of people who never had student loans in favor.(today.yougov.com) Ipsos/NPR and other surveys likewise found slim majorities supporting limited forgiveness, with opposition rising mainly as the proposed amount grew.(ipsos.com) A Data for Progress survey reported that 60% of voters supported eliminating all or some student debt, including majority support even among voters who never had loans.(dataforprogress.org) While Republicans were strongly opposed and some non‑college voters did see it as unfair, a Georgia poll found that party identification was a better predictor of views on Biden’s plan than education or income—suggesting the main cleavage ran along partisan lines, not simply college vs. non‑college.(georgiarecorder.com) Overall, the polling record does not show clear, broad‑based backlash from non‑college, working‑class voters large enough to make the policy an obvious net political loser.

On actual electoral outcomes, Democrats slightly underperformed their 2018 and 2020 levels with non‑college/working‑class voters in the 2022 midterms, continuing a pre‑existing trend of working‑class drift toward the GOP. Exit‑poll and postelection analyses show that voters without college degrees favored Republicans (roughly 57–42 nationally), and Democrats’ share of non‑college voters fell back to around 43%, compared with higher shares in 2018 and 2020.(pewresearch.org) But these same analyses attribute the overall 2022 pattern mostly to turnout differences (older and more Republican‑leaning voters showing up at higher rates, younger and more Democratic‑leaning voters turning out less) and to salient issues like inflation and abortion, not directly to student debt relief.(washingtonpost.com) There is no strong quantitative evidence isolating student loan forgiveness as the cause of Democrats’ working‑class losses, and Democrats avoided the widely expected "red wave" despite having announced the plan.

Finally, the substance of the 2022 proposal also undercuts the specific "bailout of the woke professional class" frame. Academic analysis of the announced plan finds that, as designed (with Pell‑Grant bonuses and income caps), its benefits would have been concentrated more in lower‑ and middle‑income neighborhoods and disproportionately among Black and Hispanic borrowers—not primarily among affluent professionals.(direct.mit.edu) That doesn’t mean some working‑class non‑beneficiaries didn’t resent it, but it does mean the factual premise that this was mainly a giveaway to affluent elites at their expense is overstated.

Putting this together: (1) the exact broad bailout Sacks described never fully materialized due to court intervention; (2) opinion data show the actual plans were at least as popular as unpopular overall, including among many people without loans; and (3) while Democrats have continued to lose some non‑college working‑class support, there is no clear empirical link pinning that erosion specifically on loan forgiveness rather than on broader, long‑running trends and other 2022 issues. Because we cannot cleanly attribute measurable net political harm to student loan forgiveness alone, and because the predicted mechanism (a massive, enacted bailout producing broad working‑class taxpayer backlash) didn’t fully occur, the accuracy of Sacks’s prediction is ambiguous rather than clearly right or clearly wrong.

Breaking the prediction into its key components:

1. "He's going to buy Twitter." – Correct (this part came true)

   • Elon Musk completed the acquisition of Twitter on October 27, 2022 for about $44 billion and took the company private.

2. "He's going to clean it up and improve the platform." – Not supported by outcomes
   This is subjective, but most concrete indicators point the other way:

   • Massive staff cuts and rapid policy shifts led to site instability, moderation issues, and advertiser pullback; major brands paused or reduced ad spending amid concerns about content moderation and brand safety.
   • Hate speech and misinformation complaints increased after policy and staffing changes; civil society groups and many users publicly argued the platform had degraded, not been "cleaned up."
     Because this component is value‑laden, it can’t be scored definitively, but it clearly does not have broad empirical support.

3. "He'll generate about a 2x return and Twitter will be worth ~$100B in ~6–7 years." – Not on track / contradicted by available data

   • Musk’s acquisition price implied a valuation around $44B.
   • After the deal, widespread reporting in 2023–2024 indicated that internal marks and secondary-market transactions valued the company (renamed X Corp.) at far below the purchase price, not above it. For example, Musk and X have reportedly acknowledged valuations around $20B or lower in some internal/share-based contexts, implying a large unrealized loss rather than any gain.
   • As of late 2025, X is still private and there is no market evidence of anything close to a $100B valuation, let alone a 2x from the acquisition price.

   While the original timeline (6–7 years) runs out around 2028–2029, the prediction was quite specific that Musk would roughly double his money, and the actual trajectory has gone in the opposite direction for several years. Given the enormous gap between current indications and the predicted outcome, this sub‑prediction is strongly contradicted by current evidence.

4. "He will donate Twitter into a foundation or trust to get a ≈$100B tax credit for future SpaceX/Starlink gains." – Did not happen

   • There is no record that Musk has donated Twitter/X into a charitable foundation or trust in a way that would give him a ~$100B charitable deduction or similar tax credit.
   • Twitter’s corporate structure was reorganized into X Corp. and related entities under his control, but not transferred to a philanthropic foundation; ownership remains effectively in Musk’s and associated entities’ hands.

Putting it together:

• The first, simplest part (he will buy Twitter) was right.
• The core of the prediction, however, was that he would (a) substantially improve/"clean up" the platform, (b) roughly double his investment to a $100B valuation in a 6–7 year frame, and (c) then donate it to a foundation to obtain about a $100B tax credit.
• As of November 30, 2025: the platform’s quality is widely viewed as worse, not better; valuations and financial indicators point to a large loss, not a 2x gain; and no donation or tax-credit strategy of the described type has occurred.

Given that most of the specific, falsifiable components are clearly contradicted by current facts, the overall prediction is best scored as "wrong", even though the narrow sub‑prediction that Musk would complete the Twitter acquisition was correct.

As of November 30, 2025, Twitter/X has not gone public again. Elon Musk took Twitter private in October 2022 for about $44 billion and later folded it into X Corp and then into xAI/X.AI Holdings Corp, but it remains a private company, with articles explicitly noting there is currently no public stock or completed IPO for X. (en.wikipedia.org)

Recent private/secondary deals and internal transaction valuations have put X’s value roughly around the original purchase price (about $33–45 billion, or about $44 billion in some secondary trading), which is far below the ~$220 billion+ that a 5x outcome would imply. (finance.yahoo.com)

However, because Jason’s prediction was about what would happen eventually and did not specify a time frame, it cannot yet be definitively judged false—X could, in principle, IPO later at a much higher valuation. Since the key event (a re-IPO) has not happened and no deadline was given, the status of the prediction is “too early to tell.”

Jason predicted that the All-In Summit they were about to hold in Miami in May 2022 would be their first and last summit, implying there would be no subsequent All-In Summits.

However, multiple later summits have been held:

• The inaugural All-In Summit took place in Miami Beach, Florida, in May 2022. (en.wikipedia.org)
• A second All-In Summit was held in Los Angeles at UCLA’s Royce Hall in September 2023. (en.wikipedia.org)
• A third All-In Summit ran again at Royce Hall in Los Angeles from September 8–10, 2024. (en.wikipedia.org)
• A fourth All-In Summit took place in Los Angeles from September 7–9, 2025, with official materials and coverage describing it as the 2025 All-In Summit. (en.wikipedia.org)
• Social media from the official All-In Summit 2025 account includes an attendee stating they have been to all four All-In summits, further confirming multiple post-2022 events. (twstalker.com)

Because at least three additional All-In Summits (2023, 2024, 2025) occurred after the first Miami event, Jason’s prediction that the Miami summit would also be their last was wrong.