The Forecast
Plus, a “second tipping point” for renewable energy.
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Welcome back to The Forecast from Bloomberg Weekend, where we help you think about the future — from next week to next decade.

This week we’re looking at how AI-native startups keep headcount low, a turning point for renewable energy and a marriage drought in China.

‘AI-Native’ Startups Take Pride in Keeping Headcount Low

A growing cohort of “AI-native” startups — companies built from the beginning with artificial intelligence at the center of both product and operations — are discovering they can do far more with far fewer people than their predecessors. 

Lex, an AI-powered writing assistant for professionals, has just three employees — and its founder wants to keep it that way, even as the company scales. “I love the idea of staying smaller over time so that the core group feels really aligned and motivated and able to communicate about hard things,” said founder Nathan Baschez. “You want the right small group of people, rather than more people.”

Across interviews with more than half a dozen AI-native founders, two themes repeatedly surfaced: Their teams are remarkably small, and their org charts are unusually fluid. 

At Daydream, a fashion-shopping startup still in beta, the team is in the low dozens. “If you wanted to do this company three or four years ago, you would need so many more people,” said co-founder Dan Cary, who spent more than a decade at Google. With AI assistants, even non-technical team members can build prototypes themselves, blurring the lines between roles that have traditionally been distinct. Daydream routinely tests 15 to 20 product ideas in parallel — an experimentation pace Cary says would be impossible without automation.

At Sailplane, a stealth-mode startup building AI agents, automation starts at the top. CEO Sam Ramji’s calendar is managed entirely by an AI assistant that mimics a human scheduler’s tone and responsiveness. The company has six employees and plans to stay under 10 through year’s end.

Even companies that have downsized, like AI email management startup Shortwave, say they're better for it. Founder Andrew Lee said the team was cut from 15 to six, in part because not everyone could leverage AI effectively. “We need to optimize our team for a small number of highly cross-functional people where we can move super fast,” he said. “Our moat is going to become speed.”

— Jo Constanz, Bloomberg News

Read more: Built to Stay Small: Inside the Org Charts of AI-Native Startups
 

Predictions

“You may not need an iPhone 10 years from now.” So says Apple senior vice president Eddy Cue, in testimony to the US Justice Department during its lawsuit against Alphabet. Another tech shift: Apple is “actively looking at” revamping its Safari browser to emphasize AI search engines. — Mark Gurman, Leah Nylen, and Stephanie Lai, Bloomberg News

Silicon Valley is coming for the Pentagon’s $1 trillion budget: “Instead of dozens or even hundreds of soldiers supporting one $100 million system, one soldier using AI software could command dozens of cheap, autonomous weapons.” — Lizette Chapman, Julia Janicki, Tom Fevrier, Allyson Versprille, Bloomberg News

“The Fed won’t bail out Trump (or equities).” It’s worried about inflation expectations and will wait to see deterioration in the labor market. “Bottom line: Trump’s tariffs are taking a toll, and empty store shelves and higher prices are coming.” — Edward Harrison, The Everything Risk

62% of US CEOs expect a slowdown or recession in the next six months according to Chief Executive magazine, as executives grapple with Trump-fueled uncertainty. — Wes Kosova, Bloomberg Businessweek

Iceland is entering a new volcanic era:The eruptive phase we have just entered will last about 300 to 400 years.” — Ragnhildur Sigurdardottir, CityLab

“‘No marriage, no children’ is China’s ticking timebomb.” China’s falling marriage rate is exacerbating a demographic crisis in the world's second-largest economy. — Lucille Liu, Bloomberg News

Keep an Eye On

Another Tipping Point for Renewables

For years, it’s been cheaper in most of the world to build new renewable energy than to build new fossil fuel plants. Now, wind and solar are hitting what BloombergNEF calls a “second tipping point”: They’re getting so cheap that in much of the world it’s less expensive to install new renewables than it is to operate existing fossil fuel plants.

“New wind and solar are outcompeting existing fossil-fuel plants in markets that account for half of total electricity generation and three-fifths of global GDP,” wrote Amar Vasdev in BNEF’s February report on energy costs.

Several countries in Europe and Asia had already crossed this threshold, but this year it’s newly true of India: “For the first time since BNEF began gathering data, we estimate that a solar farm financed last year in India was a few dollars per megawatt-hour cheaper than running an existing coal plant with a typical efficiency,” wrote Vasdev. 

Bloomberg

What Are the Chances...

27%
Chance that the total US tariff on China is below 50% by the end of May, according to Kalshi. Forecast as of 10 p.m. ET on Saturday.

Weekend Reads

The US Economy Will Pay the Price for Trump’s Attacks on Universities
A Bad Ukraine-Russia Deal Is Also a Terrible Deal for Europe
The United Nations Is Losing Favor With Its Former Cheerleader
Warren Buffett Versus American Capitalism
Why India and Pakistan Won’t Go to War Over Water

Week Ahead

Monday: EU finance ministers meet in Brussels; Canadian Prime Minister Mark Carney is expected to unveil his cabinet.

Tuesday: US President Donald Trump begins a trip to Saudi Arabia, Qatar and the United Arab Emirates; the US and India report CPI; the UK reports jobs data; SoftBank reports earnings.

Wednesday: Germany, Spain, Japan and Argentina report inflation data; NATO holds its informal ministers meeting in Turkey; Tencent reports earnings. 

Thursday: The US reports retail sales; the UK reports GDP; Mexico’s central bank is expected to cut 50 basis points; Walmart and Alibaba reports earnings. 

Friday: Japan and Russia report GDP.

Have a great Sunday and a productive week.

—Walter Frick and Kira Bindrim, Bloomberg Weekend; Jo Constanz, Bloomberg New

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