Y Combinator's 2025 prediction: AI will win the Nobel Prize in Mathematics or Economics, achieve AI video conversations, and stablecoins will become increasingly important

Will AI sweep the Nobel Prize in 2025? Will everyone use stablecoins to buy things? Is having an AI assistant like Jarvis no longer a dream? "The world's hottest incubator" Y Combinator has released its New Year outlook.

On January 1st, Y Combinator's CEO Garry Tan, along with partners Jared Friedman, Harj Taggar, and Diana Hu, shared their respective predictions for 2025 in a blog post.

Diana Hu stated that AI is accelerating advancements and breakthroughs in science and technology. After winning the Nobel Prize in Physics and Chemistry in 2024, AI may continue to win major awards in 2025. Considering that OpenAI is collaborating with numerous mathematicians, AI might be able to win significant awards in the field of mathematics and could also potentially receive the Nobel Prize in Economic Sciences.

Harj Taggar believes that cryptocurrencies will become mainstream by 2025, with stablecoins becoming part of everyday transactions. By then, everyone may have used stablecoins to purchase items. As soon as merchants start accepting stablecoin payments, the entire payment market will experience explosive growth.

Garry Tan discussed Dogecoin. He predicts that if Elon Musk and Vivek's "Department of Government Efficiency" plan succeeds in reducing government waste, the price of Dogecoin may rise indirectly as a result. He believes that interest rate fluctuations are influenced by many factors, one of which is whether the government has a large deficit. If the "Department of Government Efficiency" can reduce government spending, this may drive interest rates down and encourage cryptocurrency prices to rise.

Jared Friedman focused on AI video conversations, believing that AI video conversation technology will advance significantly by 2025. AI will have its own virtual image and facial expressions, making the entire interaction process real-time and as smooth and natural as conversing with a real person.

The full text is as follows:

Garry Tan:

Welcome to the New Year special of "Light Cone." Today, we will bring you some predictions about 2025. Diana, you go first.

Diana Hu:

Okay. Last year, artificial intelligence won two Nobel Prizes. The first was the Nobel Prize in Physics, awarded to Jeff Hinton for his pioneering work in deep neural networks. The second was the Nobel Prize in Chemistry, awarded to Demos and his team for their research on AlphaFold and protein folding. We can see that artificial intelligence is accelerating the richness and discovery in the fields of science and technology. There are a total of six Nobel Prizes, with four awards yet to be announced.

So, why not win another one? Perhaps the Mathematics Prize? That could be interesting. I know there are many collaborations between OpenAI and the renowned mathematician Terence Tao, along with many researchers involved. There might also be a chance for the Economics Prize. If we can propose some interesting economic theories, there may be hope. But I think the Peace Prize and Literature Prize might be more complex Harj Taggar:

Alright, I'm going to make a somewhat risky prediction on camera, which is: next year, cryptocurrency will become mainstream. Specifically, my prediction is that by this time next year, you and everyone you know will have used stablecoins to purchase at least one item, whether it's coffee or a book. Why do I think this will happen? Because payment networks, which are essentially the market. On one side of the market are merchants and on the other side are consumers. We all know that in entrepreneurship and market business, the hardest part is the "chicken and egg" problem in the early stages. But once you crack that problem, you can have a very solid and lasting business. In fact, the biggest YC companies are almost all marketplace businesses, like Airbnb, DoorDash, Instacart, and even Coinbase itself was originally a marketplace. Its exchange is like a marketplace. Now, people initially entered the cryptocurrency market for speculation and to buy things that would increase in price, but stablecoins have become a truly valuable use case. Now, many people have crypto wallets, at least hundreds of millions of people own crypto wallets, and they will recognize that stablecoins are a good way to purchase goods. By then, one side of the market will already be there—hundreds of millions of people owning stablecoin wallets. Now, what's left is for merchants to start accepting USDC or other stablecoin payments. I think it's not difficult to capture that side of the market.

Jared Friedman:

Yes, there are indeed far fewer merchants.

Harj Taggar:

That's right. There are fewer merchants, and it's actually a more traditional point-of-sale process. I think now, with the gradually optimistic regulatory environment, you'll see a strong push next year. You walk into your local coffee shop, and they will accept USDC payments.

Garry Tan:

This will indeed be a significant change. The demand for stablecoins in the financial sector is evident. Think about that disaster with Synapse, where that startup lost tens of millions to hundreds of millions of user funds. If there had been an open ledger at that time, it should have been possible to track where the funds went. But now they don't even know where the funds went and can't trace the users' money. So, this situation is indeed crazy. When you think about it carefully, it feels like it's been dragging on for too long.

I also have a prediction related to cryptocurrency. If Musk and Vivik's plan to reduce government waste can succeed, then the price of Dogecoin will rise in a very indirect way. I believe that interest rate fluctuations are driven by many factors, but one important factor is whether the government is engaging in significant deficit spending. The market trends I see now, at least what we observed at the end of December, suggest that people think Trump might increase spending. If Dogecoin can successfully reduce spending, it means interest rates will decline, the economy might improve as a result, and GDP may grow. And interest rates actually control everything—we've learned that over the past three to four years. So, from the perspective of cryptocurrency prices, they have a high correlation with interest rates. If interest rates decline, cryptocurrency prices will rise, and GDP may grow Similarly, if the Dogecoin plan fails, it could lead to increased spending by Trump during his second term. All I can say is, we support you, Musk.

Harj Taggar:

Yes, another aspect related to what we discussed is the concern about lowering interest rates, which is that inflation may rise again. But overall, technology is deflationary, especially artificial intelligence, which could become the greatest deflationary force of our lifetime. If this can be realized, we might be able to lower interest rates without triggering significant inflation.

Jared Friedman:

Let me share a prediction related to AI. One product that I am really looking forward to seeing and experiencing is the ability to have Zoom video calls with AI next year. In 2024, everyone will finally be able to make calls to AI, and due to low latency, the calling experience will become very natural. I believe we will also see similar advancements next year, where we can have Zoom calls with AI, complete with facial expressions and full virtual avatars, making the entire interaction real-time and appearing as if we are talking to a real person on the screen.

Diana Hu:

Doesn't that feel uncomfortable? There are some versions now, but the latency is high, and the lip-syncing is poor, so the experience isn't great.

Jared Friedman:

Yes, but I think we will see significant improvements next year, and there may even be a 3D Turing test, making the experience feel very natural.

Harj Taggar:

Yes, perhaps we can have them host a show for us.

Garry Tan:

Surprise! The show is actually hosted by AI. Just kidding, it's still us. So, that's it for today's program, hoping to bring you a quick 2025 prediction special. Happy New Year, and see you next time