All-In's 2026 Predictions

Episode Overview

• This episode serves as a comprehensive "state of the union" analysis covering global economics, Silicon Valley politics, and the looming impact of AI on labor markets.
• The hosts (the "All-In" besties) debate the consequences of California's proposed wealth tax, arguing it will accelerate capital flight and hollow out the state's tax base.
• A significant portion focuses on the "Software Industrial Complex" and how AI will destroy the traditional SaaS business model of charging for maintenance and migration.
• The conversation extends to 2026 predictions, exploring the collapse of political centrism, the rise of "sovereign" digital assets, and the shifting U.S. foreign policy stance from ideology to transactionalism.

Key Concepts

The Economics of Capital Flight & Wealth Taxes The hosts analyze the "Illiquidity Trap" created by taxing unrealized gains. When governments tax the theoretical increase in asset value before a sale, high-net-worth individuals—particularly startup founders—are forced to liquidate assets to pay the bill. This often means selling equity, which dilutes their ownership and can cause them to lose voting control of their own companies. The result is not increased revenue for the state, but a shrinking tax base as capital and talent relocate to jurisdictions like Texas or Florida, creating a negative feedback loop for state budgets.

The "Licensing" Loophole in Antitrust Regulation In a regulatory environment where traditional Mergers & Acquisitions (M&A) are blocked by aggressive antitrust enforcement, tech giants have innovated a new deal structure. Instead of buying a company (which triggers years of review), they "license the IP" and "acqui-hire" the core team. This allows the acquirer to absorb the target's value immediately without a formal purchase, leaving a "zombie" shell company behind. This represents a structural shift in how corporate consolidation occurs under heavy regulation.

The Collapse of the "Software Industrial Complex" The enterprise software market relies heavily on three revenue buckets: initial licensing, maintenance, and migration. The hosts argue that legacy software firms make 90% of their revenue from the latter two—essentially charging for technical debt and hourly labor. AI is poised to automate these "maintenance and migration" tasks, causing the cost of software services to plummet. This threatens the multi-trillion-dollar valuations of legacy firms that rely on headcount-based billing rather than pure innovation.

Jevons Paradox in the AI Era Countering the narrative that AI will cause mass unemployment, the hosts apply Jevons Paradox—a 19th-century economic theory—to knowledge work. The paradox states that as technology increases the efficiency of a resource, total consumption of that resource increases rather than decreases. As AI lowers the cost of coding and production, the market will likely discover massive new use cases for software that were previously economically unviable, leading to an explosion in demand for software rather than a reduction in developers.

The Shift from Monroe Doctrine to Transactionalism Geopolitically, the U.S. is moving away from the "Monroe Doctrine" (ideological protection of a sphere of influence) toward a "Trump Doctrine" of transactionalism. This means the U.S. may stop policing the world based on historical alliances and instead engage only when there is a specific, immediate benefit (e.g., border security or trade advantages). This shift forces other nations to secure their own supply chains, moving the world from multilateral trade to unilateral national security.

Sovereign Economic Privacy There is a gap in the global financial system for a "digital bearer asset" that offers the speed of crypto but the privacy required for national security. Bitcoin operates on a public ledger (too transparent for state secrets), and Gold is physically cumbersome. The hosts predict Central Banks will seek a new cryptographic asset class that allows nations to move money secretly without revealing their balance sheets to adversaries.

Quotes

• At 0:03:27 - "When you look at our friends that have all explicitly left, it's about half a trillion of net worth, which I think is very bad for the long-term budget of California." - Highlighting the tangible economic damage caused by capital flight.
• At 0:05:15 - "It's very difficult if you're an entrepreneur with a good idea to start building here, because if you get stuck in success with a bunch of illiquid stock and have no way to pay 5% of that value, you're going to bankrupt your own company." - Explaining the existential threat wealth taxes pose to startup founders.
• At 0:07:05 - "The way they calculate the value of your stock is not based on its liquid market value, but if you own super-voting shares, they multiply... your super-voting by the market cap of the company and they deem your shares to be worth that." - A technical critique of how government valuation methods can destroy corporate governance.
• At 0:15:20 - "When historians look back on the Trump presidency... I think that there is a clear Trump Doctrine that trumped the Monroe Doctrine." - Arguing that U.S. foreign policy has fundamentally shifted toward transactionalism.
• At 0:27:11 - "The problem with Neocon regime change operations was... threefold... What has Trump done that is like any of those things? There's been no invasion, no occupation, and no nation building." - Analyzing the shift toward "realist" foreign policy that achieves outcomes without military deployment.
• At 0:43:28 - "Buckets two and three, where all the money is made, is what's called maintenance and migration... Those last two buckets represent 90% of all the dollars in revenue... I think you're going to see that total economic opportunity shrink and contract aggressively." - Predicting the collapse of legacy software revenue models due to AI automation.
• At 0:52:50 - "I think M&A cannot happen... it's the IP license M&A workaround... These huge licensing deals that basically replace M&A." - Identifying the new strategy tech giants use to bypass antitrust regulators.
• At 0:58:38 - "As the cost of a resource goes down, the aggregate demand for it actually increases because you discover more and more use cases." - Defining Jevons Paradox to explain why AI will likely create a software boom.
• At 0:58:39 - "The paradox of course being that if you assume demand remains constant, then the volume of the underlying resource should fall... Instead, making it more efficient leads to massive growth." - Further clarifying why efficiency leads to consumption growth, not reduction.
• At 1:04:36 - "The most contrarian belief is that I don't think SpaceX will IPO. I think that it will reverse merge into Tesla and I think Elon will use it as a moment to consolidate control." - A specific prediction about Elon Musk's future corporate structuring.
• At 1:05:31 - "I think Elon will use it as a moment to consolidate control and power of his two seminal assets into one cap table." - Emphasizing that control is often more valuable to founders than public market liquidity.
• At 1:06:15 - "Central banks will realize that there are limitations to gold and limitations to Bitcoin and will as a result seek out a completely new cryptographic paradigm... that is fungible, that is tradable, and that is completely secure and private." - Predicting the rise of privacy-focused sovereign digital assets.
• At 1:16:15 - "The trend in oil is inexorable and it's down... Irrespective of your thoughts on climate change, the trends on electrification and energy storage are just unstoppable." - Arguing that technology, not ideology, will end the dominance of hydrocarbons.
• At 1:29:47 - "Much of the citizen journalism in the past has been... passive. 'Hey, I caught this thing and I observed it.' But now there are people that are going to actively take a camera and say, 'hey, I'm going to go discover this thing.'" - Describing the shift from passive observation to active "auditing" of institutions.
• At 1:29:47 - "The work of journalism has been decentralized." - Concluding that traditional media gatekeepers have lost their monopoly on investigation.

Takeaways

• Founders should incorporate in jurisdictions with stable tax policies (like Delaware, Texas, or Florida) to avoid future "unrealized gains" taxes that could force a loss of company control.
• Investors should scrutinize legacy SaaS portfolios for exposure to "maintenance and migration" revenue, as these business lines are at high risk of demonetization by AI.
• Software engineers should pivot their skills from "writing code" to "directing AI," as the volume of software needed will explode while the manual labor of coding diminishes.
• Corporations looking to exit should explore "IP Licensing" and "Acqui-hiring" structures rather than traditional M&A to navigate the current antitrust environment.
• Watch the copper market closely; as nations move to secure unilateral supply chains for data centers and defense, copper is becoming a critical scarcity bottleneck.
• Monitor "citizen audit" channels on social media as leading indicators of institutional failure; these active investigations often reveal systemic risks faster than traditional news.
• Expect political volatility to increase as the "center" hollows out; businesses must prepare to navigate a landscape dominated by populist poles rather than moderate consensus.
• Consider the investment implications of "accelerated depreciation" policies in the US, which are currently acting as a massive artificial stimulant for the industrial and manufacturing sectors.
• Do not rely on "Big Tech" for political cover; the industry is now a universal target for both the populist Right (censorship) and populist Left (inequality), making it politically vulnerable.